DISTRIBUTOR’S AGREEMENT

• 1. PREAMBLE
• 1.1 KAZZONG has available the technical infrastructure (hard- and software) for digitally dis-tributing music recordings in the Internet (referred to hereinafter as “Kazzong Service”). The main element of the Kazzong Service is a Web-based application (referred to here-inafter as “Kazzong Player”), which can be integrated in any website using the right HTML code, provided the operator of the respective website so permits. With the Kazzong Player, end consumers visiting the respective website can either (a) use individual streaming to play and listen free of charge to the music recordings (the “KAZZONG Rep-ertoire”) (excerpts or full-track), which are connected to and displayed on the respective Kazzong Player and which are stored on a server operated and controlled by KAZZONG (the “Kazzong Server”) (“streaming-on-demand”), and/or (b) buy digital copies of said music recordings from KAZZONG in MP3 format and download them permanently on to their terminal (e.g. PC) (“download-on-demand”). In addition, the end consumers can see on the Kazzong Player any artwork pertaining to the music recordings and connected to the Kazzong Player. KAZZONG can place advertisements for third-party products (e.g. small banners or links) on the Kazzong Player.
• 1.2 KAZZONG acquires the rights in the music recordings offered via the Kazzong Service under license agreements with the respective proprietors of the rights (e.g. artists, labels, content aggregators, jointly referred to hereinafter as “Licensor(s)”). The music recordings are uploaded by the respective Licensors on to the Kazzong-Server and made accessible to end consumers via one or more Kazzong Players installed by each Licensor individually for its music recording(s) (thus a Licensor may e.g. install a separate Kazzong Player for each album by a particular artist). The Kazzon Players can be inte-grated by Licensors in any websites through which they want to make their music re-cordings accessible. If a Licensor so wishes, it may also have its music recordings made accessible through websites operated or mediated by KAZZONG’s distribution partners (“Distributors”).
• 1.3 Apart from using Distributors, the distribution of music recordings by the Kazzong Service is also designed such that end consumers may effect re-distribution. Re-distribution by end consumers means that a Kazzong Player to which access is provided on a website can be integrated in any other website at any time by end consumers using the HTML code thus made publicly accessible. The Kazzong Player includes a relevant function in order to simplify this for end consumers.
• 1.4 The Distributor is able to contribute towards extending the scope of the Kazzong Service by integrating Kazzong Players in its own websites and/or in third-party websites to which it has access. The parties therefore agree as follows:
• 2. DISTRIBUTOR’S AUTHORISATION
• Der VERTRIEBSPARTNER ist für die Vertragslaufzeit berechtigt, die von ihm je-weils im Kazzong-System angefragten und vom LIZENZGEBER (generell oder nach entsprechender Anfrage durch KAZZONG) freigegebenen Kazzong-Player nach Maßgabe der Bestimmungen dieses Vertrages, insbesondere der Regelungen in Ziffern 2 und 3 in von ihm ausgewählte und von KAZZONG jeweils im Kazzong-System freigegebene Webseiten zu integrieren. Der VERTRIEBSPARTNER erhält hierzu einen entsprechenden HTML-Code. Der VERTRIEBSPARTNER muss die Webseiten, in die er den Kazzong-Player integrieren möchte, jeweils in dem dafür vorgesehenen System-Bereich des Kazzong-Dienstes anmelden. Der VERTRIEBSPARTNER ist erst nach der Freigabe einer Webseite durch KAZZONG im Kazzong-System berechtigt, den Kazzong-Player in die von ihm angemeldete Webseite zu integrieren. Der VERTRIEBSPARTNER nimmt zur Kenntnis, dass die LIZENZGEBER die im Rahmen des Kazzong-Dienstes angebotenen Musikauf-nahmen jederzeit zurückziehen können und dass der VERTRIEBSPARTNER auch bei den von ihm auf den eigenen Webseiten oder den Webseiten Dritter installier-ten Kazzong-Playern keinen Anspruch auf die (weitere) Verfügbarkeit bestimmter Musikaufnahmen hat.
• 3. TERMS FOR INTEGRATING A KAZZONG PLAYER IN A WEBSITE
• The following additional restrictions apply even after a Kazzong Player has been released for integration in the websites registered by the Distributor:
  The Distributor may not integrate the Kazzong Player in websites containing any illegal content or material, and/or containing content or material or originating from providers suited to damage KAZZONG’s image, name and/or reputation. In particular, the Kazzong Player may not be integrated on websites containing pornographic or fascist material or any content harmful to young people. Notwithstanding any further statutory and contrac-tual rights, KAZZONG is entitled at any time to demand that the Distributor immediately remove a Kazzong Player from websites conflicting with the above terms. Moreover, KAZZONG is entitled in any such case to immediately block the entire Content on the Kazzong Server that is connected to the Kazzong Player integrated on the website con-cerned. If the Distributor fails to comply with a written demand from KAZZONG to remove a Kazzong Player from a website within 2 working days, then KAZZONG shall be entitled to approach the provider of the website concerned and demand the removal of the Kazzong Player, and in the event of its refusing to do so to take legal action to assert the claim for its removal.
• 4. SALES COMMISSION
• 4.1 For all the music recordings sold during the contractual term through Kazzong Players on the websites registered and released in accordance with Item 2 above, the Distributor shall receive commission amounting to 3 % (three per cent) (referred to hereinafter as “Sales Commission”) of the gross price (= end consumer price incl. VAT) attained by KAZZONG from such sales. On payment of the Sales Commission, all the services ren-dered / yet to be rendered by the Distributor under this Agreement shall be deemed paid for.
• 4.2 The Sales Commission shall be settled on a monthly basis. For the purpose of settling its Sales Commission, the Distributor undertakes to open an account with one of the payment providers used by KAZZONG (referred to hereinafter as the “PP Account”). The Sales Commission shall be paid by KAZZONG into the PP Account as a credit balance in line with tax regulations. In order to simplify administrative aspects, amounts less than EUR 20 shall not be credited to the PP Account until the end of the calendar year. In this context, the Distributor is under obligation to immediately provide KAZZONG with its value-added tax identification number (VAT ID), or to disclose same without delay later on if it only acquires it after commencement of the contractual term.
• 4.3 The Distributor is responsible for paying tax on the amounts itself. The Distributor under-takes to immediately inform KAZZONG unsolicited if its turnover tax status alters. KAZZONG shall not pay any income tax, corporation tax or comparable taxes for the Distributor which are levied in connection with the conclusion and performance of this Agreement.
• 5. DISTRIBUTOR’S OBLIGATIONS
• The Distributor shall assume the following obligations during the contractual term:
• - A link to KAZZONG shall be placed in a prominent position on the Distributor’s website registered with KAZZONG, either on the start page or on a separate page which can be reached from the start page with a single click (in this case, the link must be immediately recognisable on the start page).
• - The Distributor may not link music provided by third parties or advertise for it.
• - An advertisement for the Kazzong Service shall be placed in a prominent position on the Distributor’s aforementioned website. Moreover, the Distributor shall regu-larly refer to the Kazzong Service in its newsletters.
• - The Distributor must disclose the necessary technical parameters to KAZZONG so that KAZZONG can set up the transmission of the data and songs. If anything has to be altered or installed on its website, the Distributor shall pay the costs incurred.
• 6. GUARANTEE, RELEASE & DISCHARGE
• The Distributor guarantees that it is entitled to integrate either itself or through third par-ties the Kazzong Players it has requested in the websites it has registered in accordance with Item 2. The Distributor shall release and discharge KAZZONG on first demand from all and any claims asserted by the operators of these websites in connection with the in-tegration of the Kazzong Players. The Distributor shall refund to KAZZONG all and any reasonable costs incurred in connection with warding off such claims, in particular the costs for legal defence (e.g. lawyers’ fees and court costs).
• 7. RIGHTS CLEARANCE FOR THE KAZZONG REPERTOIRE
• KAZZONG shall clear the rights in the music recordings, in the underlying music works and in the other content offered through the Kazzong Players that are required for operat-ing the Kazzong Service and for using the Kazzong Repertoire in the context of the Kaz-zong Service. The same applies to any technology and software used in connection with the Kazzong Service. In this respect, the second and third sentence of Item 6 apply by analogy in the Distributor’s favour.
• 8. LIABILITY
• 8.1 KAZZONG shall only be liable to the Distributor for compensation under this Agreement or otherwise if and insofar as:
• - the losses or damage are due to intent or gross negligence on KAZZONG’s part, or
• - KAZZONG has inflicted injury to life or limb or health damage on the Distributor due to slight negligence, or breached a cardinal duty.
• 8.2 The limitation of liability pursuant to Item 8.1 shall not apply to liability under mandatory product liability law, nor shall it apply insofar as KAZZONG has assumed a guarantee for the quality of a contractual product or service, or if the contractually agreed quality is meant to safeguard the Distributor against specific consequential damage.
• 8.3 If KAZZONG is liable for slight negligence under the above provisions, then its liability shall be limited to the pecuniary losses perceptible to KAZZONG on taking the circum-stances into account when it concluded the contract, or which typically occur in cases of this kind of breach of contract.
• 8.4 The limitations of liability pursuant to Item 8.3 apply accordingly to losses sustained due to intent or gross negligence on the part of KAZZONG’s vicarious agents.
• 8.5 Derogating from the statutory regulation, the period of limitation for compensation claims by the Distributor arising from contractual violations that are not due to a defect in a product or service or to tort shall be two years, if the compensation claim is based on negligent conduct by KAZZONG and is for injury to life or limb or deprivation of personal liberty. Said period of limitation shall commence on knowledge of the circumstances substantiating the claim and of the culpable person either being gained or failing to be gained for reasons of gross negligence. Derogating from this, any compensation claim shall become statute-barred (a) five years after the date on which it was created, irrespective of when knowledge was gained or failed to be gained for reasons of gross negligence; or (b) fifteen years after the breach of duty was committed, irrespective of the date on which the claim was created and of when knowledge was gained or failed to be gained for reasons of gross negligence. The shorter period shall be decisive.
• 9. CONTRACTUAL TERM
• This Agreement is reached for a fixed term of 12 months. It shall automatically be re-newed for 12 months at a time unless either party gives written notice terminating it 3 months before the expiry of the respective term. The right to give extraordinary notice for important cause remains unaffected. An important cause for KAZZONG shall be deemed to exist e.g. if KAZZONG discontinues operating the Kazzong Service.
• 10. MISCELLANEOUS
• 10.1 This Agreement definitively reflects the content of the contractual agreements reached by and between the parties, and replaces all and any previous agreements between the par-ties on the contractual subject-matter. No ancillary agreements, including verbal ones, have been reached. Amendments or supplements to this Agreement (including this clause on written form) have to be done in writing.
• 10.2 If any of the provisions of this Agreement is or becomes null and void or impracticable, this shall not affect the validity or practicability of the remaining provisions. In any such case, the parties shall agree a provision approximating the invalid or impracticable one as nearly as possible in business terms.
• 10.3 German law applies. Venue shall be Munich.