EXHIBIT 10.39
BRILLIANT DIGITAL ENTERTAINMENT, INC.
AD SELLING & SERVING AGREEMENT
This agreement ("AGREEMENT") is entered into as of the 2nd day of October, 2001
("EFFECTIVE DATE"), by and between Brilliant Digital Entertainment, Inc., a
Delaware corporation, located at 0000 Xxxxxxx Xxxxxx Xxxx., Xxxxx 000, Xxxxxxxx
Xxxxx, Xxxxxxxxxx 00000 ("BDE"), and Consumer Empowerment B.V., a company
organized under the laws of The Netherlands and located at Xxxxxxxxxx 00, 0000XX
Xxxxxxxxx, Xxx Xxxxxxxxxxx ("KAZAA").
BDE and KaZaa (the "PARTIES") hereto expect to enter into a more formal
agreement which contains the terms of this Agreement and may contain the
standard terms and conditions utilized by BDE for agreements of this nature (the
"LONG FORM AGREEMENT"). In connection therewith, the Parties shall negotiate in
good faith such Long Form Agreement for a period of ninety (90) days from the
date hereof. Notwithstanding the foregoing, unless and until such Long Form
Agreement is fully executed, this Agreement shall be deemed valid and legally
binding. In consideration of the mutual terms, conditions and covenants
hereinafter set forth, the Parties agree as follows:
1. RECITAL: BDE and KaZaa are negotiating to enter into a Bundle
Technology License Agreement ("LICENSE AGREEMENT").
2. CONDITION
PRECEDENT: This Agreeme nt is expressly conditioned upon the execution
and delivery of the Technology Bundle License Agreement by
both Parties.
3. AD SERVICE: Both Parties shall be entitled to sell and serve
advertisement campaigns and/or sponsorships in BDE's b3d
format (collectively "AD CAMPAIGN(S)") on the KaZaa owned
websites and software applications (the "NETWORK").
4. CONSIDERATION: 4.1 AD SERVER LICENSE FEE: As consideration for KaZaa's use
of BDE's proprietary ad serving technology used in
conjunction with the delivery of Xx Xxxxxxxxx on the
Network, KaZaa shall pay BDE twenty percent (20%) of the
Direct Adjusted Gross Ad Revenue received by KaZaa for such
Xx Xxxxxxxxx. "Direct Adjusted Gross Ad Revenue" shall be
defined as any and all gross advertising revenue received in
connection with an Ad Campaign on the Network, less any and
all verifiable sales commission (any such internal sales
commission costs being capped at fifteen percent (15%)),
bandwidth, ad serving and hosting costs, if any. KaZaa will
not knowingly serve any Xx Xxxxxxxxx on the Network from any
third party ad server unless such third party is a bona fide
licensee of BDE's ad server technology.
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4.2 SALES COMMISSION: As consideration for the sale of Xx
Xxxxxxxxx on the Network sold directly by BDE or BDE's
agent, KaZaa shall pay to BDE thirty-five percent (35%) of
the Direct Adjusted Gross Ad Revenue received by KaZaa for
such Xx Xxxxxxxxx.
4.3 The above shall be referred to individually and
collectively as "REVENUE SHARE."
5. EXCLUSIVITY: BDE shall be the exclusive 3D interactive, with audio, rich
media advertising format displayed on the Network for the
six (6) month period commencing with the bundling of the
Digital Projector in KaZaa ("BDE Exclusivity"). During this
six month period, KaZaa shall be precluded from using any
other 3D interactive, with audio, rich media advertising
formats, including but not limited to Flash ads with audio
(however Flash ads with no audio will not violate the BDE
Exclusivity). Prior to the end of this six month period of
exclusivity, the Parties shall negotiate in good faith to
determine whether such exclusivity shall continue for the
balance of the Term, and any extensions thereof.
6. ACCOUNTING
AND PAYMENT
TERMS: BDE shall pay KaZaa its Revenue Share of the Direct Adjusted
Gross Ad Revenue within ten (10) business days after receipt
of payment by BDE for each Ad Campaign without any offsets.
7. HOUSE ADS: KaZaa shall have the right to serve both KaZaa and BDE
internal and self-promotional advertisements as well as
advertisements for not for profit organizations,
collectively not to exceed five percent (5%) of KaZaa's
available, viewable and verifiable daily advertising
inventory ("AD INVENTORY"), in BDE's b3d format exclusively
on the Network at no ad server license fee cost to KaZaa.
8. TERM: The term ("TERM") of this Agreement shall be for one (1)
year commencing on the Effective Date upon execution of this
Agreement by authorized signatories of both Parties. The
Term shall automatically renew for two additional terms of
one (1) year each ("ADDITIONAL TERMS"), provided that
neither Party gives notice of non-renewal at least ninety
(90) days prior to the end of the Term or either Additional
Term. Either party shall have the right to immediately
terminate this Agreement in the event the other party
commits a material breach, which is not cured within sixty
(60) days of its receipt of written notice from the
non-breaching party.
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9. PUBLICITY: Subject to the mutual approval of the Parties, the Parties
agree to use best efforts to issue a press release or public
announcement concerning the Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed and delivered this
Agreement as of the date first written above.
BRILLIANT DIGITAL ENTERTAINMENT, INC. KAZAA
BY: /S/ XXXXX XXXXXXXXXX BY: /S/ XXXXXX XXXXXXXXX
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Xxxxx Xxxxxxxxxx Xxxxxx Xxxxxxxxx
ITS: CEO ITS:
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