TV PRODUCTION AND DISTRIBUTION AGREEMENT

 

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                    TV PRODUCTION AND DISTRIBUTION AGREEMENT

 

 

This Agreement (including the Exhibit(s) hereto) is made between:-

 

SWEDISH MATCH GRAND PRIX AB ("SMGP")

Rosenlundsgatan 36, SE-118 85 Stockholm, Sweden

 

and

 

NARROWSTEP LTD ("NSP")

60 Parsons Green Lane, London SW6 4HU, United Kingdom

 

(hereinafter collectively referred to as the "Parties")

(The Swedish Match Tour is referred to as the "Tour")

 

and sets out the terms and conditions under which NSP is contracted by SMGP for

TV production and distribution of ten (10) event programmes from event regattas

on the Tour in the 2004/5 and 2005/6 seasons.

 

In this Agreement the following words and expressions shall have the following

meanings:

 

"Content" means electronically recorded audio and visual material such as may be

protected by relevant intellectual property legislation;

 

"Fees" means all fees payable by SMGP to NSP for the Professional Services;

 

"Initial Term" means the minimum term for which NSP will provide the Services;

 

"Professional Services" means any professional, consulting or support services

provided by NSP to SMGP under this Agreement;

 

"Renewal Term" means any term following the Initial Term;

 

"Services" means the Professional Services and the Supplemental Services;

 

"Supplemental Expenses" means all supplemental expenses incurred by NSP in

relation to the expenses for subsistence, flights and accommodation for the

agreed NSP team at each event;

 

"Supplemental Fees" means all fees payable by SMGP to NSP in respect of

Supplemental Services and such fees shall be in accordance with NSP's then

current prices and pricing policy;

 

 

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"Supplemental Services" means any agreed certain services and equipment needed

by SMGP on a "one-off" or emergency basis where such services are not included

within the scope of the Professional Services;and

 

"The Player" means the Narrowstep Inc TV player on the Internet incorporating,

ChannelServer, AdServer and MediaServer elements which are commonly known as

`The Player' in Narrowstep's business model.

 

 

1.        TERMS FOR PARTIES

1.1       Whereby it is agreed that NSP and SMGP shall accept the terms in full

         within this Agreement for television coverage of the Tour TV series.

 

2.        COMMISSIONING AGREEMENT

2.1       NSP is commissioned by SMGP to film sailing events on the Tour, to

         produce programs and to distribute such programs, in accordance what is

         further described in EXHIBIT 1.

 

2.2       NSP shall provide SMGP with 14 x PAL format DVD and 3 x NTSC format DVD

         after each production is completed.

 

3.        REMUNERATION

3.1       The agreed remuneration for the Professional Services is USD 325,000

         (three hundred and twenty five thousand USD).

 

3.2       If SMGP cancels one or more of the events on the Tour, the renumeration

         set out above shall be reduced by USD 30,000 (thirty thousand USD) for

         each cancelled event unless the Parties agree to an arrangement for NSP

         to provide a replacement programme.

 

3.3       If SMGP adds one or more events to the Tour, SMGP shall pay an

         additional fee of USD 30,000 per added event and year, and the

         Professional Services shall comprise such event. SMGP will consult NSP

         prior to the addition or deletion of any event.

 

3.4       In the event of deletion or addition of one or more events on the Tour,

         the renumeration set out above shall be adjusted in accordance with

         section 3.2 and/or section 3.3 above. Such adjustments, if any, shall

         be settled between the Parties by the 31st of December each year during

         the term of this Agreement.

 

4.        TERM

4.1       The Term of this Agreement will be from the 1st of February 2005 and

         shall continue until the 31st of December 2005.

 

4.2       This Agreement will be automatically extended for one (1) year at a

         time, unless terminated in writing on or prior to the 1st of December

         of each year

 

4.3       The termination of this Agreement shall not affect the validity of the

         clauses 7 (save for 7.4 and 7.5), 8, 15, 16 and 17.

 

5.        PAYMENT TERMS

5.1       Payment shall be made via electronic funds transfer with all charges

         paid by sender in ten (10) equal instalments (the number of instalments

         may change, should

 

 

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         events be added or cancelled as set out in sections 3.2 and 3.3) of USD

         30,000 (thirty thousand USD) on the 30th day of each month beginning

         February, and one final instalment of USD 25,000 (twenty-five thousand

         USD) on 1 December.

 

5.2       NSP shall issue to SMGP a monthly invoice.

 

5.3       SMGP shall provide all flights, accommodation and subsistence expenses

          for the agreed NSP team at each event. Flight costs shall not exceed

         USD 30,000. Any Supplemental Expenses relating to this incurred by NSP

         shall be reimbursed by SMGP providing these are agreed in writing by

         the Tour President or the Tour Director of SMGP in advance, or if

         agreed on site at an event, by a follow-up e-mail confirming the

         agreement.5.3

 

5.4       Travel, accommodation and subsistence costs relating to any additional

         events added to the Tour as in clause 3.3 of this agreement shall be

         provided or reimbursed to NSP.

 

5.5       SMGP shall reimburse any Supplemental Fees for any Supplemental

         Services performed by NSP, providing these are agreed in writing by the

         Tour President or the Tour Director of SMGP in advance, or if agreed on

         site at an event, by a follow-up e-mail confirming the agreement.

 

5.6       Payment of all invoices issued by NSP to SMGP shall become due fourteen

         (14) days after receipt of the same by SMGP.

 

5.7       Where applicable NSP will charge to SMGP such taxes as may be

         applicable at the prevailing rate and all other relevant purchase tax

         on the Fees, Supplemental expenses and Supplemental Fees. Should NSP

         become aware of any such tax, NSP shall without delay notify in writing

         SMGP thereof. Should NSP not give a written notice without delay to

         SMGP, NSP will be responsible for any such taxes that could have been

         avoided had SMGP received such a notice.

 

6.        LATE PAYMENTS

6.1       Late payments shall be subject to the prevailing rate of interest

         according to Swedish law which shall accrue on a daily basis and is due

         and payable by SMGP. However, any delay as regards the payment that

         falls due on the 30th of February 2005 shall not be subject to interest

         if the delay depends on the execution of this Agreement taking place

         after that date.

 

7.        RIGHTS

7.1       SMGP shall be the sole and exclusive owner of all results of work

         performed by NSP under this Agreement. Without limitation, films,

         programming, news rushes, Content, as well as other productions and

         recordings of the same, shall be considered as results of work

         performed by NSP under this Agreement. SMGP's ownership of such results

         shall include all intellectual property rights and SMGP shall be

         entitled to make changes in such results and to transfer its rights to

         any third party.

 

7.2       At SMGP's request, NSP shall without delay provide SMGP with results of

         work performed by NSP under this Agreement. Any untoward costs incurred

         by NSP will be reimbursed by SMGP providing these are agreed in writing

         by the Tour President or the Tour Director of SMGP in advance.

 

 

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7.3       SMGP agrees that NSP is allowed to use all materials covered within

         this agreement for internet broadcasting.

 

7.4       SMGP agrees that NSP is allowed to use all materials covered within

         this agreement for their own advertising and promotion in perpetuity,

         providing the express written agreement of SMGP is obtained beforehand.

 

7.5        SMGP agrees that NSP is allowed to use all materials covered within

         this agreement once this agreement terminates, provided the express

         written agreement of SMGP is obtained beforehand.

 

7.6       The Narrowstep Player is recognised as being proprietary Narrowstep

         software and as such Narrowstep is the sole owner of this technology

         and software, which is under license to SMGP and is operated by

         Narrowstep only for the duration of this agreement, and SMGP recognises

         it has no claims or rights in this respect.

 

8.        LIMITATION OF LIABILITY

8.1       In no circumstances shall the Parties be liable in contract, tort

         (including negligence or breach of statutory duty) or otherwise

         howsoever caused for:

 

         (i)     any loss of profit business contracts revenues or anticipated

                savings or;

        (ii)     any special indirect or consequential damage of any nature

                whatsoever arising directly or indirectly out of the provision

                by NSP of the Services or of any error or defect therein or of

                the performance, non-performance, or delayed performance by NSP

                of this Agreement.

 

8.2       In the event of a technical failure of equipment or of a material

         failure with video tapes, NSP shall endeavour to rectify the failure on

         site or provide replacement equipment and video tapes at th