THIS AGREEMENT is made the day of 2005 BETWEEN:
Exhibit
10.4
THIS
AGREEMENT
is made
the day of 2005
BETWEEN:
(1)
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FREMANTLEMEDIA
NORTH AMERICA, INC.
of
0000 Xxxxxxxx, 00xx
xxxxx, Xxx Xxxx, XX 00000, XXX (“Fremantle”);
and
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(2)
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FLUID
AUDIO NETWORKS, INC.
of
0000 Xxxxx Xx Xxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000, XXX
(“FAN”)
(each a “Party”
or collectively the “Parties”).
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INTRODUCTION
(A)
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FAN
is an internet-focused music services company with promotional and
marketing distribution channels;
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(B)
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Fremantle
owns or controls the format of the television programme “American Idol” in
the Territory (“American
Idol”);
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(C)
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Fox
Broadcasting Corporation (“Fox”)
is the broadcaster of American Idol in the Territory and operates
the
official American Idol web site at xxxx://xxx.xxxxxxxxx.xxx
(the “American
Idol Site”);
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(D)
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Fremantle
wishes to license to FAN, and FAN agrees to license from Fremantle,
in
accordance with the terms and conditions in this Agreement, the exclusive
rights to use the American Idol brand with FAN’s online music service
whereby users can submit their own songs and performances to be listened
to and judged by the online audience (“American
Idol Underground”).
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NOW
IT IS
HEREBY AGREED AS FOLLOWS:
1.
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DEFINITIONS
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The
following words and phrases shall have the following meanings unless the context
otherwise requires:
a)
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“Affiliate”
means any corporation or other business entity that directly or indirectly
controls, is controlled by, or is under common control with a party.
Control means direct or indirect ownership of or other beneficial
interest
in fifty percent (50%) or more of the voting stock, other vesting
interest, or income of a corporation or other business
entity.
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b)
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“Bank
Guarantee”
means a guarantee from a reputable lending institution ensuring that
the
liabilities of FAN pursuant to this Agreement will be met.
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Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
c)
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“Confidential
Information”
means any
and all information relating to the trade secrets, operations, processes,
plans, intentions, product information, know-how, designs, market
opportunities, transactions, affairs and/or business of the Parties
and/or
to their customers, clients, holding companies and/or subsidiaries
contained in or on any medium or format. For the avoidance of doubt,
the
User Data shall be Confidential Information of Fremantle, except
where the
User has opted-in to receive communications from FAN.
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d)
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“Distribution
Channels” means
web sites approved by Fremantle in writing, such approval not to
be
unreasonably withheld or delayed. For the purposes of this provision,
the
American Idol Site shall be considered an approved web site.
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e)
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“eBlasts”
means email messages sent to database associated with American Idol
Site
which promote, inter alia, American Idol Underground.
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f)
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“Guaranteed
Payment”
means the amount guaranteed to be paid by FAN to Fremantle in accordance
with the provisions of Clause 7 of this Agreement.
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g)
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“Intellectual
Property Rights”
means copyright, database right, patents, registered and unregistered
design rights, registered and unregistered trade marks and all other
industrial, commercial or intellectual property rights existing in
any
jurisdiction and all rights to apply for the same.
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h)
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“Language”
means the English language.
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i)
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“Launch
Date” means
the date which is seven (7) months from date of this
Agreement.
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j)
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“Net
Income”
means gross income from all revenue streams derived from FAN’s use of the
Property, including but not limited to, music uploading fees &
promotions, subscriptions, advertising, integrated sponsorships and
premium services, with no deductions therefrom, save for administrative
expenses (such administrative expenses not to exceed *% of all
revenue).
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k)
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“Property”
means
the title, graphics (characters, character names, character images
and
likenesses), format and trade marks (registered or unregistered)
contained
in or derived from American Idol and all Intellectual Property Rights
related thereto.
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l)
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“Quarter
Date” means
31 March, 30 June, 30 September and 31 December each year during
the
Term.
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m)
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“Royalties”
means
the royalties referred to in Clause 6 herein.
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Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
n)
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“Royalty
Rate”
means **% of FAN’s Net Income. Any deviation therefrom shall be subject to
the prior written approval of Fremantle on a case by case
basis.
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o)
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“Specification”
means
the detailed description of the features and functionality of American
Idol Underground as agreed by the Parties and set out in Schedule
1.
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p)
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“Support
Services”
means the provision of any new version, upgrade, error correction,
bug
fix, patch, work around, enhancement, addition or other update of
American
Idol Underground by FAN, as further defined in Schedule 2.
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q)
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“Term”
means
three (3) years from date of this Agreement, subject to the termination
provisions in Clause 12 and the renewal provisions in Clause
3.
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r)
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“Territory”
means the World.
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s)
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“User”
means any person who registers for American Idol Underground.
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t)
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“User
Communications” means
any content or material sent or delivered by a User to or through
American
Idol Underground.
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u)
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“User
Data” means
all personal data relating to Users including their email addresses,
usernames, passwords and any other personal information that is collected,
stored, or maintained by FAN.
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References
to Clauses and Schedules are to Clauses and Schedules of this
Agreement.
2.
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GRANT
OF RIGHTS
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a)
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In
consideration of the payments and mutual promises contained in this
Agreement Fremantle grants to FAN the exclusive right to use and
exploit
the Property in connection with FAN’s online music service, and to brand
and market such service as American Idol Underground in the Language
in
the Territory via the Distribution Channels during the Term, subject
to
and in accordance with the terms and conditions set out in this Agreement.
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b)
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FAN
shall not use or deal with any sub-contractors or sponsors in connection
with this Agreement without Fremantle’s prior written consent, such
consent not to be unreasonably withheld or delayed provided FAN procures
direct undertakings of confidentiality and assignment of Intellectual
Property Rights with respect to the Property in favour of Fremantle
consistent with any of FAN’s obligations under this Agreement. For the
avoidance of doubt, FAN shall remain liable for the acts and omissions
of
any sub-contractors or sponsors that it engages in connection with
this
Agreement.
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Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
3.
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RENEWAL
& EXTENSION RIGHTS
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a)
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FAN
shall have the right to renew this Agreement for a further one year
period
(ie. Year 4 - beginning upon the third anniversary of the date of
this
Agreement) following expiry of the Term (the “Extended
Term 1”)
on the same terms and conditions provided that the Guaranteed Payment
for
the Extended Term 1 shall be US$***** and PROVIDED that FAN achieves
the
Guaranteed Payment for Year 3 of the Term through the payment of
Royalties
and fully complies with its obligations under this Agreement.
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b)
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FAN
shall have the right to further renew this Agreement for another
one year
period (ie. Year 5 - beginning upon the fourth anniversary of the
date of
this Agreement) following expiry of Extended Term 1 (the “Extended
Term 2”)
on the same terms and conditions provided that the Guaranteed Payment
for
the Extended Term 2 shall be US$***** and PROVIDED that FAN achieves
the
Guaranteed Payment for Year 4 of the Term through the payment of
Royalties
and fully complies with its obligations under this Agreement.
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c)
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FAN
shall have first right of refusal to develop American Idol Underground
in
other languages, subject to separate terms and conditions to be agreed
in
good faith between FAN and Fremantle’s representative in the relevant
territory to which the language extension relates.
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4.
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FAN’S
OBLIGATIONS
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FAN
agrees that:
a)
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it
shall develop American Idol Underground in accordance with the
Specification;
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b)
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it
shall use best endeavours to implement American Idol Underground
on a
minimum of one Distribution Channel on or before the Launch
Date;
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c)
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it
shall make any changes to American Idol Underground as reasonably
requested in writing by Fremantle;
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d)
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it
shall ensure that at all times American Idol Underground functions
and
performs in accordance with the Specification;
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e)
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it
shall obtain Fremantle’s prior written approval in relation to all uses of
the Property, in accordance with Clause 8 herein;
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Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
f)
|
it
shall be responsible for all consents, releases and licences (and
shall
provide Fremantle with written evidence thereof) in connection with
any
applicable clearance rights including images and music;
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g)
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American
Idol Underground is intended for original content only and shall
not
rebroadcast or use any performances from the American Idol series
unless
cleared and paid for by FAN and subject to separate terms and
conditions;
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h)
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it
shall pre-screen American Idol Underground content for quality standards,
including but not limited to, obscenity, libellous threat and copyright
infringement;
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i)
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it
shall support all Users as required as well as providing the Support
Services, at its own cost;
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j)
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it
shall provide Fremantle with reports and access to information as
stipulated in Clause 6;
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k)
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it
shall provide Fremantle, within 30 days of signature of this Agreement,
with a marketing plan, including planned network distribution, for
approval;
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l)
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it
shall obtain and submit to Fremantle Bank Guarantees in relation
to the
Guaranteed Payment for each Quarter of the Term. The initial Bank
Guarantee shall be in place within sixty (60) days from the date
of this
Agreement and shall be for the amount of US$*****;
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m)
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it
shall use best endeavours to generate cross-promotion with other
licensees
of Fremantle; and
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n)
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it
shall fulfil any additional obligations as outlined herein.
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5.
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FREMANTLE’S
OBLIGATIONS
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Fremantle
agrees it shall:
a)
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not
unreasonably withhold or delay approval of all uses of the
Property;
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b)
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use
best endeavours to provide fair promotion of American Idol Underground,
including integration through the American Idol Site and “eBlasts” to the
database associated therewith;
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c)
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use
best endeavours to generate cross-promotions with third party sponsors
and
licensees;
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d)
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use
best efforts to introduce FAN to current sponsors and advertisers
of
American Idol in the Territory;
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Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
e)
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use
best endeavours to secure tickets (the number of which shall be determined
by Fremantle) for American Idol shows for promotional use by FAN,
excluding the finale show;
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f)
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use
best endeavours to provide above-the-fold placement on the American
Idol
Site’s homepage in the form of promotional banners (including, and in
particular, the audition pop-up banner), integration into newsletters
(including Fox newsletters, licensee newsletters, video emails and
other
interactive vehicles, subject to approval by Fremantle and Fox. The
service and promotion potential of the aforementioned must also be
deemed
satisfactory by Fremantle and Fox;
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g)
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detail
specific categories of good and services in which FAN’s field of potential
sponsors for American Idol Underground will be limited to the current
exclusive sponsors of American Idol series in such category. The
current
list of such categories and exclusive sponsors is set forth in Schedule
3.
Fremantle reserves the right to adjust or add to this list and shall
notify FAN accordingly; and
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h)
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use
best endeavours to facilitate FAN’s presence and participation in the
American Idol auditions for marketing and promotional
purposes.
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6.
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ROYALTIES
AND ACCOUNTING
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a)
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In
consideration for the rights granted under Clause 2, FAN shall pay
to
Fremantle, Royalties calculated at the Royalty Rate within thirty
(30)
days following each Quarter Date, payment to be made in such manner
as
shall be notified to FAN by Fremantle in writing. All FAN’s own bank
charges relating to payments in favour of Fremantle shall be borne
by FAN.
Such payment shall be accompanied by a full and accurate statement
of
account showing all Royalties due and owing under this Agreement
in
respect of the quarter ending on the Quarter Date.
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b)
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The
statement of account referred to in Clause 6 a) shall be in such
form as
Fremantle shall request, and as a minimum shall show amounts payable
by
Distribution Channel and by income stream (for example, subscriptions,
advertising, integrated sponsorships).
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c)
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FAN
shall pay to the Licensor interest at a rate of 2% per annum above
the
base rate of Bank of America from time to time accruing daily on
any
amount overdue to Fremantle under this Agreement and calculated ten
(10)
days from the date on which payment is due until the date payment
is
made.
|
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
d)
|
FAN
shall keep full and proper books of account relating to the exploitation
of the rights granted under this Agreement and shall retain all supporting
records relating thereto for a period of at least 3 years from the
end of
the calendar year to which they relate, and shall preserve such books
of
account throughout the Term and for at least 6 years after its termination
or expiry.
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e)
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Fremantle
or its representative shall have the right during normal business
hours
and on not less than 5 business days prior written notice to inspect
and
take copies of such books of account and records as referred to in
Clause
6 d). In the event that such audit or inspection reveals a deficiency
in
money paid to Fremantle under this Agreement then FAN shall immediately
pay the same to Fremantle together with interest from the date first
due
calculated at the rate referred to in Clause 6 c). If the inspection
establishes that the amount of Royalty paid to Fremantle in respect
of the
Royalty periods covered by the examination is inaccurate by $5,000,
or at
least 5% of the amount properly payable (whichever is the lesser
figure),
FAN shall also reimburse to Fremantle the costs of such inspection
including, but not limited to, the fees of any accountant retained
by
Fremantle in connection therewith.
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f)
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The
provisions of Clauses 6 d) and e) shall remain in effect notwithstanding
termination or expiry of this Agreement until the settlement of all
subsisting claims brought by Fremantle.
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7.
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GUARANTEED
PAYMENT
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a)
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FAN
agrees and accepts to pay to Fremantle for the use of the rights
granted
herein, the amount of US$********* (** **** ** **************** Dollars)
as Guaranteed Payment to be paid as follows:
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Advance
|
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US$*****
(********* US Dollars) upon signature of this Agreement.
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|
The
Advance may be applied against Royalties.
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|
Guarantees
|
|
Year
1 [beginning upon the date of this Agreement]:
|
|
US$*****
(*************** US Dollars) payable on or before 30 September 2005;
|
|
US$*****
(*********** US Dollars) payable on or before 31 December
2005;
|
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
Year
2 [beginning upon the first anniversary of the date of this
Agreement]:
|
|
US$*******
(****************************** US Dollars) payable on or before
the first
Quarter Date of Year 2;
|
|
US$*****
(*************************** US Dollars) payable on or before the
second
Quarter Date of Year 2;
|
|
US$*****
(******************************** US Dollars) payable on or before
the
third Quarter Date of Year 2;
|
|
Year
3 [beginning upon the second anniversary of the date of this
Agreement]:
|
|
US$*****
(*************** US Dollars) payable on or before the first Quarter
Date
of Year 3;
|
|
US$*****
(****************** US Dollars) payable on or before the second Quarter
Date of Year 3; and
|
|
US$*****
(******************** US Dollars) payable on or before the third
Quarter
Date of Year 3.
|
|
If
by each of the above-mentioned Guarantee payment dates, the total
sum of
Royalties paid to Fremantle by FAN is less than the Guarantee payment
due,
FAN shall immediately pay to Fremantle the difference between the
total
sum of Royalties paid and the Guarantee payment due for such
period.
|
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The
above-mentioned Guarantees may be cross-collateralized during the
initial
Term only.
|
|
b)
|
FAN
hereby agrees that in the event of termination of this Agreement,
pursuant
to Clause 12 below, the Guarantee (or any outstanding balance thereof
)
for the quarterly payment period during which termination took place
together with the next two (2) quarterly Guarantees shall become
immediately due and payable to Fremantle.
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8. USE
OF THE PROPERTY & INTELLECTUAL PROPERTY RIGHTS
a)
|
FAN
shall not use the Property in any way or do or permit there to be
done any
act which may be detrimental to or inconsistent with the good name,
goodwill, reputation and image of Fremantle or the
Property.
|
b)
|
FAN
shall not by virtue of this Agreement, obtain or claim any right,
title or
interest in or to the Property except the rights of use specifically
set
out in this Agreement and hereby acknowledges and agrees that the
benefit
of all use by it of the Property (including without limitation any
goodwill associated with the Property) shall at all times accrue
to the
benefit of Fremantle.
|
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
c)
|
FAN
shall use the Property as stipulated from time to time by Fremantle
and
shall observe all reasonable directions and guidelines set forth
in the
style guide and the way in which the Property is used in relation
to
American Idol Underground and all related
marketing/promotional/sponsorship concepts and materials, as further
outlined in Clause 8A.
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d)
|
FAN
shall not use the Property accompanied by other copyright works,
trade
marks (whether registered or not) or words describing American Idol
Underground unless the Property is sufficiently distinguished from
the
surrounding and adjacent text.
|
e)
|
FAN
shall not, and shall not authorise others to, at any time, whether
during
the Term or after termination of this Agreement, adopt or use any
trade
xxxx, symbol or device which incorporates or is confusingly similar
to, or
is a simulation or imitation of any of the Property or unfairly competes
with the Property. FAN shall not, and shall not authorise others
to, at
any time, whether during the Term or after termination of this Agreement,
apply anywhere in the world to register any trade marks or copyright
works
identical to or similar to the Property.
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f)
|
FAN
shall not, and shall not authorise others at any time, to use the
Property
as part of any corporate, business or trading name or style.
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g)
|
FAN
hereby recognises that any and all Intellectual Property Rights related
to
American Idol Underground (with the exception of the Intellectual
Property
Rights owned by FAN in respect of its online music service, including
the
trade xxxx “Underground”) shall be the sole property of Fremantle and
hereby agrees and accepts to execute the form of assignment as stipulated
by Fremantle for the purpose of assigning any such Rights to
Fremantle.
|
8A. TESTING
& APPROVALS
a)
|
FAN
shall conduct beta testing for American Idol Underground to ensure
that
American Idol Underground conforms to the Specification. FAN shall
submit
to Fremantle in sufficient time to enable FAN to meet the Launch
Date,
such digitized version(s) of American Idol Underground as described
in the
Specification. FAN shall, at its sole cost, correct any defects in
any
aspect of American Idol Underground reasonably identified by Fremantle
in
writing within seven (7) days after FAN’s delivery to Fremantle of the
same.
|
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
b)
|
Further
to Clause 8 c) above, Fremantle shall retain full right to
reasonably approve
the creative and design aspects of American Idol Underground including
without limitation all aspects of the look, feel, sound and appearance
of
American Idol Underground as they relate to the User’s experience of
American Idol. Any such approvals shall not be unreasonably withheld
or
delayed. Fremantle shall have the right to veto any changes in design
or
implementation of American Idol Underground that Fremantle determines
in
its sole discretion may devalue or negatively affect general perceptions
of American Idol or the Property; provided, however, such right shall
not
be used in a manner which negates the purpose of this
Agreement.
|
c)
|
Further
to Clause 8 c) above, FAN shall submit to Fremantle, for approval
in the
manner which Fremantle shall reasonably direct, all marketing,
advertising, promotional and other material (including prizing) on
which
the Property appears, or is intended to be used in relation to American
Idol Underground. Fremantle shall notify FAN within ten (10) days
of
receipt of such material submitted to it if it approves of such material.
Should Fremantle notify FAN that any of the material is unacceptable,
Fremantle shall provide FAN with written recommendations as to the
necessary changes to achieve approval, and FAN shall replace or amend
to
the satisfaction of Fremantle such material not approved by Fremantle.
If
the material is not approved and no notification as aforesaid is
made
within the said ten (10) days, then it shall be deemed disapproved.
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9.
|
WARRANTIES
|
a)
|
FAN
warrants to Fremantle that:
|
i)
|
it
has the full right, power and authority to enter into this Agreement
and
perform its obligations hereunder;
|
ii)
|
it
is not, and shall not be, in breach of any obligations of non-competition,
non-solicitation, non-dealing or confidentiality by entering into
and
performing its obligations under this Agreement and that it is not
aware,
as at the date of this Agreement of anything within its reasonable
control
which might, or shall, adversely affect its ability to perform its
obligations under this Agreement;
|
iii)
|
it
shall use all reasonable care and skill in the performance of its
obligations under this Agreement;
|
iv)
|
any
recommendations it makes to Fremantle in respect of American Idol
Underground or its implementation or use are made on the basis of
FAN’s
best judgment and solely in consideration of FAN’s and Fremantle’s best
commercial interests;
|
v)
|
American
Idol Underground shall conform to, and operate in accordance with,
the
Specification and, where applicable, the Support Services;
|
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
vi)
|
nothing
that it does in connection with American Idol Underground shall infringe
the Intellectual Property Rights of any third party. For the avoidance
of
doubt, the parties agree that FAN makes no such warranty with respect
to
the Property or any materials provided by Fremantle; and
|
vii)
|
no
fees, licenses, commissions, residuals, use payments or other like
payments shall become due or payable by Fremantle to any third party
in
connection with the services performed by FAN or the use of American
Idol
Underground.
|
b)
|
Fremantle
warrants to FAN that:
|
i)
|
it
has the full right, power and authority to enter into this Agreement
and
perform its obligations hereunder; and
|
ii)
|
any
content or material that it provides to FAN for inclusion or use
in
American Idol Underground, including the “American Idol” trade xxxx shall
not, to the best of its knowledge, infringe any third party Intellectual
Property Rights.
|
10.
|
INDEMNITY
AND INSURANCE
|
a)
|
Each
Party shall indemnify the other and hold the indemnified Party harmless
against all and any losses, costs, damages, liabilities, claims,
demands
and expenses suffered or incurred by the indemnified Party including
legal
expenses reasonably and properly incurred arising out of:
|
i)
|
any
breach by the indemnifying Party of any provision of this Agreement;
and
|
ii)
|
any
wilful or negligent act or omission by the indemnifying Party, its
employers, officers or agents.
|
b)
|
Whenever
any Party (the “Indemnifier”)
is required to indemnify another Party (the “Indemnified”)
the Indemnified shall:
|
i)
|
notify
the Indemnifier promptly on becoming aware of any matter or claim
to which
an indemnity relates;
|
ii)
|
not
make any admission or settlement in respect of such matter or claim
without the prior consent of the Indemnifier (such consent not to
be
unreasonably withheld or delayed); and
|
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
iii)
|
allow
the Indemnifier, where appropriate, to appoint legal advisers of
its
choice and to conduct and/or settle negotiations and/or proceedings
relating to such matter or claim or (where it is not appropriate
for the
Indemnifier to have conduct of such negotiations or proceedings)
the
Indemnified shall comply at the Indemnifier’s expense, with the
Indemnifier’s reasonable requests in the conduct of any such claim,
negotiations and/or proceedings.
|
c)
|
The
indemnity in Clause 10 a) shall not apply if and to the extent that
the
relevant losses, costs, damages, liabilities and/or expenses are
wholly or
directly due to:
|
i)
|
material breach
by the Indemnified of any of its obligations under this Agreement;
and/or
|
ii)
|
the
actions or omissions of the Indemnified.
|
d)
|
FAN
shall obtain and maintain at its own cost and expense throughout
the term
of this Agreement and for two (2) years thereafter, from a reputable
and
recognised insurance company, commercial liability insurance, including
errors and omissions insurance and product liability insurance and
other
appropriate insurance the form of which must be acceptable to Fremantle,
naming Fremantle and its Affiliates as additional named insureds
and
stipulating that the coverage afforded additional insureds is primary
and
any insurance maintained by additional insureds shall be excess only
and
non-contributing with the coverage provided under that policy. Such
policies shall as a minimum, provide protection against any and all
claims, demands and causes of action arising out of any errors contained
in, or infringement of Intellectual Property Rights or other rights
of
third parties arising out of, the services provided by FAN hereunder.
The
minimum amount of cover shall be US$1,000,000 per claim. The policy
shall
provide for at least 10 days prior written notice to Fremantle from
the
insurer in the event of any modification, cancellation or termination.
FAN
agrees to furnish Fremantle with a certificate of insurance evidencing
the
insurance referred to above within 30 days after execution of this
Agreement.
|
11.
|
CONFIDENTIAL
INFORMATION
|
a)
|
The
Parties agree that they shall keep any Confidential Information strictly
confidential during the term of this Agreement and for a period of
three
(3) years thereafter (the “Confidentiality
Period”)
and shall only use Confidential Information solely for the purposes
of
this Agreement. The Parties further agree that they shall not at
any time
during the Confidentiality Period disclose any Confidential Information
directly or indirectly to any third party without the other Party’s prior
written consent.
|
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
b)
|
Each
Party undertakes to take all such reasonable steps as shall from
time to
time be necessary to ensure compliance with the provisions of this
Clause
11 by its employees, consultants, agents and sub-contractors. Without
limiting the foregoing, each Party shall use at least that degree
of care
that it takes to protect its own confidential information of a similar
nature, but in no event less than reasonable care, and shall ensure
that
its employees and representatives who have access to the Confidential
Information have signed a non-use and non-disclosure agreement protecting
confidential information that is substantially similar in content
to the
Confidential Information, prior to the assignment to such employees
and/or
representatives of duties under this Agreement or other disclosure
of
Confidential Information to such employees and/or
representatives.
|
c)
|
The
provisions of this Clause 11 do not apply to any information to the
extent
that it is:
|
i)
|
in
the public domain otherwise than in the breach of this Agreement;
or
|
ii)
|
obtained
from a third party who is free to divulge such information;
or
|
iii)
|
required
to be disclosed by any court or regulatory body of competent jurisdiction
or disclosed where there is a statutory obligation to do so.
|
12.
|
TERMINATION
|
a)
|
Either
Party may terminate this Agreement by written notice to the other
if:
|
i)
|
the
other Party is in breach of any material term of this Agreement which
is
incapable of remedy or if capable of remedy is not remedied within
14 days
of the non-breaching Party notifying the breaching Party in writing
of the
same and requiring its remedy;
|
ii)
|
a
trustee, administrator or administrative or other receiver or other
encumbrancer is appointed over or takes any step with a view to taking
possession of all or any part of the assets of the other Party; or
|
iii)
|
the
other Party convenes a meeting of its creditors or proposes or makes
any
arrangement with its creditors or a petition is presented or a meeting
is
convened for the purpose of considering a resolution, or other steps
are
taken for making an administration order against or for the winding
up of
the other Party.
|
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
b)
|
Fremantle
may in addition terminate this Agreement by written notice to FAN
if:
|
i)
|
FAN
fails to pay any amount due under this Agreement in full within fifteen
(15) business days of the date such payment is due and such failure
is not
remedied within ten (10) business days of receipt of written notice;
|
ii)
|
any
of the FAN's representations or warranties shall prove to have been
incorrect when made or become materially incorrect and Fremantle’s rights
and entitlements under this Agreement are materially and adversely
affected;
|
iii)
|
FAN
fails to obtain Bank Guarantees as required pursuant to Clause 4
l) or is
forced to draw on such Guarantee at any time during the Term;
|
iv)
|
FAN
transfers, disposes of or threatens to transfer or dispose of any
part of
its assets which is likely in the reasonable opinion of Fremantle
to
prevent or materially to inhibit the performance by FAN of its obligations
under this Agreement;
|
v)
|
there
is a change in the ownership or control of FAN or, as the case may
be, the
ultimate parent company of FAN unless FAN provides Fremantle with
at least
thirty (30) days prior written notice of such change of ownership
or
control and in Fremantle’s reasonable and good faith opinion such change
of ownership and control shall not have a material adverse affect
on the
commercial position of Fremantle or any Affiliate of Fremantle;
or
|
vi)
|
FAN
ceases or threatens in writing to cease to carry on business.
|
13.
|
CONSEQUENCES
OF TERMINATION
|
a)
|
On
termination of this Agreement for any reason:
|
i)
|
FAN
shall immediately cease to use the Property and shall do nothing
which
might lead any person to believe that FAN is still entitled to use
the
Property or is in any way connected with Fremantle;
|
ii)
|
FAN
shall, on Fremantle’s instructions, within 7 days of termination, return
or destroy all materials bearing or related to the Property and all
Confidential Information of Fremantle existing in any medium or format
held by, or under the control of, FAN and give written notice to
Fremantle
of compliance with such instructions; and
|
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
iii)
|
FAN
shall within 30 days following the next Quarter Date provide to Fremantle
a statement of account and pay any sums due to Fremantle, in accordance
with Clause 6.
|
b)
|
Termination
of this Agreement shall be without prejudice to any other rights
or
remedies a Party may be entitled to at law or under this Agreement
and
shall not affect the accrued rights of or liabilities of either Party
nor
the coming into or continuance in force of any provision of this
Agreement
which is intended to come into force or continue on or after termination,
including without limitation the provisions of Clauses 4, 6, 7, 8,
9, 10,
11, 13, 14, 18, 20, 23 & 24.
|
14.
|
NOTICES
|
a)
|
Any
notice or other document required to be given under this Agreement
or any
communication between the Parties with respect to any of the provisions
of
this Agreement shall be in writing in English and be deemed duly
given if
signed by or on behalf of a duly authorised officer of the Party
giving
the notice and if left at, or sent by pre-paid registered or recorded
delivery post or facsimile transmission (with confirmation of
transmission) to, the address of the Party receiving such notice
as set
out at in Clause 14 c) below or as otherwise notified between the
Parties
for the purpose of this Clause.
|
b)
|
Any
such notice or other communication shall be deemed to be given to
and
received by the addressee:
|
i)
|
in
the case of hand delivery at the time the same is left at the address
of
or handed to a representative of the Party, provided that confirmation
of
receipt is obtained;
|
ii)
|
in
the case of post 2 business days following the date of posting, if
the
sender and recipient are in the same country, or 7 business days
following
the date of posting if they are not; and
|
iii)
|
in
the case of facsimile transmission (with confirmation of transmission)
on
the next following business day.
|
c)
|
Notices
to Fremantle should be addressed to:
|
Manager
of Interactive, FremantleMedia North America, 0000 Xxxxxxxx Xxx, Xxxxx 000,
Xxxxx Xxxxxx, XX 00000, XXX, Fax No x0 000 000 0000
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
With
a
copy to:
VP
Legal
and Business Affairs, FremantleMedia Licensing Worldwide, 0 Xxxxxxx Xxxxxx,
Xxxxxx X0X 0XX, Xxxxxx Xxxxxxx, Fax No x00 (0)00 0000 0000
Notices
to FAN should be addressed to:
Xxxxxx
Xxxxxxx, CEO, Fluid Audio Networks, Inc, 0000 Xxxxx Xx Xxxx Xxxxxx, Xxxxx 000,
Xxx Xxxxxxx, XX 00000, XXX, Fax No x000 000 0000
With
a
copy to:
General
Counsel, Fluid Audio Networks, Inc, 0000 Xxxxx Xx Xxxx Xxxxxx, Xxxxx 000, Xxx
Xxxxxxx, XX 00000, XXX, Fax No x000 000 0000.
15.
|
AMENDMENTS
|
This
Agreement may be amended only by instrument in writing signed by the Parties.
16.
|
SEVERABILITY
|
In
the
event any provision of this Agreement is held invalid, illegal, or
unenforceable, in whole or in part, the remaining provisions of this Agreement
shall not be affected thereby and shall continue to be valid and enforceable,
and, if, for any reason, a court finds that any provision of this Agreement
is
invalid, illegal or unenforceable as written, but that by limiting such
provision it would become valid, legal and enforceable, then such provision
shall be deemed to be written and shall be construed and enforced as so limited.
If the circumstances referred to above do not apply, the Parties agree to
attempt a substitute for any invalid or unenforceable provision a valid and
enforceable provision which achieves to the greatest extent possible the same
commercial effect as would have been achieved by the invalid or unenforceable
provisions.
17.
|
FORCE
MAJEURE
|
Notwithstanding
anything to the contrary in this Agreement neither Party shall be liable to
the
other for any failure or performance hereunder which is due to an act of God,
accident, fire, lockout, strike or other labour dispute, riot or civil
commotion, failure of technical or electrical facilities not within such Party's
reasonable control, act of public enemy, enactment, rule, order or act of
government (whether national or local), or other act or events of a similar
or
different nature beyond the reasonable control of either Party, any such act
or
event being deemed an event of force majeure. Should an event of force majeure
continue for a period of sixty (60) days or more, then either Party shall be
entitled to terminate this Agreement forthwith.
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
18.
|
GOVERNING
LAW
|
This
Agreement shall be construed in accordance with and shall be governed by the
law
of the State of California. If any disputes arise out of, under or in connection
with this agreement, including any dispute as to existence, validity,
enforceability, jurisdiction or the legal relationships established by or
relating to this Agreement, the Parties agree to the exclusive jurisdiction
of
the Courts of the State of California.
19.
|
INTERPRETATION
|
The
headings of the paragraphs contained in this Agreement are solely for the
purpose of reference, are not part of the agreement of the Parties and shall
not
affect the meaning or interpretation of this Agreement.
20.
|
WAIVERS
& REMEDIES
|
No
action
taken pursuant to this Agreement, including, any investigation by or on behalf
of any Party, shall be deemed to constitute a waiver by the Party taking such
action of compliance with any representations, warranties, agreements,
covenants, obligations or commitments contained herein or made pursuant hereto.
The waiver by any Party of a breach of any provision of this Agreement shall
not
operate or be construed as a waiver of any preceding or succeeding breach and
no
failure by any Party to exercise any right, privilege or remedy hereunder shall
be deemed a waiver of such Party’s rights, privileges or remedies hereunder or
shall be deemed a waiver of such Party’s rights to exercise the same at any
subsequent time or times hereunder. The rights, powers and remedies provided
in
this Agreement are cumulative and not exclusive of any rights, powers and
remedies provided by law.
21.
|
ASSIGNMENT
|
Fremantle
shall be entitled freely to assign or sub-license any of its rights and
obligations under this Agreement to any third party. This Agreement is personal
to FAN and FAN shall not be entitled to assign or sub-license any of its rights
and obligations under this Agreement to any third party unless it has first
obtained the written consent of Fremantle, such consent not to be unreasonably
withheld or delayed.
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
22.
|
ENTIRE
AGREEMENT
|
The
terms
and conditions of this Agreement (including the Schedules hereto) constitute
the
entire agreement between the Parties hereto pertaining to the subject matter
hereof, and, except for as provided herein, supersede all negotiations,
preliminary agreements and all prior and contemporaneous discussions and
understandings of the Parties in connection with the subject matters hereof.
23.
|
FURTHER
ASSURANCES
|
Each
Party shall sign, execute and deliver all such documents as may be reasonably
required by the other and shall do all such other acts and things as may be
necessary to give full effect to this Agreement.
24.
|
NO
AGENCY
|
This
Agreement shall not be deemed to constitute a partnership, agency or joint
venture or contract of employment between the Parties, and neither Party shall
have authority or power to bind the other or to contract in the name of the
other in any way or for any purpose.
IN
WITNESS WHEREOF the Parties hereto have executed this Agreement as of the date
first above written.
Fluid
Audio Networks, Inc. FremantleMedia
North America, Inc.
By:
___________________________
|
By:
___________________________
|
Name:
_________________________
|
Name:
_________________________
|
Title:
__________________________
|
Title:
__________________________
|
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
SCHEDULE
1
SPECIFICATION
An
online
music service that enables artists to submit songs for promotion through various
distribution channels. The service may include some or all of the following
elements and features:
1.
|
An
online radio player with standard PVR functionality;
|
2.
|
A
web-based upload tool for artists to submit content;
|
3.
|
An
on-demand playback feature for listeners;
|
4.
|
A
list of channels and/or genres;
|
5.
|
An
ecommerce service whereby listeners can purchase digital downloads
and/or
CDs;
|
6.
|
A
ratings tool whereby site visitors can rate or judge an artist and/or
song;
|
7.
|
A
ratings tool whereby site visitors can view the performance and other
metrics of each song;
|
8.
|
An
advertising feature whereby advertisers and/or sponsors can advertise
through the player;
|
9.
|
Any
other features, upgrades, and services that would reasonably be considered
a natural evolution of the
Specification.
|
The
following figure represents a typical 3-tiered architecture. A presentation
layer routes requests and receives content; a middle tier processes stream
requests and credit card transactions and a 3rd
tier
that encompasses the database. The following components are
represented:
·
|
FAN
Upload Server - This server receives the content such as
MP3s.
|
·
|
Request
Router - This server routes user requests to the Media
Gateway.
|
·
|
Software
Media Gateway - This server accesses the database, pushes content
to the
CDN and processes ranking business rules.
|
·
|
Content
Delivery Network (CDN) - CDN is the delivery network represented
logically. This network can exist in-house or be outsourced. The
design
accounts for both scenarios.
|
·
|
Databases
- These databases contain location URLs and other user
data.
|
·
|
FAN
Apps & Scripted Website.
|
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
SCHEDULE
2
SUPPORT
SERVICES
FAN
will
develop a Help feature for its website. The Help feature will contain
information for FAN’s customers regarding their use of the service. The Help
feature will include a robust “Frequently Asked Questions” or FAQ page,
including answers to the most common questions regarding the
service.
FAN
will
endeavour to ensure that customers receive, in addition to the Help feature
on
the website, at least one form of the following types of first tier customer
service:
1.
|
Telephone:
Telephone support includes a phone number that customers can call
to
receive live support from FAN’s customer service
representatives.
|
2.
|
Live
Chat: Live Chat support includes an “instant messenger” style interface
where customers can communicate live with a FAN representative through
an
instant messaging window.
|
3.
|
Email
Support: Email support includes a system where the customer can email
questions to the support center. The customer receives instant
notification that the email has been received, and then within a
reasonable period of time, receives a response from a FAN support
representative with assistance related to the customer support issue.
In
the case of Email support, FAN will endeavour to investigate customer
support issues within twenty-fours (24) hours of
notification.
|
When
FAN
receives a support issue that cannot be resolved through any of the above
methods, it will open a ticket and escalate the issue for review by a second
tier customer support team. The second tier team will endeavour to fix any
problems or bugs, and if the problem cannot be fixed, will take appropriate
action with regards to the customer, potentially including a refund of any
money
paid by the customer.
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
SCHEDULE
3
CATEGORIES/SPONSORS
Telephony
- Cingular
Automobile
- Ford
Beverage
- Coca-Cola
Portable
music players - iTunes
(pending)
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.