Document:

Exhibit 4.4

 

 

POLYCOM,
INC.

EMPLOYEE STOCK PURCHASE PLAN

 

(As Amended Through May 21,
2002)

 

 

              I.                PURPOSE OF THE PLAN

 

                                This
Employee Stock Purchase Plan is intended to promote the interests of Polycom,
Inc. by providing eligible employees with the opportunity to acquire a
proprietary interest in the Corporation through participation in a
payroll-deduction based employee stock purchase plan designed to qualify under
Section 423 of the Code.

 

                                Capitalized
terms herein shall have the meanings assigned to such terms in the attached
Appendix.

 

            II.                ADMINISTRATION OF THE PLAN

 

                                The
Plan Administrator shall have full authority to interpret and construe any
provision of the Plan and to adopt such rules and regulations for administering
the Plan as it may deem necessary in order to comply with the requirements of
Code Section 423.  Decisions of the Plan
Administrator shall be final and binding on all parties having an interest in
the Plan.

 

           III.                STOCK SUBJECT TO PLAN

 

                                A.            The stock purchasable under the Plan
shall be shares of authorized but unissued or reacquired Common Stock,
including shares of Common Stock purchased on the open market.  The maximum number of shares of Common Stock
which may be issued over the term of the Plan shall not exceed Two Million Five
Hundred Thousand (2,500,000) shares.

 

                                B.            Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation’s receipt of
consideration, appropriate adjustments shall be made to (i) the maximum number
and class of securities issuable under the Plan, (ii) the maximum number and
class of securities purchasable per Participant on any one Purchase Date and
(iii) the number and class of securities and the price per share in effect
under each outstanding purchase right in order to prevent the dilution or
enlargement of benefits thereunder.

 

 

           IV.                OFFERING PERIODS

 

                                A.            Shares
of Common Stock shall be offered for purchase under the Plan through a series
of successive offering periods until such time as (i) the maximum number of
shares of Common Stock available for issuance under the Plan shall have been
purchased or (ii) the Plan shall have been sooner terminated.

 

                                B.            Each offering period shall be of
such duration (not to exceed twenty-four (24) months) as determined by the Plan
Administrator prior to the start date. 
However, the initial offering period shall commence at the Effective Time
and terminate on the last business day in January 1998.  The next offering period shall commence on
the first business day in February 1998, and subsequent offering periods shall
commence as designated by the Plan Administrator.

 

                                C.            Each offering period shall be
comprised of a series of one or more successive Purchase Intervals.  Purchase Intervals shall run from the first
business day in February each year to the last business day in July of the same
year and from the first business day in August each year to the last business
day in January of the following year. 
However, the first Purchase Interval in effect under the initial
offering period shall commence at the Effective Time and terminate on the last
business day in January 1997.

 

            V.                ELIGIBILITY

 

                                A.            Each individual who is an Eligible
Employee on the start date of any offering period under the Plan may enter that
offering period on such start date or on any subsequent Quarterly Entry Date
within that offering period, provided he or she remains an Eligible Employee.

 

                                B.            Each individual who first becomes an
Eligible Employee after the start date of an offering period may enter that
offering period on any subsequent Quarterly Entry Date within that offering
period on which he or she is an Eligible Employee.

 

                                C.            The date an individual enters an
offering period shall be designated his or her Entry Date for purposes of that
offering period.

 

                                D.            To participate in the Plan for a
particular offering period, the Eligible Employee must complete the enrollment
forms prescribed by the Plan Administrator (including a stock purchase
agreement and a payroll deduction authorization) and file such forms with the
Plan Administrator (or its designate) on or before his or her scheduled Entry
Date.

 

           VI.                PAYROLL DEDUCTIONS

 

                                A.            The payroll deduction authorized by
the Participant for purposes of acquiring shares of Common Stock during an
offering period may be any multiple of one percent (1%) of the Cash
Compensation paid to the Participant during each Purchase Interval within that 

 

2

 

offering period, up to a maximum of fifteen percent
(15%).  The deduction rate so authorized
shall continue in effect throughout the offering period, except to the extent
such rate is changed in accordance with the following guidelines:

 

                                                                                            (i)                The Participant may, at any time
during the offering period, reduce his or her rate of payroll deduction to
become effective as soon as possible after filing the appropriate form with the
Plan Administrator.  The Participant may
not, however, effect more than one (1) such reduction per Purchase Interval.

 

                                                                                           (ii)                The Participant may, prior to
the commencement of any new Purchase Interval within the offering period,
increase the rate of his or her payroll deduction by filing the appropriate
form with the Plan Administrator.  The
new rate (which may not exceed the fifteen percent (15%) maximum) shall become
effective as of the start date of the first Purchase Interval following the
filing of such form.

 

                                B.            Payroll deductions shall begin on
the first pay day following the Participant’s Entry Date into the offering
period and shall (unless sooner terminated by the Participant) continue through
the pay day ending with or immediately prior to the last day of that offering
period.  The amounts so collected shall
be credited to the Participant’s book account under the Plan, but no interest
shall be paid on the balance from time to time outstanding in such account.  The amounts collected from the Participant
shall not be held in any segregated account or trust fund and may be commingled
with the general assets of the Corporation and used for general corporate
purposes.

 

                                C.            Payroll deductions shall
automatically cease upon the termination of the Participant’s purchase right in
accordance with the provisions of the Plan.

 

                                D.            The Participant’s acquisition of
Common Stock under the Plan on any Purchase Date shall neither limit nor
require the Participant’s acquisition of Common Stock on any subsequent Purchase
Date, whether within the same or a different offering period.

 

          VII.               PURCHASE RIGHTS

 

                                A.            Grant
of Purchase Right.  A
Participant shall be granted a separate purchase right for each offering period
in which he or she participates.  The
purchase right shall be granted on the Participant’s Entry Date into the
offering period and shall provide the Participant with the right to purchase
shares of Common Stock, in a series of successive installments over the
remainder of such offering period, upon the terms set forth below.  The Participant shall execute a stock
purchase agreement embodying such terms and such other provisions (not
inconsistent with the Plan) as the Plan Administrator may deem advisable.

 

                                Under
no circumstances shall purchase rights be granted under the Plan to any
Eligible Employee if such individual would, immediately after the grant, own
(within the meaning of Code Section 424(d)) or hold outstanding options or
other rights to purchase, stock possessing 

 

3

 

five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Corporation or any Corporate
Affiliate.

 

                                B.            Exercise
of the Purchase Right. 
Each purchase right shall be automatically exercised in installments on
each successive Purchase Date within the offering period, and shares of Common
Stock shall accordingly be purchased on behalf of each Participant (other than
Participants whose payroll deductions have previously been refunded pursuant to
the Termination of Purchase Right provisions below) on each such Purchase
Date.  The purchase shall be effected by
applying the Participant’s payroll deductions for the Purchase Interval ending
on such Purchase Date to the purchase of whole shares of Common Stock at the
purchase price in effect for the Participant for that Purchase Date.

 

                                C.            Purchase
Price.  The purchase
price per share at which Common Stock will be purchased on the Participant’s
behalf on each Purchase Date within the offering period shall not be less than
eighty-five percent (85%) of the lower of (i) the Fair Market Value per
share of Common Stock on the Participant’s Entry Date into that offering period
or (ii) the Fair Market Value per share of Common Stock on that Purchase
Date.  However, for each Participant
whose Entry Date is other than the start date of the offering period, the
clause (i) amount shall in no event be less than the Fair Market Value per
share of Common Stock on the start date of that offering period.

 

                                D.            Number
of Purchasable Shares. 
The number of shares of Common Stock purchasable by a Participant on
each Purchase Date during the offering period shall be the number of whole
shares obtained by dividing the amount collected from the Participant through
payroll deductions during the Purchase Interval ending with that Purchase Date
by the purchase price in effect for the Participant for that Purchase
Date.  However, the maximum number of
shares of Common Stock purchasable per Participant on any one Purchase Date
shall not exceed One Thousand Five Hundred (1,500) shares, subject to periodic
adjustments in the event of certain changes in the Corporation’s
capitalization.

 

                                E.             Excess
Payroll Deductions.  Any
payroll deductions not applied to the 
purchase of shares of Common Stock on any Purchase Date because they are
not sufficient to purchase a whole share of Common Stock shall be held for the
purchase of Common Stock on the next Purchase Date.  However, any payroll deductions not applied to the purchase of
Common Stock by reason of the limitation on the maximum number of shares
purchasable by the Participant on the Purchase Date shall be promptly refunded.

 

                                F.             Termination
of Purchase Right.  The
following provisions shall govern the termination of outstanding purchase
rights:

 

                                                                                            (i)                A Participant may, at any time
prior to the next scheduled Purchase Date in the offering period, terminate his
or her outstanding purchase right by filing the appropriate form with the Plan
Administrator (or its designate), and no further payroll deductions shall be
collected from the Participant with respect to the terminated purchase
right.  Any payroll deductions collected

 

4

 

during the Purchase Interval in which such
termination occurs shall, at the Participant’s election, be immediately
refunded or held for the purchase of shares on the next Purchase Date.  If no such election is made at the time such
purchase right is terminated, then the payroll deductions collected with
respect to the terminated right shall be refunded as soon as possible.

 

                                                                                           (ii)                The termination of such purchase
right shall be irrevocable, and the Participant may not subsequently rejoin the
offering period for which the terminated purchase right was granted.  In order to resume participation in any
subsequent offering period, such individual must re-enroll in the Plan (by
making a timely filing of the prescribed enrollment forms) on or before his or
her scheduled Entry Date into that offering period.

 

                                                                                          (iii)                Should the Participant cease to
remain an Eligible Employee for any reason (including death, disability or
change in status) while his or her purchase right remains outstanding, then
that purchase right shall immediately terminate, and all of the Participant’s
payroll deductions for the Purchase Interval in which the purchase right so
terminates shall be immediately refunded. 
However, should the Participant cease to remain in active service by
reason of an approved unpaid leave of absence, then the Participant shall have
the right, exercisable up until the last business day of the Purchase Interval
in which such leave commences, to (a) withdraw all the payroll deductions
collected to date on his or her behalf for that Purchase Interval or (b) have
such funds held for the purchase of shares on his or her behalf on the next
scheduled Purchase Date.  In no event,
however, shall any further payroll deductions be collected on the Participant’s
behalf during such leave.  Upon the
Participant’s return to active service, his or her payroll deductions under the
Plan shall automatically resume at the rate in effect at the time the leave
began, unless the Participant withdraws from the Plan prior to his or her
return.

 

                                G.            Corporate
Transaction.  Each
outstanding purchase right shall automatically be exercised, immediately prior
to the effective date of any Corporate Transaction, by applying the payroll
deductions of each Participant for the Purchase Interval in which such
Corporate Transaction occurs to the purchase of whole shares of Common Stock at
a purchase price per share not less than eighty-five percent (85%) of the lower
of (i) the Fair Market Value per share of Common Stock on the Participant’s
Entry Date into the offering period in which such Corporate Transaction occurs
or (ii) the Fair Market Value per share of Common Stock immediately prior to
the effective date of such Corporate Transaction.  However, the applicable limitation on the number of shares of
Common Stock purchasable per Participant shall continue to apply to any such
purchase, and the clause (i) amount above shall not, for any Participant whose
Entry Date for the offering period is other than the start date of that
offering period, be less than the Fair Market Value per share of Common Stock
on that start date.

 

                                The
Corporation shall use its best efforts to provide at least ten (10)-days prior
written notice of the occurrence of any Corporate Transaction, and Participants
shall, following the receipt of such notice, have the right to terminate their
outstanding purchase rights prior to the 

 

5

 

effective date of the Corporate Transaction.

 

                                H.            Proration
of Purchase Rights. 
Should the total number of shares of Common Stock to be purchased
pursuant to outstanding purchase rights on any particular date exceed the
number of shares then available for issuance under the Plan, the Plan
Administrator shall make a pro-rata allocation of the available shares on a
uniform and nondiscriminatory basis, and the payroll deductions of each
Participant, to the extent in excess of the aggregate purchase price payable
for the Common Stock pro-rated to such individual, shall be refunded.

 

                                I.              Assignability.  The purchase right shall be exercisable only
by the Participant and shall not be assignable or transferable by the
Participant.

 

                                J.             Stockholder
Rights.  A Participant
shall have no stockholder rights with respect to the shares subject to his or
her outstanding purchase right until the shares are purchased on the Participant’s
behalf in accordance with the provisions of the Plan and the Participant has
become a holder of record of the purchased shares.

 

         VIII.               ACCRUAL LIMITATIONS

 

                                A.            No Participant shall be entitled to
accrue rights to acquire Common Stock pursuant to any purchase right
outstanding under this Plan if and to the extent such accrual, when aggregated
with (i) rights to purchase Common Stock accrued under any other purchase right
granted under this Plan and (ii) similar rights accrued under other employee
stock purchase plans (within the meaning of Code Section 423) of the
Corporation or any Corporate Affiliate, would otherwise permit such Participant
to purchase more than Twenty-Five Thousand Dollars ($25,000) worth of stock of
the Corporation or any Corporate Affiliate (determined on the basis of the Fair
Market Value per share on the date or dates such rights are granted) for each
calendar year such rights are at any time outstanding.

 

                                B.            For purposes of applying such
accrual limitations to the purchase rights granted under the Plan, the
following provisions shall be in effect:

 

                                                                                            (i)                The right to acquire Common
Stock under each outstanding purchase right shall accrue in a series of
installments on each successive Purchase Date during the offering period on
which such right remains outstanding.

 

                                                                                           (ii)                No right to acquire Common Stock
under any outstanding purchase right shall accrue to the extent the Participant
has already accrued in the same calendar year the right to acquire Common Stock
under one (1) or more other purchase rights at a rate equal to Twenty-Five
Thousand Dollars ($25,000) worth of Common Stock (determined on the basis of
the Fair Market Value per share on the date or dates of grant) for each
calendar year such rights were at any time outstanding.

 

                                C.            If by reason of such accrual
limitations, any purchase right of a Participant 

 

6

 

does not accrue for a particular Purchase Interval, then
the payroll deductions which the Participant made during that Purchase Interval
with respect to such purchase right shall be promptly refunded.

 

                                D.            In the event there is any conflict
between the provisions of this Article and one or more provisions of the
Plan or any instrument issued thereunder, the provisions of this
Article shall be controlling.

 

            IX.               EFFECTIVE DATE AND TERM OF THE
PLAN

 

                                A.            The Plan was adopted by the Board on
March 5, 1996 and shall become effective at the Effective Time, provided
no purchase rights granted under the Plan shall be exercised, and no shares of
Common Stock shall be issued hereunder, until (i) the Plan shall have been
approved by the stockholders of the Corporation and (ii) the Corporation
shall have complied with all applicable requirements of the 1933 Act (including
the registration of the shares of Common Stock issuable under the Plan on a
Form S-8 registration statement filed with the Securities and Exchange
Commission), all applicable listing requirements of any stock exchange (or the
Nasdaq National Market, if applicable) on which the Common Stock is listed for
trading and all other applicable requirements established by law or
regulation.  In the event such
stockholder approval is not obtained, or such compliance is not effected,
within twelve (12) months after the date on which the Plan is adopted by the
Board, the Plan shall terminate and have no further force or effect and all
sums collected from Participants during the initial offering period hereunder
shall be refunded.

 

                                B.            Unless sooner terminated by the
Board, the Plan shall terminate upon the earliest of (i) the last
business day in February 2006, (ii) the date on which all shares available for
issuance under the Plan shall have been sold pursuant to purchase rights
exercised under the Plan or (iii) the date on which all purchase rights are
exercised in connection with a Corporate Transaction.  No further purchase rights shall be granted or exercised, and no
further payroll deductions shall be collected, under the Plan following such
termination.

 

             X.               AMENDMENT OF THE PLAN

 

                                The Board may alter, amend, suspend
or discontinue the Plan at any time to become effective immediately following
the close of any Purchase Interval. 
However, the Board may not, without the approval of the Corporation’s
stockholders, (i) materially increase the number of shares of Common Stock
issuable under the Plan or the maximum number of shares purchasable per
Participant on any one Purchase Date, except for permissible adjustments in the
event of certain changes in the Corporation’s capitalization, (ii) alter the
purchase price formula so as to reduce the purchase price payable for the
shares of Common Stock purchasable under the Plan or (iii) materially increase
the benefits accruing to Participants under the Plan or materially modify the
requirements for eligibility to participate in the Plan.

 

                XI.           GENERAL PROVISIONS

 

                                A.            All costs and expenses incurred in
the administration of the Plan shall be 

 

7

 

paid by the Corporation.

 

                                B.            Nothing in the Plan shall confer
upon the Participant any right to continue in the employ of the Corporation or
any Corporate Affiliate for any period of specific duration or interfere with
or otherwise restrict in any way the rights of the Corporation (or any
Corporate Affiliate employing such person) or of the Participant, which rights
are hereby expressly reserved by each, to terminate such person’s
employment  at any time for any reason,
with or without cause.

 

                                C.            The provisions of the Plan shall be
governed by the laws of the State of California without resort to that State’s
conflict-of-laws rules.

 

 

 

 

 

 

 

 

 

 

 

 

8

Schedule A

 

Corporations Participating in

Employee Stock Purchase Plan

As of the Effective Time

 

 

Polycom,
Inc.

 

 

SA-1

 

APPENDIX

 

                                The
following definitions shall be in effect under the Plan:

 

                                A.            Cash Compensation shall mean the (i) regular base salary paid to a Participant by one or
more Participating Companies during such individual’s period of participation
in one or more offering periods under the Plan, plus (ii) any pre-tax
contributions made by the Participant to any Code Section 401(k) salary
deferral plan or any Code Section 125 cafeteria benefit program now or
hereafter established by the Corporation or any Corporate Affiliate, plus (iii)
all of the following amounts to the extent paid in cash: overtime payments,
bonuses, commissions, profit-sharing distributions and other incentive-type
payments.  However, Eligible Earnings
shall not include any
contributions (other than Code Section 401(k) or Code Section 125
contributions) made on the Participant’s behalf by the Corporation or any
Corporate Affiliate to any deferred compensation plan or welfare benefit
program now or hereafter established.

 

                                B.            Board shall mean the Corporation’s Board of Directors.

 

                                C.            Code shall mean the Internal Revenue Code of 1986, as amended.

 

                                D.            Common Stock shall mean the Corporation’s common stock.

 

                                E.             Corporate Affiliate shall mean any parent or subsidiary corporation of the Corporation (as
determined in accordance with Code Section 424), whether now existing or
subsequently established.

 

                                F.             Corporate Transaction shall mean either of the following stockholder-approved transactions
to which the Corporation is a party:

 

                                                                            (i)                a merger or consolidation in
which securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation’s outstanding securities are transferred to a
person or persons different from the persons holding those securities
immediately prior to such transaction, or

 

                                                                           (ii)                the sale, transfer or other
disposition of all or substantially all of the assets of the Corporation in
complete liquidation or dissolution of the Corporation.

 

                                G.            Corporation shall mean Polycom, Inc., a Delaware corporation, and any corporate
successor to all or substantially all of the assets or voting stock of Polycom,
Inc. which shall by appropriate action adopt the Plan.

 

                                H.            Effective Time shall mean the time at which the Underwriting Agreement is executed
and finally priced.  Any Corporate
Affiliate which becomes a Participating Corporation after such Effective Time
shall designate a subsequent Effective Time with respect to its
employee-Participants.

 

 

A-1

 

                                I.              Eligible Employee shall mean any person who is employed by a Participating Corporation
on a basis under which he or she is rendering services for earnings considered
wages under Code Section 3401(a).

 

                                J.             Entry Date shall mean the date an Eligible Employee first commences
participation  in the offering period in
effect under the Plan.  The earliest
Entry Date under the Plan shall be the Effective Time.

 

                                K.            Fair Market Value per share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:

 

                                                                            (i)                If the Common Stock is at the
time traded on the Nasdaq National Market, then the Fair Market Value shall be
the closing selling price per share of Common Stock on the date in question, as
such price is reported by the National Association of Securities Dealers on the
Nasdaq National Market or any successor system.  If there is no closing selling price for the Common Stock on the
date in question, then the Fair Market Value shall be the closing selling price
on the last preceding date for which such quotation exists.

 

                                                                           (ii)                If the Common Stock is at the
time listed on any Stock Exchange, then the Fair Market Value shall be the
closing selling price per share of Common Stock on the date in question on the
Stock Exchange determined by the Plan Administrator to be the primary market
for the Common Stock, as such price is officially quoted in the composite tape
of transactions on such exchange.  If
there is no closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.

 

                                                                          (iii)                For purposes of the initial
offering period which begins at the Effective Time, the Fair Market Value shall
be deemed to be equal to the price per share at which the Common Stock is sold
in the initial public offering pursuant to the Underwriting Agreement.

 

                                L.            1933 Act shall mean the Securities Act of 1933, as amended.

 

                                M.           Quarterly Entry Date shall mean the first business day in February, May, August and
November each year on which an Eligible Employee may first enter an offering
period.

 

                                N.            Participant shall mean any Eligible Employee of a Participating Corporation who is
actively participating in the Plan.

 

                                O.            Participating Corporation shall mean the Corporation and such Corporate Affiliate or Affiliates
as may be authorized from time to time by the Board to extend the benefits of
the Plan to their Eligible Employees. 
The Participating Corporations in the Plan as of the Effective Time are
listed in attached Schedule A.

 

 

A-2

 

                                P.            Plan shall mean the Corporation’s Employee Stock Purchase Plan, as set
forth in this document.

 

                                Q.            Plan Administrator shall mean the committee of two (2) or more Board members appointed by
the Board to administer the Plan.

 

                                R.            Purchase Date shall mean the last business day of each Purchase Interval.  The initial Purchase Date shall be
January 31, 1997.

 

                                S.            Purchase Interval shall mean each successive six (6)-month period within the offering
period at the end of which there shall be purchased shares of Common Stock on
behalf of each Participant.

 

                                T.            Stock Exchange shall mean either the American Stock Exchange or the New York Stock
Exchange.

 

                                U.            Underwriting Agreement shall mean the agreement between the Corporation and the underwriter
or underwriters managing the initial public offering of the Common Stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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CONFIDENTIAL PORTIONS OMITTED  

 
  Exhibit 10.17    
  

*    CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SEC.  

        This agreement (sometimes referred to as the "Content Integration Agreement") is made as of February 27, 2002 ("Effective
Date"), by and between CenterSpan Communications Corp., 7175 NW Evergreen Parkway, Suite 400 Hillsboro, Oregon 97124 (hereinafter "Subscription Service
Agent", "CenterSpan" or "you") and Sony Music, a Group of Sony Music
Entertainment Inc., 550 Madison Avenue, New York, New York 10022-3211 (hereinafter "Sony",
"we" or "us"). 

        WHEREAS
Sony is in the business of, inter alia, developing, producing, marketing, promoting, distributing and otherwise exploiting
recorded music; 

        WHEREAS
Subscription Service Agent would like to integrate, inter alia, the Sony Materials, along with Recordings embodying the featured
musical performances of musical recording artists that are not Sony Artists and other graphic, textual and multimedia materials, into the Service; 

        WHEREAS
Sony would like to, inter alia, sell Streams and Conditional Downloads of Sony Cleared Recordings to consumers via the Service; 

        WHEREAS
Subscription Service Agent desires to act as Sony's agent in connection with the sale of Streams and Conditional Downloads of the Sony Cleared Recordings to consumers via the
Service; 

        WHEREAS
Sony desires to appoint Subscription Service Agent as Sony's agent on the terms and conditions set forth in this Content Integration Agreement; 

        NOW,
THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 

1.    DEFINITIONS  

        1.01.    "Above the Fold" shall mean situated within the portion of a Web Page that is designed to be visible to
end users on a standard computer screen with a resolution of 800 pixels by 600 pixels without requiring such end users to scroll horizontally or vertically through the Web Page concerned. 

        1.01.1.    "Adjusted Gross Revenue" shall have the meaning assigned to such term in section 6.03(b)(12)
below. 

        1.02.    "Advance" shall mean a prepayment of Service Fees (as defined in subparagraph 6.03(a) below), including
for the avoidance of doubt and without limitation, the Execution Advances and the Anniversary Advances (together, the "Syndication Advances") payable
pursuant to Schedule A attached hereto. Subscription Service Agent may recoup Advances solely from Service Fees to be paid or accrued to or on behalf of Sony pursuant to this Content
Integration Agreement. Except as and to the extent, if at all, expressly provided elsewhere herein, Advances paid under this Content Integration Agreement shall not be returnable to Subscription
Service Agent or any other Person. 

        1.02.1.    "Advertisements" shall have the meaning assigned to such term in section 6.03(b)(1) below. 

        1.02.2.    "Affiliate" shall mean, with respect to any specified Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or is under common ownership or control with, or is owned or controlled by, such specified Person. As used in this
definition, the term "control" (including the terms "controlling", "controlled by" and "under common control with") of a Person means the ownership of at least fifty percent (50%) of the equity of
such other Person. 

1

 

        1.03.    "Agent Servers" hall mean the computer servers located in the Territory utilized by the Subscription
Service Agent in connection with the Service, including, for the avoidance of doubt, such computer servers that are so-called "seeding peers". 

        1.04.    "Aggregate Information" shall mean such information concerning the usage habits, patterns and/or
demographic classification of End Users as a group without specifying the identity of any individual End Users, to the extent such information is compiled by or made available to CenterSpan. Aggregate
Information shall include such items and categories of such information as CenterSpan and Sony shall mutually determine in good faith from time-to-time during the Term. For the
avoidance of doubt, examples of items and categories of information that may constitute "Aggregate Information" may include information regarding an End User's postal code, connection speed, ISP,
household income and use of Recordings on the Service. 

        1.04.1.    (a)
"Album" shall mean one (1) or more audio-only Records, at least forty
(40) minutes in playing time and embodying at least eight (8) different musical compositions sold by Sony in a single package for sale through normal retail channels (as that term is
commonly used in the U.S. phonograph record industry). (b) "Single"—a vinyl audio-only Record not more than seven
(7) inches in diameter, or the equivalent in non-vinyl configurations. (c) "Twelve-inch Single"—an
audio-only Record which contains not more than three (3) Sides of different Compositions. (d) "Extended Play Record" or
"EP"—an audio-only Record which contains four (4) or more Sides of different Compositions but does not constitute an
Album. 

        1.04.2.    "Applicable Percentage" shall have the meaning assigned to such term in section 6.03(b)(11). 

        1.05.    "Approved Electronic Device" shall mean an Electronic Device approved by Sony in writing in advance in
each instance for use in connection with the delivery of Sony Materials to End Users via the Service. As of the date hereof, the following Electronic Devices are deemed Approved Electronic Devices:
(i) personal computers that are capable of receiving, storing, playing and protecting Sony Materials in accordance with and subject to the terms and conditions of this Content Integration
Agreement (including, for the avoidance of doubt, accurately storing the Sony Materials concerned according to durational limits measured by a so-called "secure clock" (as such term is
understood in the U.S. electronic commerce industry) and accurately counting Streams and Playbacks via a so-called "secure counter" (as such term is understood in the U.S. electronic
commerce industry) and reporting the number of performances of each Recording to the extent necessary to prepare Service Fee Reports and otherwise comply with the Subscription Service Agent's
reporting obligations hereunder) and that can connect to the Internet but do not have Prohibited Digital Outputs; (ii) hand-held wireless devices that are Permitted Portable Devices
and are capable of receiving, storing, playing and protecting Sony Materials in accordance with and subject to the terms and conditions of this Content Integration Agreement (including, for the
avoidance of doubt, accurately storing the Sony Materials concerned
according to durational limits measured by a so-called "secure clock" (as such term is understood in the U.S. electronic commerce industry) and accurately counting Streams and Playbacks
via a so-called "secure counter" (as such term is understood in the U.S. electronic commerce industry) and reporting the number of performances of each Recording to the extent necessary to
prepare Service Fee Reports and otherwise comply with the Subscription Service Agent's reporting obligations hereunder) and can connect to the Internet but do not have Prohibited Digital Outputs; and
(iii) so called "set top boxes" that are capable of receiving, storing, playing and protecting Sony Materials in accordance with and subject to the terms and conditions of this Content
Integration Agreement (including, for the avoidance of doubt, accurately storing the Sony Materials concerned according to durational limits measured by a so-called "secure clock" (as such
term is understood in the U.S. electronic commerce industry) and accurately counting Streams and Playbacks via a so-called "secure counter" (as such term is understood in the U.S.
electronic commerce industry) and reporting the number of performances of each Recording to the extent necessary to prepare Service Fee Reports and otherwise comply with the 

2

 

Subscription Service Agent's reporting obligations hereunder) and that can connect to the Internet but do not have Prohibited Digital Outputs. 

        1.06.    "Approved Playback Format" shall have the meaning assigned to such term in
section 5.01(a)(ii) below. 

        1.06.1.    "Approved Streaming Format" shall have the meaning assigned to such term in
section 5.01(a)(i) below. 

        1.07.    "Approved Media Player" shall have the meaning assigned to such term in section 5.06(b)(3) below. 

        1.08.    "Approved Security Features" shall have the meaning assigned to such term in subparagraph 5.01(b) below. 

        1.09.    "Bounties" shall have the meaning assigned to such term in section 6.03(b)(2) below. 

        1.10.    "Buy Link" shall mean an active Link on the Service Site or Syndication Agent Site, as the case may be,
which links such Service Site to a Web Site created, maintained and hosted by an authorized reseller of Phonograph Records in the United States or Canada, as the case may be, that processes and
fulfills mail order sales of the Phonograph Records embodying Recordings that are Streamed or Conditionally Downloaded to End Users in the United States or Canada, as the case may be. 

        1.11.    "Canadian Authorized Recordings" shall mean those audio-only, stereo Recordings:
(i) that are embodied on Albums, Singles and EPs released by Sony's principal Licensee in Canada for the
distribution of Phonograph Records in Canada for distribution through normal retail channels (as that term is understood in the U.S. Phonograph Record industry) in Canada and are listed in such
Licensee's then most recent active Canadian product catalog (i.e. the product catalog currently known as the "Sony Music Canada Catalogue"), as such catalog is updated from time to time
throughout the Term; and (ii) in respect of which the sound recording public performance and sound recording reproduction rights have been obtained under the copyright laws of Canada and such
Licensee's recording and other applicable rights acquisition agreement(s), as applicable; and (iii) which are not otherwise excluded under paragraph 3.03 or section 4.03(e)(2)
below. 

        1.11.1.    "Canadian Cleared Recordings" shall mean those audio-only, stereo Recordings:
(i) that are Canadian Authorized Recordings; and (ii) in respect of all Publishing Rights have been obtained. For the avoidance of doubt, Canadian Cleared Recordings shall only be
accessible by Canadian End Users. 

        1.11.2.    "Canadian End User" shall mean, at any particular time, any Person who (i) has registered with
Subscription Service Agent a valid billing address that is in Canada, (ii) either (A) subscribes to the Service either through the Subscription Service Agent or a Syndication Agent and
uses the Service solely for personal, non-commercial use or (B) is otherwise eligible to subscribe to the Service but is given access to the Service either through Subscription
Service Agent or a Syndication Agent for a limited, free-trial membership, (iii) has registered for and been assigned by you a User Account, (iv) has been assigned a unique
password by Subscription Service Agent in respect of each User Account which must be correctly entered prior to the commencement of any period during which such Person is permitted to access the
Service (i.e., Persons that do not have such a unique password cannot access the Service) and (v) remains in good standing pursuant to the Service's terms of service and privacy policy. 

        1.11.2.    "Canadian Street Date" shall have the meaning assigned to such term in subsection
3.03(c)(1)(ii) below. 

3

 

        1.12.    "Change of Control" shall mean the occurrence of any of the following events: 

        (a)  The
adoption of a plan relating to the liquidation or dissolution of Subscription Service Agent. 

        (b)  A
Triggering Person or an Affiliate of a Triggering Person, acting either alone or as part of a "group" (as defined in Rules 13d-3 and
13d-5 under the Securities and Exchange Act of 1934), directly or indirectly: (1) becomes the beneficial owner of [ * * *
]* or more of the voting power of the capital stock of Subscription Service Agent (provided, however, (x) if the Triggering Person or Affiliate of such
Triggering Person is a Record Label, then [ * * * ]* of such voting power, and (y) if more than one (1) Triggering
Person (or Affiliates thereof) are Record Labels, then [ * * * ]* of such voting power by such
Record Labels in the aggregate), or (2) obtains the right or ability by voting power, contract or
otherwise, to elect or designate for election any one or more members of the board of directors of Subscription Service Agent. 

        1.12.1.    "Composition" shall mean (i) a single musical composition, irrespective of length, including all
spoken words and bridging passages, or (ii) a spoken word or dramatic work (or portion thereof), irrespective of length, that is thematically related and embodied by Sony in an Album as a
separate so-called "track" (as that term is understood in the United States Phonograph Record industry). 

        1.13.    "Conditional Download" shall mean a digital file containing a digitized copy of a Sony Cleared Recording
that is accessed by an End User from the Service that is subject to the following limitations and restrictions: (i) the digital copy resulting from such Download may reside solely on the hard
drive of one (1) Approved Electronic Device owned or controlled exclusively by the End User that has requested the digital file concerned, either directly or indirectly, and cannot be
retransmitted, moved or otherwise copied to any other computer hard drive or other digital storage device by any Person, including, without limitation, any portable device; (ii) the digital
copy will automatically be permanently disabled and/or permanently erased from such hard drive of such End User's Approved Electronic Device (as applicable) upon the expiration or termination of the
End User's subscription to the Service; (iii) the digital copy will automatically be permanently disabled and/or permanently erased from the hard drives of the Approved Electronic Devices of
all End Users immediately upon the termination or expiration of the Term or upon the occurrence of an event hereunder that excludes the Sony Cleared Recording in question from the scope of the Grant
of Rights; (iv) the digital copy will be encoded with a digital rights management specification that (A) complies in all respects with the provisions of Article 5 below, and
(B) complies with any other limitations or restrictions which may be provided for pursuant to this Content Integration Agreement, or otherwise agreed to between the parties hereto. For the
avoidance of doubt, a digital file containing a digitized copy of a Sony Cleared Recording shall not fail to qualify as a Conditional Download by reason, alone, that an End User can create an analog
copy thereof by utilizing an analog audio output jack resident on the Approved Electronic Device concerned. 

        1.14.    "Conditionally Download" shall mean the act or process of receiving a Conditional Download. 

        1.14.1    "Data Network Syndication Agent" shall mean: (i) a Syndication Agent that is actually engaged in
the business of selling or otherwise supplying Internet connectivity services in a non-de-minimus capacity (e.g., by merely displaying advertisements) (i.e., a
so-called "Internet service provider" or "ISP") or connectivity or access to any private data network, in whole or in part; (ii) a Syndication Agent that is actually engaged in the
business of selling or otherwise supplying cellular telephone, satellite telephone, ISDN, or POTS (i.e., "plain old telephone service") services in a non-de-minimus
capacity (e.g., by merely displaying advertisements) or access thereto, in whole or in part; (iii) a Syndication Agent that is actually engaged in the business of selling or otherwise supplying
access to cable television (or cable modem networked electronic data) distribution systems, including 

4

 

any so-called "multiple system operator" (i.e., a so-called "MSO") in a non-de-minimus capacity (e.g., by merely displaying advertisements), in
whole or in part; and (iv) a Syndication Agent that is actually engaged in selling or otherwise supplying access to a satellite delivered television (or electronic data)
distribution system in a non-de-minimus capacity (e.g., by merely displaying advertisements), in whole or in part. 

        1.15.    "Default Event" shall have the meaning assigned to such term in subparagraph 11.01(b) below. 

        1.16.    Omitted
without implication. 

        1.17.    Omitted
without implication. 

        1.18.    Omitted
without implication. 

        1.19.    Omitted
without implication. 

        1.20.    Omitted
without implication. 

        1.21.    "Domain Names" shall mean uniform resource locators
("URLs") registered with any duly authorized internet domain name registry (e.g., Network Solutions, Inc.). 

        1.22.    "Download" (as a noun) shall mean an electronic transmission and delivery of digital data that is
transferred from a central server or the computer hard drive owned or controlled exclusively by another End User (i.e., so-called "peer-to-peer file
sharing") to the End User through the Electronic Medium which results in the creation of an Electronic Digital Copy of the item of content concerned. 

        1.23.    "Download" or "Downloading" (used as a verb or gerund)
shall mean the process of creating Downloads. 

        1.24.    "Downloadable" shall mean the capability of resulting in a Download. 

        1.25.    "Ephemeral Copy" shall have the meaning assigned to such term in section 3.01(b)(1) below. 

        1.26.    "Electronic Device" shall mean any medium or device designed to (i) accept input of digital data;
(ii) process that input through computer programs and other sets of instructions that control the operation of such electronic device; (iii) accurately count and report the number of
performances of each Recording to the extent necessary to prepare Service Fee Reports and otherwise comply with the Subscription Service Agent's reporting obligations hereunder; and
(iv) produces output and causes a desired result which enables a Person utilizing such device to perceive a copy or performance, as the case may be, of the content embodied in the digital data
transmission concerned. 

        1.27.    "Electronic Digital Copy" shall mean a copy (other than a Conditional Download or an Ephemeral Copy) of
any content, including without limitation the Sony Materials, in a digital format. A temporary copy of content resident on a machine or device while waiting to be transferred between two
(2) locations in the same machine or device in a manner that is substantially contemporaneous with the transmission of such copy, as in the case of "buffering" or "caching" during the
transmission of a Stream and a temporary Partial Data Cache resident in a so-called "obfuscated cache" (as described with greater particularity in the Technical Specifications attached
hereto) located in a machine or device while waiting to be transferred or potentially transferred from one (1) End User to another End User via so-called
"peer-to-peer file sharing," respectively, shall not, for that reason alone, constitute an "Electronic Digital Copy" of the content concerned. 

        1.28.    "Electronic Medium" shall mean the subset of the Internet presently known as the World Wide Web and any
other public or private data networks utilized to provide Internet connectivity to consumers, any digital telephone network, any digital cable television distribution platform, and any digital
satellite television platform that primarily delivers audiovisual materials. 

5

 

        1.29.    "End User" shall mean, at any particular time, any Person who (i) is located in the Territory,
(ii) either (A) subscribes to the Service either through the Subscription Service Agent or a Syndication Agent and uses the Service solely for personal, non-commercial use or
(B) is otherwise eligible to subscribe to the Service but is given access to the Service either through Subscription Service Agent or a Syndication Agent for a limited, free-trial
membership, (iii) has registered for and been assigned by you a User Account, (iv) has been assigned a unique password by Subscription Service Agent in respect of each User Account which
must be correctly entered prior to the commencement of any period during which such Person is permitted to access the Service (i.e., Persons that do not have such a unique password cannot
access the Service) and (v) remains in good standing pursuant to the Service's terms of service and privacy policy. 

        1.30.    "End User Information" means, collectively, Aggregate Information and Personal Information whether such
information is in oral, or human readable and/or machine readable form. 

        1.31.    "Entity" shall mean any general partnership, limited partnership, corporation, limited liability company,
joint venture, trust, business trust, cooperative, association or other business organization. 

        1.32.    "Equity Consideration" shall have the meaning assigned to such term in subparagraph 6.02(a). 

        1.33.    "Extranet" shall have the meaning assigned to such term in subparagraph 7.01(a) below. 

        1.33.1.    "Functionality Specifications" shall mean the functionality specifications and mock-ups of
the Service attached hereto as Exhibit A-1. 

        1.34.    "GAAP" shall mean generally accepted accounting principles set forth in the opinions and pronouncements
of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, which are in effect from
time to time. 

        1.35.    "Grant of Rights" shall have the meaning assigned to such term in subparagraph 3.01(a) below. 

        1.35.1.    "Gross Margin" shall have the meaning assigned to such term in section 6.03(b)(3) below. 

        1.35.2.    "Gross Revenue" shall have the meaning assigned to such term in section 6.03(b)(1) below. 

        1.36.    "Home Page" shall mean the individual Web Page of a Web Site intended by the Person maintaining the Web
Site concerned to be the first Web Page viewed by end-users accessing such Web Site. 

        1.36.1.    "Imported Recordings" shall mean audio or audiovisual recordings for which you have not secured the
sound recording public performance and sound recording reproduction rights from the Person owning or controlling the applicable sound recording copyright therein necessary to exploit such recording in
connection with the Service. 

        1.37.    "Launch Date" shall mean the date that is the earlier of (A) the later of (i) the date that
Subscription Service Agent has created a working version of the Service technically satisfactory to Sony and (ii) the date that Subscription Service Agent has commenced transmission of Sony
Cleared Recordings to End Users on a commercial basis, either directly or through one or more Syndication Agents, pursuant to the terms of this Content Integration Agreement or (B) the date
that is six (6) months after the Effective Date. 

        1.37.1.    "Licensee" shall mean a licensee of rights from Sony, including, without limitation, wholly or partly
owned subsidiaries, affiliates and other divisions and components of Sony Music Entertainment Inc. 

6

 

        1.38.    "Link" shall mean an embedded icon, object, graphic or text within a Web Page that consists of a
hypertext pointer to the URL of another Web Page. 

        1.39.    Omitted
without implication. 

        1.40.    Omitted
without implication. 

        1.41.    "Media Player" shall have meaning assigned to such term in section 5.06(b)(1) below. 

        1.41.1    "Minimum Monthly Amount" shall have the meaning assigned to such term in section 6.03(b)(5)
below. 

        1.41.2.    "Monthly Playback Number" shall have the meaning assigned to such term in section 6.03(b)(6)
below. 

        1.41.3.    "Music Site Syndication Agent" shall mean a Syndication Agent that is listed  [ * * * ]* in the Entertainment/Music category (or its equivalent, in the event such
category is modified or discontinued for
any reason) on the weekly list of Web Site traffic rankings published by Jupiter Media Metrix (or, in the event that Jupiter Media Metrix no longer regularly publishes a similar list of Web Site
rankings for the Entertainment/Music category, then a similar list of Web Site traffic rankings for the Entertainment/Music (or equivalent) category published by a similarly situated, equally reliable
third party service provider.) 

        1.41.4.    "New Recordings" shall mean Recordings released by Sony on Phonograph Records for sale through normal
retail channels in the United States after the Effective Date or by Sony's principal Licensee in Canada on Phonograph Records for sale through normal channels in Canada after the Effective Date. 

        1.41.5.    "Net Advertising Revenue" shall have the meaning assigned to such term in section 6.03(b)(7)
below. 

        1.41.6.    "Network Syndication Agent" shall mean a Rank 1 Network Syndication Agent, Rank 2 Network Syndication
Agent or Rank 3 Network Syndication Agent. 

        1.41.7.    "Online Retailer Syndication Agent" shall mean a Syndication Agent that is actively engaged in the
merchandising, marketing or promotion of the sale of Records via the Electronic Medium, either in whole or in part. 

        1.41.8.    "Partial Data Cache" shall mean a single, encrypted digital file containing a portion of a digitized
copy of a Sony Cleared Recording, which, solely when combined with not less than five (5) other single, encrypted digital files each, respectively, containing a different
non-overlapping portion of a digitized copy of the Sony Cleared Recording concerned, with the aid of an Approved Electronic Device, enables the Sony Cleared Recording to be perceived by
such End User as a Stream of such Sony Cleared Recording or stored as a Conditional Download embodying such Sony Cleared Recording. Without limiting the generality of the foregoing, each Partial Data
Cache shall be subject to the following limitations, restrictions and attributes: (i) the digital file may reside solely on the hard drive of an Approved Electronic Device owned or controlled
exclusively by the End User in a so-called "obfuscated cache" (as described with greater particularity in the Technical Specifications attached hereto), (ii) the digital file cannot
be retransmitted, moved or otherwise copied to any other computer hard drive or other digital storage device by any Person, including, without limitation, any portable device except to the Approved
Electronic Device of another End User in a so-called "obfuscated cache" (as described with greater particularity in the Technical Specifications attached hereto); (iii) the Sony
Materials embodied in the digital file cannot be perceived as Sony Materials, whether directly or with the aid of an Approved Electronic Device, without first verifying that the Person seeking access
is an End User in good standing for the online session concerned and without receiving from the Service the other such non-overlapping portions of the Sony Cleared Recording concerned that
corresponds to 

7

 

the digital file concerned; (iv) each Partial Data Cache shall be transferred solely under the control and authority of Subscription Service Agent, and solely to End Users in good standing;
(v) Subscription Service Agent shall track where each digital file resides at all times; and (vi) the digital copy will be securely protected so that it (A) complies in all
respects with the provisions of Article 5 below, (B) utilizes effective technological means designed to prevent Persons from editing, changing or removing any part of the Sony Materials
contained therein or from making a copy (including an Electronic Digital Copy) thereof, or from moving or transferring such file to an Electronic Device that is not an Approved Electronic Device, and
(C) complies with any other limitations or restrictions which may be provided for pursuant to this Content Integration Agreement, or otherwise agreed to between the parties hereto. 

        1.42.    "Permitted Portable Device" means an End User's SDMI-compliant portable Electronic Device
that is capable of storing and playing the Sony Materials in accordance with and subject to the terms and conditions of this Content Integration Agreement and is an Approved Electronic Device
hereunder. 

        1.43.    "Person" shall mean any individual and any Entity, and their respective heirs, executors, administrators,
legal representatives, successors and assigns. 

        1.44.    "Personal Information" means information about each individual End User from which it is possible to
ascertain the identity of such End User, including, without limitation (i) the End User's name, (ii) the End User's mailing address (including, without limitation, the End User's zip or
postal code or equivalent) and electronic mail address and (iii) the End User's personally identifiable transaction data (e.g., credit card number and titles of Records purchased).
Notwithstanding the foregoing or anything elsewhere herein, CenterSpan shall not be obligated to utilize Personal Information for any purpose other than enforcing and protecting the rights,
restrictions and limitations set forth herein by taking appropriate actions in connection with individual End Users and potential End Users that have or allegedly have violated (or that CenterSpan
should have known have or allegedly have violated) CenterSpan's End User license agreement or other terms of service governing usage of the Service or the terms, conditions and limitations set forth
herein regarding uses of Recordings as and to the extent permitted herein. 

        1.45.    "Phonograph Record" shall mean a Record as embodied by the manufacturer and/or distributor in a physical,
non-interactive Record configuration (e.g., vinyl LP's, cassettes, compact discs, videocassettes) prior to its distribution to the consumer, as opposed to the transmission or communication
of a Record to the consumer prior to being embodied in a physical Record configuration, whether or not it may at some point be embodied in a physical Record configuration, by the consumer or under the
consumer's direction or control. 

        1.45.1.    "Playback" (as a noun) shall mean a single, encrypted digital transmission of a Sony Cleared Recording
to an End User via a Conditional Download, through an Approved Playback Format, whereby such transmission is contemporaneous with the performance of the Recording embodied therein and which, in all
cases, cannot be digitally copied, duplicated or stored in any manner or medium in whole or in part, directly or indirectly. 

        1.45.2.    "Playedback" (as a verb) means the act or process of having transmitted Playbacks solely through an
Approved Playback Format. 

        1.46.    "Procedures Report" shall have the meaning assigned to such term in paragraph 6.06 below. 

        1.46.1.    "Prohibited Digital Output" shall mean a digital output that forms a part of an Electronic Device that
is capable of rendering or transmitting unencrypted digital data containing a Conditional
Download or a Partial Data Cache that is not subject to the Approved Security Features at a transfer rate that is faster than so-called "real time" (e.g., capable of a transferring a
Record that is intended to have a playing time of sixty (60) minutes in less than that amount of time). 

8

   
        1.46.2.    "Publishing Costs" shall mean all actual, out-of-pocket costs paid to music
publishers or applicable rights societies with jurisdiction over reproduction rights in connection with exercising: (i) Publishing Rights and (ii) the rights, consents, licenses and
permissions necessary for the mechanical reproduction of musical compositions embodied in all Recordings (other than Sony Cleared Recordings and Sony Authorized Recordings) in connection with the
Service. 

        1.46.3.    "Publishing Rights" shall mean all rights, consents, licenses and permissions necessary for the
mechanical reproduction of musical compositions embodied in Sony Authorized Recordings in connection with the Service. 

        1.46.4.    "Publishing Rights Date" shall mean the date is nine (9) months after the Effective Date. 

        1.46.5.    "Radio Site Syndication Agent" shall mean a Syndication Agent: (a) that is an Internet
"webcaster" (as that term is understood in the U.S. Phonograph Record industry) [ * * * ]* in the webcast channel ratings report
category (or its equivalent, in the event such category is modified or discontinued for any reason) on the weekly list of Internet "webcaster" rankings published by Arbitron (or, in the event that
Arbitron no longer regularly publishes a similar list of Internet "webcaster" rankings for the webcast channel ratings report category, then a similar list of Internet "webcaster" rankings for the
webcast channel ratings report (or equivalent) category published by a similarly situated, equally reliable third party service provider.); (b) that owns or operates a radio station licensed as
such by the Federal Communications Commission that (A) re-transmits or simulcasts terrestrial AM or FM signals over the Internet, and (B) is a radio station that reports
airplay or other statistics to Radio & Records Inc. (i.e., R&R) (or otherwise has its airplay subject to monitoring by Radio & Records Inc., whether or not reported)  [ * * * ]
* (or, in the event that Radio & Records Inc. no longer regularly publishes a similar list of rankings of
radio stations, then a similar category or similar categories of radio stations published by a similarly situated, equally reliable third party publication); or (C) that owns or operates a
television station that is licensed as such by the Federal Communications Commission. 

        1.46.6.    "Rank 1 Network Syndication Agent"    shall mean a Syndication Agent that is  [ * * * ]* in the Consolidators or
Portals category (or its equivalent, in the event such category is modified or discontinued
for any reason) on the weekly list of Web Site traffic rankings published by Jupiter Media Metrix (or, in the event that Jupiter Media Metrix no longer regularly publishes a similar list of Web Site
rankings for the Consolidators or Portals category, then a similar list of Web Site traffic rankings for the Consolidators or Portals (or equivalent) category published by a similarly situated,
equally reliable third party service provider.) 

        1.46.7.    "Rank 2 Network Syndication Agent"    shall mean a Syndication Agent that is  [ * * * ]* in the Consolidators or
Portals category (or its equivalent, in the event such category is modified or discontinued
for any reason) on the weekly list of Web Site traffic rankings published by Jupiter Media Metrix (or, in the event that Jupiter Media Metrix no longer regularly publishes a similar list of Web Site
rankings for the Consolidators or Portals category, then a similar list of Web Site traffic rankings for the Consolidators or Portals (or equivalent) category published by a similarly situated,
equally reliable third party service provider.) 

        1.46.8.    "Rank 3 Network Syndication Agent"    shall mean a Syndication Agent that is  [ * * * ]* in the Consolidators or
Portals category (or its equivalent, in the event such category is modified or discontinued
for any reason) on the weekly list of Web Site traffic rankings published by Jupiter Media Metrix (or, in the event that Jupiter Media Metrix no longer regularly publishes a similar list of Web Site
rankings for the Consolidators or Portals category, then a similar list of Web Site traffic rankings for the Consolidators or Portals (or equivalent) category published by a similarly situated,
equally reliable third party service provider.) 

9

 

        1.47.    "Record(s)"    shall mean all forms of reproductions, transmissions or communications of Recordings now or
hereafter known, manufactured, distributed, transmitted or communicated primarily for home use, school use, jukebox use or use in means of transportation. 

        1.48.    "Recording"    shall mean a recording of sound (by any method and on any substance or material, or in any
other form or format, whether now or hereafter known, which is used or useful in the recording, production and/or manufacture of Records) embodying the performance of a single Composition. 

        1.48.1.    "Record Labels"    shall mean any Person owning or controlling multiple Recordings featuring the
performances of a reasonably significant number of recording artists (including, but not limited to, EMI Recorded Music, BMG Entertainment, Universal Music Group, Warner Music Group, Zomba Records
Corporation) and any of Affiliate of any such Person. 

        1.49.    "Service"    shall mean the interactive subscription music service owned and operated by Subscription Service
Agent conforming to the Technical Specifications, which: 

        (a)  is
accessible exclusively by End Users, exclusively through the Service Site and the Syndication Agent Sites via a maximum of three (3) Approved Electronic
Devices at any one time per User Account; provided, however, that in respect of any particular User Account, (x) no more than two (2) such Approved Electronic Devices may be an Approved
Electronic Device described in clause (i) of
paragraph 1.05 above and (y) no particular End User may utilize [ * * * ] * or
more of the Approved Electronic Devices described in clause (ii) of paragraph 1.05 above or  [ * * * ]* or more of the Approved Electronic Devices described in
clause (iii) of
paragraph 1.05 above; 

        (b)  subject
to paragraph 8.01 below, is marketed exclusively under the name "scour", "C-Star" or such other name as may be adopted by Subscription Service
Agent in connection with a substantial portion of its business, provided that such other name may not be construed by a reasonable Person as disparaging to Sony, its Affiliates and/or any of the Sony
Parties, artists, producers, mixers, remixers or other Persons that contributed to the recording of the Sony Cleared Recordings transmitted via the Service; 

        (c)  offers,
inter alia, an End User the opportunity to receive one or more Stream(s) and/or Conditional Downloads of the Sony
Cleared Recordings from the Agent Server (or, in the case of so-called "peer to peer file sharing", from an Approved Electronic Device of another End User in full compliance with the terms
of this Content Integration Agreement) promptly following such End User's specific request or demand therefor and prohibits the use of Imported Recordings (except as expressly permitted under
paragraph 5.06 below); provided that the copies of each Sony Cleared Recording received by End Users must be initially delivered via the Agent Servers and must be derived from encoded digital
files delivered by Sony to Subscription Service Agent pursuant to subparagraph 3.01(d) below (for the avoidance of doubt, this paragraph shall not operate to preclude the Service from authorizing End
Users to facilitate serial copying of such encoded digital files among End Users from an Approved Electronic Device of another End User in full compliance with the terms of this Content Integration
Agreement in the case of so-called "peer to peer file sharing"); 

        (d)  requires
each End User to furnish Personal Information to the Subscription Service Agent or to the Syndication Agent concerned; 

        (e)  compiles
Aggregate Information (subject to paragraph 1.04 above) and Personal Information (subject to paragraph 1.44 above); 

        (f)    conforms
to the Technical Specifications; and 

        (g)  conforms
to the Functionality Specifications. 

10

 

        For
the avoidance of doubt and without limiting the generality of anything in clauses (a) through (g) of this paragraph 1.49, but subject to the allocation
methodology prescribed in subsection 6.03(b)(4)(B)
below, Sony hereby acknowledges that: (i) nothing contained in this Content Integration Agreement shall be construed as a limitation of Subscription Service Agent's right to bundle the Service
with other services operated by Subscription Service Agent as part of the same consumer offering to an End User, and (ii) an End User's opportunity to receive one or more Stream(s) and/or
Conditional Downloads of Sony Cleared Recordings from an Approved Electronic Device of an End User in full compliance with the terms of this Content Integration Agreement (i.e., so-called
"peer to peer file sharing" is a primary aspect of the functionality of the Service). 

        1.50.    "Service Fee"    shall have the meaning assigned to it in subparagraph 6.03(a) below. 

        1.51.    "Service Fee Report"    shall have the meaning assigned to such term in paragraph 6.04 below. 

        1.51.1.    "Service Release Date"    shall have the meaning assigned to such term in section 3.03(c)(1) below. 

        1.52.    "Service Site"    shall mean the Web Site, based in the United States, the Home Page of which is located at
the Uniform Resource Locator ("URL") scour.com (or a successor URL designated by Subscription Service Agent and approved by Sony in writing in advance, which approval Sony shall not
unreasonably withhold) and is owned and operated solely by the Subscription Service Agent by which End Users can access the Service in accordance with the terms of this Content Integration Agreement. 

        1.53.    "Sony Artist"    shall mean recording artists whose musical performances are embodied on Sony Cleared
Recordings. 

        1.54.    "Sony Authorized Artwork"    shall mean the front album cover art, only, used by Sony in the packaging of the
Records in which Sony Cleared Recordings concerned are originally released by Sony in the United States for sale through normal retail channels (as that term is understood in the U.S. Phonograph
Record industry). For the avoidance of doubt, Sony Authorized Artwork shall not include liner notes, lyrics or other artwork, pictorial, graphic, audiovisual or textual materials which are
incorporated in the Album concerned or the packaging or used in the marketing and/or promotion of Phonograph Records embodying the Sony Cleared Recordings. 

        1.55.    "Sony Authorized Recordings"    shall mean: (a) solely with respect to United States End Users, United
States Authorized Recordings and (b) solely with respect to Canadian End Users, Canadian Authorized Recordings. 

        1.56.    "Sony Authorized Trademarks"    shall mean any Trademark owned and/or controlled by Sony and made available
to Subscription Service Agent pursuant to the terms and conditions of this Content Integration Agreement. 

        1.56.1.    "Sony Cleared Recordings"    shall mean: (a) solely with respect to United States End Users, United
States Cleared Recordings and (b) solely with respect to Canadian End Users, Canadian Cleared Recordings. 

        1.57.    "Sony Materials"    shall mean the Sony Cleared Recordings and Sony Authorized Artwork. 

        1.58.    "Sony Parties"    shall mean Sony Music Entertainment Inc. and its parent, subsidiaries, affiliates,
divisions, components and Licensees and each of their officers, agents, employees, partners, directors, controlling persons and advisors. 

        1.58.1.    "Sony's Pro Rata Share"    shall have the meaning assigned to such term in section 6.03(b)(8) below. 

11

 

        1.58.2.    "Sony's Usage Percentage"    shall have the meaning assigned to such term in section 6.03(b)(9)
below. 

        1.59.    "Stream"    (as a noun) shall mean a single, encrypted digital transmission of Recordings to End Users from
the Agent Server (or, in the case of so-called "peer-to-peer Streaming," from the Approved Electronic Device of an End User in full compliance with the terms of
this Content Integration Agreement) solely through the Electronic Medium, which digital transmission is, in the case of Recordings, contemporaneous with the performance of the Recording embodied
therein and which, in all cases, is designed not to be digitally copied, duplicated or stored in any manner or medium in whole or in part, directly or indirectly (other than any temporary copies used
solely for so-called "caching" or "buffering"). 

        1.60.    "Stream", "Streaming" or "Streamed"    (as a verb or gerund) shall mean the act or process of transmitting
Streams solely through an Approved Streaming Format. 

        1.61.    "Street Date"    shall have the meaning assigned to such term in section 3.03(c)(1) below. 

        1.62.    "Stock Purchase Agreement"    shall have the meaning assigned to such terms in subparagraph 6.02(b) below. 

        1.62.1.    "Subscription Fees"    shall have the meaning assigned to such term in section 6.03(b)(10) below. 

        1.62.2.    "Syndication Agent"    shall mean any Person who complies with the provisions of paragraph 8.02
below. 

        1.62.3.    "Syndication Agent Agreement"    shall have the meaning assigned to such term in subparagraph 8.02(a)
below. 

        1.62.4.    Omitted without implication.    

        1.62.5.    Omitted without implication.    

        1.62.6.    "Syndication Agent Sites"    shall mean the Web Sites, based in the United States or Canada, that are owned
and operated solely by the Syndication Agents by which End Users can access the Service in accordance with the terms of this Content Integration Agreement. 

        1.63.    "Technical Specifications"    shall mean the technical specifications of the Service attached hereto as
Exhibit A-2. 

        1.64.    "Term"    shall have the meaning assigned to it in paragraph 2.01 below. 

        1.65.    "Territory"    shall have the meaning assigned to it in paragraph 2.02 below. 

        1.66.    "Trademarks"    shall mean trademarks and service marks, trade names, brand names, corporate names, logos,
trade dress, and other words, designations, labels, symbols, designs, colors, color combinations or product configurations, whether registered or unregistered. 

        1.66.1.    "Triggering Person"    shall mean a Person or an Affiliate of such Person: (i) that is engaged in
the business of selling or otherwise making available Records (including, for the avoidance of doubt, Internet music retailers); (ii) that is meaningfully and substantially engaged in the
recording industry; (iii) that is meaningfully and substantially engaged in the music publishing industry; (iv) that is engaged in any business that owns or controls a Person that is  [ * * * ]* in the Consolidators or Portals category
(or its equivalent, in the event such category is modified or discontinued for any reason) on the weekly list of Web Site traffic rankings published by Jupiter Media Metrix (or, in the event that
Jupiter Media Metrix no longer regularly publishes a similar list of Web Site rankings for the Consolidators or Portals category, then a similar list of Web Site traffic rankings for the Consolidators
or Portals (or equivalent) category published by a similarly situated, equally reliable third party service 

12

 

provider); (v) that is engaged in the business of manufacturing and/or selling consumer electronics devices; (vi) that is engaged in the business of selling blank digital recording
media (other than those products in respect of which appropriate royalties are paid in accordance with the Audio Home Recording Act amendments to the United States Copyright Law), products designed to
circumvent copy protection mechanisms (e.g., audio and/or video stream capture software) or any service that directly or indirectly facilitates the reproduction, distribution, display and/or
performance of copyrighted materials without the express authorization of the applicable rightsowners; and/or (vii) any business conducted by a Person that is a Prohibited Entity (as defined in
subsection 16.06(b)(1)(i) below). 

        1.66.2.    "United States Authorized Recordings"    shall mean those audio-only, stereo Recordings:
(i) that are embodied on Albums, Singles and EPs released by Sony for distribution through normal retail channels (as that term is understood in the U.S. Phonograph Record industry) in United
States and are listed in Sony's then most recent active United States product catalog (i.e., the product catalog currently known as the "U.S. Pocket Pop Alpha"), as such catalog is updated from time
to time throughout the Term; and (ii) in respect of which the sound recording public performance and sound recording reproduction rights have been obtained under the copyright laws of United
States and Sony's recording and other applicable rights acquisition agreement(s), as applicable; and (iii) which are not otherwise excluded under paragraph 3.03 or
section 4.03(e)(2) below. 

        1.66.3.    "United States Cleared Recordings"    shall mean those audio-only, stereo Recordings:
(i) that are United States Authorized Recordings; and (ii) in respect of all Publishing Rights have been obtained. For the avoidance of doubt, United States Cleared Recordings shall only
be accessible by United States End Users. 

        1.66.4.    "United States End User"    shall mean, at any particular time, any Person who (i) has registered
with Subscription Service Agent a valid billing address that is in the United States, (ii) either (A) subscribes to the Service either through the Subscription Service Agent or a
Syndication Agent and uses the Service solely for personal, non-commercial use or (B) is otherwise eligible to subscribe to the Service but is given access to the Service either
through Subscription Service Agent or a Syndication Agent for a limited, free-trial membership, (iii) has registered for and been assigned by you a User Account, (iv) has
been assigned a unique password by Subscription Service Agent in respect of each User Account which must be correctly entered prior to the commencement of any period during which such Person is
permitted to access the Service (i.e., Persons that do not have such a unique password cannot access the Service) and (v) remains in good standing pursuant to the Service's terms of service and
privacy policy. 

        1.66.5.    "United States Street Date"    shall have the meaning assigned to such term in subsection
3.03(c)(1)(i) below. 

        1.67.    "User Account"    shall mean, with respect to each End User, the unique account set up by the Subscription
Service Agent to govern such End User's access to the Service. 

        1.68.    "Web Page"    shall mean a document that is either (A) written in HTML (i.e., Hypertext Markup
Language), or another industry standard mark-up language, that is made available for viewing by End Users at a single URL or Domain Name via the World Wide Web portion of the Internet by
server software using HTTP (i.e., Hypertext Transfer Protocol) to effectuate data transmission (or server software using any other generally accepted protocols utilized to effectuate data
transmissions via the World Wide Web portion of the Internet); or (B) written in any computer programming language other than HTML, that is intended to be accessible, directly or indirectly,
simultaneously to End Users via a computer or any other electronic device on any public data network that uses Transmission Control Protocol/Internet Protocol (i.e., TCP/IP) or Wireless Application
Protocol (i.e., WAP) to effectuate data transmission (or any other generally accepted protocols utilized to effectuate data transmissions via public data networks). 

13

 

        1.69.    "Web Site"    shall mean a collection of Web Pages (or its functional equivalent in non-World
Wide Web based methods of transmitting, receiving and displaying textual and graphic digital data) with a common theme or subject matter which are: (a) organized hierarchically,
(b) owned, managed and operated by the same Person or at the direction of such Person, and (c) interconnected via Links. 

2.    TERM; TERRITORY  

        2.01.    The
term of this Content Integration Agreement ("Term") will begin as of the Launch Date and will continue for a period ending on the date that is three
(3) years after such Launch Date, unless sooner terminated pursuant to Article 11 below. 

        2.02.    The
territory of the Grant of Rights is the United States (including solely the territories and/or possessions of Puerto Rico and the U.S. Virgin
Islands) and Canada ("Territory"). Without limiting the foregoing, you represent and warrant that: (i) neither you nor any Syndication Agent, directly or indirectly, will market, promote or
advertise the Service in any manner directed to, or designed to attract, visitors to the Service from countries outside the Territory; (ii) neither you nor any Syndication Agent will allow any
Person whose billing address is outside of the United States or Canada to be an End User; (iii) neither you nor any Syndication Agent will create or facilitate the creation of Links from Web
Sites outside the Territory to the Service Site or to any Syndication Agent Site; (iv) you will require each End User to represent and warrant to you in a click-through End User license
agreement
governing such End User's use of the Service that such End User resides in the United States or Canada, as the case may be; (v) United States End Users shall not have access to Canadian Cleared
Recordings, directly or indirectly, in whole or in part and Canadian End Users shall not have access to United States Cleared Recordings, directly or indirectly, in whole or in part; and
(vi) you will immediately terminate the subscription of any End User who violates the terms of his or her End User license agreement. You shall use your best good faith reasonable efforts to
prevent other Web Sites outside of the Territory from creating Links from such Web Sites to the Service. Notwithstanding the preceding three sentences, Sony hereby acknowledges and agrees that:
(i) your rights hereunder include the right to exploit the Sony Materials via the Internet, which by its nature extends beyond the Territory and (ii) you shall use effective,
state-of-the-art technologies that (a) prevent Persons seeking access to the Service from domains located outside the Territory from accessing the Service
and (b) effectively block out access to the Service based upon billing or addresses or other Personal Information that would lead a reasonable Person to believe that such Person is a resident
of a territory outside the Territory; provided that such technologies are available to you on commercially reasonable terms (for the purpose hereof, "reasonableness" shall be determined by taking into
account the cost of implementing the technologies as compared to the general operating costs of CenterSpan in general). 

14

   3.    GRANT OF RIGHTS  

        3.01.    (a)    Sony hereby appoints you to act as its non-exclusive agent to solely perform the functions
expressly authorized by Sony pursuant to subparagraph 3.01(b) below in connection with the Sony Materials, as integrated by you into the Service. For the avoidance of doubt, this Content Integration
Agreement may not be terminated during the Term except as otherwise specifically provided herein. Your right to integrate the Sony Materials into the Service and to distribute those Sony Materials in
accordance with the terms of this Content Integration Agreement is sometimes referred to herein as the "Grant of Rights". Your rights to use the Sony Materials shall be subject to all of the terms and
conditions of this Content Integration Agreement, and your right to use such Sony Materials shall not constitute a transfer of rights to you in or to the Sony Materials or any other intellectual
property associated therewith, except to the extent expressly authorized herein. For the avoidance of doubt, nothing contained in this Content Integration Agreement shall be construed as giving you or
any Syndication Agent the right to sell, resell or otherwise conduct or authorize the transmission of Sony Materials, either in whole or in part, as a dealer, retailer, distributor, subdistributor,
merchant or otherwise, except to the extent expressly authorized herein. Sony hereby acknowledges that you are a distributor of Records. Notwithstanding the foregoing or anything elsewhere herein,
neither you nor any Person deriving rights from you shall enable or facilitate access, directly or indirectly, in whole or in part, to Records, Recordings, or other materials, owned or controlled by
Sony or any of its Licensees via the Service or otherwise that do not constitute Sony Cleared Recordings hereunder in the Territory or elsewhere. 

        (b)  Solely
in order to effectuate the Grant of Rights, Sony hereby authorizes you and grants to you the non-exclusive power and authority to do only the
following with respect to your use of the Sony Materials: 

        (1)  Transfer
a reasonable, limited number of copies (each an "Ephemeral Copy") of each of the Sony Cleared Recordings in their entirety and corresponding Sony Authorized
Artwork onto the Agent Servers, provided that: (A) the total number of such Ephemeral Copies is limited to the number reasonably necessary to efficiently digitally transmit the Sony Materials
in accordance with the terms and conditions of this Content Integration Agreement; (B) all such Ephemeral Copies shall be destroyed and/or erased, as Sony shall direct, upon the termination or
expiration of the Term; (C) the Agent Servers to the extent they contain any Sony Materials (but, for the avoidance of doubt, not the hard drives of Approved Electronic Devices of End Users
accessing the Service via "peer to peer file sharing") are not either directly or indirectly part of a network of computer servers or computers
except to the extent, if at all, described in the Technical Specifications attached hereto; and (D) neither Subscription Service Agent nor any Person deriving rights from Subscription Service
Agent shall have any right to use or otherwise exploit Ephemeral Copies, either in whole or in part, directly or indirectly, except as expressly provided in this Content Integration Agreement; 

        (2)  To
maintain the Sony Cleared Recordings and related Sony Authorized Artwork on the Agent Servers only until the expiration of the Term (solely to the extent necessary to
enable Streams and Conditional Downloads of the Sony Cleared Recordings and the display of Sony Authorized Artwork via the Service in accordance with the terms herein); 

        (3)  To
integrate the Sony Materials into the Service for transmission to End Users (including, for the avoidance of doubt, via so-called "peer to peer file
sharing" as and to the extent expressly permitted herein) in accordance with the following provisions as well as in accordance with the other terms set forth elsewhere herein: (i) except to the
extent your right to transmit the Sony Materials has been restricted by the provisions hereunder, the Sony Materials must at all times during the Term be accessible by End Users from the Agent Servers
via the Service Site or via a Syndication Agent Site in accordance with the terms set 

15

 

forth herein; (ii) except to the extent your right to transmit the Sony Materials have been restricted by the provisions hereunder, the Sony Cleared Recordings may, at any time during the
Term, be accessible by End Users from other End Users through so-called "peer to peer" file sharing; (iii) in all cases, the Sony Materials shall only be accessible by End Users via
the Electronic Medium during the Term; (iv) United States End Users shall not have access to Canadian Cleared Recordings, directly or indirectly, in whole or in part; and (v) Canadian
End Users shall not have access to United States Cleared Recordings, directly or indirectly, in whole or in part; and 

        (4)  To
permit End Users to Stream Sony Cleared Recordings and Playback Conditional Downloads of the Sony Cleared Recordings and to display (or refrain from displaying, as
Subscription Service Agent may determine in its reasonable discretion) Sony Authorized Artwork via the Service in accordance with the terms herein, including, but not limited to the following
requirement: to the extent Subscription Service Agent displays Sony Authorized Artwork, each Stream and Playback of a Sony Cleared Recording must be accompanied by an image (75 pixels by 75 pixels in
size) of the Sony Authorized Artwork corresponding to the Sony Cleared Recording in question. For the avoidance of doubt, you shall not be required to display Sony Authorized Artwork via the Service. 

        (c)  (1)    Your
rights hereunder are non-transferable, non-sublicensable and non-delegable and you acknowledge that:
(i) all of the rights granted herein are granted on a non-exclusive basis; and (ii) Sony reserves all rights to use, and authorize third parties to use, the Sony Materials. 

        (2)  You
may only transmit or allow authorized Syndication Agents to transmit the Sony Materials to End Users as part of the Service in the Territory, subject to the next
sentence. Notwithstanding the foregoing or anything elsewhere herein, Syndication Agent may allow Persons other than End Users to
access the Service to the extent permitted under section 4.06(a)(2); provided, however, that such Persons shall not be entitled to Stream or Playback any Sony Cleared Recordings unless and
until such Persons qualify as End Users hereunder. 

        (3)  Except
as expressly permitted herein with respect to Conditional Downloads, Subscription Service Agent shall not, and shall not authorize any Person to, whether through
acts or omissions, either directly or indirectly, in whole or in part, to make any Downloads, or to create or facilitate the creation of Downloadable copies, of any Sony Materials. 

        (4)  All
rights not expressly granted to Subscription Service Agent hereunder are reserved by Sony. 

        (5)  As
between Sony and Subscription Service Agent, the Sony Materials, all performances embodied therein, and all copyrights, and Trademarks and other rights in and to the
Sony Materials of any kind are, and shall remain, the sole and exclusive property of Sony. Subscription Service Agent warrants, represents and agrees that it will not through its acts or omissions,
directly or indirectly, sell or otherwise dispose of, pledge, mortgage or in any way encumber the Sony Materials, in whole or in part, directly or indirectly, or, attempt to pledge, mortgage or
otherwise encumber Subscription Service Agent's rights under this Content Integration Agreement for the benefit of or on behalf of a Triggering Person. 

        (d)  In
all cases, the Sony Materials included on the Service shall be derived from encoded digital files or other materials or formats (which shall contain the Album title
as well as the corresponding featured artist name, track title, ISRC number (where available) and UPC number (where available)) provided to you by Sony or such other Person(s) as Sony designates in
its sole, unrestricted, discretion; provided, however, that neither End Users nor any other Persons shall have access to any ISRC numbers or UPC numbers. For the avoidance of doubt, Sony's delivery to 

16

 

you of any Phonograph Record or encoded digital files or other materials or formats under this subparagraph 3.01(d) shall not be deemed to constitute "clearance" for use in connection with the
Service in any manner, nor shall is be deemed to constitute a waiver of any of the restrictions and/or limitations on your use of any Recordings embodied thereon set forth in this Content Integration
Agreement. 

        (e)  You
warrant and represent that you shall not directly or indirectly allow any of the Sony Materials to be edited, altered or otherwise modified. 

        3.02.        You hereby represent, warrant and covenant that: (i) you have not and shall not grant any third
party rights to use any Sony Materials (a "Third Party Use") not granted to you in this Content Integration Agreement; and (ii) you have exercised and will continue to exercise commercially
reasonable efforts to monitor all Third Party Uses to ensure that they abide by the terms of the
preceding clause (i). If you become aware of any unauthorized manufacture, advertising, distribution, lease or sale by any third party of the Sony Materials, or any other Recordings (or related
Sony Authorized Artwork) the copyrights to which are owned or controlled by Sony or its Licensees, you shall immediately advise Sony in writing thereof and shall cooperate with Sony (at Sony's
reasonable expense, provided that such unauthorized use(s) is not due, in whole or in part, to Subscription Service Agent's (or any Person deriving rights from Subscription Service Agent) acts or
omissions) in the event that Sony commences any action or proceeding against such third party. In the event that any Third Party Use violates the terms of this Content Integration Agreement, you agree
to assign to Sony any rights, now or hereafter in existence, which you may have to sue or otherwise bring an action in law or in equity against such third party infringer for violating the terms of
this Content Integration Agreement or otherwise violating Sony's rights in and to the Sony Materials. 

        3.03.    (a)    At all times during the Term, Sony shall have the right at its sole discretion, effective immediately
upon notice to you (which notice may, notwithstanding anything to the contrary herein, be via facsimile, electronic mail or any other effective method of communication), to exclude any Sony Materials
from the scope of the Grant of Rights for any of the following reasons: 

        (1)  Any
so-called "artist relations" and/or "marketing" reasons; 

        (2)  Any
contractual restriction or other limitation on Sony's right to exploit the Sony Material concerned as contemplated herein in all or part of the Territory; or 

        (3)  Any
other legal reasons which, in the reasonable judgment of Sony's attorneys, might subject you, the Syndication Agents or any Sony Party or other Person to unfavorable
regulatory action or which might violate any law, violate the rights of any Person, or subject you, the Syndication Agents or any Sony Party or other Person to liability for any reason (or if Sony
believes, in its sole reasonable judgment, that (i) Sony lacks the right to authorize you to use the Sony Material concerned as contemplated herein, (ii) the Sony Material concerned
might infringe upon the rights of any Person, (iii) any use of the Sony Materials in connection with the Service is patently offensive or denigrating to Sony, any Sony Artist or any other
Person, or (iv) the use of any Sony Materials in connection with the Service might subject any Sony Party or any Sony Artist or other Person to unfavorable regulatory action, might violate any
law, might infringe the rights of any Person, or might subject any Sony Party or any Sony Artist or other Person to liability for any reason); and/or 

        (4)  The
failure to secure or retain, as the case may be, the necessary Publishing Rights, as required under section 4.03(e)(2) below, for the Sony Materials
concerned. 

        (b)  (1)
Upon your receipt of Sony's request to remove any Sony Materials from the Service, you agree that you shall, immediately thereafter but in no event later than two
(2) business days from the date of such demand, remove from the Service all Sony Materials referenced in Sony's demand; provided, however, that your non-habitual,
non-repetitive failure to so remove any 

17

 

particular Sony Materials in any instance(s) shall not constitute a material breach of this Content Integration Agreement. At Sony's written request, you shall promptly notify Sony in writing of your
compliance with the terms of this subparagraph, which notice shall be accompanied by all copies of the Sony Materials concerned. At Sony's written request, you shall furnish Sony with an affidavit,
signed by an officer of Subscription Service Agent, in a form satisfactory to Sony in its reasonable discretion, accurately confirming that you have destroyed and/or erased all copies of the Sony
Materials that are removed from the Service pursuant to this subparagraph. 

        (2)  [ * * * ]*

        (c)  (1)    (i)    Notwithstanding
the foregoing or anything elsewhere herein, you shall not make any United States Cleared Recording available as part of
the Service earlier than the date that is [ * * * ]* after the date on which the Album embodying
such Recording is initially commercially released on Phonograph Records for sale through normal retail channels in the United States (the "United States Street Date"). 

        (ii)  Notwithstanding
the foregoing or anything elsewhere herein, you shall not make any Canadian Cleared Recording available as part of the Service earlier than the date
that is [ * * * ]* after the date on which the Album embodying such Recording is initially
commercially released on Phonograph Records for sale through normal retail channels in Canada (the "Canadian Street Date"). 

        (2)  (i)    Without
limiting the generality of the foregoing and notwithstanding anything to the contrary herein (and in addition to any other exclusions set forth
herein), during each [ * * * ]* period of the Term Sony may at any time and for any reason elect to
withhold the availability of certain United States Cleared Recordings via the Service beyond the Street Date as follows: (A) a total of up to  [ * * * ]* different Albums
(and all Recordings related thereto (including remixes thereof)) or, at
Sony's option, selected Recordings from up to [ * * * ]* different Albums for a total of  [ * * * ]*
from the applicable United States Street Date for the Album concerned, and (B) up
to an additional [ * * * ]* different Albums (and all Recordings related thereto (including remixes
thereof)) or, at Sony's option, selected Recordings from up to an additional [ * * * ]* different
Albums for up to [ * * * ]* from the applicable United States Street Date for the Album concerned. 

        (ii)  Without
limiting the generality of the foregoing and notwithstanding anything to the contrary herein (and in addition to any other exclusions set forth herein), during
each [ * * * ]* period of the Term Sony may at any time and for any reason elect to withhold the
availability of certain Canadian Cleared Recordings via the Service beyond the Street Date as follows: (A) a total of up to  [ * * * ]* different Albums (and all
Recordings related thereto (including remixes thereof)) or, at
Sony's option, selected Recordings from up to [ * * * ]* different Albums for a total of  [ * * * ]*
from the applicable Canadian Street Date for the Album concerned, and (B) up to an
additional [ * * * ]* different Albums (and all Recordings related thereto (including remixes
thereof)) or, at Sony's option, selected Recordings from up to an additional [ * * * ]* different
Albums for up to [ * * * ]* year from the applicable Canadian Street Date for the Album concerned. 

        (d)  (1)    (i)    Without
limiting the generality of the foregoing or anything elsewhere herein, Sony shall advise you of the Album titles listed in
Sony's then most recent active United States product catalog (i.e. the product catalog currently known as the "U.S. Pocket Pop Alpha") that constitute United States Cleared Recordings as of such date
(such list is sometimes referred to herein as the "U.S. Initial Clearance List"), it being understood and agreed that notwithstanding anything elsewhere in this Content Integration Agreement:
(i) no such Recordings shall be deemed to constitute United States Cleared Recordings hereunder until you have been so advised of the U.S. Initial Clearance List, and (ii) all Recordings
listed in the Initial Clearance List shall be 

18

 

deemed to be United States Cleared Recordings unless and until Sony notifies you otherwise in writing. Sony shall use reasonable efforts to provide you with the U.S. Initial Clearance List,
identified as the list of United States Sony Cleared Recordings, in an electronic format reasonably available to Sony containing the Album title as well as the corresponding featured artist name,
track title, ISRC number (where available) and UPC number (where available), provided that Sony shall not be required to incur any non-de-minimus incremental costs to create or
deliver to you the U.S. Initial Clearance List in an electronic format. 

        (ii)  Without
limiting the generality of the foregoing or anything elsewhere herein, Sony shall advise you of the Album titles listed in Sony's principal Canadian Licensee's
then most recent active Canadian product catalog (i.e. the product catalog currently known as the "Sony Music Canada Catalogue") that constitute Canadian Cleared Recordings as of such date (such list
is sometimes referred to herein as the "Canadian Initial Clearance List"), it being understood and agreed that notwithstanding anything elsewhere in this Content Integration Agreement: (i) no
such Recordings shall be deemed to constitute Canadian Cleared Recordings hereunder until you have been so advised of the Canadian Initial Clearance List, and (ii) all Recordings listed in the
Canadian Initial Clearance List shall be deemed to be Canadian Cleared Recordings unless and until Sony notifies you otherwise in writing. 

        (2)  Without
limiting the generality of the foregoing or anything elsewhere herein, at reasonable periodic intervals during the Term (which periodic intervals shall be no
less frequently than once per month), Sony shall endeavor to advise you of New Recordings hereunder, it being understood and agreed that, notwithstanding anything elsewhere in this Content Integration
Agreement, any Recordings released (or re-released, as the case may be) by Sony on Phonograph Records for sale through normal retail channels in the United States or Canada, as the case
may be, after the Effective Date shall not be deemed to constitute New Recordings that are Sony Cleared Recordings hereunder unless and until confirmed as such by Sony in writing in each instance.
Sony's failure to so advise or so confirm any particular titles in any instance(s) shall not constitute a breach of this Content Integration Agreement. 

4.    OPERATION OF THE SERVICE; RESTRICTIONS  

        4.01.    Omitted without implication.    

        4.02.    (a)    All rights in any Sony Materials furnished by Sony or used by Subscription Service Agent at Sony's
request in connection with the Subscription Service, including the copyright and the right to secure copyright, shall, as between you and Sony, be Sony's property throughout the universe and in
perpetuity. 

        (b)  All
matters relating to the Sony Authorized Trademarks or to notices or disclosures on the Subscription Service, pursuant to subparagraph 4.05(a) below, deemed advisable
by Sony's attorneys shall be determined in Sony's sole discretion. Sony shall not be deemed unreasonable in rejecting any requested change to the use of the Sony Authorized Trademarks with respect to
the Subscription Service upon the advice of Sony's attorneys. 

        4.03.    (a)    Subscription Service Agent shall be solely responsible for creating, maintaining and hosting the
Service in accordance with the Technical Specifications and the Functionality Specifications. 

        (b)  Subscription
Service Agent shall, at its sole expense, be solely responsible for conducting all business activities related to the Service, including, but not limited to
the following activities: (i) setting the price End Users will pay for subscriptions to the Service sold through the Service Site and delegating to Syndication Agents the authority to set
prices End Users will pay for 

19

 

subscriptions to the Service sold through Syndication Agent Sites; (ii) processing all subscriptions to the Service placed by End Users during the Term, (iii) overseeing all activities
of the Syndication Agents in connection with the Service; (iv) subject to subparagraph 12.01(t) below, providing pricing, billing and financial clearinghouse services in connection with the
Service; (v) handling all customer service matters related to End Users; and (vi) handling all financial transactions related to the Service (including, but not limited to, billing End
Users, collecting income from and auditing Syndication Agents, processing all payments, paying all applicable taxes). Except as expressly authorized by Sony in writing in each instance, Sony shall
have no responsibilities or obligations of any nature with respect to any Syndication Agents or End Users. 

        (c)  Except
as expressly set forth herein (including, without limitation, in paragraph 16.01.1 below), as between Sony and Subscription Service Agent, Subscription
Service Agent hereby assumes all liability which may arise from products and services, as the case may be, rendered to End Users and liability for injuries to and by servants, agents, employees or the
general public in connection with operation of the Service. Except as expressly set forth herein, all business risks related to the Service, including but not limited to the risk of
non-payment by End Users and Syndication Agents, shall be borne by Subscription Service Agent. 

        (d)  All
costs and expenses incurred in insuring against loss, theft or damage of any materials delivered to Subscription Service Agent by Sony ("Delivery Materials") shall
be borne by Subscription Service Agent. Upon the loss, theft, damage to or destruction of any Delivery Materials, Subscription Service Agent shall promptly furnish Sony with proof thereof by an
affidavit executed by a duly authorized officer of the Subscription Service Agent which accurately confirms, with reasonable particularity, the loss, theft or damage concerned. For any Delivery
Materials lost, stolen, destroyed or damaged after delivery to Subscription Service Agent and prior to return to Sony, Subscription Service Agent shall promptly pay to Sony the reasonable replacement
cost thereof, which payment shall not transfer title thereto to Subscription Service Agent or any other Person. 

        (e)  (1)
Subscription Service Agent shall be solely responsible for any and all costs, fees, expenses or other charges in connection with the uses of the Sony Materials
permitted hereunder and the maintenance of the Sony Materials and computer files embodying Sony Materials. For the avoidance of doubt, as between you and Sony, Sony shall be responsible for making all
union payments (if any) and all audio record royalty payments required to be made by Sony under any agreements to which Sony is a party to each recording artist, producer, mixer, remixer and other
Person that contributed to the recording of the Sony Cleared Recordings transmitted via the Service. 

        (2)  (i)    At
all times through and including the Publishing Rights Date, Sony shall have the exclusive right and obligation to attempt to obtain all necessary
Publishing Rights. After the Publishing Rights Date, you shall be solely responsible for obtaining all Publishing Rights to the extent not secured by Sony. In all cases, notwithstanding anything
elsewhere herein, no Sony Authorized Recordings shall constitute Sony Cleared Recordings hereunder and be used in connection with the Service until either Sony or you have obtained all necessary
Publishing Rights in connection with such Sony Authorized Recording. To the extent you are responsible for obtaining Publishing Rights with respect to any Sony Authorized Recording, you shall be
solely responsible for obtaining all necessary rights with respect to (i) the musical compositions and other copyrighted literary, dramatic and other works, other than the Recording in
question, embodied within such Recording and (ii) publishing rights, consents, licenses and permissions which are necessary for your uses of the Recording in question in connection with the
Service (e.g., currently effective performance and mechanical copyright licenses for use of the musical composition in question as well as literary, dramatic and other works, other than the Recording
in question, embodied in the Sony Authorized Recording in 

20

 

question). Whether or not Sony has secured Publishing Rights with respect to any particular Sony Authorized Recording, you shall be solely responsible for securing currently effective performance
licenses for the use by means of public and/or private performance of Compositions embodied in all Sony Authorized Recordings. 

        (ii)  In
the event that there are Excess Publishing Costs (as defined in section 6.03(b)(12)), Sony shall bear financial responsibility (subject to subsection
4.03(e)(2)(iii) below) for [ * * * ]* of Sony's Usage Percentage of Excess Publishing Costs
(sometimes referred to as "Sony's Share of Excess Publishing Costs") and Subscription Service Agent shall bear financial responsibility for all other Excess Publishing Costs (sometimes referred to as
"Subscription Service Agent's Share of Excess Publishing Costs"). 

        (iii)  With
respect to Publishing Rights obtained by Sony hereunder in connection with Sony Cleared Recordings, Sony shall perform the ministerial function of administering
such Publishing Rights to the extent obtained and paying Publishing Costs; provided, however, that you shall pay (which, for the avoidance of doubt, may be in advance of the time Sony is required to
make such payments to the music publishers and/or copyright proprietors for the underlying Publishing Rights) Sony for the full amount of all Publishing Costs paid or incurred by Sony in connection
therewith, promptly following Sony's written request therefor in each instance, regardless of whether Advances have theretofore been recouped from Service Fees payable hereunder, and to the extent
that any such Publishing Costs constitute Sony's Share of Excess Publishing Costs, the amount of Sony's Share of Excess Publishing Costs shall constitute an additional Advance hereunder. With respect
to Publishing Rights obtained by Subscription Service Agent hereunder, you shall pay to the applicable holders of Publishing Rights all Publishing Costs (regardless of whether Advances have
theretofore been recouped from Service Fees payable hereunder), and to the extent that any such Publishing Costs constitute Sony's Share of Excess Publishing Costs, the amount of Sony's Share of
Excess Publishing Costs shall constitute an additional Advance hereunder. 

        (3)  Upon
your written request by notice to Sony ("Publishing Information Request Notice"), which notice, to be effective,
shall be delivered to Sony no earlier than thirty (30) days prior to the Publishing Rights Date and no later than thirty (30) days after the Publishing Rights Date, shall use reasonable
efforts to provide you with a list containing any relevant publishing information that Sony has in its possession as of the Publishing Rights Date regarding Sony Authorized Recordings that are not
Sony Cleared Recordings as of the Publishing Rights Date within thirty (30) days following the date of Sony's receipt of the Publishing Information Request Notice (which shall in no event be
deemed received earlier than the Publishing Rights Date), provided, however, that (A) Sony shall not be required to incur any non-de-minimus incremental costs to create
or deliver to you such list or information, and (B) Sony's failure to provide you with such list or information shall not be deemed a breach of this Content Integration Agreement, and
(C) notwithstanding anything to the contrary in this Content Integration Agreement, Sony makes no representations or warranties with respect to such list or information (including, without
limitation, with respect to the accuracy or completeness thereof). 

        4.04.        Subscription Service Agent shall take such action as may be necessary to avail itself of the "safe
harbor" limited liability provisions of the Digital Millennium Copyright Act of 1998 (as it may be amended from time to time), and shall comply in full with all of the procedures detailed therein as
may be necessary to take advantage of such provisions. 

21

 

        4.05.    (a)    You warrant, represent and agree to comply with all formalities necessary to ensure the full
protection of Sony's or its licensors' copyrights in the Sony Materials and Sony Authorized Trademarks as Sony may reasonably request. Your obligations under the preceding sentence shall include, but
not be limited to causing the following information to be prominently and legibly displayed in human readable form on the Approved Media Player on which the Sony Cleared Recording concerned is
Streamed or Conditionally Downloaded, provided that with respect to Approved Electronic Devices
that are Permitted Portable Devices only to the extent technologically feasible using then current state-of-the art means: 

        (1)  the
title of the Sony Cleared Recording concerned; 

        (2)  the
name of the featured musical recording artist(s) are embodied in the Sony Materials concerned (as Sony shall designate); and 

        (3)  any
other appropriate notices, credits or identifying information specified by Sony (e.g., the names of producers, featured side artists, authors, publishers, directors,
writers, performers, the name of the applicable Sony label that markets the Sony Materials concerned, etc.) or any notices required by law. 

The
information set forth above shall be displayed on the Service in a manner no less prominent in terms of size, type, appearance and other features as Subscription Service Agent displays similar
information regarding the same category of content (i.e. sound recordings, artwork, etc.) made available for use on the Service according to an authorization from a Person other than Sony appearing on
or in connection with the Service. 

        (b)  (1)    Sony
hereby grants to you a non-exclusive, non-transferable right to use Sony Authorized Trademarks for use solely by you on the
Service Site during the Term solely for advertising and purposes of trade in connection with the Service, without payment of compensation to Sony, subject to Sony's prior written consent in each
instance regarding all elements and aspects of your use of the Sony Authorized Trademark concerned in each instance. Without limiting the generality of the foregoing, in each instance (i) you
shall not make any modifications to any Sony Authorized Trademarks (other than formatting the Sony Authorized Trademark concerned to fit on the applicable Web Page on the Service Site) in connection
with the license granted hereunder without Sony's prior written consent, and (ii) you shall place a ® or TM symbol (as appropriate and as Sony directs you) in
juxtaposition with the Sony Authorized Trademarks on the Service Site. You acknowledge that the use of the Sony Authorized Trademarks as contemplated in this subparagraph 4.05(b) will not create in
you, nor will you represent that you have, any right, title or interest in or to any Sony Authorized Trademarks other than the trademark right granted in the foregoing provisions of this subparagraph
4.05(b). 

        (2)  Without
limiting the foregoing, Subscription Service Agent may not juxtapose any Sony Authorized Trademark with any other Trademark without Sony's express, prior written
approval. Notwithstanding the foregoing, Subscription Service Agent may juxtapose a Sony Authorized Trademark with other Trademarks made available for use on the Service according to an authorization
from a Person other than Sony whose intellectual property or other content is made available via the Service; provided that the Sony Authorized Trademark shall be displayed on the Service in a manner
no less prominent in terms of size, type, appearance and other features as Subscription Service Agent displays such other Trademarks and all such Trademarks (including the Sony Authorized Trademark)
shall be displayed in alphabetical order. 

        4.06.    (a)    (1)    Subscription Service Agent shall not, without Sony's prior written consent in each
instance, which consent Sony may withhold in its unrestricted discretion, make any use (directly or indirectly) of or authorize any other Persons deriving rights from Subscription Service Agent to use 

22

 

(directly or indirectly) any Sony Authorized Trademark or of the names, likenesses or biographical materials of any Sony Artist and/or any other Persons contributing to the recording or creation of
any Sony Materials (except as explicitly set forth herein), including, for the avoidance of doubt and without limitation, any producers, mixers and/or remixers, in advertisements, promotions, press
releases or marketing materials used in connection with the Service or otherwise. In instances where Sony has granted you consent to use the name or likeness of a particular Sony Artist or other
Person: (i) your right to use the name and likeness of such Person shall be limited to the extent to which such Person's name and likeness has been approved by Sony pursuant to the preceding
sentence, and (ii) Sony may, at its sole election, terminate any rights granted to you in connection with such Person's name and/or likeness upon forty-eight (48) hours notice to you
(which notice may, notwithstanding anything to the contrary herein, be via facsimile, electronic mail or any other effective method of communication). Upon your receipt of same, you and all
Syndication Agents shall immediately cease to use the name and likeness of such Person on or in connection with the Service; provided, however, that solely to the extent that you do not have the right
or ability to prevent the further use or dissemination of the materials or advertisements concerned you may continue to use the name and likeness of such Person on materials previously manufactured
and advertisements previously placed. If you or any Syndication Agent do not cease using (directly or indirectly) any Sony Authorized Trademark or the names, likenesses or biographical materials of
any Sony Artist and/or any other Persons contributing to the recording or creation of any Sony Materials upon Sony's request under section 4.06(a)(i) above, then, upon Sony's written
request and without limiting any of Sony's other rights or remedies, you or the Syndication Agent concerned, as applicable, shall terminate access to the Service (with respect to Sony Materials only). 

        (2)  Notwithstanding
the foregoing but subject to section 4.06(c)(3) below, Subscription Service Agent shall have the right to use and to authorize Syndication Agents
the right to use the names and likenesses (solely to the extent such likenesses are contained in corresponding items of Sony Authorized Artwork and are displayed in a size not to exceed 75 pixels
(height) by 75 pixels (width)) of the featured Sony Artists on the Service Site and the Syndication Agent Sites solely on and in connection with the exploitation of Sony Cleared Recordings hereunder,
provided that (A) you comply with subparagraph 4.06(b) below, (B) that such name and likeness of the featured Sony Artist concerned shall only be used in a manner that is accurately
descriptive and representative of the artists whose featured Recordings are available via the Service, and only in a manner that appropriately and proportionately reflects such availability, such as
by listing all such artists (including Sony Artists) in alphabetical order at all times, or alternatively, by rotating such names and likenesses in a rotation consisting of no less than an aggregate
of twenty-five (25) names of different artists such that no particular Sony Artist is disproportionately used or emphasized, (C) such names and such likenesses of Sony
Artists (to the extent such names and such likenesses are displayed in connection with the Service on the Service Site or the Syndication Agent Site concerned, as the case may be) shall not be given
more or less prominence than all other artists made available via the Service by position of name, type size, type style or otherwise, and (D) neither Subscription Service Agent nor any
Syndication Agent shall use any such Sony Artist's name or likeness in a manner that can be construed by a reasonable person as an endorsement of a product or service, including the Service. Upon your
receipt of Sony's request to remove any Sony Materials from the Service, you agree that you shall, immediately thereafter but in no event later than  [ * * * ]* from the date
of such demand, remove from the Service all Sony Materials
referenced in Sony's demand; provided, however, that your non-habitual, non-repetitive failure to so remove any particular Sony Materials in any instance(s) shall not
constitute a material breach of this Content Integration Agreement. At Sony's written request, you shall promptly advise Sony in writing of your compliance with the terms of this subparagraph, which
notice shall be accompanied by all copies of the Sony Materials 

23

 

concerned. At Sony's written request, you shall furnish Sony with an affidavit, signed by an officer of Subscription Service Agent, in a form satisfactory to Sony in its reasonable discretion,
accurately confirming that you have destroyed and/or erased all copies of the Sony Materials that are removed from the Service pursuant to this subparagraph. 

        (3)  [ * * * ]*

        (b)  You
shall, promptly following Sony's request, deliver to Sony sample copies and any other copies requested by Sony of artwork, packaging, containers, labels, printed
programs, advertising copy and promotional material created in connection with the Service along with a list of the artists, musical compositions and record companies whose Recordings are used in
connection with the Service. Without limiting any of Sony's rights herein, you warrant, represent and agree that, with respect to any Sony Artist whose performances are embodied on Sony Cleared
Recordings, the credits for such artist, and the artist credits in any advertising containing the Service, shall appear (in accordance with subparagraphs 4.05(c) and 4.06(a) above) in the same size,
prominence and type style as the size, prominence, and type style used in connection with credits and advertising for other artists whose work is embodied on the Service. 

        4.07.        Subscription Service Agent shall not, under any circumstance, (i) attempt to pledge, mortgage or
otherwise encumber the (A) Sony Materials, or, attempt to pledge, mortgage or otherwise encumber Subscription Service Agent's rights under this Content Integration Agreement for the benefit of
or on behalf of a Triggering Person or (B) any other tangible or intangible property of Sony provided to Subscription Service Agent pursuant to this Content Integration Agreement (including,
without limitation, End User Information) or (ii) attack or challenge the validity of any of Sony's or its Affiliate's copyrights, trademarks or other intellectual property rights or licenses. 

5.    SECURITY  

        5.01    (a)    All Sony Materials transmitted pursuant to the Service shall be transmitted solely in either: 

          (i)  (This
paragraph 5.01(a)(i) only applies to Streams of Sony Cleared Recordings that are digitally transmitted directly from Agent Servers to End Users (or,
in the case of so-called "peer-to-peer Streaming", Streams of Sony Cleared Recordings from an Approved Electronic Device of another End User).) A Streaming and
Partial Data Cache format that: (i) utilizes an encryption mechanism (utilizing security features which Sony has previously approved in writing) which is designed to prevent the creation or
facilitation of an Electronic Digital Copy from Streams or Partial Data Caches (or any combination thereof) of Sony Cleared Recordings Streamed as part of the Service hereunder, and (ii) has,
in each instance, been approved by Sony in writing in advance (each, an "Approved Streaming Format"). Without limiting the generality of the preceding
sentence, the following Streaming formats are hereby deemed Approved Streaming Formats as of the date hereof: Windows Media Audio, Real G2 with Surestream, Real G2 and RealAudio 3.0 only to the extent
that such formats comply with and conform to the security specifications attached hereto as Exhibit A-2. In the event that a technology becomes generally available which is designed
to prevent the creation or facilitation of an Electronic Digital Copy from Streams by means of computer software programs currently known as so-called "rippers" (e.g. the software program
known as "Streambox", or computer software programs with similar functionality, now known or later developed), then you shall promptly thereafter utilize such technology in connection with all Streams
of Sony Cleared Recordings hereunder. The bit rate of all Streams of Sony Materials shall be not less than [ * * * ]* kbps or
greater than [ * * * ]* kbps. 

24

  

        (ii)  (This
paragraph only applies to Playbacks of Conditional Downloads of Sony Cleared Recordings, whether or not derived from Partial Data Caches, either in whole or in
part, that are digitally transmitted directly from Agent Servers or from the Approved Electronic Device of one (1) End User to another End User (i.e., so-called "peer to peer file
sharing")). A Playback format that: (i) utilizes an encryption mechanism (utilizing security features which Sony has previously approved in writing) which is designed to prevent the creation or
facilitation of an Electronic Digital Copy from Conditional Downloads and/or Partial Data Caches transmitted as part of the Service hereunder, (ii) in the case of digital transmissions of Sony
Cleared Recordings from the Approved Electronic Device of one (1) End User to another End User (i.e., so-called "peer to peer file sharing"), such transmissions do not cause any
material degradation in audio quality or data loss of any kind as a result of serial copying, in whole or in part, directly or indirectly, (iii) utilizes effective technological means designed
to prevent Persons from editing, changing or removing (except as provided in this clause (ii)) any part of the Sony Materials contained therein or from making a copy (including an Electronic
Digital Copy) thereof, or from moving or transferring such file to an Electronic Device that is not an Approved Electronic Device, and (iv) has, in each instance, been approved by Sony in
writing in advance (each, an "Approved Playback Format"). Without limiting the generality of the preceding sentence, the following Playback format is
hereby deemed an Approved Playback Format as of the date hereof: Windows Media Audio only to the extent that such format complies with and conforms to the security specifications attached hereto as
Exhibit A-2. In the event that a technology becomes generally available which is designed to prevent the creation or facilitation of an Electronic Digital Copy from Conditional
Downloads by means of computer software programs currently known as so-called "sound card rippers" (e.g. the software program known as "Total Recorder", or computer software programs with
similar functionality, now known or later developed), then you shall promptly thereafter utilize such technology in connection with all Conditional Downloads and Partial Data Caches of Sony Cleared
Recordings hereunder. The bit rate of all Playbacks of Sony Materials shall be not less than [ * * * ]* kbps or greater than  [ * * * ]* kbps.

        (b)  (1)    The
security features, specifications and formats referred to in subparagraph 5.01(a) above and subparagraph 5.01(c) below, including the Approval
Streaming Format and the Approved Playback Format, together with the features, specifications and attributes described in paragraphs 1.05, 1.13, 1.26, 1.29, 1.42, 5.02, 5.02.1 and 5.06 herein,
respectively, and the Technical Specifications and the Functionality Specifications attached hereto, respectively, are sometimes individually and collectively referred to herein as "Approved Security
Features". Without limiting the generality of this Article 5, the Approved Security Features utilized by Subscription Service Agent shall at all times be of the highest technical standards,
which are widely considered the so-called "state-of-the-art" in the United States electronic commerce industry, including an encryption methodology
which is effectively designed to prevent any Person receiving a Stream or a Playback of Sony Materials via the Service from creating an Electronic Digital Copy of Sony Cleared Recordings 

        (2)  [ * * * ]*

        (c)  (i)    Within  [ * * * ]* months of the establishment of industry standards under the
Secure Digital Music Initiative (SDMI) or any other similar standardized digital copy protection scheme for audio recordings (an "SDMI Standard") and provided that (i) the SDMI Standard is
incorporated into formats that are available to CenterSpan on reasonable (for the purpose hereof, "reasonableness" shall be determined by taking into account the cost of implementing the SDMI Standard
as compared to the general operating costs of CenterSpan in general) non-discriminatory terms (i.e., implementation will not impose a disproportionately greater financial or technical
burden on CenterSpan than are imposed on similarly-situated competitors of CenterSpan) and (ii) if the SDMI Standard is or is likely to become a generally-accepted standard in the U.S. 

25

 

phonorecord and United States consumer electronics industries, respectively, then CenterSpan agrees to: (x) only transmit Sony Materials in a Streaming format that complies fully with such
standards and (y) license any proprietary technology duly adopted by the SDMI Plenary Body and/or the SDMI Foundation or any similar body or institute (to the extent such technology is
available) including, without limitation, any watermarks. Unless and until such time as there shall have been established an SDMI Standard, you shall only transmit Sony Materials Streamed via the
Service in an Approved Streaming Format or, in the case of Conditional Downloads, you shall only transmit Sony Materials in an Approved Playback Format that complies fully with the Streaming Security
Functional Requirements attached hereto as Exhibit B, as same may be modified by the SDMI Foundation or any similar body or institute from time to time. 

        (ii)  If
CenterSpan is unwilling or unable to: (x) transmit Sony Materials in a Streaming format that complies fully with an SDMI Standard or (y) license any
proprietary technology duly adopted by the SDMI Plenary Body and/or the SDMI Foundation or any similar body or institute (to the extent such technology is available) including, without limitation, any
watermarks, as and when required under section 5.03(c)(i) above (taking into account clause (i) of section 5.03(c)(i) above), then CenterSpan shall have the option,
exercisable by notice to Sony, to suspend the Term (such notice is sometimes referred to herein as the "SDMI Suspension Notice") until the date on which you comply with the requirements set forth in
section 5.03(c)(i) above (the period commencing on the date of your SDMI Suspension Notice and ending on the date on which you comply with the requirements set forth in
section 5.03(c)(i) above is sometimes referred to herein as the "SDMI Suspension Period"). In the event you suspend the Term pursuant to the previous sentence, the running of the Term
as well as any of Sony's obligations hereunder for the duration of any such suspension, shall be so suspended for a period equal to the SDMI Suspension Period (i.e., the Term shall be extended);
provided, however, that in no event shall the running of the Term be suspended for a period in excess of [ * * * ]*. No such
suspension shall relieve you of your obligations under this Content Integration Agreement. For the avoidance of doubt, during the SDMI Suspension Period, you shall disable or remove from the Service
all Sony Materials, all Sony Authorized Trademarks and all Links to Web Sites owned or controlled by Sony. In the event that you do not comply with the requirements set forth in
section 5.03(c)(i) above within [ * * * ]* following the [ * * *
]* period set forth in section 5.03(c)(i) above then, without limiting any of Sony's rights or remedies hereunder or otherwise, Sony shall have the
option, exercisable by notice to you and without limiting any of its rights or remedies, to deem such failure a Default Event. 

        5.02.    In order to ensure that all Persons other than End Users are prevented from accessing any Sony Materials contained in
the Service, Subscription Service Agent shall cause the Subscription Service to
operate in accordance with each of the following security features at all times during and after the Term: 

        (a)  The
Service shall utilize systems which contain a mechanism which effectively prevents: (i) Persons other than End Users from accessing the Service,
(ii) an End User from accessing the Service from more than one Electronic Device simultaneously and (iii) an End User from accessing the Service from an Electronic Device that is not a
Permitted Electronic Device. 

        (b)  The
Service shall utilize systems which contain a mechanism which is designed to prevent a Person other than the End User for whom any particular User Account is
established from accessing any Web Page pertaining to such User Account. 

        (c)  The
Service shall utilize systems which contain a mechanism which effectively prevents the sharing of passwords and simultaneous access by more than one Person to any
one (1) User Account. 

26

 

        (d)  The
Service shall utilize systems which contain a mechanism which effectively prevents the creation of Downloads or Electronic Digital Copies of Sony Cleared Recordings
Streamed hereunder, including, without limitation, by means of computer software programs currently known as so-called "stream rippers" (e.g. the software program known as "Streambox", or
computer software programs with similar functionality, now known or later developed). 

        (e)  The
Service shall utilize systems which contain a mechanism which effectively prevents the creation of Downloads or Electronic Digital Copies of Sony Cleared Recordings
Playedback hereunder. 

        (f)    The
Service shall ensure that Persons shall not be able to access Conditional Downloads after such Persons are no longer End Users in good standing or are otherwise no
longer eligible to receive and/or retain the Conditional Download concerned for any other reason. 

        5.02.1.    At all times during the Term you shall ensure that all Sony Cleared Recordings used in connection with Service shall
at all times: (i) originate from files on the Agent Servers and (ii) be available to End Users directly from the Service Site or from the Service Site indirectly via a Syndication Agent
Site (in accordance with the terms and conditions of this Content Integration Agreement). For the avoidance of doubt, in the case of so-called "peer to peer file sharing", Sony Cleared
Recordings may originate from files on the hard drive of an Approved Electronic Device of an End User in compliance with the terms hereof. 

        5.03.    (a)    At all times during the Term, you shall actively monitor compliance by each Person accessing Sony
Materials via the Service or otherwise of the Approved Security Features. In the event that you become aware that any Approved Security Features are reasonably capable of circumvention by any Person,
you shall immediately inform Sony thereof. Upon being so informed by you, or alternatively, upon Sony's informing you that any Approved Security Features are reasonably capable of circumvention by any
Person (the capability of such circumvention is sometimes referred to herein as a "Security Flaw"), you and Sony shall immediately discuss an
appropriate course of action, taking into account, at a minimum, the severity of the Security Flaw, the scope of any commercial impact upon Sony resulting from the exploitation of the Security Flaw,
the likelihood of repeated circumvention, the risk to any intellectual property rights of Sony and its Licensees, and the cost to CenterSpan of addressing the Security Flaw. CenterSpan shall
(i) implement any reasonable resolution proposed by Sony after such discussions within the shortest possible time period that is commercially practicable (in no event shall this period last
more than seventy-two (72) hours from the date of discovery of the Security Flaw concerned); and (ii) give Sony, within twenty-four (24) hours of the date
of discovery of the Security Flaw concerned, such assurances and furnish to Sony such plans as are reasonably satisfactory to Sony detailing, with reasonable particularity, the steps that have been
taken and the steps that you propose to take in connection with clause (i) of this sentence. Nothing in this paragraph 5.03 shall be deemed to limit any of Sony's rights or remedies
hereunder or otherwise, including, for the avoidance of doubt, Sony's right to recover damages (whether or not you have complied or attempted to comply with the provisions of this paragraph), and the
provisions of paragraph 16.01 shall, for the avoidance of doubt, require you to indemnify Sony for all damages arising from all Security Flaws in accordance with the provisions thereof (whether
or not you have complied or attempted to comply with the provisions of this paragraph). 

        (b)  In
the event that any Security Flaw is not cured by you as and when required under subparagraph 5.03(a) above, or alternatively, if you fail to implement any resolution
proposed by Sony on the basis that you dispute whether the breach of the Security Flaw concerned is material or damaging to Sony or its Licensees or Affiliates for any reason or on the basis that the
resolution proposed by Sony is "reasonable" in light of the criteria specified in the second sentence of subparagraph 5.03(a) or otherwise, then, without limiting any of Sony's rights or remedies
hereunder or otherwise (the parties hereby acknowledge that, after taking into account such 

27

 

criteria, termination of the Service, to the extent Sony Materials are utilized in connection therein, termination of the Term and the triggering of an "Event of Default" hereunder might be
"reasonable"; provided, however that Sony shall not have the right to terminate the Term and trigger an "Event of Default" hereunder unless and until two (2) business days after Sony has first
sent a Suspension Notice (as defined below) in respect of such Security Flaw), Sony shall have the option, exercisable by notice to you (which notice, notwithstanding anything to the contrary herein,
may be via facsimile, electronic mail or any other effective method of communication), to suspend the Grant of Rights (such notice is sometimes referred to herein as the
"Suspension Notice") until such time as: (x) you have taken all steps necessary to eliminate the Security Flaw concerned; (y) you have
given Sony such assurances and have furnished to Sony such plans as are reasonably satisfactory to Sony detailing, with reasonable particularity, the measures that have been taken and the steps that
you propose to take pursuant to clause (x) of this sentence; and (z) Sony has sent you a notice (the "Suspension Reversal Notice")
confirming that each of the requirements set forth in clauses (x) and (y) have been satisfied (the period commencing on the date of Sony's Suspension Notice and ending on the date of a
Suspension Reversal Notice is sometimes referred to herein as the "Suspension Period"). In the event Sony suspends the Grant of Rights pursuant to the
previous sentence, the running of the Term as well as any of Sony's
obligations hereunder for the duration of any such suspension, shall be so suspended for a period equal to the Suspension Period (i.e., the Term shall be extended); provided, however, that in no event
shall the running of the Term be suspended for a period in excess of thirty (30) days. For the avoidance of doubt, during the Suspension Period, you shall disable or remove from the Service all
Sony Materials, all Sony Authorized Trademarks and all Links to Web Sites owned or controlled by Sony. In the event that any Security Flaw in respect of which Sony has sent Subscription Service Agent
a Suspension Notice hereunder is not cured by Subscription Service Agent as required hereunder within ninety (90) days (or, if the Security Flaw is solely directly attributable to a failure of
Microsoft's digital rights management technology or other Microsoft software, as described in greater particularity in the Technical Specifications attached hereto (excluding any reason directly
attributable to the acts or omissions of CenterSpan, directly or indirectly, in whole or in part), one hundred twenty (120) days) of the date of the Suspension Notice concerned then, without
limiting any of Sony's rights or remedies hereunder or otherwise, Sony shall have the option, exercisable by notice to Subscription Service Agent, to deem such failure a Default Event. 

        (c)  Without
limiting the generality of anything elsewhere herein or any of Sony's rights or remedies, each of which is hereby expressly reserved, immediately after becoming
aware that any Person has utilized or has exploited any Security Flaw, either directly or indirectly, or immediately after Sony has advised Subscription Service Agent that Persons are utilizing or
exploiting any Security Flaw, either directly or indirectly: (i) all such Persons shall no longer be deemed End Users hereunder, (ii) Subscription Service Agent shall immediately and
unconditionally cancel, or require the applicable Syndication Agent to cancel, such Person's User Account; and (iii) Subscription Service Agent shall take all necessary steps to ensure that
such Person can no longer access the Service at any time thereafter. 

        5.04.    Without limiting the generality of anything in this Content Integration Agreement, neither Subscription Service Agent
nor any Person deriving rights from Subscription Service Agent shall, through Subscription Service Agent's acts or omissions, either directly or indirectly, in whole or in part, create or facilitate
the creation of Electronic Digital Copies of any Sony Materials except to the extent expressly permitted herein in connection with the Service. 

        5.05.        Upon reasonable advance notice and subject to paragraph 14.02, Sony shall have the right, at its
own expense, to conduct technical audits of the Service including, for the avoidance of doubt and without limitation, all hardware and software components and systems utilized by Subscription Service
Agent in connection with the Service including server logs, and all documentation 

28

 

setting forth Subscription Service Agent's policies and procedures with respect to security features and formats including but not limited to, the Approved Security Features. Sony shall use
reasonable efforts to conduct such technical audit in a non-intrusive manner and shall have the right the conduct such technical audit only one time per semi-annual period;
provided, however, that in the event Sony has notified you of a Security Flaw, the foregoing restriction shall not apply and Sony shall be entitled to conduct a technical audit whether or not a
technical audit(s) has previously been conducted during that semi-annual period. In addition, as and to the extent that you have the right to conduct technical audits of Syndication
Agents, Sony shall be allowed to actively participate, through Persons designated by Sony in its sole discretion, in technical audits of Syndication Agents conducted by you or, if Sony declines to so
participate in the audit concerned, promptly following Sony's request therefor, in each instance, Sony shall be furnished with a copy of all reports, materials and other information received by
you in connection with or arising out of each technical audit of each Syndication Agent conducted by you. Without limiting the generality of the foregoing, at all times, you shall use best good faith
reasonable efforts to obtain such technical audit rights from the Syndication Agents. 

        5.06.    (a)    You hereby represent and warrant that at all times during the Term only Approved Media Players (as
defined below) shall be used by End Users of the Service in connection with the transmission, performance and/or playback of Recordings during each session in which the End User concerned has access
to reproductions, performances and/or transmissions of Sony Cleared Recordings made available via the Service, either in whole or in part, directly or indirectly. 

        (b)  (1)    As
used herein, a "Media Player" shall mean a computer program which is used or useful in the
transmission, performance and/or playback of Recordings so that the digital data that embodies the audio or audiovisual recording concerned can be perceived by and communicated to an End User of such
computer program when used in conjunction with the aid of a machine or device. For the avoidance of doubt and without limitation, Microsoft's "Windows Media Audio Version 7", WMA8 and RealNetwork's
"RealPlayer 8" are "Media Players" as of the date hereof. 

        (2)  Omitted
without implication. 

        (3)  As
used herein, an "Approved Media Player" shall mean a Media Player that, while being used by an End User during or in
connection with any session during which such End User has access to the Service, directly or indirectly, is designed to prevent such End User from importing or integrating transmissions, performances
and/or playbacks of Imported Recordings from any machine or device (including, for the avoidance of doubt, through or via the End User's computer hard drive, portable electronics device or any other
storage medium) into a sequence (i.e., a so-called "playlist") consisting of both Imported Recordings and transmissions, performances and/or playbacks of Sony Cleared Recordings delivered
to such End User by the Service. Notwithstanding the foregoing, a sequence or so-called "playlist" consisting entirely of Imported Recordings may follow or precede a sequence or
so-called "playlist" consisting entirely of a significant and substantial number of Recordings delivered to such End User by the Service; provided, however, that you shall not facilitate,
directly or indirectly, the creation of any application or functionality that has the effect of automating the process of integrating the alternating performances of Imported Recordings and Sony
Cleared Recordings from different sequences or "playlists" of Recordings. The Media Player incorporated into the Application, as of the date hereof, as recently demonstrated by you for Sony (which
version, for the avoidance of doubt, contains the functionality described in the preceding sentence) is hereby deemed to be an "Approved Media Player". 

        (c)  [ * * * ]*

29

   6.    PAYMENTS AND FEES  

        6.01.    (a)    You shall make the following payments to Sony, by wire transfer or certified check, in immediately
available funds on the dates specified in subparagraphs 6.01(b) and (c) below: (i) a non-recoupable, non-returnable payment in the amount of One Million Dollars
($1,000,000) (the "Service Preparation Fee") and (ii) a recoupable Advance in the amount of One Million Dollars ($1,000,000) (the "Initial Advance"). 

        (b)  The
Service Preparation Fee shall be payable as follows: (i) Five Hundred Thousand Dollars ($500,000) promptly (but in no event later than five (5) days)
following complete execution of this Content Integration Agreement and (ii) Five Hundred Thousand Dollars ($500,000) on or before September 1, 2002. 

        (c)  The
Initial Advance shall be payable as follows: 

          (i)  Two
Hundred and Fifty Thousand Dollars ($250,000) promptly (but in no event later than five (5) days) following the earlier of: (i) September 1,
2002 and (ii) that date on which you enter into the first Syndication Agent Agreement hereunder; 

        (ii)  Two
Hundred and Fifty Thousand Dollars ($250,000) promptly (but in no event later than five (5) days) following the earlier of: (i) December 1,
2002 and (ii) the date that is three months after the date on which you enter into the first Syndication Agent Agreement hereunder; 

        (iii)  Two
Hundred and Fifty Thousand Dollars ($250,000) promptly (but in no event later than five (5) days) following the earlier of: (i) March 1, 2003
and (ii) the date that is six months after the date on which you enter into the first Syndication Agent Agreement hereunder; 

        (iv)  Two
Hundred and Fifty Thousand Dollars ($250,000) promptly (but in no event later than five (5) days) following the earlier of: (i) June 1, 2003
and (ii) the date that is nine months after the date on which you enter into the first Syndication Agent Agreement hereunder. 

        6.02.    (a)    Simultaneous with the complete execution of this agreement, and in consideration of the mutual
covenants contained herein, you hereby agree to award, transfer and assign to Sony Two Hundred Eighty Three Thousand Five Hundred Fifty Six (283,556) shares of common stock of Subscription Service
Agent (representing an interest equal to at least three percent (3%) of the total issued and outstanding capital stock of Subscription Service Agent) (the "Equity Consideration"). 

        (b)  The
transfer of the Equity Consideration shall be pursuant to a common stock acquisition and investor rights agreement (the "Stock Purchase Agreement"), in form and
substance satisfactory to Sony and entered into by the parties simultaneously herewith. 

        (c)  Simultaneous
with the complete execution of this agreement, and in consideration of the mutual covenants contained herein, you hereby agree to award, transfer and assign
to Sony warrants ("Warrants") granting Sony the option to acquire an additional interest in CenterSpan equal to One Hundred Eighty Nine Thousand Thirty Seven (189,037) shares of common stock of
Subscription Service Agent (representing an interest equal to at least two percent (2%) of the total outstanding capital stock of CenterSpan) at an exercise price equal to the thirty (30) day
trading day trailing volume weighted average price as of the sate that is thirty (30) days prior to the date first written above. 

        (d)  The
transfer of the Warrants shall be pursuant to a Warrant to Purchase Preferred Stock, in form and substance satisfactory to Sony and entered into by the parties
simultaneously herewith. 

30

 

        6.02.1.    (a)    In connection with each Syndication Agent who is a Music Site Syndication Agent, Network Syndication
Agent, Online Retailer Syndication Agent, Radio Site Syndication Agent or Data Network Syndication Agent authorized by you to offer the Service via the Syndication Agent Site concerned you agree to
make the Advance payments set forth in Schedule A hereto to Sony, by wire transfer or certified check, in immediately available funds on the dates specified thereon. 

        (b)  (1)    For
purposes of determining whether the Execution Advance portion of the Advance set forth on Schedule A is payable, a Syndication Agent shall be
classified as a Network Syndication Agent if the Syndication Agent is listed among the designated positions in the ranking in question for any two (2) weeks (whether or not such weeks are
consecutive) during the thirty (30) day period prior to the commencement of the term of the Syndication Agent Agreement (it being understood that if the Syndication Agent in question occupies
more than one category of Network Syndication Agent hereunder during such time period, the amount of the Advance payable under Schedule A shall be the
amount of the Advance corresponding to the highest of any such rankings.) For purposes of determining whether the Execution Advance portion of the Advance set forth on Schedule A is payable, a
Syndication Agent shall be classified as a Music Site Syndication Agent if the Syndication Agent is listed on the ranking in question at any time for any two (2) weeks (whether or not such
weeks are consecutive) during the thirty (30) day period prior to the commencement of the term of the Syndication Agent Agreement. For purposes of determining whether the Execution Advance
portion of the Advance set forth on Schedule A is payable, a Syndication Agent shall be classified as a Data Network Syndication Agent or an Online Retailer Syndication Agent, as applicable, if
the Syndication Agent satisfies the criteria set forth in paragraphs 1.14.2 or paragraph 1.41.7, respectively, at any time for any two (2) weeks (whether or not such weeks are
consecutive) during the thirty (30) day period prior to the commencement of the term of the Syndication Agent Agreement concerned. 

        (2)  For
purposes of determining whether (and the applicable amount of) the Anniversary Advance portion of the Advance set forth on Schedule A is payable, a
Syndication Agent shall be classified as a Rank 1 Network Syndication Agent, a Rank 2 Network Syndication Agent or a Rank 3 Network Syndication Agent if the Syndication Agent is listed among the
designated positions in the ranking in question at any time for any two (2) weeks (whether or not such weeks are consecutive) during the thirty (30) day period prior to the date that
falls one year after the term of the Syndication Agent Agreement in question has begun (it being understood that if the Syndication Agent in question occupies more than one category of Network
Syndication Agent hereunder during such time period, the amount of the Advance payable under Schedule A shall be the amount of the Advance corresponding to the highest of any such rankings.)
For purposes of determining whether the Anniversary Advance portion of the Advance set forth on Schedule A is payable, a Syndication Agent shall be classified as a Music Site Syndication Agent
if the Syndication Agent satisfies the criteria set forth in paragraph 1.41.3 at any time for any two (2) weeks (whether or not such weeks are consecutive) during the thirty
(30) day period prior to the date that falls one year after the term of the Syndication Agent Agreement in question has begun. For purposes of determining whether the Anniversary Advance
portion of the Advance set forth on Schedule A is payable, a Syndication Agent shall be classified as a Data Network Syndication Agent or an Online Retailer Syndication Agent, as applicable, if
the Syndication Agent satisfies the criteria set forth in paragraphs 1.14.1 or paragraph 1.41.7, respectively, at any time for any two (2) weeks (whether or not such weeks are
consecutive) during the thirty (30) day period prior to the date that that falls one year after the term of the Syndication Agent Agreement in question has begun. 

        (c)  Notwithstanding
the foregoing or anything elsewhere herein, if a Syndication Agent may be classified as more than one (1) type of Syndication Agent for purposes
of determining an 

31

 

Execution Advance portion of the Advance or an Anniversary Advance portion of the Advance set forth on Schedule A, respectively, as of the otherwise applicable date for making such
determination set forth in sections 6.02.1(b)(1) or (2) above for the portion concerned, the amount of the Execution Advance or Anniversary Advance concerned shall be determined on the basis of
the classification of Syndication Agent that results in the highest amount for the applicable overlapping classifications of Syndication Agents. 

        6.02.2.    (a)    Ten percent (10%) of the Advances payable to Sony hereunder and ten percent (10%) of the Service
Fees hereunder shall be deemed to be paid to Sony in consideration of the rights granted to you in section 3.01(b)(1) above. 

        (b)  Ninety
percent (90%) of the Advances payable to Sony hereunder and ninety percent (90%) of the Service Fees hereunder shall be deemed to be paid to Sony in consideration
of the rights granted to you in sections 3.01(b)(2) - (4) above. 

        (c)  For
the avoidance of doubt, the foregoing provisions of this paragraph 6.02.2 shall not in any way affect the applicability of the second sentence of
paragraph 1.02 above (i.e., the entirety of all Advances paid hereunder may be recouped from the entirety of all Service Fees to be paid or accrued to or on behalf of Sony pursuant to this
Content Integration Agreement regardless of whether the Service Fees are attributable to the rights granted to you under section 3.01(b)(1) above or sections 3.01(b)(2) through
(4) above, respectively). 

        6.03.    (a)    In consideration of the rights granted to you hereunder, you agree to pay to Sony at the end of each
calendar month (and in accordance with the provisions of this Article 6) a fee (the "Service Fee") in an amount equal to Sony's Pro Rata Share of Adjusted Gross Revenue during such month;
provided, however, that in no event shall the amount payable to Sony during any particular such month be less than the Minimum Monthly Amount. 

        (b)  As
used herein, the following terms shall have the following meanings: 

        (1)  "Advertisements" shall mean commercial space on Web Pages that are leased, licensed or sold to Persons for purposes of
advertising, promotion, marketing, sponsorships or otherwise. 

        (2)  "Bounties" shall mean all monies (including, for the avoidance of doubt and without limitation, so-called
"affiliate program" fees, so-called "referral fees" and customer acquisition fees), whether structured as a one-time payment or as a recurring revenue share, as well as the
fair market value of any non-cash consideration. 

        (3)  "Gross Margin" shall mean all monies (including non-returnable advances) actually received by you from the
sale of any products or services via any Web Page that is a part of the Service, after deducting (a) any and all taxes paid by the consumer as part of the applicable sale, (b) an amount
equal to the actual, out-of-pocket wholesale price paid by Subscription Service Agent or the Syndication Agent to any unaffiliated third parties in consideration of any such
products or services purchased for resale (i.e., the cost of goods sold), and (c) an amount equal to the actual, out-of-pocket financial clearing, shipping and handling
fees paid by Subscription Service Agent or the Syndication Agent to any unaffiliated third parties in connection with the fulfillment of the sale of the product or service concerned. 

        (4)  (A)    (I)    "Gross Revenue" shall mean the aggregate of: (a) all Syndication Agent Site
Gross Revenue; and (b) all Service Site Gross Revenue. 

        (II)  (AA)    "Syndication Agent Site Gross Revenue" shall mean: (a) all Subscription Fees that are actually
paid (or, are payable by End Users solely in connection with monies received by CenterSpan that represent Subscription Fees paid by the Syndication Agent concerned to CenterSpan notwithstanding any
default in the payment of the 

32

 

monies concerned by the End User to the Syndication Agent concerned); (b) all monies (including non-returnable advances) that are actually paid (by or on behalf of any Person,
including all Syndication Agents or otherwise) to or on behalf of you or any of your Affiliates in consideration of each Syndication Agent's right to market and make the Service available via a
Syndication Agent Site, including, for the avoidance of doubt and without limitation, all subscription and other fees or other remuneration, however characterized; (c) all Net Advertising
Revenues that are part of the Service via a Syndication Agent Site that are actually paid (by or on behalf of any Person, Syndication Agents or otherwise) to or on behalf of you or any of your
Affiliates; (d) all monies (including non-returnable advances) that are derived from Bounties attributable to the Service via a Syndication Agent Site that are actually paid (by or
on behalf of any Person, Syndication Agents or otherwise) to or on behalf of you or any of your Affiliates; (e) all monies (including non-returnable advances) that constitute Gross
Margin attributable to the Service via a Syndication Agent Site that are actually paid (by or on behalf of any Person, Syndication Agents or otherwise) to or on behalf of you or any of your
Affiliates; and (f) all other amounts (including non-returnable advances) that are attributable to the Service via a Syndication Agent Site that are actually paid (by or on behalf
of any Person, Syndication Agents or otherwise) to or on behalf of you or any of your Affiliates in connection with the operation and/or exploitation of the Service, including for the avoidance of
doubt and without limitation, the exploitation of End User Information. For purposes of determining "Syndication Agent Site Gross Revenue" hereunder, any non-cash or in-kind
consideration shall be either accounted for in cash on the basis of the fair market value of the property or services concerned or, at Sony's sole election, be delivered to Sony in the form of such
non-cash or in-kind consideration promptly after Sony's election pursuant to this subsection 6.03(b)(4)(A)(II)(AA). You shall notify Sony promptly following your receipt of any
non-cash or in-kind consideration. Notwithstanding anything to the contrary in this subsection 6.03(b)(4)(A)(II)(AA), "Syndication Agent Site Gross Revenue" shall not include
monies solely and specifically attributable to data transmission and content delivery technology fees charged solely for facilitating the transfer of non-specific electronic data, as
opposed to monies received for providing particular music, video and games media content pursuant to rights granted by or derived from copyright proprietors, licensors or grantors of content specific
intellectual property (collectively, "CDN Fees"); provided, however, that such monies received by you for CDN Fees in no event exceed the generally
prevailing, arms-length market rates for comparable services provided by unaffiliated third parties. 

    (BB)  Notwithstanding
anything to the contrary in this section 6.03(b)(4)(A)(II), to the extent, if at all, that any of the categories of revenues which are described
in clauses 6.03(b)(4)(A)(II)(AA)(a) through (f) above are payable by or on behalf of any Person, including any Syndication Agent and any End User, but are not actually paid for any reason,
CenterSpan, on behalf of itself (but to the full extent of its assignable interest in and to the debts owed by its Syndication Agents and its End Users that failed to pay amounts described in clauses
6.03(b)(4)(A)(II)(AA)(a) through (f) above) (the "Assignable Interest In Accounts Receivable"), hereby (i) irrevocably assigns, effective
as of the date that is one hundred twenty (120) days after the date that the amount concerned was due to be paid, to Sony the non-exclusive right to collect the amounts payable but
not paid (i.e., the accounts receivable) directly from the Person owing the amount concerned (as a third-party beneficiary of the End User license agreement concerned, the Syndication Agent Agreement
concerned, the other applicable agreement
concerned or otherwise) to the extent of the debt owed in connection with the Service (for the avoidance of doubt, nothing contained in this clause (i) shall be deemed to limit the 

33

 

generality of the last sentence of this clause 6.03(b)(4)(A)(II)(BB)), and (ii) agrees to provide Sony with a reasonable amount of information regarding the amount and nature of the
debt owed and identity of the End User (including all corresponding Personal Information), Syndication Agent or other Person concerned, such that Sony has the requisite information necessary in order
to ascertain the identity of such End User, Syndication Agent or other Person and to pursue legal action against the Person concerned for the amount of the debt concerned to the fullest extent
permitted by applicable law, plus such other sums and relief as may be reasonably appropriate in the exercise of Sony's sole, reasonable discretion. Without limiting the generality of the foregoing,
Subscription Service Agent shall use best efforts to participate in and collect the monies referenced in clauses 6.03(b)(4)(A)(II)(AA)(a) through (f) in its transactions with Syndication Agents
and End Users. Notwithstanding the foregoing, to the extent that CenterSpan does not so assign to Sony the Assignable Interest In Accounts Receivable in connection with its Syndication Agents and End
Users that failed to pay amounts described in clauses 6.03(b)(4)(A)(II)(AA)(a) through (f) above, then CenterSpan shall be financially responsible for the full amount of such amounts and such
amounts shall constitute "Syndication Site Gross Revenue" for all purposes hereunder. 

      (III)  (AA)    "Service Site Gross Revenue" shall mean: (a) all Subscription Fees that are actually paid or
are payable (whether or not actually paid) by End Users in respect of access to the Service via the Service Site; (b) all monies (including non-returnable advances) that are
actually paid or are payable (whether or not actually paid) (by or on behalf of any Person, including all Syndication Agents or otherwise) to or on behalf of you or any of your Affiliates in
consideration of the right to market and make the Service available via the Service Site, including, for the avoidance of doubt and without limitation, all subscription and other fees or other
remuneration, however characterized; (c) all Net Advertising Revenues that are part of the Service via the Service Site that are actually paid or are payable (whether or not actually paid) (by
or on behalf of any Person, Syndication Agents or otherwise) to or on behalf of you or any of your Affiliates; (d) all monies (including non-returnable advances) that are derived
from Bounties that are attributable to the Service via the Service Site that are actually paid or are payable (whether or not actually paid) (by or on behalf of any Person, Syndication Agents or
otherwise) to or on behalf of you or any of your Affiliates; (e) all monies (including non-returnable advances) that constitute Gross Margin attributable to the Service via the
Service Site that are actually paid or are payable (whether or not actually paid) (by or on behalf of any Person, Syndication Agents or otherwise) to or on behalf of you or any of your Affiliates; and
(f) all other amounts (including non-returnable advances) that are attributable to the Service via the Service Site and are actually paid or are payable (whether or not actually
paid) (by or on behalf of any Person, Syndication Agents or otherwise) to or on behalf of you or any of your Affiliates in connection with the operation and/or exploitation of the Service, including
for the avoidance of doubt and without limitation, the exploitation of End User Information. For purposes of determining "Service Site Gross Revenue" hereunder, any non-cash or
in-kind consideration shall be either accounted for in cash on the basis of the fair market value of the property or services concerned or, at Sony's sole election, be delivered to Sony in
the form of such non-cash or in-kind consideration promptly after Sony's election pursuant to this subsection 6.03(b)(4)(A)(III). You shall notify Sony promptly following your
receipt of any non-cash or in-kind consideration. 

    (BB)  Notwithstanding
anything to the contrary in this section 6.03(b)(4)(A)(III), to the extent, if at all, that any of the categories of revenues which are described
in clauses 6.03(b)(4)(A)(III)(AA)(a) through
(f) above are payable by or on behalf of any Person, including any Syndication Agent and any End User, but are not actually paid for any reason (the "Service Site
Aggregate Receivables"), then the amount of the Service Site 

34

 

Aggregate Receivables shall not constitute "Service Site Gross Revenue" hereunder; provided, however, that the total aggregate amount of Service Site Aggregate Receivables that is deemed not to
constitute "Service Site Gross Revenue" hereunder during any particular accounting period hereunder shall in no event exceed  [ * * * ]* or the total outstanding Service Site
Aggregate Receivables during the accounting period
concerned (the "Service Site Bad Debt Cap"). 

        (B)  To
the extent that Subscription Service Agent bundles the Service together with other products or services (each other service, a "Supplemental
Offering") operated by Subscription Service Agent as part of the same consumer offering to an End User (the Service, together with the Supplemental Offering with which it may
be so bundled, the "Bundled Service Offering"), the Gross Revenue attributable to the Service shall be determined by reasonable apportionment by
multiplying the gross monies payable to or on behalf of you (whether or not actually paid) in connection with the Bundled Service Offering, including, for the avoidance of doubt, all subscription or
access fees (however designated), all Net Advertising Revenues, all monies (including non-returnable advances) that are derived from Bounties, all monies (including
non-returnable advances) that constitute Gross Margin, and all other amounts (including non-returnable advances) that are actually paid (by or on behalf of Syndication Agents
or otherwise and whether or not actually paid) in connection with the operation and/or exploitation of the Bundled Service Offering, by a fraction, the numerator of which is the highest Subscription
Fee charged by Subscription Service Agent or a Syndication Agent for access to the Service on a stand-alone basis during the month concerned, and the denominator of which is the aggregate of
(i) the highest subscription(s) or access fee(s) charged by Subscription Service Agent or Syndication Agent for access to the Supplemental Offering(s) concerned on a stand-alone basis during
the month concerned and (ii) the highest subscription or access fee charged by the Subscription Service Agent or a Syndication Agent for access to the Service on a stand-alone basis during the
month concerned, with such valuations of access on a stand-alone basis reasonably judged by reference to reasonably comparable access to and/or distribution of the content and other services as the
offering in the applicable Bundled Service Offering. Notwithstanding anything to the contrary in this section 6.03(b)(4)(B), "Gross Revenue" shall not include monies solely and specifically
attributable to CDN Fees; provided, however, that such monies received by you for data and content delivery and management services in no event exceed the generally prevailing, arms-length
market rates for comparable services provided by unaffiliated third parties. 

        (5)  "Minimum Monthly Amount" shall mean, with respect to each Month, whichever of the amounts described in (i) and
(ii) below is greater: 

          (i)  The
Monthly Playback Number of Sony Cleared Recordings accessed via the Service multiplied by  [ * * * ]*; and 

        (ii)  the
number of End Users multiplied by (A) either (1) [ * * *
]* (solely in respect of a month during the first one (1) year period following the Launch Date), or
(2) [ * * * ]* (solely in respect of each month
following the first one (1) year period after the Launch Date), multiplied by (B) Sony's Usage Percentage for the month concerned. 

        (iii)  Notwithstanding
anything elsewhere herein, to the extent Sony Cleared Recordings accessed via the Service by potential End Users pursuant to a limited,
free-trial membership, the Service Fee payable therefor shall be determined and calculated in accordance with the "Minimum Monthly Amount" calculation prescribed in 

35

 

subsection 6.03(b)(5)(i) above; provided, however, that in respect of potential End Users that access Sony Cleared Recordings via the Service pursuant to limited, free-trial
memberships lasting [ * * * ]* consecutive days, the Service Fee payable hereunder shall be
determined and calculated in accordance with whichever of the amounts set forth in clauses (i) or (ii) of section 6.03(b)(5) above is greater. 

        (6)  "Monthly Playback Number" shall mean, with respect to each month, the aggregate number of times each Recording is
Streamed, in whole or in part, by an End User during such month plus the aggregate number of times each Conditional Download is Playedback, in whole or in part, by an End User during such month,
subject to the next sentence. If an End-User attempts to Stream or Playback a Recording that has intended playing time of sixty (60) seconds or more from the Service and such Stream
or Playback is interrupted such that the duration of the Stream or Playback is no more than thirty (30) seconds, for purposes of this section 6.03(b)(6) only, such Recording shall not be
deemed Streamed or Playedback. 

        (7)  "Net Advertising Revenues" shall mean all monies derived from the sale of Advertisements on Web Pages that form a
part of the Service or other materials (e.g., SMS messages) utilized by the Service, directly or indirectly, in whole or in part, after deducting any actual, out-of-pocket
advertising sales agency commissions actually paid by Subscription Service Agent to unaffiliated third party advertising sales agents, provided that such commissions shall not exceed  [ * * * ]
* of fees paid by an advertiser for the Advertisement concerned (or  [ * * * ]* of the fair market value of any non-cash or in-kind
consideration, if such fees are paid for in cash). In the event that you do not use unaffiliated third party advertising sales agents to sell Advertisements, you shall be allowed to deduct the amount
of advertising sales agency commissions actually paid by you or a Syndication Agent from such monies derived from the sale of Advertisements, provided that such commissions in no event exceed the
generally prevailing market rate for unaffiliated advertising agencies (but in no case more than  [ * * * ]* of fees paid by an advertiser for Advertisements). 

        (8)  "Sony's Pro Rata Share" shall mean the Applicable Percentage multiplied by Sony's Usage Percentage. 

        (9)  "Sony's Usage Percentage" shall mean a fraction, the numerator of which is the Monthly Playback Number of Sony Cleared
Recordings Playedback on the Service during the month concerned and the denominator of which is the Monthly Playback Number of all Recordings (including Sony Cleared
Recordings but excluding any Imported Recordings) Playedback on the Service during the month concerned. 

        (10) "Subscription Fees" shall mean all monies payable by End Users to or on behalf of you or any Syndication Agent (whether
or not actually paid) in consideration of access by End Users (or by trial users to the extent revenues are derived therefrom) to the Service (including, for the avoidance of doubt and without
limitation, all subscription, access, service operation, and other fees or remuneration, however characterized) whether through the Service Site or a Syndication Agent Site. 

        (11) "Applicable Percentage" shall mean  [ * * * ]*; provided, however, that if the aggregate number of End Users of the Service during the
Term via Subscription Service Agent or any particular Syndication Agent, as the case may be, exceeds the applicable amount set forth below, then, commencing as of the month during which such aggregate
number is attained, solely in respect of the Service as and to the extent it is accessed via Subscription 

36

 

Service Agent or the Syndication Agent concerned, as applicable, the "Applicable Percentage" shall mean the applicable percentage set forth below: 

	Aggregate Number of End Users
 
	 	Applicable Percentage

	[ * * * ]*	 	 

For
the avoidance of doubt, (i) if the aggregate number of End Users of the Service during the Term directly via Subscription Service Agent (as opposed to via a Syndication Agent) exceeds the
applicable amount set forth above, then, commencing as of the month during which such aggregate number is attained, solely in respect of the Service as and to the extent it is accessed via
Subscription Service Agent, the "Applicable Percentage" shall mean the applicable percentage set forth above, and (ii) if the aggregate number of End Users of the Service during the Term via
any particular Syndication Agent exceeds the applicable amount set forth above, then, commencing as of the month during which such aggregate number is attained, solely in respect of the Service as and
to the extent accessed via that Syndication Agent, and not any other Syndication Agent or Subscription Service Agent, the "Applicable Percentage" with respect to that Subscription Service Agent shall
mean the Applicable Percentage set forth above. 

        (12) "Adjusted Gross Revenue" shall mean Gross Revenue less: (A) the cost of refunds and credits actually issued by
Subscription Service Agent to End Users in connection with fees paid for the Service (Gross Revenue less these amounts are referred to below as the "Adjusted Gross Revenue
Base"), (B) the cost of bad debt (provided that the amount of bad debt that may be so deducted from Gross Revenue shall in no event exceed  [ * * * ]* of the Adjusted Gross Revenue Base), and (C) Publishing Costs (provided that the
amount of Publishing Costs that may be so deducted from Gross Revenue shall in no event exceed  [ * * * ]* of the Adjusted Gross Revenue Base. (The amount of any Publishing
Costs that may be
required to be paid to the applicable holders of Publishing Rights in connection with the acquisition and/or exercise of Publishing Rights in excess of  [ * * * ]* of the
Adjusted Gross Revenue Base is sometimes referred to herein as
"Excess Publishing Costs".) 

        6.04.    (a)    (i)    CenterSpan shall compute the Service Fees and any other payments accrued hereunder as
of the end of each calendar quarter-annual period hereunder. Within thirty (30) days following the end of each quarter-annual period hereunder, CenterSpan shall send Sony an accounting
statement covering that computation setting forth a description and calculation of the applicable payments in detail sufficient to support the calculations of the amounts paid, including the items of
information described in section 6.04(a)(ii) below (the "Service Fee Report"), together with any Service Fees which are due after deducting unrecouped Advances and other sums which are
due; provided, however, that if Sony administers Publishing Rights pursuant to subsection 4.03(e)(2)(iii), then you shall send Sony the Service Fee Report and any such Service Fees and other sums
which are due thereunder, including any sums payable pursuant to section 4.03(e)(2)(ii) above, within fifteen (15) days following the end of each quarter-annual period hereunder
(or such shorter periods as may be reasonably necessary in order for Sony to effectively and timely administer Publishing Rights obtained by Sony hereunder and pay Publishing costs in connection
therewith (e.g., monthly)). 

        (ii)  Without
limiting the generality of anything in section 6.04(a)(i) above, each such Service Fee Report shall contain, among other things, a description and
calculation of the applicable payments payable for the period concerned in detail sufficient to support the calculations of the amounts paid, as well as such additional information as Sony may require
for each Sony Cleared Recording accessed via the Service, including but not limited to: 

        (A)  the
number of Streams and the number of Playbacks of each Sony Cleared Recording accessed during the period in question, sorted by featured artist name, track 

37

 

title, the ISRC number for the Recording concerned (or such other alphanumeric identifier as Sony may designate in advance for the Recording concerned), the name of the Syndication Agent from whom
the End User obtained access to the Stream or Conditional Download in question, the Subscription Fees applicable to the Stream or Conditional Download in question, and the allocated unit price per
Stream or Conditional Download in question. 

        (B)  the
Monthly Playback Number of all other Recordings accessed in connection with the Service on an aggregate basis; 

        (C)  the
number of End Users and other Persons, if any, who accessed Recordings in connection with the Service; and 

        (D)  a
statement of Gross Revenue for the accounting period concerned itemizing, with reasonable particularity, each of the items set forth in paragraph 6.03. 

        (b)  At
all times during the Term, Subscription Service Agent shall maintain comprehensive standard management reporting systems capable of tracking all information which
Sony reasonably requests be included in the Service Fee Reports. 

        (c)  All
payments becoming due to Sony under this Content Integration Agreement will be made in full by Subscription Service Agent without any offset or deduction; provided,
however, no Service Fees shall be due and payable to Sony until such time as all Advances theretofore paid have been recouped by or repaid to you. 

        (d)  Subscription
Service Agent shall pay interest at the rate per month equal to the rate reported by the Wall Street Journal as the prime rate for major banks plus one
percent (1%), or the maximum rate permitted by law, whichever is less, from the date due, on any required payment that is not made on or before its due date, without prejudice to any other rights Sony
may have in connection with such delinquency. 

        6.05.    Omitted without implication.    

        6.06.        Subscription Service Agent shall cause the independent public accounting firm that audits Subscription
Service Agent's books and records to prepare in respect of each fiscal year of Subscription Service Agent during the Term an agreed upon procedures report (each, a "Procedures Report") verifying that
the financial and other information contained on the Service Fee Reports correspond directly to the underlying books and records of Subscription Service Agent, without adjustment and/or reconciling
items. Such books and records shall be the basis for Subscription Service Agent's own audited financial statements and shall be subject to an adequate system of internal accounting controls
surrounding the assertions of completeness, accuracy, occurrence proper period and valuation. Each such Procedures Report shall be delivered to Sony by no later than forty-five
(45) days following the end of the fiscal year covered by the Procedures Report. 

        6.07.        Subscription Service Agent shall maintain accurate and complete records and books of account in
accordance with GAAP applied on a consistent basis, which shall include, at a minimum, all documentation needed by Sony to compute and verify the payments payable to Sony hereunder, and to verify all
of the information required to be delivered to or otherwise made available to Sony in connection with the performance of this Content Integration Agreement. No more than once per year,
and only within three and one-half (31/2) years following the termination or expiration of the Term, Sony's representatives will have the right to examine those books and
records at any time during Subscription Service Agent's normal business hours, and to make copies of them and extract information from them. Subscription Service Agent will cooperate with Sony's
representatives to insure their reasonable (as construed broadly in order for Sony to enforce and protect its interests in connection with this Content Integration Agreement) access to Subscription
Service Agent's books and 

38

 

records and will furnish such supplemental information and documents as Sony may request. If the audit establishes that Subscription Service Agent has under-accounted and/or underpaid any Service
Fees (deficiency) of eleven percent (11%) or more of the Service Fees reported during the audit period then the total expenses of such inspection, including fees, shall be borne by Subscription
Service Agent. Subscription Service Agent shall promptly pay the amount of such deficiency, plus interest, as provided herein. 

        6.08.    Omitted without implication.    

        6.09.        You warrant and represent that you will bear and pay any and all taxes, duties and customs of any kind,
however designated, levied or based in any way anywhere in the Territory upon the performance of your obligations under this Content Integration Agreement or the sale or resale of any products or
services by you, including, for the avoidance of doubt and without limitation, all sales, use, excise, purchase, value added or similar taxes (other than income taxes payable by Sony on monies earned
by Sony under this Content Integration Agreement). You will execute any documents Sony may deem necessary or desirable to evidence your liability for such taxes. If any claim is made against Sony for
such taxes, you will promptly remit to Sony such sums together with any penalties and interest assessed. 

        6.10.        For a period of three and one-half (31/2) years following the last day of the
Term, Subscription Service Agent shall retain all transaction data, End User Information and other data or information reasonably necessary for Sony and Subscription Service Agent to determine and
verify all amounts due or payable hereunder and for accounting purposes, including, without limitation, each of the items required in each Service Fee Report. 

7.    EXTRANET; END USER INFORMATION  

        7.01.    (a)    Commencing
as of the date that is thirty (30) days from the Launch Date, you will make available to Sony for access
twenty-four (24) hours per day, seven (7) days per week, an electronic mechanism (e.g., a so-called "extranet") (the "Extranet") whereby Sony shall have access to
detailed
information in respect of the Service, which information is updated at no less than daily intervals, including, without limitation, with respect to the following types of information: 

        (1)  a
list of all Streams and Conditional Downloads of Sony Cleared Recordings, organized by artist, title and "label" (e.g. Epic Records, Columbia Records, 550 Music); 

        (2)  Aggregate
Information; and 

        (3)  a
comparison of the number of Streams and Conditional Downloads (as well as the number of Playbacks thereof) of Sony Cleared Recordings hereunder with the total number
of Streams and Conditional Downloads (as well as the number of Playbacks thereof) of Recordings made available on the Service. 

        (b)  Without
limiting the generality of anything in subparagraph 7.01(a) above, the Extranet shall also contain, at a minimum, the following information regarding each Sony
Cleared Recording Streamed hereunder and each Conditional Download Downloaded hereunder: 

        (1)  the
name(s) of the recording artist(s) whose featured performances are embodied on the Sony Cleared Recording; 

39

  

        (2)  title
of the Sony Record from which the Sony Cleared Recording concerned was encoded; 

        (3)  the
Sony label; 

        (4)  the
catalog number applicable to the Sony Record from which the Sony Cleared Recording concerned was encoded; 

        (5)  the
initial release date that you make the Sony Cleared Recording concerned available as part of the Service; 

        (6)  the
ISRC Code (or such other alphanumeric identifier as Sony may designate in advance for the Recording concerned) applicable to the Sony Record from which the Sony
Cleared Recording concerned was encoded; and 

        (7)  the
aggregate number of times such Sony Cleared Recording was Streamed and Conditionally Downloaded of each Stream and Conditional Download. 

        (c)  The
Extranet shall also contain such additional information as Sony and Subscription Service Agent may mutually agree upon from time to time during the Term, and in no
event shall the Extranet contain less information than the information provided to any other Person owning or controlling rights in or to Recordings made available on the Service. 

        (d)  Subject
to Article 14, at all times, Sony shall have the unrestricted ability to make copies of any information contained in the Extranet, including, for the
avoidance of doubt and without limitation, so-called "page views", in both human readable form (e.g., printed copies) and machine readable form (e.g., computer files). 

        7.02.    (a)    At
all times during the Term, you shall collect and retain User Information from all End Users. All such User Information, to the extent
it is Aggregate Information, collected and retained by you shall be jointly and equally owned by each of you and Sony. Each of you and Sony shall at all times during the Term have unrestricted access
to all such Aggregate Information applicable to End Users. Without limiting the generality of this paragraph 7.02, Aggregate Information shall not be sold by Sony to any third party or used by
Sony for purposes other than in connection with Sony's own internal analysis or review. 

        (b)  Each
End User shall, when registering to become a subscriber of the Service on the Service Site (and specifically excluding those who join the Service via a Syndication
Agent Site), be offered in clear, prominent and unambiguous terms (which terms shall be subject to Sony's prior, written consent in each instance) the option to subscribe to Sony Music's electronic
mailing list (each End User who has subscribed to Sony Music's electronic mailing list shall hereinafter be referred to as a "Sony Subscriber"). Without limiting the first sentence of this
paragraph 7.02, you shall deliver to Sony in a file format reasonably acceptable to Sony, the name and electronic mail address of each Sony Subscriber promptly following the date that the Sony
Subscriber concerned has subscribed to Sony Music's electronic mailing list. 

        7.03.    Each
of the parties hereby represents and warrants to the other that: (a) all uses by such party and each Person deriving rights from such party
of End User Information shall at all times comply with such party's privacy policy in effect at the time that the End User Information concerned was collected by such party, and (b) each
party's privacy policy with respect to the collection and use of User Information shall at all times comply with any and all applicable laws, and shall at all times otherwise be in accordance with all
generally accepted customs and practices in the electronic commerce industry in the United States. 

40

 

8.    SYNDICATION AGENTS  

        8.01.    Subject
in each case to the restrictions herein, you shall be permitted to enter agreements with Syndication Agents whereby such agents: (i) will
facilitate Sony's sale of Streams and Conditional Downloads to End Users by providing access to the Service from Syndication Agent Sites and (ii) will provide access to the Service from
Syndication Agent Sites by creating a Link between such Web Sites and the Service Site. Each Syndication Agent's ability to access and/or control the Sony Materials shall be limited solely to the
ability of the Syndication Agent to access and retransmit the Service by Linking its Syndication Agent Site to the Service Site. Except as set forth herein, no Syndication Agent shall have the right
to: (i) use any Sony Authorized Trademark or any of the Sony Materials for any purpose whatsoever (including marketing of the Service or the Syndication Agent Site) without the express written
consent of Sony or (ii) allow any Person other than an End User (or potential End User pursuant to a limited, free-trial membership) to access the Service. Notwithstanding the
foregoing or
anything elsewhere herein, Syndication Agent may allow Persons other than End Users to access the Service to the extent permitted under section 4.06(a)(2); provided, however, that such Persons
shall not be entitled to Stream or Playback any Sony Cleared Recordings unless and until such Persons qualify as End Users hereunder. All aspects of the Service shall, at all times, remain under the
sole control and authority of the Subscription Service Agent. Syndication Agents may have the right, power or authority to "co-brand", or otherwise market the Service under any other name,
but shall not have the right, power or authority to "private label" the Service (i.e., brand the Service in a manner that does not prominently and accurately attribute to Subscription Service Agent's
role in connection with the Service). For the avoidance of doubt, in the event that the Service is presented bearing a Syndication Agent's brand, trademark or other identifying information, and also
includes the phrase "Presented by CenterSpan.com" or the phrase "Powered by C-Star" (or another equivalent phrase accurately denoting some affiliation with Subscription Service Agent) on
each Web Page that forms a part of the Service, such presentation shall be deemed to be "co-branded" version of the Service and not a "private label" version of the Service. 

        8.02.    A
Person must satisfy all of the following conditions in order to constitute a Syndication Agent hereunder: 

        (a)  It
must not be owned or controlled by you, directly or indirectly, and it must enter into an agreement with the Subscription Service Agent that complies with the terms
of this Content Integration Agreement with respect to the use of the Sony Materials by Syndication Agents (a "Syndication Agent Agreement"). 

        (b)  It
must only have access to the Service during the Term of this Content Integration Agreement, and its use of the Sony Materials must comply with the terms, conditions
and limitations set forth in this Content Integration Agreement. 

        (c)  (i) (This
section 8.02(c)(i) shall only apply in respect of Syndication Agents that are not Data Network Syndication Agents.) It must be based in
the United States, its URL must end in ".com", ".net", ".biz", ".info", or similar top-level domain name used for general commercial purposes in the United States or Canada, respectively,
it must neither transmit nor retransmit the Service outside the United States either directly or indirectly via subdirectory or otherwise (subject to paragraph 2.02), and it must not syndicate,
frame or deep link the Service to a server located outside the United States. 

        (ii)  (This
section 8.02(c)(ii) shall only apply in respect of Syndication Agents that are Data Network Syndication Agents.) It must neither transmit nor
retransmit the Service outside the United States or Canada, as the case may be, either directly or indirectly, in whole or in part. 

41

 

        (d)  It
must not engage in the endorsement of political positions or political candidates (excluding endorsements that are solely incidental and not affiliated with the
Syndication Agent concerned, such as by displaying rotating "run of the site" banner advertisements over which the Syndication Agent has or had no editorial discretion or endorsement, whether in whole
or in part, directly or indirectly) and it must not engage in the sale of, or advertise, tobacco, firearms, personal hygiene products, pornography, religious causes or any other subject matter which
Sony deems in its sole, reasonable discretion to be objectionable or which, in the opinion of Sony's attorneys could subject Sony or any other Person to liability. 

        (e)  Neither
it nor any Affiliate or licensee of it may engage in the sale of products designed to circumvent copy protection mechanisms (e.g., audio and/or video stream
capture software) or any services, Web Sites and/or products (e.g., software) that directly or indirectly facilitate the reproduction (or other use), distribution, display and/or performance of
copyrighted, trademarked or servicemarked materials or other property or other tangible or intangible rights of Sony, any Affiliate of Sony or any Sony Artist without the express authorization of the
applicable rightsowners. 

If
at any time during the Term you become aware that a Syndication Agent ceases to comply with conditions (b) - (e) above, you agree to notify Sony immediately thereafter and you agree to block such
Syndication Agent's access to the Sony Materials as soon as practicable but in no event later than twenty-four (24) hours thereafter, subject to the remainder of this
paragraph 8.02. If at any time during the Term Sony becomes aware that a Syndication Agent ceases to comply with condition (d) above, Sony agrees to notify you (which notice,
notwithstanding anything to the contrary herein, may be via telephone, facsimile, electronic mail or any other effective method of communication) and you shall notify the Syndication Agent concerned
of such non-compliance and use your best efforts to cause such Syndication Agent to cure such non-compliance; provided that Sony's failure to so notify you shall not be deemed
a breach of this Content Integration Agreement. In the event that the non-compliance concerned is not cured to Sony's satisfaction within ten (10) days following Sony's notice to
you, then you shall immediately and permanently deny such Syndication Agent access to the Sony Materials and you shall promptly thereafter send Sony a notice which accurately confirms, with reasonable
particularity, such denial. 

        8.03.    (a)    You
shall use best efforts to cause each Syndication Agent to abide by the applicable Syndication Agent Agreement (to the extent
applicable to the Sony Materials) and the terms of this Content Integration Agreement (to the extent they apply to the Syndication Agent). If you become aware of any breach or if you suspect any
breach of any of the Syndication Agent Agreements, or if you become aware or you suspect that any Syndication Agent's use of the Sony Materials or the Sony Trademarks violates any terms of this
Content Integration Agreement, you shall immediately notify Sony and the Syndication Agent thereof, and you agree to use your best efforts to cause such Syndication Agent to cure such breach. In
addition, if Sony notifies you of any such breach, or alleged breach, you shall notify the Syndication Agent concerned of such breach and use your best efforts to cause such Syndication Agent to cure
such breach. In the event that the material breach concerned is not cured to Sony's satisfaction within forty-eight (48) hours following your or Sony's notice of breach to the Syndication Agent
concerned (whichever is sooner) (which notice, notwithstanding anything to the contrary herein, may be via telephone, facsimile, electronic mail or any other effective method of communication), then
you shall so notify Sony and you shall immediately and permanently deny such Syndication Agent access to the Sony Materials. You shall cooperate with Sony in any action or proceeding Sony commences
against any Syndication Agent whose use of the Sony Materials violates the terms of this Content Integration Agreement or the Syndication Agent Agreements. The
Subscription Service Agent assumes full responsibility for each Syndication Agent's compliance with the terms of this Content Integration Agreement. 

42

 

        (b)  Subscription
Service Agent covenants, warrants and represents to Sony that: (i) each Syndication Agent Agreement shall be consistent in all material respects with
the terms and conditions of this Content Integration Agreement; (ii) each Syndication Agent Agreement shall explicitly afford Sony, as a third party beneficiary of such agreement, all of the
same rights and remedies with respect to the Syndication Agent's use of the Sony Materials (including, without limitation, all rights of review, approval, withdrawal, removal and termination) as
granted to Sony pursuant to this Content Integration Agreement; and (iii) Sony shall have the right to require Subscription Service Agent to terminate any Syndication Agent Agreement with
respect to the Sony Materials if Sony determines that said Syndication Agent has committed any act as would permit Sony to terminate this Content Integration Agreement pursuant to
paragraph 11.01 below. 

9.    PROMOTIONAL OPPORTUNITIES  

        9.01.    Subscription
Service Agent shall provide to Sony, within thirty (30) days following the Effective Date and throughout the remainder of the Term,
the following marketing rights: 

        (a)  Sony
shall have the right, at its election, to cause the Service Site to feature banner advertisements created by Sony (the "Sony Banner
Ad") that meets the following criteria: (i) it shall appear Above the Fold on the Home Page of the Service Site and each other Web Page that forms a part of the Service
Site; (ii) it shall be not less than 468 pixels (width) by 60 (height) and shall contain such Links, graphics and textual materials as Sony may reasonably designate; (iii) it shall be no
less prominent in terms of size, type, appearance, space and other features (including, without limitation, the frequency and duration of its rotation for display on the Service Site which shall in no
event be less than Sony's Usage Percentage of the Service Site's available advertising inventory) than any other third party banner or other advertisements on the Service Site. Sony shall have the
right to change the content of the Sony Banner Ad as follows: (i) Sony may select one of up to five (5) different types of banner advertisements to be used as the Sony Banner Ad
for a particular cross section of End Users (the "User Group"); and (ii) Sony may change the banner advertisement used as the Sony Banner Ad for
a particular User Group as frequently as once per day. 

        (b)  Subscription
Service Agent shall provide a Link from each Web Page of the Service Site containing Sony Materials to any Web Pages designated by Sony. Each such Link
shall: (i) be in form, substance, style and location acceptable to Sony in its sole discretion and (ii) take any End User who has clicked on the Link in question to, immediately after
clicking on such Link, a so-called "daughter window" of
not less than 600 pixels (width) by 500 pixels (height) in size that contains either (i) the Sony Artist's official record company Web Site (each such URL to be provided by Sony), or
(ii) an official so-called "record label" Web Site maintained by Sony (e.g., www.columbiarecords.com or  www.epicrecords.com) (each such URL to be
provided by Sony), as Sony elects in each instance. Subscription Service Agent shall make such modifications
to each Link established pursuant to this subparagraph 9.01(b) as Sony may request, promptly following Sony's request therefor. 

        (c)  Subscription
Service Agent shall keep Sony advised of all electronic mailing lists compiled by Subscription Service Agent that relate to Sony Artists in respect of which
End Users have "opted in" or otherwise subscribed (each, a "Sony Artist Mailing List"). During the Term, Sony will have the right to require the
Subscription Service Agent to send one (1) electronic mail message per week per Sony Artist Mailing List containing such editorial content as Sony designates in its sole discretion; provided,
however, that the editorial content for each such electronic mailing will relate primarily to the Sony Artist that is the subject of the applicable Sony Artist Mailing List in each instance. 

43

 

10.  MOST FAVORED NATIONS  

        10.01.    (a)    If,
in connection with the furnishing to you of Recordings used or to be used in connection with the Service, or any rights therein,
you enter into an agreement with any third party, you agree to promptly notify Sony of such agreement (each such agreement is sometimes referred to below as an "Outside Agreement") and provide a copy
of such Outside Agreement to the Outside Consultant (as defined below). With respect to each Outside Agreement, Sony shall have the right to appoint an independent third party (an "Outside
Consultant") to advise Sony, at Sony's sole expense, whether [ * * *]* is more favorable than  [ * * * ]* of this Content
Integration Agreement [ * * *
]*. Sony's Outside Consultant shall have the right to inspect each Outside Agreement for the purpose of advising Sony whether  [ * * * ]* is more
favorable than  [ * * * ]* of this Content Integration Agreement  [ * * * ]*. If  [ * * *]* is more favorable than  [ * * * ]*, you shall offer to amend this Content Integration Agreement to reflect
[* * * ]* of the Outside Agreement  [ * * * ]*. If your offer is accepted by Sony, the parties shall
promptly amend this Content
Integration Agreement to reflect [ * * * ]* (the "Amended Agreement"). Sony shall have a period of
thirty (30) days from the date that the Outside Agreement concerned is made available to the Outside Consultant to notify you whether your offer is accepted in connection with the Outside
Agreement concerned. The date on which this Content Integration Agreement is so amended shall be referred to as the "Amendment Date." Promptly after the Amendment Date, you and Sony shall promptly
undertake to [ * * * ]* under this Content Integration Agreement. For the avoidance of doubt, each Outside Agreement furnished
hereunder shall constitute Confidential Information (as defined in subparagraph 14.01(a)). 

        (b)  You
represent and warrant that, as of the date hereof, no Record Label, artist or other third party has received any financial terms that are more favorable than the
terms hereunder. 

11.  TERMINATION  

        11.01.    (a)    Immediately
following the occurrence of any Default Event (as defined below), Subscription Service Agent shall be deemed in material
breach and default hereof and Sony, in addition to any other rights and remedies which Sony has under this Content Integration Agreement or otherwise, may upon notice to Subscription Service Agent,
immediately terminate this Content Integration Agreement and the Term, and the provisions of paragraph 11.02 below shall apply. No exercise of an option under this paragraph shall limit Sony's
rights to recover damages by reason of Subscription Service Agent's default, Sony's rights to exercise any other option under this paragraph, or any of Sony's other rights or remedies. No exercise of
any right or remedy hereunder shall limit Sony's right to recover damages by reason of Subscription Service Agent's default, Sony's right to exercise any other right or remedy under this
paragraph 11.01, or any of Sony's other rights or remedies. 

        (b)  A
"Default Event" shall mean the occurrence of any of the following events listed below: 

        (1)  Subscription
Service Agent's failure to timely make payments required hereunder or to execute, deliver and comply with the terms of the Stock Purchase Agreement or
render Service Fee Reports or render any information or documents required to be furnished or otherwise made available to Sony as and when required hereunder; provided, however, that, with respect to
any such breach other than a breach under subparagraph 6.01(a) above, Subscription Service Agent shall have a period of ten (10) business days from the date of Sony's notice of such breach in
which to cure said breach before it shall be considered a "Default Event". 

        (2)  Subscription
Service Agent's breach of any of Subscription Service Agent's material representations, warranties, covenants or material obligations hereunder, or
Subscription Service Agent's failure to fulfill any of Subscription Service Agent's material obligations hereunder; provided, however, that, with respect to any such breach in respect of which a
shorter cure period is not expressly provided elsewhere herein, Subscription Service Agent 

44

 

shall have a period of ten (10) business days from the date of Sony's notice of such breach in which to cure said breach before it shall be considered a "Default Event". 

        (3)  Subscription
Service Agent's bankruptcy or insolvency, or the dissolution or the liquidation of Subscription Service Agent's assets, or the filing of a petition in
bankruptcy or insolvency for an arrangement or reorganization by, for or against Subscription Service Agent, or the appointment of a receiver or a trustee for all or a portion of Subscription Service
Agent's property, or Subscription Service Agent's making an assignment for the benefit of creditors; provided, however, that Subscription
Service Agent shall have a period of sixty (60) consecutive days from its receipt of any involuntary petition in bankruptcy filed against Subscription Service Agent in which to cure said breach
before it shall be considered a "Default Event". 

        (4)  Subscription
Service Agent's attempt to assign any of Subscription Service Agent's rights under this Content Integration Agreement in contravention of
paragraph 16.06 below without Sony's prior written consent, or the succession of any of those rights to any other Person by operation of law. 

        (5)  In
the event that Subscription Service Agent, through its acts or omissions, directly or indirectly, permits or causes any liens, encumbrances or claims against any of
the Sony Materials or permits or causes any liens, encumbrances or claims against its rights under this Content Integration Agreement for the benefit of or on behalf of a Triggering Person. 

        (6)  A
Change of Control. 

        (7)  Failure
(A) to create a working version of the Service technically satisfactory to Sony, and (B) to commence transmission of Sony Cleared Recordings to End
Users on a commercial basis, either directly or through one or more Syndication Agents, pursuant to the terms of this Content Integration Agreement, within [ * * *
]* of the Effective Date. 

        (8)  Failure
to cure a Security Flaw in accordance with the provisions of paragraph 5.03 above. 

        11.02.    (a)    Upon
termination or expiration of the Term: (i) all rights granted to Subscription Service Agent herein shall immediately
terminate; (ii) neither Subscription Service Agent nor, for the avoidance of doubt, any Syndication Agent shall thereafter have any right to make any use of any Sony Materials or Sony
Authorized Trademarks; (iii) Subscription Service Agent shall immediately cease to use the computer files or software embodying the Sony Materials; (iv) Subscription Service Agent and
Syndication Agents shall immediately remove all Links to Web Sites owned or controlled by Sony; (v) Subscription Service Agent shall immediately return or destroy or remove, as the case may be,
all of the foregoing materials and all copies of the foregoing materials, and Subscription Service Agent shall promptly furnish Sony with a sworn affidavit, in a form satisfactory to Sony in its
reasonable discretion, accurately confirming the foregoing; and (vi) all monies then due or to become due to Sony shall become immediately due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by Subscription Service Agent. For the avoidance of doubt: (i) no termination or expiration of this Content Integration Agreement
shall affect Sony's right to payment of all monies due hereunder (and the associated accounting in connection therewith) and (ii) in all cases, those provisions herein that correspond to
provisions in other agreements that customarily survive the end of the term (including, but not limited to, the provisions contained in paragraphs 6.04 through 6.08, 12.02, 16.01 and Article 14
herein) shall survive the end of the Term. 

        (b)  (1)    In
the event Sony terminates this Content Integration Agreement and the Term at any time during the Term solely due to a Default Event set forth in
section 11.01(b)(7) that is not related to the failure to secure or retain, as the case may be, the necessary Publishing Rights, as required under section 4.03(e)(2) above, for the Sony
Materials concerned, and provided you are 

45

 

not then in breach of any material term, condition, representation, warranty, covenant or agreement contained in this Content Integration Agreement, then you shall have the right to send Sony a
notice (the "Reimbursement Notice") requesting that Sony repay to you (A) the sum of (x) any Service Preparation Fees, any Initial
Advances, any Syndication Advances and any Syndication Fees actually paid to Sony as of the date of the Reimbursement Notice, and (y) the Reimbursable Equity Portion (as defined below) and the
Reimbursable Warrant Portion (as defined below), if any, as of the date of the Reimbursement Notice, less (B) an amount equal to [ * * *
]* (which amount shall be treated as a non-recoupable sum). Promptly following the later of (i) Sony's receipt of your Reimbursement Notice and
(ii) Sony's receipt of a final, accurate Service Fee Report together with all Service Fees and other sums owed (e.g., Publishing Costs for which CenterSpan is financially responsible
hereunder), Sony shall make the payment prescribed in the preceding sentence (the "Reimbursement Amount"). Immediately upon repayment to you of the
Reimbursement Amount, Sony shall be deemed to have fulfilled all of its obligations, and, for the avoidance of doubt, shall constitute a full accord and satisfaction of all of Sony's obligations.
Nothing in this subparagraph 11.02(b) will affect Subscription Service Agent's obligations to account and pay Sony for Service Fees accrued hereunder. 

        (2)  In
the event Sony has not transferred the Equity Consideration to a Person other than an Affiliate of Sony and Sony or one of its Affiliates is in possession of the
stock certificates evidencing such Equity Consideration as of the date that Sony receives the Reimbursement Notice, then Sony will return such stock certificates to you. 

        (3)  In
the event Sony or any of its Affiliates has exercised the Warrants as of the date that Sony receives the Reimbursement Notice, you shall purchase the common stock
received by Sony and any of its Affiliates upon exercise of the Warrants at a price equal to the exercise price of the Warrants solely to the extent that Sony has not transferred the common stock to a
Person other than an Affiliate of Sony. Any Warrants not exercised by Sony or any of its Affiliates as of the date that Sony receives the Reimbursement Notice shall be automatically deemed cancelled. 

        (4)  As
used herein, the "Reimbursable Equity Portion" shall mean, to the extent Sony has transferred the Equity
Consideration, in whole or in part, to a Person other than an Affiliate of Sony, the amount of cash that Sony received in consideration for such transfer (less commissions, third party transaction
fees and expenses and applicable taxes (e.g., transfer taxes, but not income taxes)). 

        (5)  As
used herein, the "Reimbursable Warrant Portion" shall mean, (A) to the extent Sony has transferred the
Warrants, in whole or in part, to a Person other than an Affiliate of Sony, the amount of cash that Sony received in consideration for such transfer (less commissions, third party transaction fees and
expenses and applicable taxes (e.g., transfer taxes, but not income taxes)), and (B) to the extent Sony has exercised the Warrants and has transferred any of the common stock it received as a
result of such exercise, then the amount equal to (x) the amount that Sony received in consideration for such
transfer (less commissions, third party transaction fees and expenses and applicable taxes (e.g., transfer taxes, but not income taxes)), minus (y) the exercise price of the Warrants. 

        (c)  (1)    In
the event Sony terminates this Content Integration Agreement and the Term at any time during the Term solely due to a Default Event set forth in
section 11.01(b)(6), and provided you are not then in breach of any material term, condition, representation, warranty, covenant or agreement contained in this Content Integration Agreement,
then you shall have the right to send Sony a notice (the "Change of Control Reimbursement Notice") requesting that Sony repay to you (A) (x) the
sum of (i) any Service Preparation Fees actually paid to Sony as of the date of the Change of Control Reimbursement Notice, and (ii) any Initial Advances and 

46

 

Syndication Advances actually paid to Sony as of the date of the Change of Control Reimbursement Notice solely to the extent such amounts have not been recouped or repaid as of the date of the Change
of Control Reimbursement Notice, multiplied by (y) the Reimbursement Percentage (as defined below), and (B) (i) the sum of the Reimbursable Equity Portion and the Reimbursable Warrant
Portion, if any, as of the date of the Change of Control Reimbursement Notice, multiplied by (ii) the Reimbursement Percentage. Promptly following the later of (i) Sony's receipt of your
Change of Control Reimbursement Notice and (ii) Sony's receipt of a final, accurate Service Fee Report together with all Service Fees and other sums owed (e.g., Publishing Costs for which
CenterSpan is financially responsible hereunder), Sony shall make the payment prescribed in the preceding sentence (the "Change of Control Reimbursement
Amount"). Immediately upon repayment to you of the Change of Control Reimbursement Amount, Sony shall be deemed to have fulfilled all of its obligations, and, for the avoidance
of doubt, shall constitute a full accord and satisfaction of all of Sony's obligations. Nothing in this subparagraph 11.02(c) will affect Subscription Service Agent's obligations to account and pay
Sony for Service Fees accrued hereunder. 

        (2)  In
the event Sony has not transferred the Equity Consideration to a Person other than an Affiliate of Sony and Sony or any of its Affiliates is in possession of the
stock certificates evidencing such Equity Consideration as of the date that Sony receives the Change of Control Reimbursement Notice, then Sony will return to you such stock certificates evidencing a
portion of the Equity Consideration equal to (x) the number of shares of common stock then held by Sony and its Affiliates (not including any shares held as a result of exercising the Warrants
or any shares issuable upon exercise of the Warrants), multiplied by (y) the Reimbursement Percentage (the "Returnable Certificates"). 

        (3)  To
the extent Sony and its Affiliates have exercised any of the Warrants as of the date that Sony receives the Change of Control Reimbursement Notice, you shall purchase
the Returnable Exercised Shares (as defined below) at a price equal to the exercise price paid by Sony for the Returnable Exercised Shares solely to the extent that Sony has not transferred the common
stock received as a result of the exercise of the Returnable Exercised Shares to a Person other than an Affiliate of Sony. The Returnable Warrants, if any, shall be automatically deemed cancelled upon
Sony's receipt of the Change of Control Reimbursement Notice. As used herein, (A) the "Returnable Exercised Shares" shall mean (x) the
number of shares of common stock received by Sony upon exercise of the Warrants, multiplied by (y) the Reimbursement Percentage, and (B) the "Returnable
Warrants" shall mean (x) the number of Warrants not exercised by Sony or its Affiliates as of the date that Sony receives the Change of Control Reimbursement Notice,
multiplied by (y) the Reimbursement Percentage. 

        (4)  As
used herein, the "Reimbursement Percentage" shall mean (A) one (1), minus (B) a fraction, the numerator
of which is the number of days beginning with the Launch Date and ending on the date of the Change of Control Reimbursement Notice, and the denominator of which is
(i) [ * * * ]*, minus (ii) the number of days beginning with the Launch Date and ending on the date of the Change
of Control Reimbursement Notice. Notwithstanding the foregoing, in no event shall the Reimbursement Percentage be deemed more than [ * * *
]*. (The immediately preceding sentence shall not apply to the Reimbursable Equity Portion, the Reimbursable Warrant Portion, the Returnable Certificates, the
Returnable Exercised Shares or the Returnable Warrants otherwise payable or due to you pursuant to a Change of Control Reimbursement Notice.) 

47

   12.  REPRESENTATIONS AND WARRANTIES  

        12.01.    Subscription
Service Agent covenants, represents and warrants that each of the following is true: 

        (a)  Subscription
Service Agent has the right and power to enter into and fully perform this Content Integration Agreement and to make the commitments Subscription Service
Agent make herein, and has obtained or will obtain all necessary licenses, permissions and consents (including, for the avoidance of doubt, all necessary publishing licenses in connection with the use
of the Sony Cleared Recordings). 

        (b)  Sony
shall not be subject to any costs, fees, royalties or other charges in respect of the Service (including, without limitation, any mechanical royalties (except as
otherwise expressly provided herein), synchronization royalties or any fees or royalties payable in respect of the public performance or reproduction of any musical composition and any other dramatic,
literary or other works embodied in a Sony Cleared Recording). For the avoidance of doubt, as between you and Sony, Sony shall be responsible for making all union payments (if any) and audio record
royalty payments required to be made by Sony under any agreements to which Sony is a party to each recording artist, producer, mixer, remixer and other Person that contributed to the recording of the
Sony Cleared Recordings transmitted via the Service. 

        (c)  Subscription
Service Agent is fully-qualified to perform all obligations as described herein and to maintain and operate the Service as described herein. Subscription
Service Agent shall operate the Service to the best of Subscription Service Agent's abilities in accordance with the technical specifications approved by Sony, and shall not subcontract or otherwise
delegate any of Subscription Service Agent's duties hereunder. 

        (d)  Subscription
Service Agent shall own and/or control all times during the Term, all right, title and interest in and to the Service and all materials embodied, reproduced
or otherwise contained therein, and all copyrights and other rights therein, throughout the Territory, free and clear of any and all claims or encumbrances whatsoever therein to the extent necessary
for the operation of the Service as described herein. The Service, and the operation and use thereof for the purposes described herein, shall not, and at no time shall during the Term, violate any law
(including, without limitation, any
federal law or regulation) or infringe upon or violate the rights of any Person, including, without limitation, any trademarks, names, logos, copyrights, materials or other content Subscription
Service Agent creates, licenses, uses, publishes, performs, reproduces, distributes or displays (other than the Sony Materials or other materials furnished to Subscription Service Agent by Sony
hereunder). 

        (e)  Subscription
Service Agent has obtained from all necessary third parties all licenses and other rights necessary or advisable in order to create and operate the Service,
other than those licenses and other rights specifically required to be obtained by Sony hereunder. 

        (f)    Subscription
Service Agent is a corporation duly organized and in good standing under the laws of Oregon. 

        (g)  Subscription
Service Agent shall accurately count and report the number of performances of each Recording Playedback and Streamed by each potential End User during
free-trials (e.g., by making the free-trial offering a "negative option" to unsubscribe) to the extent necessary to prepare Service Fee Reports and otherwise comply with the
Subscription Service Agent's reporting, payment and other obligations hereunder. 

        (h)  Omitted
without implication. 

        (i)    The
Service shall not contain or utilize any content or other materials which Sony deems patently offensive or which, in the judgment of its attorneys, might subject
Sony to unfavorable 

48

 

regulatory action, nor shall any Web Page that forms a part of the Service contain any Link to any Web Site which contains or features any such material. 

        (j)    Subscription
Service Agent shall not enter into any agreement whatsoever on behalf of Sony, shall not make any representations or warranties on behalf of Sony, and shall
not represent to any Person that it has the power, whether express or implied, to bind Sony in any way or enter into contracts on Sony's behalf. 

        (k)  Subscription
Service Agent shall not make any use of any Sony Materials, or authorize any third party to make any use of any Sony Materials, except as specifically
permitted pursuant to the terms of this Content Integration Agreement. 

        (l)    Subscription
Service Agent shall use best efforts to ensure the security of all data and information collected and/or transmitted by the Service, including without
limitation the Aggregate Information, and that in connection with such efforts it shall make use of current, effective and so-called "state of the art" encryption and
anti-piracy technologies. 

        (m)  Subscription
Service Agent will not include the Sony Materials in computer files other than those computer files created for use as part of the Service. 

        (n)  At
all times, Subscription Service Agent shall comply with all applicable laws, rules, regulations and so-called "privacy policies" (including the privacy
policy of Sony, as such policy may be amended from time to time, to the extent reasonably applicable) in its use of End User Information. In connection therewith, Subscription Service Agent shall
maintain, and at all times comply with, a privacy policy with respect to the Service and any Web Sites as may be owned, operated and/or maintained by Subscription Service Agent during the Term hereof,
relating to the collection and use of Aggregate Information as contemplated herein, in accordance with all applicable laws, rules, regulations and generally accepted customs and practices in the
electronic commerce industry in the United States. 

        (o)  Subscription
Service Agent shall not cut, edit, change, add to, delete from or revise any Sony Materials (or authorize any Person to do any of the foregoing) without the
express prior written consent of Sony in each instance. Without limiting the scope of the foregoing, Subscription Service Agent expressly agrees that it will not alter or delete any title, credit or
copyright notice, any trademarks or service marks, or the talent, writing, producing, directing or music credits contained in the Sony Materials. 

        (p)  Subscription
Service Agent will not, directly or indirectly, sell or otherwise dispose of, pledge, mortgage or in any other way encumber the Sony Materials, or, attempt
to pledge, mortgage or otherwise encumber Subscription Service Agent's rights under this Content Integration Agreement for the benefit of or on behalf of a Triggering Person. 

        (q)  At
all times during the Term, any free-trial memberships that make Sony Cleared Recordings available to potential End Users shall be limited to:
(1) Streams of Sony Cleared Recordings and other Recordings via the Service offered to End Users, (2) one (1) membership per household, and (3) only one
(1) membership to any Person (or household) during the Term. 

        (r)  Omitted
without implication. 

        (s)  At
all times during the Term, Agent Servers containing Sony Materials shall be located solely at such locations in the United States as Subscription Service Agent has
notified Sony with reasonable particularity as to its exact physical location (e.g., by providing the name of the facility, the street address of such facility and the main phone number for such
facility). Subscription Service Agent shall
give Sony thirty (30) days' prior notice before changing the location of any Agent Server containing Sony Materials. As of the date hereof, Agent Servers containing Sony 

49

 

Materials are located at Inflow, 1233 N.W. 12th Avenue, Portland, Oregon (telephone: (503) 553-7800). 

        (t)    Except
as and to the extent expressly provided elsewhere in this Content Integration Agreement, at all times during the Term, Subscription Service Agent shall
exclusively provide all content hosting, bandwidth, rights clearinghouse, and other service functions (other than billing and financial clearinghouse services) in connection with the Service. For the
avoidance of doubt, Subscription Service Agent may authorize Syndication Agents or other agents designated by Subscription Service Agent in its reasonable discretion to provide billing and financial
clearinghouse services in connection with the Service; provided that no such delegation of such duties shall relieve Subscription Service Agent of any of its obligations set forth in this Content
Integration Agreement. 

        12.02.    (a)    Sony
represents and warrants that that it has the right, power and authority to enter into this Content Integration Agreement. 

        (b)  Sony
represents and warrants that, to the best of its knowledge, the use of the Sony Cleared Recordings (excluding any musical compositions and any dramatic, literary or
other copyrighted works (other than sound recordings) embodied therein) and the corresponding Artwork in accordance with the terms of this Content Integration Agreement will not violate or infringe
the rights of any third parties; provided, however, that in the event that Sony notifies you, under subparagraph 3.03(a) above, that any of the Sony Materials is excluded from the Grant of Rights,
then Sony's representation and warranty in this subparagraph 12.02(b) with respect to the Sony Materials that are the subject of such notice shall terminate immediately upon your receipt of such
notice (and Sony's indemnification of you under paragraph 16.01.1 below shall not cover any causes of action arising from your use thereafter of the Sony Materials that are the subject of such
notice). 

        (c)  Sony
represents and warrants that, to the best of its knowledge, it owns all right, title and interest in the Sony Materials; provided, however, that in the event that
Sony notifies you, under subparagraph 3.03(a) above, that any of the Sony Materials is excluded from the Grant of Rights, then Sony's representation and warranty in this subparagraph 12.02(c) with
respect to the Sony Materials that are the subject of such notice shall terminate immediately upon your receipt of such notice (and Sony's indemnification of you under paragraph 16.01.1 below
shall not cover any causes of action arising from your use thereafter of the Sony Materials that are the subject of such notice). 

13.  INFRINGEMENT  

        13.01.    Subscription
Service Agent agrees to notify Sony immediately after it becomes aware of any actual or threatened infringement, dilution or other
impairment ("Infringement") of the Sony Materials or Sony Authorized Trademarks. Upon receipt of such notice, Sony shall decide whether to assert or
file any legal or equitable proceedings (an "Action") with respect to such Infringement at its sole discretion. If such Infringement has occurred, at
Sony's sole option, exercisable upon notice to Subscription Service Agent, Sony may either prosecute the Action or authorize Subscription Service Agent to prosecute the Action in its own name. In the
event Sony elects to prosecute such Action, Subscription Service Agent shall cooperate with Sony in the Action, at Sony's reasonable expense. 

        13.02.    Subscription
Service Agent agrees to notify Sony immediately after it becomes aware of any asserted or threatened Action by any Person that the Sony
Materials causes the Infringement of the intellectual property or other rights of such Person. If such Person asserts or institutes an Action against Subscription Service Agent or against Sony
alleging that Infringement arises from or is related to Subscription Service Agent's conduct of the Service, Subscription Service Agent shall pay all expenses and fees (including attorneys' fees and
expenses and costs of investigation and litigation) 

50

 

incurred in connection therewith, and shall pay any judgments, proceeds, damages or settlements resulting therefrom. Subscription Service Agent may not compromise or settle any such Infringement
Action without Sony's prior written consent, which can be withheld in its sole discretion. Each of Sony and Subscription Service Agent agrees to reasonably cooperate with each other as necessary, in
defending any such Action. 

14.  CONFIDENTIALITY  

        14.01.    (a)    Each
of Sony and the Subscription Service Agent (each a "Disclosing Party") agrees that it shall, and it shall instruct in writing its
respective attorneys, accountants and other professional advisors (collectively, "Advisors") to, hold in confidence and not communicate, transmit, publish, disseminate or otherwise disclose any of the
terms and conditions of this Content Integration Agreement or of the Syndication Agent Agreements (or, for the avoidance of doubt, any Outside Agreement) or any fact, matter, event or surrounding
circumstance leading to or relating to the negotiation thereof to which such party was privy or of which it was otherwise made aware (e.g., by being copied on correspondence or by being advised of
such fact, matter, event or circumstance by another party to the negotiation) (collectively, "Confidential Information"); provided, however, that nothing in this paragraph 14.01 shall prohibit
disclosure of such Confidential Information: (i) by each such party to its respective financial officers, management, bankers or others as may be reasonably necessary in the operation of its
business, (ii) by each such party to its respective Advisors to the extent that such disclosure is in the opinion of such Advisors required to enable such Advisors fully to represent the party
concerned, (iii) in connection with any legal or governmental proceeding, or (iv) to any judicial, governmental or regulatory body. At Sony's request, you shall cause each of your
Advisors to execute a confidentiality statement in accordance with the preceding sentence. In addition, you will provide Sony with a reasonable opportunity to review and comment on any disclosure in
any of filings by you under the United States securities laws regarding this Content Integration Agreement and the transactions
contemplated hereunder and, if you are required to file this Content Integration Agreement under applicable securities laws, you will use best efforts to obtain confidential treatment for those
portions of this Content Integration Agreement that Sony designates. 

        (b)  Notwithstanding
anything to the contrary herein, Confidential Information shall not include information which: 

        (1)  at
or prior to the time of disclosure by the Disclosing Party was known to or independently developed by the party receiving such information (a "Receiving Party"),
except to the extent unlawfully appropriated by the Receiving Party or third party; 

        (2)  at
or after the time of disclosure by the Disclosing Party becomes generally available to the public through no wrongful or negligent act or omission on the Receiving
Party's part; or 

        (3)  the
Receiving Party receives from a third party free to make such disclosure without breach of any legal obligation. 

        (4)  is
required to be disclosed pursuant to any statute, regulation, order, subpoena or document discovery request. 

        14.02.    Subscription
Service Agent shall exercise best efforts to ensure that each Syndication Agent shall: (i) hold in confidence and not communicate,
transmit, publish, disseminate or otherwise disclose any of the terms and conditions of the Syndication Agent Agreements or any fact, matter, event or surrounding circumstance leading to or relating
to the negotiation thereof to which such party was privy or of which it was otherwise made aware (e.g., by being copied on correspondence or by being advised of such fact, matter, event or
circumstance by another party to the negotiation) (collectively, "Agent Confidential Information") and (ii) instruct in writing its Advisors to hold in 

51

 

confidence and not communicate, transmit, publish, disseminate or otherwise disclose any of the terms and conditions of the Syndication Agent Agreements or any fact, matter, event or surrounding
circumstance leading to or relating to the negotiation thereof; provided, however, that the exceptions set forth in subparagraphs 14.01 above shall also apply hereto. At Sony's request, you shall
cause each of the Syndication Agents to cause their Advisors to execute a confidentiality statement in accordance with the preceding sentence. In addition, you will cause the Syndication Agents to
provide Sony with a reasonable opportunity to review and comment on any disclosure in any of filings by you under the United States securities laws regarding this Content Integration Agreement and the
transactions contemplated hereunder and, if they are required to file any Syndication Agent Agreement under applicable securities laws, you will cause them to use best efforts to obtain confidential
treatment for those portions of such agreement that Sony designates. 

        14.03.    (a)    Neither
party hereto shall, without the prior written consent of the other party, issue any press release or make any other public
announcement or statement relating to any terms and conditions of this Content Integration Agreement or any fact, matter, event or surrounding circumstance leading to or relating to the negotiation
thereof to which such party was privy or of which it was otherwise made aware (e.g., by being copied on correspondence or by being advised of such fact, matter, event or circumstance by another party
to the negotiation). You and Sony shall endeavor to mutually prepare a press release to be issued after the complete execution of this Content Integration Agreement; provided that (i) the
failure of you or Sony to agree on the wording of the press release or the issuance thereof shall not constitute a breach of this agreement, and (ii) if you and Sony fail to agree on the
wording of the press release or the issuance thereof then neither you nor Sony shall issue such press release. 

        (b)  Subscription
Service Agent shall exercise best efforts to prevent Syndication Agents from issuing any press release or making any other public announcement or statement
relating to any terms and conditions of this Content Integration Agreement or the Syndication Agent Agreements or any fact, matter, event or surrounding circumstance leading to or relating to the
negotiation thereof to which such party was privy or of which it was otherwise made aware (e.g., by being copied on correspondence or by being advised of such fact, matter, event or circumstance by
another party to the negotiation). 

15.  NOTICES  

        15.01.    (a)    Except
as otherwise specifically provided herein, all notices under this Content Integration Agreement shall be in writing and shall be
given by courier or other personal delivery or by registered or certified mail at the appropriate address below or at a substitute address designated by notice by the party concerned. 

	TO YOU:	 	The address shown above.
	

TO SONY:	
 	

550 Madison Avenue

New York, New York 10022-3211

Each
notice to Sony shall be addressed for the attention of Sony's Senior Vice President, Business Affairs & Administration, and a copy of each notice to Sony shall be sent simultaneously to
the Sony Music Entertainment Inc. Law Department for the attention of Sony's Senior Vice President and General Counsel. Sony shall undertake to send a copy of each notice sent to you to Myman
Abell Fineman Greenspan & Light, LLP, 11601 Wilshire Boulevard, Suite 2200, Los Angeles, California 90025-1758, Attention: Eric Greenspan, Esq. and Jeffrey Taylor Light, Esq., but
Sony's failure to send any such copy shall not constitute a breach of this agreement or impair the effectiveness of the notice concerned. Notices shall be deemed given when mailed or, if personally
delivered, when so delivered, except that a notice of change of address shall be effective only from the date of its receipt. 

52

 

        (b)  Notwithstanding
anything in subparagraph 15.01(a) above, each Service Fee Report and accompanying payment made under subparagraph 6.03(a) above shall be addressed as
follows: Sony Music Entertainment Inc., Royalty Department, 550 Madison Avenue, New York, New York 10022-3211, Attention: Vice President, Royalty Accounting. 

16.  MISCELLANEOUS PROVISIONS  

        16.01.    Subscription
Service Agent will at all times indemnify and hold harmless the Sony Parties, from and against any and all claims, damages, liabilities,
costs and expenses (including legal expenses and counsel fees) arising out of: (a) the operation of the Service, (b) Subscription Service Agent's, Syndication Agents', End Users' and any
other Person's use (including but not limited to unauthorized use or duplication), in connection with the Subscription Service, of any Sony Materials; or (c) any breach or alleged breach by
Subscription Service Agent of any representation, warranty, covenant or agreement made by Subscription Service Agent herein, including, without limitation, Subscription Service Agent's representation,
warranty and agreement to secure and pay for all third party licenses, permissions and consents (individually and collectively, "CenterSpan Claims"). In the event of any CenterSpan Claim:
(i) Sony shall notify CenterSpan of the CenterSpan Claim concerned promptly following the date that Sony become aware of it; (ii) CenterSpan shall defend against the CenterSpan Claim
concerned (at CenterSpan's own expense) through legal counsel selected by CenterSpan with Sony's consent, which consent Sony shall not unreasonably withhold; and (iii) each party shall
reasonably cooperate with the other in the defense of the CenterSpan Claim concerned. CenterSpan shall be solely responsible for the amount of any settlement or judgment for such CenterSpan Claim and
all legal expenses and counsel fees incurred by CenterSpan in connection therewith, subject to subparagraph 16.01(b) below. 

        (b)  In
the event that CenterSpan is either unwilling to defend against the CenterSpan Claim concerned or is otherwise not reasonably defending against the CenterSpan Claim
concerned, Sony shall have the right to assume the defense and settlement of the CenterSpan Claim concerned through legal counsel selected by Sony, but CenterSpan shall be solely responsible at all
times for the amount of any
settlement or judgment for such CenterSpan Claim, as well as all reasonable legal expenses and counsel fees incurred by Sony in connection therewith. Any settlement of a CenterSpan Claim shall be
subject to CenterSpan's consent, which consent CenterSpan shall not unreasonably withhold. Notwithstanding the foregoing, in the event that CenterSpan defends against the CenterSpan Claim concerned
(at CenterSpan's own expense) through legal counsel selected by CenterSpan as provided above, Sony shall have the right at all times to actively participate in the defense thereof, and to employ legal
counsel selected by Sony at Sony's own expense, it being understood that CenterSpan shall have the right at all times, in CenterSpan's sole discretion, to maintain control of the conduct of the
defense. 

        16.01.1.    (a)    Notwithstanding
anything to the contrary in paragraph 16.11 below, except as provided in subparagraphs 12.02(b) and 12.02(c)
above, Sony shall at all times indemnify and hold harmless you from and against any and all third-party claims, losses, damages, liabilities, costs and expenses, including, without limitation, legal
expenses and reasonable counsel fees arising out of any breach by Sony of any warranty, representation, covenant or obligation by Sony hereunder (including, without limitation, (1) any claims
arising from Publishing Rights, but only in the event that Sony secures such Publishing Rights pursuant to section 4.03(e)(2), and (2) any claims arising from your use of the Sony
Cleared Recordings and corresponding Artwork as and to the extent authorized hereunder in accordance with the terms of this Content Integration Agreement), any claims that the Sony Cleared Recordings
or Sony Materials cause the Infringement of the intellectual property or other rights of such third-party regardless of whether Sony is in breach of the representations and warranties contained in
subparagraphs 12.02(b) and 12.02(c) above, and any claims arising out of legal actions undertaken by Sony against Persons owing debts in accordance with and subject to 

53

 

subsection 6.03(b)(4)(A)(II) above (individually and collectively, "Sony Claims"). In the event of any Sony Claim: (i) you shall notify Sony of the Sony Claim concerned promptly
following the date that you become aware of it; (ii) Sony shall defend against the Sony Claim concerned (at Sony's own expense) through legal counsel selected by Sony with your consent, which
consent you shall not unreasonably withhold; and (iii) each party shall reasonably cooperate with the other in the defense of the Sony Claim concerned. Sony shall be solely responsible for the
amount of any settlement or judgment for such Sony Claim and all legal expenses and counsel fees incurred by Sony in connection therewith, subject to subparagraph 16.01.1(b) below. 

        (b)  In
the event that Sony is either unwilling to defend against the Sony Claim concerned or is otherwise not reasonably defending against the Sony Claim concerned, you
shall have the right to assume the defense and settlement of the Sony Claim concerned through legal counsel selected by you, but Sony shall be solely responsible at all times for the amount of any
settlement or judgment for such Sony Claim, as well as all reasonable legal expenses and reasonable counsel fees incurred by you in connection therewith. Any settlement of a Sony Claim shall be
subject to Sony's consent, which consent Sony shall not unreasonably withhold. Notwithstanding the foregoing, in the event that Sony defends against the Sony Claim concerned (at Sony's own expense)
through legal counsel selected by Sony as provided above, you shall have the right at all times to actively participate in the defense thereof, and to employ legal counsel selected by you at your own
expense, it being understood that Sony shall have the right at all times, in Sony's sole discretion, to maintain control of the conduct of the defense. 

        16.02.    Subscription
Service Agent acknowledges that the Sony Materials and Sony Materials hereunder has a special, unique and extraordinary character which
gives them a peculiar value, and that, in the
event of a breach of any term, condition, representation, warranty, covenant or agreement contained in this Content Integration Agreement, Sony shall be caused irreparable injury, including loss of
goodwill and harm to reputation, which cannot be adequately compensated in monetary damages. Accordingly, in the event of any such breach, actual or threatened, Sony shall have, in addition to any
other legal remedies, the right to injunctive or other equitable relief. 

        16.03.    All
remedies provided for pursuant to this Content Integration Agreement are cumulative, and no exercise, or failure to exercise, any option by either
party will limit such party's right to recover damages or pursue any other remedies available at law or in equity. 

        16.04.    If
any provision of this Content Integration Agreement or the application thereof to any party, Person or circumstance shall be invalid, illegal or
unenforceable to any extent, the remainder of this Content Integration Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law. 

        16.05.    This
Content Integration Agreement, including the various Exhibits attached hereto, shall constitute the entire agreement between the parties with
respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter. No change or termination of this Content Integration
Agreement shall be binding upon Sony or you unless it is made by an instrument signed by both parties hereto. A waiver by either party of any provision of this Content Integration Agreement in any
instance shall not be deemed a waiver of such provision, or any other provision hereof, as to any future instance or occurrence. All remedies, rights, undertakings, and obligations contained in this
Content Integration Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, or obligation of either party. The captions of the Articles in this
Content Integration Agreement are included for convenience only and shall not affect the interpretation of any provision. 

        16.06.    (a)    Sony
may assign its rights under this Content Integration Agreement in whole or in part to any subsidiary, affiliated or controlling
corporation, to any Person owning or acquiring a substantial portion of the stock or assets of Sony, or to any partnership or other venture in which Sony 

54

 

participates, and such rights may be similarly assigned by any assignee. No such assignment shall relieve Sony of any of Sony's obligations hereunder. Subject to subparagraph 16.06(b) below, you
shall not have the right to assign this Content Integration Agreement or any of your rights or obligations hereunder, in whole or in part, without Sony's prior written consent. Any purported
assignment by you in violation of this paragraph shall be void. 

        (b)  (1)    You
may assign your rights under this Content Integration Agreement to another Person, in connection with a sale or transfer of substantially all assets
associated with the Service, subject to the following conditions: 

          (i)  The
acquiring Person, or any Affiliate of such Person, cannot be: (A) a Triggering Person, (B) an entity (or the parent, subsidiary, affiliate or licensee
of any such entity) against which Sony or any licensee, either directly or indirectly, has a claim arising out of the unauthorized recording, manufacture, distribution, sale, reproduction (or other
use) of any Sony Materials or other property or other tangible or intangible rights, (C) an entity (or the parent, subsidiary, affiliate or licensee of any such entity) involved in litigation
with Sony arising out of the unauthorized recording, manufacture, distribution, sale, reproduction (or other use) of any Sony Materials or other property or other tangible or intangible rights, or
(D) an entity (or the parent, subsidiary, affiliate or licensee of any such entity) engaged in any unauthorized recording, manufacture, distribution, sale or other activity in violation of
Sony's or it licensee's rights (any such entity described in clauses (B)—(D) is sometimes referred to as a "Prohibited Entity"). (In each case, CenterSpan may request that Sony inform
CenterSpan whether a potential acquirer of CenterSpan constitutes a Prohibited Entity.) 

        (ii)  The
assignment shall not be effective until you have delivered to Sony an instrument approved by Sony (such approval not to be unreasonably withheld or delayed)
effecting the assignment and the assignee's assumption of your obligations, and Sony has executed that instrument to evidence Sony's approval of it (which approval shall not be unreasonably withheld
if the conditions of subsections 16.06(b)(1)(i) - (ii) and (iii) and (iv) below herein have been met); 

        (iii)  No
such assignment shall relieve you of your obligations under this Content Integration Agreement (unless Sony otherwise agrees in writing); and 

        (iv)  If
such an assignment takes place, any further transfer of the rights assigned shall be subject to the same conditions. 

        (2)  Subject
to section 11.01(b)(6), you may convey your rights under this Content Integration Agreement to a subsidiary or affiliate of CenterSpan, provided that:
(i) fifty percent (50%) of the stock and assets of such subsidiary or affiliate are owned by CenterSpan at all times throughout the Term, (ii) CenterSpan wholly-controls such
subsidiaries' or affiliates' operations at all times throughout the Term, and (iii) fifty percent (50%) of the Service is thereafter owned and operated solely by such subsidiary or affiliate. 

        (3)  Any
purported assignment by you in violation of this subparagraph 16.06(b) shall be void. For the avoidance of doubt, CenterSpan's obligations under this Content
Integration Agreement shall not be diminished or otherwise affected by any such assignment. 

        16.07.    Unless
specifically set forth in this Content Integration Agreement, neither party shall be entitled to recover damages or to terminate the Term by
reason of any breach by the other party of its material obligations, unless the latter party has failed to remedy the breach within thirty (30) days following receipt of notice thereof (or, if
the breach concerned cannot be remedied within thirty (30) days, if the
latter party commences to remedy the breach within that time and proceeds to complete the remedy with reasonable promptness). 

55

 

        16.08.    In
entering into this Content Integration Agreement, you have and shall have the status of independent contractor. Nothing herein contained shall
contemplate or constitute you or any Syndication Agent as Sony's agent, except to the extent expressly set forth herein, or employee, and nothing herein shall constitute a partnership, joint venture
or fiduciary relationship between you and Sony. 

        16.09.    THIS
CONTENT INTEGRATION AGREEMENT HAS BEEN ENTERED INTO IN THE STATE OF NEW YORK, AND THE VALIDITY, INTERPRETATION AND LEGAL EFFECT OF THIS CONTENT
INTEGRATION AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY
CONFLICT OF LAW PRINCIPLES UNDER NEW YORK LAW). THE NEW YORK COURTS (STATE AND FEDERAL), SHALL HAVE SOLE JURISDICTION OF ANY CONTROVERSIES REGARDING THIS CONTENT INTEGRATION AGREEMENT; ANY ACTION OR
OTHER PROCEEDING WHICH INVOLVES SUCH A CONTROVERSY SHALL BE BROUGHT IN THOSE COURTS IN NEW YORK COUNTY AND NOT ELSEWHERE. THE PARTIES WAIVE ANY AND ALL OBJECTIONS TO VENUE IN THOSE COURTS AND HEREBY
SUBMIT TO THE JURISDICTION OF THOSE COURTS. ANY PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY, AMONG OTHER METHODS, BE SERVED UPON YOU BY DELIVERING IT OR MAILING IT, BY REGISTERED OR CERTIFIED MAIL,
DIRECTED TO THE ADDRESS FIRST ABOVE WRITTEN OR SUCH OTHER ADDRESS AS YOU MAY DESIGNATE PURSUANT TO ARTICLE 16. ANY SUCH DELIVERY OR MAIL SERVICE SHALL BE DEEMED TO HAVE THE SAME FORCE AND EFFECT AS
PERSONAL SERVICE WITHIN THE STATE OF NEW YORK. 

        16.10.    This
Content Integration Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. This Content Integration Agreement shall not become effective until executed by all proposed parties hereto. 

        16.11.    SONY
MAKES NO WARRANTY OF MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE SONY MATERIALS. IN NO
EVENT SHALL SONY BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, MULTIPLE, SPECIAL OR INDIRECT DAMAGES IN CONNECTION WITH THIS CONTENT INTEGRATION AGREEMENT (INCLUDING BUT NOT LIMITED TO LOST
BUSINESS PROFITS) EVEN IF SONY HAS BEEN ADVISED OF THE POSSIBILITY OF THE SAME. 

        16.12.    Subscription
Service Agent recognizes that the sale of Records by means of Conditional Download and Streaming, is speculative and that Sony makes no
warranties, representations or guarantees with respect to the number of Streams or Conditional Downloads, if any, which will be sold by Sony hereunder or otherwise. 

        16.13.    Omitted
without implication. 

        16.14.    Sony
and Subscription Service Agent agree to execute such further documentation and perform such further actions, including the recordation of such
documentation with appropriate authorities, as may be reasonably requested by the other party hereto to evidence and effectuate further the purposes and intents set forth in this Content Integration
Agreement. 

        16.15.    Subscription
Service Agent shall, from time to time, do and perform such other and further acts and duly execute and deliver such further documents and
assurances as may be required by applicable laws or as requested by Sony to establish, maintain and protect Sony's rights and remedies and to carry out and effect the intent and purpose of this
Content Integration Agreement, including, without limitation, the execution and delivery of additional documentation and/or instruments, in recordable form, and the recording or filing of additional
documentation and/or instruments, including, without limitation, any notice, UCC-1 and/or security agreement in accordance with the laws of such jurisdictions in which Sony may in its sole
discretion from time to time deem necessary. Without limiting the foregoing, Subscription Service Agent shall cause any such document and/or additional instruments which shall be executed to be kept,
filed, deposited or recorded, at all times, in such places that Sony shall designate in its sole discretion in order to perfect and preserve Sony's rights in and to the Sony Materials and the Sony
Authorized Trademarks. 

56

 

        IN
WITNESS WHEREOF, the parties hereto have executed this Content Integration Agreement, effective as of the date first above written. 

	 	 	SONY MUSIC, A Group of Sony Music Entertainment Inc.
	

 	
 	

By:	
 	

/s/  RON WILCOX      

	 	 	Name:	 	Ron Wilcox
	 	 	Title:	 	EVP, BA & NT, SMEI SVP, BA & ADM., SONY MUSIC, A GROUP OF SMEI
	

 	
 	

CENTERSPAN COMMUNICATIONS CORP.
	

 	
 	

By:	
 	

/s/  FRANK G. HAUSMANN      

	 	 	Name:	 	Frank G. Hausmann
	 	 	Title:	 	Chairman and CEO

57

  

 
 

Schedule A    
  

	TYPE OF SYNDICATION AGENT
 
	 	Execution

Advance*
	 	Anniversary

Advance**

	Rank 1 Network Syndication Agent	 	[ * * * ]X	 	[ * * * ]X***
	Rank 2 Network Syndication Agent	 	[ * * * ]X	 	[ * * * ]X***
	Rank 3 Network Syndication Agent	 	[ * * * ]X	 	[ * * * ]X***
	Data Network Syndication Agent	 	[ * * * ]X	 	[ * * * ]X***
	Music Site Syndication Agent	 	[ * * * ]X	 	[ * * * ]X***
	Online Retailer Syndication Agent	 	[ * * * ]X	 	[ * * * ]X***
	Radio Site Syndication Agent	 	[ * * * ]X	 	[ * * * ]X***

	*
	The
Execution Advance (sometimes referred to as the "Execution Advance" portion) shall be equal to the greater of: (X) the amount in the Execution Advance column above and
(Y) [ * * * ]X of the fair market value of all consideration guaranteed to be paid to CenterSpan or by
CenterSpan (or on CenterSpan's behalf) in connection with the Syndication Agent Agreement in question during the first twelve (12) months of the term of such agreement. Execution Advance shall
be paid as follows: (A) [ * * * ]X of the Execution Advance promptly following CenterSpan's execution of
the Syndication Agent Agreement in question, and (B) the balance of the Execution Advance not later than five (5) days following the commencement of the first month following the
quarterly accounting period during which the Initial Advance paid to date has been recouped by or repaid to you under the Content Integration Agreement.

	**
	The
Anniversary Advance (sometimes referred to as the "Anniversary Advance" portion) shall be paid promptly after the date that is twelve (12) months after the first day of the
term of the Syndication Agent Agreement in question. Thereafter, the Anniversary Advance shall be payable every twelve (12) months.

	***
	In
the event that the Term of the Content Integration Agreement will not last for three (3) years from the beginning of the term of the Syndication Agent Agreement in question,
CenterSpan shall be permitted to pro-rate this amount proportionately, based on the amount of time then remaining under the Term of the Content Integration Agreement. In the event that
such Term is extended, CenterSpan shall pay the unpaid balance of the Anniversary Advance.

	X
	CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SEC.

58

  

 
 

Exhibit A-1    
  

Functionality Specifications  

See attached. 

59

   Optimizing the Cost of Distributing Digital Media  

         

  

Optimizing the Cost of Distributing Digital Media  

        Enabling technologies such as mediated Peer-to-Peer (P2P) distribution platforms are opening the digital distribution
channel to secure e-commerce and legitimate business models by offering the lowest cost-of-goods and compelling economics. Mediated P2P is simply a hybrid P2P
system in which a central server "mediates" the connections between host peers and receiving peers when files are exchanged, to ensure the fastest, most efficient transfer. 

        Based
on CenterSpanTM Communications' experience with the C-StarOneTM mediated P2P distribution platform and Scour.com, the company's retail
entertainment destination built upon C-StarOne, a model has been developed comparing the costs of delivering content using traditional real-time streaming, client/server
downloads and mediated P2P transfers. According to our analysis, mediated P2P costs are one-third that of client/server downloads and less than 10% that of
traditional streaming for audio content. P2P offers even greater savings with video content. A mediated P2P network enables the delivery of content such as music, video,
publications, images and games at the lowest cost available today. 

MODEL CONSTRUCTION AND ASSUMPTIONS  

        We used a number of overarching assumptions to construct our comparison. First, the delivery mechanism must support the respective rightsholder's claims and
provide secure content delivery.
Second, the critical bandwidth costs are those that are billed directly to the central system. We refer to these as "hosted bandwidth costs." Third, system costs are a significant consideration. These
costs include network infrastructure, Web services, search, download, storage and peer presence. Fourth, these system costs scale with the number of users served and type of content hosted. 

COSTS  

        Hosted bandwidth costs are directly related to four critical use factors: 1) the number of users served by the system; 2) the number of downloads or
streams; 3) the listening habits of the user; and 4) the match between the content and the users' tastes. We structured the model to accept any number of registered users, focusing on
scenarios for 200,000 to two million registered users. We set downloads at thirty per month per user after considering public and private research findings, potential customer input and our own
planning. The number of users and the number of downloads or streams per user, together with the user's Internet connection speed, determine the peak load on the system. This peak load in turn
determines the system's Internet connection size and cost. 

        The
third factor, the impact of users' listening habits on bandwidth use adds a little more complexity. In comparing streaming and downloading systems, one must remember that a streaming
listener must be connected to the source and consuming bandwidth for the duration of each stream. A downloader by contrast can download once and listen many times without consuming additional
bandwidth. Our model assumes ten listens per download. 

        The
match between content and the users' tastes also needs some explanation. If the tastes of the users are similar and match the media being distributed, it will disseminate quickly.
Conversely, if the tastes of the users vary over a wide range and don't closely match the content being distributed then content will be disseminated slowly. The speed of dissemination of content
directly affects the costs of the P2P system, but has no impact on other systems. 

1

 

        If
content is disseminated quickly to the peers in a P2P network, the number of peer hosts rises quickly and increases the likelihood that a peer source will be available. As more peers
hosts are available, the load on the centralized server portion of the network drops and peer hosts serve an increasingly large portion of the downloads. CenterSpan's Scour.com beta experience has
shown that popular content disseminates very quickly—less than one week—to the point where downloads come primarily from the peer hosts. Overall, considering the entire range
of content in the Scour.com beta, the peer hosts and the central server each serve almost exactly half of the downloads. With more targeted and popular content, this balance should change so that 66%
to 75% of the downloads come from peer hosts. Once content has moved to the peer network, the P2P centralized server functions focus primarily on the specialized task of tracking host and content
presence on the network. 

        Raw
bandwidth cost or line cost is another key driver of hosted bandwidth costs. Bandwidth for streaming is more expensive than that required for downloads—often up to 50%
more—since it requires additional headroom and real-time traffic packet prioritization to ensure that the packets traverse the Internet safely. 

        System
infrastructure costs have the following components. (The most costly are listed first, and they drop in cost quickly after the first two.) 

	•
	Search and database—this includes multiple large systems that host the main content database and
user authentication system. Included are hardware and software expenses to provide timely response to user inquiries for content. The database requires a large initial investment in hardware and
software licensing.

	•
	Network infrastructure—this includes many of the standard components in a typical Web site
network operations center (NOC). It will include DNS servers, routers, load balancers and the like. The network infrastructure requires a large initial investment.

	•
	Download or stream management—these components manage the actual dissemination of the content to
the user. This requires small incremental boxes that can scale behind the network infrastructure.

	•
	Web services—these are largely page servers. They come in fairly small increments and scale
easily behind an infrastructure with load balancing.

	•
	Storage—the storage portion includes a storage area network that houses the content to be
distributed. This component scales with the amount of content and is somewhat independent of the number of users. With large content catalogs and high demand, redundancy is necessary to provide
reasonable service. In a streaming or client/server system, some additional investment is required for redundancy. In a P2P system, the redundancy comes from the peer network.

	•
	Peer presence—this component tracks availability of hosts in the peer network. Again, these will
scale in small building block increments behind the network infrastructure. 

        C-StarOne's
P2P platform infrastructure approach is scalable using an architecture with redundancy and small building blocks. This reduces infrastructure costs somewhat, and
is significant, but much smaller than hosted bandwidth costs. 

AUDIO MODEL ASSUMPTIONS AND VARIABLES  

 In our model:  

	•
	Each
user downloads thirty files per month for one year

	•
	The
downloads average four megabytes each

	•
	Content
downloads come from a peer host 75% of the time 

2

 

	•
	Users
listen to each song ten times regardless of stream or download

	•
	System
components scale with maximum simultaneous users (10% of registered users)

	•
	Best
case bandwidth cost $0.005 per megabyte and $0.007 for streaming

	•
	System
costs reflect actual CenterSpan costs for the Scour.com beta

	•
	The
system costs in the model include hardware and software purchase or start-up costs

	•
	Streaming
and client server has all content available on the host at all times

	•
	P2P
system moves content into the peer network and off the central servers over time, reducing the size of storage required

	•
	No
content costs are included in this analysis

	•
	Operations
personnel costs are very close across the different systems and not included in this analysis 

VIDEO MODEL ASSUMPTIONS AND VARIABLES

(where different from audio)  

 In our model:  

	•
	Each
user downloads 52 files per year

	•
	The
downloads average 200 megabytes each

	•
	Content
downloads come from a peer host 70% of the time

	•
	Users
watch each video 1.5 times regardless of stream or download 

  

3

 

  

  

        Our
analysis clearly shows that hosted bandwidth dominates the costs of distributing content in server-based streaming and client/server download models. Server streaming has
particularly high hosted bandwidth costs since each subsequent listen requires a new download. Client/server has hosted bandwidth costs since it includes all bandwidth for all downloads. P2P hosted
bandwidth costs are the lowest of the three since only a small portion of the downloads come from the central server. 

4

 

        The
system infrastructure costs are significant, but pale in comparison to hosted bandwidth. Streaming and client/server system infrastructure costs are almost identical. P2P costs are
lower due to an architecture and design approach with small scalable building blocks. 

SUMMARY  

        End-user customers and digital distributors typically measure their effectiveness by security, service level and cost. CenterSpan's
C-StarOne mediated P2P distribution platform excels in each category. It delivers secure, reliable services that are easily more cost effective than even the most efficient server-based
streaming or client/server systems. C-StarOne's P2P infrastructure scales easily and naturally because peers provide additional redundancy to the system. The central mediation provides
superior security and control. C-StarOne is the enabling technology that allows the market for digital content to continue its rapid growth. 

        For
more information on how CenterSpan Communications' C-StarOne mediated P2P platform delivers the most cost-effective distribution for digital content, contact
Phil Bride, Senior Product Marketing Manager, at (503) 615-3200, or visit www.centerspan.com. 

©  Copyright
2001, CenterSpan Communications Corp. All Rights Reserved. 

5

   Multi-Source Peer Streaming Revolutionizes Streaming Media  

         

  

Breaking the Streaming Cost Barrier:

Multi-Source Peer Streaming Revolutionizes Streaming Media  

EXECUTIVE SUMMARY  

        Today the Internet has evolved into a dynamic infrastructure for delivering a very large and rapidly growing selection of audio, video, and information content to
serve Internet users who want to use streaming media content to view upcoming movie trailers, watch classic TV show reruns, listen to audio files, or watch the news from their desktops. 

        According
to a new Internet Study by Arbitron Inc. and Edison Media Research, streaming media is now one of the fastest growing technologies on the Internet. As of
July 2001, 52 percent of online Americans (or approximately 78 million people) have watched or listened to streaming media content. Proliferation of broadband into American homes
will only accelerate this trend, analysts say. 

        Despite
its popularity, traditional streaming is not a cost-effective method for delivering high-quality online information content to this
ever-increasing population of streaming users. CenterSpanTM Communications' C-StarOneTM Content Delivery Network (CDN) with Multi-Source Peer
StreamingTM solves
cost and quality issues associated with traditional streaming and enables content providers to deliver superior streamed media at a substantial savings in operating costs. 

THE LIMITATIONS OF CURRENT STREAMING TECHNOLOGY  

        While streaming content provides many potential benefits, it is not without challenges. Like any technology, the benefit to the consumer must be balanced against
the cost and other requirements of the provider. Currently, traditional real-time streaming providers have systems that differ in detail, but all involve an extensive server infrastructure
and real-time synchronization to deliver content. These systems face the same high cost and low quality issues as a result. 

        With
traditional streaming, a file is delivered as a continuous, synchronized stream of multimedia data from a content provider's streaming server to a user's computer. Data traveling
the Internet, from host to end user, must often traverse many servers of varying quality and transmission speeds. While traditional streaming saves the user from waiting to download large files, other
major challenges arise because the Internet was designed for passing discrete packets of data, not continuous streams. 

        All
these factors often cause a multitude of transmission problems. And because a data stream must be sent at exactly the same rate for the entire duration of the stream, the quality of
streaming media often falls victim to the weakest (i.e., smallest or most congested) link between source and destination. As a result, users can often experience delays in playback and uneven
quality (lags, freezing, jerkiness). 

Server Load  

        Traditional streaming requires an extensive software and hardware infrastructure (or hefty fees to a Content Delivery Network vendor) to store and deliver what
are typically large multimedia files and then perform real-time synchronization of the content data stream with the media player of each requesting user. 

        In
a traditional model (see figure 1), the burden of storage, delivery, and synchronization is placed on expensive central servers and supporting software. As more and more users try to
access a piece of streaming content, a tremendous strain is placed on the server. 

1

 

  

Figure 1. Traditional Real-Time Streaming  

 Surges Associated with Events  

        Both servers and networks are susceptible to surges associated with big events like the release of an anticipated music video. When demand surges, servers can get
overrun—forcing them to reject connections. Further, the network can become too congested, impacting the quality of the streams. This infrastructure must always have excess capacity to
deal with intermittent spikes of demand, such as when a popular new song is released. 

        As
more and more users request streaming content, more and more connections are required. This consumes significant quantities of precious and expensive bandwidth, often delivering
repetitive or redundant information. For example, if ten different users want to view the same 4 MB stream of the newest music video, ten different connections would be required. This uses ten times
the bandwidth for the exact same piece of content. The server infrastructure cannot dynamically change to deal with such unpredictable fluctuations. 

Bandwidth Costs  

        Bandwidth for traditional streaming is also cost prohibitive. Streaming bandwidth is much more expensive than that required for downloads—often up to
50 percent more because it requires headroom and real-time traffic packet prioritization. Content sites and ISPs will find it difficult to cover the costs of delivering streaming
media content as more people watch or listen to streaming content online. 

INTRODUCTION TO MULTI-SOURCE PEER STREAMING  

        A mediated, peer-to-peer platform that incorporates multi-source
streaming can be an answer to traditional streaming problems. In a mediated peer-to-peer network,
central servers maintain an index of content and where it can be found. In this type of network, the server receives a content request and
identifies active hosting peers from the index. The server mediates the connection between the requesting peer and the closest, most efficient peers. In a  multi-source network, multiple peers store and
relay segments of content to support the streaming process. 

        Multi-source peer streaming is based on the recognition that the economies of peer-to-peer file distribution can be effectively applied to
streaming. This is achieved by breaking up the content into small segments that can be efficiently delivered by the mediated distribution network. 

2

 

        In
addition to breaking the content into segments, further efficiencies are achieved by separating delivery from playback. As discussed earlier, an inherent problem with traditional
streaming is the data stream must be synchronized from the streaming server across the Internet as it is played back on the user's machine. Separating delivery from playback eliminates the
synchronization problem associated with traditional streaming by synchronizing the data stream on the user's computer instead of a remote central server. Figure 2 illustrates the multi-source peer
streaming process. 

  

Figure 2. C-StarOne Multi-Source Peer Streaming  

        With multi-source peer streaming, many of the duties that are normally performed by an expensive central content server are offloaded to peer machines. This is
accomplished through a data sequencing and license mechanism on the user's computer. 

        When
a user becomes a peer in the network, small random segments received from seeding servers or other peers in the network may be stored in an encrypted cache—which is an
integral component of multi-source peer streaming. The cache also stores and manages segments received in anticipation of user demand. The presence and the contents of the cache are invisible to the
user. All content in the cache is protected, and the cache itself is encrypted. 

        This
Intelligent Caching SystemTM enables both pull (a user requests content) and push (the system distributes files to the network) strategies to distribute content, further
reducing storage and seeding costs. 

Content in the Network  

        As an example, we'll use figure 3 to illustrate how "Video X" moves through the CDN. Although the following example uses a fictional video file, any type of
digital content can be distributed. The delivery network is a closed-network system. Providers control the content that's published to the peer network—users are never allowed to add
content. 

 Preparing for Distribution  

        To
prepare content for distribution with peer streaming, Video X is first compressed and encrypted in a Digital Rights Management(1) (DRM) wrapper. Each piece of digital content and
wrapper is given a unique key. Once wrapped, the file is divided into a number of separate segments, and each encrypted segment is identified so that it can be assembled in the correct order. The
number of segments is based on a combination of factors, including the size of the file. 

3

 

 Distributing Content  

        The
file segments from Video X are then introduced into the content distribution network. Initially, all segments are delivered to secure seeding servers. The network then distributes
the file segments across the network to the peer caches, either in response to peer requests or in anticipation of heavy demand (see figure 3). The server records the location of the video's segments
in a catalog file, which enables the server to direct the requester to the closest, most efficient peer. As the segments move out into the network, no single peer has more than an arbitrary subset of
encrypted segments. 

  

Figure 3. Encryption and Distribution of Content to the Peer Cache

	(1)
	The
C-StarOne platform currently makes use of Microsoft Windows Media Rights Manager, but can also support other DRMs. DRM technologies effectively wrap each file
inside a protective (encrypted) "rights shell," which can protect digital goods at a number of levels. DRM allows business rules to be assigned for each piece of content. For example, the DRM can be
set to allow content to be played three times, then become "locked" and unusable. Or, for content available in a paid subscription service, the rights can be set to allow unlimited plays but the file
cannot be copied to another device or CD. 

 Requesting Content  

        When
a user requests Video X, C-StarOne receives the request; then locates and returns a list of the most efficient host peers from its catalog of locations. The user's
machine then notifies the host peers to begin sending segments, and the encrypted segments are delivered. 

        Since
the video's encrypted segments are being received from different peers in the network, reception can be overlapped (for example, segments 2 and 4 can be received at the same time).
This allows full use of the receiver's bandwidth, while not imposing a significant load on sending peers. 

        Once
the peers are in contact, the central server is not involved in the transfer. If the hosting peer for a file segment goes off-line before or during a file transfer, the
system doesn't freeze or require additional user intervention. The system instantly detects that a peer is offline and notifies the server, which then mediates a transfer with the next most efficient
hosting peer. 

4

 

 Playing a Stream  

        As
the requesting user's PC receives the video's encrypted file segments, they are sequenced and delivered to the DRM-supported media player. Some of the segments may come
from the local cache, but the majority of segments come from peers in the distribution network. If a suitable peer cannot be found, the segment may come from a seeding server. 

        To
the user, playing back a multi-source stream is no different than playing back a traditional stream. Once the initial segments of the file are transferred, the stream begins to play
like any other streaming file—but without Internet-induced or server overload delays. 

        Playback
requires a license, which is automatically generated and delivered silently to the authorized user's computer. The license key is unique to the user's computer and the content
being played. The user is not able to play back the file without both the license and content. Figure 4 illustrates the peer streaming playback process. 

  

Figure 3. Peer Streaming Playback Process  

        After
playback, the requesting user's computer is logged into the central server as a potential host peer for that content. A small subset of segments may be kept locally in the cache
for future use or delivery to other peers. The segments retained on the local cache do not represent a significant portion of the full file, remain DRM encrypted, and are never available to the user. 

THE ADVANTAGES OF MULTI-SOURCE PEER STREAMING  

        Multi-source peer streaming sidesteps the problems of server size, bandwidth, and file compression and degradation by utilizing the existing Intranet
infrastructure in a completely different way. Multi-source peer streaming handles all the peer-to-peer distribution activities behind the scenes, including encryption and
licensing. 

        Multi-source
peer streaming overcomes the many limitations of traditional streaming, enabling content providers to: 

 Reduce Infrastructure Costs and Support Greater Demand  

        Multi-source
peer streaming avoids costly infrastructure requirements associated with traditional streaming—since peers and the user's machine perform many of the tasks
typically performed by expensive central servers. According to our analysis, mediated peer-to-peer costs are  

5

 

 one-third that of client/server downloads and less than 10% that of traditional streaming for audio content. Multi-source peer streaming offers even greater
savings with video content. 

        Costs
are reduced further because a peer-to-peer streaming network "self-organizes" in response to heavy demand for content. This means that as the
number of requests increase, more peers become available to respond. Increased demand imposes little additional burden on the server infrastructure, since the servers are not involved in the actual
peer-to-peer transfer. 

  

 Reduce Expensive Bandwidth Costs  

        With
multi-source streaming, transfers take place between peers using the bandwidth of the peer network. The user no longer needs to be connected to the server for the entire duration of
the stream. Data sent from a peer is dynamically synchronized on the user's machine. 

 Increase Reliability and Enhance Users' Experience  

        Multi-source
peer streaming enhances the user's experience, avoiding the inferior quality or even failure of a traditional stream due to file degradation, low bandwidth, or network
congestion. 

	•
	Content
delivered by the multi-source peer stream has equal or better quality than traditional streams.

	•
	Providers
can anticipate demand and predeliver popular content to caches during off-hours. This helps smooth out demand spikes and enables users
with slow Internet connections to have a high-quality experience.

	•
	Users
are guaranteed access to content because redundant copies of content are seeded throughout the network and are available on seeding servers.

	•
	Users
aren't frustrated by server or network problems—if the hosting peer for a file segment goes off-line before or during a file
transfer, the system instantly detects that a peer is offline and notifies the server, which then mediates a transfer with the next most efficient hosting peer. 

 Protect Intellectual Property  

        Digital
Rights Management (DRM) technology is incorporated in all multi-source peer-to-peer transfers, which makes it is virtually impossible to intercept and
corrupt content files. Royalties and other revenue from copyrighted material are protected—from receipt of files through user 

6

 

download. Providers also control the content that's published to the peer network—there's never a chance of users adding data to the closed network. 

        This
advanced encryption and digital signature provides the following benefits: 

	•
	Content
starts secure and remains secure, from initial delivery to protected seeding servers through playback on users' computers.

	•
	Each
individual file segment is protected by the original DRM encryption on the file. Locating, intercepting, or assembling the segments correctly are
virtually impossible because the file is randomly segmented and distributed to multiple locations after encryption.

	•
	The
cache is encrypted, and users are prevented from accessing the random segments of content temporarily stored in the cache on their computers. 

        When
content is encoded with a DRM wrapper, a unique identification is embedded in the file. Acoustic fingerprinting techniques become unnecessary to identify file contents. The unique
identification of content means that content is cataloged, tracked, and controlled when distributed. 

        When
a user requests a file, the server infrastructure is consulted to locate suitable peers, then logs the peers involved in the transfer. The server also logs license generation for
the playback computer. Since the central server handles both transactions, reporting is straightforward and accurate. 

        A
digital signature of the encrypted file further protects the content. The server infrastructure provides the signature to the peer network to confirm that the file sent to the user is
the original file. This confirmation is done both before the peers begin delivering the content and again by the receiving peer to validate that the file was received unaltered. If a peer offers
invalid content, it is removed from the source list of that content to prevent further attempts to download the modified file. The system can also refuse requests, thereby withdrawing content from
circulation. 

        DRM
encoding also requires a license to decrypt the content during playback. This license is automatically generated and delivered silently to the user's computer without interrupting
the user experience. The license is unique to the user's computer and to the particular content, and playback requires both the license and the content. 

SUMMARY  

        CenterSpan Communications' C-StarOne Content Delivery Platform with Multi-Source Peer Streaming: 

	•
	Decreases costs and increases the profitability of online audio, video and information content by leveraging
the efficiencies of peer-to-peer file transfer technology and applying them to streaming. Less server infrastructure is required to perform expensive storage and delivery
activities, enabling providers to support peak demand without additional infrastructure.

	•
	Provides consistent, high-quality service and increases performance to customers by synchronizing
the media stream on users' computers instead of a central server, thereby optimizing bandwidth.

	•
	Protects content at all times by integrating state-of-the-art encryption
and digital signature technologies throughout file distribution, delivery, storage, and playback. 

7

 

FOR MORE INFORMATION  

        To find out how CenterSpan Communications' C-StarOne Multi-Source Peer Streaming can help you deliver content more cost-effectively,
contact: 

Phillip
Bride

Senior Product Marketing Manager

(503) 615-3200 

Also
visit www.centerspan.com.

8

  

 
 

Exhibit A-2    
  

Technical Specifications  

See attached. 

60

   

  

Security of the C-Star System
  By Michael Hudson, Chief Technology Officer, CenterSpan Communications, Inc.

February 2002 

Executive Summary  

        This paper explains the security methods used in CenterSpan's C-Star network. The information contained in this paper is company confidential and
disclosed strictly under Non-Disclosure Agreement. This information and may not be copied or distributed except under the terms of that agreement. 

        CenterSpan
focuses its security on industry-standard methods with the strongest manageable key strengths. This paper starts with an overview of the interconnections of the
C-Star network to enable readers to better understand the how the security protections are applied, and then goes on to discuss the security methods in detail. 

        The
C-Star system implements security through encrypted and segmented content, web page features, peer hosting port, cache security, back-end firewalls, proxy
isolation, and seeding server features. These elements work together at many different levels to provide a secure, easy-to-use system. 

System Overview  

        The C-Star Content Delivery NetworkTM consists of peers connected to a central mediating host. Peers in the network request content; the
Host Broker manages the delivery of the content to the peers.
Although content is generally received from other peers acting as hosts, it may also be received from Seeding Servers. The back end of the C-Star network manages this complex, rapidly
changing "Who has what?" information and makes sure that peers are treated fairly within the network. This combination of peers, hosts, seeding servers, and back end components is shown in the overall
system architecture in figure 1. 

1

 

  

Figure 1. C-Star System Architecture Overview  

Elements of the System  

	•
	Peer Cache

The
peer cache is a block of drive space that is created upon install and is dedicated to the use of the C-Star client. This block of space is an area of storage that is managed by the
C-Star client software. The cache may contain entire content files, or may contain only content segments. All content and content segments are encrypted while they are in the cache, which
is not readable by the end user and does not use the Windows file system. The user does not know what is in their cache at any given time. 

Peer
caches receive Content Work Manifests from a C-Star component called the Distribution Agent. When a peer receives a manifest, the cache's control system parses the manifest into a
queue of work. Each command in this queue is executed and will result in content being added to or dropped from the peer cache. 

	•
	Seeding Peer Servers

The
Seeding Servers are an element of the system that act as initial storage for the content being published and distributed throughout the network; and also guarantee quality of service through
availability. These servers are always available to the network; requesting peers can obtain any segment from the Seeding Servers if too few peer caches contain the content segment a peer has
requested. These Seeding Servers are HTTP web servers that run C-Star code that responds to peer requests for content. The Seeding Servers may be managed, hosted, and backed up just like
any other HTTP server. 

	•
	Client Proxies

Every
peer in the C-Star network connects to the C-Star back end through TCP/IP to a port on a Client Proxy. Client Proxies manage the connections to all active peers. Proxy
connections are very dynamic and self-repairing. 

2

 

The
C-Star system uses proxy connections to send and receive messages throughout the network. Every active client is represented within the C-Star network by its location ID
(its proxy port is considered to be transitory). The proxy connections are also used to maintain presence detection so the Host Broker can know what resources are available at any given moment. 

	•
	Host Brokers

The
Host Brokers, which act as the mediators for all content transfers, query the Host Databases to find the best locations from which to obtain content requested by a peer in the network. These
results, which are transferred to the requesting peer, are used by that peer to get segments from other peers or servers. 

	•
	Host Databases

Host
Databases produce a dynamic view of the content that is presently available in the system. This content presence information is updated whenever content is delivered, dropped, or found to be
missing when requested by another peer. These databases are also used to track the activity, the bandwidth at which a peer delivers content, and the reliability of peers. The system frequently updates
content popularity indexes by monitoring content activity contained within the databases. 

	•
	Distribution Agent

The
Distribution Agent ensures that the appropriate amount of any given piece of content is present in the cache population. The Agent periodically checks the popularity index and presence index of
each of the content's segments. It then issues cache manifests required to meet the index. Dampening is built into the algorithms to avoid excess network activity. 

	•
	Data Flow

When
a client requests a particular piece of content, the client receives a token from the offering page link (such as on a web application that offers the content). The client communicates the token
in its request to the Host Broker through the Client Proxy connection. The Host Broker validates the request and then sends the requesting client a Content Manifest that contains the information about
the segments needed to get the entire piece of content. The requesting client then asks the Host Broker for each segment listed in the manifest. The Host Broker responds to each segment request by
supplying an ordered list of clients who are currently acting as hosts for that segment. 

The
requesting client starts at the beginning of the ordered list and requests a content segment from a hosting client, which then responds by supplying the content segment. As the segments are
received from the hosting clients, log messages are sent to the database servers, which are acting as log servers. This information enables C-Star to monitor and report on the network
activity, and to keep the performance and content presence information that the Host Broker requires. 

Content Security at Publication  

        C-Star uses Microsoft's Digital Rights Management (DRM) technology to protect content as it travels through every step in the process—from
publication to playback. In addition to encrypting content, the content is segmented before distribution into the network. The content also contains a digital signature that enables C-Star
to validate segments as true copies of the original. 

	•
	Encryption

During
the encryption process, the complete content file is encrypted and the licenses are generated for its use as part of our back-end publishing process. When content is encrypted, a
unique identification is embedded into the file. 

3

 

The
C-Star system is designed to be DRM agnostic, but Microsoft's DRM is the only DRM presently supported. 

	•
	Segmentation

The
encrypted full content file is then segmented into many small pieces. The size and number of these segments is determined by the length and use of the content. These segments are given
non-representational names, which are then collected into the content manifest. The requesting peer uses the manifest to gather all the required segments and assemble them in the correct
order. This process is shown in figure 2. If you intercepted a single segment, there would be nothing to tell you what it contained. You also could not get the Microsoft player to play a single
segment to get a hint by listening to it. 

  

Figure 2. How Content Segmentation and Playback Work  

	•
	Signatures

As
each segment is created, it is digitally signed. This signature enables C-Star to later validate it as a true copy of the original. The signatures are checked whenever a segment is
received from another peer. If the signatures do not match the values listed in the manifest, then the segment is discarded and the Host Broker is notified of the contaminated data. 

The
Host Broker will remove the hosting client from the database to prevent additional peers in the network from attempting to receive that particular segment. 

4

 

Page Security  

        C-Star can also provide page security to the web services that offer content to end users. Web services must be able to make sure that only valid
users are playing the content and that all efforts have been made to avoid a system hacker's ability to spoof the starting links for the content. C-Star uses two systems to implement page
security: the first protects the start links interaction with the client; the second provides a method to independently validate all content requests within the system. These two systems are discussed
below in greater detail: 

	•
	Link Interconnect

The
links on web services pages are dynamic and provide "start delivery" information without making a direct metadata connection to the content offering. The requesting peer uses the information
delivered by the link to trigger validation and to start the delivery. 

	•
	Request Validation

When
the requesting client's C-Star delivery system begins processing the request for content, the client notifies the Host Broker—which causes a secure back-office
query of the web service's validation server. This enables the web service provider to compare location ID, content ID, and the user's active status to approve or deny the transfer. If the web service
provider decides not to allow the transfer, the request is cancelled before any content has been transferred. A web service provider may elect to not do this check, but the added security is worth the
effort to avoid unauthorized activity. 

Peer Security  

Hosting Port Security  

        The peer client's hosting port security provides protection from hackers who attempt to query the hosting client's port to determine what content the particular
hosting client might contain. Since the content at the port is only in segments (and the segment names are not related to content names in any observable way), someone trying to pirate content from a
hosting client would have to request random content IDs and hope to retrieve a usable content segment. Manifests or metadata are not available from this port, so any segment retrieved would be fairly
useless. 

Cache Security  

        The cache on the peer's system is encrypted using Blowfish variant, 128-bit symmetric key algorithm. The private keys are stored and handled in a
secondarily keyed, obfuscated method. The cache directory and its related tables are also stored in an encrypted form and are not Windows Explorer-system compliant. 

        If
a user was able to breach the encryption that covers the cache, they would not be able to associate segment content IDs with any segments they might extract. 

Content Licensing  

        Since the content is protected with Microsoft's DRM, this provides a final level of protection against unauthorized use. The client's player activates the check
of the license, and C-Star manages the delivery of licenses to provide a seamless user experience. Two back-end, independent monitoring systems validate and compare the license
activity with other system activity. Our license acquisition method also indicates to the license server that the license was granted to a valid C-Star client. Checking these records
enables us to further monitor invalid use attempts. 

5

 

Player Security  

        C-Star can be set to only allow connections by Microsoft-certified secure players. These players are certified to behave only within the permissions
set by the DRM. The signing methods used by Microsoft are proprietary to this use; C-Star follows the signature validation methods recommended by Microsoft. These players also support the
"Secured Stack Only" limitation in XP and later systems. This addresses the weakness of "Sound Card Ripper" driver stack replacement attacks. This setting, however, has no effect on earlier Windows
systems. 

Back-End Server Security  

Firewall  

        The back-end server system is protected by a set of Cisco PIX firewalls. These firewalls are set very restrictively to only pass the
C-Star traffic. Cisco PIX firewalls represent the strongest commercially available firewall system. 

Proxy Isolation  

        The peer clients connect to the back-end servers system through the Client Proxies. This connection methodology isolates and validates the client
peers and provides a very difficult-to-breach protection of Host Broker activity. As peer clients log on to the Client Proxies, they must pass a sequence of challenges and key
verification to ensure that only valid clients are allowed to connect and route messages. 

Peer Client to Proxy Message Protection  

        As each peer client logs onto the C-Star network, a challenge response system is used to validate the location ID and authenticity of the client. When
a peer client is validated, a unique, single-session only 128-bit key is generated and tested. When the key is installed, the communication shifts from the standard system key to unique
client encoding of every message using an ARC4 symmetric algorithm. If the connection between the peer client and the Client Proxy is interrupted, the key and handshake are regenerated to protect from
"man-in-the-middle" attacks on the control message structure. 

Seeding Server Security  

        Because the content that resides on the Seeding Servers is encrypted, segmented, and the content IDs randomized, there is little need to closely protect the
segments with extreme safeguards. The Seeding Servers are simple HTTP servers running a JSP script that provides a GET/PUT service interface. The Seeding Server's content is protected because a hacker
could never know what content is stored on any given Seeding Server and what each segment might represent. This methodology allows reasonable security through the HTTP server's control of file access
while still enabling standard IT support methodologies to be used on these distributed resources. 

Script Interconnection  

        The security methods used here are the same as mentioned under Hosting Port Security in the Peer Security section.
These methods present a similar interface to the requesting peer data transport methods. 

Conclusion  

        As you can see, the C-Star network was designed to allow for network independence and the security methods used. This enables us to change elements,
implement new features, or re-key as required. We at Centerspan feel that this network is the most secure, user-friendly system in the industry. We are constantly seeking to
improve our security while maintaining a simple user experience. 

6

   C-StarOne Mediated Peer-to-Peer  

  

Mediated Peer-to-Peer (P2P) Enables Viable, Cost Effective Delivery of Digital Entertainment  

        Few recent Internet trends have captured the attention of an entire industry like the sharing of digital entertainment. Free, unregulated
peer-to-peer (P2P) networks that share mostly illegal pirated music and video are nonetheless responsible for a massive behavioral and cultural shift in how people want their
entertainment delivered. In the U.S. alone, more than a third of all Internet users have downloaded music files.(1) Consumers are now looking to the entertainment industry to provide a
consumer-centric e-commerce experience for access to legitimate content—immediate digital delivery, user-friendly technology and cafeteria-style options. 

        A
mediated P2P network—in which a central server acts as a "broker" to locate content on individual peer computers—enables the entertainment industry to deliver a
robust experience at the lowest cost available today. 

        CenterSpanTM
Communications estimates its next-generation mediated P2P network to be 10 times as cost-effective as a central server-based system
in delivering digital content. Adding a digital rights management (DRM) solution to the mediated P2P architecture gives content providers the legal and secure distribution system they need. Mediated
P2P, with integrated DRM support, is the clear choice for replicating the successful bricks-and-mortar retail channel on the Internet. 

AN OVERVIEW OF P2P  

        In a P2P networked environment, individual computers communicate directly with one another rather than through a centralized server system. While today's Domain
Name System (DNS) allows servers to
be found easily on the Internet using a familiar address such as http://www.whitehouse.gov, it has tended to centralize content onto individual servers.
This has created single points of failure resulting in crashed and busy servers, and so has propelled alternative networking architectures such as P2P into the forefront of computer science. 

        When
used for the distribution of large digital entertainment files, P2P gives content providers significant value and cost savings as compared to using a central server system. 

        In
a traditional centralized server architecture, all content is hosted on a single server or a server farm. All requests for content from client computers must be routed through this
central location. For the huge amounts of data required for audio and visual content, the costs are high. 

        In
a decentralized 'pure' P2P network, the content is spread across many different computers or "peers." Every computer in a P2P environment is both a peer and a potential host, and can
share content directly. This spreads content and resource requirements across the network, leading to more rapid proliferation of content and reduced storage and bandwidth costs. However, control over
where and how the content is shared is lost in a pure P2P network. 

1

 

  

MEDIATED P2P: WHAT IT IS AND HOW IT WORKS  

        In situations where cost efficiencies are important and control over how content is shared needs to be maintained, a P2P hybrid architecture that combines the
benefits of both central servers and pure P2P can be an optimum solution. In a mediated P2P system, content is initially stored in central servers before being injected into the network in response to
requests by peers. Those peers then become hosts of the content. 

        In
a mediated P2P network, central servers contain an index of all content and where it can be found. When a request is received by the
server, peers hosting the content are identified from the index. The server acts as a broker and "mediates" a direct communications link between the
requesting peer and the closest, most efficient host peer. The server instructs the requesting peer where it can obtain the file, but is not otherwise involved in the transfer. This greatly reduces
bandwidth and storage costs over a central server architecture. 

  

2

 

COST SAVINGS WITH MEDIATED P2P  

        While digital compression technologies significantly reduce the size of music and video files that can be shared, the popularity of music sharing on the Internet
is so large that it's unlikely that any single centralized server system existing today could reliably support it. 

        Existing
P2P file sharing technologies transfer almost 3 billion songs(2) in a single month. In calculating cost estimates, the planning assumption is that the total universe of
free and subscription music downloads in the near future will be at least this large. If we average these songs at a file size of 3.5 MB each, this results in a total transfer of about
10 billion megabytes of data in a single month. To deliver this kind of bandwidth would require more than 25,000 T1 lines (1.536 megabits/second) to accommodate peak usage. At a cost of around
$1,000 per T1 per month, this translates to $25 million in bandwidth costs per month, or $300 million per year. Installation costs, server hardware and software costs, server warehousing
costs and administrative/maintenance costs would significantly increase this total. Bandwidth costs are expected to drop in the near future, which will bring down variable costs, but fixed costs will
remain. 

        In
a mediated P2P network, bandwidth costs are greatly reduced because downloading takes place between peers. CenterSpan Communications estimates that its P2P architecture may reduce
bandwidth requirements 10 fold over today's central server systems. The server overhead of maintaining a comprehensive content index—and the overhead of supporting peer searches on this
index—consumes approximately 10% of total bandwidth, while downloading music files consumes roughly 90% of total bandwidth. Reduced bandwidth requirements significantly reduce total
operating costs. A mediated P2P network can deliver music to the end user for 10% of the cost of a centralized server-based system. Using the sample size above, this translates into a cost of
$30 million per year instead of $300 million. 

CONSUMER USAGE EXAMPLE  

        For example, consider a subscriber member searching for content. In a worst-case scenario, the user runs 10 searches to find a particular title (our
experience shows it's actually closer to 3 to 4). If each
search returns 100 results, 1,000 titles are presented. With an average of a 256-byte packet of search information returned to the user for each song title, the user consumes about 256 KB
of server bandwidth for each song download. Search uploads from the user are negligible. The result is that approximately 90% of bandwidth consumed for the transfer of music between peers requires
little or no involvement from the server. This represents the bandwidth savings factor of P2P versus central servers. 

3

 

  

SUPER PEERS KEEP STORAGE COSTS LOW  

        In a hybrid, mediated P2P system, all new content is initially hosted by central servers and "seeded" into the peer network based on demand levels. Eventually, a
significant number of peers will be hosting the content and the central server will no longer need to be accessed. To speed this process and keep server costs down, selected broadband
peers—"super peers"—can be pre-seeded with content. Demand for new content varies widely. However, using demand curve models and making certain assumptions(3), a
managed number of super peers will be sufficient to serve accelerating demand in a P2P network. As demand increases for particular content, the number of hosting peers increases as well. 

        Several
factors determine how many peers in the network must host a particular content file before it is removed from the central server. In practice, when the number of hits to the
server falls and the number of hosting peers can meet demand, the file can be archived from the central server. Theoretically, for the P2P network to provide the file, only one peer needs to be
online. The number must actually be higher, since that peer may go offline at any time. 

        A
Forrester Research study shows that 60% of broadband users leave their computer on 24/7.(4) As the installed base of an entertainment P2P network will be heavily populated with
broadband users (by our estimation more than 25%), a limited number of host peers are necessary to ensure a suitable customer experience. This number can be reduced further by intelligently
pre-seeding super peers with the targeted content. 

P2P AND DIGITAL RIGHTS MANAGEMENT  

        While consumers want immediate delivery and user-friendliness when using online distribution channels, content providers demand a legal and highly
secure system that will accurately track sales and usage data to compensate copyright holders. Integrating support for digital rights management technology (DRM) into a mediated P2P platform provides
the secure, cost-effective solution the entertainment industry is searching for. 

        DRM
protects the digital goods, and can do so at a number of levels. This flexibility supports an e-commerce model by allowing different rights to be assigned to content at
different price points. DRM allows business rules to be assigned for each piece of content. Again using music as an example, the 

4

 

DRM can be set to allow promotional content to be played three times, then become "locked" and unusable. Or, for content available in a paid subscription service, the rights can be set to allow
unlimited plays but the file cannot be copied to another device or CD. 

        DRM
technologies effectively wrap each file inside a protective (encrypted) "rights shell." For example, digital music players will only be able to unlock a song inside this protected
shell if the proper rights exist. The rights of a song might be playback on a specific device but not on others, or the song could only be played a limited number of times, or the song could be
transferred to a CD. In each case the rights to the song cannot be separated from the music, and the player will only allow the music to be played as defined by these rights. If the song is copied and
shared then the rights instructions go with it and the person receiving the song must obtain a license to play it. 

        In
a mediated P2P system that supports DRM, files are wrapped in their DRM shell and cataloged on the central server index before they are made available to the peer network. Once on the
network, the files stay protected against unauthorized use even under broadest system-wide distribution and access. If a network member sends the song to another member, this member must
acquire their own license to play the song. When a consumer new to the system attempts to access the protected song they are automatically routed to the central server/e-commerce gateway
where they can become a member of the network and buy various types of rights to play the song. 

        The
DRM shell also includes tampering detection technology to protect the integrity of the file. The consumer is guaranteed to receive the same high quality song that the content
provider released because files cannot be renamed, changed, spoofed or infected with viruses while moving through the peer network. 

        Of
course, DRM applies to more than music; it can be used to protect video, games, photos, e-books or any other form of digital content. Combining mediated P2P distribution
technology and DRM content
protection technology provides a viable business model for the distribution of digital entertainment content on the Internet. 

SUMMARY  

        The fundamental economic success factors in the digital distribution channel are the same as in the bricks-and-mortar retail channel:
controlling cost-of-goods by deploying the lowest cost distribution and understanding consumer price elasticity relative to value. Enabling technologies such as mediated P2P
and DRM are opening the digital distribution channel to secure e-commerce and legitimate business models by offering the lowest cost-of-goods and compelling
economics. At the same time, consumer demand for easily accessible and reasonably priced digital entertainment is growing, stoked by first-generation P2P networks. As a result, the market for digital
entertainment is poised to grow exponentially. 

        Forrester
Research recently found that 70% of online music consumers are willing to pay an average of $9 per month for a digital music subscription.(5) Likewise, a survey by research
firm Webnoize found that 45% of college students are willing to pay $20 per month for an unlimited music subscription.(6) Webnoize expects 12 million subscribers for digital media services by
the year 2003, generating $3 billion in annual revenue.(7) 

        For
content providers looking to digital distribution to lower their retail costs and build closer relationships with their customers, mediated P2P with integrated DRM provides the
lowest cost secure and legal digital distribution platform available today. 

	(1)
	Pew
Internet & American Life Project, The Music Downloading Deluge, April 2001.

	(2)
	Webnoize
Research, New Subscription Models: Solving the Digital Music Puzzle, Winter 2001. 

5

 
	(3)
	Assumptions:

	•
	Growing
demand for content

	•
	Demand
is proportional to number of people online

	•
	A
small percentage of content accounts for the majority of transfers

	•
	Installed
base is assumed to be greater than 25% broadband

	•
	60%
of broadband users leave their computers on (Forrester Research, see below) 

	(4)
	Forrester
Research, P2P's Pervasive Future, January 2001.

	(5)
	Forrester
Research, Digital Music Will Squeeze Physical CD Sales, March 2001.

	(6)
	Webnoize
Research, Napster University, Spring 2000.

	(7)
	Webnoize
Research, New Subscription Models: Solving the Digital Music Puzzle, Winter 2001. 

For
more information on how CenterSpan Communications' next-generation mediated P2P platform delivers the most cost-effective distribution solution for digital entertainment,
contact Shelley Pritikin at (503) 615-3200, or visit www.centerspan.com. 

©  Copyright
2001, CenterSpan Communications Corp. All Rights Reserved. 

6

  

 
 

Exhibit B    
  

 
  STREAMING SECURITY FUNCTIONAL REQUIREMENTS    
  

Introduction  

        This document outlines the issues around the security of streamed media and enumerates the requirements of the international Recording Industry of such systems. 

        Capitalized
terms in this document are defined in Annex A or in the SDMI Portable Device Specification Part 1 Version 1.0 (henceforth the "SDMI PD Specification"). 

 
 

FUNCTIONAL REQUIREMENTS    
  

        The following are requirements of a Streaming Security System. 

SCOPE 

        This
Streaming Functional Requirement Document shall be able to be applied to all types of Streaming, in particular digital broadcasting, other forms of digital communications to the
public (such as cable transmission systems) and streaming over packet-based networks (such as the Internet). 

CONTENT SECURITY 

        A
Streaming Security System shall not allow Content to be accessible digitally except in accordance with this document. 

        In
particular: 

	•
	Content
shall be Protected at all points in the system,

	•
	A
Streaming Security System shall ensure that the Content is not accessible by systems and applications that do not enforce the Usage Rules. This requirement
shall, as a minimum, apply both to connections between software modules and hardware connections between consumer devices.

	•
	A
Streaming Security System shall ensure that after Content is rendered, it is inaccessible within the system that performed the rendering.

	•
	Unprotected
and unauthenticated digital outputs shall not be enabled or supported for Content that carries Streaming Usage Rules that do not authorize such
outputs. This requirement shall not apply to existing, widely deployed devices such as USB speakers. The level of protection of the Content shall be no less than that provided by encryption, using
technology customarily accepted within the applicable industry, to the extent necessary to protect Content. 

        A
Streaming Security System shall ensure that Content which is removed from the system other than in accordance with the Content's Streaming Usage Rules (for example by analogue copying)
is, to the extent possible, unable to be used in a manner inconsistent with these Functional Requirements. This might be achieved by adding or re-marking a watermark in the Content into a
state whereby systems compliant with other security specifications (such as the SDMI PD Specification) cannot accept it. 

STORED CONTENT 

        If
Streamed Content contains Streaming Usage Rules that permit the storage of a copy of the Content by the recipient of the Stream, then that copy may only be stored as SDMI Protected
Content for Local Use and the Usage Rules of the stored copy shall be the Usage Rules required by the Streaming Usage Rules. 

61

 

ROBSUSTNESS 

        A
Streaming Security System shall conform to agreed robustness Requirements that set out the strength of the security and response to new circumstances which is required. The SDMI PD
Specification contains appropriate language and is attached to this document for reference as Annex B. 

SELECTION OF SYSTEM 

        Where
the law does not so prohibit, Rights Holders shall be able to specify whether their Content is authorized to be delivered over a particular Streaming Security System. 

STREAMING USAGE RULES 

        A
Streaming Security System shall allow Streaming Usage Rules to be expressed as associated or embedded information, or else inherently implied by the Service's design, and shall ensure
that all forms are obeyed. 

        Streaming
Usage Rules shall be linked persistently to the Content, implicitly or explicitly. 

        A
Streaming Security System shall provide a sufficiently rich vocabulary in its expression of Streaming Usage Rules that all possible business models are accommodated. There is a
discussion of this in the next section. 

DEFAULT USAGE RULE ENFORCEMENT 

        Where
there are no Streaming Usage Rules relating to Content, a Streaming Security System shall apply the Default Streaming Usage Rules. 

        The
Default Streaming Usage Rule shall be that streamed Content may be rendered for immediate consumption but that no copy shall be retained before or after rendering. 

STREAMING USAGE RULE ENFORCEMENT 

        A
Streaming Security System shall ensure that Streaming Usage Rules are obeyed within it and also that Streaming Usage Rules and consequent Usage Rules are obeyed in systems to which
Content is transferred. 

PERFORMANCE  

IMPACT ON END-USERS 

        So
far as is possible, a Streaming Security System shall be transparent to end-users. It shall neither materially increase the time to listen when a Stream is demanded by an
end-user, nor materially degrade the sonic quality of the system, compared to an insecure system. 

CONTENT SELECTION 

        A
Streaming System shall allow Rights Holders to specify the type of service for which a particular piece of content is authorized. This might include: 

RETRANSMISSION 

        A
Streaming Security System shall allow Rights Holders to specify whether another streaming system is permitted to further stream a particular piece of Content, or to place conditions on
such further streaming. 

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QUALITY ASSURANCE 

        A
Streaming Security System shall, where not prohibited by law, allow Rights Holders to specify that Content shall not be delivered over Best Effort Systems (i.e., that it shall only be
delivered over Quality of Service (QoS) Assured Systems, or conventional broadcasting systems). 

        Where
not prohibited by law, a Streaming Security System shall allow Rights Holders to specify the limits on audio quality at which Content may be delivered by reference to bit rates,
acceptable codecs, etc. 

IDENTIFICATION DATA 

        A
Streaming Security System shall allow Rights Holders to control how the identification data, which is associated with Content being Streamed, is used by applications and end users. 

COMPLIANCE 

        A
Streaming Security System shall have adequate means for enforcing compliance. 

 
 

USAGE RULES    
  

        The following is a non-exhaustive list of the type of Streaming Usage Rules which a Streaming Security System may be required by Rights Holders to
support. 

RECORD CONTROL 

        A
Streaming Security System shall allow Rights Holders to specify whether the end-user is permitted to retain a copy of a particular piece of Content (excluding temporary
copies made in rendering the stream). It shall also allow Rights Holders to place constraints on the use of this copy by allocating Usage Rules to the retained Content. 

COPYING 

        Content
may be authorized for retention only for a specified period or for a specified number of listens. 

SECURITY 

        Content
may be authorized for retention only if it is held on a system or device of security meeting the requirements of the Rights Holder, e.g., 

	•
	"only
on an SDMI compliant device"

	•
	"on
a CD-R with the SCMS copy prohibit bit set"

	•
	"only
in a particular type of secure container" 

NAVIGATION 

        A
Streaming Security System shall be able to allow or prevent various sorts of navigation within streamed Content—such as skipping or fast-forwarding over musical
Content or advertising. 

DISTRIBUTION 

        A
Streaming Security System shall allow Rights Holders to specify whether the end-user is permitted to transmit a copy of a particular piece of Content to other
end-users. It shall also allow 

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Rights Holders to place restrictions on this transmission, for example by restricting the copy to a particular audio quality level, or to a particular excerpt. 

TERRITORIALITY 

        A
Streaming Security System shall allow Rights Holders to specify into which geographic or otherwise defined territories delivery of the Content is authorized. A Streaming Security
System shall also support the application of different Default Streaming Usage Rules in different geographic or otherwise defined territories. 

SUBSCRIPTION PAYMENT 

        A
Streaming Security System shall allow Rights Holders to restrict a stream for delivery only to end-users who have paid a subscription fee or otherwise become eligible to
have a particular Stream delivered to them. For instance, streams could be limited to end-users who have purchased a membership in a fan club or responded to an advertisement. 

PAY PER LISTEN/MINUTE 

        A
Streaming Security System shall allow Rights Holders to restrict distribution of a stream to end-users who pay a fee to have the Stream delivered, whether by the song, the
minute or some other measure. 

IMPULSE PURCHASE 

        A
Streaming Security System shall allow Rights Holders to specify that Streamed Content may be retained in accordance with Streaming Usage Rules that permit purchase of the Streamed
Content under explicitly controlled circumstances. For example, a Rights Holder might authorize the "purchase" of a track played over a Streaming Security System. 

 
 

Annex A—Definitions    
  

STREAMING 

        Streaming is delivering audio or audio-visual Content (henceforth Content) to an end-user such that it is consumed at
approximately the same time as it is sent. 

DOWNLOADING 

        By
contrast, Downloading is delivering Content to an end-user so that it is intended to be consumed at a later time, possibly
in accordance with Usage Rules (see below). 

Rights Holder 

        The
Rights Holder is the owner or licensee of Copyright or Neighboring Rights in the sound recording being streamed. 

STREAMING USAGE RULES 

        Streaming Usage Rules are rules for the use of Content, defined by Rights Holders in the Content. Streaming Usage Rules may allow or
disallow the immediate consumption of the Content. They may also allow or disallow other uses of the Content such as, retention, onward transmission etc. 

        Streaming Usage Rules may differ for different delivery systems and Rights Holders. 

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        Streaming Usage Rules may be attached to or embedded within Content, or else inherently implied by the Service's design. 

DEFAULT STREAMING USAGE RULES 

        Default Streaming Usage Rules are the rules defined for end-users in the absence of Streaming Usage Rules from Rights Holders.
Default Streaming Usage Rules may differ for different delivery systems. They may also differ from Default Usage Rules set out in other specifications, such as the SDMI Portable Device Specification
Part 1 Version 1.0. 

STREAMING SECURITY SYSTEM 

        A
Streaming Security System is able to ensure that Streaming Usage Rules (or where relevant, Default Streaming Usage Rules) are obeyed. It
includes the entire system, from the point where Content is introduced into it to the point where Content is either rendered in accordance with Streaming Usage Rules or handed off to another system in
accordance with Streaming Usage Rules. 

PROTECTED 

        Protected Content is in a state in which unauthorized access is restricted by technical means (e.g., encryption or scrambling). 

QUALITY OF SERVICE (Q0S) ASSURED SYSTEMS 

        QoS Assured Systems are systems where the path from source to end-user is subject to guarantees over the available bandwidth
and error rate. 

BEST EFFORT SYSTEMS 

        Best Effort Systems are systems where the path from source to end-user is NOT subject to guarantees over the available
bandwidth and error rate. 

 
 

Annex B—Robustness Requirements    
  

        The following text is copied from the SDMI PD Specification Section 10: 

 
 

GENERAL    
  

SCOPE 

        These
Robustness Requirements apply to implementations ("Implementations") of the SDMI Portable Device Specification, Part 1, Version 1.0 (the "Specification") and are
incorporated in the Specification. Capitalized terms not defined herein shall have the meanings set forth in the Specification. 

OBJECTIVE 

        Implementations
shall protect SDMI Protected Content against unauthorized access, copying and distribution. Implementations shall maintain SDMI Protected Content in a protected state or
a protected environment at all times except while such Content is being rendered in decompressed form. 

CONSTRUCTION 

        Implementations
shall comply with the Specification and be designed and manufactured so as effectively to frustrate attempts to modify such products so as to defeat the functions of the
Specification, as more specifically described below. 

65

 

DEFEATING FUNCTIONS AND FEATURES 

        Implementations
shall not include switches, jumpers or traces that may be cut, or control functions means (such as end user remote control functions or keyboard, command or keystroke
bypass) by which content protection technologies or other mandatory provisions of the Specification may be
defeated or by which compressed, decrypted SDMI Protected Content may be exposed to unauthorized copying, usage or distribution. 

MAINTAIN SECURITY 

        Implementations
shall be designed and manufactured so as to effectively frustrate attempts to: (i) discover or reveal non-public keys or cryptographic algorithms or
other secrets/confidential information used to protect Content in Implementations, (ii) defeat the functions related to Authentication, encryption, decryption, SDMI screening, watermark
screening, watermark insertion, the Secure Authenticated Channel and Storage of SDMI Protected Content, as defined and required in Specification, including the control functions or Usage Rules, to the
extent such functions and rules are implemented in the foregoing, and (iii) change embedded identities (collectively, clauses (i), (ii), and (iii) of this Section 10.1.4 are
referred to herein as the "Security Functions and Features"). Furthermore, in SDMI-Complaint products, where SDMI Protected Content is delivered from one part of the
SDMI-Complaint product to another—whether among integrated circuits, software modules, or a combination thereof—the portions of such product that perform the
Security Functions and Features shall be designed and otherwise integrated and associated with each other such that SDMI Protected Content in a usable form flowing between them shall be Protected from
being intercepted and copied or distributed. 

METHODS OF MAKING FUNCTIONS ROBUST 

        Implementations
shall use at least the following techniques to be designed to effectively frustrate efforts to circumvent or defeat the functions and protections in the Specification and
these Robustness Requirements: 

ACCESSIBILITY OF CONTENT 

        Decrypted
SDMI Protected Content shall not be available on outputs other than those specified in the Specification or these Robustness Requirements and, within Implementations, such
Content shall not be present on any user accessible buses in useable form in such a manner that permits users to circumvent or defeat the Security Functions and Features. For these purposes, a "user
accessible bus" shall mean a data bus which is designed for end user upgrades or access, such as PCMCIA, device bay, IEEE 1394 or Cardbus, but not PCI buses, memory buses, CPU buses, and similar
portions of a device's internal architecture. The foregoing shall also apply to interfaces between or among SDMI-Compliant products, such that SDMI Protected Content is transmitted in a
Protected manner. 

PLAYBACK 

        Unprotected
digital playback (e.g., via USB speakers) shall be limited to linear PCM at 48 kHz 16 bit or below, and any playback at a rate higher than 1.5 times normal speed shall be
noticeably degraded unless the pitch is corrected to the pitch at the normal speed. 

ROBUSTNESS REQUIREMENTS APPLICABLE TO SOFTWARE IMPLEMENTATIONS 

        Any
portion of an Implementation that implements one or more of the security functions set forth in the Specification in software that could allow compromise of SDMI Protected Content
shall include 

66

 

all of the characteristics set forth in Sections 10.1 and 10.2.1 of these Robustness Requirements. In addition, such Implementations shall: 

        Use
one or more reasonable methods, which may include, but shall not be limited to: encryption, execution of a portion of the implementation in ring zero or supervisor mode, and/or
embodiment in a secure physical implementation; and in every case of implementation of software, using techniques of obfuscation to disguise and hamper attempts to discover the approaches used. 

        Be
designed so as to perform self-checking of the integrity of its component parts and be designed to result in a failure of the Implementation to provide the authorized
Authentication and/or decryption function in the event of unauthorized modification. For these purposes, a "modification" includes any change in, or disturbance or invasion of features or
characteristics, or interruption of processing. This provision requires at a minimum the use of "signed code" or other means of tagging or operating throughout the code which are equivalent or more
robust. For purposes hereof, "component parts" are those that interact with SDMI Protected Content. 

ROBUSTNESS REQUIREMENTS APPLICABLE TO HARDWARE IMPLEMENTATIONS 

        Any
portion of an SDMI-Complaint product that implements a part of the Specification in hardware shall include all of the characteristics set forth in Sections 10.1 and
10.2.1 of these Robustness Requirements. The fact that a software Implementation operates on a hardware computing platform shall not, in and of itself, cause such hardware computer platform to be
subject to the requirements set forth in Sections 10.2.4 and 10.2.5. If, however, the software Implementation relies on hardware or any hardware component to satisfy these Robustness Requirements,
then such hardware or hardware
component shall be governed by the robustness rules set forth herein for hardware implementations. In addition, such Implementation shall: 

	1)
	Use
any reasonable means including, but not limited to: embedding encryption keys and algorithms in silicon circuitry or firmware which cannot be read, or the techniques described
above for software.

	2)
	Be
designed such that attempts to remove or replace hardware elements in a way that would compromise the content protection features of the Specification would pose a serious risk of
damaging such product so that it would no longer be able to receive playback SDMI Protected Content. By way of example, a component that is soldered rather than socketed may be appropriate for these
means.

	3)
	Be
designed such that the failure of a Security Function or Feature would cause the product to no longer be able to receive or playback SDMI Protected Content. 

ROBUSTNESS REQUIREMENTS APPLICABLE TO HYBRID IMPLEMENTATIONS 

        The
interfaces between hardware and software Implementations of an SDMI-Compliant product or between or among SDMI-Complaint products shall be designed so that
they provide the level of protection that would be provided by a purely hardware or purely software Implementation as described above. 

REQUIRED LEVELS OF ROBUSTNESS 

	1)
	The
Security Functions and Features and the characteristics set forth in Section 10.1.4 shall be implemented so that it is reasonably certain that they:

	2)
	Cannot
be defeated or circumvented using Widely Available Tools (as defined below) or Specialized Tools (as defined below) and 

67

 

        Can
only with difficulty be defeated or circumvented using Professional Tools (as defined below). 

        Widely
Available Tools shall mean general-purpose tools or equipment that are widely available at a reasonable price, such as screwdrivers, jumpers, clips, and soldering irons. 

        Specialized
Tools shall mean specialized electronic tools that are widely available at a reasonable price, such as memory readers and writers, debuggers, decompilers, or similar software
development products other than devices or technologies that are designed and made available for the specific purpose of bypassing or circumventing the protection technologies that are required by the
Specification, i.e., "Circumvention Devices". 

        Professional
Tools shall mean professional tools or equipment, such as logic analyzers, chip disassembly systems, or in circuit emulators, but not including either professional tools or
equipment that are made available on the basis of a non-disclosure agreement or Circumvention Devices. 

NEW CIRCUMSTANCES 

        If
an Implementation when designed and shipped complies with the requirements set forth above, but at any time thereafter circumstances arise which—had they been existing at
the time of design—would have caused such Implementation to fail to comply with the Specification ("New Circumstances"), then upon having reasonable notice of such New Circumstances, the
developer of such Implementation (the "SDMI Participant") shall promptly redesign affected product(s) or make available upgrades to its affected product(s), and, as soon as reasonable practicable,
consistent with ordinary product cycles and taking into account the level of threat to Content under the New Circumstances, shall incorporate such redesign or replacement into its affected product(s),
cease manufacturing such affected product(s) and cease selling such affected product(s). 

EXAMINATION/INSPECTION 

        Under
reasonable terms, including execution of mutually acceptable non-disclosure/non-use agreements, and upon reasonable notice to the SDMI Participant and the
SDMI Foundation by one of the RIAA, the IFPI or the RIAJ (each referred to herein as a "Recording Company Association"), such Recording Company Association may at its own expense have an independent
expert (acceptable to the SDMI Participant whose product(s) are to be inspected) inspect the details necessary to an understanding of such product(s)' implementation of the Specification and these
Robustness Requirements and such details sufficient to determine whether such product(s) is/are SDMI-Compliant. 

        Such
SDMI Participant's approval of such proposed expert shall not be unreasonably withheld. Details which may be inspected include the executable object code, functional design
diagrams, examples of the product, or block diagrams, but shall not include the source code, the Verilog Hardware Description Language (VHDL) or similar highly confidential information as reasonable
designated by the SDMI Participant. Any report made by the independent expert shall be made available to both the Recording Company Association and the SDMI Participant. The SDMI Participant shall not
be precluded or estopped from challenging the opinion of such expert in any forum. Nothing in this paragraph shall limit the role or testimony of such expert, if any, in a judicial proceeding under
such protective orders as a court may impose. This provision may not be invoked more than once per implementation, model or version, provided that such right of inspection shall include the right to
re-inspect such implementation, model or version if it has been revised in an effort to cure any alleged failure or compliance. Any investigation conducted hereunder shall be based on
reasonable grounds and commenced in a good faith attempt to determine whether an Implementation is SDMI-Compliant. 

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QuickLinks

Exhibit 10.17

Schedule A

Exhibit A-1

Exhibit A-2

Exhibit B

STREAMING SECURITY FUNCTIONAL REQUIREMENTS

FUNCTIONAL REQUIREMENTS

USAGE RULES

Annex A—Definitions

Annex B—Robustness Requirements

GENERAL

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