INTERACTIVE MARKETING AND CONTENT DISTRIBUTION AGREEMENT

 

 

ALTNET

[GRAPHIC OMITTED]

 

 

INTERACTIVE MARKETING AND CONTENT DISTRIBUTION AGREEMENT

 

This Interactive Marketing and Content Distribution Agreement (this "Agreement"), dated as of October 12, 2004 ("Effective Date"), is entered into between Altnet, Inc. ("Altnet"), with a principal place of business at 6355 Topanga Canyon Boulevard, Suite 120, Woodland Hills, CA 91367, and Karma Media, Inc. ("Customer"), with a principal place of business at 330 Washington Blvd, Suite 706, Marina del Rey, CA 90292.  Altnet and Customer may be referred to individually as a "Party" and collectively as the "Parties."

 

 

INTRODUCTION

 

Altnet operates a distributed computing platform for the secure transmission of content which is accessible from, including but not limited to, the KMD (as defined below), third party web sites, software applications, software programs, search engines and secured physical forms of distribution ("Altnet Network").  

 

Altnet is a party to that certain Commercial Index Search Results Agreement, by and between Altnet and Sharman Networks Ltd. ("Sharman Networks"), pursuant to which, among other things, Altnet has the right to create browser channels for display to users of the Kazaa Media Desktop application (the "KMD") on behalf of customers.

 

Altnet wishes to promote, distribute and sell digital content on behalf of Customer which will consist of content provided by Customer for inclusion on the Altnet Network, including photographs, images, graphics, messages, data, information, text or other materials and promotional materials, but excluding advertisements which shall be provided by Altnet ("Collateral Content").  In addition, Altnet may include customer content on themed channels inside the KMD (the "Channels"), which will consist, in part, of Collateral Content provided by Customer for inclusion on the Channel.  For the purposes of this Agreement, the Channel and other locations from which the Altnet Network is accessible shall be deemed to be part of the Altnet Network.

 

The primary purpose for entering into this Agreement is to promote and sell Customer’s downloadable digital audio and video files ("Files," and together with Collateral Content, the "Content") over the Altnet Network.

 

Altnet intends to promote the Content as set forth in this Agreement.

 

The Parties wish to enter into an agreement on the terms and conditions set forth herein whereby (a) Customer has the principal responsibility for producing and providing Content to Altnet and (b) Altnet shall design, host, and publish the Content on the Altnet Network with certain assistance from Customer.

 

TERMS

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

1.

ALLOCATION OF RESPONSIBILITIES REGARDING CONTENT.

 

1.1.

General Responsibilities of Customer.

 

1.1.1.

Customer shall produce and deliver the Content to Altnet, including, but not limited to all graphics, images, text and descriptions.  Content shall be delivered by Customer to Altnet within fourteen (14) days of the Effective Date.

 

1.1.2.

Customer shall be responsible for creating and providing value-added offerings for use/display on the Content, such as contests, newsletters, merchandising sales promotions and other promotions, to encourage users to purchase Files and other Content ("Value-Add Offerings").  For the purposes of this Agreement, Value Add Offerings shall be deemed Content.

 

1.1.3.

Prior to delivering any Content to Altnet, Customer shall acquire all rights in and to the Content necessary to carry out the terms of this Agreement (including, but not limited to, securing licenses to all 3^rd party content for sales and distribution thereof).

 

1.1.4.

Customer is solely responsible, at its cost, for obtaining all licenses for the "performance" and other use of the Content contemplated by this Agreement.  Customer shall, at its cost, be responsible for obtaining any and all other third party rights, consents and licenses with respect to the Content, including, without limitation, any master recording or mechanical copyright licenses, to the extent required.  With respect to all mechanical licenses required to be obtained hereunder (i) Customer shall provide Altnet with necessary information and otherwise reasonably assist Altnet with any filings that are Altnet’s responsibility, and (ii) Customer shall, at its cost, be responsible for administering such licenses and making payments to publishers and/or clearing agencies related thereto.  With respect to streaming and downloading, Customer shall, at its cost, be responsible for obtaining any mechanical licenses for any country in which such access is provided to users of the KMD.  If requested by Altnet, Customer shall provide Altnet with evidence that Customer has paid all license fees, royalties, and other amounts due third parties for any Content

 

1.1.5.

Customer shall, at Customer’s own cost, be solely responsible for making certain that any Value-Add Offerings or other Content that it delivers to Altnet for inclusion on the Customer Channel is compliant with all federal, state, local or any other laws and/or regulations (including all laws relating to sweepstakes and contests) regarding such Value-Add Offering or other Content.

 

1.2.

General Responsibilities of Altnet.

 

1.2.1.

Altnet will, on behalf of Customer, manage, maintain and operate the Content (including reviewing, updating and otherwise managing all Content available on or through the Altnet Network).

 

1.2.2.

Notwithstanding the fact that Customer will produce and deliver the Content to Altnet, all Content on the Altnet Network, including without limitation, all products, links, buttons, Value-Add Offerings, promotions, sponsorships or similar Content and all features and transaction opportunities available from the Content, will be determined and approved or rejected by Altnet, in its sole discretion.  

 

1.2.3.

Altnet has the exclusive right to sell and control advertisements on the Channels and/or elsewhere on the Altnet Network.  Altnet will sell all advertising inventory on the Altnet Network as it deems appropriate.  Altnet will collect and retain all revenues associated with the advertising.  

 

2.

OWNERSHIP; BRANDING.

 

Customer agrees that as between the Parties, Altnet will be deemed the owner of any end-user date collected, usage surveys or reports or other communications with third parties with regard the distribution of Content.

 

3.

CONTENT – PRODUCTION WORK; CONTROL; OPERATIONS.

 

3.1.

Customer.

 

3.1.1.

Customer will provide all design, graphic, text and production work in connection with the Content.  

3.1.2.

Customer Content shall include:

 

3.1.2.1.

 Promotional material and graphics forthcoming.

 

 

Unless otherwise agreed by the parties, all videos shall have a running time of less than one (1) hour and may be up to 100 Megabytes in file size once encoded.

 

3.1.3.

Customer shall ensure that Content meets Altnet’s requirements for digital format, file size, and distribution rules, which Altnet may change from time to time.

 

3.1.4.

Customer shall determine the price of Files on the applicable Insertion Order at rates consistent with other similar content on Altnet.  Customer and Altnet shall mutually agree upon pricing of Content other than Files (including subscription rates, if applicable).

 

 

3.2.

Altnet.

 

3.2.1.

Except as otherwise provided herein, Altnet will have the exclusive right and responsibility to manage, maintain and operate the Content on the Altnet Network on behalf of Customer (including reviewing, deleting, updating and otherwise managing the Content available on or through the Altnet Network in accordance with this Agreement).  Altnet, in its sole discretion, will make the determination as to what Content will be on or available through the Altnet Network.  Altnet may reject any Content prior to posting and/or remove any Content at any time and in its sole discretion.  

 

3.2.2.

Altnet will be responsible for the cost of maintenance, operation and hosting of the Content.  

 

3.2.3.

Altnet shall provide a secure payment system/gateway for end users to purchase Files, including a third party payment processing system.

 

3.2.4.

Altnet shall provide to Customer periodic reports listing details of the number of times Files have been downloaded, licensed and/or paid for.

 

3.2.5.

Altnet shall promote the Content as set forth in Section 4 hereof.

 

3.2.6.

Altnet reserves the right in its sole discretion to redesign or modify the structure, "look and feel" navigation and other elements of the Altnet Network.

 

4.

PROMOTIONS.

 

4.1.

Guaranteed Promotions.  In connection with the Content, Customer is guaranteed the following minimum promotional placements:

 

4.1.1.

Three (3) key words ("Key Word") on TopSearch per File, approced by Altnet.

 

4.2.

Discretionary Promotions.

 

4.2.1.

In addition to the promotions set forth in Section 4.1 hereto, Altnet has the right to promote the Files and/or the Collateral Content in any manner it deems appropriate to drive sales of the Files or other Content and subscriptions to the Files or the Channels, including but not limited to, making the Channel and/or the Content (or portions of the Content) accessible by end users of the KMD, Channels or other web sites, software applications, software programs, search engines, physical products and other methods of distribution that give users access to the Altnet Network.