CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT OF 1933. A COMPLETE COPY OF THIS EXHIBIT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
DIGITAL ENTERTAINMENT PARTNERSHIP
BETWEEN
COMPAQ COMPUTER CORPORATION AND
QUOKKA SPORTS, INC.
THIS AGREEMENT (the "Agreement") is made as of January 1, 1999 (the "Effective Date") by and between QUOKKA SPORTS, INC., a corporation organized under the laws of Delaware, with principal offices at 525 Brannan Street, San Francisco, CA. 94107 (hereinafter referred to as "Quokka") and COMPAQ COMPUTER CORPORATION, a corporation organized under the laws of the state of Delaware,20555 State Hwy. 249, Houston, TX, 77070-2698 (hereinafter referred to as "COMPAQ").
RECITALS
WHEREAS, Quokka has and will develop, construct and operate the digital coverage of a network tentatively known as Quokka. com (the "Network"), which will feature digital coverage of a wide variety of events, including sailing, adventure and motor racing events over the years, and will, in part, include certain individual Event Coverage as well. Quokka is establishing Quokka. com which is designed to act as a central portal for Quokka Sports Immersion productions, the tentative programming calendar for which is set forth on Exhibit E.
WHEREAS, COMPAQ desires to be a digital entertainment partner in connection with the Network and the Event Coverage therein, and to receive the rights and benefits as more fully described herein;
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. DIGITAL ENTERTAINMENT PARTNERSHIP: Quokka hereby designates COMPAQ as its exclusive Quokka Performance Team Official Partner for the Computing category (as defined herein) in connection with the Network. the "Computing" category is defined as CPU-based devices that process digital information utilizing software, either visually or aurally, for business, educational or entertainment purposes. Computing components shall mean all computers which are referred to as: workstations, personal computers (PC's, desktops, towers, notebooks, laptops, portables, handhelds, palmtops, etc.), servers, minicomputers and mainframes. This category also includes Computing-related maintenance, support services, and professional IT services. Quokka shall be entitled to appoint no more than [*] additional Official Partners of the Quokka Performance Team, provided that Quokka shall not appoint as an Official Partner any other company in the Computing category during the term of this Agreement. Other Quokka Performance
2. Team categories currently contemplated include, but are not limited to: Networking, Software, Digital Distribution Communications, Wireless Communications, Database Software, Consumer Electronics, Digital Documents and Digital Imaging.
3. TERM: The term of this Agreement shall commence upon the execution of this Agreement and conclude December 31, 2001, unless terminated sooner or extended pursuant to COMPAQ's first negotiation rights more fully described in Exhibit A.
4. RIGHTS GRANTED TO COMPAQ: Quokka guarantees, represents and warrants that it has the legal right and responsibility to provide the rights and benefits granted to COMPAQ under this Agreement as outlined in the attached Exhibit A and Exhibit B. Quokka further guarantees, represents and warrants that the materials, content and services appearing on the Network (collectively "Materials") are factually accurate and do not contain any fraudulent, deceptive or obscene materials, or material which misrepresents, ridicules or attacks an individual or group on the basis of age, color, national origin, race, religion, sex, sexual orientation or handicap; that the Materials will not violate any foreign or domestic, federal, state or local law or regulation, or any rights of any third party, including, but not limited to, any copyright, patent, trademark, trade secret, music, image, or other proprietary, property, or contractual right, or constitute false advertising, unfair competition, defamation, invasion of privacy or rights to celebrity, or any other right of any person or entity
5. PAYMENT: In consideration of the rights and benefits granted to COMPAQ herein, COMPAQ shall make payments to Quokka Sports in accordance with the terms and schedule in the attached Exhibit C. Quokka will invoice COMP A Q sixty (60) days prior to the due date ("Invoice Date"). Payments received by Quokka more than seventy (70) days after the Invoice Date will bear interest at the rate of 1.5% per month from the original Due Date to the date the payment is received.
4.1 If the cumulative Actual Branded Page Views are less than the Projected Branded Page Views as set forth in Exhibit C or the actual number or category of Events covered is substantially less than those listed in Exhibit E, COMPAQ shall receive a mutually agreeable "make good" during the Term or thereafter until such Branded Page Views are achieved.
4.2 While there shall be no obligation on the part of Quokka to achieve such Actual Branded Page Views, for any cumulative Actual Branded Page Views between [*] and [*] of the Projected Branded Page Views there shall be no additional charge to COMPAQ.
4.3 Once the cumulative Actual Branded Page Views reach [*] of the Projected Branded Page Views, then Quokka shall provide COMPAQ with an option to purchase any additional inventory.
6. PURCHASE OF EQUIPMENT: During the Term, Quokka shall purchase certain COMPAQ computer products and services in an amount no less than [*] in accordance with the terms and schedule in the attached Exhibit D. During the Term, any COMPAQ products and services shall be sold or provided to Quokka [*]. COMPAQ will invoice Quokka thirty (30) days prior to the due date ("Invoice Date"). Payments received by Compaq more than forty five (45) days after the Invoice Date will bear interest at the rate of 1.5% per month from the original Due Date to the date the payment is received. Upon completion of Quokka's current outsourcing agreement with Global Center, Quokka shall enter into good-faith negotiations for COMPAQ to provide Operations Management Services (outsourcing) for the Data/IT Infrastructure needs of Quokka, provided that there is no conflict with any other agreement entered into by Quokka.
7. MEZZANINE FINANCING OPTION: Quokka shall use reasonable efforts to provide Compaq with an opportunity to participate in its mezzanine round of finance which is currently planned to be closed on or before its public offering. The terms of the investment shall be set by the lead investor for that round, the investment bankers for Quokka's initial public offering or such other entity as Quokka shall appoint. It is anticipated (though not warranted by Quokka) that the potential investment from COMPAQ would be in the approximate range of [*] million, which sum, if COMPAQ elects to participate in the round, shall be in addition to the 3 Year Fee set forth in Exhibit C. While this round of finance is currently contemplated by Quokka, there is no guarantee that Quokka will undertake such a round of finance coincident with or prior to its public offering, and Quokka makes no representation or warranty with respect thereto, and the failure to undertake such a round of finance shall not be ab reach of this Agreement.
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