Consulting Agreement - OnlineFIlmSales.com LLC and MediaChase Ltd.
CONSULTING AGREEMENT
This Agreement is made as of September 30, 1999 (the "EFFECTIVE
DATE"), between Onlinefilmsales.com, LLC, a California limited liability
company, located at 1351 4th Street, Suite 227, Santa Monica, CA 90401
("COMPANY"), and Mediachase, Ltd., a Delaware corporation, located at 8286
Santa Monica Blvd., West Hollywood, CA 90046 ("CONSULTANT").
In consideration of the mutual covenants herein contained, the parties hereby
agree as follows:
1. DEFINITIONS. For purposes of this Agreement, capitalized terms shall have
the following meaning(s):
1.1 "COMPANY MATERIALS" means a copy of all applicable Company Marks
(as defined in Section 10.1) and all other concepts, methods, text, images and
materials (with all materials provided by Company, its advertising agency, or
Company's other agents, including any works of authorship) that Company will
provide to Consultant pursuant to the Project Schedule or otherwise in
connection with Consultant's services hereunder.
1.2 "COMPANY WEB SITE" means the Web Site to be developed by
Consultant and comprised of all the Works as described in the Project Schedule.
1.3 "ERROR" means any reproducible error, problem, or defect resulting
from: (a) an incorrect functioning of the Software that affects the
functionality of the Company Web Site(s) (based upon the specifications provided
by Company in the Project Schedule and approved by Consultant) in any material
respect; or (b) any failure of the Works delivered to Company hereunder to
materially meet the specifications in the Project Schedule.
1.4 "FINAL DELIVERABLE" means the final version of a Company Web Site
or other interactive services product that will be delivered to Company (based
upon the specifications provided by Company in the Project Schedule and approved
by Consultant) after successful completion of a mutually agreed upon testing
plan where Consultant is responsible for verifying that a Company Web Site
performs in accordance with the technical specifications in the Project Schedule
and the Company is responsible for verifying the business function correctness
of the Company Web Site(s) or other interactive services product.
1.5 "INTERNET" means the world-wide network of computers which
provides access to the World Wide Web.
Consultant________________ Company________________
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1.7 "PROJECT SCHEDULE" means the Project Schedule attached hereto as
Schedule 1.
1.8 "SOFTWARE" means computer programming/formatting code or operating
instructions developed by Consultant and used to create any portion of a Company
Web Site, incorporated into a Company Web Site, or used to operate a Company Web
Site or a Web Server in connection with a Company Web Site. Software includes,
for example, any previously developed files necessary to make forms, buttons,
check-boxes, and similar functions and underlying technology or components, such
as animation templates, interface programs which link multimedia and other
programs, customized graphics manipulation engines, and menu utilities.
1.9 "THIRD PARTY SOFTWARE" means any software or other computer
programming material (for example, a standard authoring program or platform or
off-the-shelf software) which is specifically identified in the Project Schedule
as being owned by a company or individual other than Consultant, is generally
available to the public, including Company, under published licensing terms, and
will be used in the development of or to display or run a Company Web Site.
1.10 "WEB BROWSER" means software designed to allow interactive access
to the World Wide Web, including without limitation, Navigator, Microsoft
Internet Explorer, Mosaic, MacWeb/WinWeb, Cello, and Lynx.
1.11 "WEB PAGE" means a document or file that is formatted using HTML,
Java or other programming language now or in the future used by Consultant and
that is intended to be accessible to Internet users with a Web Browser.
1.12 "WEB SERVER" means a computer operated by or for Company (a) that
Consultant or others use in making a Company Web Site available on the Internet
or intranet; or (b) that has a non-live version of a Company Web Site and that
is used for making and testing content or other changes to a Company Web Site
prior to making such changes available to the public over the Internet.
1.13 "WEB SITE" means a series of interconnected Web Pages that may
either be dynamically generated or may reside in a single directory or multiple
directories on a single Web Server or multiple Web Servers.
1.14 "WORKS" mean the items listed as "Works to be Delivered" in the
"Project Timetable, Works Delivery and Payment Schedule" in the Project
Schedule, each in the form that Consultant has specifically agreed to deliver
that item to Company.
1.15 "WORLD WIDE WEB" means all of the Web Pages that are accessible to
a typical computer user with appropriate access to the Internet using a Web
Browser.
Consultant________________ Company________________
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2. SERVICES.
2.1 PROJECT SCHEDULES. Consultant has and shall continue to provide
certain services to Company, including, by way of example and not by limitation,
information architecture development, website design, website content
production, and technical consulting ("SERVICES"), all as more fully described
and specified on the project schedules that shall, from time to time, be defined
and executed by the parties and attached to this Agreement (each, a "PROJECT
SCHEDULE"). The initial Project Schedule has been attached hereto as SCHEDULE 1,
(relating to the Onlinefilmsales.com project). Each Project Schedule shall
include a description of services to be performed and a detailed budget for such
Project Schedule, along with any other supplemental or differing terms from
those contained herein. No Project Schedule is valid until executed by both
parties. Consultant will complete the Company Web Site(s) on the timetable
established in the "Project Timetable, Works Delivery and Payment Schedule" in
the Project Schedule (the "PROJECT TIMETABLE"). Company will provide to
Consultant the Company Materials, including all media elements, materials,
timely approvals necessary for Consultant to complete the Company Web Site(s) on
the Project Timetable.
2.2 MANNER OF PERFORMING SERVICES. Consultant may engage qualified
subcontractors in the performance of the services hereunder, provided however
that Company may have particular subcontractor(s) removed from the project, in
its reasonable discretion, upon two weeks notice to Consultant. Before any
Consultant employee, consultant, agent or subcontractor performs services in
connection with this Agreement, the employee, consultant, agent or subcontractor
and Consultant must have entered into a written agreement containing
"work-made-for-hire" and confidentiality provisions substantially equivalent to
those contained herein. Such agreement shall be substantially in the form
attached hereto; provided, however, that Company pre-approves the existing
agreements listed on Schedule 2 hereto.
2.3 CHANGE ORDERS. The project managers for the parties shall be
authorized to approve or disapprove certain changes to the work, schedules and
other aspects of the services, in their mutual discretion, as is more
particularly described in the attached Project Schedule. Major modifications to
the overall scope of work, budget, or the specifications in a Project Schedule,
however, shall require execution of a written change order by both parties to
this Agreement (a "CHANGE ORDER") in a form mutually acceptable to the parties.
Each Change Order complying with this section shall be deemed to be an amendment
to the applicable Project Schedule and will become part of this Agreement.
2.4 THIRD PARTY SOFTWARE. Development and use of a Company Web Site
may involve Third Party Software. Unless otherwise specified in the Project
Schedule, Consultant will be responsible for payment for, and entering into
appropriate licensing agreements concerning Third Party Software required for
the development of the
Consultant________________ Company________________
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Company Web Site(s), which payments will be included in
the agreed upon budget. Unless otherwise specified in the Project Schedule, the
Company will be responsible for payment for, and entering into appropriate
licensing agreements concerning use of Third Party Software required to operate
(i.e., run and display) the Company Web Site(s) or any other licensing
agreements for which Consultant is not responsible hereunder.
2.6 CONSULTANT PROVIDED MATERIALS. With the exception of the Company
Materials and the Third Party Software, Consultant will provide all other
graphics, text, drawings, and other materials required to produce the Company
Web Site(s) or complete any applicable interactive services as set forth in the
Project Schedule.
3. TERM AND TERMINATION. This Agreement shall commence on the Effective Date
and shall continue for a period of one (1) year, unless earlier terminated by
either party upon 30 days' written notice, provided that termination by
Consultant shall not be effective until completion of any specifically defined
term set forth on any Project Schedule applicable at the time of such notice,
unless otherwise agreed.
3.1 DEFAULT. In the event that either party hereto materially defaults
in the performance of any of its duties or obligations under the Agreement and
does not substantially cure such default within 30 days, or fails to commence a
cure within 10 days, after being given written notice specifying the default,
then the non-defaulting party may, by giving written notice thereof to the
defaulting party, terminate this Agreement as of a date specified in such notice
of termination; provided, however, in no event shall the cure for any Company
payment default (other than a payment which is disputed in good faith) hereunder
continue for longer than 5 business days after notice of the default.
3.2 PROJECT SCHEDULE. In the event that either party hereto materially
defaults in the performance of any of its duties or obligations under a Project
Schedule and does not substantially cure such default within 30 days, or fails
to commence a cure within 10 days, after being given written notice specifying
the default, then the non-defaulting party may, by given written notice thereof
to the defaulting party, terminate the Project Schedule as of a date specified
in such notice of termination; provided, however, in no event shall the cure for
any Company undisputed payment default hereunder continue for longer than 5
business days after notice of the default.
3.3 INSOLVENCY. In the event that either party hereto becomes or is
declared insolvent or bankrupt, is the subject of any proceedings relating to
its liquidation, insolvency or for the appointment of a receiver or similar
officer for it, makes an assignment for the benefit of all or substantially all
of its creditors, or enters into an agreement for the composition, extension, or
readjustment of all or substantially all of its obligations, then the other
party hereto may, by giving written notice thereof to such party, terminate this
Agreement as of a date specified in such notice of termination.
Consultant________________ Company________________
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3.4 EFFECT OF TERMINATION. Upon termination of this Agreement, Company
shall be obligated to pay Consultant for all services rendered pursuant to any
outstanding Project Schedules of Work through the effective date of such
termination. Upon termination of a Project Schedule, Company shall be obligated
to pay Consultant for all services rendered pursuant to the Project Schedule
through the effective date of such termination. Termination of this Agreement by
either party pursuant to the provisions of this Section 3 shall terminate each
party's obligations under this Agreement except for the provisions of this
Section 3.4 and Sections 5.1, 6.3, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16, all
of which shall survive termination of this Agreement.
4. PAYMENT FOR SERVICES; EXPENSES; EQUIPMENT
4.1 CHARGES. As full compensation for the Services to be provided by
Consultant pursuant to any Project Schedule for activities that are budgeted,
reasonably substantiated, and actually worked, Company agrees to pay Consultant
in such amounts, at such times and in such manner as is set forth in the budget
set forth on the Project Schedule. Consultant agrees that such fees will not
exceed Consultant's own actual costs in providing such services (which the
parties acknowledge will contain an overhead component as mutually agreed upon
in the budget).
4.2 EXPENSES. Company is responsible for paying or reimbursing all
reasonable expenses arising from Consultant's performance of the Services as
allowed for in the budget and set forth on the Project Schedule, as well as for
cost increases due to events of force majeure (a material interruption or
interference with the development or other services by any cause outside of
Consultant's reasonable control, including, fire, flood, epidemic, earthquake,
explosion, war, blockade, embargo, act of public enemy, civil disturbance, labor
disputes, strike, lockout, any applicable law, acts of God), changes that could
not be reasonably anticipated at the time the budget was prepared, costs
relating to any acceleration of schedule, costs for which Company is reimbursed
by insurance, costs associated with any delay in obtaining approvals or Company
Materials, and changes requested by Company.
4.3 EQUIPMENT. The party indicated on the appropriate Project Schedule
shall furnish, at that party's expense, all equipment and materials used to
perform the Services.
5. PROVISION OF SERVICES.
5.1 INDEPENDENT CONTRACTOR. It is understood and agreed that
Consultant shall perform the Services as an independent contractor and
consultant. Consultant shall not be deemed to be an employee of Company.
Consultant shall not be entitled to any benefits provided by Company to its
employees, and Company will make no deductions from any of the payments due to
Consultant hereunder to pay any governmental agency or authority, except as may
otherwise be required by law.
Consultant________________ Company________________
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Consultant agrees that Consultant shall be personally responsible for any and
all taxes and other payments due on payments received by him from Company
hereunder.
5.2 KEY PERSONNEL. Christopher Lutz ("LUTZ") has been identified by
the parties as being essential to the performance of the services by Consultant
hereunder. Lutz shall perform the role described below and in the attached
Project Schedule(s) on a first priority, non-exclusive basis, and shall not be
removed the projects associated with such Project Schedule(s) without the prior
written consent of Company. Should Lutz for any reason become unable or
unwilling to continue to perform his role, Company may, in its sole discretion,
immediately terminate this Agreement and all Project Schedules, or request that
Consultant provide replacement personnel. Any replacement personnel shall have
equivalent experience and qualifications and shall be subject to the prior
approval of Company. In consideration of the agreement by Lutz to perform these
services, the parties acknowledge that Company has agreed to pay Lutz (in
addition to the budget specified in the Project Schedule) a monthly consulting
fee as set forth in the Project Shedule attached hereto.
6. DELIVERY AND ACCEPTANCE. The following provisions will apply for delivery
and acceptance of the Works developed hereunder. The standard for acceptance of
the Works developed hereunder shall be material conformity to the specifications
set forth in the Project Schedule.
6.1 Company shall accept or reject the initial version and any
corrected version of each Work within 10 business days after receipt, notifying
Consultant in writing of any Error, deficiencies or inadequacies in the initial
draft. Failure to so notify Consultant within such period shall be deemed
acceptance of the Work.
6.2 If Company rejects the initial version or any corrected version of
any Work, Consultant shall immediately begin commercially reasonable attempts to
correct such Error and shall have a period of 7 business days from receipt of
the written rejection to correct all Errors, deficiencies or inadequacies
specified by Company and submit a revised draft, or such amount of time as is
reasonably agreed upon by the parties.
6.3 In the event that Company and Consultant cannot agree on
acceptance of, or acceptable modifications to, any Work within 30 business days
following the later of (i) the date indicated on the Project Timetable for
delivery of that Work; or (ii) the date of the original submission of that Work
to Company, Company shall have the option of terminating the Project Schedule on
the terms described herein and therein. Unless otherwise expressly provided in
the Project Schedule, upon such termination by Company, Company shall be
obligated to compensate Consultant for all accepted Work to date, and Company
shall not be obligated to compensate Consultant for all work not accepted to
date; provided however, that Company shall have the option to receive such
unaccepted work so long as Company compensates Consultant. In addition,
Consultant________________ Company________________
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subject to payment of the compensation contemplated in this Section 6.3,
Company shall be entitled to receive copies of all Works (including but not
limited to the source code of the Works for use pursuant to the terms herein)
in existence at that point, and to take over development of the project from
that point.
In the event of a dispute between the parties as to whether the Work was
in material conformity to the specifications set forth in the Project Schedule,
the parties agree to submit such dispute to expedited, binding arbitration. The
arbitration shall commence within 30 days after the request for arbitration by
either party and will be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the "Rules"). The parties agree
to select a single arbitrator in accordance with the Rules, which arbitrator
shall have knowledge of the technical delivery issues in the new media area. The
arbitrator shall decide all matters in dispute in accordance with the law of the
State of California and the provisions of this Agreement. To the extent that
such Rules are silent, the procedures for arbitration in the State of
California, Cal. Code Civ. Proc ' 1280 et seq., shall be applicable to the
arbitration. Notwithstanding anything to the contrary in the Rules or the Code
of Civil Procedure, the parties agree that there shall be no depositions and
limited document discovery as ordered by the arbitrator. The arbitration shall
be initiated in and take place in Los Angeles County, California, or any other
place selected by mutual, written agreement. All costs incurred in connection
with any arbitration proceedings hereunder shall be divided evenly between the
party(ies). Each party shall bear his, her or its own attorneys' fees and costs.
The award rendered by the arbitrator shall be final and conclusively binding on
the parties, and judgment on such award may be entered in any court of competent
jurisdiction. Neither a party nor an arbitrator may disclose the existence,
content or results of any arbitration hereunder without the prior written
consent of all parties.
7. REPRESENTATIONS AND WARRANTIES OF COMPANY. Company represents and
warrants to Consultant that:
7.1 Company either owns or has the right to the use (as contemplated
herein) of the Company Materials and Company Marks. Company represents and
warrants that the Company Materials and Company Marks are either proprietary to
Company or are the intellectual property of third parties duly licensed to
Company. Company further represents and warrants that it has full right and
power to enter into and perform this Agreement without the consent of any third
party
7.2 Company further represents and warrants that it has either sole,
exclusive title to the Company Materials or the right to license or sub-license
such Company Materials and that such Company Materials do not and will not
infringe upon or violate any U.S. patent, copyright, trademark, trade secret, or
other proprietary or intellectual property rights of any third party. Company
also represents and warrants and covenants that its use of the Final Deliverable
will comply with applicable laws,
Consultant________________ Company________________
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regulations and all third party agreements applicable hereto.
8. REPRESENTATIONS AND WARRANTIES OF CONSULTANT. Consultant hereby
represents and warrants, to the best of Consultant's knowledge, that:
8.1 (a) Consultant is the originator or valid licensee of works
created under this Agreement on behalf of Company and any third parties will
have executed assignment of rights reasonably acceptable to Company; (b) all
work delivered to Company under this Agreement, excluding any Third Party
Software or third party materials and materials provided by Company, does not
infringe the proprietary rights of any third party; (c) none of the Work
produced by Consultant nor any element thereof will be subject to any
restrictions or to any mortgages, liens, pledges, security interests,
encumbrances or encroachments; (d) Consultant will not grant, directly or
indirectly, any rights or interest whatsoever in the Company Materials to third
parties except as provided herein or a Project Schedule; (e) Consultant has full
right and power to enter into and perform this Agreement without the consent of
any third party; (f) Consultant will take all reasonably necessary precautions
to prevent injury to any persons (including employees of Company) or damage to
property (including Company's property) in connection with Consultant's services
during the term of this Agreement; (g) should Company permit Consultant to use
any of Company's equipment, tools, or facilities during the term of this
Agreement, such permission shall be gratuitous and Consultant shall be
responsible for any injury to any person (including death) or damage to property
(including Company's property) arising out of use of such equipment, tools or
facilities, whether or not such claim is based upon its condition or on the
alleged negligence of Company in permitting its use; (h) Consultant shall comply
with all applicable laws and regulations in performance of its services
hereunder. Notwithstanding the foregoing, Consultant shall not be deemed to be
making any representations or warranties that any of the Work or the services of
Consultant hereunder do not violate any pending or issued patent; provided,
however, that Consultant represents and warrants that it has no actual knowledge
(without any investigation) of any such patent violation(s).
8.2 Consultant further represents that, subject to the qualifications
herein, the Final Deliverable accepted by Company will materially comply with
the specifications in the Project Schedule and any Change Orders; and the Final
Deliverable will function with properly configured Web Browsers and with
MailServ, ListServ, GopherServ, FTP servers, and Telnet. The Consultant
expressly disclaims any warranty that the Final Deliverable will be error free
or operate without interruption.
9. CONFIDENTIAL INFORMATION.
9.1 CONFIDENTIALITY. In connection with the purposes of this
Agreement, each party (the "disclosing party") has and will continue to disclose
to the other party (the "receiving party") certain information (i) that is
marked or otherwise identified, orally or in
Consultant________________ Company________________
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writing, as confidential or proprietary information of the disclosing party
or a third party ("CONFIDENTIAL INFORMATION") prior to, upon or promptly
after receipt by the receiving party; or (ii) which the receiving party
should recognize from the circumstances surrounding the disclosure to be
Confidential Information. The receiving party (x) shall hold all Confidential
Information in confidence and will use such information only for the purposes
of fulfilling the receiving party's obligations hereunder and for no other
purpose, and (y) shall not disclose, provide, disseminate or otherwise make
available any Confidential Information of the disclosing party to any third
party, in either case without the express written permission of the
disclosing party.
9.2 SCOPE. The foregoing obligations in Section 9.1 shall not apply to
(a) use or disclosure of any information pursuant to the exercise of the
receiving party's duties under this Agreement; (b) information that is or
becomes generally known or available by publication, commercial use or otherwise
through no fault of the receiving party; (c) information that is independently
developed or learned by the receiving party other than pursuant to this
Agreement; (d) information that is lawfully obtained from a third party who has
the right to make such disclosure without restriction; (e) any disclosure
required by applicable law, provided that the receiving party shall use
reasonable efforts to give advance notice to and cooperate with the disclosing
party in connection with any efforts to prevent such disclosure; or (f)
information that is released for publication by the disclosing party in writing.
10. TRADEMARKS.
10.1 LICENSE TO USE COMPANY MATERIALS, TRADEMARKS AND LOGOS. Subject to
the terms and conditions of this Agreement, Company hereby grants to Consultant
a limited, non-exclusive, non-transferable license to use any Company Materials,
and to use the Company's insignia, tradenames, trademarks, service marks and
logos set forth therein, or as otherwise specified in writing by Company
(collectively the "COMPANY MARKS"), to display Company Marks in order for
Consultant to perform its obligations under this Agreement. Subject to the terms
and conditions of this Agreement, Consultant hereby grants to Company a limited,
non-exclusive, non-transferable license to use any Consultant materials provided
to Company by Consultant (if any) (the "CONSULTANT MATERIALS"), and to use the
Consultant's insignia, tradenames, trademarks, service marks and logos set forth
therein, or as otherwise specified in writing by Consultant (collectively the
"CONSULTANT MARKS"), to display Consultant Marks in order for Company to perform
its obligations under this Agreement.
10.2 ADVERTISING, AND CREDIT. Except as provided herein, no press
release, announcement, publication, or other use of the Consultant Marks or
Company Marks, as applicable (collectively, the "Marks"), shall be made by
either party without the other party's prior written approval. Consultant shall
use only the most current Company Materials and Company Marks, as may be
provided by Company from time to time. Consultant shall not form any combination
marks with Company Marks. Company shall
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use only the most current Consultant Marks, as may be provided by Consultant
from time to time. Company shall not form any combination marks with
Consultant Marks. Each party agrees and recognizes the other party's
exclusive ownership of such party's Marks worldwide, and agrees not to take
any action inconsistent with the other party's ownership of the Marks and
agrees that any benefits accruing from use of such Marks shall automatically
vest in the party owning such Marks. Consultant may not modify for public
display any Company Materials or Company Marks, except upon receiving
Company's prior written approval on a case-by-case basis. Company shall not
modify the Consultant Marks. All rights not expressly granted hereunder are
reserved by the parties.
11. NON-INTERFERENCE WITH BUSINESS.
11.1 SUBSTANTIALLY SIMILAR SERVICES. During the Term, Consultant agrees
not to undertake work on a project that is competitive to the project described
in the Project Schedule for any competitor of Company (as determined by Company)
without first receiving written permission to do so from Company. The term
"competitive" shall have the meaning set forth in the Project Schedule.
11.2 COMPANY CLIENTS, ASSOCIATES AND EMPLOYEES. Neither party shall,
directly or indirectly solicit or encourage to cease work with the other party
or any of its affiliates any employee or consultant then under contract with
such party or any of its affiliates within 3 months of the termination of this
Agreement.
12. ALLOCATION OF INTELLECTUAL PROPERTY RIGHTS.
12.1 RIGHTS IN THE SOFTWARE. The Software and all rights and any source
code related to the Software shall be owned exclusively by Consultant.
Consultant shall retain the right to reuse or incorporate Software whether
previously developed or developed pursuant to the Project Schedule, or in other
projects for other customers, provided however, that no Software containing any
Company Materials shall be reused in such manner.
12.2 RIGHTS IN THE WORKS. Subject to the rights of Consultant in the
Software described in Sections 12.1 and with the exception of any Third Party
Software, (i) the services provided by Consultant and the Works shall constitute
"works made for hire" for Company, as that phrase is defined in the Copyright
Act, and (ii) Company shall be considered the author and shall be the copyright
owner of the Works. If any of the Works do not qualify for treatment as "works
for hire" or if Consultant retains any interest in any components of the Works
for any other reason, Consultant hereby grants, assigns and transfers to Company
ownership of all United States and international copyrights and all other
intellectual property rights in the Works, subject to certain rights of
Consultant described herein, and all the rights of use with respect thereof
which are intended to be conferred under this Section 12.2, free and clear of
Consultant________________ Company________________
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any and all claims for royalties or other compensation except as stated in a
Project Schedule or herein.
12.3 RIGHTS IN THE MARKS; DOMAIN NAMES. Consultant agrees that the
Company Marks and any goodwill appurtenant thereto shall be owned exclusively by
Company and shall inure solely to the benefit of Company. Company agrees that
the Consultant Marks and any goodwill appurtenant thereto shall be owned
exclusively by Consultant and shall inure solely to the benefit of Consultant.
Company shall own and be the registrant for all domain names associated with any
Company Web Site developed hereunder. If Consultant registers any domain names
on behalf of Company, Consultant shall take all actions necessary to effect
transfer of such domain names to Company.
12.4 LIMITED LICENSE TO THE SOFTWARE. Consultant hereby grants Company
in perpetuity a nonexclusive, non-transferable license throughout the universe
to copy, distribute, transmit, display, perform, create derivative works, and
otherwise use the Software in object code form, in whole or in part, including,
without limitation, the right to add to, subtract from, arrange, rearrange,
revise, modify, change and adapt the Software and any part or element thereof.
All rights under this license shall be exercised by the Company solely to
operate, maintain, and make the Company Web Site(s) available to end users or
for other related business purposes.
12.5 THIRD PARTY SOFTWARE. Consultant has identified in the Project
Schedule certain Third Party Software which may be used in the development of
(or may need to be used by Company in the operation or modification of) the
Company Web Site(s) for which Consultant cannot grant to Company the rights set
forth in Sections 12.2 and 12.3 above. Except to the extent described in a
Project Schedule, Consultant represents and warrants to Company that there are
no restrictions or royalty terms applicable to Consultant's or Company's use of
such Third Party Software in making the Company Web Site(s) available on the
Internet or in preparing modifications of the Company Web Site(s).
13. INDEMNIFICATION.
Company shall defend, indemnify and hold Consultant and its principals,
officers, directors and affiliates harmless from and against any and all
liabilities, losses, damages, costs and expenses (including legal fees and
expenses) associated with any claim or action brought against them by a third
party arising out of (i) any breach or alleged breach of any of the
representations and warranties of Company contained herein, (ii) any breach or
alleged breach by Company of any other covenant contained herein, or (iii) the
production, development or exploitation of the Work or the operation of
Company's business; provided, however, that the foregoing shall not be deemed to
relieve Consultant of its obligation to indemnify Company as provided herein.
Consultant________________ Company________________
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Consultant agrees to indemnify and hold Company and its principals, officers,
directors and affiliates harmless from and against any and all liabilities,
losses, damages, costs and expenses (including legal fees and expenses)
associated with any claim or action brought against them by a third party
arising out of (i) any breach of any of the representations and warranties of
Consultant contained herein, or (ii) any breach by Consultant of any other
covenant contained herein.
The party being indemnified hereunder (the "indemnified party") shall notify the
party agreeing to indemnify such party (the "indemnifying party") promptly of
any such claim in writing, provided, however, that the failure to give such
notice shall not relieve the indemnifying party of the indemnifying party's
obligations hereunder except to the extent that the indemnifying party was
actually and materially prejudiced by such failure with the indemnified party's
liability limited to direct damages caused by such failure. The indemnifying
party will have the sole right to conduct the defense of any such claim or
action (with counsel reasonably satisfactory to the indemnified party) and all
negotiations for its settlement or compromise unless otherwise agreed to in
writing. However, if the indemnifying party, after receiving notice of any such
claim, fails promptly to begin the defense of such claim or action, the
indemnified party may (upon notice to the indemnifying party) retain counsel and
commence to undertake the defense, compromise, or settlement of such claim or
action and any such actions shall be at the expense of the indemnifying party
unless and until indemnifying party undertakes the defense as contemplated
herein. Neither party may enter into any compromise or settlement that
materially affects the other party without the other party's written approval.
14. LIMITATION OF LIABILITY. NOTWITHSTANDING ANY TERM OR PROVISION CONTAINED
IN THIS AGREEMENT, IN NO EVENT WHATSOEVER SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY OR TO ANY OTHER PERSON, FIRM OR CORPORATION, FOR ANY INDIRECT,
INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES, OR OTHER
SIMILAR TYPE OF DAMAGES, INCLUDING YET NOT LIMITED TO DAMAGES BASED UPON LOSS OF
PROFITS AND/OR LOSS OF BUSINESS ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT, AND/OR SUCH PARTY'S ALLEGED BREACH OF THIS AGREEMENT, WHETHER OR NOT
SUCH PARTY IS INFORMED, KNEW OR SHOULD HAVE KNOWN, OF THE POSSIBILITY OF SUCH
DAMAGES IN ADVANCE.
THE LIMITATIONS ON LIABILITY SET FORTH IN THIS SECTION SHALL APPLY TO ALL CAUSES
OF ACTION, INCLUDING, YET NOT LIMITED TO, BREACH OF CONTRACT, BREACH OF
WARRANTY, STRICT LIABILITY, NEGLIGENCE MISREPRESENTATION AND OTHER TORTS, AND
LIABILITY BASED UPON THE PROVISIONS OF ANY PART OF THIS AGREEMENT AND ANY
FEDERAL, STATE AND/OR LOCAL LAW AND/OR ORDINANCE.
Consultant________________ Company________________
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<PAGE>
15. EQUITABLE RELIEF. Except for the limitations described in Section 14,
each party recognizes that nothing in this Agreement is intended to limit any
remedy of the other under the California Uniform Trade Secrets Act. In addition,
Consultant recognizes that the covenants contained in Section 8 hereof are
reasonable and necessary to protect the legitimate interests of the Company,
that the Company would not have entered into this Agreement in the absence of
such covenants, and that Consultant's violation or threatened violation of such
covenants will cause Company irreparable harm and significant injury, the amount
of which may be extremely difficult to estimate, thus, making any remedy at law
or in damages inadequate. Therefore, Consultant agrees that Company shall have
the right to apply to any court of competent jurisdiction for an order
restraining any breach or threatened breach of this Agreement and for any other
relief Company deems appropriate, without the necessity of posting of any bond
or security. This right shall be in addition to any other remedy available to
Company in law or equity.
16. MISCELLANEOUS
16.1 RETURN OF COMPANY PROPERTY. On termination of this Agreement, or
at any time the Company so requests, Consultant will deliver immediately to the
Company all property belonging to the Company and all material containing or
constituting Company's Confidential Information, including any copies in its
possession or control, whether prepared by Consultant or by others. On
termination of this Agreement, Company will deliver immediately to the
Consultant all property belonging to the Consultant and all material containing
or constituting Consultant's Confidential Information, including any copies in
its possession or control, whether prepared by Company or by others.
16.2 GOVERNING LAW. This contract will be governed by and construed in
accordance with the laws of the State of California, without giving effect to
its conflicts of laws rules. Any dispute arising under this Agreement shall be
heard in the state or federal courts within Los Angeles County, California.
16.3. SEVERABILITY. If any provision of this Agreement is determined to
be invalid, illegal or unenforceable, the validity or enforceability of the
other provisions shall not be affected.
16.4. ASSIGNMENT. Consultant shall not assign, sell, transfer, delegate
or otherwise dispose of, whether voluntarily or involuntarily, or by operation
of law, any rights or obligations under this Agreement. Any purported
assignment, transfer, or delegation by Consultant shall be null and void. In the
event of any assignment by Company to a third party, Company shall thereafter
remain liable for its obligations hereunder.
Consultant________________ Company________________
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<PAGE>
16.5 MODIFICATION. No term or provision of this Agreement may be
amended, waived, released, discharged or modified in any respect except in
writing, signed by the parties hereto.
16.6 AMENDMENT. In circumstances where the Services change and/or new
Services arrangements are made, the terms and conditions as described by all
other provisions of this Agreement will remain in full force and effect whether
or not a new Agreement, addendum, or change order is executed by both parties.
16.7 ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding between the parties with respect to the subject matter hereof, and
there are no terms, conditions, representations, warranties or covenants other
than those contained herein. This Agreement supersedes any previous agreements
or understandings between the parties with respect to the subject matter hereof,
whether written or oral.
16.8 HEADINGS AND CAPTIONS. The Headings and Captions in this Agreement
are included for purposes of clarity and do not represent material terms or
conditions of this agreement.
16.9 MODIFICATION, WAIVER. This Agreement may be modified only in a
writing signed by Company. Failure to enforce any provision of this Agreement
shall not constitute a waiver of any term hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year set forth above.
AGREED TO BY:
Onlinefilmsales.com, LLC, Mediachase, Ltd.
By:________________________________ By:__________________________________
Title:_____________________________ Title:_______________________________
Date:______________________________ Date:________________________________
Consultant________________ Company________________
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<PAGE>
SCHEDULE 1
PROJECT SCHEDULE
RELATING TO
ONLINEFILMSALES.COM
The following is Project Schedule No. 1 (the "PROJECT SCHEDULE"), made as of
September 30, 1999 to the Consulting Agreement (the "AGREEMENT") executed on
September 30, 1999, between Onlinefilmsales.com, LLC ("COMPANY"), and
Mediachase, Ltd. ("CONSULTANT"). Except as specifically stated herein, each
capitalized term used in this Project Schedule shall have the same meaning as
is assigned to it in the Agreement.
1. SERVICES TO BE PROVIDED
The "SERVICES," as that term is used in the Agreement, shall include the
following:
Consultant has and shall continue to perform all services and take all
actions necessary to develop, create and facilitate the initial launch on the
Internet of the ONLINEFILMSALES.COM Web Site, as contemplated by the parties
herein. Consultant shall produce and deliver each Work described in section 6
below. Consultant's services shall include all work necessary to create a
working, interactive Web Site which conforms in all material and functional
respects to the prototype delivered to Company by Consultant on February 21,
2000. The standard of acceptance for all Works shall be material conformity
to (i) the prototype; and (ii) the written specifications provided by to
Company by Consultant in the specifications document to be delivered by
Consultant to Company on or before a date to be determined (but currently
anticipated to be on or about April 13, 2000).
2. COMPENSATION.
Company shall cash flow all fees and expenses according to a budget mutually
agreed upon by the parties. The parties agree that prior to the first day of
each calendar month (commencing with April, 2000), the parties will agree
upon the estimated budget of expenses for the upcoming month and the
particular deliverables anticipated for such month. Company will then pay the
estimated amount on the first day of the month. Company will remain obligated
to pay actual costs upon Consultant's request to the extent they exceed the
estimated costs and, in the event actual costs are less than estimated costs,
such amount will be applied against the estimated budget of expenses for the
next month (or upon termination of this Agreement refunded to the Company).
Company shall pay such budgeted amounts in advance each month.
Additionally, the parties acknowledge that such budget shall include a
monthly consulting fee for the services of Lutz in the amount of $14,000 per
month for his services as described in Section 5.2 of the Agreement through
September, 2000. The parties acknowledge that the budget shall also include an
additional bonus to Consultant equal to 80% of the $14,000 monthly fee for
the three months of February, March and April, 2000. The parties further
acknowledge that the general overhead formula and rates for principals of
Consultant (other than Lutz) used in computing the invoices for February,
2000 will be approved for budgeting purpose unless mutually agreed to the
contrary by the parties in writing. The parties acknowledge that MediaChase
shall not be obligated to proceed forward each month unless the monthly
budget and deliverables are agreed to by the parties.
3. PROJECT MANAGERS.
Company and Consultant shall each designate a project manager who will assume
primary responsibility for communicating with the other party and for advancing
the project. In addition, Company will appoint a production accountant who will
be on site at Consultant's offices. Consultant shall not be authorized to pay
any invoices to third parties without the prior approval of the production
accountant.
Consultant Project Manager(s):
Eric Olson and/or
Chris Lutz
Company Project Manager:
Dean Shapiro and/or
Heidi Lester
Company Production accountant:
Bennett Lientz
4. TERM AND TERMINATION.
This Project Schedule shall commence upon the effective date of the Agreement
and shall terminate upon delivery and acceptance of the Works described in
Section 7 (but in no event later than September 30, 2000).
5. COMPANY MATERIALS. Company or other representatives shall provide
Consultant with the following in the formats set forth in the table below
(except for items specifically described below as being provided by
Consultant):
------------------------------------------------------------------------------------------------------------------
MATERIALS TO BE PROVIDED BY COMPANY
------------------------------------------------------------------------------------------------------------------
SECTION OF REQUIRED DETAILED REQUIRED PARTY
WEB SITE CONTENT DESCRIPTION FORMAT RESPONSIBLE DATE DUE
------------------------------------------------------------------------------------------------------------------
[Section] [Content] [Description] [Format] [ Company / Consultant ] [DATE]
TBD TBD TBD TBD TBD TBD
------------------------------------------------------------------------------------------------------------------
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<PAGE>
The content list may change throughout the development process. The parties
agree the Consultant Project Manager and Company Project Manager can
authorize reasonable changes to the content list without execution of a
Change Order, but must confirm such changes in writing by fax or email. If
the Project Managers determine that the timing or scope of requested content
changes is likely to effect estimated project costs or milestones, a Change
Order is required before the changes contemplated will be executed by
Consultant.
6. PROJECT TIMETABLE FOR WORKS DELIVERY. Based upon Company's written
specifications, Consultant has described the major milestones, works to be
delivered and dates for delivery of Works, below. Company agrees that any
delay with respect to the provision of Company Materials, approvals, or other
assistance to Consultant, changes in the specifications by Company (or delays
contemplated as a result of the matters described in Section 4.2 of the
Agreement) shall reasonably extend the deadline for subsequent tasks or
milestones set forth in the table below by a period at least equal to such
delays. In addition, for any Company obligation described as time-sensitive
or critical in this Project Schedule, failure of the Company to meet its
deadline due to the delays will entitle Consultant to prepare a revised
Project Timetable based on a realistic estimate of the effect of the delay on
the completion of the project, taking into account other work scheduled by
Consultant. [THE FOLLOWING CHART IS PROVIDED AS AN EXAMPLE. ACTUAL MILISTONE
SCHEDUL TO BE DETERMINED.]
-------------------------------------------------------------------------------------------------------------------
PROJECT ESTIMATE
-------------------------------------------------------------------------------------------------------------------
MILESTONE DESCRIPTION OF MILESTONE WORKS TO BE DELIVERED DATE
-------------------------------------------------------------------------------------------------------------------
Kick-Off Meeting Development process begins, None January 1, 2000
with Consultant design team
beginning work on design
options.
-------------------------------------------------------------------------------------------------------------------
Delivery of Specifications, including Specifications Document [Date]
Specifications a feature summary, TBD
Project timeline, and
deliverables.
-------------------------------------------------------------------------------------------------------------------
Beta Site Completion/ Working site with Prototype with technical
Quality Assurance technical functionality components completed TBD
and revisions based
on client comments.
-------------------------------------------------------------------------------------------------------------------
Launch Delivery of completed version 1 Final Deliverable TBD
(known to the parties as Phoenix
Version 1.0) and debut of the
functioning Web Site.
-------------------------------------------------------------------------------------------------------------------
TOTAL ESTIMATED PRICE: $_______.00
-------------------------------------------------------------------------------------------------------------------
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<PAGE>
7. WORKS DELIVERED TO COMPANY. Each item listed in the "Works to be
Delivered" column in the chart above ("WORKS") will be subject to delivery and
acceptance by the Company under the terms of the Agreement and subject to the
agreement of the parties on the actual delivery items and payment of amounts
in advance of each calendar month.
8. THIRD PARTY SOFTWARE. The following Third Party Software will be
necessary for the operation of the Company Website: [TBD]. [Note: Must include
licensing fees per Section 2.4 of the Agreement]
9. COMPLETION DATE. The Project is proposed for completion on or before
[TBD].
10. DEVELOPMENT SITE. The URL for the development site which Company may use
to review progress under this Project Schedule is:
Development Site IP Address: 172.24.24.11
Username:___________________________
Password:___________________________
11. CONSULTANT AND COMPANY CONTACTS.
Company- Contact Consultant- Technical Contact Consultant- Adminstrative
Heidi Lester Chris Lutz Contact
1351 4th Street, Suite 227 8286 Santa Monica Blvd. Melanie Lutz
Santa Monica, CA 90401 West Hollywood, CA 90046 8286 Santa Monica Blvd.
Phone: 310.394.4025 Phone: 323.822.3600 West Hollywood, CA 90046
Fax: 310.394.2625 Fax: 323.822.3606 Phone: 323.822.3600
mark@onlinefilmsales.com chris@mediachase.com Fax: 323.822.3606
melanie@mediachase.com
Company agrees that the individuals listed above have full authority to direct
and provide feedback relating to the services described in this Project
Schedule, including but not limited to the ability to execute a
Milestone/Deliverable Acknowledgement of Acceptance.
12. COMPETITIVE PROJECT. For purposes of Section 11.1 of the Agreement, a
"competive project" shall mean the development of any solution or program
which directly enables users to engage in transactions to purchase or license
rights to completed motion pictures or a database and/or tracking system
relating to the management of the purchase or license of rights to completed
motion pictures.
13. CONSULTANT INTELLECTUAL PROPERTY REPRESENTATIONS. The representations
of Consultant in Section 8.1 of the Agreement, regarding intellectual
property rights, are made to the best of Consultant's knowledge without any
independent investigation.
Onlinefilmsales.com, LLC Mediachase, Ltd.
By:______________________________ By:____________________________________
Title:___________________________ Title:_________________________________
Date:____________________________ Date:__________________________________
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