<PAGE>
EXHIBIT 10.21
AMENDED AND RESTATED SERVICE AGREEMENT
(1) On Demand
Distribution Limited, doing business as Loudeye
(2) Charles Edward
Averdieck
Dated March 15, 2006 (the "EFFECTIVE DATE")
OSBORNE CLARKE
2 Temple Back East
Temple Quay
Bristol
BS1 6EG
Telephone +44 (0) 117 917 3000
Fax +44
(0) 117 917 3005
SJH/0792861/B1597951/SJH
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CONTENTS
<TABLE>
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<C>
1. Definitions and
interpretation....................................... 1
2.
Appointment..........................................................
4
3.
Term.................................................................
4
4. Duties of the
Executive..............................................
4
5. Hours of
work........................................................
5
6. Principal place of
work.............................................. 5
7.
Remuneration.........................................................
5
8.
Expenses.............................................................
6
9.
Benefits.............................................................
6
10.
Holidays.............................................................
7
11. Sickness or
injury...................................................
7
12. Termination of and suspension from
Employment........................ 8
13. Obligations during
Employment........................................ 10
14. Obligations after
Employment......................................... 12
15. Disciplinary and Grievance
procedure................................. 13
16. Collective
Agreements................................................
14
17.
Deductions...........................................................
14
18. Entire
Agreement.....................................................
14
19. Third
Parties........................................................
14
20. Data
Protection......................................................
14
21. Releases and
waivers.................................................
14
22.
Notices..............................................................
15
23. Governing law and
jurisdiction....................................... 15
</TABLE>
<PAGE>
THIS AGREEMENT is made effective on March 15, 2006
BETWEEN:
(1) ON DEMAND
DISTRIBUTION LIMITED, doing business as LOUDEYE whose
registered
office is at Bush House, 72 Prince Street, Bristol BS1 4QD (the
"COMPANY");
and
(2) CHARLES EDWARD
AVERDIECK of 92 Englewood Road, London SW12 9NY (the
"EXECUTIVE").
IT IS AGREED as follows:
1. DEFINITIONS
AND INTERPRETATION
1.1
In this Agreement,
unless the context otherwise requires, the
following definitions shall apply:
"AGREEMENT" means this Agreement (including any schedule or
annexure
to it and any document referred to in it or in agreed form).
"BOARD" means the board of directors of Loudeye Corp. from time
to
time and includes any committee of the Board duly appointed by
it.
"BUSINESSES" means the provision of digital media services and
any
trade or other commercial activity which is carried on by any
Group
Company, or which any Group Company shall have determined to carry
on
with a view to profit in the immediate or foreseeable future.
"CAUSE" means (a) violation by Executive of a state or federal
criminal law involving the commission of a crime against the
Company,
or any felony; (b) habitual or repeated misuse by Executive of
alcohol
or controlled substances; (c) fraud, intentional misrepresentation
or
dishonesty by Executive with respect to the business of the
Company;
(d) any incident materially compromising Executive's reputation
or
ability to represent the Company with the public; (e) any
intentional
act by Executive that substantially impairs the Company's
business,
goodwill or reputation; or (f) a determination by a majority of
the
Company's directors (other than the Executive) within thirty (30)
days
after the end of each of two (2) consecutive calendar quarters
that
the Company (or the Executive) has not substantially met the
Quarterly
Goals (as defined below).
"CHANGE OF CONTROL" shall mean the occurrence of any of the
following
events:
(i) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended)
becomes
the "beneficial owner" (as defined in Rule 13d-3 under said
Act),
directly or indirectly, of securities of Loudeye representing
fifty percent (50%) or more of the total voting power
represented
by Loudeye's then outstanding voting securities; or
(ii) The consummation of the sale or disposition by Loudeye of
all or substantially all Loudeye's assets in one or a series of
related transactions; or
(iii) The consummation of a merger or consolidation of Loudeye
or
share exchange involving any other corporation, other than (A)
a
merger, consolidation or share exchange which would result in
the
voting securities of Loudeye's outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding
or by being converted into voting securities of the surviving
entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of Loudeye or such
surviving
entity outstanding immediately after such merger or
consolidation, or (B) a merger effected solely for purposes of
changing the domicile of Loudeye.
"COMPANY INVENTION" means any improvement, invention or discovery
made
by the Executive which in accordance with Section 39, Patents Act
1977
is the property of the Company.
<PAGE>
"CONFIDENTIAL INFORMATION" means any trade secrets or other
information which is confidential, commercially sensitive and is
not
in the public domain relating or belonging to the Company or any
Group
Company including but not limited to information relating to
the
business methods, corporate plans, management systems, finances,
new
business opportunities, research and development projects,
marketing
or sales of any past, present or future service, secret
formulae,
processes, inventions, designs, know-how discoveries, technical
specifications and other technical information relating to the
creation, production or supply of any past, present or future
service
of the Company or any Group Company, lists or details of
customers,
potential customers or suppliers or the arrangements made with
any
customer or supplier and any information in respect of which any
Group
Company owes an obligation of confidentiality to any third
party.
"CUSTOMER" means any person:
(a) with whom or which
the Executive has dealt or of whom or of which
he has knowledge by virtue of his Duties in the 12 months
preceding the Termination Date; and
either:
(b) who or which shall
at the Termination Date be negotiating with
the Company or any Group Company for the provision of any
Restricted Services or Restricted Proposed Services; or
(c) to whom or which
the Company or any Group Company shall at any
time during the period of 12 months prior to the Termination
Date
have supplied any Restricted Services.
"DUTIES" means the duties of the Executive as set out in clause
4.
"EMPLOYMENT" means the period of the Executive's employment under
this
Agreement which for the purposes of this Agreement shall be deemed
to
include any period of garden leave imposed under sub-clause
12.6.
"GOOD REASON" shall mean, without Executive's express written
consent:
(a) the material reduction of (i) Executive's duties, benefits,
authority or responsibilities (as determined in good faith by
the
Board of Directors), or (ii) compensation ; (b) the relocation of
the
principal place of Executive's employment to a location that is
more
than fifty (50) miles away from its current location, other than
a
relocation to the Company's European headquarters located in
Bristol,
U.K.; and (c) the uncured breach of any material provision of
this
Agreement by the Company, including, without limitation, failure
by
the Company to pay Executive's Base Salary or bonus; provided,
however, that the Executive shall not be deemed to have resigned
for
Good Reason hereunder unless with respect to each of (a) and (b)
and
(c) above, the Executive shall have provided written notice to
the
Company within 60 calendar days after the event that the
Executive
believes gives rise to the Executive's right to terminate
employment
for Good Reason, describing in reasonable detail the facts that
provide the basis for such belief, and the Company shall have
thirty
(30)
days from the date of such notice to cure any such material
reduction, relocation or breach.
"GROUP COMPANIES" means the Company, its subsidiaries or
subsidiary
undertakings, any holding company or parent undertaking and any
subsidiary or subsidiary undertaking of any holding company or
parent
undertaking and "GROUP COMPANY" means any of them.
"LOUDEYE" means Loudeye Corp., a Delaware corporation.
"MANAGING DIRECTOR" means any person holding office as Managing
Director of the Company from time to time, including any person
exercising substantially the functions of a managing director or
chief
executive officer of the Company.
"MATERIAL INTEREST" means:
(a) the holding of any
position (whether employed or engaged) or
provision of services as director, officer, employee,
consultant,
adviser, partner, principal, agent or volunteer.
<PAGE>
(b) the direct or indirect control or
ownership (whether jointly or
alone) of any shares (or any voting rights attached to them) or
debentures save for the ownership for investment purposes only
of
not more than 5 per cent of the issued ordinary shares of any
company whose shares are listed on any Recognised Exchange. or
(c) the direct or
indirect provision of any financial assistance.
"QUARTERLY GOALS" shall mean specific targeted metrics of
Company
performance (financial or otherwise) and / or Executive
performance
for a calendar quarter. The Quarterly Goals shall be agreed to
in
writing by the Executive and the Company within the thirty (30)
day
periods prior to the beginning of each calendar quarter. The first
set
of Quarterly Goals shall be for the Second Quarter of 2006.
"RECOGNISED EXCHANGE" means a Recognised Investment Exchange as
defined in Section 285, Financial Services and Markets Act 2000 or
any
comparable exchange or market.
"RELEVANT PERIOD" means the period beginning on the day after
the
Termination Date equal to (a) during the year ended December 31,
2006,
six (6) months less any period during which the Company has
exercised
its right to send the Executive on garden leave pursuant to
sub-clause
12.6, and (b) any time including and after January 1, 2007,
nine
months (9) less any period during which the Company has exercised
its
right to send the Executive on garden leave pursuant to
sub-clause
12.6.
"RESTRICTED AREA" means the United States of America and the
European
Union.
"RESTRICTED PROPOSED SERVICES" means any digital media services
which
are, at the Termination Date, proposed to be provided by the
Company
or any Group Company at any time during the 12 months following
the
Termination Date and in respect of which or the marketing of which
the
Executive's Duties were directly concerned or for which the
Executive
was responsible during the 12 months preceding the Termination Date
or
in relation to which the Executive possesses Confidential
Information
at the Termination Date.
"RESTRICTED SERVICES" means any digital media services of a kind
which
have been provided by the Company or any Group Company in the
ordinary
course of the Businesses at any time during the 12 months
preceding
the Termination Date and in respect of which or the marketing of
which
the Executive's Duties were directly concerned or for which the
Executive was responsible during such period or in relation to
which
the Executive possesses Confidential Information at the
Termination
Date.
"RESTRICTED SHAREHOLDING" means the direct or indirect control
or
ownership (whether jointly or alone) of shares in a company
which,
together with shares held by any person acting in concert with
him
carry 25% or more of the voting rights of that company.
"RESTRICTED SUPPLIES" means any goods or services supplied to
the
Company or
any Group Company on terms which as to the nature of the
supplies and/or the terms of supply are unique to the
relationship
between the supplier and the relevant Group Company and in respect
of
which or the marketing of which the Executive's Duties were
directly
concerned or for which the Executive was responsible during the
12
months preceding the Termination Date or in relation to which
the
Executive possesses Confidential Information at the Termination
Date.
"SUPPLIER" means any person with whom the Executive has dealt or
of
whom or of which the Executive has knowledge by virtue of the
Duties
in the 12 months preceding the Termination Date and who has
during
that period provided Restricted Supplies to the Company or any
Group
Company.
"TERMINATION DATE" means the date on which the Employment
terminates.
1.2
In this Agreement,
unless the context otherwise requires:
(a) words in the
singular include the plural and vice versa and words
in one gender include any other gender;
(b) a reference to a
statute or statutory provision includes:
<PAGE>
(i) any subordinate
legislation (as defined in Section 21(1),
Interpretation Act 1978) made under it; and
(ii) any statute or statutory provision which modifies,
consolidates, re-enacts or supersedes it;
(c) a reference
to:
(i) a "PERSON"
includes any individual, firm, body corporate,
association or partnership, government or state (whether or
not having a separate legal personality);
(ii) clauses and schedules are to clauses and schedules of this
Agreement and references to sub-clauses and paragraphs are
references to sub-clauses and paragraphs of the clause or
schedule in which they appear;
(d) the table of
contents and headings are for convenience only and
shall not affect the interpretation of this Agreement; and
(e) except where
otherwise stated, words and phrases defined in the
City Code on Take-overs and Mergers or in the Companies Act
1985
have the same meaning in this Agreement.
2.
APPOINTMENT
2.1
The Company appoints
the Executive and the Executive agrees to serve
as Managing Director--Europe on the terms set out in this
Agreement.
Executive will report to the Company's Chief Executive Officer
("CEO").
2.2
The Executive warrants
that the Executive is free to enter into this
Agreement and is not bound by, nor subject to any court order,
arrangement, obligation, restriction or undertaking (contractual
or
otherwise) which prohibits or restricts the Executive from
entering
into this Agreement or performing the Duties.
3. TERM
3.1
The Employment will
commence on the Effective Date and, unless
terminated in accordance with clause 12, shall continue until
terminated by either party, subject to the termination benefits
provided in Sections 9.4 and 9.5 hereof.
3.2
The Executive's period
of continuous employment with the Company began
July 9, 2000.
4. DUTIES OF THE
EXECUTIVE
4.1
The Executive shall
carry out such duties as may attach to the
Executive's office or be assigned to or vested in the Executive by
the
CEO from time to time and exercise the powers consistent with
such
duties.
4.2
At all times during
the Employment (subject to any restrictions on the
Executive's conduct imposed pursuant to sub-clause 12.6) the
Executive
shall:
(a) unless prevented
by ill health and except during holidays taken
in accordance with this Agreement, devote the whole of the
Executive's working time and attention to the Employment;
(b) perform the Duties
faithfully and diligently;
(c) obey all lawful
and reasonable directions of the CEO and/or the
Board, observe such restrictions or limitations as may from
time
to time be imposed by the CEO and/or the Board upon the
Executive's performance of the Duties and implement and abide
by
any relevant Company policy which may be promulgated or
operated
in practice from time
to time;
<PAGE>
(d) use best
endeavours to promote the interests of the Company and
shall not do or willingly permit to be done anything which is
harmful to those interests; and
(e) keep the CEO fully
informed (in writing if so requested) of the
Executive's conduct of the business or affairs of the Company
and
provide such explanations as the CEO may require.
4.3
The Executive shall
(without further remuneration and in addition to
the Executive's duties to the Company) if and for so long as
the
Company requires during the Employment:
(a) carry out any
duties assigned to the Executive in relation to any
Group Company; and
(b) act as an officer
of any Group Company or hold any other
appointment or office as nominee or representative of any Group
Company;
in each case as if they were to be performed or held by the
Executive
for or in relation to the Company.
5. HOURS OF
WORK
5.1
The Executive's hours
of work shall be the Company's normal office
hours of 9.00 a.m. to 6.00 p.m. Monday to Friday and such
further
hours as may be necessary for the proper discharge of the Duties.
The
Executive shall not be entitled to receive any additional
remuneration
for work outside the Company's normal office hours.
5.2
The Executive
acknowledges that he may be required to work in excess
of an average of 48 hours in any one period of 7 calendar days if
so
requested by the Company and consents to do so. The Executive
may
withdraw such consent by giving not less than 3 months' prior
notice
in writing to the Company of such withdrawal.
6. PRINCIPAL
PLACE OF WORK
6.1
The Executive's
principal place of work shall be at Fourth Floor, 9
Argyll Street, London W1 or the Company's principal place of
business
from time to time. The Company reserves the right to change the
Executive's principal place of work to any other location within
the
United Kingdom on giving reasonable prior notice to the
Executive.
6.2
The Executive shall
travel to and work on a temporary basis from such
locations within the UK and abroad as the CEO may reasonably
require
for the performance of his Duties.
6.3
There is no current
requirement, as at the date of this agreement, for
the Executive to work outside the United Kingdom for any
consecutive
period of one month or more.
7.
REMUNERATION
7.1
During the Employment
the Company shall pay to the Executive a salary
at the rate of L123,750 per annum ("BASE SALARY"). The salary
shall accrue from day to day, be payable by equal monthly
instalments
in arrears on or about the 25th day of each month and shall
include
any fees to which the Executive is entitled as a director of any
Group
Company.
7.2
The Executive's salary
shall be reviewed annually in January when the
Company may increase or decrease Executive's salary or make no
change
to it; except that the Executive's Base Salary shall never be
reduced
below L123,750.
7.3
Executive's
eligibility for a performance bonus shall be based on the
overall performance of the Company. Each year the Compensation
Committee shall set both a performance target and maximum
performance
goal for the Company for the fiscal year. The performance target
and
maximum performance goal shall be documented in writing and
acknowledged by Executive. If, based on the Company's audited
financial statements, the performance target is met, and if the
Company is EBITDA positive (as determined in accordance with
GAAP),
Executive shall be eligible for an annual bonus of up to fifty
percent
(50%) of his Base Salary. If, based on the Company's audited
financials, the maximum performance goal is met, and if the Company
is
EBITDA positive, Executive shall be eligible for an annual bonus of
up
to one hundred percent (100%) of his Base Salary. For avoidance
of
doubt, executive's maximum aggregate annual bonus potential under
this
Section 7.3 is 100% of his Base Salary. The parties will negotiate
in
good faith to address any issues of fairness or consistency if
there
are changes in GAAP between the time that the targets are
established
and the calculation of eligibility for bonus.
<PAGE>
The actual amount of any bonus payable to Executive shall be
determined by the CEO, in consultation with the Executive Committee
of
the Board. Executive understands that in any year no more than
twenty
five percent (25%) of that year's total positive EBITDA balance
be
distributed as bonus compensation individually or collectively to
the
Company's executive leadership team (including Executive and
the
Company's other senior executives). Any potential bonus amount that
is
not payable pursuant to the prior sentence shall not be earned
and
shall not be accrued by the Company. For illustration purposes
only,
if in a given year Executive meets the maximum performance goal
entitling Executive to a performance bonus of L112,500 and the
Company's positive EBITDA balance as of the
