Background:

A. Provider has created software (the "Software") that automates certain aspects of the task of editing sound or video for film and television.

B. Provider makes the Software available for use through its Website.

C. Client wants to access the Website for the purposes of using the Software to process sound or video editing data.

1. Definitions

In these Terms:

(a) "Paying-Processing Client" means an individual who opens an account directly with Provider and enters into an agreement on these Terms solely for his or her own access to the Website for the purpose of processing sound or video editing data. A "Paying-Processing Client" may be an individual, nominated as an Authorized User under Clause 3.1 by a Billing Client, who decides to open his or her own account directly with Provider, to pay for his or her own use of the Website and the Software, and to be bound by these Terms;

(b) "Billing Client" means a person who opens an account with Provider subject to these Terms, to enable individuals it nominates under Clause 3 (not being Paying-Processing Clients) to access the Website for the purposes described above. A Billing Client may be a company;

(c) "Authorized User" means (a) any individual nominated by a Billing Client under Clause 3.1 to access the Website on the account of the Billing Client, and (b) any individual who is a Paying-Processing Client;

(d) "Client" means a Billing Client or a Paying- Processing Client;

(e) "Contract Period" means the period of any agreement formed on these Terms as determined under Clause 16;

(f) "Intellectual Property Rights" means all intellectual property rights, including without limitation:

- patents, copyright, registered designs, trade marks and the right to have confidential information kept confidential; and

- any application or right to apply for registration of any of the rights referred to in (i);

(g) "Non-Excludable Condition" is defined in Clause 14.3 (a) of these Terms;

(h) "Provider" means Sounds in Sync;

(i) "Provider's Address" means PO Box 2, Waverley, NSW 2024, Australia and its e-mail address is mark@editrace.com;

(j) "Software" is defined in paragraph A above; and

(k) "Website" means the site with the address www.editrace.com.

2. Supply of Services

Provider will use all reasonable commercial efforts to supply its services under these terms according to any timetable specified by Client.

3. Website Access

3.1 A Billing Client opens an account with Provider solely to enable individuals it nominates to have access to the Website to process sound or video editing data. By following the prompts on the Website, the administrator of a Billing Client will select a username and password so that the administrator can have access to the Website for the purposes of adding and deleting users that it nominates.

3.2 Each Authorized User will have a different username and password. Except where Clause 3.3 applies (and the Authorized User becomes a Paying-Processing Client), any use of the Website and the Software by an Authorized User nominated and added by Client is taken to be a use by Client, is subject to these Terms, and Client is responsible for that use.

3.3 An Authorized User nominated by Client may elect to pay for his or her own use of the Website, and in that case the Authorized User will enter into an agreement on these Terms directly with Provider for the use of the Website and the Software. An Authorized User who does this is a Paying-Processing Client.

3.4 A Paying-Processing Client must keep confidential its username and password, and use them only for its own internal business. A Billing Client must take all reasonable steps to ensure that its Authorized Users keep confidential their own usernames and passwords, and use them only for Billing Client's internal business.

4. Client's Web Browser

To gain access to the Website, an Authorized User needs only an up to date web browser approved by Provider (as indicated on the Website).

5. Maximum Permitted Disk Space

For the Purpose, and during the Contract Period, Provider will allow the Client to utilize space on its web-server up to the maximum permitted disk space as agreed in communications between Client and Provider about establishment of Client's access rights. Provider may impose, and Client must pay, additional charges at Provider's usual rates if Client uses more than this maximum permitted disk space.

6. Uploads

When an Authorized User enters and uploads data to the Website, Client must ensure that the Authorized User does so in a manner that is consistent with user guidelines published by Provider.

7. Authority to Process Editing Data and to Use Software

After an Authorized User has uploaded data to the Website, he or she is permitted to process the editing data using the Software. For the Contract Period, Provider grants to Client a limited, non-exclusive, non-assignable, non-transferable, non-sublicensable right and licence for Client to use the Software as deployed on Provider's web-server. Client will gain access to the Software only through the Website by the methods described above and in the user guidelines, and:

7.1 Provider retains all right, title, and interest in and to the Software and any associated user documentation as described in Clause 7.2 below, subject only to the limited licence granted above.

7.2 Provider may provide user documentation reasonably necessary in Provider's discretion to support the Client's use of the Software, and this user documentation will appear on the Website. Client may print one copy of this user documentation to assist Client to use the Software but otherwise shall not make or attempt to make any copies of the Software or user documentation, or any part thereof, except as specifically authorized in writing by Provider. If Client prints user documentation all copyright and other proprietary notices appearing on the documentation must be kept intact by Client.

Client acknowledges that it will not have a copy of the Software, and that the Software will at all times reside on Provider's server. Client's editing data will therefore reside on Provider's server during the Term.

8. Manner of Processing Editing Data

Client must undertake any activities using the Software for the processing of editing data in a manner that is consistent with user guidelines published by Provider.

9. Confidentiality of Client's Data

As between Client and Provider, Client will continue to own any data that is uploaded to the Website by Client. Provider will not access or use that data except where necessary for the purposes of supplying technical support of the Software and as otherwise requested by Client.

10. Maintaining and Recording of Client Data

At all times Client must maintain on its own computer an up-to-date copy of all data and materials that it uploads to the Website. When the Contract Period ends, Provider will delete or arrange for deletion of any of Client's data then residing on any of Provider's servers or on any server of Provider's ISP.

11. Payment of Fees

11.1 Client must pay fees to Provider according to the rates and methods of payment agreed in communications between Client and Provider about establishment of Client's access rights for the Website.

11.2 Unless otherwise agreed in the communications referred to in Clause 11.1, all fees are expressed in Australian dollars and all payments must be made in Australian dollars. International payments to be made by Client must be made by wire transfer in immediately available funds to a bank account designated by Provider. If payment is to be converted to Australian dollars from any other currency, the conversion shall be made according to the telegraphic transfer buying rate of the transferring bank of the Client on the date of such payment. The Client is responsible for all costs associated with the wire transfer and the currency exchange including without limitation any fees charged to Provider by Provider's bank in relation to the wire transfer or currency exchange.

11.3 Unless otherwise agreed in the communications referred to in Clause 11.1, Client must pay an amount in advance to Provider on account of (a) fees that will charged by Provider on each occasion that the Software is used for editing data, and (b) costs for which Client is responsible under these Terms that may be incurred by Provider in relation to Client including any bank fees as described in Clause 11.2. At all times the amount paid in advance by Client for use of the Website must be not less than the minimum advance payment agreed in the relevant communications between Client and Provider. If, as a result of use of the Software by Client and the charging of fees or costs by Provider in relation to Client, the amount paid in advance by Client is less than this minimum advance payment, Client will pay an additional amount in advance. On termination of the agreement formed upon these Terms, Provider will refund any unutilized amount paid in advance by Client, except where Client cannot be located at any of its notified addresses or where termination is by Provider under Clause 17.

11.4 When the Contract Period has run for more than 12 months, Provider may review and in its discretion may vary the fees (including rates and methods of payment) then applicable under the agreement formed on these Terms, by notice in writing to Client. Thereafter, at intervals of not less than 6 months, at any time and from time to time, Provider may review and in its discretion may vary the fees (including rates and methods of payment) then applicable under the agreement formed on these Terms, by notice in writing to Client.

12. Taxes and GST

Unless otherwise agreed, the Fees are exclusive of any Taxes such as Australian GST. Client must pay Australian GST in addition to the Fees except where the Fees are exempt from GST.

13. Warranties

13.1 Provider represents and warrants to Client as follows:

(a) It will supply any services under an agreement governed by these Terms with due care and skill, and any materials supplied in connection with those services will be reasonably fit for the purpose for which they are supplied;

(b) It has the legal right and authority to supply any services that it supplies under an agreement governed by these Terms.

14. Exclusions and Limitations of Liability

14.1 Clause 13 contains the only express warranties made by Provider under these Terms.

14.2 Provider does not exclude or limit the application of any provision of any statute (including the Trade Practices Act 1974 (Cth)) where to do so would contravene that statute or cause any part of this clause to be void.

14.3 Provider excludes:

(a) from any agreement formed upon these Terms, all conditions, warranties and terms implied by statute, general law, international convention or custom, except any implied condition or warranty the exclusion of which would contravene any statute or cause this clause to be void (a "Non-Excludable Condition");

(b) all liability to Client in contract for indirect, punitive or special damages and any consequential losses arising out of or in connection with any agreement formed upon these Terms even if:

(i) Provider knew they were possible; or

(ii) the damages or losses were otherwise foreseeable, and the exclusion of liability in this paragraph (b) extends without limitation, to exclude all liability of Provider for loss of profits, or damage suffered as a result of claims by any third person such as a customer of Client, or damage suffered as a result of loss or corruption of Client's data;

(c) all liability to Client resulting from Client being unable to gain access to the Website at any time and for any reason; and

(d) all liability to Client in negligence for acts or omissions of Provider arising out of or in connection with any agreement formed upon these Terms.

14.4 Provider's liability to Client in respect of its indemnity in Clause 15.5 is unlimited, but Provider's liability for breach, for any reason, of:

(a) the warranties given under Clause 13 and any other express provisions of these Terms, is limited in the aggregate to the greater of (i) the amount that is equal to the fees actually charged by Provider and paid by Client (by application of an amount paid in advance or otherwise) in respect of use of the Website and the Software in the period of one month immediately preceding the first relevant breach, and (ii) One Hundred Australian Dollars (\$100); and

(b) any Non-Excludable Condition, is limited to supplying again the relevant services.

14.5 On request by Client, Provider will refund any amount paid by Client for the services in respect of which the breach occurred, rather than applying the remedy referred to in Clause 14.4 (b).

15. Intellectual Property Rights: Mutual Warranties & Indemnities

15.1 Client represents and warrants to Provider that the uploading of any data to the Website and the processing of any editing data by use of the Software:

(a) does not and will not infringe the intellectual property rights of any third party in relation to the data; and

(b) does not and will not breach any contractual or other legal obligations of the Client to any third party.

15.2 Client indemnifies Provider against all expenses, losses, damages and costs (on a full indemnity basis) incurred by or awarded against Provider arising directly or indirectly out of any claim by any third party to the effect that the uploading of any data to the Website or the processing of the editing data by use of the Software:

(a) infringes the Intellectual Property Rights of any third party in relation to the data; or

(b) breaches any contractual or other legal obligations of the Client to any third party.

15.3 If there is a breach of the warranty made by Client in Clause 15.1, or a claim by a third party of the kind described in Clause 15.2, without limiting its remedies, Provider may suspend or terminate the supply of services to Client, without liability to Client and without obligation to refund any fees to Client.

15.4 Provider represents and warrants to Client that the grant by Provider under these Terms of rights to use the Software, and the provision of services to Client by Provider, does not and will not infringe the Intellectual Property Rights of any third party.

15.5 Provider indemnifies Client against all expenses, losses, damages and costs (on a full indemnity basis) incurred by or awarded against Client arising directly or indirectly out of any claim by any third party to the effect that the grant of rights to use Software under these Terms, or the provision of services to Client by Provider under these Terms:

(a) infringes the Intellectual Property Rights of any third party in relation to the Software; or

(b) breaches any contractual or other legal obligations of the Provider to any third party.

16. Term

16.1 Unless otherwise agreed in communications between Client and Provider concerning the establishment of Client's access rights to the Website, an agreement formed on these Terms will continue until terminated at any time by either party giving not less than one month's notice in writing to the other.

16.2 If Client fails to use its account with Provider for a period of 6 months or more, Provider may by notice in writing to Client ask if Client wishes to retain the account for use. If Client does not respond in the affirmative by notice in writing to Provider within 7 days, Provider may immediately terminate the agreement formed on these Terms and remove any files uploaded by Client to Website.

17. Termination

17.1 Either party can terminate an agreement formed upon these Terms with immediate effect by giving notice to the other party ("Notified Party") if:

(a) the Notified Party breaches any provision of these Terms and fails to remedy the breach within 7 days after receiving notice to do so; or

(b) any event referred to in Clause 17.2 happens to the Notified Party.

17.2 Each party ("Informing Party") must inform the other immediately if:

(a) the Informing Party takes any step to enter into an arrangement with its creditors;

(b) the Informing Party ceases to be able to pay its debts as they become due;

(c) the Informing Party ceases to carry on business;

(d) any step is taken to appoint a receiver, a receiver and manager, a trustee in bankruptcy, a provisional liquidator, a liquidator, an administrator or other like person of part or all of the Informing Party's assets or business.

18. Assignments and Transfers

Client may not assign any of its rights under an agreement formed on these Terms. Client's rights under any agreement formed on these Terms are personal to Client. Provider may at any time transfer its rights and obligations to a company controlled by the owner of Provider, and Client consents to such a transfer.

19. Notices

19.1 Any notices to be given under or for the purposes of these Terms must be in writing signed by an authorized officer of the party giving the notice, and must be given between the hours of 9am and 5pm on a business day (a day when banks are open for ordinary business) in the place of receipt of the notice. If given at any other time, a notice will be taken to have been received on the next business day (in the place of receipt) after the date of actual receipt.

19.2 Notices may be given by registered post (with proof of delivery) or by e-mail. Notices must be given to the address or e-mail address of the recipient as specified in communications between Client and Provider concerning the establishment of Client's access rights to the Website. A party can change its address or e-mail address by notice given to other.

19.3 Notices will be deemed to be received:

(a) upon delivery when given by registered post; and

(b) upon receipt with confirmation of delivery when sent by e-mail.

20. Non Waiver and Variation

20.1 Failure by a party to insist on performance of an obligation of the other party is not a waiver of any right related to performance of that obligation unless the waiver of performance is given in writing.

20.2 In its discretion Provider may vary any of these Terms, any user guidelines and any Website policies, by giving to Client not less than 7 days notice in writing of the variation. But fees payable by Client (including rates and methods of payment of fees) will only be varied in the manner specified in Clause 11.3.

21. Entire Agreement

These Terms and any documents or communications referred to in the these Terms are together the entire agreement between the parties in relation to their subject matter, and supersede any prior understandings, communications or representations by either of the parties.

22. Relationship of Parties

An agreement formed on these Terms does not create a joint venture, partnership, agency or other formal business relationship or entity of any kind between the parties, nor does any such agreement impose an obligation upon either party to form any such relationship or entity.

23. Severance

Part or all of any clause of an agreement made upon these Terms that is unenforceable or illegal will be severed from the agreement and will not affect the enforceability of the remaining provisions of the agreement.

24. Disputes

Neither party will commence legal proceedings to enforce any of its rights under an agreement formed upon these Terms unless it sends a notice to the other party stating the nature of its grievance at least 14 days prior to commencement of legal proceedings.

25. Governing Law

Any agreement formed upon these Terms is governed by the laws of New South Wales, Australia. The parties submit to the non-exclusive jurisdiction of the Courts of New South Wales.