EXHIBIT 10.12
Service Distribution Agreement
[GRAPHIC OMITTED]
Between
NS8 Corporation
and
Advanced Datanetwork
Communications Co., Ltd.
SERVICE DISTRIBUTION AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of [ ] 2006, is entered into by and
between NS8 Corporation, a Delaware corporation with its offices at One Union
Square, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("NS8"),
and Advanced Datanetwork Communications Co., Ltd., a Thai limited company,
through Buddy Broadband, its IPTV service brand (collectively, "ADC"), with an
office at 19th Floor, Amarin Tower 500 Ploenchit Rd., Lumpini, Pathumwan,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇. Each party hereto is also individually referred to as
"Party" and together referred to as the "Parties".
RECITALS
A. NS8 is in the business of providing digital products and services, through
its division, iWave Interactive Services ("iWave"), to companies in the
business of providing digital content services to end-consumers by various
means.
B. ADC is in the business of providing digital content services to
end-consumers by means of the service(s) (the "ADC Services"). ADC wishes
to acquire certain products and services (collectively, the "iWave
Services") from NS8 for its internet PC VOD services.
C. The Parties wish to enter into an agreement whereby NS8 will make the iWave
Services available to ADC for use in ADC's business within Thailand.
D. This Agreement sets out the terms under which such NS8 iWave Services will
be made available to ADC.
In consideration of the premises and the respective covenants contained herein
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereby agree as follows:
1. TECHNICAL AND OTHER SERVICES
1.1 TERM. The term (the "Term") during which NS8 (iWave) shall be
required to make its products and services (collectively, the "iWave
Service(s)") available to ADC hereunder and during which ADC shall be permitted
to use the NS8 iWave Services shall commence on the Service Commencement Date as
set out in Schedule A to this Agreement and shall terminate on the third
anniversary thereof unless terminated earlier as provided in this Agreement.
Additional terms and conditions governing the Term during which NS8 will be
required to make its iWave Services available to ADC hereunder and during which
ADC shall be permitted to use the NS8 iWave Services are set out in Schedule A
to this Agreement.
1.2 iWAVE DELIVERY PLATFORM. NS8 will provide ADC, at no charge (except
as may otherwise be provided in this Agreement), with the relevant equipment,
hardware, and training with respect to the iWave Delivery Platform, as follows:
(a) iWave Application Hardware Specifications as described in
Schedule B;
(b) Advertising engine;
(c) iWave LDMS - Library Distribution Management System (as
described in Schedule A);
(d) iWave real time reporting engine; and
(e) iWave Consumer Programming Guide (CPG) customized for
Buddy Broadband-iWave brand.
The `free of charge" iWave Delivery Platform does not include:
(f) Streaming servers, Media Storage and network load
balancing equipment;
(g) Geofiltering third party software
1.3 TECHNOLOGY. Transmissions of licensed films or programs over the
internet shall be delivered from ADC's secure servers directly to the Device of
the User via an encrypted content file protected at all times using digital
rights management software approved by NS8 (the "DRM"). Delivery to PC's and
other approved portable/mobile devices shall be distributed exclusively by means
of the iWave Interactive Distribution Platform.
1.4 TECHNICAL EXCHANGE. ADC shall provide to NS8 within thirty (30)
days of the date of this Agreement a full description of the ADC Service
including network architecture, encoding and encryption methodologies,
subscriber verification and authentication procedures, billing and reporting
procedures and content protection and security measures as deemed appropriate
for the integration of the iWave Service platform into Buddy Broadband.
1.5 TERRITORY. The "Territory" includes the right for ADC to use NS8's
iWave Services as part of its ADC Buddy Broadband Services as contemplated in
this Agreement. The Territory includes the country of Thailand. ADC shall use
industry-approved geo-filtering technology to ensure that users of NS8's iWave
Services reside within the Territory.
1.6 CONTINUAL SERVICE. ADC must ensure that the ADC Service(s) remain
live, continue to fully and effectively operate and be available to consumers in
the Territory (Thailand throughout the entire Term of this Agreement.
1.7 LANGUAGE SUPPORT. English and Thai character language support on
the CPG (Consumer Programming Guide). Any additional language support will be
considered customization work not included in this Agreement.
1.8 CUSTOM DEVELOPMENT & SPECIAL FEATURES REQUEST. Special development
features requested by ADC that are additional to the standard features of the
NS8 iWave Service(s) can be developed and deployed for an additional charge for
specification architecture and prototype creation. NS8's custom development
service utilizes NS8's design, engineering, research and development and
proto-type teams to assist ADC in it's special feature needs. The price of these
additional charges will be mutually agreed to by NS8 and ADC on a case by case
basis.
1.9 SEPARATE AGREEMENT REQUIRED. This Agreement does not cover any
technical or other services that may be provided by NS8 to ADC other than those
specifically contemplated in this Agreement. In the event that ADC desires NS8
to provide any such additional services, then any provision of such additional
services would be subject to a separate agreement to be negotiated between the
Parties.
1.10 INTEGRATION OF OUTSIDE SERVICES. NS8 and ADC must mutually agree
to any integration of outside (third party) services with the NS8 iWave
Service(s) that might be proposed by ADC. For example, if ADC wants to add any
services that are to be linked to iWave, then NS8 must first agree to that
addition. Any development or other work that would be required to implement the
integration of any such outside services will be covered by and subject to the
provisions of section 1.8 of this Agreement.
2. FINANCIAL ARRANGEMENTS
2.1 PAYMENT OF REVENUE SHARE. ADC shall pay NS8's revenue (exclusive of
value added tax) to NS8 on a monthly basis at the rate as is mutually agreed by
the Parties and specified in Schedule A hereto and executed by both Parties. The
revenue share may be amended or modified from time to time by mutual agreement
of the Parties.
2.2 NS8 BANK DETAILS. Unless and until ADC is otherwise notified by
NS8, all payments hereunder shall be paid by wire transfer in United States
Dollars (converted at the Exchange Rate in effect on the payment due date
according to the rate announced by the Bank of Thailand) to NS8 at the bank
account specified in Schedule A hereto.
2.3 LATE PAYMENTS. Any payment not made within fifteen (15) business
days from the date that it is due under this Agreement shall accrue interest
from the date such amount is due until payment is received in full at the rate
of 7.5 % per annum of the defaulting amount.
2.4 BILLING INTEGRATION. ADC shall be responsible to perform all
billing integration in respect of the commercial transactions contemplated by
this Agreement and for such purposes ADC will perform all required billing
integration employing API's provided by NS8.
3. ADVERTISING, MARKETING AND REPORTING
3.1 BUDDY BROADBAND/IWAVE VOD SERVICE. ADC shall provide all necessary
promotion, advertising and marketing for the Buddy Broadband/iWave VOD Service.
3.2 ACCESS OF REPORTING. ADC shall provide full access of reporting
through iWave LDMS to NS8. NS8 will have direct access to all usage and data
reporting of the ADC Service through its direct real time reporting engine
provided under this Agreement. At no time shall direct access of the iWave
reporting engine be granted to any third party without the express written
consent of NS8. NS8 reserves the right to charge any third party for the right
to receive direct access to the real time reporting engine. These restrictions
and charges do not apply to providing the necessary reporting information
required by ADC's content providers by means of printed or electronic delivery
of usage reports.
3.3 CO-BRANDED iWAVE. ADC/Buddy Broadband will provide co-branded
services to NS8 to include the iWave brand as part of the Service. The terms of
the co-branding with both Buddy Broadband and iWave to be mutually agreed to by
both parties as long as both corporate branding is present.
3.4 ADVERTISING AND PROMOTION. iWave shall be included as part of all
promotion and marketing of the ADC/Buddy Broadband Services.
4. NS8'S REPRESENTATIONS AND WARRANTIES
4.1 In reliance upon the representations made to NS8 by the Studio and
other Content Owners, and without limiting any other representation or warranty
made by ADC herein, NS8 hereby represents and warrants to ADC that it has the
full right, power and authority to enter into this Agreement.
5. ADC'S REPRESENTATIONS AND WARRANTIES
Without limiting any other representation or warranty made by ADC
herein, ADC hereby represents, warrants and covenants to NS8 that:
5.1 It has the full right, power and authority to enter into this
Agreement; and
5.2 All of its services shall comply with the restrictions and
specifications set forth herein.
5.3 All of its services and content are fully licensed with rights of
distribution specific to that of the distribution methods contemplated herein
and shall comply with the restrictions and specifications set forth herein or
any other content licensing agreement that might be imposed by a studio or
content owner.
6. INDEMNIFICATION
6.1 ADC shall indemnify, defend and hold harmless NS8 and its
Representatives from and against any and all claims, damages, liabilities, costs
and expenses, including reasonable outside counsel fees, arising from or in
connection with the breach of any representation, warranty or provision of this
Agreement by ADC. NS8 shall promptly notify ADC of any such claim or litigation.
The failure to provide such prompt notice shall not diminish ADC's
indemnification obligations except only to the extent ADC is actually prejudiced
by such failure. In addition, ADC shall indemnify NS8 and its Representatives
for any claims resulting from ADC exhibiting any film or other program or
content, or due to ADC's unauthorized editing or modification of any film or
program or content or ADC's authorization of a third party to do any of the
foregoing if in violation of the express terms of this Agreement.
7. MISCELLANEOUS
7.1 NS8 may terminate this Agreement if (a) ADC breaches any of its
payment or security obligations and fails to cure same within fifteen (15) days
after receiving notice of any such breach from NS8, (b) ADC breaches any
representation, warranty or covenant (other than payment or security
obligations) and fails to cure same within 15 days after receiving notice of any
such breach from NS8, (c) ADC files a petition in bankruptcy or becomes
insolvent, or (d) or if any change in control of ADC occurs. Upon termination,
NS8 shall be relieved of its future obligations and ADC shall remain obligated
to fulfill all accrued obligations, including the payment of all Fees and
expenses owing to NS8. In addition, NS8 may declare all Fees due (or to become
due but for such termination) immediately due and payable.
7.2 Each party agrees to maintain in confidence the terms of this
Agreement and all information derived from the other party, except (a) as
necessary to comply with applicable law or court order and, without limiting the
generality of the foregoing, as necessary to comply with the rules or
regulations of an relevant stock exchange or the Securities and Exchange
Commission of the United States of America, (b) as part of its normal reporting
procedures to its parent company, auditors and attorneys, and (c) in order to
enforce any of its rights.
7.3 ADC may not assign this Agreement without the prior written consent
of NS8. NS8 may freely assign this Agreement to an affiliate capable of
performing NS8's obligations.
7.4 This Agreement is a short form agreement, and the parties may, by
mutual agreement, supersede this Agreement with a more comprehensive long form
agreement. Until the execution and delivery of such long form agreement, this
Agreement shall be the binding agreement between the parties relating to the
subject matter hereof.
8. NOTICE
8.1 Except as otherwise expressly provided herein, all notices,
statements and other documents desired or required to be given hereunder shall
be in writing and shall be given by personal delivery, reputable overnight or
courier delivery service or facsimile. All notices, statements and other
documents shall be sent to:
If to NS8: NS8 Corporation
#▇▇▇ - ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Corporate-Legal Department
Fax No.: ▇▇▇▇-▇▇▇-▇▇▇▇
If to ADC: Trairat Kaewkerd
Advanced Datanetwork Communications Co., Ltd.
19th Floor, Amarin Tower
500 Ploenchit Rd., Lumpini, Pathumwan
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Attention: Managing Director
Fax No.: ▇▇▇▇-▇▇▇-▇▇▇▇
(or at such other address as may be designated in writing by either party).
Notice given by facsimile shall be deemed given on the business day of receipt,
as evidenced by the confirmation sheet thereof; notice given by personal
delivery shall be deemed given upon delivery and notice given by overnight
delivery or courier service shall be deemed given the third business day
following the business day of delivery to the overnight delivery service.
9. GOVERNING LAW
9.1 This Agreement shall be interpreted and construed in accordance
with the laws of Washington State with the same force and effect as if fully
executed and to be fully performed therein without giving effect to its
conflicts of laws, principles or rules and shall be exclusively submitted to the
Federal and State courts of Washington State, USA. The parties waive their right
to trial by jury.
10. FORCE MAJEURE
10.1 Neither party shall in any manner whatsoever be liable or
otherwise responsible for any delay or default in, or failure of performance
resulting from or arising out of or in connection with any "Event of Force
Majeure", and no such delay, default in, or failure of performance shall
constitute a breach by either party hereunder. For purposes of this Agreement,
an "Event of Force Majeure" in respect of a party shall mean any reasonably
unforeseeable act, cause, contingency or circumstance beyond the reasonable
control of such party, including, without limitation, any governmental action,
nationalization, expropriation, confiscation, seizure, allocation, embargo,
prohibition of import or export of goods or products, regulation, order or
restriction (whether foreign, federal or state), war (whether or not declared),
civil commotion, disobedience or unrest, insurrection, public strike, riot or
revolution, fire, flood, drought, other natural calamity, damage or destruction
to plant and/or equipment, or any other accident, condition, cause, contingency
or circumstance (including without limitation, acts of God or terrorism within
or without the United States), but shall not include an inability to pay for
whatever reason.
11. CONFIDENTIALITY
11.1 COMMUNICATIONS. All communications between the Parties or their
affiliates or any of them in respect of this Agreement or the transactions
contemplated by this Agreement and all proprietary information and other
proprietary material (whether such party's or another party's proprietary or
confidential information or material) supplied to or received by any of them
from the others which is either marked "confidential" or is by its nature
intended to be exclusively for the knowledge of the recipient alone shall be
kept confidential by the recipient unless such information (a) is available to a
member of the public through no act or omission on the part of the recipient,
(b) was available to the recipient on a non-confidential basis from a source
other than a party hereto, provided that to the recipient's knowledge after due
inquiry, such source is not bound by any obligation of confidentiality with
respect to such information or the disclosure thereof, (c) has been
independently acquired or developed by the recipient without violating any of
its confidentiality obligations hereunder, or (d) has been specifically approved
in writing by the disclosing party for use or dissemination by the recipient. If
a party or its affiliate is compelled to disclose confidential information
obtained hereunder by judicial or administrative procedures or in the opinion of
its counsel, by other requirements of law, or if such confidential information
is required to be disclosed for the enforcement of the recipient's rights as a
party under this Agreement, then in each such circumstance, this confidentiality
obligation shall cease only to the extent required under the respective
circumstances. For the purposes of clarification, each Party to this Agreement
agrees that the Agreement and all of the terms and conditions hereof may be
disclosed by a Party without the consent of the other Party as required by
applicable rules and regulations of the United States Securities and Exchange
Commission.
11.2 NOTWITHSTANDING TERMINATION. The obligations of any party
contained in this Article 11 shall endure for the term of this Agreement and
shall continue for two (2) years thereafter. The Parties acknowledge the
competitive value and confidential nature of the confidential information to be
disclosed and that damage could result to the disclosing party if confidential
information is disclosed to any third party or used by any party other than the
disclosing party. Further, the Parties acknowledge that if the receiving party
shall violate the provisions of this Article 11, the disclosing party may suffer
immediate and irrevocable harm for which damages may be an inappropriate and/or
inadequate remedy and the Parties further agree that in the event of a breach or
a threatened breach of any provision of this Article 11, the disclosing party
shall be entitled and each of the Parties hereby consents to the issuance, in
the Federal or State courts of Washington State, USA, or at the election of the
disclosing party elsewhere, of a temporary restraining order, preliminary and
permanent injunction, without bond, restraining and enjoining the said breach or
violation by the receiving party and any other person or entity which may be
acting in concert with the receiving party to whom the confidential information
may have been disclosed.
11.3 NO ANNOUNCEMENT. The Parties shall not make any announcements or
press releases in respect of this Agreement or the transactions contemplated
herein without the prior written consent of both Parties, except as may be
required by law or the applicable rules and regulations of any applicable stock
exchange or the Securities and Exchange Commission of the United States of
America (the "SEC"). Any disclosures regarding this Agreement as may be required
by law or the applicable rules and regulations of any applicable stock exchange
or the SEC can be made by the Party subject to any such requirement without the
consent of or any consultation with the other Party.
12. LIMITATION OF LIABILITY
12.1 Neither party shall be liable to the other for special,
consequential or incidental loss or for loss of profits.
12.2 Except as otherwise provided for in this Agreement, in no event
will a Party have any liability to the other Party for any damages whatsoever
arising out of or in connection with this Agreement.
13. ENTIRE UNDERSTANDING
13.1 This Agreement includes the entire understanding of the Parties
with respect to the subject matter hereof, and all prior agreements (written or
oral) with respect to such subject matter have been merged herein. No
representations or warranties have been made other than those expressly provided
for herein. This Agreement may not be modified, except by a written instrument
signed by the Parties, and this provision may not be waived except by written
instrument signed by the Parties.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.
Signed on behalf of NS8 Corporation by:
(..................................................)
Name:
Title:
Signed on behalf of Advanced Datanetwork Communications Co., Ltd. by:
(.................................................)
Name: Somprasong Boonyachai
Title: Chairman
(.................................................)
Name: Trairat Kaewkerd
Title: Managing Director
Witness: __________________________
Name: Fuangfa Amponstira
Title: Senior Sales Director, Broadband Marketing
SCHEDULE A - SERVICE DISTRIBUTION AGREEMENT
STANDARD TERMS
Terms to be determined
SCHEDULE B - SERVICE DISTRIBUTION AGREEMENT
iWAVE APPLICATION HARDWARE SPECIFICATIONS - (Section 1.2)
Specifications to be inserted