Encoding Services and Compact Disc Purchase Agreement - Loudeye Technologies Inc. and XM Satellite Radio Inc.
AGREEMENT
This Encoding Services and Compact Disc Purchase Agreement ("Agreement") is
entered into as of August 25, 2000 (the "Effective Date") by and between Loudeye
Technologies, Inc., a Delaware corporation ("Loudeye") and XM Satellite Radio
Inc., a Delaware corporation ("XM")
WHEREAS, Loudeye is in the business of providing encoding services to third
parties and is an authorized distributor of compact discs;
WHEREAS, XM wishes to purchase certain compact discs from Loudeye to
populate its music library and wishes to engage Loudeye to encode those compact
discs in the formats set forth herein to facilitate the transmission of XM's
programming.
NOW THEREFORE, intending to be legally bound, and in consideration of the
mutual promises and covenants contained herein, the parties agree as follows:
1 Definitions.
1.1 "CDs" shall mean one or more compact discs released in one (1) package
and containing one or more sound recordings in digital format.
1.2 "DLT" shall mean digital linear tapes.
1.3 "Encode" or "Encoding" shall mean, with regard to the CDs, encoding
the audio in accordance with the specifications set forth on Exhibit
B-1.
1.4 "Meta Data" shall mean the information set forth in Exhibit B-3
2 Purchase of CDs.
2.1 Volume Purchase. XM will purchase from Loudeye the CDs listed on
Exhibit A attached hereto and any other CD purchase order which the
parties may execute from time to time.
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2.2 Bar Coding. Prior to delivery to XM, Loudeye shall bar code each CD
with a unique identifier to ensure that future releases will not be in
conflict with older releases in XM's library.
2.3 [ * .] XM shall have the right to [ * ] by Loudeye. Loudeye shall
[ * .]
2.4 Delivery. In accordance with the schedule set forth in Exhibit C,
Loudeye will deliver the CDs to XM at the address listed in Exhibit C.
3 Encoding.
3.1 Blue Line Acceptance Test. Loudeye shall Encode sample CD's in
accordance with the specifications set forth in Exhibits B-1 (the
"Sample"). On or before [ * ], Loudeye will submit the Sample to XM
for review.
(a) If, [ * ] the Sample is acceptable, and XM communicates such
acceptance of the Sample to Loudeye no later than [ * ] the
Sample shall become the Blue Line Sample and Loudeye shall begin
Encoding the CDs in accordance with the schedule and requirements
set forth in Exhibit C.
(b) If, [ * ] the Sample is unacceptable, XM may [ * ] or XM may
request that Loudeye submit a new Sample and the previous
provisions shall similarly apply to such new Sample; provided,
however that the schedule and requirements set forth in Exhibit C
shall be adjusted as necessary to reflect the new XM acceptance
date.
3.2 Delivery. Subject to the provisions above in section 3.1, [ * ]
Loudeye shall deliver the encoded CDs, and related Meta Data in
accordance with the schedule and requirements set forth in Exhibit C
attached hereto.
4 Price and Payment Terms.
4.1 CDs. XM shall pay to Loudeye [ * ] for the purchase of each CD. Upon
shipment of the CDs from the provider of the CDs, Loudeye shall
invoice XM for the CDs shipped, plus an administrative fee of [ * ] of
the CDs shipped, and XM shall pay the invoice within [ * ] days of
receipt of that invoice. [ * ] shall pay reasonable shipping costs and
expenses.
4.2 Encoding. XM shall pay Loudeye [ * ] per CD for encoding the CD and
providing the Meta Data.
4.2.1 Deposit. Within [ * ] days from the Effective Date, XM shall
pay Loudeye [ * ] ("Deposit"). If the Agreement is terminated
pursuant to Section 5.4, the Deposit [ * ]
4.2.2 Encoding. Upon each delivery of the encoded files and Meta
Data as set forth in Exhibit C, Loudeye shall invoice XM. The
Deposit shall first be applied to all amounts owed hereunder.
Any amount invoiced in excess of
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the Deposit shall be paid within [ * ] days of XM's receipt of
an invoice.
4.3 Other Terms. Payment must be made in U.S. Dollars and may be made in
cash, cashiers check, money order, travelers' checks, check or
Visa/MasterCard. Interest at the maximum allowed by law will be
charged on all accounts not paid by due date unless previous
arrangements have been made by Loudeye.
4.4 Subsequent Deliveries. Upon request of XM, subsequent deliveries of
encoded CDs will be provided at an agreed to time. Such request shall
be made through the Loudeye external system interface. XM shall
receive an additional [ * ] CDs during the year 2001 at a cost of
[ * ] per encoded CD. Loudeye shall invoice XM for the year 2001
deliveries [ * ], which shall be due net [ * ] days from date of
invoice.
5 Term and Termination.
5.1 Term. The term of this Agreement shall begin on the Effective Date
and shall continue until December 31, 2001, unless otherwise
terminated by either party.
5.2 Termination for Cause. Either party may terminate this Agreement in
the event of any material breach of the Agreement by the other party;
provided, that such breach shall not result in termination if the
breach is cured by the other party within [ * ] days of receipt of
such notice.
5.3 Termination Without Cause. XM may terminate this Agreement for its
convenience upon [ * ] days notice to Loudeye. Loudeye may terminate
this Agreement for convenience upon [ * ] days notice after the
initial production of approximately [ * ] CDs have been encoded and
files delivered. 5.4 [ * ]
6 Confidentiality.
6.1 Except as expressly set forth herein, the parties shall maintain in
confidence the terms of this Agreement. During the term of this
Agreement, the parties may disclose to one another certain information
which is considered by the disclosing party to be proprietary or
confidential information (the "Confidential Information").
Confidential Information is defined as any information, communication
or data, in any form, including, but not limited to, oral, written,
graphic or electromagnetic forms, models or samples, which the
disclosing party identifies as confidential or which is of such a
nature that the receiving party should reasonably understand that the
disclosing party desires to protect such information, communication or
data against unrestricted disclosure or use, including, without
limitation, site traffic and performance data, business information,
financial data and marketing data. All Confidential Information shall
remain the sole property of the disclosing party and its
confidentiality shall be maintained and protected by the receiving
party with the same degree of care as
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the receiving party uses for its own confidential and proprietary
information. The receiving party shall not use the Confidential
Information of the other party except as necessary to fulfill its
obligations under this Agreement, nor shall it disclose such
Confidential Information to any third party without the prior written
consent of the disclosing party.
6.2 The restrictions on the use or disclosure of any Confidential
Information shall not apply to any Confidential Information: (i) after
it has become generally available to the public without breach of this
Agreement by the receiving party; (ii) that is rightfully in the
receiving party's possession prior to disclosure to it by the
disclosing party; (iii) that is independently developed by the
receiving party; (iv) that is rightfully received by the receiving
party from a third party without a duty of confidentiality; or (v)
that is disclosed under operation of law.
6.3 Press Releases. Loudeye and XM may enter into a joint press release
upon execution of the Agreement, provided that the parties can
mutually agree upon the language of such press release.
7 Warranties
7.1 Loudeye represents and warrants to XM that:
7.1.1 All of the services to be performed by Loudeye hereunder will
be rendered in a first-class professional manner by qualified
personnel;
7.1.2 None of the services performed hereunder will infringe or
otherwise violate any third party patent, copyright, trade
secret or other intellectual property right (provided, however
that the foregoing does not include the possible infringement
of the rights of others by content provided by XM to Loudeye
for encoding as contemplated under this Agreement);
7.1.3 The encoded CDs shall comply with the Blue Line Sample;
7.1.4 Loudeye recognizes that the delivery schedule set forth in
Exhibit C is a material part of this Agreement.
7.2 LOUDEYE SHALL NOT BE LIABLE FOR PROFITS OR OTHER DAMAGES CAUSED BY THE
LOSS, DAMAGE OR DESTRUCTION OF MATERIALS BELONGING TO XM OR ANY OTHER
PERSON IN POSSESSION OF LOUDEYE UNLESS CAUSED BY THE NEGLIGENCE OF
LOUDEYE IN WHICH EVENT, THE LIABILITY SHALL BE LIMITED TO THE
REPLACEMENT OF A SIMILAR QUANTITY OF BLANK TAPE OR MAGNETIC OR OPTICAL
MEDIA TO THE MATERIALS WHICH WERE LOST, DAMAGED OR DESTROYED.
NOTWITHSTANDING THE FOREGOING, IN THE EVENT THAT ANY CD'S PURCHASED
HEREUNDER BY XM ARE LOST, DAMAGED OR DESTROYED WHILE IN THE POSSESSION
OF LOUDEYE DURING ITS PROVISIONS OF ITS SERVICES HEREUNDER, LOUDEYE
SHALL REPLACE SUCH CD'S WITH
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SUBSTITUTE CD'S. EXCEPT FOR THE ABOVEMENTIONED REPLACEMENTS, LOUDEYE
SHALL HAVE NO FURTHER LIABILITY REGARDING THE LOSS, DAMAGE OR
DESTRUCTION OF THE AFOREMENTIONED MATERIALS OR CD'S. IF MATERIALS
FURNISHED BY LOUDEYE ARE FOUND TO BE DEFECTIVE IN MANUFACTURE, LOUDEYE
SHALL REPLACE SUCH MATERIALS WITH A SIMILAR QUANTITY OF BLANK TAPE OR
MAGNETIC OR OPTICAL MEDIA, PROVIDED XM NOTIFIES LOUDEYE IN WRITING
WITHIN THIRTY DAYS AFTER SHIPMENT OF SUCH DEFECT. EXCEPT FOR SUCH
REPLACEMENT, LOUDEYE SHALL HAVE NO FURTHER LIABILITY IN CONNECTION
WITH SUCH DEFECTIVE MATERIALS. EXCEPT AS OTHERWISE EXPRESSLY CONTAINED
HEREIN, LOUDEYE MAKES NO WARRANTY, EXPRESSED OR IMPLIED WITH RESPECT
TO THE MATERIALS OR SERVICES PROVIDED BY IT. EXCEPT AS OTHERWISE
EXPRESSLY CONTAINED HEREIN, LOUDEYE EXPRESSLY DISCLAIMS ALL WARRANTIES
EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILTY. ALL WARRANTIES WITH RESPECT TO THE SERVICE
ARE STRICTLY LIMITED TO THOSE SET FORTH HEREIN. IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL, INDIRECT,
SPECIAL OR INCIDENTAL DAMAGES EVEN IF SUCH PARTY HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.
7.3 Loudeye agrees that it maintains third party liability insurance
policies and is insured against any covered third party liability
claims arising from property damage while on the premises of Loudeye.
8 Indemnification
8.1 Except with respect to claims covered in the following section or
otherwise related to the content provided by XM to Loudeye, Loudeye
agrees to defend, protect, indemnify and hold harmless XM from and
against all third party claims of any kind resulting from (a) the
services provided by Loudeye on behalf of XM hereunder, except for any
damages arising exclusively out of any material breach of this
acknowledgment by XM, (b) any violation of any applicable federal,
state or local laws by Loudeye in the course of performing the
services on behalf of XM or (c) except for claims for which XM owes an
indemnification duty to Loudeye as provided hereunder, any claim that
the performance of the services infringes or otherwise violates any
patent, trademark, copyright, trade secret or other intellectual
property right.
8.2 XM agrees to defend, protect, indemnify and hold harmless Loudeye from
and against all third party claims of any kind resulting from any
claim that the performance of the services infringes any copyright,
including but not limited to any and all performance license rights,
mechanical license rights, synchronization
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license rights and rights under the Digital Performance Right in Sound
Recordings Act of 1995, in the sound recordings or musical
compositions that comprise the works being reproduced and encoded by
Loudeye.
8.3 The indemnification obligations under this Section are subject to the
following conditions: (a) the indemnified party shall notify the
indemnifying party in writing promptly after the indemnified party
becomes aware of a covered claim or the possibility thereof; provided,
however, that a failure to notify shall not diminish the indemnifying
party's obligations except to the extent that the indemnifying party
is materially prejudiced as a result of such failure to notify; (b)
the indemnified party shall reasonably cooperate, at the indemnifying
party's reasonable expense, in good faith in the defense of a covered
claim and the indemnifying party shall select counsel reasonably
acceptable to the indemnified party to defend such claim and all costs
of such counsel shall be borne by the indemnifying party, provided
that the indemnified party may elect to participate in any covered
claim with an attorney of its own choice and its own expense; and (c)
the indemnifying party shall have sole control of the settlement,
compromise, negotiation and defense of any covered claim, provided,
however, that neither party may settle any such claim without the
other party's prior written consent which shall not be unreasonably
withheld or delayed.
9 General Provisions
9.1 Independent Contractors. The parties are entering this Agreement as
independent contractors, and this Agreement will not be construed to
create a partnership, joint venture or employment relationship between
them. Neither party will represent itself to be an employee or agent
of the other or enter into any agreement on the other's behalf of or
in the other's name.
9.2 Compliance with other Laws. In its performance of this Agreement,
each party will comply with all applicable laws, regulations, orders
and other requirements, now or hereafter in effect, of governmental
authorities having jurisdiction. Without limiting the generality of
the foregoing, each party will pay, collect and remit such taxes as
may be imposed with respect to any compensation, royalties or
transactions under this Agreement. Except as expressly provided
herein, each party will be responsible for all costs and expenses
incurred by it in connection with the negotiation, execution and
performance of this Agreement.
9.3 Force Majeure. Neither party will be liable for, or will be
considered to be in breach of or default under this Agreement on
account of, any delay or failure to perform as required by this
Agreement as a result of any causes or conditions that are beyond such
party's reasonable control and that such party is unable to overcome
through the exercise of commercially reasonable diligence. If any
force majeure event occurs, the affected party will give prompt
written notice to the other party and will use commercially reasonable
efforts to minimize the impact of the event.
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9.4 Notices. Any notice or other communication required or permitted to
be made or given by either party pursuant to this Agreement will be in
writing, and will be deemed to have been duly given: (a) three (3)
business days after the date of mailing if sent by certified U.S.
mail, postage prepaid with return receipt requested; (b) when
transmitted if sent by facsimile, provided a confirmation of
transmission is produced by the sending machine and a copy of such
facsimile is promptly sent by another means specified in this section;
or (c) when delivered if delivered personally or sent by express
courier service. All notices shall be sent to the other party at its
address as set forth below.
To XM:
Patty Armacost
Director, Contracts
XM Satellite Radio Inc.
1500 Eckington Place NE
Washington, DC 20002-2194
To Loudeye:
Meena Kang Latta
Loudeye General Counsel
Loudeye Technologies Inc.
414 Olive Way, Suite 300
Seattle, WA 98101
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9.5 Assignment. Neither party may assign this Agreement, in whole or in
part, without the other party's prior written consent (which consent
will not be unreasonably withheld), except to (a) any corporation
resulting from any merger, consolidation or other reorganization
involving the assigning party, (b) any of its affiliates, or (c) any
individual or entity to which the assigning party may transfer
substantially all of its assets; provided that the assignee agrees in
writing to be bound by all the terms and conditions of this Agreement.
Subject to the foregoing, this Agreement will be binding on and
enforceable by the parties and their respective successors and
permitted assigns.
9.6 No Waiver; Severability. The failure of either party to enforce any
provision of this Agreement will not constitute a waiver of the
party's rights to subsequently enforce the provision. The remedies
specified in this Agreement are in addition to any other remedies that
may be available at law or in equity. If any provision of this
Agreement shall be declared by any court of competent jurisdiction to
be illegal, void or unenforceable, the remaining provisions of this
Agreement shall not be affected and shall remain in full force and
effect.
9.7 Entire Agreement. This Agreement (a) represents the entire agreement
between the parties with respect to the subject matter hereof and
supersedes any previous or contemporaneous oral or written agreements
regarding such subject matter, (b) may be amended or modified only by
a written instrument signed by a duly authorized agent of each party,
and (c) will be interpreted, construed and enforced in all respects in
accordance with the laws of New York, without reference to its choice
of law rules. Any action relating to this Agreement must be brought in
state or federal courts located in New York, and the parties
irrevocable consent to the jurisdiction of such courts.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
LOUDEYE TECHNOLOGIES, INC.
By: /s/ Martin Tobias
-------------------------------
Name: Martin Tobias
Title: Chief Executive Officer
XM SATELLITE RADIO, INC.
By: /s/ Hugh Panero
-------------------------------
Name: Hugh Panero
Title: President and Chief Executive Officer
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Exhibit A
CDs
As listed in Excel File XM_Final_CD_Order dated June 22, 2000.
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Exhibit B-1
ENCODING
Encoding specifications shall following the specifications set forth
in the following sections of the [ * :]
-------------------------------------------------------------
[ * ], [ * ]
-------------------------------------------------------------
[ * ] [ * ]
-------------------------------------------------------------
[ * ]
-------------------------------------------------------------
[ * ]
-------------------------------------------------------------
[ * ]
-------------------------------------------------------------
[ * ] [ * ]
-------------------------------------------------------------
[ * ]
-------------------------------------------------------------
Sections of the aforementioned document not specifically mentioned
above will not pertain to this contract. In particular, it is
understood by both parties that the data specifications are defined by
Exhibit B-3 of this Agreement and not by anything contained in the
aforementioned document.
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Exhibit B-3
Meta Data
Loudeye will provide XM, or entity designated by XM to receive such information
with a XML dataset consisting of [ * ] CD's on or before [ * ].
Data fields for Non-Classical titles are given by [ * ] with the exception that
the [ * ] will not be provided. Both parties understand that the [ * ] is not
[ * ]. Loudeye will provide [ * ] for each CD to XM.
Data fields for Classical titles are given by Section [ * ] with the exception
that [ * ] will not be provided. [ * ] will be responsible for adding the "LE"
extension to the Loudeye unique identifier. Classical data will be delivered
[ * ] but to be on or before [ * ].
**Track length is actual time calculated from the ripping software during the
production process.
Data fields and tables are subject to change; Loudeye will map any changes from
the UPC to the masterbarcode.
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Exhibit C
Delivery
Subject to the receipt of XM's acceptance of the Sample on or before [ * ,]
Loudeye Technologies shall deliver the following items in accordance with
the delivery schedule noted below.
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Item Quantity Delivery Date
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Meta-Data * [ * ] [ * ]
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Blue Line Demo [ * ] [ * ]
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Music Files on DLT, and [ * ] ]
Meta-data (per Exhibit A)
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Associated CDs [ * ] [ * ]
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*[ * ]CDs worth of this Meta-data [ * ] by Loudeye to the physical CD at
the time of delivery on [ * ].
All deliveries shall be [ * .] [ * ] shall be responsible for all
expenses associated with shipping, handling and insurance. Loudeye
Technologies shall use reasonable commercial efforts to encode [ * ] CDs
per [ * ], but this number may vary in any particular [ * ]; provided,
however, Loudeye Technologies shall encode an average of [ * ] CDs per
[ * ] in any given [ * ] period during the initial production run.
All deliveries shall be made to the following address:
XM Satellite Radio Inc.
1500 Eckington Place NE
Washington, DC 20002-2194
Attention: Charles Logan
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