Master Agreement for Multimedia Development

Master Agreement for Multimedia Development and Consulting Services

THIS AGREEMENT FOR MULTIMEDIA DEVELOPMENT AND CONSULTING SERVICES is made and entered into by and between Multimedia Productions, Inc., a corporation existing under the laws of the State of New York with offices at Madison Avenue, New York, New York (hereinafter referred to as "Producer") and Worldwide Media Consultants, Inc., a professional corporation existing under the laws of North Carolina with offices at Park Avenue, Charlotte, N.C. (hereinafter referred to as "Consultant").

WHEREAS, Producer is the owner of all rights, title and interest in and to a certain CD-ROM multimedia applications described on Exhibit A hereto (hereinafter the "Multimedia Applications") for use on IBM-compatible personal computers using MS-DOS version 3.0 or higher; and

WHEREAS, Producer desires that Consultant modify the Multimedia Applications and develop additional applications (the "Additional Applications").

NOW, THEREFORE, in consideration of the mutual promises set forth herein, Producer and Consultant hereby agree as follows:

1. Services and Scope of Work

1.1. Services

Consultant agrees to provide to Producer consulting services as are described on such schedules as are executed from time to time by both parties to this Agreement (the "Schedules") each of which Schedules shall be consecutively numbered and annexed hereto. Such services shall be provided in accordance with the provisions of this Agreement and the applicable Schedule.

1.2. Scope of Work

A Statement of Scope of Work (the "Statement") shall be included in each Schedule. Each Statement will contain a description of the tasks to be performed by Consultant with respect to the Multimedia Applications or the Additional Applications, the modifications and documentation to be produced by Consultant, acceptance criteria, warranty periods, a schedule of performance, a schedule of payments and a statement of Consultant's anticipated expenses.

2. Confidentiality and Proprietary Rights

2.1. Confidentiality

Consultant acknowledges that Producer is the owner of valuable trade secrets and other confidential information, and licenses the same from others. Consultant also acknowledges that the deliverables which it shall produce as a result of its services hereunder shall constitute confidential information of Producer. Consultant agrees that the services which Producer performs for clients is confidential; that to enable Producer to perform these services, its clients furnish confidential information concerning their business affairs, finances, properties, methods of operation and other data; that the goodwill of Producer depends, among other things, upon its keeping such services and information confidential and that unauthorized disclosure of the same would irreparably damage Producer; and that by reason of its duties hereunder, Consultant may come into possession of information concerning such services or information furnished by clients, even though Consultant does not itself take any direct part in or furnish the services performed for those clients. All such information owned by Producer, developed for the Producer, licensed by Producer, or concerning clients of Producer and services rendered by Producer to such clients is hereinafter collectively referred to as "Confidential Information."

2.2. Non-Disclosure

Consultant agrees that, except as directed by Producer, Consultant will not, at any time during or after the term of this Agreement, disclose any Confidential Information to any person, or permit any person to examine and/or make copies of any documents, discs, programs, data or other materials in any form prepared by Consultant or that come into Consultant's possession or under Consultant's control by reason of Consultant's services, and that upon termination of this Agreement, Consultant will turn over to Producer all documents, papers, discs, programs, data and other materials in any form in Consultant's possession or control that contain or relate to such Confidential Information.

2.3. Injunctive Relief

Consultant acknowledges that disclosure of any Confidential Information by Consultant will give rise to irreparable injury to Producer or the owner of such information, inadequately compensable in damages. Accordingly, Producer or such other party may seek and obtain injunctive relief against the breach or threatened breach of the foregoing undertakings, in addition to any other legal remedies which may be available. Consultant acknowledges and agrees that the covenants contained herein are necessary for the protection of legitimate business interests of Producer, its subsidiaries and/or affiliated companies and are reasonable in scope and content.

2.4. Proprietary Rights

Producer owns all rights, title and interest in and to the Multimedia Applications and the Additional Applications and all portions thereof. Unless otherwise specified in a Schedule, all work performed under any Schedule whether in regard to the Multimedia Applications or Additional Applications, and all materials, products, modifications developed or prepared by Consultant under this Agreement, are the property of Producer and all title and interest therein shall vest in Producer and shall be deemed to be a work made for hire and made in the course of the services rendered hereunder. To the extent that title to any such works may not, by operation of law, vest in Producer or such works may not be considered works made for hire, all rights, title and interest therein are hereby irrevocably assigned to Producer. All such materials shall belong exclusively to Producer, with Producer having the right to obtain and to hold in its own name, copyrights, registrations or such other protection as may be appropriate to the subject matter, and any extensions and renewals thereof. Consultant agrees to give Producer and any person designated by Producer, reasonable assistance, at Producer's expense, required to perfect the rights defined in this Paragraph. Unless otherwise requested by Producer, upon the completion of the services to be performed under each Schedule or upon the earlier termination of such Schedule, Consultant shall immediately turn over to Producer all materials and modifications developed pursuant to such Schedule.

2.5. Acquisition of Additional Rights

Producer has, or shall obtain all rights, licenses, waivers, permissions, credits or attribution, including the right to incorporate pre-existing work as content in the Multimedia Applications or the Additional Applications which is necessary for Consultant to perform its services hereunder. Consultant shall, upon Producer's request, use its best efforts to obtain at Producer's cost and expense any such rights and permissions.

3. Consultant Personnel

3.1. Consultant Project Manager

Consultant will appoint for each Schedule a qualified member of its staff to act as project manager (the "Consultant Project Manager"), whose duties shall be to act as liaison between Producer and Consultant. The amount, if any, to be charged Producer for the Services of the Consultant Project Manager shall be included in the Schedule.

3.2. Consultant Staff

Consultant will provide adequate staff to complete the services specified in the Schedule within the time frame set forth in the Schedule. In the event that any Consultant employee is found to be unacceptable to Producer, Producer shall notify Consultant of such fact and Consultant shall immediately remove said employee and, if requested by Producer, provide a replacement acceptable to Producer, within five (5) days of said notice. Producer may elect not to request a replacement, and, in that event Producer may terminate the applicable Schedule, without further liability of any kind, upon written notice to Consultant. Producer is the sole judge as to performance capability.

Consultant agrees to ensure the continuity of Consultant employees assigned to perform services hereunder. Any removal or reassignment by Consultant of those of its employees assigned to perform services hereunder must be with one (1) month's prior written notice to Producer and with Producer's prior written consent as to the removal or reassignment and as to any replacement employee, who shall have substantially equivalent or better qualifications than the employee being replaced. In the event Consultant replaces any of its employees with Producer's consent, Consultant will promptly provide said replacement. Unless otherwise agreed to in writing by Producer, Consultant shall not remove or replace personnel provided hereunder. There will be no charge to Producer for any replacement provided in accordance with the above paragraphs while the replacement employee acquires the necessary orientation which shall not exceed five (5) working days.

3.3. Independent Contractor

Consultant is an independent contractor. Neither Consultant nor Consultant's employees are, or shall be deemed for any purpose to be, employees of Producer. Producer shall not be responsible to Consultant, Consultant's employees or any governing body for any payroll-related taxes related to the performance of the Services.

4. Project Management

4.1. Producer Project Manager

Producer shall designate a project manager for each Schedule (the "Producer Project Manager") who shall act as a liaison between Producer and Consultant.

4.2. Progress Reports and Meetings

Consultant shall submit a detailed Progress Report to Producer Project Manager every month during the term of each Schedule. Such progress reports will detail work performed to date and estimated time and cost to complete. If Producer so requests, Consultant shall hold status meetings with Producer Project Manager in order to review the status of Consultant activities.

5. Fees, Expenses, Records and Taxes

5.1. Fees

Consultant agrees to invoice Producer, monthly in arrears for services provided to Producer by Consultant personnel under each Schedule which specifies that services performed thereunder are to be performed on a time and materials basis in accordance with the billable rates set forth on Exhibit B hereto. Consultant agrees to invoice Producer for services provided to Producer by Consultant personnel under each Schedule which specifies that services performed thereunder are to be performed on a fixed price basis in accordance with the schedule of payments set forth in the Schedule.

5.2. Expenses

Consultant shall invoice Producer, monthly in arrears, for expenses incurred as a result of performing services in accordance with any Schedule. Such expenses shall be limited to reasonable out-of-pocket expenses necessarily and actually incurred by Consultant in the performance of its services hereunder, provided that: (i) Producer has given its prior written consent for any such expenses; (ii) the expenses have been detailed in a form acceptable to Producer and submitted to the appropriate Producer Project Manager for review and approval; and (iii) Consultant submits supporting documentation in addition to the approved expense form.

5.3. Review of Fees and Expenses

Consultant will submit the charges and/or expenses to be invoiced for services performed and the applicable time reports or documentation under any Schedule to the Producer Project Manager for approval prior to actual invoicing. The charges and/or expenses invoiced in accordance with this Paragraph, except for any amounts disputed by Producer, shall be payable by Producer within thirty (30) days of Producer's receipt of each invoice.

5.4. Maximum Dollar Amount

Notwithstanding anything to the contrary contained herein, and subject only to change in scope mutually agreed to by the parties in writing, Producer shall not be liable for any charges and/or expenses under any Schedule for work done on a time and materials basis in excess of the maximum dollar amount specified on such Schedule.

5.5. Records

Consultant shall maintain complete and accurate accounting records, in a form in accordance with generally accepted accounting principles, to substantiate Consultant's charges and expenses hereunder and Consultant shall retain such records for a period of one (1) year from the date of final payment under any Schedule.

5.6. Taxes

Producer agrees to pay the amount of any sales, use, excise or similar taxes applicable to the performance of the Services, if any, or, in lieu thereof, the Company shall provide Consultant with a certificate acceptable to the taxing authorities exempting Producer from payment of these taxes.

6. Acceptance of Services

6.1. Acceptance Criteria

Any services or deliverables performed or delivered by Consultant hereunder shall be subject to acceptance testing by Producer to verify that the service or deliverable satisfies the acceptance criteria mutually agreed to by Producer and Consultant.

The acceptance criteria for each modification, which shall be included in the applicable Schedule, shall be jointly developed and mutually agreed to in writing by Producer and Consultant before work commences under the Schedule, when possible, but in no event later than thirty (30) days in advance of the date identified in the Schedule for completion of the service or deliverable involved. If Producer in good faith cannot agree to any of the acceptance criteria proposed by Consultant, Producer may terminate this Agreement without incurring any liability hereunder.

6.2. Acceptance Testing

Acceptance testing for any modification shall commence within five (5) working days of the date on which Consultant notifies Producer Project Manager, in writing, that the service or deliverable has been satisfactorily completed, in Consultant's opinion, and is ready for acceptance testing by Producer. Acceptance testing shall continue for the period of time specified in the acceptance criteria or, if no such time period has been agreed upon by the parties, for a period of thirty (30) consecutive days (the "Initial Acceptance Period").

In the event that any service or deliverable does not conform to the acceptance within the Initial Acceptance Period described above, Producer shall give Consultant written notice thereof. Producer shall cooperate with Consultant in identifying in what respects the service or deliverable has failed to conform to the criteria. Consultant shall, at no cost to Producer, promptly correct any deficiencies which prevent such service or deliverable from conforming to the criteria. Upon completion of the corrective action by Consultant, and at no additional cost to Producer, the acceptance test will be repeated until the service or deliverable has successfully conformed to the acceptance criteria.

If the service or deliverable does not conform to the acceptance criteria within sixty (60) days after the end of the Initial Acceptance Period described above, Producer may: (i) immediately terminate the applicable Schedule without any further obligation or liability of any kind and Consultant shall immediately reimburse Producer any amounts paid thereunder; or (ii) require Consultant to continue to attempt to correct the differences, reserving the right to terminate as aforesaid at any time. When the service or deliverable has successfully conformed to or satisfied the acceptance criteria Producer shall give Consultant written notice thereof.

7. Indemnity and Insurance

7.1. Indemnity

Consultant agrees to defend at its own cost and expense any claim or action against Producer, its subsidiaries and/or affiliated companies, for actual or alleged infringement of any patent, copyright or other property right (including, but not limited to, misappropriation of trade secrets), a claim for libel based on any software, program, service data and/or other materials furnished to Producer by Consultant pursuant to the terms of this Agreement or the use thereof by Producer.

Consultant further agrees to indemnify and hold Producer, its subsidiaries and/or affiliated companies, harmless from and against any and all liabilities, losses, and expenses associated with any such claim or action.

Consultant agrees, should Producer's use of any service, program, and/or other material furnished to Producer by Consultant be enjoined by any court, to promptly obtain, at no expense to Producer, the right to continue to use the items so enjoined or, at no expense to Producer, provide Producer promptly with substitute items that are functionally equivalent to the enjoined products.

Consultant shall be liable for and shall indemnify and hold Producer, its subsidiaries and/or affiliated companies harmless against any loss or damage in connection with or arising out of the fault or negligence of Consultant.

Consultant agrees to indemnify Producer, its subsidiaries and/or affiliated companies for any liability or expense due to claims for personal injury to property arising out of the furnishing, performance or use of the services or materials provided hereunder as well as any claim for payment of compensation or salary asserted by an employee of Consultant.

Consultant is a professional corporation and each of the members of said corporation hereby agrees to be held jointly and severally liable for any liability of Consultant set forth herein or arising hereunder.

Consultant shall not be obligated under this provision to the extent that such claim or action arises with relation to any specific pre-existing work provided or specified by Producer for inclusion in the Multimedia Applications or Additional Applications.

7.2. Insurance

Consultant shall procure and maintain for itself and its employees all insurance coverages as required by Federal or State law, including workers' compensation insurance. Consultant also agrees to maintain limits of $1,000,000 employees liability insurance, $1,000,000 combined single limit for bodily injury or property damage and $500,000 per occurrence automobile liability coverage. Consultant shall furnish to Producer a certificate of insurance evidencing such coverage and naming Producer as additional insured. Said certificate will include a provision whereby fifteen (15) days notice must be received by Producer prior to coverage cancellation by either Consultant or insurer.

8. Warranties

8.1. Consultant Warranties

Consultant warrants that: (a) each of its employees assigned to perform services under any Schedule shall have the proper skill, training and background so as to be able to perform in a competent and professional manner and that all work will be performed in accordance with the applicable Schedule; (b) Producer shall receive free, good and clear title to all materials, modifications and products developed under this Agreement and no such materials, modifications or products shall infringe any United States patent, copyright or other proprietary right (including, but not limited to, misappropriation of trade secrets); (c) each and every service and deliverable performed or delivered hereunder shall conform to the specifications for same as mutually agreed to in writing by Producer and Consultant; (d) for 120 days from (i) the date Producer notifies Consultant of Producer acceptance of a service or deliverable or (ii) the completion date of any Schedule, Consultant will, at no charge to Producer, furnish such materials and services as shall be necessary to correct any defects in the operation of the version of the service or deliverable or other products in Producer's possession and to maintain them in good working order in accordance with the specifications for same; and (e) any materials provided to Producer contain no matter which, if published, will be libelous.

9. General

9.1. Timeliness of Performance

Consultant understands that prompt performance of all services hereunder is required by Producer in order to meet its schedules and commitments. In the event that any anticipated or actual delays in meeting Producer's deadlines or scheduled completion dates are caused by the unacceptable performance of any Consultant employee or any other cause within the reasonable control of Consultant, Consultant shall provide additional temporary personnel, as requested by Producer and at no charge to Producer, in order to complete the assignment involved in a timely manner. Neither party, however, shall be responsible for any delays that are not due to such party's fault or negligence or that could not have reasonably been foreseen or provided against.

9.2. Term and Termination

This Agreement shall commence on the date as indicated on the first Schedule attached hereto and shall continue in full force and effect thereafter unless and until terminated in accordance with the provisions of this Agreement or any Schedule or until satisfactory completion of the services provided for herein and in all Schedules, based on the acceptance criteria set forth in said Schedules.

In the event of any material breach of this Agreement by either party, the other party may cancel this Agreement, by giving thirty (30) days' prior written notice thereof; provided, however, that this Agreement shall not terminate at the end of said thirty (30) days' notice period if the party in breach has cured the breach of which it has been notified prior to the expiration of said thirty (30) days.

In the absence of a material breach of this Agreement by Consultant, Producer may terminate this Agreement or any Schedule hereunder by giving Consultant two (2) weeks prior written notice of its election to terminate said Agreement or Schedule. In such case, Producer agrees to pay Consultant for all costs incurred by the Consultant with Producer's approval up to the effective date of termination.

9.3. Work Rules

Unless otherwise agreed to by the parties, Consultant's personnel and Consultant's subcontractors, shall observe the working hours, working rules, and policies of Producer while working on Producer's premises.

9.4. Assignment

This Agreement shall be binding upon the parties' respective successors and permitted assigns. Neither party may assign this Agreement or any of its rights or obligations hereunder without the prior written consent of the other party, and any such attempted assignment shall be void, except that Producer may assign this Agreement, or any of its rights or obligations hereunder, upon written notice to Consultant, to any of its subsidiaries or affiliated companies, without the consent of Consultant or in connection with the sale of all or substantially all of the assets of Producer. Furthermore, no work to be performed by Consultant hereunder shall be subcontracted to or performed on behalf of Consultant by any third party, except upon written permission by Producer.

9.5. Notices

Any notices or communication under this Agreement shall be in writing and shall be hand delivered or sent by registered mail return receipt requested to the party receiving such communication at the address specified above or such other address as either party may in the future specify to the other party.

9.6. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

9.7. Modifications

No modification, amendment, supplement to or waiver of this Agreement or any Schedule hereunder, or any of their provisions, shall be binding upon the parties hereto unless made in writing and duly signed by both parties.

9.8. Waiver

A failure of either party to exercise any right provided for herein shall not be deemed to be a waiver of any right hereunder.

9.9. Complete Agreement

This Agreement and each Schedule attached hereto set forth the entire understanding of the parties as to the subject matter therein and may not be modified except in a writing executed by both parties.

9.10. Severability

In the event any one or more of the provisions of this Agreement or of any Schedule is invalid or otherwise unenforceable, the enforceability of remaining provisions shall be unimpaired.

9.11. Publicity

Consultant agrees that it will not, without prior written consent of Producer, use in advertising, publicity or otherwise the name of Producer, or any affiliate of Producer, or refer to the existence of this Agreement in press releases, advertising or materials distributed to prospective customers.

9.12. Most Favored Producer

Consultant agrees to treat Producer as its most favored customer. Consultant represents that all of the provisions of this Agreement and any Schedule are comparable to or better than the equivalent provisions being offered by Consultant to any of its other customers. If Consultant offers more favorable provisions to any customer during the terms of their contract periods than under this Agreement or any Schedule, such provisions shall be made available to Producer.

9.13. Non-Solicitation

Unless otherwise mutually agreed to by the parties in writing, Consultant agrees not to hire or to solicit the employment of any personnel of Producer directly or indirectly associated with Consultant's work effort under any Schedule during the term of such Schedule and for a period of six (6) consecutive months thereafter.

IN WITNESS WHEREOF, the parties hereto, each acting under due and proper authority, have executed this Agreement as of the date written on Schedule Number 1 attached hereto.