Mihalism URL upload problem

I have recently installed Mihalism image upload script and everything is working fine except the URL upload. I get an error as "The file x.jpg is not readable or does not exist". I have not changed anything in the upload.php file and below the original upload.php code

<?php
	/*
	*
	* Mihalism multi host v3.1.x                      
	* Copyright (c) 2005 - 2007 Mihalism Inc (www.mihalism.com)
	*
	*/
	require_once('./page_header.php');

	$file_count = 0;
	$path       = $CONFIG['file_path'];

	switch($_POST['type']){
		case 'url_upload':
			url_upload();
			break;
		default:
			direct_upload();
	}

	function url_upload(){
		global $CONFIG, $DB, $UDATA, $file_count, $path, $filename;
		for($i = 0; $i <= 15; $i++){
			$file = array(
				'name'  => array_shift(explode('?', basename($_POST['userfile'][$i]))),
				'url'   => $_POST['userfile'][$i],
				'rand'  => random_string(20)
			);
			if($file['name'] != ''){
				$file_count++;
				if($file_count <= 15){
					if($i >= 1){
						echo "<div class='cell_divider'></div><br>\n";
					}
					$extension = file_type($file['name']);
					$filename  = $file['rand'].".".$extension;
					$thumbnail = thumbnail_name($filename);
					if(!preg_match("/(https|http|ftp):\/\/[^\"\s']+/", $file['url'])){
						message("The file <b>{$file['name']}</b> contains a invalid URL.");
					}elseif(!in_array($extension, $CONFIG['file_types'])){
						message("The file <b>{$file['name']}</b> extension is not allowed.");
					}elseif(!$fcc = implode('', file($file['url']))){
						message("The file <b>{$file['name']}</b> is not readable or does not exists.");
					}elseif(strlen($fcc) > $CONFIG['max_file_size']){
						message("The file <b>{$file['name']}</b> exceeds the max file size allowed.");
					}elseif(strlen($fcc) < 5){
						message("The file <b>{$file}</b> contains no data.");
					}elseif(file_exists(ROOT_PATH.$path.$filename) !== false){
						message("The file <b>{$file['name']}</b> seems to already exists on this server.");
					}elseif(!fwrite(fopen($path.$filename, 'x'), $fcc)){
						message("File transfer failed for file <b>{$file['name']}</b>.");
					}else{
						if($CONFIG['is_user'] == true){
							$DB->query("INSERT INTO `".SQL_FILE_STORAGE_TABLE."` VALUES('', '{$filename}', '0', '{$UDATA['user_id']}');");
						}else{
							$DB->query("INSERT INTO `".SQL_FILE_STORAGE_TABLE."` VALUES('', '{$filename}', '{$_POST['private']}', '0');");
						}
						$DB->query("INSERT INTO `".SQL_FILE_LOGS_TABLE."` VALUES ('', '{$filename}', '".time()."', '{$_SERVER['REMOTE_ADDR']}');");
						create_thumbnail($filename);
						results_table();
					}
				}
			}
		}
	}

	function direct_upload(){
		global $CONFIG, $DB, $UDATA, $file_count, $path, $filename;
		for($i = 0; $i <= 15; $i++){
			$file = array(
				'name'  => $_FILES['userfile']['name'][$i],
				'size'  => $_FILES['userfile']['size'][$i],
				'tmp'   => $_FILES['userfile']['tmp_name'][$i],
				'error' => $_FILES['userfile']['error'][$i],
				'rand'  => random_string(20)
			);
			if($file['error'] != 4 && $file['name'] != ''){
				$file_count++;
				if($file_count <= 15){
					if($i >= 1){
						echo "<div class='cell_divider'></div><br>\n";
					}
					$extension = file_type($file['name']);
					$filename  = $file['rand'].".".$extension;
					$thumbnail = thumbnail_name($filename);
					if(!in_array($extension, $CONFIG['file_types'])){
						message("The file {$file['name']}</b> extension is not allowed.");
					}elseif($file['size'] > $CONFIG['max_file_size']){
						message("The file <b>{$file['name']}</b> exceeds the max file size allowed.");
					}elseif($file['error'] != 0){
						$filerror = array(			
							1 => "The file <b>{$file['name']}</b> exceeds the <a href=\"http://us2.php.net/manual/en/ini.core.php#ini.upload-max-filesize\">upload_max_filesize</a> directive in php.ini.",
							2 => "The file <b>{$file['name']}</b> exceeds the <b><i>MAX_FILE_SIZE</i></b> directive that was specified in the HTML form.",
							3 => "The file <b>{$file['name']}</b> was only partially uploaded.",
							6 => "Missing a temporary folder.",
							7 => "Failed to write file <b>{$file['name']}</b> to disk.",
							8 => "File <b>{$file['name']}</b> upload stopped by extension."
								);
						message($filerror[$file['error']]);
					}elseif(file_exists(ROOT_PATH.$path.$filename)){
						message("The file <b>{$file['name']}</b> seems to already exists on this server.");
					}elseif(!move_uploaded_file($file['tmp'], ROOT_PATH.$path.$filename)){
						message("File upload failed for file <b>{$file['name']}</b>.");
					}else{
						if($CONFIG['is_user'] == true){
							$DB->query("INSERT INTO `".SQL_FILE_STORAGE_TABLE."` VALUES('', '{$filename}', '0', '{$UDATA['user_id']}');");
						}else{
							$DB->query("INSERT INTO `".SQL_FILE_STORAGE_TABLE."` VALUES('', '{$filename}', '{$_POST['private']}', '0');");
						}
						$DB->query("INSERT INTO `".SQL_FILE_LOGS_TABLE."` VALUES ('', '{$filename}', '".time()."', '{$_SERVER['REMOTE_ADDR']}');");
						create_thumbnail($filename);
						results_table();
					}
				}
			}
		}
	}

	if($file_count == 0){
		message("Please go back and ".(($_POST['type'] != 'url_upload') ? 'select' : 'enter')." at least one file to upload.");
	}

	require_once('./page_footer.php');
?>

PHP:

Thanks in advance for helping me out