EXHIBIT 10.6
JOINT ENTERPRISE AGREEMENT
THIS AGREEMENT (this "AGREEMENT") is entered into as of June 23, 2003,
by and between ALTNET, INC., a Delaware corporation ("ALTNET") and a subsidiary
of Brilliant Digital Entertainment, Inc., a Delaware corporation, located at
0000 Xxxxxxx Xxxxxx Xxxx., Xxxxx 000, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000, and
SHARMAN NETWORKS LIMITED, a company organized under the laws of Vanuatu
("SHARMAN").
RECITALS
WHEREAS, Sharman was created with the intention of working jointly with
Altnet to develop a business by which the power of peer-to-peer file sharing
could be used to distribute copyright licensed content for profit;
WHEREAS, prior to the effective date of this Agreement, Altnet and
Sharman have been sharing revenue derived from the joint use of Sharman and
Altnet's technology pursuant to an oral agreement;
WHEREAS, their prior oral agreement and this Agreement promote and seek
to attain the joint commercial goals of Altnet and Sharman;
WHEREAS, the joint commercial goals of Altnet and Sharman could not be
attained except through the use and contribution by each of their respective
technologies to this joint enterprise; and
WHEREAS, Altnet and Sharman have entered into this Agreement in order
to share the profits created from this joint enterprise.
AGREEMENT
In consideration of the foregoing and the mutual terms, conditions and
covenants hereinafter set forth, Altnet and Sharman (each a "PARTY" and
collectively, the "PARTIES") agree as follows:
1. DEFINITIONS.
1.1. "ALPM" shall have the meaning given such term in
SECTION 4.6.
1.2. "ASM" shall mean the Altnet Signing Module computer
software application program that is installed on an end user's computer to
enable the award to the user and management of Altnet Points (as defined below)
under the Altnet loyalty points program. The ASM is more fully defined on
EXHIBIT C.
1.3. "CLAIM" shall have the meaning given such term in
SECTION 9.3.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
1.4. "CONTENT CHANNEL," "CONTENT CHANNEL AGREEMENTS," and
"CHANNEL PARTNERS" shall have the meanings given such terms in SECTION 4.7.1.
1.5. "CONVERSION RATES" means the percentage of Index
Search Results displayed to users of the KMD Technology which result in a user
download of the content files located through the Index Search Results.
1.6. "DEFAULT PERIOD" shall have the meaning given such
term in SECTION 8.3.
1.7. The "EFFECTIVE DATE" of this Agreement is April 30,
2002.
1.8. "GENERAL KEYWORDS" shall have the meaning given such
term in SECTION 3.2.
1.9. "GROSS REVENUE" means all revenue actually received
by Altnet or Sharman from the commercial exploitation of Index Search Results
("ALTNET SALES"). The "BASELINE" initially refers to monthly Gross Revenue of
$*** U.S. dollars commencing October 1, 2003. The Baseline shall be increased by
a reasonable amount mutually agreed upon by the Parties starting on January 1,
2004 and every twelve months thereafter, with such agreement not to be
unreasonably withheld. The Parties shall negotiate in good faith to reach
agreement on the amount of the annual increase to the Baseline for each year. If
the Parties fail to mutually agree on the amount of the annual increase to the
Baseline within 60 days after the end of the applicable year, then the Baseline
for the then current year shall automatically increase to *** percent (***%) of
the prior year's Baseline.
1.10. "INDEX SEARCH RESULTS" means search results that are
provided by Altnet's and/or a third-party's centrally controlled, distributed,
or other type of index in response to KMD Technology users' search queries, such
as those provided by Altnet through its TopSearch function. Index Search Results
do not include any index method, if any, deployed in the KMD Technology prior to
March 2002.
1.11. "INFOTIPS" means a small, separate window over the
Kazaa GUI that pops up when end users of the KMD Technology click to download an
Altnet file which displays information (other than advertisements, except to the
extent mutually agreed to by Altnet and Sharman) that is directly related to the
content selected for download by the user.
1.12. "KAZAA GUI" means the Kazaa Graphic User Interface
that comprises part of the KMD Technology, and any successor or replacement
graphical user interfaces.
1.13. "KMD TECHNOLOGY" means the peer-to-peer technology
platform currently known as the Kazaa Media Desktop and any future fixes,
updates, upgrades and replacements to or for the Kazaa Media Desktop.
1.14. "MAJOR ENTERTAINMENT COMPANY" means (A) any global
media or content company which, together with all of its subsidiaries and
affiliates, (i) agrees to use Index Search Results in the Kazaa GUI to locate at
least 100 titles of popular music or 5 titles of mass market
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
motion pictures or television series, and (ii) has at least $500 million in
annual revenue on a consolidated basis, or (B) any licensee of content from any
company that meets the definition in clause (A) that agrees to use Index Search
Results in the Kazaa GUI to locate at least 100 titles of popular music or 5
titles of mass market motion pictures or television series, regardless of the
level of such licensee's revenues. Notwithstanding this definition, Altnet and
Sharman may mutually designate particular companies as Major Entertainment
Companies from time to time.
1.15. "MARKS" shall mean trademarks, service marks, trade
names, and logos.
1.16. "NET REVENUE" means Gross Revenue, less actual third
party (i.e., parties other than Altnet or its affiliates) costs, royalties and
revenue share payments directly attributable to an Altnet Sale (including,
without limitation, DRM and digitization costs incurred for preparing digital
files for sale by Altnet, fees and commissions paid or payable to business
development consultants, bankers and finders for sourcing the commercial
relationship that resulted in the applicable Altnet Sale, and royalties or other
revenue share payments to third parties from whom Altnet has acquired rights to
distribute digital files), provided that sales commissions and other consulting
fees payable to third parties for assisting in obtaining rights to digital
content shall not exceed *** percent (***%) of Gross Revenue.
1.17. "OTHER CHANNEL GROSS REVENUE" means all revenue
actually received by Altnet or Sharman from a Content Channel Agreement
generated by Altnet, other than Gross Revenue from Altnet Sales.
1.18. "OTHER CHANNEL NET REVENUE" means Other Channel Gross
Revenue, less actual third party (i.e., parties other than Altnet or its
affiliates) costs, royalties and revenue share payments directly attributable to
a Content Channel Agreement (including, without limitation, DRM and digitization
costs incurred for preparing digital files in connection with such Content
Channel Agreement, fees and commissions paid or payable to business development
consultants, bankers and finders for sourcing the commercial relationship that
resulted in the applicable Content Channel Agreement, and royalties or other
revenue share payments to the Channel Partner), provided that sales commissions
and other consulting fees payable to third parties for assisting in obtaining
rights under the Content Channel Agreement shall not exceed *** percent (***%)
of Other Channel Gross Revenue.
1.19. "PEERENABLER SOFTWARE" shall mean Joltid Limited's
"PeerEnabler" peer-to-peer network software application, which forms a system
which is capable of digitally signing and publishing data files, and making
these data files available for end users to download from other end users
(peer-to-peer transfers) and if no other end user has the data file the
requesting end user will be able to download the file from a web server.
1.20. "POINTS MANAGER RULES" shall mean the rules relating
to the issuance of Altnet Points to end users established by Altnet from time to
time and communicated to Sharman, including, without limitation, rules relating
to the number of Altnet Points that can be awarded to end users for making their
computer resources available to Sharman for distribution of the KMD Technology,
and rules relating to how Altnet Points can be redeemed for various
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
products and/or services using the ALPM. The initial Points Manager Rules are
set forth on EXHIBIT D attached hereto.
1.21. "RECORDS" shall have the meaning given in SECTION
5.3.
1.22. The "TOPSEARCH FUNCTION" refers to an Altnet
technology by which a bundled Altnet component (such as a DLL) would receive the
KMD Technology user's search queries and return Indexed Search Results, where
those search results are based on information supplied, directly or indirectly,
from an Altnet and/or third party (as appointed by Altnet) database. It is the
responsibility of the KMD Technology to display the Index Search Results to the
user in the Kazaa GUI, such that the user can click on and download the file.
When a user clicks to download an Indexed Search Result file, the KMD Technology
will pass all necessary information on to the bundled Altnet component such that
the Altnet component can download the file onto the user's machine, generate
statistics, and any other functions that would reasonably form part of the
operation of such a system.
1.23. "TOPSEARCH KEYWORDS" shall have the meaning given in
SECTION 3.2.
2. EXCLUSIVE ENGAGEMENT.
2.1. Subject to the terms and conditions set forth in this
Agreement, Sharman hereby appoints Altnet, and Altnet hereby accepts Sharman's
appointment, as the exclusive (even as to Sharman) representative of Sharman for
the sale, license, and/or other commercial exploitation of Index Search Results
displayed on or otherwise accessed using the Kazaa GUI in response to end user
search requests conducted using the KMD Technology.
2.2. Sharman acknowledges and agrees that, during the
Term, Sharman shall retain no right to sell, license, or otherwise commercially
exploit Index Search Results, nor shall Sharman have the right to grant to any
third party the right to do so, and that such functions shall be exclusively
reserved to Altnet upon the terms and conditions set forth in this Agreement.
2.3. The Parties acknowledge that the mutual objective of
this Agreement is to create a business model developed for sustainable growth as
indicated by increases in Conversion Rates and Gross Revenue and agree to
exercise any discretion afforded by this Agreement towards those goals,
including, but not limited to, agreement to maintain strict quality controls
over files and descriptions as detailed in SECTION 4.5.
2.4. Sharman hereby grants to Altnet, during the term of
this Agreement, a worldwide, non-exclusive, limited, non-transferable license to
use Sharman's Marks, including without limitation "Kazaa", in connection with
the exploitation by Altnet of its other rights hereunder.
3. DELIVERY OF ALTNET SEARCH RESULTS; INFOTIPS.
3.1. Subject to the terms and conditions of this
Agreement, Altnet shall have the right to display Index Search Results in the
Kazaa GUI in response to search requests
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
conducted by end users of the KMD Technology, and deliver or cause to be
delivered media and other content to end users from Altnet's servers, a third
party's (as appointed by Altnet) servers, Altnet's software applications, or the
KMD Technology, at Altnet's discretion.
3.2. Subject to the terms and conditions of this
Agreement, Altnet shall have placement rights permitting it to display Index
Search Results in the Kazaa GUI in response to top search keywords ("TOPSEARCH
KEYWORDS") as set forth on EXHIBIT A, and Altnet shall have the right to display
Index Search Results in the Kazaa GUI in response to general keywords ("GENERAL
KEYWORDS") as set forth on EXHIBIT A. Altnet shall, in its sole discretion,
determine whether Index Search Results are displayed in response to TopSearch
Keywords or General Keywords.
3.3. Notwithstanding EXHIBIT A, the Parties agree to
negotiate in good faith for any reasonably necessary changes in the number of
Index Search Results displayed for TopSearch Keywords, based upon the responses
of users of the KMD Technology to the content located through these results, the
availability of quality content, statistical data on Conversion Rates, Gross
Revenue, and evidence of licensing the content located by Index Search Results
by the users of the KMD Technology.
3.4. With respect to Index Search Results only, during the
term of this Agreement, Altnet also shall have the exclusive right (even as to
Sharman) to display InfoTips in the Kazaa GUI when an end user clicks on an
Index Search Result to download a file. Sharman shall not display, or permit the
display in the Kazaa GUI, of InfoTips or similar contextual informational
windows in response to an end user clicking on an Index Search Result to
download a file. Altnet's right to display InfoTips in the Kazaa GUI shall be
subject to the additional terms and restrictions set forth in EXHIBIT B and to
the parameters as detailed in Section 2.3 of this Agreement. 3.5. In addition to
Sharman's other obligations in this SECTION 3, Sharman shall use commercially
reasonable efforts to implement such technological modifications as may be
reasonably requested by Altnet in order to timely accomplish and maintain the
functioning of the foregoing, and use its best efforts to continue to bundle
during the term of this Agreement the TopSearch function for installation as a
mandatory application (meaning users of the KMD Technology must install the
TopSearch function simultaneously with the KMD Technology with which the
TopSearch function is distributed) with any and all downloads of the KMD
Technology (other than downloads of pre-release alpha, test, evaluation and beta
versions of the KMD Technology), subject to Sharman's release schedule for new
versions. Additionally, Sharman will take all necessary steps to ensure that the
KMD Technology will cease to operate, and require re-installing, if the user
uninstalls or removes the TopSearch function from their computer. Each Party
shall bear its own costs in connection with such technological modifications.
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
4. ALTNET SERVICES.
4.1. During the Term, Altnet shall use its commercially
best efforts to solicit media and other content owners and their
representatives, including advertising agencies, for the purpose of selling,
licensing, or otherwise commercially exploiting Index Search Results without
infringement upon the valid rights, including copyrights, trademarks or patents,
of others, on such terms and conditions acceptable to Altnet and the third party
content owners. Altnet may engage third parties to assist in the sale, license,
or other commercial exploitation of Index Search Results.
4.2. During the Term, Sharman agrees that Altnet, its
affiliates and representatives shall have the authority, and the exclusive right
(even as to Sharman), to negotiate and execute such third party agreements for
the exploitation of Index Search Results. Sharman shall reasonably cooperate
with and provide reasonable assistance to Altnet in connection with, and for the
purpose of enabling Altnet to perform under, any such agreement; provided,
however, Sharman shall not be obligated to incur out-of-pocket expenses in
connection with such cooperation and assistance and Sharman shall not be
obligated to provide such cooperation or assistance if it unduly interferes with
Sharman's conduct of its business.
4.3. During the Term, Sharman agrees that Altnet shall
have the authority, and the exclusive right (even as to Sharman), to integrate
payment and micropayment systems into the KMD Technology for content that is the
subject of Index Search Results, and to operate and offer to content owners and
other third parties payment, billing and collection services that are integrated
with such payment and micropayment systems. Sharman shall use commercially
reasonable efforts to implement such technological modifications as may be
reasonably requested by Altnet in order to timely accomplish and maintain the
functioning of the foregoing, subject to Sharman's release schedule for new
versions. Each Party shall bear its own costs in connection with such
technological modifications.
4.4. Notwithstanding the foregoing, if Sharman reasonably
determines that Altnet's integrated payment and micropayment systems are not
meeting industry standards for similar systems (in terms of price, quality,
accessibility, or other like factors), then Sharman must notify Altnet as to the
perceived deficiency. At such time, Altnet shall have forty five (45) days to
cure such deficiency. If no cure has occurred within such sixty-day period,
then, at Sharman's election made by written notice delivered at any time before
such deficiency is actually cured, the exclusive rights granted to Altnet in
SECTION 4.3 shall terminate and become nonexclusive.
4.5. Altnet agrees to make commercially reasonable efforts
to manage the sale of keywords and the selection of files located by Index
Search Results so as to maintain relevance and maximize the Conversion Rates and
Gross Revenue. Relevance refers to providing search results that relate directly
to the search terms entered by users. For example, if a user searches for a
particular music artist, the "relevant" results provided by Altnet will be
licensed songs by that artist, samples and previews of such songs, other
promotional material for that artist or other material that directly relates to
the particular artist or their music. Altnet
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
acknowledges that keywords that lead to irrelevant Index Search Results will
negatively impact the Conversion Rates.
4.6. Altnet has developed a "points" management software
program (the "ALPM"), presently referred to as the "Altnet Loyalty Points
Manager," which enables users, including users of the KMD Technology, to
accumulate points ("ALTNET POINTS") as a form of reward currency for making
certain of their computer resources available to Altnet in connection with the
commercial exploitation of Index Search Results and other functions. The Parties
anticipate that the ALPM will encourage greater use of the Altnet service and
maximize Conversion Rates and Gross Revenue to the benefit of both Altnet and
Sharman. Sharman shall reasonably cooperate with and provide reasonable
assistance to Altnet in connection with, and for the purpose of enabling Altnet
to deploy, the ALPM, including, without limitation, using commercially
reasonable efforts to implement such technological modifications as may be
reasonably requested by Altnet in order to timely accomplish and maintain the
functioning of the foregoing, subject to Sharman's release schedule for new
versions. Sharman shall not, however, be obligated to incur out-of-pocket
expenses in connection with such cooperation and assistance and Sharman shall
not be obligated to provide such cooperation or assistance if it unduly
interferes with Sharman's conduct of its business. Sharman will take all
reasonable steps to ensure that the ALPM is, and remains, a mandatory install
when the KMD Technology is installed. However, once the ALPM is installed, users
shall be free to uninstall the ALPM, with no requirement on Sharman's part to
make the KMD Technology cease to operate if such uninstall occurs.
4.7. CONTENT CHANNELS.
4.7.1. Subject to the terms of this SECTION 4.7,
and during the term of this Agreement, Sharman hereby grants to Altnet the
non-exclusive right to enter into agreements ("CONTENT CHANNEL AGREEMENTS") with
third parties ("CHANNEL PARTNERS") to provide for the establishment of one or
more browse channels within the Kazaa GUI that enable users to find and download
rights-managed content from the relevant browse channel in a single click
process (each, a "CONTENT CHANNEL"), and to provide for all of the terms and
conditions governing the management, maintenance, operation, and other elements
of each Content Channel.
4.7.2. Sharman's obligations under this SECTION 4.7
with respect to each Content Channel shall be subject to Sharman's prior written
approval of the terms of the applicable Content Channel Agreement, which
approval may be withheld by Sharman in its absolute discretion, and absent such
approval, Sharman shall have no obligation to Altnet or any Channel Partner.
Altnet shall not enter into any Content Channel Agreement with a Channel Partner
without first receiving Sharman's aforementioned prior written approval. Sharman
shall, if requested by Altnet, assist Altnet in negotiations with prospective
Channel Partners.
4.7.3. With respect to each Content Channel
Agreement approved by Sharman and entered into by Altnet and the Channel
Partner, during the term of the Content Channel Agreement (including for the
duration of any renewals and extensions thereof), Sharman shall provide Altnet
reasonable access to any and all necessary services, support,
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
personnel, employees, facilities, bandwidth, intellectual property, software
(including the KMD Technology) hardware, and any other assets of Sharman, and to
perform any services required, and to cooperate with Altnet to its fullest
extent, to enable Altnet to perform those obligations under the Content Channel
Agreement that, by their express or implied terms, require such assets and
assistance from Sharman; PROVIDED, HOWEVER, that Sharman shall not be obligated
to incur out-of-pocket expenses in connection with such cooperation and
assistance and Sharman shall not be obligated to provide such cooperation or
assistance if it unduly interferes with Sharman's conduct of its business.
Furthermore, Sharman agrees not to take any action within its control which
would cause Altnet to be in breach of its obligations to the Channel Partner
under the Content Channel Agreement.
4.7.4. The Parties agree that all Net Revenue
derived from any Content Channel Agreement delivered by Altnet shall be divided
*** as provided in SECTION 5 below. The Parties further agree that all Other
Channel Net Revenue shall similarly be divided ***. SECTIONS 5.2 and 5.3 shall
also apply to Other Channel Net Revenue.
4.7.5. The Parties obligations with respect to each
Content Channel Agreement entered into prior to termination or expiration of
this Agreement shall survive such termination or expiration and shall continue
during the term of the Content Channel Agreement (including for the duration of
any renewals and extensions thereof).
4.8. Altnet agrees to create, safely maintain, and
preserve all statistical records of the responses of users of the KMD Technology
to the content located through Index Search Results displayed for TopSearch
Keywords, including the statistical data on Conversion Rates, and other records
pertaining to licensing the content located by Index Search Results by the users
of the KMD Technology, in an understandable form, in the English language. Such
records should be kept throughout the duration of this Agreement and for a
period of three (3) years from their creation. Altnet further agrees to provide
summaries of such records to Sharman every two weeks for the first three months
following the Effective Date, and *** thereafter until Termination. Sharman may
request to audit the complete records once in any *** period upon seven (7) days
written notice. Any such audit shall be at Sharman's cost and conducted by
Sharman or by an independent certified public accountant selected by Sharman,
and shall be conducted during regular business hours and in such a manner as not
to unreasonably interfere with Altnet's normal business activities.
5. CONSIDERATION.
5.1. In consideration of the Parties respective rights and
obligations under this Agreement, the Parties agree that all Net Revenue shall
be divided ***.
5.2. The Parties agree that, except as otherwise provided
herein, all amounts payable by one Party to the other Party under this Agreement
shall be paid within *** days following the end of the month in which such
amounts were actually received by the Party obligated to make the payment.
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
5.3. Altnet agrees to create, safely maintain, and
preserve records of all Altnet Sales, payments made, payments received, payments
due, price lists, contracts executed, and all other relevant commercial,
business, financial, shipping, or accounting documentation related thereto
(collectively "RECORDS") in an understandable form, in the English language, and
using generally accepted accounting practices and reasonable business methods.
Such Records should be kept throughout the duration of this Agreement and for a
period of three (3) years from creation of that record. During this period,
Sharman may cause an audit to be made of the Records in order to verify Altnet's
compliance with this Agreement. Any such audit shall be conducted by Sharman's
accountants or finance department or by an independent certified public
accountant selected by Sharman, and shall be conducted during regular business
hours and in such a manner as not to unreasonably interfere with Altnet's normal
business activities. Sharman shall pay for any such audit, unless the audit
shows that Altnet underpaid the fees due under this Agreement by five percent
(5%) or more or otherwise breached this Agreement in a material manner. In those
cases, Altnet shall pay Sharman for the costs associated with the audit, remedy
any breach if possible, use commercially reasonable efforts to mitigate any harm
resulting from the breach, and immediately pay any missed payments owed Sharman
subject to a *** late fee (or the maximal amount allowable by law, whichever is
less) accumulated per month for each month (rounded up) that the fees were late.
In no event shall audits be made more frequently than once annually unless the
immediately preceding audit disclosed a material discrepancy or underpayment.
The above repayment and remedies shall not affect Sharman's other available
remedies in law or equity.
5.4. As additional consideration to Sharman, Brilliant
Digital Entertainment, Inc., a Delaware corporation and the holder of a majority
of Altnet's issued and outstanding voting securities ("BDE"), shall issue to
Sharman as soon as practicable following execution of this Agreement, a five
year warrant (the "WARRANT") to purchase up to 14,000,000 shares of BDE's common
stock, par value $0.001 per share, at an exercise price equal to the volume
weighed average price of a share of BDE's Common Stock on the American Stock
Exchange over the 5 consecutive trading days ending on June 23, 2003, which
Warrant shall vest 50% three months following the date of issuance and 50% on
the second anniversary of the date of issuance (provided that this Agreement is
still in effect), and shall otherwise be on the terms and subject to the
conditions set forth in the form of warrant attached hereto as EXHIBIT E.
6. LICENSE TO ALTNET SIGNING MODULE.
6.1. LICENSE GRANT. Altnet hereby grants to Sharman a
limited, non-exclusive, non-sublicensable (except for sublicenses permitted by
SECTION 6.3 and SECTION 7 below), non-assignable license (the "ASM LICENSE") to
install and use the ASM, as more fully described on EXHIBIT C to this Agreement,
and any future programming fixes, updates and upgrades to the ASM provided to
Sharman (the "ASM LICENSED SOFTWARE"), for the limited purpose described in
SECTION 6.2 below (the "ASM LIMITED PURPOSE").
6.2. ASM LIMITED PURPOSE. Sharman may use the ASM Licensed
Software solely to authenticate and issue Altnet Points to end users that place
the KMD Technology in the end users' My Shared Folder and make the KMD
Technology available to be uploaded by others
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
using the PeerEnabler Software. Sharman may only issue Altnet Points to end
users based on the Points Manager Rules.
6.3. LICENSE RESTRICTIONS. The ASM Licensed Software may
be used solely for the ASM Limited Purpose. Sharman shall not: (i) remove any
proprietary notices from the ASM Licensed Software; (ii) cause, permit or
authorize the modification, creation of derivative works, translation, reverse
engineering, decompiling or disassembling of the ASM Licensed Software; (iii)
sell, assign, rent, lease, act as a service bureau, or grant rights in the ASM
Licensed Software, including, without limitation, through sublicense, to any
other entity without the prior written consent of Altnet, except as provided in
SECTION 7 below, and except that Sharman may sublicense the ASM Licensed
Software to end users for the ASM Limited Purpose; (iv) export or re-export the
ASM Licensed Software in violation of U.S. export laws; or (v) use the ASM
Licensed Software to, or in any way that would, violate any applicable law,
regulation or ordinance.
6.4. PROPRIETARY RIGHTS. The ASM Licensed Software
contains proprietary and confidential information of Altnet, including
copyrights, trade secrets and trademarks and is protected by United States and
international copyright laws. The ASM Licensed Software, including without
limitation all intellectual property rights therein and thereto, are and shall
remain the exclusive property of Altnet and its suppliers, and except for the
limited license granted to Sharman, Altnet reserves all right, title and
interest in and to the ASM Licensed Software. Sharman shall not take any action
to jeopardize, limit or interfere with Altnet's ownership of and rights with
respect to the ASM Licensed Software. Sharman acknowledges that any unauthorized
copying or unauthorized use of the ASM Licensed Software is a violation of this
ASM License and copyright laws and is strictly prohibited.
6.5. POINTS. Sharman acknowledges and agrees that: (1) the
Altnet Points are the sole property of Altnet and that Sharman has no claim,
right, title or interest in and to the Altnet Points that may be awarded by
Sharman to end users as provided herein; (2) the Altnet Points may be issued for
the ASM Limited Purpose only, and Sharman shall not otherwise give, assign,
transfer, trade, bargain, sell or otherwise distribute Altnet Points to any end
user or third party; and (3) Altnet has the right to amend, change or modify the
Points Manager Rules or Altnet's policies regarding the Altnet Points at any
time and at Altnet's sole discretion, including, but not limited to, the
cancellation, removal and/or termination of the Altnet Points and/or the Altnet
loyalty points program in its entirety without any recourse to Sharman
whatsoever. Altnet shall give Sharman at least thirty (30) days advance written
notice of any material change or addition to the Points Manager Rules, and shall
consult with Sharman in advance of implementing any change or addition in an
effort to minimize the adverse impact of the change or addition on users of the
KMD Technology and to allow Sharman to inform such users of the change or
addition. Furthermore, Altnet shall not cancel, remove or terminate Altnet
Points and/or the Altnet loyalty points program without providing Sharman with
at least sixty (60) days advance written notice. Sharman and Altnet shall
cooperate in providing notice to users of the KMD Technology of the cancellation
or termination in an effort to minimize the adverse reaction such cancellation
or termination has among users of the KMD Technology. Until expiration of the
sixty (60) day notice period, Altnet shall continue to operate the Altnet
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
loyalty points program in substantially the same manner it operated the program
at the time of delivery of the notice (except that after thirty (30) days,
Altnet shall not be required to issue additional Altnet Points), including,
without limitation, allowing users of the KMD Technology to redeem Altnet
Points.
6.6. TERM; TERMINATION OF ASM LICENSE.
6.6.1. The ASM License provided for in this SECTION
6 will become effective as of the date hereof and, unless terminated as set
forth herein, shall continue for an initial term of three (3) years from the
date hereof. This SECTION 6 shall automatically renew for additional three (3)
year terms.
6.6.2. The ASM License provided for in this SECTION
6 shall terminate prior to expiration of the then current term upon the earliest
of (i) termination or non-renewal of this Agreement, as provided in SECTION 8
hereof, (ii) Altnet's cancellation and/or termination of the Altnet loyalty
points program, and (iii) a date which is ninety (90) days following written
notice by Altnet to Sharman of termination of the ASM License provided for in
this SECTION 6.
6.6.3. Upon termination or expiration of the ASM
License, Sharman shall immediately cease the use of the ASM Licensed Software,
including, without limitation, using the ASM Licensed Software to authenticate
and award Altnet Points to end users of the KMD Technology.
7. RIGHT OF SUBLICENSE.
7.1. GRANT. Altnet hereby grants to Sharman a limited,
non-exclusive, non-assignable right to sublicense the (a) ASM, (b) the TopSearch
function, and (c) the ALPM, and any future programming fixes, updates and
upgrades to the foregoing software applications (collectively, the
"SUBLICENSABLE SOFTWARE"), to Qualified Sublicensees, for the limited purpose
described in Section 7.2 below (the "LIMITED SUBLICENSE PURPOSE").
7.2. LIMITED SUBLICENSE PURPOSE. Sharman may sublicense
each component of the Sublicensable Software to any third party (a "QUALIFIED
SUBLICENSEE") to whom Sharman sublicenses rights to use the "FastTrack"
peer-to-peer file sharing technology for use in an Internet application (a
"QUALIFIED APPLICATION"), for substantially the same uses, and subject to
substantially the same limitations on use, applicable to Sharman in its use of
the Sublicensable Software for its own purposes, including, without limitation,
the following general purposes:
7.2.1. TOPSEARCH FUNCTION -- for the sale, license,
and/or other commercial exploitation of Index Search Results displayed on or
otherwise accessed using the graphic user interface of the Qualified
Sublicensee's Qualified Application in response to end user search requests
conducted using such Internet application;
7.2.2. ALPM - to enable users of the Qualified
Sublicensee's Qualified Application to earn Altnet Points for making certain of
their computer resources available to
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Altnet in connection with the commercial exploitation of Index Search Results
and other functions; and
7.2.3. ASM -- to authenticate and issue Altnet
Points to end users that make the Qualified Sublicensee's Qualified Application
available to be uploaded by others using the PeerEnabler Software.
Sharman acknowledges and agrees that it shall not have the
right to sublicense the Sublicensable Software for any purpose for which Sharman
itself does not have the right to use the Sublicensable Software, and that any
Qualified Sublicensee's use of the Sublicensable Software shall be so limited.
Any sublicense agreement shall contain agreements of the Qualified Sublicensee
which are substantially equivalent (and identical, where appropriate) to those
of Sharman set forth in SECTION 6.3 through SECTION 6.5 hereof, and shall
provide for termination of the Qualified Sublicensees' right to use the
Sublicensable Software on substantially the same terms set forth in Section 6.5
(with respect to the ASM and the ALPM) and Section 8 (with respect to the
TopSearch function).
7.3. LONG FORM AGREEMENT. Sharman and Altnet acknowledge
that it is there present intention to enter into long form agreements providing
for Sharman's right to sublicense the Sublicensable Software to Qualified
Sublicensees, and agree to negotiate such long form agreements in good faith
with the intent to enter into such agreements prior to any sublicense by
Sharman. If the parties do not enter into any such long form agreements, then
this Agreement shall control the parties' rights and obligations with respect to
the subject matter of this SECTION 7.
8. TERM AND TERMINATION.
8.1. This Agreement will become effective as of the
Effective Date and, unless terminated as set forth herein, shall continue for an
initial term of three (3) years following the date of this Agreement. Subject to
Altnet meeting the minimum obligations under SECTION 1.9, this Agreement shall
automatically renew for additional three (3) year terms, provided that upon the
commencement of the third three (3) year term, and each three (3) year term
thereafter, a new Baseline which provides for attainable growth based on actual
performance achieved over the prior term shall have been agreed upon by Sharman
in its reasonable discretion.
8.2. This Agreement may be terminated by either Party
immediately (i) if the other Party becomes insolvent or makes an assignment for
the benefit of its creditors or any proceeding is commenced by or against such
other Party under any bankruptcy, liquidation or other debtor's protection law
or statute; or (ii) if the other Party materially breaches this Agreement and
does not cure such breach within thirty (30) days of receiving written notice
that specifies the alleged breach from the non-breaching Party.
8.3. After October 1, 2004, if Gross Revenue fails to meet
or exceed the then current Baseline for three or more consecutive months (a
"DEFAULT PERIOD"), Sharman may in its sole discretion terminate this Agreement
by providing Altnet with written notice of termination;
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
provided, however, if Gross Revenue meets or exceeds the then current Baseline
for a period of three consecutive months immediately following a Default Period,
Sharman's right to terminate this Agreement pursuant to this clause shall lapse,
but only with respect to such Default Period.
9. DISCLAIMERS AND INDEMNIFICATION.
9.1. DISCLAIMER OF WARRANTIES
EXCEPT AS EXPRESSLY SET FORTH HEREIN, SHARMAN HEREBY DISCLAIMS ALL
EXPRESS OR IMPLIED CONDITIONS, REPRESENTATIONS, AND WARRANTIES,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT, ACCURACY, AND QUIET
ENJOYMENT. EXCEPT AS EXPRESSLY SET FORTH HEREIN, ALTNET HEREBY
DISCLAIMS ALL EXPRESS OR IMPLIED CONDITIONS, REPRESENTATIONS, AND
WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, ACCURACY, AND QUIET ENJOYMENT. THE PARTIES
UNDERSTAND AND AGREE THAT SHARMAN HAS NO CONTROL OVER USERS' USE OF THE
KAZAA MEDIA DESKTOP SOFTWARE, AND THAT THE DELIVERY OF INDEX SEARCH
RESULTS TO END USERS OF THE KAZAA MEDIA DESKTOP IS ON AN "AS AVAILABLE"
BASIS.
9.2. LIMITATIONS OF LIABILITY
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, EXCEPT FOR THE
INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 9.3, IN NO EVENT SHALL
EITHER PARTY BE LIABLE (WHETHER IN CONTRACT, WARRANTY, TORT, NEGLIGENCE
OR OTHERWISE) FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, LOST
PROFITS OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES, AND NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL
PURPOSE OF ANY LIMITED REMEDY STATED HEREIN.
9.3. INDEMNIFICATION. Altnet shall defend, indemnify and
hold Sharman and its officers, directors, principals, employees and agents
harmless from and against all costs, liabilities, expenses and settlement
amounts incurred with respect to any claim, suit, or proceeding (a "CLAIM")
brought against Sharman or its officers, directors, principals, employees or
agents by a third party to the extent that such Claim arises from or is related
to the infringement or misappropriation of any intellectual property right or
injury to privacy rights (including without limitation rights of publicity) or
other unlawful or illegal act or omission by Altnet relating to the use, sale,
license or commercial exploitation of the Index Search Results by Altnet, its
officers, directors, principals, employees, agents, and sublicensees. Sharman
will (i)
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
give Altnet notice of the relevant Claim; (ii) reasonably cooperate with Altnet,
at Altnet's expense, in the defense of such Claim; and (iii) give Altnet the
right to control the defense of any such Claim, provided that Altnet may not
enter into any settlement affecting Sharman's rights without Sharman's
agreement. Sharman will have the right to participate in the defense with
counsel of its choice at its own expense. The provisions of this SECTION 9.3
shall survive termination of this Agreement.
10. GENERAL.
10.1. PUBLICITY. Except as required by law or stock
exchange regulations, neither Party shall issue a press release or public
announcement or otherwise make any disclosure concerning (i) any concept,
project or activity relating to either Party's business or technology in which
both Parties are or will be jointly involved; or (ii) this Agreement or the
terms hereof, without the prior written approval of the other Party.
10.2. ASSIGNMENT. Neither Party may assign this Agreement,
in whole or in part, without the other Party's prior written consent (which will
not be unreasonably withheld or delayed), except that either Party may assign
this Agreement (i) in connection with a sale of all or substantially all of such
party's assets, (ii) to a subsidiary or affiliate, or (iii) as part of a merger,
consolidation or reorganization. It shall be noted that, whenever in this
Agreement one of the Parties hereto is named or referred to, the heirs, legal
representatives, successors, successors-in-title and assigns of such Parties
shall be included, and all covenants and agreements contained in this Agreement
by or on behalf of the Parties shall be binding upon and inure to the benefit of
their respective heirs, legal representatives, successors-in-title and assigns,
whether so expressed or not.
10.3. GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the Restatement (Second) of Contracts,
notwithstanding the actual state or country of residence or incorporation of the
Parties.
10.4. ATTORNEYS' FEES. If any action, suit or other
proceeding is instituted concerning or arising out of this Agreement, the
prevailing Party shall recover all of such Party's reasonable outside attorneys'
fees and costs incurred in each and every such action, suit or other proceeding,
including any and all appeals or petitions therefrom.
10.5. NOTICE. All notices required to be given hereunder
shall be deemed to have been given: (i) three (3) days after deposit with
Federal Express or another nationally recognized overnight delivery service,
delivery charges prepaid; or (ii) upon the date of receipt of written
confirmation that the notice was transmitted by electronic facsimile device
("FAX"), as set forth below:
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
(a) If to Altnet:
Altnet, Inc.
c/o Brilliant Digital Entertainment, Inc.
0000 Xxxxxxx Xxxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000 XXX
Attn: Chief Executive Officer
Fax: (000) 000-0000
(b) If to Sharman:
Sharman Networks Limited
x/x XXX Xxxxxxxxxxx
Xxxxx 00, Xxxxx 0, Xxxxxxxx Xxxx Xxxxxx
000 Xxxxxxxx Xxxx,
Xxxxxxxx, XXX 0000 Xxxxxxxxx
Attn: Chief Executive Officer
Fax: x00 (0) 0000-0000
Either Party may from time to time changes its address above by giving the other
Party notice of such change in accordance with this paragraph.
10.6. NO AGENCY. The Parties acknowledge and agree that
they at all times shall remain independent contractors and will have no power or
authority to assume or create any obligation or responsibility on behalf of each
other. This Agreement will not be construed to create or imply any partnership,
agency or joint venture.
10.7. SEVERABILITY. In the event that any of the provisions
of this Agreement are held to be unenforceable under any applicable law or be so
held by an applicable court decision, the remaining portions of this Agreement
will remain in full force and effect.
10.8. MODIFICATIONS AND WAIVERS. Unless otherwise
specified, any amendment, supplement or modification of or to any provision of
this Agreement, any waiver of any provision of this Agreement and any consent to
any departure by the parties from the terms of this Agreement, shall be
effective only if it is made or given in writing and signed by both parties. No
failure or delay on the part of either party in exercising any right, power or
remedy under this Agreement shall operate as a waiver, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise or the exercise of any other right, power or remedy.
10.9. FORCE MAJEURE. Neither Party shall be responsible for
any failure to perform its obligations under this Agreement due to acts of God,
war, riot, embargoes, acts of civil or military authorities, fire, or floods.
15
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
10.10. HEADINGS. The Headings to the sections and exhibits
of this Agreement are included merely for convenience of reference and do not
affect the meaning of the language included therein.
10.11. INTERPRETATION. In the event either Party makes any
claim relating to any conflict, omission or ambiguity in this Agreement, no
presumption or burden of proof or persuasion shall be implied by virtue of the
fact that this Agreement was prepared by or at the request of either party or
its counsel.
10.12. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original. For purposes
hereof, a facsimile copy of this Agreement, including the signature pages
hereto, shall be deemed to be an original.
10.13. ENTIRE AGREEMENT. This Agreement, together with the
License Agreement, is the complete and exclusive agreement between the Parties
with respect to the subject matter hereof, superseding any prior agreements and
communications (both written and oral) regarding such subject matter.
16
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the Effective Date.
Altnet, Inc. Sharman Networks Limited
By: /S/ XXXXX XXXXXXXXXX By: Global Nominees Limited
----------------------------- Its: Authorized Representative
Name: Xxxxx Xxxxxxxxxx
Title: Chief Executive Officer
WITH RESPECT TO SECTION 5.4 ONLY:
Brilliant Digital Entertainment, Inc.
By: /S/ XXXXX XXXXXXXXXX
-----------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Chief Executive Officer
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
EXHIBIT A
TOPSEARCH KEY WORDS
Altnet shall have placement rights permitting it to display Index Search Results
in the Kazaa GUI in response to TopSearch Keywords as the top three (3) search
results.
TopSearch Keyword results will be displayed in the Kazaa GUI above or ahead of
any other search results. In the event that the Kazaa GUI is changed in some
future version so that the concept of "above" or "ahead of" is no longer
relevant or applicable, then in that event TopSearch Keyword results will be
displayed in such a way that they receive preferential placement compared to all
other search results.
GENERAL KEY WORDS
Altnet shall have the right to display Index Search Results in the Kazaa GUI in
response to General Keywords in a ratio of no less than one (1) General Keyword
result for every four (4) other search results.
INCREASING THE NUMBER OF INDEXED SEARCH RESULTS
Subject to the terms and conditions of this Agreement, Altnet shall have the
right, to the extent provided in this paragraph, to increase the number of Index
Search Results in the Kazaa GUI that are initially displayed in response to
TopSearch Keywords and that locate the media content of any Major Entertainment
Company. Sharman shall use commercially reasonable efforts to release a new
version of the Kazaa GUI and/or the KMD Technology and perform any other actions
reasonably necessary to enable Altnet to increase the display of Index Search
Results for a Major Entertainment Company's media content up to the following
number of search results in the Kazaa GUI: within thirty (30) days following
written notification from Altnet to Sharman of a Major Entertainment Company
agreeing to use Index Search Results in the Kazaa GUI to locate its media
content in accordance with the terms as defined in clause 1.1.4 and not on a
`trial only' basis:
Altnet shall have the immediate right (which right shall continue until
otherwise determined by Altnet in its sole discretion), to display the
applicable Index Search Results as the top ten (10) search results in the Kazaa
GUI (or such lesser number of search results as determined by Altnet);
commencing ninety (90) days following such written notification, and continuing
thereafter until otherwise determined by Altnet in its sole discretion, Altnet
shall have the right to display the applicable Index Search Results as the top
twenty (20) search results in the Kazaa GUI (or such lesser number of search
results as determined by Altnet);
commencing one hundred and fifty (150) days following such written notification,
and continuing thereafter until otherwise determined by Altnet in its sole
discretion, Altnet shall have
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
the right to display the applicable Index Search Results as the top thirty-five
(35) search results in the Kazaa GUI (or such lesser number of search results as
determined by Altnet); and
commencing one hundred and eighty (180) days following such written
notification, and continuing thereafter until otherwise determined by Altnet in
its sole discretion, Altnet shall have the right to display the applicable Index
Search Results as the top fifty (50) search results in the Kazaa GUI (or such
lesser number of search results as determined by Altnet). This paragraph does
not apply when an end user of the KMD Technology elects to `search again' the
same search term for additional results.
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
EXHIBIT B
INFOTIPS:
FREQUENCY
1. In general, an InfoTip will be displayed each time that the user clicks
to download a TopSearch file for which an InfoTip is available.
2. Sharman may elect to provide the user with a set of controls,
accessible in the Kazaa GUI's Options Menu or elsewhere, that allow
that user to turn off the display of InfoTips, or set them to appear no
more than once every, say, 5 minutes. If Sharman elects to do this then
these InfoTip frequency caps would apply only to new Kazaa and
TopSearch DLL versions which support that added functionality required
for this, and not to existing Kazaa and TopSearch DLL versions which do
not support this functionality. If Sharman decides to add said
functionality then Sharman and Altnet will each bear their own costs
for developing the necessary technology.
SIZE OF WINDOW
Altnet agrees that InfoTips will be limited to 640 (w) by 480 (h) in size.
CONTEXTUAL RELEVANCE
Altnet agrees that it will only serve InfoTips that are contextually relevant to
the file with which it is associated, and will otherwise act in accordance with
Section 2.3 of this Agreement.
SOUND AND ANIMATION
InfoTips may contain a variety of audio and graphic elements, including Flash
and animation. Where sound is used and its length is 15s or greater, Altnet
agrees that the user will have an option to mute the sound via a sound-control
icon in the InfoTip. Altnet further agrees that the presentation and treatment
of InfoTips, including the use of any sound, will be governed by the principles
established in Section 2.3 of this Agreement.
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
EXHIBIT C
ALTNET SIGNING MODULE
The Altnet Signing Module is a small application program that needs to be
installed on the user's PC in order for any downloads or uploads made by that
user to accrue points for the uploading party.
INSTALLATION
Sharman recognizes that the incorrect installation or configuration of the ASM
could lead to loss of Altnet Points for users of the ALPM program, and Sharman
agrees to ensure that its installation and configuration of the ASM is according
to any instructions and documentation supplied by Altnet.
UNINSTALLATION
Sharman recognizes that users may wish to continue being ALPM members even if
they wish to uninstall Kazaa, and Sharman will therefore not uninstall or
deactivate the ASM as part of the Kazaa uninstallation or otherwise. However,
this must be at the users sole discretion and must be clearly and fairly
communicated to the user in accordance with all notification requirements of
Sharman and Altnet EULAs.
COMPATIBILITY
Altnet estimates that the ASM, and the ALPM program, will be compatible with
approx. 95% of PCs on which Kazaa can be installed. Both parties recognize that
in the approx. 5% of PCs which are incompatible with ASM or ALPM, that these
components may not be functional on that user's PC, which may lead to that user
or other users not obtaining points or the ability to view points.
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
EXHIBIT D
POINTS MANAGER RULES
Altnet acknowledges that Section 6.5 of this Agreement shall govern the Altnet
Points Program, and to the extent that there is a conflict between this Exhibit
D and Section 6.5, Section 6.5 shall govern.
General Rules
1. In addition to the following rules regarding the Points Program (the
"PROGRAM RULES") the Points and Points Program are subject to the terms
and conditions of the Altnet End User's License Agreement (the "XXXX"),
the Altnet Terms and Conditions of Use and the Altnet Privacy Policy
(collectively, the "ALTNET TERMS AND POLICIES"). You may review the
XXXX by clicking HERE [MAKE ACTIVE LINK], the Terms and Conditions of
Use by clicking HERE [MAKE ACTIVE LINK], and the Privacy Policy by
clicking HERE [MAKE ACTIVE LINK].
2. Altnet reserves the right to amend, change or modify the Program Rules
or Altnet's policies regarding the Points and the Points Program at any
time and at Altnet's sole discretion, with or without notice,
including, but not limited to, the cancellation, removal and/or
termination of the Points, the Points Program, and/or any promotional
programs, sweepstakes, games of chance, skill contests or other
promotions relating to the Points Program or involving Points ("POINTS
Promotions").
3. Only one person may be enrolled in a Points Program membership and
account.
4. The Points are the sole property of Altnet and you have no claim,
right, title or interest in and to the Points awarded to you.
5. The Points are nontransferable and the sale, assignment, transfer,
trade, bargaining or other distribution of Points other than by Altnet,
Altnet's third party Points redemption partners or Altnet's Points
Promotions administrators is strictly prohibited. Any member of the
Points Program engaged in such activity shall be immediately
disqualified from the Points Program and the member's Points Program
membership shall be terminated. Any improperly obtained Points shall be
void and will be immediately confiscated and destroyed.
6. Altnet reserves the right to audit any and all Points Program
memberships at any time to ensure compliance with the Points Program,
the Program Rules and the Altnet Terms and Policies. If an audit
reveals possible violations or discrepancies, continued accrual of
points to a member's account shall be halted pending completion of the
audit. If the completed audit reveals a member has violated the Program
Rules or the Altnet Terms
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
and Policies, that member's Points Program membership and account shall
be terminated and that member's Points shall be confiscated and
destroyed.
7. Each Points Program member is solely responsible for his or her Points
Program membership and account. Each member shall be responsible for
notifying Altnet of a change to the member's email address or other
required information and Altnet, Altnet's third party Points redemption
partners and Altnet's Points Promotions administrators shall have no
liability of any kind for misdirected Points, misdirected goods or
services redeemed from Points, or misdirected Points Promotions prizes
or giveaways or the consequences thereof.
8. Each Points Program member is solely responsible for any and all taxes
on any and all goods or services redeemed from Points by such member or
any Points Promotions prizes or giveaways that member receives.
9. The Points Program, Points and Points Program memberships and accounts
are only available to persons residing in jurisdictions which do not
prohibit participation in Internet-based awards programs. Furthermore,
the Points Program, Points and Points Program memberships and accounts
are only available to persons older than 13 years of age or such
greater age required to participate in Internet-based awards programs
in the jurisdiction in which such persons reside. Any Points Program
membership or account enrolled by any person in violation of this
paragraph shall be immediately terminated and such member's Points
shall be confiscated and destroyed.
23
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
EXHIBIT E
FORM OF WARRANT
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*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.