Document:

<PAGE>

                                                                   EXHIBIT 10.5

                              Dated 21st June, 2004

                         ON DEMAND DISTRIBUTION LIMITED

                                      -and-

                                CHARLES GRIMSDALE

--------------------------------------------------------------------------------

                          DIRECTOR'S SERVICE AGREEMENT

--------------------------------------------------------------------------------

<PAGE>

This Agreement made the 21st day of June 2004

BETWEEN

(1)   ON DEMAND DISTRIBUTION LIMITED registered in England under number 3935034
      whose registered office is at Box Mill, Mill Lane, Box Corsham, Wiltshire,
      SN13 8PN ("the Company"), and

(2)   CHARLES GRIMSDALE of Little Court, Grib Lane, Blagdon, N Somerset ("the
      Director")

WHEREBY IT IS AGREED as follows:-

1.    DEFINITIONS AND INTERPRETATION

1.1   In this Agreement unless the context otherwise requires:

      "Associated Company"                 shall mean any company which is for
                                           the time being the Company's
                                           subsidiary (as defined in Section 736
                                           of the Companies Act 1985) or holding
                                           company (as defined in Section 736 of
                                           the Companies Act 1985) or a
                                           subsidiary (as defined in the said
                                           Section 736) of such holding company
                                           other than the Company itself in any
                                           jurisdiction in any part of the
                                           world;

      "the Board"                          shall mean the board of directors for
                                           the time being of the Company (or any
                                           director or committee of directors
                                           authorised by the board of directors
                                           of the Company).

      "Business"                           shall mean any business of or
                                           commercial activities carried on by
                                           the Company as at the Termination
                                           Date.

      "Confidential Information"           means any information that is secret
                                           or confidential and relates to or is
                                           connected with the Company or any
                                           business carried on by the Company
                                           from time to time and shall include
                                           but not be limited to any lists or
                                           details of customers or suppliers,
                                           information relating to any process
                                           inventions or Registrable Rights
                                           owned or used by the Company,
                                           computer programs applications or
                                           codes (whether source or object),
                                           software specifications, user and/or
                                           instruction manuals and/or other
                                           documentation relating to such
                                           computer programs or applications,
                                           product lists, price lists, marketing
                                           plans, staff and salary details,
                                           financial and/or management and/or
                                           organisational information of the
                                           Company and any other matter which is
                                           notified to the Director

                                       1
<PAGE>

                                           during the course of his employment
                                           as being confidential provided that
                                           information which has entered the
                                           public domain (other than as a result
                                           of the Director's breach of this
                                           Agreement) shall cease to be
                                           confidential.

      "Group"                              shall mean and include the Company
                                           and its Associated Companies
                                           including Loudeye Corporation
                                           ("Loudeye") from time to time.

      "Recognised Investment Exchange"     shall have the meaning ascribed to it
                                           in Section 207 of the Financial
                                           Services Act 1986.

      "the Termination Date"               shall mean the date on which the
                                           Director's employment with the
                                           Company terminates howsoever arising.

1.2   The masculine shall include the feminine and neuter and the singular shall
      include the plural and vice versa.

1.3   The clause headings and numbering are for convenience only and shall not
      affect the interpretation of this Agreement.

2.    APPOINTMENT AND DURATION

2.1   The Director shall serve the Company as Chief Executive Officer (or in
      such other capacity commensurate with the Director's status as may from
      time to time be agreed) for a period of 12 months from the date that
      Loudeye makes an offer to acquire all of the share capital of the Company.
      Thereafter, this Agreement shall be extended for a further 12 months after
      which period it will automatically terminate, unless the parties agree
      otherwise. During the second 12 month term the Director shall carry out
      such duties as the Company shall determine in a senior capacity but
      without day to day responsibility for operating the Company.

2.2   The Director's date of continuous employment with the Company is from 18th
      day of October 2000.

2.3   This Agreement is terminable by not less than six months written notice
      given by either party to the other unless terminated earlier in accordance
      with this Agreement.

2.4   The appointment shall in any event terminate on the Director's sixty-fifth
      birthday.

3.    DUTIES AND PLACE OF WORK

3.1   The Director shall (unless prevented by ill health) devote such reasonable
      time and attention during normal business hours, which are 9am to 6pm, and
      such additional hours as may be reasonably necessary (except during
      holidays) entirely to the business of the Company subject to and in
      accordance with any general or special directions which may from time to
      time be given to him by the Board and will well

                                       2
<PAGE>

      and faithfully perform the same and use his utmost endeavours to promote
      the interests of the Company.

3.2   The Director agrees that the limits on weekly working time contained in
      the Working Time Regulations 1998 will not apply to this employment.

3.3   The Director shall act as an officer of the Company or any Associated
      Company or hold any other appointment or office as nominee or
      representative of the Company as the Board shall direct.

3.4   The Director's place of work shall be Broad Quay House, Bristol or such
      other place as the Company and the Director shall from time to time agree.
      The Director may be required to carry out his duties outside the United
      Kingdom for periods in excess of one month.

3.5   The Director shall not during the continuance of this Agreement, except
      with the written consent of the Board or as a holder (by way of investment
      only) of no more than 3% of the total amount of the stocks, shares or
      debentures of any company which are for the time being quoted on a
      Recognised Investment Exchange, be:-

      3.5.1 in any manner interested in any company or firm carrying on any
            business which is in competition with any of the business or
            businesses for the time being of the Company.

3.6   Notwithstanding the foregoing, the Company may at any time suspend the
      Director from the performance of his duties or exclude him from any or all
      of the premises of the Company for the purpose of investigating and
      determining any allegation of serious misconduct provided that throughout
      any such suspension or exclusion the Director's salary and other benefits
      hereunder shall continue to be paid or provided in fully.

3.7   Once notice to terminate employment has been given by the Director or the
      Company, the Company:

      3.7.1 shall be under no obligation to provide any work or work of any
            particular kind for the Director;

      3.7.2 may require the Director not to attend work at any or all premises
            of the Company;

      3.7.3 shall require the Director to comply at all times with Clause 3.5 of
            this Agreement; and

      3.7.4 may require the Director to comply with any or all of the provisions
            of Clause 9.2 of this Agreement

      provided that his salary and any other contractual benefits shall not
      cease to be payable or provided by reason of the Company exercising its
      rights pursuant to this Clause. This Clause 3.7 shall not affect the
      general right of the Company to suspend or dismiss the Director.

                                       3
<PAGE>

4.    CONFIDENTIALITY

4.1   The Director shall not at any time whether before or after the termination
      of his employment with the Company disclose to any person firm company or
      organisation whatsoever nor use print nor publish any Confidential
      Information relating to the Company or the business thereof except in the
      proper performance of his duties under this Agreement, with the prior
      written consent of the Company or as may be required by law.

5.    REMUNERATION AND EXPENSES

5.1   Subject to Clause 5.2, as remuneration for his services hereunder the
      Company shall pay to the Director a salary at the rate of (pound)125,000
      per annum (or such higher salary as may from time to time be agreed
      between the Director and the Board) payable by equal monthly instalments
      in arrears on the last day of each calendar month such salary to be
      inclusive of any sums receivable as director's fees or other emoluments
      from the Company.

5.2   In the event that the Director and the Company agree that the Director may
      work less than a five day week the remuneration in Clause 5.1 shall be
      reduced pro-rata to the number of days per week that it is agreed that the
      Director should work.

5.3   In addition to his remuneration under Clause 5.1 the Director may be
      entitled to participate from time to time in any bonus arrangements which
      the Board shall have determined to establish. The Board may alter or
      withdraw any bonus arrangements upon giving notice in writing to the
      Director provided that such notice shall not affect any entitlement bonus
      which has arisen at the date of the notice. The Board shall notify the
      Director of the terms of any bonus scheme in place and of any targets
      applicable to his entitlement under such arrangement.

5.4   Except as otherwise provided in this Agreement or as otherwise agreed by
      the Company the Director shall not be entitled to any remuneration or
      other payment from the Company in respect of any period of employment
      during which the Director is absent from work.

5.5   The Company shall, subject to prompt production of receipts, or other
      reasonable evidence of expenditure, reimburse all travelling, hotel and
      other out of pocket expenses reasonably and properly incurred by the
      Director in the performance of his duties hereunder. The Director shall
      comply with the Company's procedures and rules in force from time to time
      in relation to expenses.

5.6   The Company shall be entitled to recover any debt owed to the Company by
      the Director or any other sums lawfully due to the Company from the
      Director by means of deductions from the Director's remuneration or other
      sums due to the Director during the continuation of or on the termination
      of this Agreement, including any payment in lieu of notice or accrued but
      untaken holiday entitlement.

5.7   If the Director is entitled under this agreement to participate in any
      scheme or plan or to receive any benefit which is covered by a scheme or
      plan the Director's entitlement to participate is in accordance with the
      terms and conditions of the relevant scheme as they may exist from time to
      time (and the Director shall familiarise himself with the

                                       4
<PAGE>

      terms of such scheme), and the Company may vary or withdraw any such
      scheme in its absolute discretion. The provision of any scheme or plan
      will not affect the Company's ability to terminate the Director's
      employment in accordance with this Agreement.

5.8   Where the Director's job title includes the word "Director" the use of
      that term in the Director's job title shall not of itself confer the
      office of director of the Company or any group company on the Director and
      accordingly, the Director shall not enjoy any rights or assume any
      obligations arising out of the office of director of the Company or any
      group company as the case may be. If the Director is appointed as a
      director or secretary from time to time of the Company or any group
      company then his appointment as such shall be subject to the Articles of
      Association from time to time in force of the Company or of such group
      company. The Company or any such group company, as the case may be,
      reserves the right on giving written notice to the Director to terminate
      any office immediately at any time.

6.    HOLIDAYS AND HOLIDAY PAY

6.1   In addition to bank and public holidays the Director shall be entitled to
      25 working days paid holiday in each calendar year at such times as may be
      approved by the Board. Up to 10 days holiday in each year may be carried
      forward to the next year but must be taken before Easter in that year
      failing which any days carried over and not used as holiday before Easter
      shall be paid in full and shall thereafter be lost as holiday entitlement.

6.2   Upon the termination of this Agreement for whatever reason the Director
      shall be entitled to payment in lieu of any outstanding holiday
      entitlement which may remain after deducting from accrued holiday
      entitlement the amount of holiday already taken in the calendar year in
      which the employment ceases. Accrued holiday entitlement shall be
      calculated by taking for each complete calendar month of employment during
      the calendar year in which the employment ceases one twelfth of the annual
      holiday to which the Director would have been entitled for that year with
      a fraction of a day being rounded up. For the purpose of calculating
      payments in lieu, a day's pay shall be taken to be the Director's basic
      annual salary divided by two hundred and sixty.

6.3   The Director shall refund to the Company any holiday pay received in
      excess of the amount accrued due up to and including the date of
      termination and the Company may deduct any such sum from payments due to
      the Director from the Company on termination.

7.    SICKNESS AND SICK PAY

7.1   If the Director shall at any time be prevented by illness from performing
      his duties under this Agreement he shall on demand furnish the Board with
      evidence of such incapacity and the cause thereof and if the Board is
      satisfied with such evidence he shall during such incapacity not exceeding
      an aggregate of 120 working days in any rolling period of 12 months be
      entitled (as long as this Agreement has not been terminated) (subject to
      clause 7.3) to receive his full remuneration less the amount of any
      statutory sick pay or other benefit to which the Director is entitled
      under social security legislation for the time being in force.

                                       5
<PAGE>

7.2   If the Director shall at any time be prevented by illness from performing
      his duties under this Agreement for more than 120 working days in any
      rolling period of 12 months the Company will make such payment of
      statutory sick pay as may be due to the Director. The Company may at the
      absolute discretion of the Board make additional payments to the Director
      during such periods of absence.

7.3   If the incapacity referred to in Clause 7.1 results from an accident
      injury or illness in respect of which damages may be recoverable from a
      third party then:-

      7.3.1 the Director shall not be entitled to any remuneration during such
            incapacity but the Company may having regard to all the
            circumstances of the case continue payment to the Director of
            amounts not exceeding the payment during incapacity to which the
            Director would otherwise be entitled;

      7.3.2 the Director shall notify the Company immediately and shall at the
            expense of the Company assist the Company in taking any steps or
            proceedings in the name of the Director to recover damages in
            respect of such incapacity; and

      7.3.3 the Director undertakes to reimburse to the Company out of any
            damages recovered the total amount of such payments or such
            proportion thereof as the Board may determine having regard to the
            amount or proportion of the damages recovered which is attributable
            to loss of earnings.

7.4   If required to do so for the proper performance of his duties the Director
      will at the expense of the Company undergo a medical examination by a
      medical practitioner appointed by the Company for the purpose. The
      Director consents to the disclosure to the Company of any medical report
      diagnosis prognosis or result of any medical test made or produced in
      connection with a medical examination required under this Clause and the
      Company shall be entitled to discuss the examination and all matters
      arising therefrom with the practitioner who carried out such examinations.

8.    PENSION AND OTHER BENEFITS

8.1   The Company shall contribute 5% of such part of the Director's
      remuneration as does not exceed the allowable maximum as defined in
      Section 640A(2) of the Income and Corporation Taxes Act 1988 to a personal
      pension scheme nominated by the Director which is approved by the Board of
      the Inland Revenue under the said Act.

8.2   There is not a contracting out certificate in force in respect of the
      Director's employment.

8.3   The Company shall offer to the Director membership of an Inland Revenue
      approved life assurance scheme providing benefits on death in service of 4
      times the Director's basic remuneration in accordance with the rules and
      terms of such life assurance scheme as may be in force in relation to the
      Director from time to time.

9.    INVENTIONS

9.1   For the purpose of this Clause 9:

                                       6
<PAGE>

      "Inventions"      means any inventions, developments, secret formulae,
                        processes, notations, improvements, trade marks, service
                        marks, logos, trade names, copyrights, copyright works,
                        moral rights, semi-conductor topography rights, designs,
                        know-how, get-up, plans, drawings, computer codes
                        (whether source or object), computer programs or
                        applications (whether or not downloadable), software
                        specifications, Websites, compilations, reports,
                        information, databases, models or any other
                        specifications or devices of whatever nature, which
                        relate to the business and/or products of the Company or
                        Loudeye and are invented, originated, composed, written,
                        discovered, developed, created, generated, devised or
                        otherwise acquired by the Director on whatever media
                        during the term of this employment with the Company
                        under this Agreement (whether in the course of his
                        employment or otherwise and whether alone or jointly
                        with or in conjunction with any other person or other
                        persons) PROVIDED THAT any Invention to which Section 39
                        Patents Act 1977 applies shall only be an invention
                        within this definition if the same:

      9.1.1 was made in the course of the normal duties of the Director, or in
            the course of duties falling outside his normal duties, but
            specifically assigned to him by the Board, and in either case it was
            reasonable to expect that the same might result from the execution
            by the Director of his duties to the Company pursuant to this
            Agreement; or

      9.1.2 was made in the course of the Director's duties and at the time of
            making the same, because of the nature of his duties and the
            particular responsibilities arising from the nature of his duties,
            he had a special obligation to further the interests of the Company.

      "Registrable Rights"    means patents, trade marks and service marks
                              (whether registered or unregistered), registered
                              designs, pending applications for any of those
                              rights, accrued goodwill in any trade business or
                              service names (whether registered or
                              unregistered), rights in designs, copyrights,
                              database rights, utility models and all other
                              similar or equivalent industrial, intellectual or
                              commercial rights or property subsisting under the
                              laws of each and every jurisdiction throughout the
                              world whether registered or not and whether
                              vested, contingent or future and all reversions,
                              renewals and extensions of any of the foregoing
                              and all rights under licences, consents, orders,
                              statutes or otherwise in relation to any of the
                              foregoing.

9.2   The Director hereby agrees that:

      9.2.1 the entire legal and beneficial interest of the Director in any
            Inventions or Registrable Rights shall become the absolute
            beneficial property of the Company without any payment to the
            Director (except to the extent provided in Section 40 Patents Act
            1977) other than reimbursement of out of pocket expenses and the
            Director hereby assigns with full title guarantee by way of future
            assignment to the Company the whole of his interest in any
            Inventions

                                       7
<PAGE>

            and in any Registrable Rights in any such Inventions or Registrable
            Rights throughout the world including any extensions, renewals or
            revivals and the right to sue for damages;

      9.2.2 the Director shall promptly communicate to the Company full
            particulars of all Inventions and Registrable Rights and, if any of
            the Inventions is capable of being protected by any Registrable
            Rights, the Company shall determine whether and where applications
            shall be made for such Registrable Rights in respect of the same and
            the Director shall, until such rights are fully and absolutely
            vested in the Company, hold the Inventions in trust for the Company
            and shall not disclose any details of any such Invention or
            Registrable Rights to any third party;

      9.2.3 if the know-how, technique, process, improvement, invention or
            discovery is not an invention belonging to the Company within the
            meaning of Clause 9.1, the Company shall treat all information
            disclosed to it by the Director as confidential property of the
            Director;

      9.2.4 all such Registrable Rights shall be applied for and taken out at
            the Company's expenses and in the name of the Company or if the
            Company shall require in the joint names of the Director and the
            Company and the Director shall concur in applying for the same and
            shall at the Company's expense prepare all such drawings and
            specifications models and designs as may be necessary and give every
            reasonable assistance in his power to procure the grant of such
            Registrable Rights to the Company;

      9.2.5 the Director will, at the reasonable request and expense of the
            Company, do all acts and execute all documents which may be
            necessary to give effect to this Clause 9 including, without
            limitation, entering into any action, claim or proceeding and should
            the Director be unavailable to do so, the Director irrevocably
            appoints the Company to be his attorney in his name and on his
            behalf to sign execute or do any such instrument or thing and
            generally to use his name for the purpose of giving to the Company
            (or its nominee) the full benefit of the provisions of this Clause
            9.2 and a certificate in writing signed by any director or the
            secretary of the Company in favour of any third party stating that
            any instrument or act falls within the authority conferred by this
            Clause 9.2.5 shall be conclusive evidence that such is the case; and

      9.2.6 the Director waives all moral rights arising from any Inventions or
            Registrable Rights, so far as the Director may lawfully do so, in
            favour of the Company.

10.   TERMINATION

10.1  The Company may by notice in writing to the Director terminate forthwith
      the employment of the Director if the Director:

      10.1.1  in the reasonable opinion of the Board seriously neglects or
              refuses to carry out the duties required of him hereunder or is
              guilty of any other wilful breach or non-observance of any of the
              terms and conditions of this Agreement after being notified in
              writing of such neglect and having failed to remedy such neglect
              within 28 days of being requested to do so;

                                       8
<PAGE>

      10.1.2  becomes bankrupt, or is the subject of a receiving order or enters
              into any composition or deed of arrangement with creditors;

      10.1.3  becomes of unsound mind;

      10.1.4  becomes disqualified from acting as a director by reason of any
              provision of the Companies Act 1985, the Company Directors
              Disqualification Act 1986 or any other statutory provision;

      10.1.5  is convicted of any criminal offence other than an offence which
              in the reasonable opinion of the Board adversely affects neither
              the reputation of any company in the Group nor the Director's
              ability to fulfil his duties adequately; or

      10.1.6  is the subject of or causes the Company to be the subject of a
              penalty or reprimand imposed by any regulatory authority by which
              the Company is governed or to which its activities are subject.

10.2  In the event that the Executive is absent due to ill health or accident
      for a consecutive period of 120 working days, the Company may terminate
      the employment of the Executive by giving three month's written notice.

10.3  Upon either party giving to the other notice of termination in accordance
      with Clause 2.1 of this Agreement or upon the termination of the Agreement
      for whatever reason the Director shall:

      10.3.1  if so requested by the Board resign from all or any offices he may
              hold as a director of the Company or any company in the Group and
              in the event of his failure to do so the Company or such group
              company is hereby irrevocably authorised to appoint some person in
              his name and on his behalf to execute any documents and to do all
              things requisite to give effect to such resignation;

      10.3.2  deliver up any or all documents and other property of or relating
              to the Group in his possession or under his control and shall not
              make or retain any copy or duplicate of any part thereof and shall
              not make or retain any notes or extracts therefrom.

10.4  The Company may in its absolute discretion terminate this Agreement with
      immediate effect by paying to the Director a sum equivalent to his normal
      basic salary and any accrued bonus and the replacement value to the
      Director of all other benefits due to the Director under this Agreement
      (which shall cease to be provided with immediate effect) in respect of a
      period equal to the period of notice to which the Director would otherwise
      have been entitled under Clause 2.1 of this Agreement. The Company shall
      deduct from any sum paid under this Clause 10.4 income tax and national
      insurance contributions and any sums owed to the Company by the Director.

11.   RESTRICTIONS

      For the purposes of this Clause 11:

      "Relevant Period" means the lesser of:

                                       9
<PAGE>

      (a)     12 months from the Termination Date;

      (b)     12 months from the Termination Date less the number of days the
              Company has, pursuant to Clause 3.7, required the Director not to
              attend work or perform his duties.

11.1  The Director hereby acknowledges that the Company's business is a highly
      specialised and competitive business and that the Director will have
      access to and an intimate knowledge of the Company's Confidential
      Information and that the disclosure of any Confidential Information to
      actual or potential competitors of the Company or the use of any
      Confidential Information by the Director either alone or with other
      persons would place the Company at a serious competitive disadvantage and
      would do material damage, financial or otherwise, to its legitimate
      business interests. The Director further acknowledges and agrees that if
      he was entitled to compete with the Company immediately after the
      termination of this Agreement in any capacity the Company would be at a
      serious disadvantage and such unfair competition would do material damage,
      financial or otherwise, to its legitimate business interests. Therefore,
      the Director acknowledges and agrees that the restrictions set out in
      Clause 11 are fair and reasonable in the circumstances for the protection
      of the Company's legitimate business interests.

11.2  The Director covenants that he shall not at any time during his employment
      or for the Relevant Period without the prior written consent of the
      Company either alone or jointly with or as employee, manager, officer,
      director, agent, consultant, contractor or partner of any other person,
      firm, company or organisation directly or indirectly:

      11.2.1  be employed, engaged, concerned or interested in any business or
              activity throughout the world which competes directly with any
              Business with which the Director had been materially concerned in
              the performance of his duties under this Agreement during the 12
              months immediately preceding the Termination Date;

      11.2.2  in relation to any Business and in competition with the Company
              canvass, solicit or endeavour to take away from the Company the
              business or custom of any person, firm, company or organisation
              who or which was, at the Termination Date or at any time during
              the 12 months immediately preceding the Termination Date, a
              customer or client of the Company with whom or which the Director
              shall have come into contact in the performance of his duties
              under this Agreement during the 12 months immediately preceding
              the Termination Date;

      11.2.3  in competition with the Company solicit the services of any
              person, firm, company or organisation who or which at the
              Termination Date or during the 12 months immediately preceding the
              Termination Date was a supplier, agent, contractor or consultant
              of the Company which whom or which the Director had come into
              contact in the performance of his duties under this Agreement
              during the 12 months immediately preceding the Termination Date;
              nor

      11.2.4  solicit or endeavour to entice away from the Company any person
              who was on the Termination Date a director or a senior employee of
              the Company.

                                       10
<PAGE>

11.3  The Director acknowledges and agrees that the restrictions set out in
      Clause 11.2 are fair and reasonable in the circumstances and that if any
      one or more or any part of such restrictions shall be rendered or judged
      invalid or unenforceable such restriction or part shall be deemed to be
      severed from this Agreement and such invalidity or unenforceability shall
      not in any way affect the validity or enforceability of the remaining
      restrictions.

11.4  Following termination of this Agreement the Director shall not falsely
      represent himself or permit himself to be represented as being in any way
      connected with or interested in the business of the Company other than as
      a shareholder.

11.5  The Director hereby acknowledges that the restrictions contained in Clause
      11.2 shall operate for the benefit of the business carried on by the
      Company and such restrictions shall be enforceable against the Director by
      the Company.

12.   NOTICES

      Notices may be given by either party to the other by personal service or
      by letter sent by recorded delivery post or by telex or facsimile
      transmission or other permanent written form addressed in the case of the
      Company to its registered office for the time being or in the case of the
      Director to his last known home address. Any notice given by post shall be
      deemed to have delivered 48 hours after posting. Any notice given by telex
      or facsimile transmission shall be deemed to have been delivered at the
      time specified on the sender's transmission records.

13.   GENERAL

13.1  If the employment of the Director hereunder shall be terminated by reason
      of the liquidation of the Company for the purpose of reconstruction or
      amalgamation and he shall be offered employment with any concern or
      undertaking resulting from such reconstruction or amalgamation on terms
      and conditions not less favourable than the terms of this Agreement or if
      his employment hereunder shall be terminated by the Company for any other
      reason and he shall be offered employment with any Associated Company on
      terms and conditions not less favourable than the terms of this Agreement
      then the Director shall have no claim against the Company in respect of
      the termination of his employment under this Agreement.

13.2  This Agreement contains the terms and conditions of the employment as at
      the date hereof.

13.3  This Agreement supersedes any former or subsisting contract of employment
      or contract for services between the Company and the Director which shall
      cease to have effect on and from the date of this Agreement and sets out
      the entire agreement between the parties at the date hereof in relation to
      the employment of the Director by the Company.

13.4  The Director acknowledges and agrees that the information relating to him
      which is governed by the Data Protection Act 1984 and/or the Data
      Protection Act 1998 may be held and processed by the Company for all
      matters and purposes in connection with the Director's employment and the
      business of the Company and may be

                                       11
<PAGE>

      transferred to third parties and to countries outside the European
      Economic Area for such purposes.

13.5  A person who is not a party to this Agreement has no right under the
      Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
      Agreement but this does not affect any right or remedy of the third party
      which exists or is available apart from this Act.

14.   COLLECTIVE AGREEMENTS

      There are no collective agreements in force affecting the Director's terms
      and conditions of employment.

15.   GRIEVANCE AND DISCIPLINARY PROCEDURES

15.1  The Director shall be entitled to raise any grievance concerning his
      employment with the Board in writing.

15.2  The Company has no formal disciplinary procedure applicable to the
      Director.

IN WITNESS whereof these presents have been entered into as a deed the day and
year first above written

Executed and delivered as a DEED
for and on behalf of                                 /s/ John Grinham
On Demand Distribution Limited                       ----------------
                                                     Director

                                                     /s/ Tiff Pike
                                                     -------------

                                                     Director/Company Secretary

Executed and delivered as a DEED by the
said Charles Grimsdale                               /s/ Charles Grimsdale
                                                     ---------------------------

in the presence of:-                                 /s/ Margaret Davis
                                                     ---------------------------
                                                     Signature of Witness

                                                     ---------------------------
                                                     M. Davis

                                                     Print Name of Witness

                                                     Print Address of Witness

                                       12<PAGE>

EXHIBIT 10.6

February 13, 2004

Mr. Marc Morgenstern

Dear Mr. Morgenstern

On behalf of Loudeye Corp., a Delaware corporation ("Loudeye"), I am pleased to
offer you the position of Vice President and General Manager of Overpeer (the
"Company"), an entity anticipated to be a wholly owned subsidiary of Loudeye.
Speaking for myself, as well as the other members of the Company's management
team, we are very much looking forward to having you on the team.

The terms of your new position with the Company are as set forth below:

      1.    Position.

                  a.    You will be Vice President and General Manager of the
                        Company, working out of the Company's offices in New
                        York, NY. You will report to the CEO of Loudeye.

                  b.    You agree to the best of your ability and experience
                        that you will at all times loyally and conscientiously
                        perform all of the duties and obligations required to
                        the reasonable satisfaction of the Company. During the
                        term of your employment, you further agree that you will
                        devote all of your business time and attention to the
                        business of the Company, and the Company will be
                        entitled to all of the benefits and profits arising from
                        or incident to all such work services and advice. You
                        will not render commercial or professional services of
                        any nature to any person or organization, whether or not
                        for compensation, without the prior written consent of
                        the Company's Board of Directors, and you will not
                        directly or indirectly engage or participate in any
                        business that is competitive in any manner with the
                        business of the Company. Nothing in this letter is
                        designed to prevent you from accepting speaking or
                        presentation engagements consistent with the Company's
                        business plan in exchange for honoraria or from serving
                        on boards of charitable organizations, or from owning no
                        more than one percent (1%) of the outstanding equity
                        securities of a corporation whose stock is listed on a
                        national stock exchange.

      2.    Start Date. This offer is expressly contingent upon Loudeye
            completing its acquisition of the Company ("closing") and is void if
            said condition does not occur. Subject to fulfillment of any
            conditions imposed by this letter agreement, your employment will
            commence the first business day following closing.

      3.    Proof of Right to Work. For purposes of federal immigration law, you
            will be required to provide to the Company documentary evidence of
            your identity and eligibility for employment in the United States.
            Such documentation must be provided to us within three (3) business
            days of your Start Date, or our employment relationship with you may
            be terminated.

      4.    Compensation.

<PAGE>

                  a.    Base Salary. You will be paid a monthly salary of
                        $15,833.33, which is equivalent to $190,000.00 on an
                        annualized basis. Your salary will be payable in two
                        equal payments per month pursuant to the Company's
                        regular payroll policy (or in the same manner as other
                        employees of the Company).

                  b.    Bonus. You will have an opportunity to earn bonuses that
                        will be aligned to Company and personal objectives. The
                        bonus amount available will be 100% of your current base
                        salary. Seventy five percent (75%) of your total
                        available bonus will be aligned to three business
                        performance metrics: revenue growth, earnings (EBITDA)
                        and cash flow. The specifics of these Company objectives
                        will be determined by the CEO and will be subject to
                        approval by the Board of Directors. Twenty five percent
                        (25%) of your total available bonus will be aligned with
                        personal MBO's that you and I will define together.

                  c.    Annual Review. Your base salary will be reviewed
                        annually as part of the Company's normal salary review
                        process.

      5.    Stock Options.

                  a.    Initial Grant. You will be eligible to participate in
                        stock option or other incentive programs available to
                        officers or employees of the Company. Your initial grant
                        amount will be issued on your Start Date and will total
                        180,000 Options. The shares shall vest over a four year
                        period and become exercisable in accordance with the
                        following schedule: 18.75% of the Shares on the nine
                        month anniversary from your Start Date and quarterly
                        thereafter at a rate of 6.25% of the total number of
                        options every quarter until fully vested (pro-rate for
                        any periods less than a full calendar quarter).

      6.    Proprietary Information and Inventions Agreement. Your acceptance of
            this offer and commencement of employment with the Company is
            contingent upon the execution, and delivery to an officer of the
            Company, of the Company's Proprietary Information and Inventions
            Agreement, a copy of which is enclosed for your review and execution
            (the "Confidentiality Agreement"), prior to or on your Start Date.

      7.    Benefits. The Company will provide you with standard medical and
            optional dental insurance benefits. You will be eligible to purchase
            coverage for your dependents under The Company's medical and dental
            insurance program. The company pays 50% of the medical and dental
            premiums for spouse and dependents.

      8.    Confidentiality of Terms. You agree to follow the Company's strict
            policy that employees must not disclose, either directly or
            indirectly, any information, including any of the terms of this
            agreement, regarding salary, bonuses, or stock purchase or option
            allocations to any person; provided, however, that you may discuss
            such terms with members of your immediate family and any legal, tax
            or accounting specialists who provide you with individual legal, tax
            or accounting advice.

      9.    At-Will Employment. Notwithstanding the Company's obligation
            described in Section 6 above, your employment with the Company will
            be on an "at will" basis, meaning that either you or the Company may
            terminate your employment at any time for any reason or no reason,
            without further obligation or liability.

      10.   Severance: Notwithstanding Section 6 above, if your employment is
            terminated for reasons other than cause, you shall be entitled to
            receive three month's base salary and continued benefits coverage,
            together with any bonus that has been earned and accrued as of the
            termination date.

      11.   Prior Contractual Commitment: This letter of employment supercedes
            and voids any previous employment or related agreements with the
            Company.

                                       2
<PAGE>

Marc, we are all delighted to be able to extend you this offer and look forward
to working with you. To indicate your acceptance of the Company's offer, please
sign and date this letter in the space provided below and return it to me, along
with a signed and dated copy of the Proprietary Information and Inventions
Agreement. This letter, together with the Proprietary Information and Inventions
Agreement, sets forth the terms of your employment with the Company and
supersedes any prior representations or agreements, whether written or oral.
This letter may not be modified or amended except by a written agreement, signed
by the Company and by you.

Very truly yours,

LOUDEYE CORP.

/s/ Jeff Cavins

Jeff Cavins

President and CEO

ACCEPTED AND AGREED:

   /s/ Marc Morgenstern
------------------------

Signature

2/18/04

Date

Enclosure: Proprietary Information and Inventions Agreement

                                       3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}]]