Document:

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                                                                   EXHIBIT 10.14

Note: Portions of this exhibit indicated by "[*]" are subject to a confidential
treatment request, and have been omitted from this exhibit. Complete, unredacted
copies of this exhibit have been filed with the Securities and Exchange
Commission as part of this company's confidential treatment request.

                               SERVICES AGREEMENT

This Services Agreement (this "Agreement") is executed as of this 17th day of
December, 1999 (the "Effective Date") by and between encoding.com, Inc., a
Delaware corporation ("Encoding"), and Valley Media, Inc., a Delaware
corporation ("Valley").

                                    RECITALS

     A. Encoding offers services and applications for encoding, optimizing and
delivering audio and video content on the Internet.

     B. Valley is a distributor of music and video entertainment products.

     C. Valley desires to obtain certain services from Encoding that will allow
Valley to include a digital music sampling service as part of the consumer
database it offers to its retail customers.

                                   AGREEMENT

In consideration of the foregoing and the mutual promises and covenants
contained herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, Valley and Encoding hereby agree
as follows:

1.   Definitions.  For purposes of this Agreement, the following definitions
     -----------
will apply:

     1.1. The term "Confidential Information" means any information that one
          party (the "Disclosing Party") furnishes or makes available to the
          other party (the "Receiving Party") and all information related to the
          business of one party (the "Disclosing Party") which the other party
          (the "Receiving Party") acquires in the course of performing its
          obligations under this Agreement; provided, however, that the term
          "Confidential Information" does not include any information that the
          Receiving Party can prove (a) is generally available to or known by
          the public, (b) was available to or known by the Receiving Party on a
          non-confidential basis prior to disclosure by the Disclosing Party,
          (c) was independently developed for the Receiving Party by persons who
          were not given access to the information disclosed by the Disclosing
          Party, or (d) becomes generally known to the public after the
          Effective Date through no act or omission of the Receiving Party.

     1.2. The term "Major Labels" means, collectively, [*], and (f) any
          affiliate, division or subsidiary of any of the entities described in
          parts (a) through (e) of this Section 1.2.

2.   Inventory Loan.  Valley maintains an inventory of compact discs containing
     --------------
prerecorded music (each, a "CD" and, collectively, the "CDs"). Valley will [*],
one copy of each stock-keeping unit maintained by Valley among its     inventory
of CDs during the term of this Agreement, including the original artwork and
packaging for each such CD (each, a "Loaned CD" and, collectively, the "Loaned
CDs"). Valley will deliver the Loaned CDs to Encoding. Encoding will [*] in
delivering the Loaned CDs. In addition, Encoding will pay Valley a handling
charge of [*] per Loaned CD delivered to Encoding by Valley.

3.   Product Information File.  Valley maintains an electronic data file
     ------------------------
containing [*] for each recording contained in a CD in its inventory (the
"Product Information File"). Valley will deliver to Encoding, at [*] charge, one
electronic copy of the Product Information File. In addition, during the term of
this Agreement, Valley will deliver to Encoding daily updates of the Product
Information File ("PIF Updates") containing artist and UPC information for
recordings contained in CDs that have been added to Valley's inventory since the
original Product Information File or the last PIF Update was delivered to
Encoding by Valley, whichever was later. For purposes of this Agreement, the
term "Product Information File" means the Product Information File as updated
and/or amended by Encoding to

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incorporate any and all PIF Updates. Valley will not be required to deliver
updates of the Product Information File to Encoding following the termination or
expiration of this Agreement unless the parties agree otherwise.

4.  Encoding of Loaned CDs.
    -----------------------

 4.1.  For each recording contained in a Loaned CD (each, a "Recording" and,
                                                            ----------
   collectively, the "Recordings"), Encoding will create a storable electronic
                      ----------
   file containing a copy of that Recording in digital form (each, a "Song File"
                                                                      ---- ----
   and, collectively, the "Song Files"). Encoding will create each Song File in
                           ----------
   a manner that will allow that Song File to be encoded into each of the
   streaming and downloading formats and at each of the data rates described in
   Exhibit A hereto, which is incorporated herein by this reference.  Valley may
   ---------
   amend Exhibit A from time to time to include additional streaming and/or
         ---------
   downloading formats and/or additional data rates, and Encoding will create
   Song Files and Song Clips (as defined below) for each Recording in such
   additional formats and/or at such additional data rates in accordance with a
   schedule agreed upon by both parties. Valley will [*] by Encoding in encoding
   the Loaned CDs into such additional formats and/or at such additional data
   rates pursuant to this Section 4.1.

 4.2.  From each Song File, Encoding will create a sound clip (each, a "Song
                                                                        ----
   Clip" and, collectively, the "Song Clips") of a length, in each of the
   ----                     ---------------
   formats and at each of the data rates described in Exhibit B hereto, which is
                                                      ---------
   incorporated herein by this reference.

 4.3.  Encoding will link each Song Clip to that portion of the Product
   Information File containing product information for the Recording underlying
   the Song Clip, so that users of the Product Information File [*] for a
   particular Recording will be able to [*].

 4.4.  Encoding will create a storable electronic file containing a copy of the
   cover art of each Loaned CD in digital form (each, a "Cover Art File" and,
                                                         --------------
   collectively, the "Cover Art Files". Encoding will incorporate the Cover Art
                      ---------------
   Files into the Product Information File so that a digital image of the cover
   art for a Loaned CD will appear on each screen viewed by a user of the
   Product Information File that contains information regarding a Recording
   contained in that Loaned CD.

 4.5.  After Encoding has created Song Files and Song Clips for each Recording
   contained in a Loaned CD, and created a Cover Art File for that Loaned CD,
   Encoding will promptly return the Loaned CD to Valley. Valley will [*] in
   delivering the returned Loaned CDs. Encoding may return Loaned CDs without
   shrink-wrap, and Encoding will use [*] efforts to have each returned Loaned
   CD in a condition that would allow Valley to return the Loaned CD to the
   vendor from which it was purchased without any refurbishment on Valley's
   part; provided, however, if Encoding is not able to return a Loaned CDs in
   such returnable condition, Encoding will pay [*] of Valley's wholesale cost
   for any such Loaned CD.

 4.6.  Encoding will update and/or amend the Product Information File on a daily
   basis to incorporate the information contained in any and all PIF Updates.

 4.7.  If, in carrying out its responsibilities under this Agreement, but
   without any separate obligation to do so, Encoding becomes aware of a
   Recording that is contained in a Loaned CD [*].

 4.8.  Encoding will attempt to create a customized clip service that will allow
   an artist or label to select the portion of a Recording by that artist or
   label that is used to create a Song Clip for that Recording. The artist or
   label would be required to bear the cost related to the creation of any such
   customized Song Clip.

5.   Music Sampling Service.  Valley and Encoding will use the Product
     ----------------------
Information File and the Song Clips to create a music sampling service (the
"Sampling Service") that will be sold or licensed to third parties.  Encoding
and Valley each will have the right to sell or license the Sampling Service to
third parties; provided, however, that neither Encoding nor Valley may sell,
license or otherwise transfer the Sampling Service or any portion thereof to
[*]. Encoding and Valley will each be responsible for collecting sales revenue
and/or license fees from their respective customers and/or licensees. During the
term of this Agreement, Encoding and Valley will each be entitled to [*] of any
license fees received by the other party for selling or licensing the Sampling
Service, but only to the extent [*]. Encoding will perform the following
services to support the Sampling Service:

 5.1.  Encoding will store the Song Clips on its business systems and use those
   systems to stream the Song Clips to consumers using the Sampling Service. In
   hosting and streaming the Sampling Service, Encoding will

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   maintain interface capabilities that are consistent with industry
   standards. Encoding's right to host and stream the Sampling Service on
   behalf of Valley under this Section 5.1. is not exclusive, and Valley may
   retain other persons or entities to perform such services in accordance
   with the following conditions. Valley will notify Encoding in writing if it
   wishes to have hosting and streaming services for the Sampling Service
   performed by a person or entity other than Encoding (the "Third Party
   Service Provider"). For a period of sixty (60) days following Encoding's
   receipt of such notice, Valley and Encoding will negotiate in good faith
   regarding Encoding's provision of such services instead of the Third Party
   Service Provider. If, at the conclusion of such sixty (60) day period,
   Valley and Encoding have not reached an agreement for Encoding to perform
   such services after negotiating in good faith, Valley will be permitted to
   retain the Third Party Service Provider to perform such services.

 5.2.  Encoding will collect the data described in Exhibit D hereto (the
                                                   ---------
   "Consumer Data"), which is incorporated herein by this reference, regarding
   --------------
   the usage and purchasing habits of consumers that use the Sampling Service.

6.   Minimum Service Levels.  In consideration of the capital expenditures that
     ----------------------
will be incurred by Encoding in connection with this Agreement, which are
described in Section 7.1. below, Valley [*] that Encoding will receive revenues
from the Sampling Service of at least [*] during each three month period (an
"Installment Period") during the first twelve (12) months after the Sampling
-------------------
Service becomes operational (the "Guaranteed Period") for a total guaranteed
                                  -----------------
payment of at least [*]. If Encoding does not receive revenues from the Sampling
Service of at least [*] during each Installment Period during the Guaranteed
Period, Valley will make a payment to Encoding (each, a "Guaranteed Payment")
                                                         ------------------
within thirty (30) Days of the conclusion of applicable Installment Period equal
to the difference between [*] and the amount of revenues actually received by
Encoding from the Sampling Service during the applicable Installment Period (the
"Sampling Service Revenue"); provided, however, that Encoding will not be
entitled to receive the Guaranteed Payment if (a) the Sampling Service is not
operational on or before [*] if Valley has provided the Priority CDs (as defined
below) within 30 days of the Effective Date, or [*], which is incorporated
herein by this reference; provided, further, that Valley shall not be obligated
to make a Guaranteed Payment for a particular Installment Period if Encoding has
received an average of [*] from Guaranteed Payments and Sampling Service Revenue
and all Guaranteed Payments for the Installment Period in question and each
preceding Installment Period. For purposes of this Section 6, the Sampling
Service will become "operational" when Encoding has created Song Files and Song
Clips for the [*] Loaned CDs designated as "Priority CDs" within 30 days of the
Effective Date. For the purposes of this Section 6, all references to "revenue"
shall be revenue calculated in accordance with U.S. GAAP.

7.   Service Fees.
     ------------

 7.1.  Capital Expenses.  Encoding will pay all the necessary upfront capital
       ----------------
   equipment charges necessary for the creation of the Sampling Service which
   are estimated to total [*] and to include:

   7.1.1.     Facilities
   7.1.2.     Ripping Stations
   7.1.3.     Encoding Stations
   7.1.4.     Raid Online Storage
   7.1.5.     Nearline Storage System
   7.1.6.     Computer servers and Equipment

 7.2.  Shared Costs.  In consideration of the services performed by Encoding
       ------------
   under this Agreement, Encoding and Valley will [*] the costs of creating the
   Song Files and Song Clips. The costs will include [*]. Encoding estimates
   these direct costs to total [*].  Therefore, Valley will pay Encoding a total
   of [*] on [*] for the non-refundable expenses for setting up the Sampling
   Service. The above estimates are fixed and in the event the actual costs for
   this service increase or decrease, Valley will [*].

 7.3.  Maintenance Costs.  For the ongoing maintenance encoding of new inventory
       -----------------
   for the Sampling Service, Valley and Encoding will [*] the actual direct
   ongoing encoding costs estimated at the rate of [*] per CD used in the
   Sampling Service. Therefore, Valley would pay Encoding a service fee of [*]
   per such CD. These costs are fixed through September 2000. In the event, the
   costs for maintenance are determined to increase or decrease by [*] or
   higher, the parties agree to renegotiate this clause and its fee schedule in
   good faith. Encoding will invoice Valley on a monthly basis that reflects the
   actual number of files added to the

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   Sampling Service inventory. Valley and Encoding will each pay [*] of all
   shipping and handling charges to and from the Valley and Encoding.com
   facilities.

 7.4.  Streaming Costs.  Encoding will charge Valley [*] for the ongoing
       ---------------
   streaming and hosting costs. [*] is defined as the [*] plus [*] of the [*]
   plus [*].

8.   Ownership and Rights upon Termination.
     -------------------------------------

 8.1.  Loaned CDs.
       ----------

   8.1.1.  The Loaned CDs are, and will at all times remain, Valley's sole and
       exclusive property, and Valley will have the right to demand the return
       of any or all of the Loaned CDs, with Encoding and Valley to each pay [*]
       of the cost of such return, including the original artwork and packaging
       for each Loaned CD, at any time; provided, however, that, if at any time
       any or all of the Loaned CDs (other than any Loaned CDs purchased by
       Encoding pursuant to Section 9.2 of this Agreement) are determined to be
       Encoding's property, Encoding hereby grants Valley a security interest in
       such Loaned CDs.

   8.1.2.  Upon the expiration or termination of this Agreement, Encoding will
       promptly return all of the Loaned CDs, including the original artwork and
       packaging for each Loaned CD, with Encoding and Valley to each pay [*] of
       the cost of such return, to Valley (other than any Loaned CDs Encoding
       has already returned to, or purchased from, Valley pursuant to Section
       9.2 of this Agreement).

 8.2.  Files and Clips.
       ---------------

   8.2.1.  The Song Clips, the Song Files and the Cover Art Files will be, and
       will at all times remain, the sole and exclusive property of Valley;
       provided, however, that, if at any time any or all of the Song Files
       and/or the Song Clips and/or the Cover Art Files are determined to be
       Encoding's property, Encoding hereby grants Valley a security interest in
       such Song Files and/or Song Clips and/or Cover Art Files .

   8.2.2.  The Product Information File and any and all PIF Updates will be, and
       will at all times remain, the sole and exclusive property of Valley;
       provided, however, that, if at any time the Product Information File, any
       portion thereof, or any or all of the PIF Updates are determined to be
       Encoding's property, Encoding hereby grants Valley a security interest in
       the Product Information File and/or such PIF Updates.

   8.2.3.  Valley hereby grants Encoding a worldwide, perpetual, irrevocable,
       nonexclusive license to use, store, modify, copy and distribute the
       Product Information File, the PIF Updates, the Song Clips, the Song Files
       and the cover Art Files. This license will survive any termination or
       expiration of this Agreement. Encoding will have the right to sublicense
       the Product Information File, the PIF Updates, the Song Files, the Song
       Clips and the Cover Art Files to any entity other than [*].

   8.2.4.  Upon the expiration or termination of this Agreement, or at any
       earlier time, upon demand by Valley, Encoding will promptly deliver to
       Valley, [*], copies of all of the Song Files, Song Clips and Cover Art
       Files in the formats maintained hereunder; provided, however, if Valley
       terminates this Agreement as a result of a breach of this Agreement by
       Encoding pursuant to Section 18.2, Encoding shall [*].

 8.3.  Consumer Data. All of the Consumer Data will be, and will at all times
       -------------
   remain, the sole and exclusive property of Valley; provided, however, that
   Valley will pay Encoding [*] all revenues received by Valley through the
   sale, licensing or other commercial exploitation of all or any portion of the
   Consumer Data during the term of this Agreement.

9.   Audiofile License and Deleted Product.
     --------------------------------------

 9.1.  At the same time the parties enter into this Agreement, they will enter
   into an Audiofile License Agreement substantially in the form attached hereto
   as Exhibit F (the "Audiofile License"), which is incorporated herein by this
      ---------       -----------------
   reference, pursuant to which Valley will license its audiofile database
   ("Audiofile") to Encoding on a royalty free basis during the term of this
   -----------
   Agreement. If Valley is notified by any of its suppliers that the supplier is
   deleting one of the Loaned CDs from its catalog, Valley will post a deletion
   notice regarding the Loaned CD on Audiofile, and Encoding will return its
   copy of the Loaned CD to Valley on or before the Last

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   Customer Return Date stated in the deletion notice, with Encoding and
   Valley to [*] of the cost of such return.

 9.2.  If Valley posts a deletion notice regarding a Loaned CD on Audiofile and
   Audiofile is fully operational and accessible by Encoding, and Encoding fails
   to return its copy of the Loaned CD to Valley prior to the Last Customer
   Return Date stated in the deletion notice, Encoding will purchase the Loaned
   CD from Valley at Valley's wholesale price for the Loaned CD.

10.  Initial Warrant Grant.  Encoding will issue warrants for [*] shares of
Encoding common stock with a strike price of [*] per share and an exercise
period of [*] (the "Initial Warrants"). The Initial Warrants will be granted
upon commencement of this agreement.

11.  Rights Acquisition.  Encoding will grant Valley an additional [*] on the
same terms and conditions as the Initial Warrants in consideration of Valley's
certification attached hereto as Exhibit G (the "Certificate"), which is
                                 ---------       -----------
incorporated herein by this reference, regarding Valley's attempts to [*]. The
statements contained in the Certificate will constitute representations and
warranties of Valley under this Agreement. If Valley enters into a definitive
written agreement with [*] regarding the matters set forth in the Certificate,
Valley will provide a copy of such agreement to Encoding.

12.  Future Endeavors.
     ----------------

 12.1.  Valley and Encoding will explore the possibility of a variety of new
   offerings leveraging either the existing assets such as the Song Files, Song
   Clips and/or the PIF for additional Internet Music services including digital
   downloading services for Valley's customers, Internet radio broadcasts,
   Internet or digital juke boxes, "just-in-time" compact disc manufacturing; or
   offerings leveraging other assets of Valley and Encoding.

 12.2.  Valley and Encoding agree that both parties will mutually agree upon the
   appropriate business model for all new jointly created new ventures. In such
   ventures as may occur, Encoding and Valley will [*] but will attempt to
   structure the ventures so [*].

13.  Representations and Warranties of Encoding. To induce Valley to enter into
     ------------------------------------------
this Agreement and to perform the transactions contemplated hereunder, Encoding
represents and warrants as follows:

 13.1.  Organization.  Encoding is a corporation duly organized, validly
        ------------
   existing and in good standing under the laws of the state of Delaware.

 13.2.  Authority; Consents and Approvals; No Violations. Encoding has the full
        ------------------------------------------------
   corporate power and authority and legal right to execute and deliver this
   Agreement, and otherwise to perform its obligations hereunder. This Agreement
   has been validly executed and delivered by Encoding and will constitute a
   valid and binding obligation of Encoding enforceable in accordance with its
   terms, except to the extent such enforceability may be limited by the effects
   of bankruptcy, insolvency, reorganization, moratorium or other similar laws
   affecting creditors' rights generally, and by the effect of general
   principles of equitable law, regardless of whether such enforceability is
   considered in a proceeding in equity or at law. The execution and delivery of
   this Agreement and the consummation of the transactions contemplated hereby
   do not and will not violate any provision of Encoding's Certificate of
   Incorporation or Bylaws, or violate, conflict with, result in a breach of or
   constitute (with or without due notice, lapse of time or both) a default
   under any agreement, license, contract, franchise, permit, indenture, lease,
   or other instrument to which Encoding is a party, or by which it or any of
   its assets are bound.

 13.3.  Performance Standards.  Encoding will perform the services described in
        ---------------------
   Sections 4 and 5 of this Agreement in a professional and workmanlike manner
   that is consistent with the highest industry standards.

14.  Representations and Warranties of Valley.  To induce Encoding to enter into
     ----------------------------------------
this Agreement and to perform the transactions contemplated hereunder, Valley
represents and warrants as follows:

 14.1.  Organization.  Valley is a corporation duly organized, validly existing
        ------------
   and in good standing under the laws of the state of Delaware.

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 14.2.  Authority; Consents and Approvals; No Violations. Valley has the full
        ------------------------------------------------
   corporate power and authority and legal right to execute and deliver this
   Agreement, and otherwise to perform its obligations hereunder. This Agreement
   has been validly executed and delivered by Valley and will constitute a valid
   and binding obligation of Valley enforceable in accordance with its terms,
   except to the extent such enforceability may be limited by the effects of
   bankruptcy, insolvency, reorganization, moratorium or other similar laws
   affecting creditors' rights generally, and by the effect of general
   principles of equitable law, regardless of whether such enforceability is
   considered in a proceeding in equity or at law. The execution and delivery of
   this Agreement and the consummation of the transactions contemplated hereby
   do not and will not violate any provision of Valley's Certificate of
   Incorporation or Bylaws or violate, conflict with, result in a breach of or
   constitute (with or without due notice, lapse of time or both) a default
   under any agreement, license, contract, franchise, permit, indenture, lease,
   or other instrument to which Valley is a party, or by which it or any of its
   assets are bound.

15.  Indemnification.  Each party will, at all times, indemnify, defend and hold
     ---------------
the other party harmless from and against any and all third-party claims,
damages, liabilities, costs and expenses (including reasonable attorney's fees)
arising out of any breach or alleged breach by the indemnifying party of any
representation, warranty or obligation of such party under this Agreement. In
addition, each party will, at all times, indemnify, defend and hold the other
party harmless from and against any and all third-party claims, damages,
liabilities, costs and expenses (including reasonable attorney's fees) arising
out of any infringement or alleged infringement of the patents, copyrights,
trademarks or other intellectual property rights of any third party that results
from the commercial use of the Sampling Service by the indemnifying party, any
of the indemnifying party's licensees, or any person or entity that has
purchased the Sampling Service, or any portion thereof, from the indemnifying
party.

16.  Limitation on Damages.  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
     ---------------------
OTHER FOR INDIRECT OR CONSEQUENTIAL DAMAGES, WHETHER OR NOT SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF THE FORM OF ACTION.

17.  Confidential Information.  Neither Encoding nor Valley may use any
     ------------------------
Confidential Information of the other except as permitted under this Agreement.
In addition, neither Encoding nor Valley may disclose any Confidential
Information of the other unless (a) such disclosure is made to the Disclosing
Party's employees or agents on a "need to know" basis or (b) such disclosure is
required by law or legal process and the party from whom such disclosure is
required has given the other party prior notice of such requirement and has
cooperated with the non-Disclosing Party to oppose disclosure. For purposes of
this Agreement, any unauthorized use or disclosure of Confidential Information
by an employee or agent of either party will be treated as an unauthorized
disclosure by such party.

18.  Term and Termination.
     --------------------

 18.1.  This Agreement will terminate on the [*]of the Effective Date (the
   "Initial Termination Date"), unless both parties provide a written amendment
   at least ninety (90) days prior to the Initial Termination Date, in which
   case this Agreement will be extended for an additional [*] years and will
   terminate upon the [*] anniversary of the Effective Date.

 18.2.  Either party may terminate this Agreement if (i) the other party
   materially breaches any of its obligations under this Agreement, (ii) the
   non-breaching party sends written notice to the breaching party describing
   the breach in reasonable detail, and (iii) the breaching party does not cure
   the breach within thirty (30) days following its receipt of such notice.

 18.3.  Either party may terminate this Agreement if (i) the other party becomes
   insolvent, or (ii) a petition is filed by or against the other party under
   any bankruptcy or insolvency laws and, in the event of any involuntary
   petition, the petition is not dismissed within forty-five (45) days of the
   filing date.

 18.4.  The parties may terminate this Agreement by mutual consent through a
   signed writing.

19.  Press Release.  Upon execution of this Agreement, Encoding and Valley will
     -------------
issue a joint press release (the "Press Release") announcing the execution of
                                  -------------
this Agreement and briefly describing the transactions contemplated hereby.
Neither party will issue the Press Release, nor any other release concerning
this Agreement or the transactions contemplated hereby, without the other
party's prior consent.

20.  Miscellaneous
     -------------

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 20.1.  Assignment. Neither party may assign any of its rights under this
        ----------
   Agreement without the other party's prior written consent; provided, however,
   that either party may assign its rights under this Agreement to any affiliate
   of such party, any entity into which such party is merged or any entity that
   purchases substantially all of the assets of such party.

 20.2.  Further Assurances.  In addition to the obligations required to be
        ------------------
   performed by the parties hereto under the other provisions of this Agreement,
   the parties agree to perform, without further consideration, such other acts
   and to execute, file, acknowledge and deliver such other instruments and
   documents, including without limitation UCC-1 financing statements covering
   the Loaned CDs, the Song Files, the Song Clips, the Product Information File
   and the PIF Updates, as may be reasonably required to carry out the
   provisions and purposes of this Agreement and to fully and properly
   consummate the transactions contemplated hereby.

 20.3.  Amendment and Waiver. No amendment or modification of this Agreement
        --------------------
   will be effective unless set forth in a writing signed by an authorized
   representative of the party against which enforcement of such amendment is
   sought. No waiver by a party of the other party's obligation to comply with
   any provision of this Agreement will be deemed or will constitute a waiver of
   the nonwaiving party's obligation to comply with any other provision of this
   Agreement or with the nonwaiving party's obligation to comply with the waived
   provision on a subsequent occasion.

 20.4.  Arbitration. Any dispute or controversy arising between Encoding and
        -----------
   Valley regarding this Agreement will be submitted to arbitration in the state
   of the defending party in accordance with the rules then in effect of the
   American Arbitration Association.  Any award made by an arbitrator pursuant
   to this Section 20.4 will be binding upon both parties in the absence of
   fraud and may be entered in any court of competent jurisdiction.

 20.5.  Notices. Any notice to a party pursuant to this Agreement shall be given
        -------
   by one of the following means: (a) certified or registered United States
   mail, postage prepaid, (b) private courier or express service requesting
   evidence of receipt as a part of its service, or (c) by telecopy, with a copy
   also to be given by first class United States mail, postage prepaid, or by
   any means permitted under parts (a) or (b) of this Section 20.5.  Notices
   shall be given to the parties at the following addressees:

        If to Valley: Valley Media, Inc.

                1280 Santa Anita Court
                Woodland, California  95776
                Attention:  Sachin Adarkar
                Fax Number:  (530) 406-5231

        If to Encoding: encoding.com, Inc.

                414 Olive Way, 3rd Floor
                Seattle, Washington  98101
                Attention:  CFO
                Fax Number:  206-832-4001

        with a mandatory copy to:  Venture Law Group

                4750 Carillon Point
                Kirkland, WA 98033
                Attention:  John W. Robertson
                Fax Number:  (425) 739-8750

 20.6.  Binding Effect.  Upon execution of this Agreement by all parties hereto,
        --------------
   this Agreement shall inure to the benefit of, and be binding on and
   enforceable against, the parties and their respective heirs, legal
   representatives, successors and permitted assigns.

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 20.7.  Entire Agreement. This Agreement, including the exhibits and schedules
        ----------------
   hereto, together with the Audiofile License and the Warrant, constitute the
   entire agreement and understanding between the parties with respect to the
   subject matter hereof, and supersede any prior or contemporaneous agreements
   or understandings relating to the subject matter hereof, whether written or
   oral.

 20.8.  Counterparts.  This Agreement may be executed in two or more
        ------------
   counterparts, each of which shall be deemed an original and all of which,
   taken together, will constitute one and the same instrument.

 20.9.  Attorneys' Fees. If any arbitration, legal action or other proceeding is
        ---------------
   brought for the enforcement of this Agreement, or because of an alleged
   dispute, breach, default or misrepresentation in connection with any of the
   provisions of this Agreement, the successful or prevailing party will be
   entitled to recover reasonable attorneys' fees and other costs incurred in
   such action or proceeding, in addition to any other relief to which it may be
   entitled.

 20.10.  Survival. The provisions of Sections 1, 8.3, 15, 16, 17, and 20 will
         --------
   survive any termination or expiration of this Agreement.

 20.11.  Headings. The headings of the paragraphs and sections of this Agreement
         --------
   are included for purposes of convenience only and shall not affect the
   construction or interpretation of any provisions hereunder.

 20.12.  Partial Invalidity. The invalidity of any part or provision of this
         ------------------
   Agreement will not affect the enforceability of the remainder of this
   Agreement.

 20.13.  Governing Law. This Agreement will be governed by and construed in
         -------------
   accordance with the substantive laws of the State of California applicable to
   contracts entered into and performed entirely within that state.

In witness whereof, the parties have executed this Services Agreement as of the
Effective Date.

Valley Media, Inc.                      encoding.com, Inc.

/s/ Sachin Adarkar                      /s/ David C. Bullis

-----------------------                 --------------------------

By: Sachin Adarkar                      By: David C. Bullis

Its: General Counsel                    Its: President/Chief Operating Officer

[*] Confidential Treatment Request

                                       8<PAGE>

                                                                 EXHIBIT 10.14.1

Note: Portions of this exhibit indicated by "[*]" are subject to a confidential
treatment request, and have been omitted from this exhibit. Complete, unredacted
copies of this exhibit have been filed with the Securities and Exchange
Commission as part of this company's confidential treatment request.

                              AMENDED AND RESTATED

                               SERVICES AGREEMENT

       This Amended and Restated Services Agreement (this "Agreement") is
                                                           ---------
executed as of the 7th day of April, 2000 by and between Valley Media, Inc., a
Delaware corporation("Valley") and Loudeye Technologies, Inc., a Delaware
corporation, originally Loudeye.com, Inc. ("Loudeye") to amend and restate the
Services Agreement between Valley and Loudeye dated as of December 17, 1999 (the
"Effective Date.  The original Services Agreement is amended and restated in its
 --------------
entirety as set forth herein.

                                    RECITALS

       A.  Loudeye offers services and applications for Loudeye, optimizing and
delivering audio and video content on the Internet.

       B.  Valley is a distributor of music and video entertainment products.

       C.  Valley desires to obtain certain services from Loudeye that will
allow Valley to include a digital music sampling service as part of the consumer
database it offers to its retail customers.

                                   AGREEMENT

       In consideration of the foregoing and the mutual promises and covenants
contained herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, Valley and Loudeye hereby agree as
follows:

1. Definitions.  For purposes of this Agreement, the following definitions will
--------------
  apply:

  1.1.  The term "Confidential Information" means any information that one party
     (the "Disclosing Party") furnishes or makes available to the other party
     (the "Receiving Party") and all information related to the business of one
           ---------------
     party (the "Disclosing Party") which the other party (the "Receiving
                 ----------------
     Party") acquires in the course of performing its obligations under this
     Agreement; provided, however, that the term "Confidential Information" does
     not include any information that the Receiving Party can prove (a) is
     generally available to or known by the public, (b) was available to or
     known by the Receiving Party on a non-confidential basis prior to
     disclosure by the Disclosing Party, (c) was independently developed for the
     Receiving Party by persons who were not given access to the information
     disclosed by the Disclosing Party, or (d) becomes generally known to the
     public after the Effective Date through no act or omission of the Receiving
     Party.

  1.2.  The term "Major Labels" means, collectively, [*], and (f) any affiliate,
     division or subsidiary of any of the entities described in parts (a)
     through (e) of this Section 1.2.

2. Inventory Loan.  Valley maintains an inventory of compact discs containing
-----------------
  prerecorded music (each, a "CD" and, collectively, the "CDs").    Valley will
                              --                          ---
  [*], one copy of each stock-keeping unit maintained by Valley among its
  inventory of CDs during the term of this Agreement, including the original
  artwork and packaging for each such CD (each, a "Loaned CD" and, collectively,
                                                   ---------
  the "Loaned CDs").  Valley will deliver the Loaned CDs to Loudeye at [*].
  Loudeye will pay Valley a handling charge of [*] per Loaned CD delivered to
  Loudeye by Valley.

[*] Confidential Treatment Request

                                       1
<PAGE>

3. Product Information File.  Valley maintains an electronic data file
---------------------------
  containing [*] for each recording contained in a CD in its inventory (the
  "Product Information File").  Valley will deliver to Loudeye, at [*] charge,
  -------------------------
  one electronic copy of the Product Information File.  In addition, during the
  term of this Agreement, Valley will deliver to Loudeye daily updates of the
  Product Information File ("PIF Updates") containing artist and UPC information
                             -----------
  for recordings contained in CDs that have been added to Valley's inventory
  since the original Product Information File or the last PIF Update was
  delivered to Loudeye by Valley, whichever was later.  For purposes of this
  Agreement, the term "Product Information File" means the Product Information
  File as updated and/or amended by Loudeye to incorporate any and all PIF
  Updates.  Valley will not be required to deliver updates of the Product
  Information File to Loudeye following the termination or expiration of this
  Agreement unless the parties agree otherwise.

4. Encoding of Loaned CDs.
-------------------------

  4.1.  For each recording contained in a Loaned CD (each, a "Recording" and,
                                                              ---------
     collectively, the "Recordings"), Loudeye will create a storable electronic
                        ----------
     file containing a copy of that Recording in digital form (each, a "Song
                                                                        ----
     File" and, collectively, the "Song Files").  Loudeye will create each Song
     ----                          ----------
     File in a manner that will allow that Song File to be encoded into each of
     the streaming and downloading formats and at each of the data rates
     described in Exhibit A hereto, which is incorporated herein by this
                  ---------
     reference.  Valley may amend Exhibit A from time to time to include
                                  ---------
     additional streaming and/or downloading formats and/or additional data
     rates, and Loudeye will create Song Files and Song Clips (as defined below)
     for each Recording in such additional formats and/or at such additional
     data rates in accordance with a schedule agreed upon by both parties.
     Valley will [*] by Loudeye in encoding the Loaned CDs into such additional
     formats and/or at such additional data rates pursuant to this Section 4.1.

  4.2.  From each Song File, Loudeye will create a sound clip (each, a "Song
                                                                        ----
     Clip" and, collectively, the "Song Clips") of a length, in each of the
     ----                          ----------
     formats and at each of the data rates described in Exhibit B hereto, which
                                                        ---------
     is incorporated herein by this reference.

  4.3.Loudeye will link each Song Clip to that portion of the Product
     Information File containing product information for the Recording
     underlying the Song Clip, so that users of the Product Information File [*]
     for a particular Recording will be able to [*].

  4.4  Loudeye will create a storable electronic file containing a copy of the
     cover art of each Loaned CD in digital form (each, a "Front Cover Art File"
                                                           --------------------
     and, collectively, the "Front Cover Art Files".  Loudeye will also create a
                             ---------------------
     storable electronic file containing a copy of the art on the back of the CD
     jewel case of each Loaned CD in digital form (each, a "Back Cover Art File"
     and, collectively, the "Back Cover Art Files").  The combination of "Front
     Cover Art Files" and "Back Cover Art Files" will be known collectively as
     "Cover Art Files".  Loudeye will incorporate the Cover Art Files into the
     Product Information File so that a digital image of the cover art for a
     Loaned CD can appear on each screen viewed by a user of the Product
     Information File that contains information regarding a Recording contained
     in that Loaned CD.  The Back Cover Art Files will be captured through the
     jewel case housing the CD at an additional cost to Valley Media of $0.67
     per CD.  Loudeye will invoice Valley on a monthly basis for such costs.

  4.5.  After Loudeye has created Song Files and Song Clips for each Recording
     contained in a Loaned CD, and created a Cover Art File for that Loaned CD,
     Loudeye will promptly return the Loaned CD to Valley at [*].  Loudeye may
     return Loaned CDs without shrink-wrap, and Loudeye will use [*] efforts to
     have each returned Loaned CD in a condition that would allow Valley to
     return the Loaned CD to the vendor from which it was purchased without any
     refurbishment on Valley's part; provided, however, if Loudeye is not able
     to return a Loaned CDs in such returnable condition, Loudeye will pay [*]
     of Valley's wholesale cost for any such Loaned CD.

  4.6.  Loudeye will update and/or amend the Product Information File on a daily
     basis to incorporate the information contained in any and all PIF Updates.

  4.7.  If, in carrying out its responsibilities under this Agreement, but
     without any separate obligation to do so, Loudeye becomes aware of a
     Recording that is contained in a Loaned CD [*].

[*] Confidential Treatment Request

                                       2
<PAGE>

  4.8. Loudeye will attempt to create a customized clip service that will allow
     an artist or label to select the portion of a Recording by that artist or
     label that is used to create a Song Clip for that Recording. The artist or
     label would be required to bear the cost related to the creation of any
     such customized Song Clip.

5.  Music Sampling Service.  Valley and Loudeye will use the Product
--------------------------
Information File and the Song Clips to create a music sampling service (the
"Sampling Service") that will be sold or licensed to third parties.  Loudeye and
-----------------
Valley each will have the right to sell or license the Sampling Service to third
parties; provided, however, that neither Loudeye nor Valley may sell, license or
otherwise transfer the Sampling Service or any portion thereof to [*].  Loudeye
and Valley will each be responsible for collecting sales revenue and/or license
fees from their respective customers and/or licensees.  During the term of this
Agreement, Loudeye and Valley will each be entitled to [*] of any license or
other fees received by the other party for selling or licensing the Sampling
Service; provided, however, that if [*] the Sampling Service to [*] in
connection with [*] to that party, and [*], as the case may be, [*] for the
Sampling Service beyond the [*] in an amount not greater than [*], then the
parties shall not be required to [*].  The amount of license or other fees
received in connection with selling or licensing the Sampling Service which must
be shared pursuant to this paragraph shall be [*] determined in good faith in
accordance with U.S. GAAP.  In the case of [*] shall include only [*] and other
[*] to provide [*].  Loudeye will perform the following services to support the
Sampling Service:

  5.1.  Loudeye will store the Song Clips on its business systems and use those
     systems to stream the Song Clips to consumers using the Sampling Service.
     In hosting and streaming the Sampling Service, Loudeye will maintain
     interface capabilities that are consistent with industry standards.
     Loudeye's right to host and stream the Sampling Service on behalf of Valley
     under this Section 5.1. is not exclusive, and Valley may retain other
     persons or entities to perform such services in accordance with the
     following conditions.  Valley will notify Loudeye in writing if it wishes
     to have hosting and streaming services for the Sampling Service performed
     by a person or entity other than Loudeye (the "Third Party Service
     Provider").  For a period of sixty (60) days following Loudeye's receipt of
     such notice, Valley and Loudeye will negotiate in good faith regarding
     Loudeye's provision of such services instead of the Third Party Service
     Provider.  If, at the conclusion of such sixty (60) day period, Valley and
     Loudeye have not reached an agreement for Loudeye to perform such services
     after negotiating in good faith, Valley will be permitted to retain the
     Third Party Service Provider to perform such services.

  5.2.  Loudeye will collect the data described in Exhibit D hereto (the
                                                   ---------
     "Consumer Data"), which is incorporated herein by this reference, regarding
     --------------
     the usage and purchasing habits of consumers that use the Sampling Service.

6. Minimum Service Levels.  In consideration of the capital expenditures that
   ----------------------
   will be incurred by Loudeye in connection with this Agreement, which are
   described in Section 7.1. below, Valley [*] that Loudeye will receive
   revenues from the Sampling Service of at least [*] during each three month
   period (an "Installment Period") during the first twelve (12) months after
               ------------------
   the Sampling Service becomes operational (the "Guaranteed Period") for a
                                                  -----------------
   total guaranteed payment of at least [*].  If Loudeye does not receive
   Sampling Service Revenues of at least [*] during each Installment Period
   during the Guaranteed Period, Valley will make a payment to Loudeye (each, a
   "Guaranteed Payment") within thirty (30) Days of the conclusion of the
    ------------------
   applicable Installment Period equal to the difference between [*] and the
   amount of revenues actually received by Loudeye from licensing or sale of the
   Sampling Service during the applicable Installment Period together with any
   amounts actually received by Loudeye pursuant to Section 7.4 (cumulatively,
   the "Sampling Service Revenue"); provided, however, that Loudeye will not be
        ------------------------
   entitled to receive the Guaranteed Payment if Valley delivered the first [*]
   in accordance with the [*] set forth on Exhibit G hereto, in each case
                                           ---------
   together with [*] which, at the time of delivery of the [*], were correct in
   all elements necessary so that at least [*] of such [*] will pass through [*]
   without interruption due to [*], and (a) the Sampling Service is not
   operational on or before [*] and, or (b) [*], which is incorporated herein by
   this reference; provided, further, that Valley shall not be obligated to make
   a Guaranteed Payment for a particular Installment Period if Loudeye has
   received an average of [*] or more from Guaranteed Payments and Sampling
   Service Revenue during each of the preceding Installment Periods and the
   Installment Period in question.  For purposes of this Section 6, the Sampling
   Service will become "operational" when Loudeye has created Song Files and
   Song Clips for that number of [*] equal to the [*].  The PIF Accuracy
   Percentage shall be the [*], measured on all delivery dates set forth in
   Exhibit H on and after March 17, 2000 with respect to the [*] delivered as of
   ---------
   those delivery dates.  For the purposes of this Section 6, all references to
   "revenue" shall be revenue calculated in accordance with U.S. GAAP at the
   time the Guaranteed Payment would be due.

[*] Confidential Treatment Request

                                       3
<PAGE>

7. Service Fees.
---------------

  7.1. Capital Expenses.  Loudeye will pay all the necessary upfront capital
  ---------------------
     equipment charges necessary for the creation of the Sampling Service which
     are estimated to total [*] and to include:

     7.1.1.  Facilities
     7.1.2.  Ripping Stations
     7.1.3.  Loudeye Stations
     7.1.4.  Raid Online Storage
     7.1.5.  Nearline Storage System
     7.1.6.  Computer servers and Equipment

  7.2. Encoding Costs.  Valley will pay by [*] of the costs of creating the
  -------------------
     Song Files and Song Clips.  This amount is fixed and in the event the
     actual costs for this service increase or decrease, Valley will not have to
     pay any portion of any overage.

  7.3. Costs to Update Sampling Service.  Valley will pay Loudeye a fee of [*]
  -------------------------------------
     for each CD added to the Sampling Service in excess of the initial [*]
     Loaned CDs delivered by Valley to Loudeye.  This fee is fixed through
     September 2000.  In the event, Loudeye's costs for adding CDs are
     determined to increase or decrease by [*] or higher, the parties agree to
     renegotiate this clause and its fee schedule in good faith.  Loudeye will
     invoice Valley on a monthly basis that reflects the actual number of files
     added to the Sampling Service inventory.  Valley will deliver the
     additional CDs described in this section to Loudeye at [*].  Loudeye will
     pay Valley a handling charge of [*] per additional CD delivered to Loudeye
     by Valley pursuant to this section.

  7.4. Streaming Costs.  Loudeye will charge Valley [*] for the ongoing
  --------------------
     streaming and hosting costs.  [*] is defined as the [*] plus [*] of the [*]
     plus [*].

8. Ownership and Rights upon Termination.
----------------------------------------

  8.1. Loaned CDs.
  ---------------

     8.1.1.  The Loaned CDs are, and will at all times remain, Valley's sole and
        exclusive property, and Valley will have the right to demand the return
        of any or all of the Loaned CDs, with Loudeye to pay [*], including the
        original artwork and packaging for each Loaned CD, at any time;
        provided, however, that, if at any time any or all of the Loaned CDs
        (other than any Loaned CDs purchased by Loudeye pursuant to Section 9.2
        of this Agreement) are determined to be Loudeye's property, Loudeye
        hereby grants Valley a security interest in such Loaned CDs.

     8.1.2.  Upon the expiration or termination of this Agreement, Loudeye will
        promptly return all of the Loaned CDs, including the original artwork
        and packaging for each Loaned CD, at [*], to Valley (other than any
        Loaned CDs Loudeye has already returned to, or purchased from, Valley
        pursuant to Section 9.2 of this Agreement).

  8.2. Files and Clips.
  --------------------

     8.2.1.  The Song Clips, the Song Files and the Cover Art Files will be, and
        will at all times remain, the sole and exclusive property of Valley;
        provided, however, that, if at any time any or all of the Song Files
        and/or the Song Clips and/or the Cover Art Files are determined to be
        Loudeye's property, Loudeye hereby grants Valley a security interest in
        such Song Files and/or Song Clips and/or Cover Art Files.

     8.2.2.  The Product Information File and any and all PIF Updates will be,
        and will at all times remain, the sole and exclusive property of Valley;
        provided, however, that, if at any time the Product Information File,
        any portion thereof, or any or all of the PIF Updates are determined to
        be Loudeye's property, Loudeye hereby grants Valley a security interest
        in the Product Information File and/or such PIF Updates.

[*] Confidential Treatment Request

                                       4
<PAGE>

     8.2.3.  Valley hereby grants Loudeye a worldwide, perpetual, irrevocable,
        nonexclusive license to use, store, modify, copy and distribute the
        Product Information File, the PIF Updates, the Song Clips, the Song
        Files and the Cover Art Files.  This license will survive any
        termination or expiration of this Agreement.  Loudeye will have the
        right to sublicense the Product Information File, the PIF Updates, the
        Song Files, the Song Clips and the Cover Art Files to any entity other
        than [*].

     8.2.4.  Upon the expiration or termination of this Agreement, or at any
        earlier time, upon demand by Valley, Loudeye will promptly deliver to
        Valley, [*], copies of all of the Song Files, Song Clips and Cover Art
        Files in the formats maintained hereunder; provided, however, if Valley
        terminates this Agreement as a result of a breach of this Agreement by
        Loudeye pursuant to Section 18.2, Loudeye shall [*].

  8.3. Consumer Data. All of the Consumer Data will be, and will at all times
  ------------------
     remain, the sole and exclusive property of Valley; provided, however, that
     Valley will pay Loudeye [*] of all payments received by Valley through the
     sale, licensing or other commercial exploitation of all or any portion of
     the Consumer Data during the term of this Agreement.

9. Audiofile License and Deleted Product.
----------------------------------------

  9.1.  At the same time the parties enter into this Agreement, they will enter
     into an Audiofile License Agreement substantially in the form attached
     hereto as Exhibit F (the "Audiofile License"), which is incorporated herein
               ---------       -----------------
     by this reference, pursuant to which Valley will license its audiofile
     database ("Audiofile") to Loudeye on a royalty free basis during the term
                ---------
     of this Agreement.  If Valley is notified by any of its suppliers that the
     supplier is deleting one of the Loaned CDs from its catalog, Valley will
     post a deletion notice regarding the Loaned CD on Audiofile, and Loudeye
     will return, [*], its copy of the Loaned CD to Valley on or before the Last
     Customer Return Date stated in the deletion notice [*].

  9.2.  If Valley posts a deletion notice regarding a Loaned CD on Audiofile and
     Audiofile is fully operational and accessible by Loudeye, and Loudeye fails
     to return its copy of the Loaned CD to Valley prior to the Last Customer
     Return Date stated in the deletion notice, Loudeye will purchase the Loaned
     CD from Valley at Valley's wholesale price for the Loaned CD.

10. Initial Warrant Grant.  Loudeye will issue warrants for [*] shares of
-------------------------
  Loudeye common stock with a strike price of [*] per share and an exercise
  period of [*] (the "Initial Warrants").  The Initial Warrants will be granted
                      ----------------
  upon commencement of this agreement.

11. Rights Acquisition.  Loudeye will grant Valley an additional [*] warrants on
----------------------
  the same terms and conditions as the Initial Warrants in consideration of
  Valley's certification attached hereto as Exhibit G (the "Certificate"), which
                                            ---------       -----------
  is incorporated herein by this reference, regarding Valley's attempts to [*].
  The statements contained in the Certificate will constitute representations
  and warranties of Valley under this Agreement.  If Valley enters into a
  definitive written agreement with [*] regarding the matters set forth in the
  Certificate, Valley will provide a copy of such agreement to Loudeye.

12. Future Endeavors.
--------------------

  12.1.  Valley and Loudeye may explore the possibility of a variety of new
     offerings leveraging either the existing assets such as the Song Files,
     Song Clips and/or the Product Information File or offerings leveraging
     other assets of Valley and Loudeye.  However, neither party is obligated to
     engage in any joint business activities beyond those specifically agreed to
     in this Agreement unless the parties enter into a separate agreement which
     sets forth their respective rights and obligations.

  12.2.  Right of [*].  Valley agrees that during the term of this Agreement
         ------------
     Loudeye shall be [*] and, at Loudeye's option, [*] with respect to, any and
     all [*] to [*] or any of its [*] for which Valley [*] any or all of such
     [*] (individually, an "Opportunity," and collectively, "Opportunities"),
                            -----------                      -------------
     and Valley agrees to [*] with [*] in good faith for the [*] of such
     Opportunities.  Prior to [*] an Opportunity to [*], Valley shall [*] such
     Opportunity to [*].  Thereafter, Loudeye shall have [*] days (the "[*]
     Period") during which it will [*] with respect to such Opportunity.  During
     ------
     the term of this Agreement, Valley shall not [*] such Opportunity to [*]
     until the earliest to occur of (i) Loudeye's notifying Valley in writing
     that [*] with respect to such Opportunity or (ii) the expiration of the [*]
     Period.

[*] Confidential Treatment Request

                                       5
<PAGE>

13. Representations and Warranties of Loudeye.  To induce Valley to enter into
---------------------------------------------
  this Agreement and to perform the transactions contemplated hereunder, Loudeye
  represents and warrants as follows:

  13.1. Organization.  Loudeye is a corporation duly organized, validly
  ------------------
     existing and in good standing under the laws of the state of Delaware.

  13.2. Authority; Consents and Approvals; No Violations. Loudeye has the full
  ------------------------------------------------------
     corporate power and authority and legal right to execute and deliver this
     Agreement, and otherwise to perform its obligations hereunder.  This
     Agreement has been validly executed and delivered by Loudeye and will
     constitute a valid and binding obligation of Loudeye enforceable in
     accordance with its terms, except to the extent such enforceability may be
     limited by the effects of bankruptcy, insolvency, reorganization,
     moratorium or other similar laws affecting creditors' rights generally, and
     by the effect of general principles of equitable law, regardless of whether
     such enforceability is considered in a proceeding in equity or at law.  The
     execution and delivery of this Agreement and the consummation of the
     transactions contemplated hereby do not and will not violate any provision
     of Loudeye's Certificate of Incorporation or Bylaws, or violate, conflict
     with, result in a breach of or constitute (with or without due notice,
     lapse of time or both) a default under any agreement, license, contract,
     franchise, permit, indenture, lease, or other instrument to which Loudeye
     is a party, or by which it or any of its assets are bound.

  13.3. Performance Standards.  Loudeye will perform the services described in
  ---------------------------
     Sections 4 and 5 of this Agreement in a professional and workmanlike manner
     that is consistent with the highest industry standards.

14. Representations and Warranties of Valley.  To induce Loudeye to enter into
    ----------------------------------------
    this Agreement and to perform the transactions contemplated hereunder,
    Valley represents and warrants as follows:

  14.1. Organization.  Valley is a corporation duly organized, validly existing
  ------------------
     and in good standing under the laws of the state of Delaware.

  14.2. Authority; Consents and Approvals; No Violations. Valley has the full
  ------------------------------------------------------
     corporate power and authority and legal right to execute and deliver this
     Agreement, and otherwise to perform its obligations hereunder.  This
     Agreement has been validly executed and delivered by Valley and will
     constitute a valid and binding obligation of Valley enforceable in
     accordance with its terms, except to the extent such enforceability may be
     limited by the effects of bankruptcy, insolvency, reorganization,
     moratorium or other similar laws affecting creditors' rights generally, and
     by the effect of general principles of equitable law, regardless of whether
     such enforceability is considered in a proceeding in equity or at law.  The
     execution and delivery of this Agreement and the consummation of the
     transactions contemplated hereby do not and will not violate any provision
     of Valley's Certificate of Incorporation or Bylaws or violate, conflict
     with, result in a breach of or constitute (with or without due notice,
     lapse of time or both) a default under any agreement, license, contract,
     franchise, permit, indenture, lease, or other instrument to which Valley is
     a party, or by which it or any of its assets are bound.

15. Indemnification.  Each party will, at all times, indemnify, defend and hold
-------------------
  the other party harmless from and against any and all third-party claims,
  damages, liabilities, costs and expenses (including reasonable attorney's
  fees) arising out of any breach or alleged breach by the indemnifying party of
  any representation, warranty or obligation of such party under this Agreement.
  In addition, each party will, at all times, indemnify, defend and hold the
  other party harmless from and against any and all third-party claims, damages,
  liabilities, costs and expenses (including reasonable attorney's fees) arising
  out of any infringement or alleged infringement of the patents, copyrights,
  trademarks or other intellectual property rights of any third party that
  results from the commercial use of the Sampling Service in a manner other than
  that contemplated by this Agreement by the indemnifying party, any of the
  indemnifying party's licensees, or any person or entity that has purchased the
  Sampling Service, or any portion thereof, from the indemnifying party.

16. Limitation on Damages.  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
-------------------------
  OTHER FOR INDIRECT OR CONSEQUENTIAL DAMAGES, WHETHER OR NOT SUCH PARTY HAS
  BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF THE FORM OF
  ACTION.

17. Confidential Information.  Neither Loudeye nor Valley may use any
----------------------------
  Confidential Information of the other except as permitted under this
  Agreement.  In addition, neither Loudeye nor Valley may disclose any
  Confidential

(*) Confidential Treatment Request

                                       6
<PAGE>

  Information of the other unless (a) such disclosure is made to
  the Disclosing Party's employees or agents on a "need to know" basis or (b)
  such disclosure is required by law or legal process and the party from whom
  such disclosure is required has given the other party prior notice of such
  requirement and has cooperated with the non-Disclosing Party to oppose
  disclosure.  For purposes of this Agreement, any unauthorized use or
  disclosure of Confidential Information by an employee or agent of either party
  will be treated as an unauthorized disclosure by such party.

18. Term and Termination.
------------------------

  18.1.  This Agreement will terminate on the [*] of the Effective Date (the
     "Initial Termination Date"), unless both parties provide a written
     -------------------------
     amendment at least ninety (90) days prior to the Initial Termination Date,
     in which case this Agreement will be extended for an additional [*] years
     and will terminate upon the [*] anniversary of the Effective Date.

  18.2.  Either party may terminate this Agreement if (i) the other party
     materially breaches any of its obligations under this Agreement, (ii) the
     non-breaching party sends written notice to the breaching party describing
     the breach in reasonable detail, and (iii) the breaching party does not
     cure the breach within thirty (30) days following its receipt of such
     notice.

  18.3.  Either party may terminate this Agreement if (i) the other party
     becomes insolvent, or (ii) a petition is filed by or against the other
     party under any bankruptcy or insolvency laws and, in the event of any
     involuntary petition, the petition is not dismissed within forty-five (45)
     days of the filing date.

  18.4.  The parties may terminate this Agreement by mutual consent through a
     signed writing.

19. Press Release.  Upon execution of this Agreement, Loudeye and Valley will
-----------------
  issue a joint press release (the "Press Release") announcing the execution of
                                    -------------
  this Agreement and briefly describing the transactions contemplated hereby.
  Neither party will issue the Press Release, nor any other release concerning
  this Agreement or the transactions contemplated hereby, without the other
  party's prior consent.

20. Miscellaneous
-----------------

  20.1. Assignment. Neither party may assign any of its rights under this
  ----------------
     Agreement without the other party's prior written consent; provided,
     however, that either party may assign its rights under this Agreement to
     any affiliate of such party, any entity into which such party is merged or
     any entity that purchases substantially all of the assets of such party

  20.2. Further Assurances.  In addition to the obligations required to be
  ------------------------
     performed by the parties hereto under the other provisions of this
     Agreement, the parties agree to perform, without further consideration,
     such other acts and to execute, file, acknowledge and deliver such other
     instruments and documents, including without limitation UCC-1 financing
     statements covering the Loaned CDs, the Song Files, the Song Clips, the
     Product Information File and the PIF Updates, as may be reasonably required
     to carry out the provisions and purposes of this Agreement and to fully and
     properly consummate the transactions contemplated hereby.

  20.3. Amendment and Waiver.  No amendment or modification of this Agreement
  --------------------------
     will be effective unless set forth in a writing signed by an authorized
     representative of the party against which enforcement of such amendment is
     sought.  No waiver by a party of the other party's obligation to comply
     with any provision of this Agreement will be deemed or will constitute a
     waiver of the nonwaiving party's obligation to comply with any other
     provision of this Agreement or with the nonwaiving party's obligation to
     comply with the waived provision on a subsequent occasion.

  20.4. Arbitration.  Any dispute or controversy arising between Loudeye and
  -----------------
     Valley regarding this Agreement will be submitted to arbitration in the
     state of the defending party in accordance with the rules then in effect of
     the American Arbitration Association.  Any award made by an arbitrator
     pursuant to this Section 20.4 will be binding upon both parties in the
     absence of fraud and may be entered in any court of competent jurisdiction.

  20.5. Notices.  Any notice to a party pursuant to this Agreement shall be
  -------------
     given by one of the following means:  (a) certified or registered United
     States mail, postage prepaid, (b) private courier or express service
     requesting evidence of receipt as a part of its service, or (c) by
     telecopy, with a copy also to be given by first class United

[*] Confidential Treatment Request

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<PAGE>

     States mail, postage prepaid, or by any means permitted under parts (a) or
     (b) of this Section 20.5. Notices shall be given to the parties at the
     following addressees:

          If to Valley:  Valley Media, Inc.
                         1280 Santa Anita Court
                         Woodland, California  95776
                         Attention:  Sachin Adarkar
                         Fax Number:  (530) 406-5231

         If to Loudeye:  Loudeye Technologies, Inc.
                         414 Olive Way, 3rd Floor
                         Seattle, Washington  98101
                         Attention:  General Counsel
                         Fax Number:  206-832-4001

                         with a mandatory copy to:  Venture Law Group
                         4750 Carillon Point
                         Kirkland, WA 98033
                         Attention:  John W. Robertson
                         Fax Number:  (425) 739-8750

  20.6. Binding Effect.  Upon execution of this Agreement by all parties
  --------------------
     hereto, this Agreement shall inure to the benefit of, and be binding on and
     enforceable against, the parties and their respective heirs, legal
     representatives, successors and permitted assigns.

  20.7. Entire Agreement.  This Agreement, including the exhibits and schedules
  ----------------------
     hereto, together with the Audiofile License and the Warrant, constitute the
     entire agreement and understanding between the parties with respect to the
     subject matter hereof, and supersede any prior or contemporaneous
     agreements or understandings relating to the subject matter hereof, whether
     written or oral.

  20.8. Counterparts.  This Agreement may be executed in two or more
  ------------------
     counterparts, each of which shall be deemed an original and all of which,
     taken together, will constitute one and the same instrument.

  20.9. Attorneys' Fees.  If any arbitration, legal action or other proceeding
  ---------------------
     is brought for the enforcement of this Agreement, or because of an alleged
     dispute, breach, default or misrepresentation in connection with any of the
     provisions of this Agreement, the successful or prevailing party will be
     entitled to recover reasonable attorneys' fees and other costs incurred in
     such action or proceeding, in addition to any other relief to which it may
     be entitled.

  20.10. Survival.  The provisions of Sections 1, 8, 15, 16, 17, and 20 will
  ---------------
     survive any termination or expiration of this Agreement.

  20.11. Headings. The headings of the paragraphs and sections of this
  ---------------
     Agreement are included for purposes of convenience only and shall not
     affect the construction or interpretation of any provisions hereunder.

  20.12. Partial Invalidity.  The invalidity of any part or provision of this
  -------------------------
     Agreement will not affect the enforceability of the remainder of this
     Agreement.

  20.13. Governing Law.    This Agreement will be governed by and construed in
  --------------------
     accordance with the substantive laws of the State of California applicable
     to contracts entered into and performed entirely within that state.

  20.14  Audit Right.  The parties shall keep at their respective principal
  ------------------
     places of business complete and accurate books of account relating to
     revenues received and costs incurred which are relevant to the
     determination of payment obligations of the parties under this Agreement.
     Each party shall have the right, upon reasonable notice and during the
     other party's normal business hours and no more often than once during any
     12 month period, to enter the other party's premises for purposes of
     auditing all books of account, documents, records and files relating to
     calculations which are required under this Agreement.

[*] Confidential Treatment Request

                                       8
<PAGE>

In witness whereof, the parties have executed this Amended and Restated Services
Agreement as of April 7, 2000.

    Valley Media, Inc.               Loudeye Technologies, Inc.

    /s/ Sachin Adarkar               /s/ David C. Bullis

    ------------------------         --------------------------------

    By:  Sachin Adarkar              By:  David C. Bullis

    Its:  General Counsel            Its:    President/Chief Operating Officer

[*] Confidential Treatment Request
                                       9

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