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CD-Rom Distribution Agreement

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Sectors: Media
Governing Law: California , View California State Laws
Effective Date: September 14, 1996
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THIS AGREEMENT is made and entered into as of September 14, 1996 by and between Brilliant Digital Entertainment, Inc. (hereinafter "BII"), a Delaware corporation having an address for purposes of this Agreement at 6355 Topanga Canyon Boulevard, Suite 513, Woodland Hills, California, 91367 and Packard Bell NEC, Inc. (hereinafter "PB"), a Delaware corporation, having an address for purposes of this Agreement at One Packard Bell Way, Sacramento, California


WHEREAS, BII is the owner of all U.S. and foreign copyrights and other proprietary rights in the computer multipath movie program, "Cyberswine";

WHEREAS, BII intends to develop additional multipath movie programs from time to time and may elect to provide such multipath movie programs to PB (together with Cyberswine and to the extent provided by BII to PB, the "Multipath Movies");

WHEREAS, each Multipath Movie only becomes operational when downloaded from BII's Internet site to computers running CD-ROMS containing BII's proprietary multi-media run time player, graphics libraries, sound libraries and user interfaces (each a "Run Time CD-Rom");

WHEREAS, Multipath Movies are compatible with PB Multi-Media computers containing sound and video graphics capability and shipped with 28.8 or faster modems ("PB Computers") running Run Time CD-ROMs; and

WHEREAS, PB wishes to obtain the nonexclusive right and license to offer Run Time CD-ROMs for Multipath Movies in conjunction with the offering of, and in order to promote increased sales of, its PB Computers; and

WHEREAS, PB intends to market and promote BII's Internet site so that purchasers of PB Computers may purchase Multipath Movies on-line from BII's Internet site;

NOW, THEREFORE, the parties agree as follows:


For the purposes of this Agreement, the definitions set forth below shall apply to the respective capitalized terms:

1.1 "END USER DOCUMENTATION." The documentation to be furnished hereunder by BII. End User Documentation shall consist of human-readable statements and information required by the end-user customers of PB for the operation of the Run Time Code as part of a Product.

1.2 "FUNCTIONAL SPECIFICATION." The specifications for the Run Time Code set forth in Exhibit "A" attached hereto and any future version thereof provided by BII and agreed to by PB.

1.3 "PB DOCUMENTATION." A derivative work of the End User Documentation prepared by PB by editing, reorganizing, and expanding the BII Documentation into the format and trade dress deemed appropriate by PB and approved by BII in the exercise of its reasonable discretion, for purposes of marketing the Product.

1.4 "PRODUCT." Each Multipath Movie provided by BII which consists of (i) a combination of Run Time Code, as delivered by BII on each individual Golden Master CD-Rom, and PB Documentation, conforming to the Functional Specifications, to be copied and distributed by PB, under a sublicense, to PB's end user customers purchasing a PB Computer, and (ii) the additional information downloaded from BII's Internet site by end users purchasing same for each such Multipath Movie.

1.5 "RUN TIME CODE." The computer programming code, in object code (i.e., machine-readable) form only for Run Time CD-ROMs, to be furnished by BII hereunder on individual Golden Master CD-ROMs for each Multipath Movie, which complies with the Functional Specifications set forth in Exhibit "A" attached hereto.



2.1 BII shall, during 1997, deliver one copy of the Run Time Code for Cyberswine or other title to PB on a Golden Master CD-Rom and one copy of the End User Documentation for Cyberswine to PB on floppy disk.

2.2 PB shall notify BII in writing at least CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION of the time it intends to reconfigure the hard drive of any model of PB Computers, in order to allow BII, at its option, sufficient lead time to provide a substitute Multipath Movie Golden Master CD-Rom for use in lieu of the previously delivered Multipath Movie. Although BII has no obligation to substitute a different or enhanced Multipath Movie for any Multipath Movie then being marketed, BII may, prior to the date of such reconfiguration, deliver to PB a new Golden Master CD- Rom and End User Documentation

which will contain either an enhanced version of a previously released Multipath Movie or a new Multipath Movie containing new content.



PB shall, CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION of receipt of the Run Time Code and End User Documentation for each Multipath Movie or enhancement thereof, provide to BII a final draft of the PB Documentation and packaging material for BII's review and approval. BII shall review the PB Documentation for technical accuracy and overall style and to assure BII has been provided with prominent credit as the developer and producer of each such Multipath Movie and CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, report to PB in writing, any perceived inaccuracies and concerns over style and credits and recommend corrections. PB shall incorporate into the PB Documentation and packaging material any recommended corrections necessary to ensure technical accuracy and to satisfy BII's concerns over style and credit.



4.1 PB shall at all times provide BII with priority access to pre- release versions of PB Computers, and all user and developer documentation therefor on PB's standard alpha test terms and conditions to allow BII reasonable time in which to ensure that all Run Time CD Roms will be compatible with and executable on the all PB Computers.

4.2 PB shall, promptly upon delivery to PB of each Multipath Movie Golden Master CD-Rom, conduct an acceptance test for the purpose of confirming that the Run Time CD-Rom can be successfully installed and executed on PB Computers. BII shall make a reasonable effort to make all necessary modifications required to achieve such confirmation. Additionally, PB shall have the right to not accept any Multipath Movie delivered by BII, if it is determined such Multipath Movie's content is derived from a movie released with an X or NC-17 rating.

4.3 PB shall accept the Run Time CD-Rom at such time as it determines that it can be successfully installed and executed on the PB Computers. PB shall conduct all acceptance testing on a highest priority basis. When PB makes such determination, it shall execute and furnish to BII a Statement of Acceptance. Failure to reject the Run Time CD-Rom within CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION from delivery shall be deemed an acceptance.



5.1 The Product shall be marketed on a joint logo basis in the trade dress of PB with a byline identifying BII. PB Documentation shall contain the following notice after the title of the Multipath Movie:

"Copyright Brilliant Digital Entertainment, Inc. 1996, edited and

distributed by Packard Bell NEC under license."

5.2 PB shall furnish to BII, prior to publication or other dissemination, a copy of each version of the Run Time CD-Rom and PB Documentation distributed by PB and representative copies of all other material and publications that use or display the trade name or trademarks of BII, including without limitation all packaging containing the Product and
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