Digital Entertainment Partnership - Compaq Computer Corp. and Quokka Sports Inc.
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 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.
[*] Confidential treatment requested.
Page 1 of 16
<PAGE> 2
2. 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.
3. 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
4. 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 COMPAQ
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.
5. 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
[*] Confidential treatment requested.
Page 2 of 16
<PAGE> 3
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.
6. 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 a
breach of this Agreement.
7. CONFIDENTIALITY: The parties acknowledge that this Agreement and its
terms shall be confidential. The parties further acknowledge that, in the course
of performing duties under this Agreement, each party may obtain from the other
party data or information of a confidential or proprietary nature, including
know-how and trade secrets, relating to the business, the affairs, the
development projects, or current or future products or services of such party
("Confidential Information"). Confidential Information may be disclosed to a
party in writing, in other tangible form (including e-mails), orally, or
visually. Data or information will be considered Confidential Information if:
(a) a party has marked it as such; (b) a party, orally or in writing, has
advised the other party of its confidential or proprietary nature, or (c) due to
its character and nature, a reasonable person under like circumstances would
treat it as confidential. Neither party will at any time, either during or after
the term of this Agreement, either (i) publish, disclose or otherwise divulge
any of the other party's Confidential Information to any person, except its
officers and employees with a need to know under a contractual duty to maintain
the confidentiality of such information consistent with the obligations imposed
hereunder; or (ii) permit its officers or employees to divulge any of the other
party's Confidential Information without the express prior written consent of
the other party. Neither party shall use the other party's Confidential
Information except in the course of performing its duties under this Agreement.
Upon the other party's request or expiration or termination of this Agreement
for any reason, each party will immediately destroy or return to the other party
all of the other party's Confidential Information in its possession, custody or
control. The foregoing obligations will not apply to any Confidential
Information that (1) is already known to the receiving party; (2) is or becomes
publicly known through no wrongful act of the receiving party; (3) is
independently developed by the receiving party without benefit of the disclosing
party's Confidential Information; (4) is received from a third party without
similar restriction and without breach of any obligation of confidentiality; or
(5) is required or reasonably necessary to be disclosed to comply with laws,
statutes, regulations, orders, and other governmental rules, including, without
limitation, any voluntary filing under the Securities Act of 1933, as amended,
or the Securities and Exchange Act of 1934, as amended, to the
[*] Confidential treatment requested.
Page 3 of 16
<PAGE> 4
extent of such required disclosure only and provided that the disclosing party
is notified, if applicable, prior to such disclosures to allow them to seek a
protective order. Additionally, neither party shall be prohibited from
disclosing the terms and conditions of this Agreement to financial institutions
when required to obtain financing provided such financial institutions are under
a contractual duty to maintain the confidentiality of the information that is
consistent with the obligations imposed hereunder. The obligations of
confidentiality shall expire three years after the expiration of termination of
this Agreement.
8. INDEPENDENT CONTRACTORS: Notwithstanding the use of the term Digital
Entertainment Partnership herein, nothing contained herein shall constitute or
be construed as the creation of any partnership, agency or joint venture
relationship between the parties hereto. Neither party shall have the right to
obligate or bind the other in any manner whatsoever, and nothing herein
contained shall give or is intended to give any rights of any kind to any third
persons. The relationship of the parties shall be as independent contractors.
9. CONSEQUENTIAL DAMAGES: Other than for the purchase and sale of
equipment, under Section 5 of this Agreement, in no event shall either party be
liable to the other party or to third parties for lost profits or other
consequential, incidental, indirect, special, punitive damages of any nature
whatsoever, including, without limitation, loss of profits, loss of business, or
anticipatory profits, even if such party has been apprised of the likelihood of
such damages. The terms applicable to the purchase and sale of equipment are
provided in Section 5, Exhibit D and the Limited Warranty Statements
accompanying each product.
10. ASSIGNMENT: This Agreement is in the nature of a contract for
personal services, therefore, neither party shall assign any right or interest
herein nor delegate any duty or obligation without the prior written consent of
the other, unless the assignment is made to a successor in interest or to an
entity that purchases all or substantially all of its assets.
11. USE OF MARKS: Trademark licenses are granted in Exhibit B. Each
party shall submit any promotional materials and advertisements using the other
party's (the "Licensing Party") trademarks, or the third party trademarks
licensed hereunder, to the Licensing Party prior to any commercial availability
thereof. The Licensing Party shall approve or disapprove such materials within
five (5) working days of such submission. If the Licensing Party fails to
approve such materials within such period, the submitted material may be deemed
approved. Once per year, upon a party's request, each party shall supply to the
respective Licensing Party a reasonable number of specimens of its materials
bearing any of the Licensing Party's Marks in determining if such party is
maintaining the applicable quality standards for using the licensed marks.
Notwithstanding the foregoing, neither party shall be permitted to make any
ancillary use of such trademarks without the prior written approval of the other
party. Each party's license to use, copy and distribute such trademarks will
terminate with the expiration or termination of this Agreement.
12. ENTIRE AGREEMENT AND ORDER OF PRECEDENCE: The entire understanding
between the parties is incorporated herein and supersedes all prior discussions
and agreements between the parties relating to the subject matter hereto. All
prior understandings, oral or written, if any, have been merged herein, or, if
not merged, are hereby canceled. This Agreement can be modified only by a
written amendment executed by Quokka and COMPAQ, and shall not be supplemented
or modified by any course of dealing
Page 4 of 16
<PAGE> 5
or trade usage. The terms of this Agreement will prevail over conflicting terms
contained in any purchase order, invoice or confirmation used by the parties or
submitted under this Agreement. No representations have been made except those
expressly set forth herein.
13. FUTURE OBLIGATIONS: Any obligations and duties, which by their
nature extend beyond the expiration or termination of this Agreement, including
but not limited to the confidentiality obligations under Section 8 and the
Indemnity obligations under Section 20, shall survive any expiration and
termination and remain in effect.
14. INVALID PROVISIONS: If any provision or provisions of this Agreement
shall be held to be invalid or unenforceable, such provision shall be enforced
to the fullest extent permitted by applicable law and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
15. FORCE MAJEURE: Neither party shall be liable for the failure to
perform any of its obligations under this Agreement if such failure is caused by
the occurrence of any contingency beyond its reasonable control. However, each
party shall use its reasonable best efforts to minimize the resulting duration
and consequences of any failure or delay in performance. Additionally, each
party shall cooperate in good faith such that the rights and obligations
hereunder may be fulfilled by rescheduling, substitution, alternate performance,
equitable adjustment of the contract price or similar means.
16. TERMINATION:
16.1 Commencing May 1, 1999, in the event that COMPAQ shall be
dissatisfied with Quokka's performance hereunder and, in Compaq's sole judgment,
shall not have received adequate future assurances from Quokka with respect to
such performance, then COMPAQ shall have the right to terminate the Agreement at
the end of any calendar year by giving Quokka written notice of its intention to
terminate no later than June 30 of such year. Such termination shall become
effective only at the conclusion of such calendar year. Subsequent to the
effective date of such termination, COMPAQ shall not be liable for any further
payment obligations and Quokka shall have no further responsibility to COMPAQ
hereunder, except as provided under Section 12, Future Obligations.
16.2 Commencing May 1, 1999, Quokka shall have the right to terminate
the Agreement at the end of any calendar year by giving COMPAQ written notice of
its intention to terminate no later than June 30 of such year. Such termination
shall become effective only at the conclusion of such calendar year. Subsequent
to the effective date of such termination, COMPAQ shall not be liable for any
further payment obligations and Quokka shall have no further responsibility to
COMPAQ hereunder, except as provided under Section 12, Future Obligations.
16.3 Due to the potential similarity between the Computing category and
certain of the Quokka Performance Team categories, Quokka shall notify Compaq
prior to executing any agreements with any other Official Partner. In the event
that Compaq believes, in its sole judgment, that the category specified for such
additional Official Partner materially dilutes Compaq's exclusive rights
hereunder such that the benefits that COMPAQ receives are less than one half of
that set forth in this Agreement, then Compaq shall have ten (10) business days
from receipt of Quokka's notification that Quokka has, in fact, executed such an
Page 5 of 16
<PAGE> 6
agreement to give Quokka notice of its intention to terminate the Agreement at a
date no earlier than six (6) months from the date of Compaq's notice of
intention to terminate. Such termination shall become effective only at the
conclusion of such six (6) month period. Subsequent to the effective date of
such termination, COMPAQ shall not be liable for any further payment
obligations, and Quokka shall have no further responsibility to COMPAQ
hereunder, except as provided under Section 12, Future Obligations.
17. NOTICE: Notices required or permitted hereunder shall be in writing
and deemed given and received when properly posted by registered or certified
mail, postage prepaid, first class, in an envelope properly addressed
(i) if to COMPAQ, to: COMPAQ Computer Corporation
20555 State Hwy. 249
Houston, TX 77070-2698
ATTN: Doug Wheeler
(ii) if to Quokka, to: Quokka Sports, Inc.
525 Brannan Street, Ground Floor
San Francisco, CA. 94107
ATTN: Alan Ramadan
18. WAIVER: Any waiver of any kind by either party of a breach of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
by the other party. Any delay or omission in exercising any right, power or
remedy pursuant to a breach or default by one party shall not impair any right,
power or remedy which the other party may have. All rights, remedies,
undertakings, obligations and agreements contained in this Agreement shall be
cumulative and none of them shall be in limitation of any other right, remedy,
undertaking, obligation or agreement of either party.
19. GOVERNING LAW:THIS AGREEMENT AND ALL TRANSACTIONS EXECUTED HEREUNDER
SHALL BE GOVERNED EXCLUSIVELY BY AND CONSTRUED IN ACCORDANCE WITH THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
20. ATTORNEYS FEES: In any action or proceeding between the parties
hereto, or brought to enforce the terms of this Agreement, the prevailing party
in such action or proceeding shall be entitled to recover its attorneys' fees
and costs.
21. INDEMNIFICATION:
21.1 Quokka agrees to defend, indemnify and hold harmless Compaq and its
affiliated companies, and their respective employees, directors and officers
from and against any and all third party claims, demands, suits, expenses,
judgments, awards, fines, fees (including court costs and reasonable attorneys
fees) arising out of or related to Quokka's performance of this Agreement and
the activities hereunder, including activities of the Network, or breach or
alleged breach of any of the representations, warranties or guarantees made
hereunder. Compaq shall promptly notify Quokka of any such claims.
Page 6 of 16
<PAGE> 7
21.2 Compaq agrees to defend, indemnify and hold harmless Quokka and its
affiliated companies, and their respective employees, directors and officers
from and against any and all third party claims, demands, suits, expenses,
judgments, awards, fines, fees (including court costs and reasonable attorneys
fees) arising out of or related to Compaq's performance of this Agreement,
claims that Compaq' trademarks, when used in accordance with Compaq's written
approval, infringe any intellectual property or proprietary rights of any third
party or breach or alleged breach of any of the representations, warranties or
guarantees made hereunder. Quokka shall promptly notify Compaq of any such
claims.
Whereof, the parties hereto have signed this Agreement this 3rd day of May
in 1999.
COMPAQ COMPUTER CORPORATION
By: /s/ ENRICO PESATORI Date: 5/3/99
-------------------------------------- ------------------
Enrico Pesatori
Senior Vice President of Corporate Marketing
QUOKKA SPORTS, INC.
By: /s/ ALAN RAMADAN Date: 5/5/99
-------------------------------------- ------------------
Alan Ramadan
President & CEO
Page 7 of 16
<PAGE> 8
EXHIBIT A
RIGHTS AND BENEFITS
I. RIGHTS
A. EXCLUSIVE CATEGORY RIGHTS
Exclusive Computing category rights (as defined in Paragraph 1 of the Agreement)
on the Quokka Performance Team associated with the Network during the Term. The
exclusive category designation for the Network includes all Event coverage
unless any Event rightsholder prohibits Quokka from offering COMPAQ the
exclusive Computing category in connection with coverage of such rightsholder's
Event. Notwithstanding the foregoing and for the sake of clarity, the category
rights granted COMPAQ herein shall not extend to the Olympic Games.
B. EXCLUSIVE RIGHT OF FIRST NEGOTIATION ON RENEWAL
Except in the case where COMPAQ has terminated the Agreement, Quokka shall begin
exclusive negotiations with COMPAQ at least one (1) year prior to the expiration
of COMPAQ's category rights hereunder for a period of ninety (90) days with
respect to the acquisition by COMPAQ of rights similar to the rights granted
herein. If at the end of this negotiating period the parties have not reached a
written agreement, Quokka may enter into agreement with any third party with
respect to rights similar to, or different from, the rights granted herein.
C. WORLDWIDE USAGE OF OFFICIAL MARKS AND DESIGNATIONS
1. Worldwide use of Official Marks, subject to the terms in Exhibit B:
Quokka Performance Team Mark
Quokka Sports Mark
2. Worldwide use of Official Designations, subject to the terms in
Exhibit B:
Official Worldwide Partner of the
Quokka Performance Team Official Worldwide Computing
Partner of the Quokka Performance Team
D. [*]
[*]
[*] Confidential treatment requested.
Page 8 of 16
<PAGE> 9
II. BENEFITS
A. CATEGORY LEADERSHIP BENEFITS
1. Exclusive Association: Exclusive Computing association with
Quokka Sports, the leader in the emerging Digital Entertainment
Marketplace.
2. Exclusive ownership of the Computing category for the Quokka
Performance Team.
3. Incorporation of COMPAQ products in the development of the Quokka
Sports Platform, subject to COMPAQ's efforts to make such
products available in a reasonably timely fashion.
4. Access to Quokka Sports strategic digital media R&D initiatives
done in conjunction with other IT industry leaders (where Quokka
has the unilateral right to include COMPAQ).
5. Insight into leading technology product and service trends from
the Quokka Sports team, Quokka Performance Team partners and
other influential Quokka alliances.
6. Opportunities for COMPAQ digital media products to participate in
real world labs and product development trials for testing and
showcasing purposes.
7. Opportunity to participate in attempts to define and promote
Digital Entertainment Industry Standards to secure long-term
competitive advantages.
8. Access, at no dollar charge, to Quokka Immersion Media syndicated
content to integrate within Alta Vista, compaq.com and other
COMPAQ cross media marketing efforts.
9. Establishment of an on-going relationship between Quokka and
COMPAQ Research to showcase jointly their leading-edge Internet
capabilities.
10. Access for COMPAQ executive(s) to participate in an Annual Quokka
Sports Digital Summit including the leaders in digital media,
technology, sport and entertainment collectively defining the
digital media industry.
11. Access to Quokka Sports digital media market research.
12. As set forth in Exhibit B, worldwide license to use all Quokka
Performance Team cobrandable official marks, performance
meters/icons
Page 9 of 16
<PAGE> 10
and designation in COMPAQ external and internal marketing and
sales efforts, subject to Quokka having such rights.
13. Right to leverage the Quokka Performance Team partnership
alliance as the cross-marketing platform with all internal and
external COMPAQ brand communications, marketing initiatives,
production promotional efforts, new product releases (within the
designated computing category scope) sales efforts, trade events.
14. Quokka will appoint a designated COMPAQ Relationship manager, at
no cost to COMPAQ, to manage and maximize to the extent possible
the benefits hereunder.
15. COMPAQ Digital Entertainment Partnership Plan prepared jointly by
Quokka Sports and COMPAQ focused on executing against COMPAQ
business strategies.
16. Annual ROI-based Assessment Report.
B. BUSINESS TO BUSINESS AND CONSUMER SALES BENEFITS
1. Real-time COMPAQ and Quokka Performance Team Product Showcase
within Network to use as a dynamic visual representation
dedicated to educating and promoting the Quokka Performance Team
story and COMPAQ products and services in a digital media
context. Showcases may be leveraged by COMPAQ as a lead
generation system for pre-screening targeted customers.
2. E-commerce: Integration and promotion of COMPAQ Online Direct
Store to prospects and customers by linking the Quokka Sports
online store(s) to the COMPAQ online store (or retail fulfillment
centers) for back-end management.
3. COMPAQ Sales Tool: Quokka will create a custom URL within the
Network for exclusive use by COMPAQ to showcase COMPAQ equipment
and technology.
4. Ability to sell Quokka products and services on Compaq.com and
Alta Vista.
5. Access to and use of names and other registration information for
direct marketing purposes, in accordance with user agreement
terms.
6. Ability to use Quokka Sports Immersion content across all COMPAQ
sales channels and sales presentations, events and trade shows as
approved by Quokka Sports.
Page 10 of 16
<PAGE> 11
7. Access to and branding throughout the Quokka Digital Studio for
real time product showcasing and corporate customer and employee
events.
8. Direct Marketing: Reasonable commercial efforts to promote QPT
and COMPAQ's role therein in online newsletters, direct mail and
one to one relationship marketing efforts.
C. SPONSORSHIP BENEFITS
1. Exclusive category access and use of Event designations in
connection with coverage of Events, to the extent that Quokka may
grant such rights.
2. Hospitality programs, as mutually agreed, in connection with each
Event, to the extent that Quokka may grant such rights.
3. Exclusive category access to premier product placement and QPT
branding at Quokka Sports production venues, to the extent Quokka
may grant such rights.
4. Option to co-market and/or co-brand with QPT logo all applicable
Quokka Sports collectible products at Quokka's reasonable
discretion.
D. MEDIA BENEFITS
1. Guaranteed Branded Media Impressions: Guaranteed premiere Quokka
Performance Team branding and placement for COMPAQ (as
exemplified in the attached Exhibit F) on or within [*] of the
cumulative Projected Branded Page Views set forth in Exhibit C.
At least [*] of such cumulative Projected Branded Page Views
shall represent solo branding and placement for COMPAQ and/or
Alta Vista (as exemplified in the attached Exhibit G).
2. Exclusive COMPAQ First QPT Partner Mention: To the extent that
Quokka maintains control of placement of any branding on any
particular site or in connection any QPT marketing programs,
COMPAQ's logo shall appear first (at the left or on top, as the
case may be) where the logos of Quokka Performance Team Official
Partners will appear at the same time in a linear fashion (either
horizontally or vertically).
3. Exclusive category access to premier product placement within the
Network.
4. Premium multimedia advertising design, strategic consulting and
creative services furnished by Quokka at no cost to COMPAQ (e.g.,
pop-ups, interstitials, distributed applications and broadband
media advertisements).
[*] Confidential treatment requested.
Page 11 of 16
<PAGE> 12
5. Monthly Network viewer/audience reports, including page views.
E. QPT PUBLIC RELATIONS/COMMUNICATIONS BENEFITS
1. When available, Quokka will use its reasonable efforts to
recognize and endorse the Quokka Performance Team partnership
alliance and COMPAQ's official designation in off-line media
relations, public announcements, advertising and keynote
addresses done by Quokka Sports.
2. From time to time, Quokka shall make reasonable efforts to supply
executive speakers (such as John Bertrand and Alan Ramadan) to
speak to COMPAQ meetings, events and trade shows regarding
COMPAQ's Digital Marketing initiatives. All speaker fees shall be
waived for COMPAQ.
3. From time to time, Quokka shall make reasonable efforts to
participate in COMPAQ promotional events, both online and
otherwise.
4. Access to Quokka Sports Immersion content for COMPAQ use to
integrate in all employee communications.
Page 12 of 16
<PAGE> 13
EXHIBIT B
USAGE OF DESIGNATIONS AND MARKS
1. Subject to Quokka's reasonable, prior written approval which will not be
unreasonably withheld or delayed:
A. License of Marks: Quokka grants to COMPAQ a category-exclusive license
during the Term to use, and authorize third party distributors of its
products and services to use, the marks granted in Exhibit A in COMPAQ's
packaging, advertising and promotional materials, product and services
literature and other communications.
B. License of Designations: Quokka grants COMPAQ a category-exclusive
license during the Term to use, and authorize third party distributors
of its products and services to use, the designations granted in Exhibit
A in COMPAQ's packaging, advertising and promotional materials, product
and services literature and other communications.
C. Reservations: Quokka's trademarks, logos and designations, licensed
hereunder shall remain the property of Quokka. Any and all rights under
trademark or copyright law or otherwise relating to such items shall
inure to the benefit of Quokka. The right to use Quokka's marks as
permitted under this Agreement is nonassignable, nonexclusive and
nontransferable by Compaq.
2. Subject to COMPAQ's reasonable, prior written approval, which will not be
unreasonably withheld or delayed, COMPAQ grants Quokka a license during the Term
to use its marks and designations in Quokka's packaging, advertising and
promotional materials, product and services literature, derivative products and
other communications. Compaq's trademarks, logos and designations, licensed
hereunder shall remain the property of Compaq. Any and all rights under
trademark or copyright law or otherwise relating to such items shall inure to
the benefit of Compaq. The right to use Compaq's marks as permitted under this
Agreement is nonassignable, nonexclusive and nontransferable.
Page 13 of 16
<PAGE> 14
EXHIBIT C
QUOKKA SPORTS DIGITAL ENTERTAINMENT PACKAGE
A. Projected Viewership:
<TABLE>
<CAPTION>
----------------------------------------------
Year Projected Branded Page Views
----------------------------------------------
<S> <C>
1999 [*]
----------------------------------------------
2000 [*]
----------------------------------------------
2001 [*]
----------------------------------------------
TOTAL [*]
----------------------------------------------
</TABLE>
B. Term: January 1, 1999 to December 31, 2001, unless sooner terminated as
set forth herein.
C. 3 Year Fee: [*], payable: [*] for 1999, [*] for 2000 and [*] in 2001,
which Fee represents the following Applied Discount (s):
- Long-term Partner Discount: [*] off List Price
- Additional Repeat Partner Discount for COMPAQ: additional [*] off
List Price.
D. Payment Due Date*:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
1999 2000 2001
-----------------------------------------------------------------------
<S> <C> <C> <C>
January 15 [*] [*] [*]
-----------------------------------------------------------------------
April 15 [*] [*] [*]
-----------------------------------------------------------------------
July 15 [*] [*] [*]
-----------------------------------------------------------------------
October 15 [*] [*] [*]
-----------------------------------------------------------------------
</TABLE>
*-- pursuant to Paragraph 4, invoices will be sent 60 days prior to the
payment Due Date.
[*] Confidential treatment requested.
Page 14 of 16
<PAGE> 15
EXHIBIT D
EQUIPMENT PURCHASE SCHEDULE
Schedule for Quokka Purchases of Compaq Equipment, Support, and IT Services*:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
1999 2000 2001
-----------------------------------------------------------------------
<S> <C> <C> <C>
First Quarter $ [*] $ [*] $ [*]
-----------------------------------------------------------------------
Second Quarter [*] [*] [*]
-----------------------------------------------------------------------
Third Quarter [*] [*] [*]
-----------------------------------------------------------------------
Fourth Quarter [*] [*] [*]
-----------------------------------------------------------------------
TOTAL [*] [*] [*]
-----------------------------------------------------------------------
</TABLE>
*In the event that Quokka does not spend the sums set forth in any particular
quarter, Quokka shall not be in breach of this agreement so long as it places
the total amount of purchases in any calendar year by December 31 and so long as
COMPAQ has meet its payment obligations hereunder. In the event that Quokka
purchases more than the sums set forth above in any particular year, such
additional purchases over such minimum sums shall be credited against the next
year's purchase obligation first and then the next succeeding year's obligation.
In the event that this Agreement shall be terminated, then Quokka's obligation
to purchase COMPAQ equipment and services shall also terminate simultaneously.
Warranty:
The warranty provisions applicable to each product are those that accompany the
product and are provided in the standard Limited Warranty Statement packaged
with the product.
COMPAQ MAKES NO OTHER WARRANTIES EXPRESS OR IMPLIED, AND DOES NOT WARRANT THE
PRODUCT'S PERFORMANCE WITH ANY THIRD PARTY PRODUCT. THE WARRANTIES CONTAINED IN
THE PRODUCT PACKAGING AND IN THIS AGREEMENT ARE EXCLUSIVE AND ARE IN LIEU OF ALL
OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
[*] Confidential treatment requested.
Page 15 of 16
<PAGE> 16
EXHIBIT E
QUOKKA SPORTS IMMERSION PRODUCTIONS AND TENTATIVE PROGRAMMING
<TABLE>
<CAPTION>
PLANNED IN DEVELOPMENT
------- --------------
<S> <C> <C>
Motor Sports CART [*]
Grand Prix Motorcycles
Sailing [*] America's Cup
[*]
[*]
[*]
Adventure Marathon des Sables [*]
Hidden Peak [*]
Trango Tower [*]
[*] [*]
[*]
Other TBD [*]
</TABLE>
NOTE: THE FOREGOING IS SUBJECT TO CHANGE IN THE DISCRETION OF QUOKKA.
[*] Confidential treatment requested.
Page 16 of 16