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  1. 1. PPVNETWORKS PAY-PER-VIEW PARTNER AGREEMENT (02.20.2004 draft) To be used with Webmasters who will operate a PPVNetworks-managed theatre site promoting content licensed from Studios. This Agreement is made and entered into between SVOTHI Corp., dba PPVNetworks, (“Pay-Per-View Site Provider”), a New York corporation and __________________________________ (“Partner Site”). WHEREAS, Licensors are the producers and owner of original feature-length video works and other related photographic and audio-visual content; and WHEREAS Pay-Per-View Site Provider has Licensing agreements with Licensors to offer Pay-Per-View Sites to Partner Sites containing their Licensed Content., including original feature-length video works and other related photographic and audio-visual content from Licensors; WHEREAS Partner Sites desires to link Authorized Partner Websites to Authorized Pay-Per-View Websites containing Licensed Content from one or many Licensors ; NOW THEREFORE, in consideration of the mutual covenants herein contained and for good and valuable consideration, the adequacy and sufficiency of which are acknowledged, the parties agree as follows: 1. Definitions 1.1 “LICENSED CONTENT” shall mean each and every photographic, audiovisual, audiotext, musical and other works found on Pay-Per-View Sites. 1.2 “ONLINE PAY-PER-VIEW” shall mean the transmission or other dissemination of a digitized version of the Licensed Content over the Internet through a website that allows a user or subscriber of the website to view a streamed version of a specific video title which is part of the Licensed Content for a specific limited duration of time (for example, during a 24 hour period) subject to the prior paying of a fee or charge for the right to access and view said specific video title. Such fees and charges are specifically listed and described in Attachment B. 1.3 “AUTHORIZED PARTNER WEBSITES” shall mean only those websites owned and operated by Partner Site, specifically identified by the following URLS: _____________________________________________________________________ , and no others. [Note: list Partners’s sites that will be sending traffic to theatre.] 1
  2. 2. 1.4 “AUTHORIZED PAY-PER-VIEW WEBSITES” shall mean only those websites owned and operated by Pay-Per-View Site Provider which contain Licensed Content and will be linked to Authorized Partner Sites: _____________________________________________________________________ . [Note: list domain name of theatre site PPVNetworks is creating for Partner.] 1.5 “EFFECTIVE DATE” shall be 12:01 a.m. Eastern Standard Time the day on which this License Agreement has been signed by both Pay-Per-View Site Provider and Partner Site. 3. Term of the Agreement and Effective Date 3.1 The terms and conditions set forth in this Agreement shall become effective upon the date that this Agreement is executed by both parties hereto, said date of execution shall be deemed the “effective date” of this Agreement. 3.2 The original term of this Agreement shall be for a period of one (1) years commencing from the effective date of this Agreement unless this Agreement is modified or extended in writing by the parties hereto. 3.3 At the termination or expiration of this Agreement all rights granted to Partner Sites under this Agreement shall be extinguished. 4. Fees to Be Paid to Partner Site In exchange for the right to link Authorized Pay-Per-View Websites to Authorized Partner Sites, Pay-Per-View Site Provider agrees to pay Partner Site a fee of fifty percent (50%) of all Subscription Revenues and twenty-five percent (25%) of all Pay-Per-View Revenues generated from the Authorized Pay-Per-View Sites, as described in Attachment B, without any deduction, adjustment or offset, derived from the transmission or other exploitation of the Licensed Content by Online Pay-Per-View during the term of this Agreement or any extensions thereof. 4.1 All fees payable to Partner Site under this Agreement shall be paid on a monthly basis, and shall be due and payable no later than fifteen (30) days after the end of each month. 4.2 Upon expiration or termination of this Agreement all accrued fees shall be accelerated and shall immediately become due and payable. 4.3 The receipt or acceptance by Partner Site of any statement of licensing fees due Partner Site, or of the payment of fees by Pay-Per-View Site Provider shall not prevent Partner Site from subsequently challenging the validity or accuracy of such statement or payment. 2
  3. 3. 4.4 All payments due Partner Site shall be made in U.S. currency by check drawn on a U.S. bank, unless otherwise specified by Partner Site. 4.5 Late payments shall incur interest at the rate of One Percent (1%) per month from the date such payments were originally due. 6. Partner Site’s Representationss and Warranties. Partner Site hereby represents and warrants that: 6.1 Partner Site will feature Authorized Pay-Per-View Website’s on Authorized Partner Websites within 30 days of completion of these sites. Partner Site will make reasonable efforts to market the Online Pay-Per-View services to its customers by prominently featuring the links on its homepage and including Online Pay-Per-View in its marketing efforts. 7. Pay-Per-View Site Provider’s Representations and Warranties 7.1. That Pay-Per-View Site Provider is solely responsible for the creation, design, maintenance, editing, supervision and operation of its Authorized Pay-Per-View Websites, including without limitation all decisions regarding: the persons who may enter and access the contents of Authorized Pay-Per-View Websites or become members of said Websites; the Terms and Conditions of membership; the geographical locations where Pay-Per-View Site Provider permits the downloading and accessing of the content of its Websites; the use of adult verification or screening mechanisms or procedures to attempt to limit the access or viewing of any material or content on Pay-Per-View Site Provider’s Authorized Pay-Per-View Websites by minors. Partner Site acknowledges that PARTNER SITE HAS NO CONTROL OVER PAY-PER-VIEW SITE PROVIDER’S AUTHORIZED PAY-PER-VIEW WEBSITES, or any of the design, layout, content, subject matter, products, services or persons that appear in or on or that are linked to the Websites, or the geographical areas into which the Websites disseminates, transmits, broadcasts or otherwise distributes or permits the access of the content or services offered by Authorized Pay-Per-View Websites, including without limitation the Licensed Content. 7.2 Pay-Per-View Site Provider will provide Partner Site with ability to access realtime online revenue share reports for Authorized Pay-Per-View Websites, if requested 8. Indemnification, Injunctive Relief 8.1 Partner Site shall fully indemnify Pay-Per-View Site Provider and hold Pay-Per-View Site Provider harmless from any liabilities, losses, damages, costs and expenses, including attorney’s fees, arising from any dispute, claim, action or proceeding based upon or in any way related to any breach or alleged breach of Partner Site’s warranties, representations, promises, agreements or obligations set forth herein. 3
  4. 4. 8.2 Pay-Per-View Site Provider shall fully indemnify Partner Site and hold Partner Site harmless from any liabilities, losses, damages, costs and expenses, including attorney’s fees, arising from any dispute, claim, action or proceeding based upon or in any way related to any breach or alleged breach of Pay-Per-View Site Providers’s warranties, representations, promises, agreements or obligations set forth herein. 8.3 Partner Site acknowledges and agrees that any use or threatened use of the Licensed Content by Partner Site that is not expressly authorized by this Agreement shall result in and constitute irreparable injury to Licensor and entitling Licensor to seek and obtain injunctive relief preventing such unauthorized use. 9. Warranties, Liabilities, Remedies and Limitations Thereof 9.1 THE ONLINE PAY-PER-VIEW SITES AND LICENSED CONTENT ARE PROVIDED "AS IS" AND ALL FAULTS AND THE ENTIRE RISK AS TO SATISFACTORY QUALITY, PERFORMANCE, ACCURACY AND EFFORT IS WITH PARTNER SITE. PAY-PER-VIEW SITE PROVIDER DISCLAIMS ANY AND ALL OTHER WARRANTIES, WHETHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY, MERCHANT QUALITY, CORRESPONDENCE TO DESCRIPTION, OR FITNESS FOR A PARTICULAR PURPOSE. 9.3 Pay-Per-View Site Provider makes no representations or warranties as to whether the Licensed Content would offend the community standards of localities in which Partner Site may choose to use, publish or exhibit the Licensed Content. 9.4 Pay-Per-View Site Providers’s cumulative liability to Partner Site or any other party for any loss or damages resulting from any claims, demands, indemnifications or actions arising out of or relating to this Agreement or Partner Site’s use of the Online Pay-Per-View Sites shall not exceed the revenues of Authorized Pay-Per-View Sites. 9.5 In no event shall Pay-Per-View Site Provider or any persons or entities associated therewith be liable for any direct, indirect, punitive, incidental, special or consequential damages arising out of or in any way connected with this Agreement or the subject matters hereof (including, without limitation, damages for loss of business profits, business interruption or loss of business information) even if Licensee has been advised of the possibility of such damages. Because of the extreme difficulty of fixing actual damages for any failure of Pay-Per-View Site Provider to perform its obligations hereunder or from any failure of Pay-Per-View Site Provider to perform any obligations imposed by law, Partner Site agrees that Pay-Per-View Site Providers’s entire liability, and Partner Sites’s exclusive remedy, for any claim for damages against Pay-Per-View Site Provider and all persons or entities directly or indirectly affiliated therewith arising out of this Agreement or the various subject matters hereof, whether grounded in contract, tort or any other theory of liability, shall be limited to liquidated damages in the amount of the consideration paid in connection with the affected transaction, and no more. The provisions of this paragraph apply even though the loss or damage, irrespective of 4
  5. 5. cause or origin, results directly or indirectly, either from performance or non- performance of obligations imposed by this Agreement. Some states do not allow the limitation or exclusion of liability for incidental or consequential damages, so in those states the above limitation or exclusion may not apply. 9.6 Partner Sites’s limited warranties set forth above are not assignable by Partner Site in any way whatsoever. 10. Termination 10.1 Termination by Mutual Consent. This Agreement shall terminate upon the mutual written agreement of the parties. 10.2 Termination for Material Breach. If either party breaches or defaults in the performance or observation of any of the material provisions of this Agreement, and such breach or default is not cured within thirty (30) days after the giving of written notice by the other party specifying such breach or default, the non-defaulting party shall have the right to terminate this Agreement without further notice. 10.3 Upon termination or expiration of this Agreement, all rights granted to Partner Site by Pay-Per-View Site Provider shall immediately cease and Partner Site shall thereupon immediately cease to use, display, publish, exhibit or disseminate said Pay- Per-View Sites and Licensed Content or any Derivative Works based on said Licensed Content. Partner Site agrees and acknowledges that any continued use, display, publication, exhibition or dissemination of the Licensed Content by Partner Site after termination or expiration shall constitute a basis for equitable relief, including injunctive relief, in addition to monetary damages. 11. Limitation of Agreement/ Relationship of the Parties The relationship of Pay-Per-View Site Provider and Partner Site hereunder is limited to the respective rights and obligations of the parties as specifically provided herein. The parties to this Agreement are independent contractors and nothing in this Agreement shall make them joint venturers, partners, employees, agents or other representatives of the other party hereto, or shall be construed or interpreted to permit either party to undertake any agreement for the other, or to use the name or identifying mark of the other, all except as is specifically provided herein. 12. Successors and Assigns This Agreement shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and legal representatives of Pay-Per-View Site Provider and Partner Site. Partner Site may not assign its rights or obligations hereunder without the prior written consent of Pay-Per-View Site Provider. Pay-Per-View Site Provider may assign its rights or obligations hereunder without the prior written consent of Partner Site. 13. Notices 5
  6. 6. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed given (i) if delivered personally, or (ii) three (3) days after mailed by certified or registered mail, postage prepaid, return receipt requested, or (iii) upon transmission, if sent by prepaid telegram, telex or telecopy (fax) and a receipt of transmission is obtained, in each case addressed to the party to receive notice, at the address or fax number as follows: For PARTNER SITE: ____________________________________ ____________________________________ ____________________________________ Fax number:__________________________ For SVOTHI CORP. (PAY-PER-VIEW SITE PROVIDER): ____________________________________ ____________________________________ ____________________________________ Fax number:__________________________ 14. Integration; Amendment; Nonwaiver This Agreement constitutes the entire agreement of Pay-Per-View Site Provider and Partner Site with respect to the subject matter hereof, and supersedes and cancels all other prior Agreements, discussions, communications, understandings, promises or representations, whether written or oral. No modification of this Agreement shall be enforceable unless reduced to writing and signed by duly authorized representatives of both parties. No officer, employee or representative of either party has any authority to make any representation or promise in connection with this Agreement or the subject matter thereof which is not contained expressly in this Agreement; and Partner Site acknowledges and agrees that Partner Site has not executed this Agreement in reliance upon any such representation or promise. Partner Site acknowledges and agrees that the failure of Pay-Per-View Site Provider to enforce any of the specific provisions of this Agreement shall not preclude any other or further enforcement of such provision(s) or the exercise of any other right hereunder. 15. Governing Law/Arbitration/Jurisdiction and Venue 6
  7. 7. This Agreement shall be governed by and construed under the laws and judicial decisions of the State of New York and the United States as applied to agreements between New York state residents entered into and to be performed within the State of New York, except as governed by Federal law. The application of the United Nations Convention of Contracts for the International Sale of Goods is expressly excluded. 15.1 Subject to the provisions of paragraph 15.2, any and all disputes as to the interpretation of or any performance under this Agreement which are not first resolved informally, shall be determined by binding arbitration in New York, New York, in accordance with the rules of the American Arbitration Association. The final award in any such arbitration proceeding shall be subject to entry as a judgment by any court of competent jurisdiction, provided that such judgment does not conflict with the terms and provisions hereof. The jurisdiction of the arbiter (or arbiters) with respect to legal matters shall be limited only by the statutory and common law of the State of New York and the United States. 15.2 Notwithstanding the foregoing, Pay-Per-View Site Provider shall have the right, in it’s absolute discretion, to initiate and file any claims or disputes regarding intellectual property, copyright or trademark infringement in a court of competent jurisdiction without the requirement of first submitting such claims or disputes to binding arbitration. 15.3 If for any reason any matter or dispute arising under this Agreement is not resolved by binding Arbitration, or if any of the proceedings or decisions of the Arbitration must be enforced by a court of competent jurisdiction, Partner Site agrees that in case of any litigation regarding this Agreement or the various subject matters hereof, that the venue for such litigation shall be, depending on by the subject matter of the dispute, either the Municipal Court of New York, New York, or the Superior Court of the County of New York. Licensee hereby consents and stipulates to the jurisdiction of the Courts of the State of New York and the United States District Court. Additionally, the parties agree that service of process in any such proceeding may be achieved by any means allowed under New York or federal law. For such purposes, Partner Site constitutes and appoints the Secretary of State of New York as Partner Sites’s agent to receive service of any and all process in any such action, proceeding or litigation. The parties hereto hereby waive and agree not to assert (by way of motion, as a defense or otherwise) that any such proceeding is brought in an inconvenient forum or that the venue thereof is improper. 16. Attorney's Fees Partner Site agrees that if suit, action or arbitration is brought to enforce or interpret any provision of this Agreement, or the rights or obligations of any party hereto as they relate to the subject matter of this Agreement, the prevailing party shall be entitled to recover, as an element of such party’s costs of suit, and not as damages, all reasonable costs and expenses incurred or sustained by such prevailing party in connection with such suit or 7
  8. 8. action or arbitration, including, without limitation, attorneys’ fees and expenses and court costs. 17. Severability/ Invalidity In the event of invalidity of any provision(s) of this Agreement, such invalidity shall not affect the validity of the remaining provisions of this Agreement. However, and notwithstanding the generality of the foregoing, if any such provision(s) of this Agreement might otherwise be held by a court of competent jurisdiction to be lawfully valid, enforceable, or legal then that provision shall first be construed, if possible, in a manner that keeps it from being contrary to law, invalid, unenforceable, or illegal while reflecting those intentions of the parties ("Saving Interpretation"). If such Saving Interpretation is not reasonable under the circumstances then such provision(s) shall be deleted without effect to the remaining provisions. 18. Construction For purposes of construction, this Agreement shall be deemed to have been drafted by both Pay-Per-View Site Provider and Partner Site. 19. Waivers No waiver by either party of the breach of any covenant, condition or term of this Agreement shall be construed as a waiver of any preceding or succeeding breach nor shall the acceptance of any fee or other payment during any period in which either party is in default be deemed to be a waiver of such default. All rights, remedies, undertakings, obligations and agreements contained in this Agreement shall be cumulative and none of them shall be a limitation of any other remedy, right, undertaking, obligation, or agreement. All waivers must be in writing and signed by the waiving party. 20. Compliance with Law Each party hereto shall comply with all applicable laws, rules, ordinances and regulations of any federal, state or other governmental authority. 21. Headings The headings in this Agreement are for convenience only and do not in any way limit or amplify the terms or conditions of this Agreement. 22. Counterparts This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. In the event of any variation or discrepancy between fully-executed copies of this Agreement (including any exhibits and riders), Pay-Per-View Site Providers’s copy shall 8
  9. 9. control. Additionally, this Agreement may be executed by faxed signatures, the delivery of which shall be binding and effective for all purposes. 23. Authority By executing this Agreement in the space provided below, the person signing this Agreement on behalf of the Partner Site represents to Pay-Per-View Site Provider that the Partner Sites’s governing body or person(s) (i) has authorized Partner Site to enter into this Agreement and to assume the duties and obligations set forth herein, and (ii) has authorized the signatory hereof to execute and deliver this Agreement on behalf of Partner Site and to thereby bind Partner Site to the terms and conditions hereof. 24. Effectiveness of this Agreement This Agreement shall not be effective until it has been signed by Pay-Per-View Site Provider. Until then, Partner Site’s execution and delivery of this Agreement shall only constitute an offer, contingent on approval by Pay-Per-View Site Provider. IN WITNESS WHEREOF, this Agreement has been executed and delivered in New York, New York as of the date first below written. _________________________ SVOTHI CORP. (PARTNER SITE) (PAY-PER-VIEW SITE PROVIDER) By:______________________ By______________________ Name:___________________ Name:___________________ Date:____________________ Date:____________________ Title:____________________ Title:____________________ ATTACHMENT “A” Description of the specific Licensed Content which is the subject of this Agreement. ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ 9
  10. 10. ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ATTACHMENT “B” Listing and Description of Pay-Per-View, Subscription and No Charge uses of Licensed Content. Pay-Per-View and Subscription Fees combined account for all gross revenues. A. Pay-Per-View. For a charge of $6.95 per movie, the subscribers of Authorized Pay-Per-View Websites have 24 hours of unlimited access to a selected Licensor video. This charge can be changed with the mutual agreement of Licensor, Pay-Per-View Site Provider and Partner Site. B. Subscription Fees. Subscription fees of $6.95/day, $19.95/month, $39.95/3 months, shall provide subscribers with unlimited access to the following Licensed Content: up to 10 representative thumbnail images of up 320x240 pixels per video in Attachment A and one streaming video preview up to 5 minutes in length per video in Attachment A. Pay-Per-View Site Provider has the right to remove or add the above subscription plans for the purposes of marketing research and maximizing profitability, but must have the mutual agreement of both parties to create new plans or change prices of existing plans. C. No Charge. The following Licensed Content can be to accessible to visitors of Authorized Pay-Per-View Websites at no charge: text descriptions of videos, box cover photos, two representative thumbnail images of up to 320x240 pixels per video in Attachment A, and one free sample streaming video for the entire Authorized Licensee Website of up to 3 minutes in length. The free sample streaming video will not change more frequently than every 6 months. 10