MUSIC SAMPLING AGREEMENT

This Agreement is entered into on the ____ day of ________, 1994, by and between Multimedia Intellectual Property Co., a [STATE] corporation having a place of business at Street Address, Town, State (“Multimedia Intellectual Property Co.”) and ______________, a [STATE] corporation, having a place of business at _______________ (“Content Provider”).

                                   RECITALS

 A. Content Provider owns all rights to the content set forth in Exhibit A (the “Property” as further defined below).
B. Content Provider is interested in permitting development of derivative works based upon the Property in the form of interactive multimedia products (“Licensed Products” as further defined below);
C. Multimedia Intellectual Property Co. is in the business of developing, publishing and distributing CD-ROM-based and other electronic products; and
D. Content Provider is desirous of having Multimedia Intellectual Property Co. develop, publish and distribute the Licensed Products;
NOW, THEREFORE, in consideration of the premises, conditions, covenants and warranties herein contained, the parties agree as follows:

AGREEMENT

I. Definitions
A. “Advances” shall mean all funds advanced by Multimedia Intellectual Property Co. to Content Provider as provided in this Agreement.
B. “Bundled Copies” shall mean copies of Licensed Products distributed bundled with hardware or software of Multimedia Intellectual Property Co. or a third party. Bundled copies do not include Retail Copies.
C. “Confidential Information” shall mean the information of either party which is disclosed to the other party pursuant to this Agreement, in written form marked “confidential”, or if disclosed orally, then confirmed in a writing summarizing such information within ____ (___) days of disclosure and marked “confidential.” By way of example and without limiting the generality of the foregoing, Confidential Information shall include trade secrets, know-how, inventions, algorithms, structure and organization of software programs, schematics, contracts, customer lists, financial information, sales and marketing plans, and business plans.
D. “Cost of Goods” shall mean Multimedia Intellectual Property Co.’s actual cost of manufacturing and packaging copies of a Title up to the time of shipment into the distribution channel, including the cost of the optical or magnetic media upon which the Title is recorded, packaging materials, manuals and other collateral materials and program components, CD-ROM or magnetic disk duplication, printing and binding of manuals and other materials included in or with the finished copies of a Title, and pre-distribution shipping costs, plus standard labor costs for product manufacture.
E. “Effective Date” shall mean the date first set forth above.
F. “Licensed Products” shall mean interactive multimedia products based upon the Property.
G. “Net Revenue” shall mean all revenues recognized in accordance with generally accepted accounting principles relating to the distribution or sale of Licensed Products by Multimedia Intellectual Property Co. or any of its affiliated, associated or subsidiary companies, less (a) units returned as defective, as a result of errors in billing or shipment, or otherwise returned in the ordinary course of business, (b) Cost of Goods, and (c) taxes. The foregoing deductions shall be reasonable and consistent with the amounts paid in the industry for such items.
H. “Retail Copies” shall mean all copies of a particular Title distributed to third parties except Bundled Copies, but does not include promotional copies and returns.
I. “Territory” shall mean the entire Universe.

II. Proprietary Rights and Grant of License
A. Subject to the terms of this Agreement, Content Provider shall continue to own all right, title and interest in and to the Property. Multimedia Intellectual Property Co. shall own all right, title and interest in and to the Licensed Products, and shall have sole control over the development, format, contents, and all other aspects of the Licensed Products.
B. Content Provider hereby grants to Multimedia Intellectual Property Co., its successors and assigns, subject to the payment of the advances and royalties set forth herein and for the term set forth below, the exclusive right, license and privilege throughout the Territory to:
1. develop, produce, reproduce, manufacture, distribute, export, import promote, advertise, market, rent, sell, and exploit the Property in the form of the Licensed Products, by all means and on all platforms now known or hereafter developed;
2. translate the Licensed Products at Multimedia Intellectual Property Co.’s expense into any non-English language, using whatever means, developers, contractors or sublicensees deemed appropriate by Multimedia Intellectual Property Co., and exercise the rights granted in Subparagraph 1. above in connection with the translated versions of the Licensed Products. Any expenses incurred by Multimedia Intellectual Property Co. in the translating of the Title to other languages shall be considered additional Advances to be recouped from first dollar revenues prior to payment of royalties to Content Provider. Multimedia Intellectual Property Co. shall own the copyright in any such translations;
3. publicly display or perform and authorize others to perform the Licensed Products, and any prototypes or demonstration versions of the Licensed Products, or any part thereof, in connection with the advertising, publicizing, marketing and distribution of the Titles;
4. sublicense others to exercise any of the rights set forth in Subparagraphs 1 through 3 above.
C. Multimedia Intellectual Property Co. Efforts; Reversion of Rights. The timing and manner of exercise of these rights granted herein shall be solely within the discretion of Multimedia Intellectual Property Co.. Provided, however, that if Multimedia Intellectual Property Co. fails or declines to ship Retail Copies of at least one Licensed Product in reasonable commercial quantities within ___ (__) years from the Effective Date, then all of the granted rights shall terminate and revert to the Content Provider and thereupon the Content Provider and Multimedia Intellectual Property Co. shall be released and discharged from any further liability or obligation hereunder to each other. Any complete or partial versions or components of Licensed Products developed by Multimedia Intellectual Property Co. in the course of this Agreement shall be and remain the sole property of Multimedia Intellectual Property Co..
D. Reserved Rights. Any rights to the Property not specifically granted to Multimedia Intellectual Property Co. in this Agreement are reserved to Content Provider. Content Provider shall have the right to utilize or permit others to utilize any reserved rights throughout the duration of this Agreement and beyond, but Content Provider agrees that it will not, either jointly or alone, directly or indirectly, perform any act which may in any way diminish, invalidate, or detrimentally affect the full exercise and enjoyment by Multimedia Intellectual Property Co. of the rights granted in this Agreement.

III. Advances.
A. Multimedia Intellectual Property Co. agrees to pay Content Provider the following Advances on the following dates:    . Such advances shall be non-refundable, except as otherwise provided herein.

IV. Royalties.
A. The Advances shall be recouped by Multimedia Intellectual Property Co. from first dollar revenues. No royalties will be paid to Content Provider under this Agreement until such royalties exceed the aggregate amount of the Advances paid to Content Provider. Multimedia Intellectual Property Co. shall pay Content Provider the following royalties: (a) ___ percent (__%) on Net Revenue related to Retail Copies; and (b) ___ percent (__%) on Net Revenue related to Bundled Copies.
B. All royalty payments shall be made in Canadian dollars by a check drawn on a Canadian bank.
C. Multimedia Intellectual Property Co. shall render to Content Provider on a quarterly basis, within forty-five (45) days after the end of each calendar quarter during which Licensed Products are sold, a written statement of the royalties due to Content Provider with respect to such Licensed Products. Such statement shall be accompanied by a remittance of the amount due, if any. Content Provider shall have the right, upon reasonable request, to review those records of Multimedia Intellectual Property Co. necessary to verify the royalties paid no more than once per calendar year. Any such audit will be conducted at Content Provider’s expense and at such times and in such a manner as to not unreasonably interfere with Multimedia Intellectual Property Co.’s normal operations, and Content Provider and its auditor shall be required to treat information revealed during the audit as Confidential Information; provided, however, that if any such audit reveals an error of at least 5% in the payment of royalties, then Multimedia Intellectual Property Co. shall pay the costs of the audit. If a deficiency is shown by such audit, Multimedia Intellectual Property Co. shall immediately pay that deficiency. Non-payment of any deficiency within thirty (30) business days of the date on which Multimedia Intellectual Property Co. receives notice of such deficiency shall constitute a material breach of this Agreement.

V. Credits and Marketing
A. Multimedia Intellectual Property Co. agrees to provide credits for the Property and Content Provider in the Licensed Products.
B. Content Provider will provide Multimedia Intellectual Property Co. with all commercially reasonable cooperation and support of Multimedia Intellectual Property Co.’s efforts to market and promote the Licensed Products.
C. The manner in which Licensed Products are packaged, distributed and marketed, including the names under which the Licensed Products are sold, shall be solely within the discretion of Multimedia Intellectual Property Co..

VI. Content Provider Copies
A. Upon request, Content Provider shall be given twenty (20) copies of each Licensed Product for each platform free of charge at the time the Licensed Product is first shipped in commercial quantities in the retail channel for that platform.

VII. Warranties, Indemnification, and Remedies
A. Content Provider warrants and represents that it owns all right, title and interest in the Property.
B. Content Provider represents, warrants and covenants that it has full right, power and authority to enter into this Agreement and to grant the rights granted herein without violating any other agreement or commitment of any sort; and that use of the Property as contemplated in this Agreement does not and will not infringe or constitute a misappropriation of any trademark, patent, copyright, trade secret or other proprietary, publicity, or privacy right of any third party and Multimedia Intellectual Property Co.’s development, use, reproduction, sale, licensing and/or distribution of Licensed Products shall not violate any rights of any kind or nature of any third party.
C. Content Provider shall defend, indemnify and hold harmless Multimedia Intellectual Property Co., its successors, assigns, parents, subsidiaries, affiliates, licensees and sublicensees, and their respective officers, directors, agents and employees, from and against any action, suit, claim, damages, liability, costs and expenses (including reasonable attorneys’ fees), arising out of or in any way connected with any breach of any representation or warranty made by Content Provider herein or any claim that any Licensed Product infringes any intellectual property rights or other rights of any third party on account of the use of the Property in the Licensed Product. Multimedia Intellectual Property Co. shall give Content Provider prompt notice of any such claim or of any threatened claim.
D. If Multimedia Intellectual Property Co. receives notice of any claim, demand or suit, or of any facts which would lead a reasonable person to believe that there has been a breach of Content Provider’s warranties as set forth herein, Multimedia Intellectual Property Co. shall have the right to withhold from any payments due to Content Provider under this Agreement, and deposit in an interest-bearing escrow account with a commercial bank, reasonable amounts as security for Content Provider’s obligations hereunder, unless Content Provider posts other security reasonably acceptable to Multimedia Intellectual Property Co. Upon resolution of the claim, the amount in escrow including accrued interest thereon shall be distributed to Content Provider after deductions of any amounts required to be paid to Multimedia Intellectual Property Co. or third parties under this indemnity.
E. Neither Content Provider nor Multimedia Intellectual Property Co. shall agree to the settlement of any such claim, demand or suit prior to final judgment thereon without the consent of the other party, whose consent shall not be unreasonably withheld.
F. Multimedia Intellectual Property Co. hereby represents, warrants and covenants that it has the full right, power and authority to enter into this Agreement. Multimedia Intellectual Property Co. shall defend, indemnify and hold harmless Content Provider, its successors, assigns, parents, subsidiaries, affiliates, licensees and sublicensees, and their respective officers, directors, agents and employees, from and against any action, suit, claim, damages, liability, costs and expenses (including reasonable attorneys’ fees), arising out of or in any way connected with any breach of any representation or warranty made by Multimedia Intellectual Property Co. herein. Content Provider shall give Multimedia Intellectual Property Co. prompt notice of any such claim or of any threatened claim.
G. The parties’ indemnification obligations set forth in the foregoing paragraphs shall survive termination of this Agreement.
H. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY (OR TO ANY PERSON CLAIMING RIGHTS DERIVED FROM THE OTHER PARTY’S RIGHTS) FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, OR EXEMPLARY DAMAGES OF ANY KIND, INCLUDING LOST PROFITS, LOSS OF BUSINESS, OR OTHER ECONOMIC DAMAGE, AND FURTHER INCLUDING INJURY TO PROPERTY, AS A RESULT OF BREACH OF ANY WARRANTY OR OTHER TERM OF THIS AGREEMENT, REGARDLESS OF WHETHER THE PARTY ALLEGEDLY LIABLE WAS ADVISED, HAD OTHER REASON TO KNOW, OR IN FACT KNEW OF THE POSSIBILITY THEREOF. EACH PARTY ACKNOWLEDGES THAT THE FOREGOING SENTENCE REFLECTS AN INFORMED, VOLUNTARY ALLOCATION BETWEEN THE PARTIES OF THE RISKS (KNOWN AND UNKNOWN) THAT MAY EXIST IN CONNECTION WITH THIS AGREEMENT, THAT SUCH VOLUNTARY RISK ALLOCATION WAS A MATERIAL PART OF THE BARGAIN BETWEEN THE PARTIES, AND THAT THE ECONOMIC AND OTHER TERMS OF THIS AGREEMENT WERE NEGOTIATED AND AGREED TO BY THE PARTIES IN RELIANCE ON SUCH VOLUNTARY RISK ALLOCATION.

VIII. Termination
A. This Agreement shall terminate automatically and without notice
years from the Effective Date.
B. This Agreement will terminate on the thirtieth (30th) day after one party gives the other notice of a material breach by the other of any term of this Agreement, unless the breach is cured before that day; provided, however, that if the material breach relates only to a particular Licensed Product, then only the rights with respect to that Licensed Product shall be terminated.
C. This Agreement may be terminated by either party without prior notice if: (a) either party files a petition for bankruptcy or is adjudicated a bankrupt, (b) a petition in bankruptcy is filed against either party, (c) either party becomes insolvent or makes an assignment for the benefit of its creditors or an arrangement for its creditors pursuant to any bankruptcy law, (d) either party discontinues its business, or (e) a receiver is appointed for either party or its business.
D. Upon termination of this Agreement, Multimedia Intellectual Property Co. shall have the right to fill existing orders for the Licensed Products. Multimedia Intellectual Property Co. shall further have the right to sell off existing copies of the Title then in stock for a period of ____ (__) months from the date of termination. Content Provider shall have the right to verify the existence and validity of the existing orders and existing copies of the Licensed Products then in stock upon reasonable notice to Multimedia Intellectual Property Co.
E. Termination of this Agreement shall not extinguish any of Multimedia Intellectual Property Co.’s or Content Provider’s rights or obligations under this Agreement which by their terms continue after the date of termination. Termination of this Agreement shall be without prejudice to any other rights that either party may have at law or in equity, and shall not effect the rights of end-users to continue to use all distributed copies of the Titles.

IX. Confidential Information
A. Neither party shall disclose any of the Confidential Information of the other party during or after the time this Agreement is in effect. Information shall not be deemed confidential if it:
1. is now or hereafter becomes, through no act or omission on the part of the receiving party, generally known or available within the industry, or is now or later enters the public domain through no act or omission on the part of the receiving party;
2. was acquired by the receiving party before receiving such information from the disclosing party and without restriction as to use or disclosure;
3. is hereafter rightfully furnished to the receiving party by a third party, without restriction as to use or disclosure;
4. is information which the receiving party can document was independently developed by the receiving party;
5. is required to be disclosed pursuant to law, provided the receiving party uses reasonable efforts to give the disclosing party reasonable notice of such required disclosure, and cooperates in any attempts by the disclosing party to obtain a protective order or other similar protection against disclosure of the Confidential Information; or
6. is disclosed with the prior written consent of the disclosing party.

X. Freedom to Compete
A. Subject to the terms of this Agreement, each party agrees that nothing in this Agreement will be construed as restricting or prohibiting either party from lawfully competing with the other party in any other aspect of its business, including, but not limited to, the development or distribution of other products or services, or the publishing of products competitive with those contemplated under this Agreement, and each party agrees to continue to compete vigorously in all other such aspects of its business.

XI. Export Controls
A. Each party assures the other that it will comply with all export laws and restrictions and regulations of the Department of Commerce or other United States or foreign agency or authority, and not export, or allow the export or reexport of any Title in violation of any such restrictions, laws or regulations.

XII. Assignment
A. This Agreement and the rights granted hereunder are personal to the parties and shall not be assigned without the prior written consent of the other party; provided, however, that Multimedia Intellectual Property Co. may assign this Agreement to any person or entity to whom it transfers all or substantially all of its rights in the Licensed Products as part of a corporate reorganization, merger, or sale of all or substantially all of its assets or of the assets of the publishing group of Multimedia Intellectual Property Co.. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties and their respective successors and permitted assigns.

XIII. Integration
A. This Agreement sets forth the entire agreement between the parties with respect to the subject matter hereof, and may not be modified or amended except by written agreement executed by the parties hereto.

XIV. Severability
A. If any provision of this Agreement is declared by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this Agreement shall continue in full force and effect, and the invalid provision shall be replaced by the legal provision which most closely achieves the intent of the invalid provision.

XV. Governing Law
A. This Agreement shall be governed by the laws of     applicable to agreements made and to be wholly performed therein (without reference to conflict of laws). The parties agree that the only proper venues for any action to enforce this agreement shall be    . Content Provider hereby submits to the jurisdiction of these courts, and waives any right it might otherwise have to claim lack of personal jurisdiction or forum non conveniens. In any action to enforce the terms of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and expenses.

XVI. Force Majeure
A. If the performance of this Agreement or any obligation under it (except payment of monies due) is prevented, restricted or interfered with by reason of acts of God, acts of government, or any other cause not within the control of either party, the party so affected shall be excused from such performance, but only for so long as and to the extent that such a force prevents, restricts or interferes with that party’s performance. Notwithstanding the foregoing, the non-affected party may terminate this Agreement immediately upon written notice if the force majeure circumstances continue for more than _____ (___) days. In the event of a force majeure situation, Multimedia Intellectual Property Co. may allocate the Titles among its distributors, licensors, licensees and customers in the manner it, in its sole discretion, deems appropriate.

XVII. Independent Contractor
A. Content Provider shall be deemed to have the status of an independent contractor, and nothing in this Agreement shall be deemed to place the parties in the relationship of employer-employee, principal-agent, partners or joint venturers. Content Provider shall be responsible for any withholding taxes, payroll taxes, disability insurance payments, unemployment taxes and other similar taxes or charges on the payments received by Content Provider hereunder.

XVIII. Notices
A. The address of each party hereto as set forth above shall be the appropriate address for the mailing of notices, checks and statements, if any, hereunder. Notices sent to Multimedia Intellectual Property Co. shall be sent to the attention of    . Notices sent to Content Provider shall be sent to the attention of    . All notices which either party is required or may desire to serve upon the other party may be served personally or by certified or registered mail (postage prepaid), reputable commercial courier, or by facsimile transmission, and shall be effective upon receipt. Either party may change its address by written notice to the other.

XIX. No Brokers
A. All negotiations relative to this Agreement have been carried on by the parties directly, without the intervention of any person as a result of any act of either party (and, so far as known to either party, without the intervention of any such person) in such manner as to give rise to any valid claim against the parties hereto for brokerage commissions, finder’s fees or other like payment.

XX. Waiver
A. No waiver by either party, whether express or implied, of any provision of this Agreement shall constitute a continuing waiver of such provision or a waiver of any other provision of this Agreement. No waiver by either party, whether express or implied, of any breach or default by the other party, shall constitute a waiver of any other breach or default of the same or any other provision of this Agreement.

IN WITNESS WHEREOF, the parties have caused this Development Agreement to be executed on the date set forth above by their duly authorized representatives.

[Content Provider’s Name]

By:
[Name]
[Title]

Multimedia Intellectual Property Co.

By:
[Name]
[Title]

EXHIBIT A
Description of the Property