Document:

EX-10.17.6

 

EXHIBIT 10.17.6

CONFIDENTIAL
TREATMENT REQUESTED

EXECUTION COPY

CONTENT ATTACHMENT NO. 1

TO CONTENT DISTRIBUTION ADDENDUM

TO SYNACOR MASTER SERVICES AGREEMENT

“ADELPHIA
MUSIC” BY [*]

     This Attachment No. 1 forms a part of the Content Distribution Addendum to the Synacor Master
Services Agreement dated July 13, 2004, by and between Synacor, Inc. (“Synacor”) and ACC
Operations, Inc. (“Client”), including any schedules, attachments, exhibits, addenda, amendments or
riders attached thereto (collectively, the “Agreement”) and is governed by, and subject to, the
Agreement. Any capitalized terms used in this Attachment No. 1 and not defined herein shall have
the meanings ascribed to such terms in the Agreement.

     WHEREAS, the Agreement contemplates Synacor and Client completing separate attachments to the
Content Distribution Addendum detailing specific content offerings and additional fees associated
with such offerings in the event that Client desires to include premium content on Client’s
web-site, HSI customer home page, currently known as “www.Adelphia.net” (“Client’s Web-site”); and

     WHEREAS, the Parties desire by way of this Content Attachment No. 1 to set forth the specific
content offering and pricing with respect to certain content currently known as [*]

     NOW, THEREFORE, in consideration of, and pursuant to, the Agreement, the Parties agree as
follows:

     1. Service Description and General Overview

     [*] provides a full music-on-demand subscription service that Client may offer to its
high speed Internet customers as an Adelphia-branded music service initially to be known as
“Adelphia Music” (the “Service”), with access to a constantly growing library of music (currently
over 1,000,000 tracks) from the four (4) major record labels and hundreds of independent labels.
[*] has the right to provide its service to Client and Synacor customers in the United States.
The library of music covers multiple genres, the majority of the Billboard Top 200 and exclusives
and pre-street date content, all of which is available in CD-quality audio (encoded at 128kbps).

     2. Term; Termination

     Unless terminated earlier as provided herein, the “Term” of this Content Attachment No. 1
shall consist of, collectively, the Initial Term (as defined below) and the Renewal Term (as
defined below). The “Initial Term” under which the Service shall be made available to Client
pursuant to the terms of this Content Attachment No. 1 and the Agreement shall be for a period of
twelve (12) months commencing upon the date upon which Client first makes the Service available to
subscribers via Client’s web-site. After the expiration of the Initial Term, this Content
Attachment No. 1 shall automatically renew for one (1) successive term of twelve (12) months (the
“Renewal Term”), unless this Content Attachment No. 1 is terminated earlier in accordance with the
terms hereof, or either Party provides the other Party written notice of its desire not to renew
this Content Attachment No. 1 a minimum of thirty (30) days prior to the end of the Initial Term.
Notwithstanding anything in this Content Attachment No. 1 to the contrary, either Party may, upon
giving thirty (30) days’ written notice identifying specifically the basis for such notice,
terminate this Content Attachment No. 1 for a breach of any material term or condition of this
Content Attachment No. 1 by the other Party, unless the Party receiving such notice cures such
breach within such thirty (30)-day period.

 

	 	 	 
	*	 	CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

     3. Accessing Content

     Subscribers may access the Service through the Synacor-provided Client portal. To access the
Service, subscribers must first log-in to the Client portal with their ID and password, at which
point they can access the Service without any further log-in required. Subscribers can search for,
browse and access music through an Internet Explorer browser that supports flash and Active X.

     Subscribers can also find and listen to music through editorially-created playlists and/or
radio stations, chart listings and featured content areas that are presented within the Service UI.
In addition, subscribers may search for music by album, artist, track and composer. Advanced search
capabilities allow subscribers to search by other criteria, such as date, decade or genre.
Subscribers can also browse the catalog by genre category.

     4. Playback of Content and Playback Functionality

     At
a minimum, [*] will enable tracks to be streamed for immediate listening, or to be
downloaded to a subscriber’s hard drive for play-back later while off-line in accordance with the
terms of use as defined and agreed to by the Parties. Subscribers may listen to downloaded tracks
through Windows Media Player 9.0 or higher (installed separately). Subscribers can also use their
Windows Media Player to create, manage and listen to their own individual playlists. These
playlists will continue to be accessible as long as the subscriber maintains a valid subscription
to the Service via Client’s Website. Subscribers do not need to be connected to the network to
playback previously downloaded tracks as long as their subscription to the Service via Client’s
Web-site is valid and their Digital Rights Management (“DRM”) (as defined below) license has been
updated.

     At a minimum, [*] will support playback functionality within the service user interface
that allows users to play, pause and stop streamed tracks. Subscribers can also use the user
interface to adjust volume, skip to the next track or skip back to the previous track within a
playlist for streamed music that they are listening to. Playback of downloaded tracks is through
Windows Media Player, which also provides subscribers with the ability to adjust volume, pause,
skip tracks, or repeat playback.

     5. Parental Controls

     At a minimum, [*] will maintain a list of and identify those songs and albums that have
been identified by the record industry (using the industry standard Parental Advisory sticker) as
containing music with explicit lyrics. Subscribers will have access to password protected parental
controls provided by [*] to restrict such explicit content from being displayed, downloaded or
played back within the Service.

     6. Digital Rights Management and Restrictions

     Windows Media Digital Rights Management (“DRM”) is used by [*] to ensure that songs that
are downloaded as part of a subscription are not used in a manner that violates the rights of the
copyright owner. While a subscriber has a valid subscription to the Service via Client’s web-site,
the DRM licenses are granted and individual song licenses can be renewed on-line for additional
thirty (30)-day periods. Once a subscription has been terminated or canceled, the licenses are
automatically deactivated and downloaded songs can no longer be played.

     If the track license for a song downloaded by a subscriber has expired, the subscriber must
reconnect to the Internet to revalidate the track license. The track license will be renewed as
long as the subscriber still has a valid subscription to the Service via Client’s Web-site.
Subscriber’s can access the

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	*	 	CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

Service from up to three (3) separate personal computers (“PCs”). However, they can only access the
Service from a single PC at any given time. If a subscriber has accessed the Service from the
maximum of three (3) PCs, and would like to access the Service on another PC, they can do so by
contacting Client Customer Support and having their PC count reset. Customer Service
Representatives can reset the PC count by using the Service Administration Tools.

     Subscription downloads
of songs or albums are restricted to the computer to which they were
originally downloaded. This means that they cannot be “burned” to a CD or transferred to a portable
device. (A planned new version of the [*] service will enable transfer of downloaded songs to
devices that are equipped with the appropriate Microsoft DRM technology.) If a PC is removed from
the access list via the PC count reset process, any subscription download songs stored on that PC
will no longer be playable.

     7. Customer Support

     Subscribers will be able to find answers to most questions through the online FAQ list which
is integrated into the service user interface. Tier 1 subscriber support will be provided by
Client, Tier 2 and Tier 3 technical support will be provided by Synacor, in conjunction with
[*], as necessary. This means that initial subscriber queries will be fielded by Client
support personnel. If the Client support team is unable to answer the question, it will be
forwarded to Synacor. Synacor will address the question, in consultation with [*] if
necessary. Synacor will provide a response back to the Client Customer Support contact for
communication to the pertinent subscriber.

     8. Technical Specifications and System Requirements

     All tracks are presented in Windows Media Format, encoded at 128 kbps (CD Quality Audio).

     Minimum System Requirements:

	 	•	 	Windows 98/2000/XP/ME
	 
	 	•	 	Internet Explorer 6.0 or higher
	 
	 	•	 	Windows Media Player 9.0 or higher (must be installed prior to Adelphia Music installation)
	 
	 	•	 	64 MB RAM
	 
	 	•	 	Pentium class processor
	 
	 	•	 	50 MB of hard disk space
	 
	 	•	 	Optimized for 800 x 600 resolution with 256 colors or better screen resolution
	 
	 	•	 	Adelphia High-Speed Internet connection
	 
	 	•	 	Sound card
	 
	 	•	 	Speakers or headphones

     9. Data and Reporting Requirements

     [*]

     10. Branding Requirements

     The Service shall initially be branded by Client as “Adelphia Music.”

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	*	 	CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

     11. Premium Content Bundle

     Synacor will have the right to bundle other third party content or services along with the
Service.

     12. Pricing and Payment

     The fee payable by Client to Synacor under this Content Attachment No. 1 in consideration of
the right to provide the Service to Client’s subscribers will [*], and payment terms shall be as set forth in Section 3, of Schedule A of the Agreement.
Pursuant to Section 3, of Schedule A of the Agreement, additional discounts may also apply,
depending on the cumulative level of annual billings achieved. In the event that additional
optional features or enhanced functionality (collectively, “Enhanced Features”) are developed for
the [*] service which have the potential for generating additional revenue and Client desires
to make such Enhanced Features available to its subscribers, Synacor and Client shall negotiate in
good faith with respect to apportioning any such revenue between Synacor and Client.

     Without limiting Client’s rights under Section 2 hereof to terminate this Content Attachment
No. 1 in the event of an uncured breach, if at any time during the Term the Service is interrupted
or unavailable for a period of more than [*] (a “Service Interruption”),
Synacor shall reimburse Client for credits Client provides to Service subscribers who have called
Client complaining of such Service Interruption (each, a “Refund Subscriber”), up to [*].

     13. [*]

 

* CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED  AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.

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[*]

     14. Counterparts

     This Content Attachment No. 1 may be executed in counterparts, all of which (once executed)
taken together shall constitute a single agreement, and facsimile signatures shall be effective as
if original.

     IN WITNESS WHEREOF, the Parties have executed this Content Attachment No. 1 as of the date set
forth below.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SYNACOR, INC.	 	 	 	ACC OPERATIONS, INC. (CLIENT)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Ronald Frankel
	 	 	 	By:
	 	/s/ Karl Ossentjuk	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name: RONALD FRANKEL
	 	 	 	 	 	Name: KARL OSSENTJUK	 	 	 	 	 	 
	 

	 	Title:   PRESIDENT & CEO
	 	 	 	 	 	Title:   VP Internet Services Product Mgmt	 	 	 	 	 	 
	Date:
	 	11-21-04
	 	 	 	Date:	 	11-18-04	 	 	 	 	 	 

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	*	 	CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.EX-10.17.7

 

EXHIBIT 10.17.7

CONFIDENTIAL
TREATMENT REQUESTED

EXECUTION COPY

AMENDMENT NO. 1 TO

SYNACOR [*] CONTENT NO. 1 ATTACHMENT

     This Amendment No. 1 to Synacor [*] Content Attachment No. 1 (this “Amendment No. 1”),
dated as of the 1st day of June, 2005, is by and between SYNACOR, INC. (“Synacor”) and
ACC OPERATIONS, INC. (“Client”) and amends the Content Attachment No. 1, dated November 21, 2004,
to Content Distribution Addendum to Synacor Master Services Agreement, by and between Synacor and
Client (“Content Attachment No. 1”). Capitalized terms used but not defined in this Amendment No. 1
shall have the meanings ascribed to them in Content Attachment No. 1 or the Master Services
Agreement dated July 13, 2004 by and between Synacor and Client (the “Agreement”), as applicable.

WITNESSETH:

     WHEREAS, Section 6 of Content Attachment No. 1 provides that the licenses to Client’s Users
for DRM protected music are time based; and

     WHEREAS, the Parties desire to provide for the download and permanent licensing to Users of
individual music tracks and/or albums.

     NOW, THEREFORE, in consideration of the premises and of the mutual agreements set forth below,
and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows:

1. Digital Rights Management (“DRM”). DRM is used by [*] to ensure that songs that are
downloaded are not used in a manner that violates the rights of the copyright owner. At the
time of execution of Content Attachment No. 1, the [*] DRM technology supported only
subscription-based music licenses (the “Subscription Model”), as provided in Content
Attachment No. 1. The [*] DRM now supports the purchase by Users of permanent licenses to
individual music tracks or albums which may be downloaded by Users (the “Download Model”) for
a fee and Synacor hereby agrees to make such Download Model available to Client and its Users
in connection with the Adelphia Music service.

2. Revenue Share. The Parties agree that all revenues derived from Users of Adelphia Music via
the Download Model and the costs specifically attributable to Client for providing the
Download Model to Users of Adelphia Music (limited to actual and direct costs to Synacor
assessed with respect to obtaining content from [*], additional actual and direct per
transaction charges imposed by [*] on, or passed through to, Synacor (e.g., studio, label
and publishing fees), Verisign or other third party transaction costs, and credit card
processing fees (collectively, “Costs”)) shall be aggregated and that Synacor shall share the
Net Revenues (as defined herein) [*] with Adelphia. Net revenues shall be
calculated as total gross revenues generated from Users of Adelphia Music through the Download
Model from all purchases of music tracks or albums, less (a) Client’s portion of the Costs,
(b) refunds that Synacor or Client’s agents refund to a User, and (c) charge-backs (i.e.,
charges that credit card merchants pay to a customer after the customer successfully disputes
an item on his or her credit card statement) (hereinafter “Net Revenues”).

3. Monthly Report. Beginning no later then September 1, 2005, Synacor will provide a monthly
report that details the total gross revenues and Net Revenues derived from Users of Adelphia
Music through the Download Model during the pertinent month, including a delineation of tracks
and albums purchased during such month, as well as the Costs and Client’s portion of such
Costs, refunds and charge-backs. Synacor shall provide financial information sufficient to
support the split of Net Revenues and any attendant payments to Adelphia on a monthly basis.
Notwithstanding anything in this Paragraph 3 to the contrary, Synacor shall track all of the
foregoing information at the same level of detail specified herein for transactions by Users
of

 

	 	 	 
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SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

 

Adelphia Music occurring during the months of June, July and August 2005, which information
shall be included in the first monthly report to be provided by September 1, 2005, and Client
shall receive its share of the revenue for such months accordingly. Client shall have the
right to inspect and audit Synacor’s books and records relating to the foregoing pursuant to
Section 11 of the Agreement.

4. Pricing. Client and Synacor agree that the initial charge to Users of Adelphia Music for
downloads of individual tracks under the Download Model will be [*] for albums.
Any revisions to pricing will be mutually determined.

5. Effectiveness. Except as specifically amended hereby, the Agreement and Content Attachment
No. 1 shall continue in full force and effect in accordance with the provisions thereof as in
existence on the date hereof. If any provision of this Amendment No. 1 conflicts with any
provision of the Agreement or Content Attachment No. 1, the provisions of this Amendment No. 1
shall control.

     IN WITNESS WHEREOF, the parties have executed this Amendment No. 1, effective as of the date
first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SYNACOR, INC.	 	 	 	ACC OPERATIONS, INC.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ George Chamoun
	 	 
	 	By:
	 	/s/ Nancy McGee	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name: George Chamoun
	 	 	 	 	 	Name: NANCY MCGEE	 	 	 	 	 	 
	 

	 	Title:   SVP
	 	 	 	 	 	Title:   SVP MARKETING	 	 	 	 	 	 
	Date:

	 	6/9/2005	 	 	 	 	 	 	 	 	 	 	 	 

 

* CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED  AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.

2

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