Document:

Unassociated Document

    DIGITAL
      MUSIC AND VIDEO LICENSE AGREEMENT

    PUBLISHING

     

    This
      Digital Music and Video License Agreement (the "Agreement"),
      together with the Standard Terms and Conditions attached hereto
      and incorporated by reference, is entered into as of the date of signature
      of
      this Agreement (the "Effective
      Date") by and between Mohen, Inc. d/b/a SpiralFrog, a Delaware
      corporation with its principal place of business at 95 Morton Street, New York,
      New York 10014, (referred to in this Agreement as "Licensee")
      and the licensing party listed on the attached signature page,
      including, but not limited to, such licensing party's Affiliates, as defined
      herein (collectively referred to in this Agreement as either "Licensor"
      or "you"). Unless otherwise indicated, all capitalized terms
      used in this Agreement have the meaning set forth in the Standard Terms and
      Conditions.

     

    WHEREAS,
      Licensee desires to offer to Users (as defined below), solely via its digital
      music service (the "Service",
      defined and described more fully below and in the annexed
      Exhibit A), Limited Music Downloads and Music Streams (as such terms are defined
      below) embodying Master Recordings (as defined below), including Relevant
      Compositions (as defined below); and

     

    WHEREAS,
      Licensee desires to offer to Users, solely via the Service, Limited Video
      Downloads and Video Streams (as such terms are defined below) embodying A/V
      Master Recordings (as defined below), including Underlying Compositions (as
      defined below); and

     

    WHEREAS,
      in connection with the operation of the Service, Licensee seeks licenses to
      reproduce and distribute the Licensor Compositions as embodied in Limited Music
      Downloads, Music Streams, Limited Video Downloads, and Video Streams, and
      Licensor is prepared to issue such licenses to Licensee in connection with
      the
      Service;

     

    NOW,
      THEREFORE, in consideration of the promises contained in this Agreement and
      for
      other good and valuable consideration, the adequacy and sufficiency of which
      each party hereby acknowledges the parties agree as follows:

     

    1.            Grant
      of
      Rights.
      Licensor hereby grants the following non-exclusive rights
      in
      and to

     

    the
      Licensed Content (listed in Exhibit B, as amended from time to time, and
      incorporated by reference) to Licensee, during the Term and within the
      Territory:

    (a)  to
      reproduce Relevant Compositions and Underlying Compositions as Digital Files
      on
      Secured Servers;

    (b)  to
      reproduce and distribute Relevant Compositions and Underlying Compositions
      embodied in Digital Files as Limited Music Downloads, Music Streams, Limited
      Video Downloads, and Video Streams;

    (c)  the
      right
      to use reputable third-party meta-data (i.e., data from All-Music Guide,
      Gracenote, Muze and Pollstar) in conjunction with the Licensed Content;
      and,

    (d)  those
      rights that may not be expressly granted hereunder that permit Licensee to
      carry
      on its business and operate the Service as intended by the parties under this
      Agreement.

     

    1A.            Delivery
      of Licensed
      Content. Licensor will provide Licensed Content to
      Licensee

     

    within
      thirty (30) days of execution of this Agreement, and, as new Licensed content
      becomes available, Licensor will provide the respective Licensed Content within
      thirty (30) business days of Licensor's receiving notice from Licensee
      requesting such Licensed Content.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.            Restrictions
      on Grant of Rights.

    (a)            Any
      and all rights in and to the Licensed Content not expressly granted

    hereunder
      are reserved by Licensor, including, but not limited to:

    (i)             rights
      of public performance (Licensee warrants and represents that

    Licensee
      shall obtain licenses to publicly perform Licensor Compositions in connection
      with the Service from the applicable performing rights societies);

    (ii)             copyrights
      or other rights in musical compositions and sound

    recordings,
      including any musical compositions and sound recordings embodied in any Digital
      File;

    (iii)

    (iv)  rights
      to
      use, exploit, or permit the use or exploitation of any Licensor Composition
      or
      the Lyrics of any Licensor Composition in a video game;

    (v)  rights
      to
      use, exploit, or permit the use of exploitation of any Licensor Composition
      of
      any Licensor Composition as a ringtone, ringback tone, or other so-called
      "telecommunication personalization product";

    (vi)  adaptation
      (derivative work) rights or right to alter the fundamental character of an
      Licensor Composition or the Lyrics of an Licensor Composition, or to create
      any
      derivative work based in whole or in part on an Licensor Composition or the
      Lyrics of an Licensor Composition;

    (vii)  merchandising
      rights;

    (viii)  use
      of a
      Licensor Composition for a marketing campaign, product tie-in, game or contest,
      or otherwise to directly advertise, promote or cross-promote any product or
      service; and,

    (ix)  permanent
      download rights.

    Provided
      however, nothing shall prevent Licensor and Licensee from entering into a
      separate written agreement according to the terms of Section 15 of the Standard
      Terms and Conditions, by which Licensor grants Licensee any such rights
      according to the terms of that separate agreement.

    (b)            This
      Agreement may not be sublicensed, assigned or otherwise transferred
      by

    Licensee.

    (c)  Licensor
      hereby acknowledges that User's experience of any Licensor

    
      	
               

            	
              Composition
                occurs in connection with third-party advertising; however, Licensee
                shall
                not: (I)without
                Licensor's prior, written consent create a direct
                association

            

    

    
      	
               

            	
              between
                any specific Licensor Composition and any third-party advertising
                in a
                manner that suggests Licensor or artists featured in any specific
                Licensor
                Composition is associated with or endorses any advertiser, product
                or
                service; or,

            

    

    (ii)
      knowingly display advertisements from any entity whose primary business relates
      to the unauthorized distribution of copyrighted material, illegal drugs or
      pornographically obscene.

    (d)  For
      the
      avoidance of doubt, ownership and control of any copyrights and/or trademarks
      in
      any Licensed Content is retained solely by Licensor, and neither Licensee nor
      any User or other third party shall obtain any ownership rights in any work
      derived from or that makes use of any Licensed Content.

     

    3.            Compensation.
      In consideration of the rights granted herein, Licensee
      shall pay

    Licensor
      the following amounts, which will be calculated on a quarterly
      basis:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a)            Music
      Royalty. With respect solely to Licensee's exploitation of Limited
      Music

    Downloads
      and Music Streams, Licensee shall pay to Licensor a royalty equal to the greater
      of (i) ten percent (10%) of Gross Music Revenue or twenty percent (20%) of
      Master Revenue, multiplied by Licensor's Music Royalty Share.

     

    (A)  The
      "Music Royalty Share" shall equal a fraction, the numerator of which shall
      be
      the sum of the number of Music Plays and Music Streams, and the denominator
      of
      which shall be the sum of the number of Music Plays, Music Streams, Service-wide
      Music Plays and Service-wide Music Streams.

     

    (B)  The
      "Music Master Revenue" shall equal the amount the owner of the Master Recording
      embodying the Licensor Composition receives (or is credited) for the
      exploitation of Limited Music Downloads and Music Streams.

     

    (C)            Notwithstanding
      the foregoing, solely with respect to the Non-CMRRACompositions
      exploited in Limited Music Downloads and Music Streams in Canada, Licensee
      shall
      pay to Licensor a royalty equal to the royalty payable for the comparable
      Limited Music Downloads and Music Streams under the terms of the CMRRA
      Agreement.

     

    (b)            Video
      Royalty. With respect solely to Licensee's exploitation of Limited
      VideoDownloads
      and Video Streams, Licensee shall pay to Licensor a royalty equal to the greater
      of (i) ten percent (10%) of Gross Video Revenue or (ii) twenty percent (20%)
      of
      Video Revenue, multiplied by Licensor's Video Royalty Share, which will be
      calculated on a quarterly basis:

     

    (A)  The
      "Video Royalty Share" shall equal a fraction, the numerator of which shall
      be
      the sum of the number of Video Plays and Video Streams, and the denominator
      of
      which shall be the sum of the number of Video Plays, Video Streams, Service-wide
      Video Plays, and Service-wide Video Streams.

     

    (B)  The
      "Video Master Revenue" shall equal the amount the owner of the Master Recording
      embodying the Licensor Composition receives (or is credited) for the
      exploitation of Limited Video Downloads and Video Streams.

     

    (d)             Unsold
      Advertising Inventory. Licensee shall provide to Licensor, and Licensor
      shall be entitled to use, a pro-rata share of six percent (6%) of Licensee's
      unsold advertising inventory, which Licensor may use to promote Licensed Content
      owned and/or controlled by Licensor. Licensor's pro-rata share of unsold
      advertising inventory shall be determined by using the fraction used in
      calculating Licensor's Music Royalty Share multiplied by six percent (6%) of
      the
      unsold advertising inventory available based upon the previous quarter's royalty
      calculation (or in the case of the Service's first quarter after launch, a
      commercially reasonable estimate of the same).

     

    (e)  Licensee
      will use its best efforts to track Music Plays, Service-wide Music Plays,
      Video Streams and Service-wide Video Streams using the system of each Covered
      Device, which systems are subject to interruptions and other interference not
      within Licensee's control, and that such interruptions and other interference
      will affect the royalty calculations set forth above.

     

    (f)            If,
      during the Term of this Agreement, we have an agreement with any third
party
      publisher ("Other Agreement") granting us the same distribution and reproduction
      rights granted hereunder in third-party-owned musical compositions or shares
      of
      musical compositions, yet prescribing a royalty computation method ("Other
      Method") which, if used under this Agreement, would result in royalty
      computations more favorable to you than that

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    prescribed
      in this Section 3, we will so advise you and will pay you royalties based on
      the
      Other Method instead, for the portion of the Term of this Agreement during
      which
      the Other Agreement is effective.

     

    4.             Advance.
      Licensee shall pay to Licensor the sum of Three Hundred
      Thousand United States Dollars (US$300,000.00) as an advance against the amounts
      otherwise payable to Licensor under paragraph 3 above, payable promptly after
      the full execution of this Agreement.

     

    5.             Term.
      The term of this Agreement shall commence as of the
      Effective Date, and unless earlier terminated in accordance with the Terms
      and
      Conditions, shall continue until December 31, 2008.

     

    IN
      WITNESS WHEREOF,
the parties have executed this Agreement as of the Effective
      Date:

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    prescribed
      in this Section 3, we will so advise you and will pay you royalties based on
      the
      Other Method instead, for the portion of the Term of this Agreement during
      which
      the Other Agreement is effective.

     

    4.   Advance.
      Licensee shall pay to Licensor the sum of Three Hundred
      Thousand United States Dollars (US$300,000.00) as an advance against the amounts
      otherwise payable to Licensor under paragraph 3 above, payable promptly after
      the full execution of this Agreement.

     

    5.  Term.
      The term of this Agreement shall commence as of the
      Effective Date, and unless earlier terminated in accordance with the Terms
      and
      Conditions, shall continue until December 31, 2008.

     

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of
      the Effective Date:

     

    MOHEN,
      INC. d/b/a SPIRALFROG

     

    BY:
      /s/ Joesph Mohen

    Chairman

     

    BY
      /S/ David Rosner

    UMPG

    2440 Sepulvada Blvd

    Los Angeles CA. 90064

    ATT Sr. Vice President of Bus. Affairs

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "eCommerce
      Revenue" shall mean all amounts or other considerations received
      by Licensee during the Term, from (i) Users, and (ii) from any other entity
      (including, without limitation, advertisers), who sells goods or services on
      the
      Service or via a separate website that is accessed via a direct link or
      advertisement on the Service and for which sales Licensee receives
      consideration, including, but not limited to, Referral Fees.

     

    "Gross
      Music Revenue" shall mean Advertising Revenue which is directly
      attributable to Limited Music Downloads and Music Streams.

     

    "Gross
      Video Revenue" shall mean Advertising Revenue which is directly
      attributable to Limited Video Downloads and Video Streams (other than Limited
      Video Downloads or Video Streams of a prelicensed video product, such as
      television programs, motion pictures or video games).

     

    "Licensed
      Content" shall mean Licensor Compositions,

     

    "Licensee"
      shall mean, individually and collectively, Mohen, Inc. d/b/a
      SpiralFrog and each of its Affiliates.

     

    "Licensor
      Composition" shall mean only that portion of the ownership,
      interest and rights in a Composition that is owned, controlled by or licensed
      to
      Licensor in the Territory, which are listed in Exhibit B and which are available
      for the purposes described in this Agreement.

     

    "Limited
      Download" shall mean an encrypted digital transmission of a
      time-limited or other use-limited download of a Digital File embodying a Master
      Recording, which is delivered via the Service from a Secured Server(s) to the
      Covered Device of a User in accordance with the terms and conditions of such
      User's agreement with Licensee and is only available to such User through such
      Covered Device for a limited period of time in accordance with the terms of
      this
      Agreement.

     

    "Limited
      Music Download" shall mean a digital transmission of a
      time-limited or other use-limited download of a Licensor Composition embodied
      in
      a Master Recording, which is delivered via the Service from a Secured Server(s)
      to the Covered Device of a User in accordance with the terms and conditions
      of
      such User's agreement with Licensee and is only available to such User through
      such Covered Device for a limited period of time. Each Limited Music Download
      times out within two months from the date on which the User first downloaded
      the
      Master Recording, or from the date on which the User last reconnected his/her
      Covered Device so that the service can renew the license and collect play-count
      information or from the end of the term.

     

    "Limited
      Video Download" shall mean an encrypted digital transmission of
      a time-limited or other use-limited download of a Licensor Composition embodied
      in an A/V Master Recording, which is delivered via the Service from a Secured
      Server(s) to the Covered Device of a User in accordance with the terms and
      conditions of such User's agreement with Licensee and is only available to
      such
      User through such Covered Device for a limited period of time. Each Limited
      Video Download times out within two months from the date on which the User
      first
      downloaded the Master Recording, or from the date on which the User last
      reconnected his/her Covered Device so that the service can renew the license
      and
      collect play-count information or from the end of the term.

     

    "Master
      Recording" shall mean an audio-only master sound
      recording.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "Music
      Play" shall mean each instance whereby a User causes a Licensor
      Composition to be heard in its entirety (as embodied on a Master Recording)
      on a
      Covered Device, when such content was originally delivered to the Covered Device
      as a Limited Music Download.

     

    "Music
      Stream" shall mean an encrypted digital transmission of the
      Licensor Composition embodied in a Master Recording from Secured Servers via
      the
      Service that allows a User to receive and listen to a particular Master
      Recording upon request at a time chosen by the User using streaming technology
      (including, without limitation, via Real Networks' RealAudio or Microsoft's
      Windows Media Audio formats) through the User's Covered Device, which
      transmission will (a) not result in a substantially complete portable
      reproduction of such Master Recording (other than a temporary copy such as
      those
      used solely for caching or buffering) and (b) occur substantially
      contemporaneously with the play of the given Master Recording.

     

    "Person"
      means a natural person, a corporation, a limited liability
      company, a partnership, a trust, a joint venture, a division, any governmental
      authority or any other entity or organization.

     

    "Personal
      Computer" shall mean an Internet Protocol (IP)-enabled desktop
      or notebook computer.

     

    "Portable
      Digital Music Device" shall mean a portable digital music device
      (including, but not limited to, mobile-telephone and other mobile devices that
      may also operate on a wireless communications network) that is used for the
      storage and play/playback of digital music files (i.e., music files encoded
      in
      MP3, AAC, WMA or similar audio format).

     

    A
"Relevant
      Composition" shall mean the Licensor Composition embodied on a
      Master Recording.

     

    "Secured
      Server" shall mean a secured server that is (a) located in the
      Territory, (b) owned and operated by Licensee or Licensee's vendor and (c)
      continuously protected by means of (i) physical security that meets or exceeds
      the prevailing physical security best practices in the industry and (ii)
      firewall and other digital security technology that meets or exceeds the
      prevailing digital security technology best practices in the
      industry.

     

    "Security
      Systems" shall have the meaning set forth in paragraph 3(g)
      hereof.

     

    "Service"
      shall mean the online service owned and operated by Licensee,
      as
      described more fully in Exhibit A hereto (hereby incorporated herein by this
      reference), which offers to Users, but is not limited to, Limited Music
      Downloads, Music Streams, Limited Video Downloads, Video Streams and/or Lyric
      Displays that are transmitted from Secured Servers to the Covered Devices of
      Users in accordance with the terms and conditions of this Agreement. The Service
      shall also include and incorporate the Lyric Search Service.

     

    "Service-wide
      Music Plays" are the total number of instances where Users cause
      compositions (as embodied on Master Recordings) of third-party rights-owners
      contributing such compositions to the Service to be heard in their entirety
      on a
      Covered Device, when such content was originally delivered to the Covered Device
      as limited-use downloads.

     

    "Service-wide
      Music Streams" shall mean the total number of encrypted digital
      transmissions from Secured Servers via the Service of compositions (as embodied
      on Master

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Recordings)
      of third-party rights-owners contributing such compositions to the Service
      that
      allow Users to receive and listen to particular Master Recordings upon request
      at a time chosen by the User using streaming technology (including, without
      limitation, via Real Networks' RealAudio or Microsoft's Windows Media Audio
      formats) through the User's Covered Device, which transmissions will (a) not
      result in a substantially complete portable reproduction of such Master
      Recording (other than a temporary copy such as those used solely for caching
      or
      buffering) and (b) occur substantially contemporaneously with the play of the
      given Master Recording.

     

    "Service-wide
      Video Plays" are the total number of instances where Users cause
      compositions (as embodied on A/V Master Recordings) of third-party rights-owners
      contributing such compositions to the Service to be heard and seen in their
      entirety on a Covered Device, when such content was originally delivered to
      the
      Covered Device as limited-use downloads.

     

    "Service-wide
      Video Streams" shall mean the total number of encrypted digital
      transmissions from Secured Servers via the Service of compositions (as embodied
      on A/V Master Recordings) of third-party rights-owners contributing such
      compositions to the Service that allow Users to receive, view and listen to
      particular A/V Master Recordings upon request at a time chosen by the User
      using
      streaming technology (including, without limitation, via Real Networks'
      RealAudio or Microsoft's Windows Media Audio formats) through the User's Covered
      Device, which transmissions will (a) not result in a substantially complete
      portable reproduction of such A/V Master Recording (other than a temporary
      copy
      such as those used solely for caching or buffering) and (b) occur substantially
      contemporaneously with the play of the given A/V Master Recording.

     

    "Territory"
      shall mean the United States, its possessions, territories,
      and
      military bases (the "USA"), except that solely with respect to the reproduction
      and distribution of Relevant Compositions and Underlying Compositions embodied
      in Digital Files as Limited Video Downloads and Video Streams, the "Territory"
      shall mean the USA and Canada. For purposes of this Agreement, distribution
      of a
      Digital File shall be deemed to occur within the Territory if either (a) the
      Secured Server from which the Digital File is distributed to the User is located
      in the USA, or (b) the Secured Server from which the Digital File is distributed
      to the User is located outside of the USA and the User receiving the Digital
      File resides in the USA and such User's Personal Computer is located in the
      USA.
      Notwithstanding the foregoing, the "Territory" with respect to Limited Music
      Downloads and Music Streams shall be deemed to include Canada solely with
      respect to those Compositions to the extent not licensed to Licensee through
      that certain agreement between Licensee, on the one hand, and CMRRA, on the
      other hand (such agreement is hereinafter referred to as the "CMRRA Agreement"
      and such Compositions are hereinafter referred to as the "Non­CMRRA
      Compositions").

     

    "Underlying
      Composition" shall mean the Relevant Composition embodied on an
      A/V Master Recording.

     

    "User"
      shall mean any individual who is a registered user of the
      Service, having agreed to Licensee's user agreement, and who is authorized
      by
      Licensee to access Limited Downloads, Streams, Limited Video Downloads and
      Video
      Streams, and/or any individual who uses the Service solely to access 30-second
      Music Streams or 30-second Video Streams, via the Service solely for personal,
      non-commercial use.

     

    "Video
      Play" shall mean each instance whereby a User causes a Licensor
      Composition to be heard and seen in its entirety (as embodied on an A/V Master
      Recording) on a Covered

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Device,
      when such content was originally delivered to the Covered Device as a Limited
      Video Download.

     

    "Video
      Stream" shall mean an encrypted digital transmission of a
      Licensor Composition embodied in an A/V Master Recording from Secured Servers
      via the Service that allows a User to receive, view, and listen to a particular
      A/V Master Recording upon request at a time chosen by the User using streaming
      technology (including, without limitation, via Real Networks' RealAudio or
      Microsoft's Windows Media Audio formats) through the User's Covered Device,
      which transmission will (a) not result in a substantially complete portable
      reproduction of such A/V Master Recording (other than a temporary copy such
      as
      those used solely for caching or buffering) and (b) occur substantially
      contemporaneously with the play of the given A/V Master Recording.

     

    2.Licensee
      Service Obligations.

     

    (a)              Service
      Operation. Licensee will be responsible for all DRM encoding,
      hosting, serving and providing clearinghouse and other functions necessary
      for
      the operation of the Service in accordance with the terms and conditions of
      this
      Agreement.

     

    (b)              User
      Agreement Licensee shall require each User to enter into a user
      agreement which prohibits further distribution of the Licensed
      Content.

     

    (c)              Limitations
      on User Access, Licensee's user agreement shall state that each User
      shall only be authorized to access Limited Music Downloads, Music Streams,
      Limited Video Downloads, Video Streams and Lyric Displays through the Service
      on, and for each User Covered Devices shall only include one (1) Personal
      Computer and up to two (2) Portable Digital Music Devices.

     

    (d)              Buy
      Link. Upon a User's selection of Licensed Content, Licensee will
      ensure that Users have access to a "buy button" or similar hyperlink, through
      which the User can purchase permanent copies (in electronic and/or physical
      format) of the applicable Relevant Composition and/or Underlying
      Composition.

     

    (e)              Metadata.
      Licensor will provide Licensee with all metadata associated with
      the
      Licensed Content, including without limitation, any and all names, full contact
      information and share of composition-ownership for any composers, publishers
      and/or other rights owners with whom Licensor shares ownership of each
      Composition. Licensee shall use commercially reasonable efforts to use metadata
      delivered by Licensor to Licensee hereunder. Licensor shall deliver such
      metadata to Licensee via FTP in either XML or tab delineated format or as
      otherwise mutually agreed between the parties in writing. Notwithstanding
      anything to the contrary contained in this Agreement, Licensor shall retain
      all
      right, title and interest in and to any Licensor-provided metadata delivered
      hereunder.

     

    (f)              Writer/Licensor
      Credit. Licensee shall, to the extent commercially feasible, include
      in any graphics and/or imagery displayed in connection with any Licensor
      Composition, written credit in legible form setting forth the names of the
      writer(s) and publisher(s) of such Licensor Composition. Further, upon
      Licensor's notice to the appropriate Licensee contact set forth on Exhibit
      C,
      Licensee promptly will correct any errors in such credits. Failure to abide
      by
      the provisions of this subparagraph 2(g) shall not be a breach of this
      Agreement.

     

    (g) Security
      Compliance.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i)            In
      connection with any use of Licensed Content, Licensee shall

    implement
      and maintain copy protection and DRM technology and systems, consistent with
      accepted industry practices (collectively, "Security Systems") with respect
      the
      Service under its supervision and/or control, including Secured Servers and
      operating systems, that:

    (A)  are
      designed to prevent unauthorized reproduction and distribution of Licensed
      Content;

    (B)  encrypt
      Licensed Content with a reasonably current version of DRM technology accepted
      within the industry;

    (C)  are
      sufficient to track and enforce the use and other license limitations
      contemplated by this Agreement; and

    (D)  generally
      meet or exceed accepted industry practices for the licensed delivery of music
      via digital transmission.

    Provided
      however, Licensee may distribute MP3 files in an unprotected format when the
      distribution of such files is expressly approved by Licensor.

    (ii)            If
      Licensor has a good-faith basis to believe that Licensee is not in compliance
      with such Security Systems, Licensor shall be entitled, upon thirty (30)
      business days' prior written notice to Licensee, to conduct or have a third
      party conduct an examination (a "Security Compliance Examination") of the
      operations and Security Systems of Licensee solely with respect to rights
      covered by this Agreement. Licensee shall make commercially reasonable efforts
      to cooperate with Licensor and/or Licensor's qualified designated representative
      regarding such Compliance Examination. Licensor's shall not conduct any Security
      Compliance Examinations of Licensee more frequently than once every twelve
      (12)
      months.

     

    3.Accounting.

     

    (a)               Payment
      Process.
Licensee shall pay royalties due to Licensor hereunder within sixty
      (60) days after the end of each quarterly accounting period (or partial period
      in the event of an early termination or expiration before the calendar close
      of
      such quarterly period) by wire or ACH banking transfer, provided Licensor
      provides such bank account and related information to Licensee in writing within
      a reasonable period of time.

     

    (b)              Accounting
      Statements. In connection with each royalty payment hereunder,
      Licensee shall provide Licensor with an electronic statement ("Statement")
      which
      shall set forth aggregate User consumption history of the Licensed Content
      in
      sufficient detail to determine Music Royalties and Video Royalties Payable
      hereunder. Each statement shall also include detail on the Licensed Content
      distributed to Users via the Service as (i) Limited Music Downloads, (ii)
      Limited Video Downloads, (iii) Music Streams and (iv) Video Streams. Each
      statement shall identify the number of Limited Music Downloads, limited Video
      Downloads, Music Stream, and Video Streams associated with

     

    (c)              Audit.  Licensor
      shall be entitled, once during every calendar year, upon at least
      thirty days' prior written notice, to examine the books and records of Licensee
      to determine the accuracy of Licensee royalty statements (a "Royalty
      Examination"). Such Royalty Examination shall be conducted by an
      accountant with experience in digital music royalty payments. Such Royalty
      Examination shall take place at Licensee's place of business during normal
      business hours, in a manner designed to be as non-disruptive to Licensee's
      business as possible. Licensor shall not conduct an audit more frequently than
      once every twelve (12) months.

     

    (d)  All
      statements rendered by Licensee shall be incontestable within one (1) year
      of
      the date due, unless an objection in writing is made for each such statement.
      Any

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    objection
      must specify, with particularity, the reason for such objection, and if an
      audit
      is to be conducted with respect to such statement, it must be conducted within
      three (3) years of the issuance of such statement. Notwithstanding any
      applicable statutes of limitations, Licensor waives any action brought in
      connection with an audit of any royalty statement unless such action is brought
      within one (1) year of the date of the commencement of any such
      audit.

     

    4.Licensed
      Content List / Takedown
      Procedure.

     

    (a)
      The
      rights granted hereunder shall apply solely to the Licensed Content set forth
      on
      the Licensed Content List, attached hereto as Exhibit B. Licensor will provide
      the Licensed Content List according to the following terms:

     

    (i)  The
      Licensed Content List shall include at least all Licensor Compositions and
      Lyrics licensed to the digital music provider which has received the largest
      number of Licensor Compositions and Lyrics licensed owned/controlled by
      Licensor.

    (ii)  Licensor
      will provide a complete, updated Licensed Content List at execution of this
      Agreement and thereafter no less frequently than monthly as Licensed Content
      is
      added or subtracted from the Licensed Content List via access to an FTP or
      similar site as agreed upon by the appropriate, respective contacts of the
      parties as listed on Exhibit C; provided however, except as set forth in
      paragraph 4(a)(iv) below, nothing shall prevent Licensee from providing new
      Licensed Content to Users at the street date of the Master Recording and/or
      A/V
      Master Recording, as applicable. If Licensor provides additional Licensor
      Compositions and Lyrics licensed to any other third party digital music or
      digital music video service, then Licensor shall offer such additional Licensor
      Compositions and Lyrics licensed to Licensee at the same time.

    (iii)  The
      Licensed Content List shall include, without limitation, any and all names,
      full
      contact information and share of composition-ownership for any composers,
      publishers and/or other rights owners with whom Licensor shares ownership of
      each Composition.

    (iv)  Notwithstanding
      the foregoing subparagraphs 4(a)(i) and 4(a)(i), Licensor shall not be
      considered in breach of subparagraph 4(d) if Licensor fails to provide Licensed
      Content (A) due to the reasonable objection of an artist with whom Licensor
      is
      bound by agreement with respect to such artist's rights in a Licensor
      Composition (an "Artist Agreement"), or (B) that is provided to third parties
      on
      an exclusive basis under written agreement for a limited term ("Exclusives");
      provided however, Licensor will provide Licensee the Exclusives immediately
      upon
      termination of such limited term.

     

    (b)             If
      any Licensed Content ceases to be owned or controlled by Licensor for
      any

     

    reason,
      then upon Licensor's written notice and request, Licensee shall remove access
      to
      such Licensed Content from the Service within one (1) business day of such
      request. Licensor shall not exercise the takedown right described in this
      paragraph in a manner that intentionally would defeat or frustrate the rights
      granted to Licensee under the Agreement.

     

    (c)             Licensee
      shall not exploit the rights conveyed herein relating to any Licensed
Content
      prior to the official USA release date of an album or individual Master
      Recording, as applicable, embodying such Licensed Content. Further and
      notwithstanding the foregoing, Licensee may exploit those rights conveyed herein
      before such release date to the extent that Licensee must reproduce Licensed
      Content to receive, store, and prepare its availability to Users (for example,
      as ephemeral copies) without distributing it to Users.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.             Licensee's
      Third-Part
      Obligations.   Except as specifically set
      forth herein, Licensee
      will be solely responsible for procuring any and all licenses, clearances and/or
      consents that may be required to operate, or from the operation of, the Service
      as contemplated hereby, and will be responsible for all payments required to
      be
      paid to any entity (including, without limitation, any performance rights
      society or similar body, any owners of Master Recording copyrights, any
      collection societies, industry organizations or similar bodies) in connection
      with the Service.

     

    6.             Licensor's
      Third-Part
      Obligations.  In
      addition to the other agreements and obligations
      of Licensor herein, with respect to Licensed Content, Licensor shall be
      responsible for any sample clearances and/or consents, and payments, including,
      but not limited to, all associated so-called writer royalties that, as a result
      of the Service, may be required for, or due to, a writer and any other
      third-party record royalty participants (e.g., a producer). In addition,
      Licensor shall be responsible for any payments that may be due to the Musical
      Performance Trust Fund and the Administrator of the Special Payment Fund of
      the
      American Federation of Musicians, and any similar fund established by a
      collective bargaining agreement within the recorded music industry.

     

    7      .Intellectual
      Property.

     

    (a)              Ownership
      of Licensed Content. All right, title and interest in and to the Licensed
      Content, including all intellectual property rights inherent therein are owned
      and retained exclusively by Licensor.

     

    (b)              Ownership
      of Licensee Service and related systems. As between Licensee and Licensor,
      Licensee owns all right, title and interest in and to the Service (subject
      to
      ownership of Licensed Content as described in paragraph 7(a)), including all
      intellectual property rights in and to all elements and components related
      thereto, and all goodwill associated with the Service will inure solely to
      the
      benefit of Licensee. Licensor understands and agrees that it shall not acquire
      any right, title or interest in or to the Licensee Service, or any part thereof,
      by reason of this Agreement or the performance hereof. All rights not
      specifically granted herein with respect to the Service are reserved to
      Licensee. Licensor will not contest, or assist other non-affiliated parties
      in
      contesting, Licensee's rights and interests in the Service or the validity
      of
      such ownership (including all intellectual property rights in and to all
      elements and components related thereto).

     

    (c)             Consumer
      Data.  Licensee shall be the sole owner of any and all
demographic
      and User data related to the Service, including, but not limited to,
      survey

    information,
      IP addresses, User activity, cookies and email addresses. To the extent
      practicable, Licensee shall provide Licensor with anonymous, aggregate consumer
      data related to Licensor's Licensed Content.

     

    8.          Representations,
      Warranties and Covenants; Indemnity.

     

    (a)             Each
      Party represents to the other Party that:

     

    (i)     such
      Party has the full right, power and authority to execute, deliver and
      perform this Agreement and to consummate the transactions contemplated
      hereby;

    
      
              

                  /      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (ii)  the
      execution, delivery and performance of this Agreement and the consummation
      of
      the transactions contemplated hereby have been duly authorized by all necessary
      corporate action;

    (iii)  this
      Agreement has been duly executed and delivered by an authorized officer, and
      is
      a legal, valid and binding obligation enforceable against such Party in
      accordance with its terms, except as enforcement may be limited by general
      principles of equity (regardless of whether such enforceability is considered
      in
      a proceeding at law or in equity) and the effect of applicable bankruptcy,
      insolvency, moratorium and other similar laws of general application relating
      to
      or affecting creditor's rights generally, including the effect of statutory
      or
      other laws regarding fraudulent conveyances and preferential
      transfers;

    (iv)  the
      execution, delivery and performance of this Agreement will not constitute a
      breach or default under any contract or agreement to which such Party is a
      party
      or by which such Party is bound or otherwise violate the rights of any third
      Person; provided however, Licensor shall not be considered in breach of this
      subparagraph 8(a)(iv) solely to the reasonable extent Licensor is bound by
      an
      Artist Agreement; and,

    (v)  except
      to
      the extent expressly set forth in an Artist Agreement, no consent, approval
      or
      authorization of or from any governmental entity or any other Person not a
      party
      to this Agreement, whether prescribed by law, regulation, contract or agreement,
      is required for its execution, delivery and performance of this Agreement or
      consummation of the transactions contemplated hereby.

     

    (b)
      Licensor hereby warrants and represents to Licensee that:

     

    (i)  Licensor
      owns or controls the Licensed Content and has the right to grant all rights
      contained herein to the Licensed Content;

    (ii)  Licensor
      is a duly organized and existing company in good standing under the laws of
      its
      place and country of formation, and has the exclusive right, power and authority
      to enter into this Agreement, to grant the rights agreed to be granted by
      Licensor hereunder;

    (iii)  Licensor
      has not made and will not make any grant, assignment, commitment, license or
      do
      or permit any act which will or might materially interfere with or impair the
      full and complete performance of Licensee's full and complete enjoyment and
      exercise of the rights and privileges granted herein; and,

    (iv)  There
      are
      no liens, claims or encumbrances which might conflict with or otherwise affect
      any of the provisions of this Agreement or Licensee's promotion or exploitation
      of the Licensed Content in any and all media whether now known or hereafter
      devised throughout the universe in perpetuity.

     

    (c)Licensee
      hereby represents and warrants to Licensor that it shall:

     

    (i)  it
      shall
      take all reasonable steps necessary to implement and shall comply with its
      security obligations set forth in this Agreement; and,

    (ii)  it
      shall
      use best efforts to obtain from the relevant owners, at its own expense, any
      rights in and to underlying musical compositions embodied in Licensed Content
      necessary to exploit the Licensed Content in accordance with this
      Agreement.

     

    (d)             Licensee
      agrees to indemnify, defend and hold harmless Licensor,

     

    ("Indemnitee")
      from and against any losses, injuries, damages, claims, expenses
      and costs (including without limitation reasonable attorneys' fees) ("Claims")
      incurred or suffered by Indemnitee, arising from any third-party
      actions, claims, suits or legal

    
      
              

                  /      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    proceedings
      of any kind, caused by, arising from or related to: (i) Licensee's failure
      to
      perform any of its obligations under this Agreement and/or any breach or alleged
      breach of any representation or warranty hereunder; (ii) the operation of the
      Service or Licensee's business; and (iii) any acts or omissions of any Licensee
      employee or agent. Licensor shall promptly notify Licensee in writing of any
      Claim and allow Licensee to control the defense thereof; provided that Licensee
      may not settle such Claim without Licensor's prior written
      approval.

     

    (e)            Licensor
      agrees to indemnify, defend and hold harmless Licensee, its

     

    respective
      officers, employees and agents, (collectively, the "Licensee
      Indemnitees") from and against any losses, injuries, damages,
      claims, expenses and costs (including without limitation reasonable attorneys'
      fees) ("Claims")
      incurred or suffered by any Licensee Indemnitee, arising from
      any third-party actions, claims, suits or legal proceedings of any kind, caused
      by, arising from or related to: (i) Licensor's failure to perform any of its
      obligations under this Agreement and/or any breach or alleged breach of any
      representation or warranty hereunder; (ii) the operation of Licensor's business;
      and (iii) any acts or omissions of any Licensor employee or agent. Licensee
      shall promptly notify Licensor in writing of any Claim and allow Licensor to
      control the defense thereof; provided that Licensor may not settle such Claim
      without Licensee's prior written approval.

     

    9.            Termination;
      Survival.

     

    (a)  Licensor
      shall have the right to terminate this Agreement after providing

     

    thirty
      (30) days' prior written notice to Licensee in the event of a material breach
      of
      any provision of this Agreement, only if during such thirty (30) day period,
      Licensee fails to cure such alleged breach.

     

    (b)  Licensee
      shall have the right to terminate this Agreement at any time on thirty (30)
      days' prior written notice to Licensor, in the event of a material breach of
      any
      provision of this Agreement, only if during such thirty (30) day period,
      Licensor fails to cure such alleged breach.

     

    (c)  All
      representations, warranties and indemnities shall survive expiration or
termination
      of this Agreement.

     

    (d)  Within
      ninety (90) days after the effective date of any termination under this
paragraph,
      each User's rights to the Licensed Content shall lapse.

     

    (e)       This
      subparagraph 9(e), paragraphs 8, 11, 14, 15, 17, and 18 and those obligations
      of this Agreement that may reasonably be expected to survive the termination
      or
      expiration of this Agreement shall survive the termination or expiration of
      this
      Agreement.

     

    10.            Assignment.  This
      Agreement shall not be assignable by either without the prior
      written consent of the non-assigning party and any such assignment shall be
      invalid ab

    initio. Notwithstanding
      the preceding sentence, either party may assign this Agreement in conjunction
      with a transfer, merger and/or acquisition of a substantial portion of the
      assigning party's business, stock, or assets, or to any entity controlled by,
      controlling or under common control with the assigning party.

     

    11.            Choice
      of Law.  The parties agree that it is to their
      mutual benefit that their respective
      rights and obligations under this Agreement are guided by, and their disputes
      hereunder are determined in accordance with, a well developed body of law.
      Accordingly,

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    the
      parties agree that the validity, interpretation and legal effect of this
      Agreement shall be governed by the internal laws of the State of New York,
      U.S.A., applicable to contracts entered in and performed entirely within the
      State of New York, U.S.A. The parties agree that any legal suit, action or
      proceeding arising out of or relating to this Agreement must be instituted
      in
      New York, and Licensor and Licensee each (i) irrevocably submits to the
      exclusive jurisdiction of the United States District Court for the Southern
      District of New York, or the Supreme Court of the State of New York, County
      of
      New York, and (ii) waives any objection to the venue of any such suit, action
      or
      proceeding and any claim relating to forum non conveniens. In any such suit,
      action, or proceeding, any summons, order to show cause, writ, judgment, decree
      or other process may be delivered to Licensor or Licensee outside the State
      of
      New York or outside the United States and when so delivered, such party shall
      be
      subject to the jurisdiction of such court, and amenable to the process so
      delivered as though the same had been served within the State of New York but
      outside the county in which such suit, action or proceeding is
      pending.

     

    12.             No
      Partnership.   Nothing
      contained herein shall be
      construed to place the
      parties
      in the relationship of partners or joint venturers, and Licensee shall have
      no
      power to obligate or bind Licensor in any manner whatsoever.

     

    13.             Notices.  All
      notices required hereunder shall be in writing and shall be given either
      by
      personal delivery, telecopy or by registered or certified mail (postage
      prepaid), and shall be deemed given hereunder (unless actual receipt is
      hereinabove required) on the date delivered, telegraphed, telecopied or telexed
      or a date forty-eight (48) hours after the date mailed. Until further notice,
      the addresses of the parties shall be as follows:

     

     

    

    
      	
              LICENSEE:

              Mohen,
                Inc

              95
                Morton St,

              New
                York, NY 10014

              Attn:
                Chief Executive Officer

              With
                a courtesy copy to:

            	
              LICENSOR:

              [Address
                as indicated on the signature page.]

            
	
               

            	 
	
              Hughes
                Hubbard and Reed LLP One Battery Park Plaza

              New
                York, New York 10004 (212) 422-4726 fax

              Attn:
                Harry Packman

            	 

    

    

     

    Each
      party will provide current contacts for each of technical, content, marketing,
      financial, and publicity matters. The initial list of such contacts for each
      party is attached as Exhibit C.

     

    14.Confidential
      Information.

     

    
      
              

                  /      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a)  The
      Party
      receiving Confidential Information shall not disclose the Confidential
      Information of the disclosing Party, except as permitted under this Agreement.
      All Confidential Information will be held and protected by the receiving Party
      in confidence and will be used and disclosed by the receiving Party only as
      required to render performance or to exercise rights and remedies under this
      Agreement. The foregoing shall not apply to any information generally available
      to the public, independently developed, or lawfully and independently obtained.
      The receiving Party may disclose the disclosing Party's Confidential Information
      to its officers, directors, employees, legal representatives, accountants,
      tax
      advisors, agents and contractors, on a need-to-know basis. Notwithstanding
      the
      foregoing, this Agreement and its contents may be disclosed by Licensee to
      a
      third party under appropriate confidentiality requirements in connection with
      (i) a due diligence examination being conducted by such third party in
      connection with the corporate organization, reorganization, or capitalization
      of
      Licensee; (ii) subject to a court order or subpoena; or, (iii) as required
      in a
      case brought by or against a party hereto.

    (b)  The
      disclosing Party's Confidential Information is and will remain the property
      of
      the disclosing party, and no disclosure under this Agreement grants or confers
      any ownership rights in or license to any of that information to the
      non-disclosing party (excluding express licenses and grants set forth in this
      Agreement).

    (c)        Promptly
      upon expiration or termination of this Agreement and upon the request
      of the disclosing Party, the receiving Party will either: (i) return to the
      disclosing

    Party all
      of  its Confidential Information; or (ii) destroy all of such
      disclosing Party

    Confidential
      Information and certify to such destruction in writing.

     

    15.             Entire
      Agreement; Amendment; Copyright
      Act Amendments of No Effect.  This Agreement, including
      all exhibits, schedules and attachments hereto (incorporated herein by this
      reference), represents the entire understanding of the parties with respect
      to
      the subject matter hereof, supersedes all prior and contemporaneous agreements
      and understandings of the parties (whether written or oral) with respect to
      the
      subject matter hereof. This Agreement may not be altered or amended except
      in a
      written instrument executed by both parties. This Agreement shall be deemed
      to
      exist and the parties intend to be bound only upon signature of a written
      agreement by both parties, and no negotiation, exchange of draft or partial
      performance shall be deemed to imply an agreement or other understanding between
      the parties. Any revisions pending as of the Effective Date to section 115
      of
      title 17 of the U.S. Code, and any revision to section 117 of title 17 of the
      U.S. Code that may subsequently be enacted shall, regardless of form or content,
      have no affect whatsoever on the terms of this Agreement.

     

    16.             Force
      Majeure.

     

    Neither
      party shall be liable to the other for any failure or delay caused by events
      beyond the parties' control, including, without limitation, sabotage, failure
      or
      delays in transportation or communication, failures or substitutions of
      equipment, labor disputes, accidents, shortages of labor, fuel, raw materials
      or
      equipment, technical failures, fire, flood, war, blockage, acts of public enemy,
      civil disturbance, and/or any resultant interruption in public services,
      including mail delivery.

     

    17.Waiver;
      Severability; Headings;
      Counterparts.

     

    No
      right
      that either party has regarding this Agreement may be waived or modified except
      by the waiving party in writing. If any provision of this Agreement is held
      to
      be invalid or unenforceable, the remainder shall remain in full force and
      effect. The division of this Agreement into sections, clauses, paragraphs or
      subdivisions thereof, and the insertion of

    
      
              

                  /      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    headings,
      are for convenience and reference only and
      shall
      not affect the construction or interpretation hereof. This Agreement may
      be executed in one or more counterparts, each of which shall be deemed to be
      an
      original, but all of which shall be one and the same document. A copy or
      facsimile of a signature shall be binding upon the signatory as if it were
      an
      original signature.

     

    18.             Limitation
      of Liability.

     

    IN
      NO
      EVENT SHALL EITHER PARTY BE RESPONSIBLE FOR ANY CONSEQUENTIAL, SPECIAL, PUNITIVE
      OR OTHER INDIRECT DAMAGES, INCLUDING, WITHOUT LIMITATION, LOST REVENUE OR
      PROFITS, IN ANY WAY ARISING OUT OF OR RELATED TO THE AGREEMENT, EVEN IF THE
      AFFECTED PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, UNLESS
      DUE
      TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE NON-AFFECTED PARTY. EACH
      PARTY'S MAXIMUM AGGREGATE LIABILITY TO THE OTHER PARTY UNDER SECTION 8 SHALL
      NOT
      EXCEED THE TOTAL AMOUNT PAID BY LICENSEE TO LICENSOR DURING THE TWELVE (12)
      MONTH PERIOD PRIOR TO THE FIRST DATE ON WHICH THE LIABILITY AROSE. BECAUSE
      SOME
      JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF CERTAIN LIABILITY,
      IN
      SUCH JURISDICTIONS THE LIABILITY OF THE INDEMNIFYING PARTY SHALL BE LIMITED
      TO
      THE MAXIMUM EXTENT PERMITTED BY LAW. THE PROVISIONS OF THIS SECTION 18 SHALL
      APPLY NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY AND
      REGARDLESS OF THE FORM OF THE CLAIM OR CAUSE OF ACTION, WHETHER IN CONTRACT,
      WARRANTY, STATUTE, TORT (INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE) OR
      OTHERWISE.

     

    19.             Publicity

     

    Neither
      party shall issue any press release regarding this Agreement and/or the content
      of this Agreement without the other party's prior written approval. Each party
      agrees to submit to the other for prior written approval all press releases
      and
      other materials using or incorporating the other party's name, logos,
      trademarks, trade names, and/or service marks.

     

    -
      End of
      Standard Terms and Conditions -

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    Service
      Description

     

    (attached).

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Description
      of the SpiralFrog service

     

    SpiralFrog.com
      is a conditional download service (content will expire according to DRM
      restrictions set on the files) for music and music videos, free to its users.
      All content is provided in Windows Media format and protected via Microsoft
      DRM
      technology. The initial content license is for no more than 60 days followed
      by
      the renewal for another no more than 60 days. The licenses are renewed on a
      regular basis through the membership renewal process no more than every 60
      days.
      All SpiralFrog users are required to go through a "membership renewal" process
      regularly to extend the length of the license. The renewal process requires
      the
      user to complete a survey, which may be sold to advertisers for premium fees.
      Once the user has completed the required survey the content is re-licensed
      for
      an additional period.

     

    SpiralFrog
      will implement a mechanism intended to prevent multiple users from sharing
      a
      single user id by monitoring simultaneous usage patterns by the same user ID.
      Should we see multiple concurrent hits for a user ID on multiple IP addresses
      the account will be locked out from the service and the user
      notified.

     

    SpiralFrog
      maintains a key in its metadata database for each licensed song that indicates
      the territories where the content is authorized to be distributed. SpiralFrog
      uses the incoming IP address to determine the origin country of the logged
      on
      user and disables the content not approved for that particular territory from
      being viewed by the user. Spiralfrog uses an IP-to-country mapping database
      licensed from MaxMind.com to determine the country of origin of the
      user.

     

    Users
      register one time in order to download music by providing their email address,
      nickname, password, their age, gender and state/territory or zip code/postal
      code.

    Once
      registered, users can download as many songs as they wish, one song at a time,
      by first typing in a provided randomized unique code to prevent computerized
      downloading. Each download is guaranteed to take at least 90 seconds regardless
      of internet connection speed.

     

    Once
      downloaded, songs can be played on the user's computer through Windows Media
      Player and may be side-loaded on up to two devices through Windows Media Player
      device synchronization (any WMA-DRM or WMV-DRM compatible device). Users must
      come back regularly to renew and re-license in order to keep their music library
      current otherwise the license will expire causing the tracks to be
      unplayable.

    A
      Windows
      .Net application and an ActiveX control (or a Firefox plugin) are installed
      on
      the user's computer. Combined the components are known as the SpiralFrog
      Download Manager. The Download Manager enables the secure downloading of content
      from SpiralFrog and is responsible for DRM license management and
      reporting.

     

    After
      a
      successful logon, users can browse for their favorite content by genre or
      artist, or search by name of song, artist or other details. Users are also
      presented a number of "Top XX" lists, e.g. "most downloaded", "recent releases"
      or "SpiralFrog recommends".

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Among
      the
      metadata included are artist name, track name, album name, genre, album art
      and
      30-second preview clips.

     

    
      	
              ·  

            	
              Users
                can queue a list of songs that they wish to download. The queue is
                processed sequentially on a first-in-first-out
                basis.

            

    

    
      	
              ·  

            	
              Before
                the first download, the user is required to enter a visual verification
                code.

            

    

    
      	
              ·  

            	
              Once
                the visual verification has been validated, the first download will
                start.
                The license to play the track is acquired at the end of each download.
                The
                user must then choose to download the next track, play the just downloaded
                track, or continue browsing the
                site.

            

    

    
      	
              ·  

            	
              Users
                must renew the license(s) to downloaded content no more than every
                60 days
                so the service can collect play-count
                information.

            

    

    
      	
              ·  

            	
              During
                the license renewal process, users must complete an online survey
                while
                viewing additional pages of advertising, so that all content is updated
                and playable for no more than an additional 60
                days.

            

    

    
      	
              ·  

            	
              Once
                the survey is complete, the user must perform the Visual Verification
                process in order to download more
                files.

            

    

    
      	
              ·  

            	
              Advertising
                is not specific to each download and there is no set duration of
                advertising during the renewal
                process.

            

    

     

    Audio
      tracks take a minimum of 90 seconds to download, videos take a minimum of 120
      seconds. During the download process the user is able to continue interacting
      with the site, where they are presented with additional advertising. There
      will
      be no interface or links to illegal or peer to peer sites.

     

    After
      downloading the music track or music video, the user can play the content
      according to the limits set by the DRM restrictions on the file:

     

    ·  The
      license is set to expire no more than 60 days from date of
      downloading.

    ·  CD
      burning is not allowed.

    ·  File
      can
      be synchronized with up to 2 portable devices.

    ·  There
      is
      no limit on the number of plays per file.

    ·  Collaborative
      play is not allowed.

     

    The
      DRM
      license download is initiated by the SpiralFrog Download Manager, after the
      digital media download completes. The SpiralFrog server process generates a
      session ID for each download and the license granting step by the Download
      Manager is tied to that session ID, thus it cannot be used by other
      users.

     

    Each
      SpiralFrog user is required to go through a regular license renewal
process where they complete surveys, typically
      branded and sold to
      advertisers. Once the user has completed the license renewal
process the tracks and/or videos for which the
      licenses are being
      renewed are updated to be playable for an additional period. The sequence of
      steps is as follows:

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              ·  

            	
              The
                client sends a "Generate License" request to SpiralFrog server after
                the
                download has completed.

            

    

    
      	
              ·  

            	
              The
                server responds with a random Visual Verification challenge, the
                challenge
                text and the challenge request time is stored at the server and tied
                to
                the end-user's session ID.

            

    

    
      	
              ·  

            	
              The
                SpiralFrog client presents the Visual Verification challenge to the
                user.

            

    

    
      	
              ·  

            	
              The
                user enters the Visual Verification response, and the SpiralFrog
                client
                calls the Microsoft DRM component (part of Windows Media Player)
                to
                generate a license request for the previously downloaded
                songs.

            

    

    
      	
              ·  

            	
              The
                SpiralFrog client sends the Visual Verification response and the
                license
                request to the SpiralFrog server .

            

    

    
      	
              ·  

            	
              The
                SpiralFrog server validates the Visual Verification response and
                only if
                it matches the Visual Verification request and the request has not
                timed
                out a license is generated and sent back to the
                client.

            

    

    
      	
              ·  

            	
              The
                SpiralFrog client saves the license on the client computer/device
                through
                the Microsoft DRM component.

            

    

     

    PC
      Identification or License Count

     

    The
      SpiralFrog client supports only Microsoft Windows based computers/devices and
      relies on Microsoft Windows Media DRM technology to identify a specific computer
      or device. Windows Media DRM makes each media player unique by linking the
      player to a host computer. SpiralFrog content files will only play on the
      single, original computer to which they are directly downloaded by the
      SpiralFrog client application, or approved MSDRM compliant ("Plays For Sure")
      portable devices.

     

    Portable
      Device Count

     

    SpiralFrog
      users can synchronize the downloaded music or video files to a portable device
      that is compatible with the Microsoft DRM, such as those portable devices that
      carry the "Plays For Sure" logo, designed to ensure compatibility and compliance
      with the DRM restrictions.

     

    SpiralFrog
      supports synchronization with the portable device through the Windows Media
      Player, or a compatible program such as Microsoft Active Sync. The DRM copycount
      parameter is used to limit the number of devices that a track may be put on.
      When a track is put on a portable device the copy count is decremented limiting
      the number of devices a track may be placed on. SpiralFrog permits users to
      have
      a maximum of two portable devices that can be synchronized with the
      PC.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    Overview
      of SpiralFrogTM
      Security

     

    1.  Introduction

    This
      white paper describes those technical details of SpiralFrog.com as they
      relate to prevent unauthorized access to the music content. This paper is
      written according to the outlines provided by major record labels.

     

    2.  Overview
      of User Experience

    SpiralFrog.com
      is a conditional download service (content will expire according to DRM
      restrictions set on the files) for music and music videos, free to its users,
      financially supported by rich media and banner advertising. All content is
      provided in Windows Media format and protected via Microsoft DRM
      technology.

     

    After
      registering for the service at the SpiralFrog.com web site, users are
      required to install SpiralFrog Download Manager on their PC running Windows
      XP
      or Vista (no other operating systems are supported). After installation, users
      will then go back to the web site and logon to the service with the
      userid/password chosen at registration. After a successful logon, users can
      browse for their favorite content by genre or artist, or search by name of
      song,
      artist or other details. Users are also presented a number of "Top XX" lists,
      e.g. "most downloaded", "recent releases" or "SpiralFrog recommends". Among
      the
      metadata included are artist name, track name, album name, genre, album art
      and
      30-second preview clips.

     

    SpiralFrog
      users can synchronize the downloaded music or video files to a portable device
      that is compatible with the Microsoft DRM, such as those portable devices that
      carry the "Plays For Sure" logo, designed to ensure compatibility and compliance
      with the DRM restrictions.

     

    After
      downloading the music track or music video, the user can play the content
      according to the limits set by the DRM restrictions on the file:

     

    -  File
      is
      set to expire no more than 60 days from date of downloading

    -  CD
      burning is not allowed

    -  File
      can
      be synchronized with up to 2 portable devices

    -  There
      is
      no limit on the # of plays per file

    -  Collaborative
      play is not allowed

     

    All
      content will be offered in Windows Media Audio (WMA) or Windows Media Video
      (WMV) format and the service will use the Microsoft DRM tools to setup, report
      and manage such restrictions.

     

    Downloaded
      content files are conditional downloads where the license is set to expire
      based
      on a predetermined term. The initial content license is typically for 60 days
      followed by the renewal for another approximately 60 days. The licenses are
      renewed on a regular basis through the membership renewal process, generally
      every 60 days. All SpiralFrog users are

     

    
      
              

          
            	              

                                              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    required
      to go through a "membership renewal" process regularly to extend the length
      of
      the license. The renewal process requires the user to complete a survey, which
      may be sold to advertisers for premium fees. Once the user has completed the
      required survey the content is re-licensed for an additional
      period.

     

    3.
      Functional Components

     

    3.1.Description
      of Components

    SpiralFrog
      consists of a web site supported by the SpiralFrog back end web and database
      servers for browsing Artists, Tracks, and Albums as well as related music data.
      A SpiralFrog Download Manager is installed by the user on their computer which
      enables the downloading of individual tracks or videos sequentially, i.e. one
      at
      a time. Spiralfrog does not supply any other application to end
      users.

     

    The
      Download Manager provides a consistent timing, 90 seconds per download for
      the
      downloading of audio content (longer for video files), a visual verification
      ("Human Interactive Proof' dialog) that ensures that a person rather than a
      computer has downloaded the file, and once verified correct, a DRM license
      is
      granted to allow the user to play the file. The download manager also provides
      the interface to the SpiralFrog back end systems to update user play count
      data.

     

    The
      SpiralFrog server system consists of the following components:

     

    
      	
              -  

            	
              SpiralFrog
                server software running on Windows Server that handles the serving
                of web
                pages and communication with the SpiralFrog Download Manager, including
                granting of DRM licenses. As our service grows, our scalability plan
                calls
                for adding more of these servers.

            

    

    
      	
              -  

            	
              A
                relational database that contains the metadata, user registration
                data and
                usage data.

            

    

    
      	
              -  

            	
              File
                system storage that contains all content files in DRM-protected format.
                In
                its early days, SpiralFrog plans to use Limelight, a Content Distribution
                Network (CDN), to provide scalability for file delivery. Protected
                audio
                and video files are stored on the SpiralFrog servers. The first time
                that
                audio/video content is requested for download it is pulled (by Limelight)
                down to servers on the Limelight network. All subsequent downloads
                of the
                same content are pulled from the Limelight servers. To pull content
                from
                the SpiralFrog servers, Limelight accesses the website
                download.spiralfrog.com. Access to this website is granted only to
                the IP addresses of specific Limelight servers which were given to
                us by
                Limelight. Limelight is the only entity that has access to this web
                site
                due to the IP address restriction. No end users are ever directed
                to this
                web site. When a user attempts to download content, it is moved to
                a
                Limelight server for downloading to the user's machine. Subsequent
                downloads of the same file are pulled from Limelight servers. All
                content
                is stored in protected and unplayable format at all times. Deep linking
                into the Limelight file storage is prevented using the Limelight
                MediaVault encryption scheme. A Limelight white paper can be provided
                to
                describe how this feature works.

            

    

     

     

    
      
              

          
            	              

                                    SpiralFrog
                      Security White Paper.DOC of
                      10              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    Starting
      with the US launch in late summer 2007, SpiralFrog plans to serve the media
      files directly from its own clustered file server. Deep linking will be
      prevented in the same fashion as with Limelight, the only difference being
      that
      at the start of the download, SpiralFrog's own servers will check that the
      hash
      is valid for the file. All systems will be regularly updated to ensure the
      most
      optimal performance and security of the SpiralFrog service.

     

    3.2.System
      Diagram

     

    
      Web.
        Browser with Download manger

    

     

     

    
      SpiralFrog.com
        Web site

    

    
      SpiralFrog
        web server

    

    

     

    
 

    
      	
              File
                system storage

            

    

     

    Relational
      database

     

     

    4.
      General System Security

     

    4.1.System
      Location

    Currently
      all SpiralFrog server components are physically located at Adhost.com
      facilities in downtown Seattle — at 140 Fourth Avenue North, Suite 360, Seattle,
      WA 98109.

    Adhost.com
      is a professional internet hosting company which rents space at their
      earthquake-protected, generator-backed building. Starting with the US launch
      in
      late summer 2007, we plan to relocate the server farm to another collocation
      provider, Equinix in Ashburn, VA. The address and location of the SpiralFrog
      data center at Equinix facilities is

     

    44470
      Chilum Place Cage 9000 Rack 301 Ashburn VA 20147

     

    SpiralFrog
      will not change collocation providers without UMG approval.

     

    4.2.Protection
      Against Unauthorized
      Local Access

     

    
      
              

          
            	              

                                    SpiralFrog
                      Security White Paper.DOC of
                      10              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    Any
      facilities used for hosting SpiralFrog equipment will be required to be
      restricted to authorized personnel only. Full ID checks of each person entering
      the co-location facilities are performed on a 24/7 basis – only those on an
      "authorized" list will be allowed access. All cabinets holding SpiralFrog
      resources are locked within the computer rooms, which protects each company's
      servers from unauthorized access. SpiralFrog will allow access to its servers
      only by its staff server and database administrators or aelorized SpiralFrog
      contractors.

     

    4.3.Protection
      Against Unauthorized
      Network Access

    The
      file
      and database servers housing the content and metadata are logically accessible
      only by the server which runs the SpiralFrog server software. Each end-user
      must
      logon (using credentials chosen at registration) before a connection is
      activated. Furthermore, all content is stored in Microsoft DRM protected format
      without the necessary license –which means that even if hackers would gain
      access to the files, they would not be of any use since they miss the required
      DRM license. To prevent automated downloads (where a computer program is
      simulating a user), SpiralFrog server requires users to key back a series of
      slanted characters, known as Human Interactive Proof, after each successful
      download.

     

    Each
      song
      has a unique license key ID which is embedded in the file. After downloading
      the
      file to the user's computer, SpiralFrog Download Manager presents the.visual verification
      dialog. After verifying that the characters were correct, the SpiralFrog
      download manager requests the SpiralFrog server to grant the license to the
      file. The license key is generated by the Microsoft DRM component from the
      key
      ID and a license seed, which is secret. The license seed is stored in the
      machine running SpiralFrog server software which runs on its own protected
      account. The license seed is in a file protected by an "ACL" (access control
      list) which allows access only after verifying the userid and password of the
      requesting process. Only SpiralFrog server and database administrators have
      access to the credentials to access this account.

     

    4.4.Security
      Breach
      Plan

    SpiralFrog
      keeps track of the download activity by registered user. A trigger will be
      set
      if a user exceeds a set number of downloads per day to further monitor against
      automated download fraud. Users found to be violating their license agreement
      (which must be accepted at install time) will be revoked of their access
      privileges. As part of the revocation the affected user's account will be
      deleted and generally the user's IP address is added to the list of revoked
      IP
      addresses (no new accounts can be created from these addresses for 6 months).
      Besides being protected via DRM. the URLs include a hash which can only be
      generated by the SpiralFrog servers. The LimeLight or SpiralFrog's own servers
      (once Ashburn data center is live) validate the hash and only provide the file
      if the hash is correct. In addition, the server administrator will setup
      triggers to monitor suspicious activity to guard against Trojan horse – type
      virus/worm attacks on the web server itself

     

    
      
              

          
            	              

                                    SpiralFrog
                      Security White Paper.DOC of
                      10              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    5.
      IT & Development Policies

     

    5.1.Operating
      System & Software
      Policies

    SpiralFrog
      client and server components are developed using Microsoft .NET technologies
      and
      require Windows XP or Vista operating systems on the client and Windows 2003
      Server on the server. SpiralFrog relies on commercial anti-virus and security
      products to protect our technological assets. Currently these systems include
      hardware and software based on Microsoft and Symantec products to protect
      against viruses, worms etc. and to keep the operating systems up to date with
      the latest security patches. SpiralFrog will install all security patches within
      24 hours of availability after being properly regression tested and deemed
      suitable, from operating systems, hardware, software, and other applicable
      vendors.

     

    SpiralFrog
      is a licensee of the Microsoft Windows Media Rights Manager Software Development
      Kit (WMRM SDK). Microsoft WMRM SDK license agreement requires that licensees
      must update the `WMRM SDK Configuration' for all Licensed Products once a week
      using a Microsoft provided URL. The WMRM SDK license also requires that all
      relevant Microsoft security updates are installed promptly.

     

    5.2.System
      Logs

     

    SpiralFrog
      will keep track of all download data by user in an SQL database. The database
      is
      organized in such a way that it is easy to generate reports on a daily, weekly
      or monthly basis by record label, artist, genre or user demographic group.
      SpiralFrog will also record play counts for all content – this is reported to
      SpiralFrog by Windows Media Player Manager. All play count data is recorded
      in
      the SQL database. SpiralFrog will keep records of all database information
      related to licensed content for as long as it is required to do so by terms
      specified elsewhere in this agreement.

     

    5.3.Employee
      Accounts

     

    SpiralFrog
      will limit the access to its servers only to the database and server
      administrators and the software architect. Access requires Windows XP Server
      userid and password – passwords will be set to expire every 90 days. Employees
      who leave or are terminated will have their account privileges deleted
      immediately.

     

    5.4.Backup

    SpiralFrog
      plans to use the offsite backup tape and storage service offered a third part
      disaster recovery service provider which will permit high-speed dynamic
      incremental backups of the SQL database on a nightly basis. At this time a
      provider has not been selected and details will be forwarded when available.
      Spiralfrog acknowledges that the backup plan must be approved formally by UMG
      in
      advance of becoming operational, including selection of any third parties.
      The
      SQL database contains no music content files – only metadata and data collected
      during operation of the service. All licensed content will be stored in a
      separate file server which will be duplicated on site only for backup purposes.
      The backup copy which will contain content on NTFS-encrypted hard
      drives,

     

     

    
      
              

          
            	              

                                    SpiralFrog
                      Security White Paper.DOC of
                      10              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    is
      stored
      at a safe deposit box at a local financial institution behind lock and key
      and
      accessible only by SpiralFrog server administrator and management. In addition
      to the disaster recovery plans in place by our collocation facilities,
      SpiralFrog will have its own recovery plan which will allow us to restore
      service in two days in case of total loss of our operational servers. The plan
      calls for content, metadata and operational data to be restored from the backup
      tapes or hard drives described above on an identical server setip.

     

    5.5.Software
      Change
      Management

     

    SpiralFrog
      expects to continually enhance its software from the launch onward. We expect
      to
      make periodic changes to both the client and server software. Client software
      changes will be accomplished dynamically, without requiring existing users
      to
      reinstall. The client software checks upon startup whether there is an update
      available and will pull it down without prompting the user if so configured.
      All
      software changes will be tested first in a lab environment, then on one of
      our
      production servers with controlled access before rolling out system
      wide.

     

    5.6.Other
      Policies

     

    Part
      of
      the role of the server administrator is to monitor, on an ongoing basis all
      system logs which include Windows Server security and audit logs. Additionally
      any firewall, intrusion detection system, intrusion prevention systems, and
      anti-virus logs will be regularly monitored. Triggers will be set to alert
      the
      administrator of critical events that relate to security, such as repeated
      failed attempts at logon.

     

    
      	
               

               

            	
              6.
                Content Ingest, Storage, and
                Packaging

            

    

    
      	
                  
                6.1.

            	
              Format
                and Codec

            

    

    SpiralFrog
      plans to offer its audio content in WMA format, generally encoded at 128Kbps.
      All streaming music videos will be offered in WMV format, 320x240 resolution,
      300Kbps bit rate. All downloadable music videos will be offered in WMV format,
      416x312 resolution, 1,000Kbps bit rate. All content files are protected by
      Windows Media DRM. SpiralFrog uses a metadata database from AMG in addition
      to
      the metadata provided by our music content providers. In the case of conflicts
      between metadata supplied by UMG and that supplied by third parties, Sprialfrog
      will always use UMG's metadata, even if considered "incorrect". Any such
      conflicts will be reported to UMG for resolution and updates.

     

    6.2.Content
      Ingestion

     

    SpiralFrog
      has developed software programs to automate the processing of our content
      providers data into a format suitable to our database. This includes extracting
      the metadata from XML files and entering it into our SQL database. During this
      process we will also match the tracks provided by the record label to the
      metadata database from AMG. The same programs will be designed to be able to
      receive and process

     

    
    

    
      
              

          
            	              

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                      Security White Paper.DOC of
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                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    incremental
      updates and metadata corrections from content providers on an as-needed
      basis.

     

    6.3.Separation
      of Content
      Types

    SpiralFrog
      intends to offer all its music file content for download only, video files
      can
      be either streamed or downloaded. The streamed video file is a lower resolution
      (320x240) version of the downloaded and is streamed in unprotected form, as
      p,rmitted by our license. All downloaded audio and video content is protected
      with Microsoft DRM.

     

    6.4.Protection
      of Raw Audio and
      Metadata

    Access
      to
      the master delivered content files is limited to the software architect only.
      This person is responsible for receiving, processing and storing the raw
      content. The unprotected content will be received and converted to the DRM
      protected form with a computer located at our collocation facility, Adhost,
      or
      other collocation facility subject to UMG's advance approval. Even when our
      Ashburn data center comes live, we will continue to do all content processing
      at
      the Adhost facility until further notice. Only the software architect will
      have
      access to this computer. One copy of encrypted files may be stored in the
      software architects' personal safe deposit box at KeyBank (at 7th Ave NE)
      in
      downtown Seattle following the ingestion process. Spiralfrog plans to store
      the
      backup files on hard drives with NTFS encrypted partitions.

     

    6.5.DRM
      Packaging and Key
      Management

    SpiralFrog
      is using Windows Media DRM version 10. All content is downloaded without the
      license key. Before the first download, the user is presented the Visual
      Verification dialog (slanted letters) – upon a successful entry of the
      characters, the download manager will contact the SpiralFrog server to obtain
      a
      license key for the downloaded content. The license key is generated from a
      public Key ID and a secret license seed. The key IDs are stored in a central
      database (SpiralFrog is using components provided by Microsoft) and the file
      header. The license keys are unique because the Key IDs are unique per song.
      Windows Media DRM provides for a secure mechanism whereby each downloaded song,
      after obtaining a license, is tied to the computer where the downloading took
      place.

     

    6.6.QA
      &
      Testing

     

    All
      DRM
      protection will be done automatically, using a computer program to process
      the
      non-protected files into protected files. SpiralFrog plans to test each batch
      of
      DRM protected files by choosing a random sample from the batch (which may
      include thousands of files) and test to ensure both that a DRM protected file
      without the license key is not usable and that after obtaining a license the
      DRM
      protection works as specified. All testing will be done at our collocation
      facility in a private client-server setting, after which it will be transferred
      to our production servers over local private network. Depending on the
      complexity and format of the metadata, SpiralFrog intends to make the content
      received from content providers available in a production form within 2 weeks
      of
      receipt.

     

     

    
      
              

          
            	              

                                    SpiralFrog
                      Security White Paper.DOC of
                      10              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    7.
      Sales, Download and Licensing

    Users
      will first visit our website,
      http://www.spiralfrog.com.
If
      the user is interested in signing up for the service, the user will be first
      required to register with SpiralFrog and to choose a personal userid and
      password. After accepting the SpiralFrog license agreement, the user will
      proceed to download the download manager used for downloading and licensing
      content.

     

    8.1
      User Authentication

     

    Each
      user
      must logon (using credentials chosen at registration) before the download
      manager is permitted to download content. SpiralFrog maintains a unique account
      for each user –registering with the service is a prerequisite for getting access
      to downloadable content. SpiralFrog will implement a mechanism intended to
      prevent multiple users from sharing a single user id by monitoring simultaneous
      usage patterns by the same user ID. Should we see multiple concurrent hits
      for a
      user ID on multiple IP addresses the account will be locked out from the service
      and the user notified.

     

    8.2
      Territorial Filtering

     

    SpiralFrog
      maintains a key in its metadata database for each licensed song that indicates
      the territories where the content is authorized to be distributed. SpiralFrog
      uses the incoming IP address to determine the origin country of the logged
      on
      user and disables the content not approved for that particular territory from
      being viewed by the user. Spiralfrog uses an IP-to­country mapping database
      licensed from MaxMind.com to determine the country of origin of the
      user.

     

    8.3
      Transaction Processing

     

    No
      money-related transaction takes place since content is free to SpiralFrog users.
      The user will obtain the license for the downloaded content upon the successful
      confirmation of the download.

     

    8.4
      Retail Authentication

     

    SpiralFrog
      does not maintain a separate retail and sales system from license serving and
      download systems.

     

    8.5
      LTRL Generation & Protection

     

    Each
      licensed song has a unique download URL derived from track specific data. This
      URL is stored in the database as the way to access the file. When the user
      wants
      to download a song, a hash is added to this URL and then passed from the server
      to the client, which then uses it to start the downloading process.

    
    

    
      
              

          
            	              

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                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    The
      protected file could therefore not be downloaded directly by knowing the URL,
      and to obtain its necessary DRM license requires going through the SpiralFrog
      client interface.

     

    8.6
      PC Identification or License Count

     

    The
      SpiralFrog client supports only Microsoft Windows based computers/devices and
      relies on Microsoft Windows Media DRM technology to identify a specific computer
      or device. Windows Media DRM makes each media player unique by linking the
      player to a host computer. SpiralFrog content files will only play on the
      single, original computer to which they are directly downloaded by the
      SpiralFrog client application, or approved MSDRM compliant ("Plays For Sure")
      portable devices.

     

    8.7
      Portable Device Count

     

    SpiralFrog
      requires that synchronization with the portable device happens through the
      windows media player. The DRM copycount parameter is used to limit the number
      of
      devices that a track may be put on. When a track is put on a portable device
      the
      copy count is decremented limiting the number of devices a track may be placed
      on. Spiralfrog permits users to have 2 portable devices that can be synchronized
      with the PC.

     

    8.8
      License Generation & Download

     

    The
      DRM
      license download is initiated by the SpiralFrog client, Known as the Download
      Manager, after the digital media download completes. The SpiralFrog server
      process generates a session ID for each download and the user's Download Manager
      is tied to that session ID, thus it cannot be used by other users.

     

    The
      DRM
      license used on all SpiralFrog content is a conditional license that expires
      after a pre-determined period. These licenses are renewed regularly, typically
      every two months. Each SpiralFrog user is required to go through a regular
      membership renewal process where they complete surveys, typically branded and
      sold to advertisers. Once the user has completed the renewal process the tracks
      and/or videos for which the licenses are being renewed are updated to be
      playable for an additional period. The sequence of steps is as
      follows:

     

    
      	
              1.  

            	
              Before
                the first download, the client sends a Visual Verification request
                to
                SpiralFrog server.

            

    

    
      	
              2.  

            	
              The
                server responds with a random Visual Verification challenge, the
                challenge
                text and the challenge request time is stored at the server and tied
                to
                the end-user's session ID.

            

    

    3.  The
      SpiralFrog client presents the Visual Verification challenge to the
      user.

    4.  The
      user
      enters the Visual Verification response.

    
      	
               

            	
              5.
                The SpiralFrog client sends the Visual Verification response and
                the
                license request to the SpiralFrog server
                .

            

    

    
    

    
      
              

          
            	              

                                    SpiralFrog
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                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    
      	
              6.  

            	
              The
                SpiralFrog server validates the Visual Verification response and
                the
                download will start only if the response matches the Visual Verification
                request.

            

    

    
      	
              7.  

            	
              After
                each download, the client calls the Microsoft DRM component to generate
                a
                "License Request" and then sends it to SpiralFrog server. The SpiralFrog
                server verifies that the user has just downloaded the song and then
                responds with the license that matches the key ID of the downloaded
                song.

            

    

    
      	
               

            	
              8.
                The SpiralFrog client saves the license on the client computer/device
                through the Microsoft DRM
                component.

            

    

     

    8.9
      Auditing

     

    SpiralFrog
      relies on the Windows Media Rights Manager (WMRM) to keep track of play counts
      on the user's computer, and associated portable music players. The SpiralFrog
      client background process (which is active at all times) contacts the WMRM
      to
      obtain play count information at intervals required for reporting licenses.
      The
      information is then sent by the SpiralFrog client to the SpiralFrog database
      servers for storage, auditing and reporting purposes.

     

    8.10
      Super-distribution

     

    If
      a
      downloaded file is emailed to someone else, the DRM restrictions will prevent
      it
      from being played on another computer.

     

    9.
      Launch Preparation and Status

    SpiralFrog
      is currently operating a password-protected site live on the interne, hosted
      at
      the Adhost collocation facility in Seattle. All major system components are
      in
      place for the service. SpiralFrog can demonstrate the present functionality,
      including DRM protection to content providers if required.

     

    SpiralFrog
      has developed comprehensive 3-tier server architecture to allow the system
      to
      scale as the user load increases. The key development personnel are former
      Microsoft employees who were responsible for the design and development of
      one
      of Microsoft's server applications. SpiralFrog is using Microsoft server
      technologies and has already consulted key Microsoft development personnel
      to
      help validate the design and to assist in further planning of the performance
      aspects of the system. SpiralFrog intends to deploy new multi-server monitoring
      tools, available from 3rd
parties,
      to help in monitoring the system performance.

    
    

    
      
              

          
            	              

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    Exhibit
      B

     

    Licensed
      Content List

     

    
    

     

    
    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      C Contacts

     

    Licensor
      contacts:

     

    1.  Technical

     

    2.  Marketing/Standards
      and Practices

     

    3.  Publicity

     

    4.  Financial
      5. Content Licensee contacts:

    1.  Technical:

    
      	
               

            	
              Mr.
                Vesa Suomalainen, CTO, vesa(aspiralfrog.com,
                206-605-8201

            

    

     

    
      	
               

            	
              Jim
                Campbell, CIO, iim(aspiralfrog.com,
                516-319-3780

            

    

     

    2.  Marketing/Standards
      and Publicity:

    Matthew
      Stern, Marketing Officer, Matthew.SternThspiralfrog.com, 718 578
      3019

     

    3.
      Content and Financial:

    Orville
      Hagler, VP, Entertainment Programming orville(aspiralfrog.com,
718-839-0941Unassociated Document

    DIGITAL
      MUSIC AND VIDEO LICENSE AGREEMENT

    PUBLISHING

     

    This
      Digital Music and Video License Agreement (the "Agreement"),
      together with the Standard Terms and Conditions attached hereto
      and incorporated by reference, is entered into as of the date of signature
      of
      this Agreement (the "Effective
      Date") by and between Mohen, Inc. d/b/a SpiralFrog, a Delaware
      corporation with its principal place of business at 95 Morton Street, New York,
      New York 10014, (referred to in this Agreement as "Licensee")
      and the licensing party listed on the attached signature page,
      including, but not limited to, such licensing party's Affiliates, as defined
      herein (collectively referred to in this Agreement as either "Licensor"
      or "you"). Unless otherwise indicated, all capitalized terms
      used in this Agreement have the meaning set forth in the Standard Terms and
      Conditions.

     

    WHEREAS,
      Licensee desires to offer to Users (as defined below), solely via its digital
      music service (the "Service",
      defined and described more fully below and in the annexed
      Exhibit A), Limited Music Downloads and Music Streams (as such terms are defined
      below) embodying Master Recordings (as defined below), including Relevant
      Compositions (as defined below); and

     

    WHEREAS,
      Licensee desires to offer to Users, solely via the Service, Limited Video
      Downloads and Video Streams (as such terms are defined below) embodying A/V
      Master Recordings (as defined below), including Underlying Compositions (as
      defined below); and

     

    WHEREAS,
      in connection with the operation of the Service, Licensee seeks licenses to
      reproduce and distribute the Licensor Compositions as embodied in Limited Music
      Downloads, Music Streams, Limited Video Downloads, and Video Streams, and
      Licensor is prepared to issue such licenses to Licensee in connection with
      the
      Service;

     

    NOW,
      THEREFORE, in consideration of the promises contained in this Agreement and
      for
      other good and valuable consideration, the adequacy and sufficiency of which
      each party hereby acknowledges the parties agree as follows:

     

    1.            Grant
      of
      Rights.
      Licensor hereby grants the following non-exclusive rights
      in
      and to

     

    the
      Licensed Content (listed in Exhibit B, as amended from time to time, and
      incorporated by reference) to Licensee, during the Term and within the
      Territory:

    (a)  to
      reproduce Relevant Compositions and Underlying Compositions as Digital Files
      on
      Secured Servers;

    (b)  to
      reproduce and distribute Relevant Compositions and Underlying Compositions
      embodied in Digital Files as Limited Music Downloads, Music Streams, Limited
      Video Downloads, and Video Streams;

    (c)  the
      right
      to use reputable third-party meta-data (i.e., data from All-Music Guide,
      Gracenote, Muze and Pollstar) in conjunction with the Licensed Content;
      and,

    (d)  those
      rights that may not be expressly granted hereunder that permit Licensee to
      carry
      on its business and operate the Service as intended by the parties under this
      Agreement.

     

    1A.            Delivery
      of Licensed
      Content. Licensor will provide Licensed Content to
      Licensee

     

    within
      thirty (30) days of execution of this Agreement, and, as new Licensed content
      becomes available, Licensor will provide the respective Licensed Content within
      thirty (30) business days of Licensor's receiving notice from Licensee
      requesting such Licensed Content.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.            Restrictions
      on Grant of Rights.

    (a)            Any
      and all rights in and to the Licensed Content not expressly granted

    hereunder
      are reserved by Licensor, including, but not limited to:

    (i)             rights
      of public performance (Licensee warrants and represents that

    Licensee
      shall obtain licenses to publicly perform Licensor Compositions in connection
      with the Service from the applicable performing rights societies);

    (ii)             copyrights
      or other rights in musical compositions and sound

    recordings,
      including any musical compositions and sound recordings embodied in any Digital
      File;

    (iii)

    (iv)  rights
      to
      use, exploit, or permit the use or exploitation of any Licensor Composition
      or
      the Lyrics of any Licensor Composition in a video game;

    (v)  rights
      to
      use, exploit, or permit the use of exploitation of any Licensor Composition
      of
      any Licensor Composition as a ringtone, ringback tone, or other so-called
      "telecommunication personalization product";

    (vi)  adaptation
      (derivative work) rights or right to alter the fundamental character of an
      Licensor Composition or the Lyrics of an Licensor Composition, or to create
      any
      derivative work based in whole or in part on an Licensor Composition or the
      Lyrics of an Licensor Composition;

    (vii)  merchandising
      rights;

    (viii)  use
      of a
      Licensor Composition for a marketing campaign, product tie-in, game or contest,
      or otherwise to directly advertise, promote or cross-promote any product or
      service; and,

    (ix)  permanent
      download rights.

    Provided
      however, nothing shall prevent Licensor and Licensee from entering into a
      separate written agreement according to the terms of Section 15 of the Standard
      Terms and Conditions, by which Licensor grants Licensee any such rights
      according to the terms of that separate agreement.

    (b)            This
      Agreement may not be sublicensed, assigned or otherwise transferred
      by

    Licensee.

    (c)  Licensor
      hereby acknowledges that User's experience of any Licensor

    
      	
               

            	
              Composition
                occurs in connection with third-party advertising; however, Licensee
                shall
                not: (I)without
                Licensor's prior, written consent create a direct
                association

            

    

    
      	
               

            	
              between
                any specific Licensor Composition and any third-party advertising
                in a
                manner that suggests Licensor or artists featured in any specific
                Licensor
                Composition is associated with or endorses any advertiser, product
                or
                service; or,

            

    

    (ii)
      knowingly display advertisements from any entity whose primary business relates
      to the unauthorized distribution of copyrighted material, illegal drugs or
      pornographically obscene.

    (d)  For
      the
      avoidance of doubt, ownership and control of any copyrights and/or trademarks
      in
      any Licensed Content is retained solely by Licensor, and neither Licensee nor
      any User or other third party shall obtain any ownership rights in any work
      derived from or that makes use of any Licensed Content.

     

    3.            Compensation.
      In consideration of the rights granted herein, Licensee
      shall pay

    Licensor
      the following amounts, which will be calculated on a quarterly
      basis:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a)            Music
      Royalty. With respect solely to Licensee's exploitation of Limited
      Music

    Downloads
      and Music Streams, Licensee shall pay to Licensor a royalty equal to the greater
      of (i) ten percent (10%) of Gross Music Revenue or twenty percent (20%) of
      Master Revenue, multiplied by Licensor's Music Royalty Share.

     

    (A)  The
      "Music Royalty Share" shall equal a fraction, the numerator of which shall
      be
      the sum of the number of Music Plays and Music Streams, and the denominator
      of
      which shall be the sum of the number of Music Plays, Music Streams, Service-wide
      Music Plays and Service-wide Music Streams.

     

    (B)  The
      "Music Master Revenue" shall equal the amount the owner of the Master Recording
      embodying the Licensor Composition receives (or is credited) for the
      exploitation of Limited Music Downloads and Music Streams.

     

    (C)            Notwithstanding
      the foregoing, solely with respect to the Non-CMRRACompositions
      exploited in Limited Music Downloads and Music Streams in Canada, Licensee
      shall
      pay to Licensor a royalty equal to the royalty payable for the comparable
      Limited Music Downloads and Music Streams under the terms of the CMRRA
      Agreement.

     

    (b)            Video
      Royalty. With respect solely to Licensee's exploitation of Limited
      Video

     

    Downloads
      and Video Streams, Licensee shall pay to Licensor a royalty equal to the greater
      of (i) ten percent (10%) of Gross Video Revenue or (ii) twenty percent (20%)
      of
      Video Revenue, multiplied by Licensor's Video Royalty Share, which will be
      calculated on a quarterly basis:

     

    (A)  The
      "Video Royalty Share" shall equal a fraction, the numerator of which shall
      be
      the sum of the number of Video Plays and Video Streams, and the denominator
      of
      which shall be the sum of the number of Video Plays, Video Streams, Service-wide
      Video Plays, and Service-wide Video Streams.

     

    (B)  The
      "Video Master Revenue" shall equal the amount the owner of the Master Recording
      embodying the Licensor Composition receives (or is credited) for the
      exploitation of Limited Video Downloads and Video Streams.

     

    (d)             Unsold
      Advertising Inventory. Licensee shall provide to Licensor, and Licensor
      shall be entitled to use, a pro-rata share of six percent (6%) of Licensee's
      unsold advertising inventory, which Licensor may use to promote Licensed Content
      owned and/or controlled by Licensor. Licensor's pro-rata share of unsold
      advertising inventory shall be determined by using the fraction used in
      calculating Licensor's Music Royalty Share multiplied by six percent (6%) of
      the
      unsold advertising inventory available based upon the previous quarter's royalty
      calculation (or in the case of the Service's first quarter after launch, a
      commercially reasonable estimate of the same).

     

    (e)  Licensee
      will use its best efforts to track Music Plays, Service-wide Music Plays,
      Video Streams and Service-wide Video Streams using the system of each Covered
      Device, which systems are subject to interruptions and other interference not
      within Licensee's control, and that such interruptions and other interference
      will affect the royalty calculations set forth above.

     

    (f)            If,
      during the Term of this Agreement, we have an agreement with any third
party
      publisher ("Other Agreement") granting us the same distribution and reproduction
      rights granted hereunder in third-party-owned musical compositions or shares
      of
      musical compositions, yet prescribing a royalty computation method ("Other
      Method") which, if used under this Agreement, would result in royalty
      computations more favorable to you than that

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    prescribed
      in this Section 3, we will so advise you and will pay you royalties based on
      the
      Other Method instead, for the portion of the Term of this Agreement during
      which
      the Other Agreement is effective.

     

    4.             Advance.
      Licensee shall pay to Licensor the sum of Three Hundred
      Thousand United States Dollars (US$300,000.00) as an advance against the amounts
      otherwise payable to Licensor under paragraph 3 above, payable promptly after
      the full execution of this Agreement.

     

    5.             Term.
      The term of this Agreement shall commence as of the
      Effective Date, and unless earlier terminated in accordance with the Terms
      and
      Conditions, shall continue until December 31, 2008.

     

     

     

    IN
      WITNESS WHEREOF,
the parties have executed this Agreement as of the Effective
      Date:

     

    MOHEN,
      INC. d/b/a SPIRALFROG

    /s/
      Scott
      Francis                                     
7/26/07

    President

    245 5th
      Ave. NY NY 10016 

     

     

     

    REDACATED

    By:                                                           
      Date

     

    President

    245
      5th Ave NY NY

    REDACATED

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    prescribed
      in this Section 3, we will so advise you and will pay you royalties based on
      the
      Other Method instead, for the portion of the Term of this Agreement during
      which
      the Other Agreement is effective.

     

    4.   Advance.
      Licensee shall pay to Licensor the sum of Three Hundred
      Thousand United States Dollars (US$300,000.00) as an advance against the amounts
      otherwise payable to Licensor under paragraph 3 above, payable promptly after
      the full execution of this Agreement.

     

    5.  Term.
      The term of this Agreement shall commence as of the
      Effective Date, and unless earlier terminated in accordance with the Terms
      and
      Conditions, shall continue until December 31, 2008.

     

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of
      the Effective Date:

     

    MOHEN,
      INC. d/b/a SPIRALFROG

     

    REDACTED

     

    By:

     

    President

     

    REDACTED

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "eCommerce
      Revenue" shall mean all amounts or other considerations received
      by Licensee during the Term, from (i) Users, and (ii) from any other entity
      (including, without limitation, advertisers), who sells goods or services on
      the
      Service or via a separate website that is accessed via a direct link or
      advertisement on the Service and for which sales Licensee receives
      consideration, including, but not limited to, Referral Fees.

     

    "Gross
      Music Revenue" shall mean Advertising Revenue which is directly
      attributable to Limited Music Downloads and Music Streams.

     

    "Gross
      Video Revenue" shall mean Advertising Revenue which is directly
      attributable to Limited Video Downloads and Video Streams (other than Limited
      Video Downloads or Video Streams of a prelicensed video product, such as
      television programs, motion pictures or video games).

     

    "Licensed
      Content" shall mean Licensor Compositions,

     

    "Licensee"
      shall mean, individually and collectively, Mohen, Inc. d/b/a
      SpiralFrog and each of its Affiliates.

     

    "Licensor
      Composition" shall mean only that portion of the ownership,
      interest and rights in a Composition that is owned, controlled by or licensed
      to
      Licensor in the Territory, which are listed in Exhibit B and which are available
      for the purposes described in this Agreement.

     

    "Limited
      Download" shall mean an encrypted digital transmission of a
      time-limited or other use-limited download of a Digital File embodying a Master
      Recording, which is delivered via the Service from a Secured Server(s) to the
      Covered Device of a User in accordance with the terms and conditions of such
      User's agreement with Licensee and is only available to such User through such
      Covered Device for a limited period of time in accordance with the terms of
      this
      Agreement.

     

    "Limited
      Music Download" shall mean a digital transmission of a
      time-limited or other use-limited download of a Licensor Composition embodied
      in
      a Master Recording, which is delivered via the Service from a Secured Server(s)
      to the Covered Device of a User in accordance with the terms and conditions
      of
      such User's agreement with Licensee and is only available to such User through
      such Covered Device for a limited period of time. Each Limited Music Download
      times out within two months from the date on which the User first downloaded
      the
      Master Recording, or from the date on which the User last reconnected his/her
      Covered Device so that the service can renew the license and collect play-count
      information or from the end of the term.

     

    "Limited
      Video Download" shall mean an encrypted digital transmission of
      a time-limited or other use-limited download of a Licensor Composition embodied
      in an A/V Master Recording, which is delivered via the Service from a Secured
      Server(s) to the Covered Device of a User in accordance with the terms and
      conditions of such User's agreement with Licensee and is only available to
      such
      User through such Covered Device for a limited period of time. Each Limited
      Video Download times out within two months from the date on which the User
      first
      downloaded the Master Recording, or from the date on which the User last
      reconnected his/her Covered Device so that the service can renew the license
      and
      collect play-count information or from the end of the term.

     

    "Master
      Recording" shall mean an audio-only master sound
      recording.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "Music
      Play" shall mean each instance whereby a User causes a Licensor
      Composition to be heard in its entirety (as embodied on a Master Recording)
      on a
      Covered Device, when such content was originally delivered to the Covered Device
      as a Limited Music Download.

     

    "Music
      Stream" shall mean an encrypted digital transmission of the
      Licensor Composition embodied in a Master Recording from Secured Servers via
      the
      Service that allows a User to receive and listen to a particular Master
      Recording upon request at a time chosen by the User using streaming technology
      (including, without limitation, via Real Networks' RealAudio or Microsoft's
      Windows Media Audio formats) through the User's Covered Device, which
      transmission will (a) not result in a substantially complete portable
      reproduction of such Master Recording (other than a temporary copy such as
      those
      used solely for caching or buffering) and (b) occur substantially
      contemporaneously with the play of the given Master Recording.

     

    "Person"
      means a natural person, a corporation, a limited liability
      company, a partnership, a trust, a joint venture, a division, any governmental
      authority or any other entity or organization.

     

    "Personal
      Computer" shall mean an Internet Protocol (IP)-enabled desktop
      or notebook computer.

     

    "Portable
      Digital Music Device" shall mean a portable digital music device
      (including, but not limited to, mobile-telephone and other mobile devices that
      may also operate on a wireless communications network) that is used for the
      storage and play/playback of digital music files (i.e., music files encoded
      in
      MP3, AAC, WMA or similar audio format).

     

    A
"Relevant
      Composition" shall mean the Licensor Composition embodied on a
      Master Recording.

     

    "Secured
      Server" shall mean a secured server that is (a) located in the
      Territory, (b) owned and operated by Licensee or Licensee's vendor and (c)
      continuously protected by means of (i) physical security that meets or exceeds
      the prevailing physical security best practices in the industry and (ii)
      firewall and other digital security technology that meets or exceeds the
      prevailing digital security technology best practices in the
      industry.

     

    "Security
      Systems" shall have the meaning set forth in paragraph 3(g)
      hereof.

     

    "Service"
      shall mean the online service owned and operated by Licensee,
      as
      described more fully in Exhibit A hereto (hereby incorporated herein by this
      reference), which offers to Users, but is not limited to, Limited Music
      Downloads, Music Streams, Limited Video Downloads, Video Streams and/or Lyric
      Displays that are transmitted from Secured Servers to the Covered Devices of
      Users in accordance with the terms and conditions of this Agreement. The Service
      shall also include and incorporate the Lyric Search Service.

     

    "Service-wide
      Music Plays" are the total number of instances where Users cause
      compositions (as embodied on Master Recordings) of third-party rights-owners
      contributing such compositions to the Service to be heard in their entirety
      on a
      Covered Device, when such content was originally delivered to the Covered Device
      as limited-use downloads.

     

    "Service-wide
      Music Streams" shall mean the total number of encrypted digital
      transmissions from Secured Servers via the Service of compositions (as embodied
      on Master

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Recordings)
      of third-party rights-owners contributing such compositions to the Service
      that
      allow Users to receive and listen to particular Master Recordings upon request
      at a time chosen by the User using streaming technology (including, without
      limitation, via Real Networks' RealAudio or Microsoft's Windows Media Audio
      formats) through the User's Covered Device, which transmissions will (a) not
      result in a substantially complete portable reproduction of such Master
      Recording (other than a temporary copy such as those used solely for caching
      or
      buffering) and (b) occur substantially contemporaneously with the play of the
      given Master Recording.

     

    "Service-wide
      Video Plays" are the total number of instances where Users cause
      compositions (as embodied on A/V Master Recordings) of third-party rights-owners
      contributing such compositions to the Service to be heard and seen in their
      entirety on a Covered Device, when such content was originally delivered to
      the
      Covered Device as limited-use downloads.

     

    "Service-wide
      Video Streams" shall mean the total number of encrypted digital
      transmissions from Secured Servers via the Service of compositions (as embodied
      on A/V Master Recordings) of third-party rights-owners contributing such
      compositions to the Service that allow Users to receive, view and listen to
      particular A/V Master Recordings upon request at a time chosen by the User
      using
      streaming technology (including, without limitation, via Real Networks'
      RealAudio or Microsoft's Windows Media Audio formats) through the User's Covered
      Device, which transmissions will (a) not result in a substantially complete
      portable reproduction of such A/V Master Recording (other than a temporary
      copy
      such as those used solely for caching or buffering) and (b) occur substantially
      contemporaneously with the play of the given A/V Master Recording.

     

    "Territory"
      shall mean the United States, its possessions, territories,
      and
      military bases (the "USA"), except that solely with respect to the reproduction
      and distribution of Relevant Compositions and Underlying Compositions embodied
      in Digital Files as Limited Video Downloads and Video Streams, the "Territory"
      shall mean the USA and Canada. For purposes of this Agreement, distribution
      of a
      Digital File shall be deemed to occur within the Territory if either (a) the
      Secured Server from which the Digital File is distributed to the User is located
      in the USA, or (b) the Secured Server from which the Digital File is distributed
      to the User is located outside of the USA and the User receiving the Digital
      File resides in the USA and such User's Personal Computer is located in the
      USA.
      Notwithstanding the foregoing, the "Territory" with respect to Limited Music
      Downloads and Music Streams shall be deemed to include Canada solely with
      respect to those Compositions to the extent not licensed to Licensee through
      that certain agreement between Licensee, on the one hand, and CMRRA, on the
      other hand (such agreement is hereinafter referred to as the "CMRRA Agreement"
      and such Compositions are hereinafter referred to as the "Non­CMRRA
      Compositions").

     

    "Underlying
      Composition" shall mean the Relevant Composition embodied on an
      A/V Master Recording.

     

    "User"
      shall mean any individual who is a registered user of the
      Service, having agreed to Licensee's user agreement, and who is authorized
      by
      Licensee to access Limited Downloads, Streams, Limited Video Downloads and
      Video
      Streams, and/or any individual who uses the Service solely to access 30-second
      Music Streams or 30-second Video Streams, via the Service solely for personal,
      non-commercial use.

     

    "Video
      Play" shall mean each instance whereby a User causes a Licensor
      Composition to be heard and seen in its entirety (as embodied on an A/V Master
      Recording) on a Covered

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Device,
      when such content was originally delivered to the Covered Device as a Limited
      Video Download.

     

    "Video
      Stream" shall mean an encrypted digital transmission of a
      Licensor Composition embodied in an A/V Master Recording from Secured Servers
      via the Service that allows a User to receive, view, and listen to a particular
      A/V Master Recording upon request at a time chosen by the User using streaming
      technology (including, without limitation, via Real Networks' RealAudio or
      Microsoft's Windows Media Audio formats) through the User's Covered Device,
      which transmission will (a) not result in a substantially complete portable
      reproduction of such A/V Master Recording (other than a temporary copy such
      as
      those used solely for caching or buffering) and (b) occur substantially
      contemporaneously with the play of the given A/V Master Recording.

     

    2.Licensee
      Service Obligations.

     

    (a)              Service
      Operation. Licensee will be responsible for all DRM encoding,
      hosting, serving and providing clearinghouse and other functions necessary
      for
      the operation of the Service in accordance with the terms and conditions of
      this
      Agreement.

     

    (b)              User
      Agreement Licensee shall require each User to enter into a user
      agreement which prohibits further distribution of the Licensed
      Content.

     

    (c)              Limitations
      on User Access, Licensee's user agreement shall state that each User
      shall only be authorized to access Limited Music Downloads, Music Streams,
      Limited Video Downloads, Video Streams and Lyric Displays through the Service
      on, and for each User Covered Devices shall only include one (1) Personal
      Computer and up to two (2) Portable Digital Music Devices.

     

    (d)              Buy
      Link. Upon a User's selection of Licensed Content, Licensee will
      ensure that Users have access to a "buy button" or similar hyperlink, through
      which the User can purchase permanent copies (in electronic and/or physical
      format) of the applicable Relevant Composition and/or Underlying
      Composition.

     

    (e)              Metadata.
      Licensor will provide Licensee with all metadata associated with
      the
      Licensed Content, including without limitation, any and all names, full contact
      information and share of composition-ownership for any composers, publishers
      and/or other rights owners with whom Licensor shares ownership of each
      Composition. Licensee shall use commercially reasonable efforts to use metadata
      delivered by Licensor to Licensee hereunder. Licensor shall deliver such
      metadata to Licensee via FTP in either XML or tab delineated format or as
      otherwise mutually agreed between the parties in writing. Notwithstanding
      anything to the contrary contained in this Agreement, Licensor shall retain
      all
      right, title and interest in and to any Licensor-provided metadata delivered
      hereunder.

     

    (f)              Writer/Licensor
      Credit. Licensee shall, to the extent commercially feasible, include
      in any graphics and/or imagery displayed in connection with any Licensor
      Composition, written credit in legible form setting forth the names of the
      writer(s) and publisher(s) of such Licensor Composition. Further, upon
      Licensor's notice to the appropriate Licensee contact set forth on Exhibit
      C,
      Licensee promptly will correct any errors in such credits. Failure to abide
      by
      the provisions of this subparagraph 2(g) shall not be a breach of this
      Agreement.

     

    (g) Security
      Compliance.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i)            In
      connection with any use of Licensed Content, Licensee shall

    implement
      and maintain copy protection and DRM technology and systems, consistent with
      accepted industry practices (collectively, "Security Systems") with respect
      the
      Service under its supervision and/or control, including Secured Servers and
      operating systems, that:

    (A)  are
      designed to prevent unauthorized reproduction and distribution of Licensed
      Content;

    (B)  encrypt
      Licensed Content with a reasonably current version of DRM technology accepted
      within the industry;

    (C)  are
      sufficient to track and enforce the use and other license limitations
      contemplated by this Agreement; and

    (D)  generally
      meet or exceed accepted industry practices for the licensed delivery of music
      via digital transmission.

    Provided
      however, Licensee may distribute MP3 files in an unprotected format when the
      distribution of such files is expressly approved by Licensor.

    (ii)            If
      Licensor has a good-faith basis to believe that Licensee is not in

    compliance
      with such Security Systems, Licensor shall be entitled, upon thirty (30)
      business days' prior written notice to Licensee, to conduct or have a third
      party conduct an examination (a "Security Compliance Examination") of the
      operations and Security Systems of Licensee solely with respect to rights
      covered by this Agreement. Licensee shall make commercially reasonable efforts
      to cooperate with Licensor and/or Licensor's qualified designated representative
      regarding such Compliance Examination. Licensor's shall not conduct any Security
      Compliance Examinations of Licensee more frequently than once every twelve
      (12)
      months.

     

    3.Accounting.

     

    (a)               Payment
      Process.
Licensee shall pay royalties due to Licensor hereunder within sixty
      (60) days after the end of each quarterly accounting period (or partial period
      in the event of an early termination or expiration before the calendar close
      of
      such quarterly period) by wire or ACH banking transfer, provided Licensor
      provides such bank account and related information to Licensee in writing within
      a reasonable period of time.

     

    (b)              Accounting
      Statements. In connection with each royalty payment hereunder,
      Licensee shall provide Licensor with an electronic statement ("Statement")
      which
      shall set forth aggregate User consumption history of the Licensed Content
      in
      sufficient detail to determine Music Royalties and Video Royalties Payable
      hereunder. Each statement shall also include detail on the Licensed Content
      distributed to Users via the Service as (i) Limited Music Downloads, (ii)
      Limited Video Downloads, (iii) Music Streams and (iv) Video Streams. Each
      statement shall identify the number of Limited Music Downloads, limited Video
      Downloads, Music Stream, and Video Streams associated with

     

    (c)              Audit.  Licensor
      shall be entitled, once during every calendar year, upon at least
      thirty days' prior written notice, to examine the books and records of Licensee
      to determine the accuracy of Licensee royalty statements (a "Royalty
      Examination"). Such Royalty Examination shall be conducted by an
      accountant with experience in digital music royalty payments. Such Royalty
      Examination shall take place at Licensee's place of business during normal
      business hours, in a manner designed to be as non-disruptive to Licensee's
      business as possible. Licensor shall not conduct an audit more frequently than
      once every twelve (12) months.

     

    (d)  All
      statements rendered by Licensee shall be incontestable within one (1) year
      of
      the date due, unless an objection in writing is made for each such statement.
      Any

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    objection
      must specify, with particularity, the reason for such objection, and if an
      audit
      is to be conducted with respect to such statement, it must be conducted within
      three (3) years of the issuance of such statement. Notwithstanding any
      applicable statutes of limitations, Licensor waives any action brought in
      connection with an audit of any royalty statement unless such action is brought
      within one (1) year of the date of the commencement of any such
      audit.

     

    4.Licensed
      Content List / Takedown
      Procedure.

     

    (a)
      The
      rights granted hereunder shall apply solely to the Licensed Content set forth
      on
      the Licensed Content List, attached hereto as Exhibit B. Licensor will provide
      the Licensed Content List according to the following terms:

     

    (i)  The
      Licensed Content List shall include at least all Licensor Compositions and
      Lyrics licensed to the digital music provider which has received the largest
      number of Licensor Compositions and Lyrics licensed owned/controlled by
      Licensor.

    (ii)  Licensor
      will provide a complete, updated Licensed Content List at execution of this
      Agreement and thereafter no less frequently than monthly as Licensed Content
      is
      added or subtracted from the Licensed Content List via access to an FTP or
      similar site as agreed upon by the appropriate, respective contacts of the
      parties as listed on Exhibit C; provided however, except as set forth in
      paragraph 4(a)(iv) below, nothing shall prevent Licensee from providing new
      Licensed Content to Users at the street date of the Master Recording and/or
      A/V
      Master Recording, as applicable. If Licensor provides additional Licensor
      Compositions and Lyrics licensed to any other third party digital music or
      digital music video service, then Licensor shall offer such additional Licensor
      Compositions and Lyrics licensed to Licensee at the same time.

    (iii)  The
      Licensed Content List shall include, without limitation, any and all names,
      full
      contact information and share of composition-ownership for any composers,
      publishers and/or other rights owners with whom Licensor shares ownership of
      each Composition.

    (iv)  Notwithstanding
      the foregoing subparagraphs 4(a)(i) and 4(a)(i), Licensor shall not be
      considered in breach of subparagraph 4(d) if Licensor fails to provide Licensed
      Content (A) due to the reasonable objection of an artist with whom Licensor
      is
      bound by agreement with respect to such artist's rights in a Licensor
      Composition (an "Artist Agreement"), or (B) that is provided to third parties
      on
      an exclusive basis under written agreement for a limited term ("Exclusives");
      provided however, Licensor will provide Licensee the Exclusives immediately
      upon
      termination of such limited term.

     

    (b)             If
      any Licensed Content ceases to be owned or controlled by Licensor for
      any

     

    reason,
      then upon Licensor's written notice and request, Licensee shall remove access
      to
      such Licensed Content from the Service within one (1) business day of such
      request. Licensor shall not exercise the takedown right described in this
      paragraph in a manner that intentionally would defeat or frustrate the rights
      granted to Licensee under the Agreement.

     

    (c)             Licensee
      shall not exploit the rights conveyed herein relating to any Licensed
Content
      prior to the official USA release date of an album or individual Master
      Recording, as applicable, embodying such Licensed Content. Further and
      notwithstanding the foregoing, Licensee may exploit those rights conveyed herein
      before such release date to the extent that Licensee must reproduce Licensed
      Content to receive, store, and prepare its availability to Users (for example,
      as ephemeral copies) without distributing it to Users.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.             Licensee's
      Third-Part
      Obligations.   Except as specifically set
      forth herein, Licensee
      will be solely responsible for procuring any and all licenses, clearances and/or
      consents that may be required to operate, or from the operation of, the Service
      as contemplated hereby, and will be responsible for all payments required to
      be
      paid to any entity (including, without limitation, any performance rights
      society or similar body, any owners of Master Recording copyrights, any
      collection societies, industry organizations or similar bodies) in connection
      with the Service.

     

    6.             Licensor's
      Third-Part
      Obligations.  In
      addition to the other agreements and obligations
      of Licensor herein, with respect to Licensed Content, Licensor shall be
      responsible for any sample clearances and/or consents, and payments, including,
      but not limited to, all associated so-called writer royalties that, as a result
      of the Service, may be required for, or due to, a writer and any other
      third-party record royalty participants (e.g., a producer). In addition,
      Licensor shall be responsible for any payments that may be due to the Musical
      Performance Trust Fund and the Administrator of the Special Payment Fund of
      the
      American Federation of Musicians, and any similar fund established by a
      collective bargaining agreement within the recorded music industry.

     

    7.Intellectual
      Property.

     

    (a)              Ownership
      of Licensed Content. All right, title and interest in and to the Licensed
      Content, including all intellectual property rights inherent therein are owned
      and retained exclusively by Licensor.

     

    (b)              Ownership
      of Licensee Service and related systems. As between Licensee and Licensor,
      Licensee owns all right, title and interest in and to the Service (subject
      to
      ownership of Licensed Content as described in paragraph 7(a)), including all
      intellectual property rights in and to all elements and components related
      thereto, and all goodwill associated with the Service will inure solely to
      the
      benefit of Licensee. Licensor understands and agrees that it shall not acquire
      any right, title or interest in or to the Licensee Service, or any part thereof,
      by reason of this Agreement or the performance hereof. All rights not
      specifically granted herein with respect to the Service are reserved to
      Licensee. Licensor will not contest, or assist other non-affiliated parties
      in
      contesting, Licensee's rights and interests in the Service or the validity
      of
      such ownership (including all intellectual property rights in and to all
      elements and components related thereto).

     

    (c)             Consumer
      Data.  Licensee shall be the sole owner of any and all
demographic
      and User data related to the Service, including, but not limited to,
      survey

    information,
      IP addresses, User activity, cookies and email addresses. To the extent
      practicable, Licensee shall provide Licensor with anonymous, aggregate consumer
      data related to Licensor's Licensed Content.

     

    8.          Representations,
      Warranties and Covenants; Indemnity.

     

    (a)             Each
      Party represents to the other Party that:

     

    (i)     such
      Party has the full right, power and authority to execute, deliver and
      perform this Agreement and to consummate the transactions contemplated
      hereby;

    
      
              

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    (ii)  the
      execution, delivery and performance of this Agreement and the consummation
      of
      the transactions contemplated hereby have been duly authorized by all necessary
      corporate action;

    (iii)  this
      Agreement has been duly executed and delivered by an authorized officer, and
      is
      a legal, valid and binding obligation enforceable against such Party in
      accordance with its terms, except as enforcement may be limited by general
      principles of equity (regardless of whether such enforceability is considered
      in
      a proceeding at law or in equity) and the effect of applicable bankruptcy,
      insolvency, moratorium and other similar laws of general application relating
      to
      or affecting creditor's rights generally, including the effect of statutory
      or
      other laws regarding fraudulent conveyances and preferential
      transfers;

    (iv)  the
      execution, delivery and performance of this Agreement will not constitute a
      breach or default under any contract or agreement to which such Party is a
      party
      or by which such Party is bound or otherwise violate the rights of any third
      Person; provided however, Licensor shall not be considered in breach of this
      subparagraph 8(a)(iv) solely to the reasonable extent Licensor is bound by
      an
      Artist Agreement; and,

    (v)  except
      to
      the extent expressly set forth in an Artist Agreement, no consent, approval
      or
      authorization of or from any governmental entity or any other Person not a
      party
      to this Agreement, whether prescribed by law, regulation, contract or agreement,
      is required for its execution, delivery and performance of this Agreement or
      consummation of the transactions contemplated hereby.

     

    (b)
      Licensor hereby warrants and represents to Licensee that:

     

    (i)  Licensor
      owns or controls the Licensed Content and has the right to grant all rights
      contained herein to the Licensed Content;

    (ii)  Licensor
      is a duly organized and existing company in good standing under the laws of
      its
      place and country of formation, and has the exclusive right, power and authority
      to enter into this Agreement, to grant the rights agreed to be granted by
      Licensor hereunder;

    (iii)  Licensor
      has not made and will not make any grant, assignment, commitment, license or
      do
      or permit any act which will or might materially interfere with or impair the
      full and complete performance of Licensee's full and complete enjoyment and
      exercise of the rights and privileges granted herein; and,

    (iv)  There
      are
      no liens, claims or encumbrances which might conflict with or otherwise affect
      any of the provisions of this Agreement or Licensee's promotion or exploitation
      of the Licensed Content in any and all media whether now known or hereafter
      devised throughout the universe in perpetuity.

     

    (c)Licensee
      hereby represents and warrants to Licensor that it shall:

     

    (i)  it
      shall
      take all reasonable steps necessary to implement and shall comply with its
      security obligations set forth in this Agreement; and,

    (ii)  it
      shall
      use best efforts to obtain from the relevant owners, at its own expense, any
      rights in and to underlying musical compositions embodied in Licensed Content
      necessary to exploit the Licensed Content in accordance with this
      Agreement.

     

    (d)             Licensee
      agrees to indemnify, defend and hold harmless Licensor,

     

    ("Indemnitee")
      from and against any losses, injuries, damages, claims, expenses
      and costs (including without limitation reasonable attorneys' fees) ("Claims")
      incurred or suffered by Indemnitee, arising from any third-party
      actions, claims, suits or legal

    
      
              

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    proceedings
      of any kind, caused by, arising from or related to: (i) Licensee's failure
      to
      perform any of its obligations under this Agreement and/or any breach or alleged
      breach of any representation or warranty hereunder; (ii) the operation of the
      Service or Licensee's business; and (iii) any acts or omissions of any Licensee
      employee or agent. Licensor shall promptly notify Licensee in writing of any
      Claim and allow Licensee to control the defense thereof; provided that Licensee
      may not settle such Claim without Licensor's prior written
      approval.

     

    (e)            Licensor
      agrees to indemnify, defend and hold harmless Licensee, its

     

    respective
      officers, employees and agents, (collectively, the "Licensee
      Indemnitees") from and against any losses, injuries, damages,
      claims, expenses and costs (including without limitation reasonable attorneys'
      fees) ("Claims")
      incurred or suffered by any Licensee Indemnitee, arising from
      any third-party actions, claims, suits or legal proceedings of any kind, caused
      by, arising from or related to: (i) Licensor's failure to perform any of its
      obligations under this Agreement and/or any breach or alleged breach of any
      representation or warranty hereunder; (ii) the operation of Licensor's business;
      and (iii) any acts or omissions of any Licensor employee or agent. Licensee
      shall promptly notify Licensor in writing of any Claim and allow Licensor to
      control the defense thereof; provided that Licensor may not settle such Claim
      without Licensee's prior written approval.

     

    9.            Termination;
      Survival.

     

    (a)  Licensor
      shall have the right to terminate this Agreement after providing

     

    thirty
      (30) days' prior written notice to Licensee in the event of a material breach
      of
      any provision of this Agreement, only if during such thirty (30) day period,
      Licensee fails to cure such alleged breach.

     

    (b)  Licensee
      shall have the right to terminate this Agreement at any time on thirty (30)
      days' prior written notice to Licensor, in the event of a material breach of
      any
      provision of this Agreement, only if during such thirty (30) day period,
      Licensor fails to cure such alleged breach.

     

    (c)  All
      representations, warranties and indemnities shall survive expiration or
termination
      of this Agreement.

     

    (d)  Within
      ninety (90) days after the effective date of any termination under this
paragraph,
      each User's rights to the Licensed Content shall lapse.

     

    (e)       This
      subparagraph 9(e), paragraphs 8, 11, 14, 15, 17, and 18 and those obligations
      of this Agreement that may reasonably be expected to survive the termination
      or
      expiration of this Agreement shall survive the termination or expiration of
      this
      Agreement.

     

    10.            Assignment.  This
      Agreement shall not be assignable by either without the prior
      written consent of the non-assigning party and any such assignment shall be
      invalid ab

    initio. Notwithstanding
      the preceding sentence, either party may assign this Agreement in conjunction
      with a transfer, merger and/or acquisition of a substantial portion of the
      assigning party's business, stock, or assets, or to any entity controlled by,
      controlling or under common control with the assigning party.

     

    11.            Choice
      of Law.  The parties agree that it is to their
      mutual benefit that their respective
      rights and obligations under this Agreement are guided by, and their disputes
      hereunder are determined in accordance with, a well developed body of law.
      Accordingly,

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    the
      parties agree that the validity, interpretation and legal effect of this
      Agreement shall be governed by the internal laws of the State of New York,
      U.S.A., applicable to contracts entered in and performed entirely within the
      State of New York, U.S.A. The parties agree that any legal suit, action or
      proceeding arising out of or relating to this Agreement must be instituted
      in
      New York, and Licensor and Licensee each (i) irrevocably submits to the
      exclusive jurisdiction of the United States District Court for the Southern
      District of New York, or the Supreme Court of the State of New York, County
      of
      New York, and (ii) waives any objection to the venue of any such suit, action
      or
      proceeding and any claim relating to forum non conveniens. In any such suit,
      action, or proceeding, any summons, order to show cause, writ, judgment, decree
      or other process may be delivered to Licensor or Licensee outside the State
      of
      New York or outside the United States and when so delivered, such party shall
      be
      subject to the jurisdiction of such court, and amenable to the process so
      delivered as though the same had been served within the State of New York but
      outside the county in which such suit, action or proceeding is
      pending.

     

    12.             No
      Partnership.   Nothing
      contained herein shall be
      construed to place the
      parties
      in the relationship of partners or joint venturers, and Licensee shall have
      no
      power to obligate or bind Licensor in any manner whatsoever.

     

    13.             Notices.  All
      notices required hereunder shall be in writing and shall be given

     

     

    either
      by
      personal delivery, telecopy or by registered or certified mail (postage
      prepaid), and shall be deemed given hereunder (unless actual receipt is
      hereinabove required) on the date delivered, telegraphed, telecopied or telexed
      or a date forty-eight (48) hours after the date mailed. Until further notice,
      the addresses of the parties shall be as follows:

     

     

    

    
      	
              LICENSEE:

              Mohen,
                Inc

              95
                Morton St,

              New
                York, NY 10014

              Attn:
                Chief Executive Officer

              With
                a courtesy copy to:

            	
              LICENSOR:

              [Address
                as indicated on the signature page.]

            
	
               

            	 
	
              Hughes
                Hubbard and Reed LLP One Battery Park Plaza

              New
                York, New York 10004 (212) 422-4726 fax

              Attn:
                Harry Packman

            	 

    

    

     

    Each
      party will provide current contacts for each of technical, content, marketing,
      financial, and publicity matters. The initial list of such contacts for each
      party is attached as Exhibit C.

     

    14.Confidential
      Information.

     

    
      
              

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    (a)  The
      Party
      receiving Confidential Information shall not disclose the Confidential
      Information of the disclosing Party, except as permitted under this Agreement.
      All Confidential Information will be held and protected by the receiving Party
      in confidence and will be used and disclosed by the receiving Party only as
      required to render performance or to exercise rights and remedies under this
      Agreement. The foregoing shall not apply to any information generally available
      to the public, independently developed, or lawfully and independently obtained.
      The receiving Party may disclose the disclosing Party's Confidential Information
      to its officers, directors, employees, legal representatives, accountants,
      tax
      advisors, agents and contractors, on a need-to-know basis. Notwithstanding
      the
      foregoing, this Agreement and its contents may be disclosed by Licensee to
      a
      third party under appropriate confidentiality requirements in connection with
      (i) a due diligence examination being conducted by such third party in
      connection with the corporate organization, reorganization, or capitalization
      of
      Licensee; (ii) subject to a court order or subpoena; or, (iii) as required
      in a
      case brought by or against a party hereto.

    (b)  The
      disclosing Party's Confidential Information is and will remain the property
      of
      the disclosing party, and no disclosure under this Agreement grants or confers
      any ownership rights in or license to any of that information to the
      non-disclosing party (excluding express licenses and grants set forth in this
      Agreement).

    (c)        Promptly
      upon expiration or termination of this Agreement and upon the request
      of the disclosing Party, the receiving Party will either: (i) return to the
      disclosing

    Party all
      of  its Confidential Information; or (ii) destroy all of such
      disclosing Party

    Confidential
      Information and certify to such destruction in writing.

     

    15.             Entire
      Agreement; Amendment; Copyright
      Act Amendments of No Effect.  This Agreement, including
      all exhibits, schedules and attachments hereto (incorporated herein by this
      reference), represents the entire understanding of the parties with respect
      to
      the subject matter hereof, supersedes all prior and contemporaneous agreements
      and understandings of the parties (whether written or oral) with respect to
      the
      subject matter hereof. This Agreement may not be altered or amended except
      in a
      written instrument executed by both parties. This Agreement shall be deemed
      to
      exist and the parties intend to be bound only upon signature of a written
      agreement by both parties, and no negotiation, exchange of draft or partial
      performance shall be deemed to imply an agreement or other understanding between
      the parties. Any revisions pending as of the Effective Date to section 115
      of
      title 17 of the U.S. Code, and any revision to section 117 of title 17 of the
      U.S. Code that may subsequently be enacted shall, regardless of form or content,
      have no affect whatsoever on the terms of this Agreement.

     

    16.             Force
      Majeure.

     

    Neither
      party shall be liable to the other for any failure or delay caused by events
      beyond the parties' control, including, without limitation, sabotage, failure
      or
      delays in transportation or communication, failures or substitutions of
      equipment, labor disputes, accidents, shortages of labor, fuel, raw materials
      or
      equipment, technical failures, fire, flood, war, blockage, acts of public enemy,
      civil disturbance, and/or any resultant interruption in public services,
      including mail delivery.

     

    17.Waiver;
      Severability; Headings;
      Counterparts.

     

    No
      right
      that either party has regarding this Agreement may be waived or modified except
      by the waiving party in writing. If any provision of this Agreement is held
      to
      be invalid or unenforceable, the remainder shall remain in full force and
      effect. The division of this Agreement into sections, clauses, paragraphs or
      subdivisions thereof, and the insertion of

    
      
              

                  /      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    headings,
      are for convenience and reference only and
      shall
      not affect the construction or interpretation hereof. This Agreement may
      be executed in one or more counterparts, each of which shall be deemed to be
      an
      original, but all of which shall be one and the same document. A copy or
      facsimile of a signature shall be binding upon the signatory as if it were
      an
      original signature.

     

    18.             Limitation
      of Liability.

     

    IN
      NO
      EVENT SHALL EITHER PARTY BE RESPONSIBLE FOR ANY CONSEQUENTIAL, SPECIAL, PUNITIVE
      OR OTHER INDIRECT DAMAGES, INCLUDING, WITHOUT LIMITATION, LOST REVENUE OR
      PROFITS, IN ANY WAY ARISING OUT OF OR RELATED TO THE AGREEMENT, EVEN IF THE
      AFFECTED PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, UNLESS
      DUE
      TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE NON-AFFECTED PARTY. EACH
      PARTY'S MAXIMUM AGGREGATE LIABILITY TO THE OTHER PARTY UNDER SECTION 8 SHALL
      NOT
      EXCEED THE TOTAL AMOUNT PAID BY LICENSEE TO LICENSOR DURING THE TWELVE (12)
      MONTH PERIOD PRIOR TO THE FIRST DATE ON WHICH THE LIABILITY AROSE. BECAUSE
      SOME
      JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF CERTAIN LIABILITY,
      IN
      SUCH JURISDICTIONS THE LIABILITY OF THE INDEMNIFYING PARTY SHALL BE LIMITED
      TO
      THE MAXIMUM EXTENT PERMITTED BY LAW. THE PROVISIONS OF THIS SECTION 18 SHALL
      APPLY NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY AND
      REGARDLESS OF THE FORM OF THE CLAIM OR CAUSE OF ACTION, WHETHER IN CONTRACT,
      WARRANTY, STATUTE, TORT (INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE) OR
      OTHERWISE.

     

    19.             Publicity

     

    Neither
      party shall issue any press release regarding this Agreement and/or the content
      of this Agreement without the other party's prior written approval. Each party
      agrees to submit to the other for prior written approval all press releases
      and
      other materials using or incorporating the other party's name, logos,
      trademarks, trade names, and/or service marks.

     

    -
      End of
      Standard Terms and Conditions -

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    Service
      Description

     

    (attached).

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Description
      of the SpiralFrog service

     

    SpiralFrog.com
      is a conditional download service (content will expire according to DRM
      restrictions set on the files) for music and music videos, free to its users.
      All content is provided in Windows Media format and protected via Microsoft
      DRM
      technology. The initial content license is for no more than 60 days followed
      by
      the renewal for another no more than 60 days. The licenses are renewed on a
      regular basis through the membership renewal process no more than every 60
      days.
      All SpiralFrog users are required to go through a "membership renewal" process
      regularly to extend the length of the license. The renewal process requires
      the
      user to complete a survey, which may be sold to advertisers for premium fees.
      Once the user has completed the required survey the content is re-licensed
      for
      an additional period.

     

    SpiralFrog
      will implement a mechanism intended to prevent multiple users from sharing
      a
      single user id by monitoring simultaneous usage patterns by the same user ID.
      Should we see multiple concurrent hits for a user ID on multiple IP addresses
      the account will be locked out from the service and the user
      notified.

     

    SpiralFrog
      maintains a key in its metadata database for each licensed song that indicates
      the territories where the content is authorized to be distributed. SpiralFrog
      uses the incoming IP address to determine the origin country of the logged
      on
      user and disables the content not approved for that particular territory from
      being viewed by the user. Spiralfrog uses an IP-to-country mapping database
      licensed from MaxMind.com to determine the country of origin of the
      user.

     

    Users
      register one time in order to download music by providing their email address,
      nickname, password, their age, gender and state/territory or zip code/postal
      code.

    Once
      registered, users can download as many songs as they wish, one song at a time,
      by first typing in a provided randomized unique code to prevent computerized
      downloading. Each download is guaranteed to take at least 90 seconds regardless
      of internet connection speed.

     

    Once
      downloaded, songs can be played on the user's computer through Windows Media
      Player and may be side-loaded on up to two devices through Windows Media Player
      device synchronization (any WMA-DRM or WMV-DRM compatible device). Users must
      come back regularly to renew and re-license in order to keep their music library
      current otherwise the license will expire causing the tracks to be
      unplayable.

    A
      Windows
      .Net application and an ActiveX control (or a Firefox plugin) are installed
      on
      the user's computer. Combined the components are known as the SpiralFrog
      Download Manager. The Download Manager enables the secure downloading of content
      from SpiralFrog and is responsible for DRM license management and
      reporting.

     

    After
      a
      successful logon, users can browse for their favorite content by genre or
      artist, or search by name of song, artist or other details. Users are also
      presented a number of "Top XX" lists, e.g. "most downloaded", "recent releases"
      or "SpiralFrog recommends".

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Among
      the
      metadata included are artist name, track name, album name, genre, album art
      and
      30-second preview clips.

     

    
      	
              ·  

            	
              Users
                can queue a list of songs that they wish to download. The queue is
                processed sequentially on a first-in-first-out
                basis.

            

    

    
      	
              ·  

            	
              Before
                the first download, the user is required to enter a visual verification
                code.

            

    

    
      	
              ·  

            	
              Once
                the visual verification has been validated, the first download will
                start.
                The license to play the track is acquired at the end of each download.
                The
                user must then choose to download the next track, play the just downloaded
                track, or continue browsing the
                site.

            

    

    
      	
              ·  

            	
              Users
                must renew the license(s) to downloaded content no more than every
                60 days
                so the service can collect play-count
                information.

            

    

    
      	
              ·  

            	
              During
                the license renewal process, users must complete an online survey
                while
                viewing additional pages of advertising, so that all content is updated
                and playable for no more than an additional 60
                days.

            

    

    
      	
              ·  

            	
              Once
                the survey is complete, the user must perform the Visual Verification
                process in order to download more
                files.

            

    

    
      	
              ·  

            	
              Advertising
                is not specific to each download and there is no set duration of
                advertising during the renewal
                process.

            

    

     

    Audio
      tracks take a minimum of 90 seconds to download, videos take a minimum of 120
      seconds. During the download process the user is able to continue interacting
      with the site, where they are presented with additional advertising. There
      will
      be no interface or links to illegal or peer to peer sites.

     

    After
      downloading the music track or music video, the user can play the content
      according to the limits set by the DRM restrictions on the file:

     

    ·  The
      license is set to expire no more than 60 days from date of
      downloading.

    ·  CD
      burning is not allowed.

    ·  File
      can
      be synchronized with up to 2 portable devices.

    ·  There
      is
      no limit on the number of plays per file.

    ·  Collaborative
      play is not allowed.

     

    The
      DRM
      license download is initiated by the SpiralFrog Download Manager, after the
      digital media download completes. The SpiralFrog server process generates a
      session ID for each download and the license granting step by the Download
      Manager is tied to that session ID, thus it cannot be used by other
      users.

     

    Each
      SpiralFrog user is required to go through a regular license renewal
process where they complete surveys, typically
      branded and sold to
      advertisers. Once the user has completed the license renewal
process the tracks and/or videos for which the
      licenses are being
      renewed are updated to be playable for an additional period. The sequence of
      steps is as follows:

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              ·  

            	
              The
                client sends a "Generate License" request to SpiralFrog server after
                the
                download has completed.

            

    

    
      	
              ·  

            	
              The
                server responds with a random Visual Verification challenge, the
                challenge
                text and the challenge request time is stored at the server and tied
                to
                the end-user's session ID.

            

    

    
      	
              ·  

            	
              The
                SpiralFrog client presents the Visual Verification challenge to the
                user.

            

    

    
      	
              ·  

            	
              The
                user enters the Visual Verification response, and the SpiralFrog
                client
                calls the Microsoft DRM component (part of Windows Media Player)
                to
                generate a license request for the previously downloaded
                songs.

            

    

    
      	
              ·  

            	
              The
                SpiralFrog client sends the Visual Verification response and the
                license
                request to the SpiralFrog server .

            

    

    
      	
              ·  

            	
              The
                SpiralFrog server validates the Visual Verification response and
                only if
                it matches the Visual Verification request and the request has not
                timed
                out a license is generated and sent back to the
                client.

            

    

    
      	
              ·  

            	
              The
                SpiralFrog client saves the license on the client computer/device
                through
                the Microsoft DRM component.

            

    

     

    PC
      Identification or License Count

     

    The
      SpiralFrog client supports only Microsoft Windows based computers/devices and
      relies on Microsoft Windows Media DRM technology to identify a specific computer
      or device. Windows Media DRM makes each media player unique by linking the
      player to a host computer. SpiralFrog content files will only play on the
      single, original computer to which they are directly downloaded by the
      SpiralFrog client application, or approved MSDRM compliant ("Plays For Sure")
      portable devices.

     

    Portable
      Device Count

     

    SpiralFrog
      users can synchronize the downloaded music or video files to a portable device
      that is compatible with the Microsoft DRM, such as those portable devices that
      carry the "Plays For Sure" logo, designed to ensure compatibility and compliance
      with the DRM restrictions.

     

    SpiralFrog
      supports synchronization with the portable device through the Windows Media
      Player, or a compatible program such as Microsoft Active Sync. The DRM copycount
      parameter is used to limit the number of devices that a track may be put on.
      When a track is put on a portable device the copy count is decremented limiting
      the number of devices a track may be placed on. SpiralFrog permits users to
      have
      a maximum of two portable devices that can be synchronized with the
      PC.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    Overview
      of SpiralFrogTM
      Security

     

    1.  Introduction

    This
      white paper describes those technical details of SpiralFrog.com as they
      relate to prevent unauthorized access to the music content. This paper is
      written according to the outlines provided by major record labels.

     

    2.  Overview
      of User Experience

    SpiralFrog.com
      is a conditional download service (content will expire according to DRM
      restrictions set on the files) for music and music videos, free to its users,
      financially supported by rich media and banner advertising. All content is
      provided in Windows Media format and protected via Microsoft DRM
      technology.

     

    After
      registering for the service at the SpiralFrog.com web site, users are
      required to install SpiralFrog Download Manager on their PC running Windows
      XP
      or Vista (no other operating systems are supported). After installation, users
      will then go back to the web site and logon to the service with the
      userid/password chosen at registration. After a successful logon, users can
      browse for their favorite content by genre or artist, or search by name of
      song,
      artist or other details. Users are also presented a number of "Top XX" lists,
      e.g. "most downloaded", "recent releases" or "SpiralFrog recommends". Among
      the
      metadata included are artist name, track name, album name, genre, album art
      and
      30-second preview clips.

     

    SpiralFrog
      users can synchronize the downloaded music or video files to a portable device
      that is compatible with the Microsoft DRM, such as those portable devices that
      carry the "Plays For Sure" logo, designed to ensure compatibility and compliance
      with the DRM restrictions.

     

    After
      downloading the music track or music video, the user can play the content
      according to the limits set by the DRM restrictions on the file:

     

    -  File
      is
      set to expire no more than 60 days from date of downloading

    -  CD
      burning is not allowed

    -  File
      can
      be synchronized with up to 2 portable devices

    -  There
      is
      no limit on the # of plays per file

    -  Collaborative
      play is not allowed

     

    All
      content will be offered in Windows Media Audio (WMA) or Windows Media Video
      (WMV) format and the service will use the Microsoft DRM tools to setup, report
      and manage such restrictions.

     

    Downloaded
      content files are conditional downloads where the license is set to expire
      based
      on a predetermined term. The initial content license is typically for 60 days
      followed by the renewal for another approximately 60 days. The licenses are
      renewed on a regular basis through the membership renewal process, generally
      every 60 days. All SpiralFrog users are

     

    
      
              

          
            	              

                                              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    required
      to go through a "membership renewal" process regularly to extend the length
      of
      the license. The renewal process requires the user to complete a survey, which
      may be sold to advertisers for premium fees. Once the user has completed the
      required survey the content is re-licensed for an additional
      period.

     

    3.
      Functional Components

     

    3.1.Description
      of Components

    SpiralFrog
      consists of a web site supported by the SpiralFrog back end web and database
      servers for browsing Artists, Tracks, and Albums as well as related music data.
      A SpiralFrog Download Manager is installed by the user on their computer which
      enables the downloading of individual tracks or videos sequentially, i.e. one
      at
      a time. Spiralfrog does not supply any other application to end
      users.

     

    The
      Download Manager provides a consistent timing, 90 seconds per download for
      the
      downloading of audio content (longer for video files), a visual verification
      ("Human Interactive Proof' dialog) that ensures that a person rather than a
      computer has downloaded the file, and once verified correct, a DRM license
      is
      granted to allow the user to play the file. The download manager also provides
      the interface to the SpiralFrog back end systems to update user play count
      data.

     

    The
      SpiralFrog server system consists of the following components:

     

    
      	
              -  

            	
              SpiralFrog
                server software running on Windows Server that handles the serving
                of web
                pages and communication with the SpiralFrog Download Manager, including
                granting of DRM licenses. As our service grows, our scalability plan
                calls
                for adding more of these servers.

            

    

    
      	
              -  

            	
              A
                relational database that contains the metadata, user registration
                data and
                usage data.

            

    

    
      	
              -  

            	
              File
                system storage that contains all content files in DRM-protected format.
                In
                its early days, SpiralFrog plans to use Limelight, a Content Distribution
                Network (CDN), to provide scalability for file delivery. Protected
                audio
                and video files are stored on the SpiralFrog servers. The first time
                that
                audio/video content is requested for download it is pulled (by Limelight)
                down to servers on the Limelight network. All subsequent downloads
                of the
                same content are pulled from the Limelight servers. To pull content
                from
                the SpiralFrog servers, Limelight accesses the website
                download.spiralfrog.com. Access to this website is granted only to
                the IP addresses of specific Limelight servers which were given to
                us by
                Limelight. Limelight is the only entity that has access to this web
                site
                due to the IP address restriction. No end users are ever directed
                to this
                web site. When a user attempts to download content, it is moved to
                a
                Limelight server for downloading to the user's machine. Subsequent
                downloads of the same file are pulled from Limelight servers. All
                content
                is stored in protected and unplayable format at all times. Deep linking
                into the Limelight file storage is prevented using the Limelight
                MediaVault encryption scheme. A Limelight white paper can be provided
                to
                describe how this feature works.

            

    

     

     

    
      
              

          
            	              

                                    SpiralFrog
                      Security White Paper.DOC of
                      10              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    Starting
      with the US launch in late summer 2007, SpiralFrog plans to serve the media
      files directly from its own clustered file server. Deep linking will be
      prevented in the same fashion as with Limelight, the only difference being
      that
      at the start of the download, SpiralFrog's own servers will check that the
      hash
      is valid for the file. All systems will be regularly updated to ensure the
      most
      optimal performance and security of the SpiralFrog service.

     

    3.2.System
      Diagram

     

    
      Web.
        Browser with Download manger

    

     

     

    
      SpiralFrog.com
        Web site

    

    
      SpiralFrog
        web server

    

    

     

    
 

    
      	
              File
                system storage

            

    

     

    Relational
      database

     

     

    4.
      General System Security

     

    4.1.System
      Location

    Currently
      all SpiralFrog server components are physically located at Adhost.com
      facilities in downtown Seattle — at 140 Fourth Avenue North, Suite 360, Seattle,
      WA 98109.

    Adhost.com
      is a professional internet hosting company which rents space at their
      earthquake-protected, generator-backed building. Starting with the US launch
      in
      late summer 2007, we plan to relocate the server farm to another collocation
      provider, Equinix in Ashburn, VA. The address and location of the SpiralFrog
      data center at Equinix facilities is

     

    44470
      Chilum Place Cage 9000 Rack 301 Ashburn VA 20147

     

    SpiralFrog
      will not change collocation providers without UMG approval.

     

    4.2.Protection
      Against Unauthorized
      Local Access

     

    
      
              

          
            	              

                                    SpiralFrog
                      Security White Paper.DOC of
                      10              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    Any
      facilities used for hosting SpiralFrog equipment will be required to be
      restricted to authorized personnel only. Full ID checks of each person entering
      the co-location facilities are performed on a 24/7 basis – only those on an
      "authorized" list will be allowed access. All cabinets holding SpiralFrog
      resources are locked within the computer rooms, which protects each company's
      servers from unauthorized access. SpiralFrog will allow access to its servers
      only by its staff server and database administrators or aelorized SpiralFrog
      contractors.

     

    4.3.Protection
      Against Unauthorized
      Network Access

    The
      file
      and database servers housing the content and metadata are logically accessible
      only by the server which runs the SpiralFrog server software. Each end-user
      must
      logon (using credentials chosen at registration) before a connection is
      activated. Furthermore, all content is stored in Microsoft DRM protected format
      without the necessary license –which means that even if hackers would gain
      access to the files, they would not be of any use since they miss the required
      DRM license. To prevent automated downloads (where a computer program is
      simulating a user), SpiralFrog server requires users to key back a series of
      slanted characters, known as Human Interactive Proof, after each successful
      download.

     

    Each
      song
      has a unique license key ID which is embedded in the file. After downloading
      the
      file to the user's computer, SpiralFrog Download Manager presents the.visual verification
      dialog. After verifying that the characters were correct, the SpiralFrog
      download manager requests the SpiralFrog server to grant the license to the
      file. The license key is generated by the Microsoft DRM component from the
      key
      ID and a license seed, which is secret. The license seed is stored in the
      machine running SpiralFrog server software which runs on its own protected
      account. The license seed is in a file protected by an "ACL" (access control
      list) which allows access only after verifying the userid and password of the
      requesting process. Only SpiralFrog server and database administrators have
      access to the credentials to access this account.

     

    4.4.Security
      Breach
      Plan

    SpiralFrog
      keeps track of the download activity by registered user. A trigger will be
      set
      if a user exceeds a set number of downloads per day to further monitor against
      automated download fraud. Users found to be violating their license agreement
      (which must be accepted at install time) will be revoked of their access
      privileges. As part of the revocation the affected user's account will be
      deleted and generally the user's IP address is added to the list of revoked
      IP
      addresses (no new accounts can be created from these addresses for 6 months).
      Besides being protected via DRM. the URLs include a hash which can only be
      generated by the SpiralFrog servers. The LimeLight or SpiralFrog's own servers
      (once Ashburn data center is live) validate the hash and only provide the file
      if the hash is correct. In addition, the server administrator will setup
      triggers to monitor suspicious activity to guard against Trojan horse – type
      virus/worm attacks on the web server itself

     

    
      
              

          
            	              

                                    SpiralFrog
                      Security White Paper.DOC of
                      10              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    5.
      IT & Development Policies

     

    5.1.Operating
      System & Software
      Policies

    SpiralFrog
      client and server components are developed using Microsoft .NET technologies
      and
      require Windows XP or Vista operating systems on the client and Windows 2003
      Server on the server. SpiralFrog relies on commercial anti-virus and security
      products to protect our technological assets. Currently these systems include
      hardware and software based on Microsoft and Symantec products to protect
      against viruses, worms etc. and to keep the operating systems up to date with
      the latest security patches. SpiralFrog will install all security patches within
      24 hours of availability after being properly regression tested and deemed
      suitable, from operating systems, hardware, software, and other applicable
      vendors.

     

    SpiralFrog
      is a licensee of the Microsoft Windows Media Rights Manager Software Development
      Kit (WMRM SDK). Microsoft WMRM SDK license agreement requires that licensees
      must update the `WMRM SDK Configuration' for all Licensed Products once a week
      using a Microsoft provided URL. The WMRM SDK license also requires that all
      relevant Microsoft security updates are installed promptly.

     

    5.2.System
      Logs

     

    SpiralFrog
      will keep track of all download data by user in an SQL database. The database
      is
      organized in such a way that it is easy to generate reports on a daily, weekly
      or monthly basis by record label, artist, genre or user demographic group.
      SpiralFrog will also record play counts for all content – this is reported to
      SpiralFrog by Windows Media Player Manager. All play count data is recorded
      in
      the SQL database. SpiralFrog will keep records of all database information
      related to licensed content for as long as it is required to do so by terms
      specified elsewhere in this agreement.

     

    5.3.Employee
      Accounts

     

    SpiralFrog
      will limit the access to its servers only to the database and server
      administrators and the software architect. Access requires Windows XP Server
      userid and password – passwords will be set to expire every 90 days. Employees
      who leave or are terminated will have their account privileges deleted
      immediately.

     

    5.4.Backup

    SpiralFrog
      plans to use the offsite backup tape and storage service offered a third part
      disaster recovery service provider which will permit high-speed dynamic
      incremental backups of the SQL database on a nightly basis. At this time a
      provider has not been selected and details will be forwarded when available.
      Spiralfrog acknowledges that the backup plan must be approved formally by UMG
      in
      advance of becoming operational, including selection of any third parties.
      The
      SQL database contains no music content files – only metadata and data collected
      during operation of the service. All licensed content will be stored in a
      separate file server which will be duplicated on site only for backup purposes.
      The backup copy which will contain content on NTFS-encrypted hard
      drives,

     

     

    
      
              

          
            	              

                                    SpiralFrog
                      Security White Paper.DOC of
                      10              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    is
      stored
      at a safe deposit box at a local financial institution behind lock and key
      and
      accessible only by SpiralFrog server administrator and management. In addition
      to the disaster recovery plans in place by our collocation facilities,
      SpiralFrog will have its own recovery plan which will allow us to restore
      service in two days in case of total loss of our operational servers. The plan
      calls for content, metadata and operational data to be restored from the backup
      tapes or hard drives described above on an identical server setip.

     

    5.5.Software
      Change
      Management

     

    SpiralFrog
      expects to continually enhance its software from the launch onward. We expect
      to
      make periodic changes to both the client and server software. Client software
      changes will be accomplished dynamically, without requiring existing users
      to
      reinstall. The client software checks upon startup whether there is an update
      available and will pull it down without prompting the user if so configured.
      All
      software changes will be tested first in a lab environment, then on one of
      our
      production servers with controlled access before rolling out system
      wide.

     

    5.6.Other
      Policies

     

    Part
      of
      the role of the server administrator is to monitor, on an ongoing basis all
      system logs which include Windows Server security and audit logs. Additionally
      any firewall, intrusion detection system, intrusion prevention systems, and
      anti-virus logs will be regularly monitored. Triggers will be set to alert
      the
      administrator of critical events that relate to security, such as repeated
      failed attempts at logon.

    
      	
               

            	
              6.
                Content Ingest, Storage, and
                Packaging

            

    

    
      	
              6.1.

            	
              Format
                and Codec

            

    

    SpiralFrog
      plans to offer its audio content in WMA format, generally encoded at 128Kbps.
      All streaming music videos will be offered in WMV format, 320x240 resolution,
      300Kbps bit rate. All downloadable music videos will be offered in WMV format,
      416x312 resolution, 1,000Kbps bit rate. All content files are protected by
      Windows Media DRM. SpiralFrog uses a metadata database from AMG in addition
      to
      the metadata provided by our music content providers. In the case of conflicts
      between metadata supplied by UMG and that supplied by third parties, Sprialfrog
      will always use UMG's metadata, even if considered "incorrect". Any such
      conflicts will be reported to UMG for resolution and updates.

     

    6.2.Content
      Ingestion

     

    SpiralFrog
      has developed software programs to automate the processing of our content
      providers data into a format suitable to our database. This includes extracting
      the metadata from XML files and entering it into our SQL database. During this
      process we will also match the tracks provided by the record label to the
      metadata database from AMG. The same programs will be designed to be able to
      receive and process

     

    
    

    
      
              

          
            	              

                                    SpiralFrog
                      Security White Paper.DOC of
                      10              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    incremental
      updates and metadata corrections from content providers on an as-needed
      basis.

     

    6.3.Separation
      of Content
      Types

    SpiralFrog
      intends to offer all its music file content for download only, video files
      can
      be either streamed or downloaded. The streamed video file is a lower resolution
      (320x240) version of the downloaded and is streamed in unprotected form, as
      p,rmitted by our license. All downloaded audio and video content is protected
      with Microsoft DRM.

     

    6.4.Protection
      of Raw Audio and
      Metadata

    Access
      to
      the master delivered content files is limited to the software architect only.
      This person is responsible for receiving, processing and storing the raw
      content. The unprotected content will be received and converted to the DRM
      protected form with a computer located at our collocation facility, Adhost,
      or
      other collocation facility subject to UMG's advance approval. Even when our
      Ashburn data center comes live, we will continue to do all content processing
      at
      the Adhost facility until further notice. Only the software architect will
      have
      access to this computer. One copy of encrypted files may be stored in the
      software architects' personal safe deposit box at KeyBank (at 7th Ave NE)
      in
      downtown Seattle following the ingestion process. Spiralfrog plans to store
      the
      backup files on hard drives with NTFS encrypted partitions.

     

    6.5.DRM
      Packaging and Key
      Management

    SpiralFrog
      is using Windows Media DRM version 10. All content is downloaded without the
      license key. Before the first download, the user is presented the Visual
      Verification dialog (slanted letters) – upon a successful entry of the
      characters, the download manager will contact the SpiralFrog server to obtain
      a
      license key for the downloaded content. The license key is generated from a
      public Key ID and a secret license seed. The key IDs are stored in a central
      database (SpiralFrog is using components provided by Microsoft) and the file
      header. The license keys are unique because the Key IDs are unique per song.
      Windows Media DRM provides for a secure mechanism whereby each downloaded song,
      after obtaining a license, is tied to the computer where the downloading took
      place.

     

    6.6.QA
      &
      Testing

     

    All
      DRM
      protection will be done automatically, using a computer program to process
      the
      non-protected files into protected files. SpiralFrog plans to test each batch
      of
      DRM protected files by choosing a random sample from the batch (which may
      include thousands of files) and test to ensure both that a DRM protected file
      without the license key is not usable and that after obtaining a license the
      DRM
      protection works as specified. All testing will be done at our collocation
      facility in a private client-server setting, after which it will be transferred
      to our production servers over local private network. Depending on the
      complexity and format of the metadata, SpiralFrog intends to make the content
      received from content providers available in a production form within 2 weeks
      of
      receipt.

     

     

    
      
              

          
            	              

                                    SpiralFrog
                      Security White Paper.DOC of
                      10              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    7.
      Sales, Download and Licensing

    Users
      will first visit our website,
      http://www.spiralfrog.com.
If
      the user is interested in signing up for the service, the user will be first
      required to register with SpiralFrog and to choose a personal userid and
      password. After accepting the SpiralFrog license agreement, the user will
      proceed to download the download manager used for downloading and licensing
      content.

     

    8.1
      User Authentication

     

    Each
      user
      must logon (using credentials chosen at registration) before the download
      manager is permitted to download content. SpiralFrog maintains a unique account
      for each user –registering with the service is a prerequisite for getting access
      to downloadable content. SpiralFrog will implement a mechanism intended to
      prevent multiple users from sharing a single user id by monitoring simultaneous
      usage patterns by the same user ID. Should we see multiple concurrent hits
      for a
      user ID on multiple IP addresses the account will be locked out from the service
      and the user notified.

     

    8.2
      Territorial Filtering

     

    SpiralFrog
      maintains a key in its metadata database for each licensed song that indicates
      the territories where the content is authorized to be distributed. SpiralFrog
      uses the incoming IP address to determine the origin country of the logged
      on
      user and disables the content not approved for that particular territory from
      being viewed by the user. Spiralfrog uses an IP-to­country mapping database
      licensed from MaxMind.com to determine the country of origin of the
      user.

     

    8.3
      Transaction Processing

     

    No
      money-related transaction takes place since content is free to SpiralFrog users.
      The user will obtain the license for the downloaded content upon the successful
      confirmation of the download.

     

    8.4
      Retail Authentication

     

    SpiralFrog
      does not maintain a separate retail and sales system from license serving and
      download systems.

     

    8.5
      LTRL Generation & Protection

     

    Each
      licensed song has a unique download URL derived from track specific data. This
      URL is stored in the database as the way to access the file. When the user
      wants
      to download a song, a hash is added to this URL and then passed from the server
      to the client, which then uses it to start the downloading process.

    
    

    
      
              

          
            	              

                                    SpiralFrog
                      Security White Paper.DOC of
                      10              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    The
      protected file could therefore not be downloaded directly by knowing the URL,
      and to obtain its necessary DRM license requires going through the SpiralFrog
      client interface.

     

    8.6
      PC Identification or License Count

     

    The
      SpiralFrog client supports only Microsoft Windows based computers/devices and
      relies on Microsoft Windows Media DRM technology to identify a specific computer
      or device. Windows Media DRM makes each media player unique by linking the
      player to a host computer. SpiralFrog content files will only play on the
      single, original computer to which they are directly downloaded by the
      SpiralFrog client application, or approved MSDRM compliant ("Plays For Sure")
      portable devices.

     

    8.7
      Portable Device Count

     

    SpiralFrog
      requires that synchronization with the portable device happens through the
      windows media player. The DRM copycount parameter is used to limit the number
      of
      devices that a track may be put on. When a track is put on a portable device
      the
      copy count is decremented limiting the number of devices a track may be placed
      on. Spiralfrog permits users to have 2 portable devices that can be synchronized
      with the PC.

     

    8.8
      License Generation & Download

     

    The
      DRM
      license download is initiated by the SpiralFrog client, Known as the Download
      Manager, after the digital media download completes. The SpiralFrog server
      process generates a session ID for each download and the user's Download Manager
      is tied to that session ID, thus it cannot be used by other users.

     

    The
      DRM
      license used on all SpiralFrog content is a conditional license that expires
      after a pre-determined period. These licenses are renewed regularly, typically
      every two months. Each SpiralFrog user is required to go through a regular
      membership renewal process where they complete surveys, typically branded and
      sold to advertisers. Once the user has completed the renewal process the tracks
      and/or videos for which the licenses are being renewed are updated to be
      playable for an additional period. The sequence of steps is as
      follows:

     

    
      	
              1.  

            	
              Before
                the first download, the client sends a Visual Verification request
                to
                SpiralFrog server.

            

    

    
      	
              2.  

            	
              The
                server responds with a random Visual Verification challenge, the
                challenge
                text and the challenge request time is stored at the server and tied
                to
                the end-user's session ID.

            

    

    3.  The
      SpiralFrog client presents the Visual Verification challenge to the
      user.

    4.  The
      user
      enters the Visual Verification response.

    
      	
               

            	
              5.
                The SpiralFrog client sends the Visual Verification response and
                the
                license request to the SpiralFrog server
                .

            

    

    
    

    
      
              

          
            	              

                                    SpiralFrog
                      Security White Paper.DOC of
                      10              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

              

                  SpiralFrog
            Confidential – Do Not
            Distribute
            Externally      
    

      

    

    

     

    
      	
              6.  

            	
              The
                SpiralFrog server validates the Visual Verification response and
                the
                download will start only if the response matches the Visual Verification
                request.

            

    

    
      	
              7.  

            	
              After
                each download, the client calls the Microsoft DRM component to generate
                a
                "License Request" and then sends it to SpiralFrog server. The SpiralFrog
                server verifies that the user has just downloaded the song and then
                responds with the license that matches the key ID of the downloaded
                song.

            

    

    
      	
               

            	
              8.
                The SpiralFrog client saves the license on the client computer/device
                through the Microsoft DRM
                component.

            

    

     

    8.9
      Auditing

     

    SpiralFrog
      relies on the Windows Media Rights Manager (WMRM) to keep track of play counts
      on the user's computer, and associated portable music players. The SpiralFrog
      client background process (which is active at all times) contacts the WMRM
      to
      obtain play count information at intervals required for reporting licenses.
      The
      information is then sent by the SpiralFrog client to the SpiralFrog database
      servers for storage, auditing and reporting purposes.

     

    8.10
      Super-distribution

     

    If
      a
      downloaded file is emailed to someone else, the DRM restrictions will prevent
      it
      from being played on another computer.

     

    9.
      Launch Preparation and Status

    SpiralFrog
      is currently operating a password-protected site live on the interne, hosted
      at
      the Adhost collocation facility in Seattle. All major system components are
      in
      place for the service. SpiralFrog can demonstrate the present functionality,
      including DRM protection to content providers if required.

     

    SpiralFrog
      has developed comprehensive 3-tier server architecture to allow the system
      to
      scale as the user load increases. The key development personnel are former
      Microsoft employees who were responsible for the design and development of
      one
      of Microsoft's server applications. SpiralFrog is using Microsoft server
      technologies and has already consulted key Microsoft development personnel
      to
      help validate the design and to assist in further planning of the performance
      aspects of the system. SpiralFrog intends to deploy new multi-server monitoring
      tools, available from 3rd
parties,
      to help in monitoring the system performance.

    
    

    
      
              

          
            	              

                                    SpiralFrog
                      Security White Paper.DOC of
                      10              
            

          
      

                  
      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      B

     

    Licensed
      Content List

     

    
    

     

    
    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      C Contacts

     

    Licensor
      contacts:

     

    1.  Technical

     

    2.  Marketing/Standards
      and Practices

     

    3.  Publicity

     

    4.  Financial
      5. Content Licensee contacts:

    1.  Technical:

    
      	
               

            	
              Mr.
                Vesa Suomalainen, CTO, vesa(aspiralfrog.com,
                206-605-8201

            

    

     

    
      	
               

            	
              Jim
                Campbell, CIO, iim(aspiralfrog.com,
                516-319-3780

            

    

     

    2.  Marketing/Standards
      and Publicity:

    Matthew
      Stern, Marketing Officer, Matthew.SternThspiralfrog.com, 718 578
      3019

     

    3.
      Content and Financial:

    Orville
      Hagler, VP, Entertainment Programming orville(aspiralfrog.com,
718-839-0941

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