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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 22, 1999
CHAMPIONSHIP AUTO RACING TEAMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-13925 38-3389456
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
755 West Big Beaver Road, Suite 800
Troy, Michigan 48084
(Address of principal executive offices, with zip code)
Registrant's telephone number, including area code: (248) 362-8800
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ITEM 5. OTHER EVENTS
In March 1999, Championship Auto Racing Teams, Inc. entered into a
Website Digital Media Agreement with CART Digital Media Enterprises, LLC, a
limited liability company which is made up of Quokka Sports, Inc. and Forsythe
Racing, Inc. Forsythe Racing, Inc. is owned by Gerald Forsythe, a director of
CART.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
10.1 Website Digital Media Agreement dated effective January
1, 1999 between Championship Auto Racing Teams, Inc. and CART Digital
Media Enterprises, LLC (certain portions have been omitted and filed
separately with the Commission pursuant to a request for confidential
treatment.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed hereunto duly
authorized.
Dated: April 21, 1999
CHAMPIONSHNIP AUTO RACING TEAMS, INC.
By: /s/ Andrew Craig
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Andrew Craig, Chief Executive Officer
By: /s/ Randy K. Dzierzawski
--------------------------------------------
Randy K. Dzierzawski, Chief Financial
Officer
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Exhibit 10.1
AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of January 1, 1999 (the
"Effective Date") by and between CHAMPIONSHIP AUTO RACING TEAMS, INC., a
corporation organized under the laws of Delaware, with principal offices at 755
West Big Beaver Road, Suite 800, Troy, Michigan 48084 (hereinafter referred to
as "CART") and CART DIGITAL MEDIA ENTERPRISES, LLC, a limited liability company
organized under the laws of Delaware, with principal offices at 525 Brannan
Street, San Francisco, CA. 94107 (hereinafter referred to as "CDME").
RECITALS
WHEREAS, CART, through its subsidiary CART, Inc. is the sanctioning
body of prestigious auto racing events and series currently known as the FedEx
Championship Series, the PPG Dayton Indy Lights Championship and the Kool Toyota
Atlantic Championship (hereinafter all races, practice and qualifying sessions
and all related activities and meetings thereto being collectively referred to
as the "Events");
WHEREAS, CDME was formed by Quokka Sports, Inc. and Forsythe Racing,
Inc. to provide digital media coverage for the Events;
WHEREAS, CART wishes to appoint CDME and CDME agrees to be appointed to
develop, construct and operate the exclusive official Site (as hereinafter
defined) in accordance with the terms and conditions of this Agreement;
WHEREAS, CART wishes to grant to CDME Digital Media rights and various
other rights pertaining to the Events in accordance with the terms and
conditions of this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS.
As used in this Agreement:
"CONTENT" means the articles, stories, statistics, data, photographs,
drawings, visualizations, video, audio, and other digital assets (including any
assets in an analog format) gathered or supplied by CART in connection with the
Events, including content currently in existence on CART.com.
"DERIVATIVE PRODUCTS" means goods or services derived from the Site (as
hereafter defined) or any portion thereof which are approved by CART, in its
reasonable discretion. In order for a product to be approved as a "derivative
product", at the time of development, CART must not offer or have licensed a
directly competing product or service, and CDME, through the use of digital
assets, must be able to provide significant added value to such product (e.g.,
screen savers and posters utilizing digital assets and books about the digital
coverage of CART). For purposes of definition, significant added value means any
product which uses Original Content as its primary source. Derivative products
do not include home videos or other products which merely make use of existing
CART assets, such as video and photographs.
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"DIGITAL MEDIA" means any communications medium as to which all of the
following are true:
(i) The principal means by which information is transmitted from the
provider to the end user is the delivery of digitally-encoded data, regardless
of the nature of the data transmitted (e.g., text, computer code, still images,
audio, motion video) or the transmission modality or modalities employed (e.g.,
copper wire, fiber optic or coaxial cable, satellite or terrestrial wireless
transmission systems);
(ii) The principal means by which information transmitted by the
provider is displayed to the end user is transitory images, sounds or other
experiences the persistence of which requires a power source at the display
device (e.g., images and sounds displayed through intelligent or dumb terminals
(including monitors and/or television sets) but not printed pages created by the
provider or the end user); and
(iii) The medium enables the end user to manipulate the specific
information being displayed to that end user at any particular moment to the
extent (e.g., frequency, immediacy, ease, cost) at least as great as the extent
to which present-day (as of the Effective Date) end users are able to manipulate
the information displayed to them via World Wide Web pages or push media
transmitted over the Internet.
In applying the foregoing definition, if a provider disseminates
information by means of any two or more media that are intended primarily to be
displayed to the end user concurrently and in an integrated way through a single
display device, the two or more media will be considered in the aggregate as a
single medium, which will be considered Digital Media only if the combined media
in aggregate satisfy the applicable tests.
"EVENT DATA" means real-time and historical Event-related data, which
may be provided by CART for use on the Site, subject to its agreements with
third parties, or which is provided by an entity other than CART to CDME,
subject to agreements between CDME and such entity. It is anticipated that such
Event Data shall include results (e.g., times of competitors and standings),
rulings, timing data, instrument and positional data, team radio communications,
text, e-mail, audio, still photographs, video and other relevant material
collected from teams, participants, suppliers, licensees, statisticians or
officials participating in the Event or available from any other source, and any
text or written material from any official or authorized print publication or
statistical supplier. Event Data may also include all participant information,
as well as historical data containing race results and timing data and other
statistical, anecdotal and archival materials, such as timing data, results,
photos, video, e-mail, documents, etc., relating to previous Events. Exhibit A
contains those items listed above which will be made available to CDME at this
time and for the duration of this Agreement and shall be maintained in
accordance with CART's obligations hereunder.
"INTERFACE" means the graphical user interface ("GUI") for the Site,
including without limitation the "look and feel" of the GUI and the software
programs implementing the GUI (e.g., HTML code, Java scripting and programs
created with other Web authoring tools or tools related to the use of Digital
Media).
"INTERNET" means the global network of computer networks commonly known
as and currently understood and including the so-called "world wide web" of
computer link-ups and communications systems through which end-users can access
and communicate with other
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computer users, file servers and domains and including any upgrades,
enhancements and successors thereto.
"MARKS" means all trademarks, trade names, service marks, logos,
designs and trade dress of the Events which are owned or controlled by CART
whether registered or unregistered, set forth in the attached Exhibit B which is
incorporated herein by reference.
"ORIGINAL CONTENT" means any material or work created by CDME or its
agent(s) for CDME, whether in analog or digital format, in which copyright,
design, (registered or unregistered) trade mark, service mark, or other similar
rights subsist or will subsist and which is incorporated into or synchronized
with or otherwise forms part of or is used in or in connection with the Site and
which is not the Interface or the Software (e.g., narrative text, graphs,
visualizations, still photos, video, etc.).
"SITE" means coverage of the Events hereunder by CDME consisting of
analog and digital assets, Event Data, Original Content, and Content, as well as
historical and background data and information, which are distributed via a host
site on the Internet and/or via Digital Media. The Site shall include language
substantially similar to that contained in Exhibit C.
"SOFTWARE" means the executable software programs relating to the Site
and any part thereof other than the Interface.
"TERM" means the term of this Agreement as defined in Section 4.
2. GRANT OF RIGHTS
2.1 CART hereby grants to CDME during the Term the exclusive worldwide
Digital Media rights to the Events as well as any additional properties, events
or series owned and sanctioned by CART during the Term. Any rights for any
additional properties, events, or series owned and sanctioned by CART during the
Term shall be subject to any pre-existing agreements such properties, events, or
series may have. All other rights granted by this Agreement shall be subject to
CART's pre-existing agreements with third parties, which agreements are
referenced herein. Notwithstanding the foregoing, this Agreement
In the event that CART makes available to CDME the rights to any additional
properties, events or series, CDME shall cover such events in accordance with
all the terms and obligations hereof. CART further appoints and CDME accepts the
appointment to develop, construct and operate during the Term the exclusive
officially authorized Site for Digital Media coverage of the Events on the terms
and conditions of this Agreement. Notwithstanding the foregoing, the exclusive
rights to the PPG Dayton Indy Lights Championship and the Kool Toyota Atlantic
Championship shall commence on the date of expiration (without extension) of
their current agreements for coverage on the Internet, which date shall be no
later than December 31, 1999. In connection with such appointment and grant,
CART hereby grants to CDME the exclusive worldwide rights and license to:
2.1.1 Use, reproduce and exploit during the Term the Marks on the
Internet, via Digital Media and in connection with the Site, as well as the
rights to use, reproduce and exploit the
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Marks in any medium in connection with the promotion, marketing, advertisement
or publicity of the Site. Notwithstanding the foregoing, CDME shall not register
the name "CART Digital Media Enterprises" for trademark protection or other
similar registration. CDME shall enter into a royalty-free license agreement
with CART for the use of the mark "CART" in connection with its company name,
"CART Digital Media Enterprises". All use of the aforementioned name, and any
other name or any mark or logo utilizing the Marks shall inure to the exclusive
benefit of CART. Nothing herein shall prevent CDME from changing its company
name.
2.1.2 Subject to the restrictions in Section 2.1.9, use, reproduce and
exploit during the term the Marks on any Derivative Products, as well as the
rights to use, reproduce and exploit the marks in any medium in connection with
the promotion, marketing, advertisement or publicity of any Derivative Product.
Notwithstanding the foregoing, in connection with the sale of any Derivative
Product, it is understood that CDME shall bear any additional third party costs
of repurposing third party photographs, videotape or other material.
2.1.3 Use for the Site Event Data and Content, whether owned, licensed
or sanctioned by CART, on a real time or other basis on the Internet, and/or via
Digital Media. All use of Event Data and Content as it relates to site
structure, architecture, navigation and branding issues shall be approved in
advance by CART, or if such approval is not practicable, shall be subject to
CART's editorial policies existing at the time of use. Content may also be used
in connection with the promotion, marketing, advertisement or publicity of the
Site or any Derivative Product.
2.1.4 CART and CDME shall work together to establish editorial
standards for the Site which are consistent with the highest standards of
journalistic integrity, and CART shall have full editorial control over the
Site.
2.1.5 Subject to Section 9 below, sell commercial partnerships and
advertising opportunities in connection with the Site.
2.1.6 Sell and services
(subject to the execution of such individual agreements as may
be necessary) to third parties CART agrees to use reasonable efforts to
facilitate the execution of such agreements.
2.1.7 Syndicate Content and Original Content to third parties for
promotional use. All agreements for syndication must be approved in advance, in
writing, by CART. Such approval will include the right and license to use some
or all of the Marks, and shall not be unreasonably withheld, or withheld in a
manner which would result in the frustration of the purposes of this Agreement.
Nothing in this paragraph shall preclude CDME from receiving compensation for
such syndication, with such compensation to be subject to the terms of this
Agreement.
2.1.8 Sell official Event photographs to third parties via the Internet
and/or via Digital Media. It is understood by the parties that the sale to the
public of any official Event photographs shall be subject to agreement and
payment of a fee to Allsport Photography or CART's then existing Official
Photographer.
2.1.9 Create, advertise, sell and distribute through any channels or
mediums any Derivative Product. Notwithstanding the foregoing, all derivative
products (including the use of any Marks in connection therewith) must be
licensed by CART Licensed Products to CDME in a separate licensing agreement.
CART agrees not to treat CDME any differently than similarly
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situated CART Licensed Product Licensees with respect to each such product.
CDME's right to distribute, advertise and sell Derivative Products shall expire
180 days after the expiration or termination of this Agreement unless otherwise
provided in the Licensing Agreement for such Derivative Product(s).
2.1.10 Sell official CART and CART Licensed Products merchandise,
products, and services to third parties on the Site via the Internet and/or via
Digital Media through December 31, 1999 subject to a license agreement to be
executed with CART Licensed Products, Inc. where a sliding scale commission
shall be paid by CART Licensed Products to CDME as set forth in attached Exhibit
D. CDME will work with CART Licensed Products to identify and implement a phased
approach to incorporate CART Licensed Products merchandise into the site. CART
Licensed Products shall promote and market the cart.com store as the place to
purchase CART associated merchandise in CART Licensed Product's marketing
activities. CART and CDME agree to work together to develop a long term plan for
handling e-commerce, it being understood and agreed that CDME shall be included
in any plan. To that end, by September 1, 1999, the parties shall work together
to develop such plan and business model, including the addition of third
party(ies), if any, as part of such long term plan.
2.1.11 Include branding and promotion for Quokka Sports, Inc. in
connection with the Site substantially equivalent to that utilized by ESPN in
connection with its broadcast coverage of sporting events, provided that any
branding shall be subject to CART's prior written approval, which approval shall
not be unreasonably delayed or withheld.
2.2 As between CDME and CART, CART shall retain all rights to the
domain name CART.com. Notwithstanding the foregoing, promptly upon execution of
this Agreement and during the Term, CART shall cause control of the
aforementioned domain to be transferred to CDME, and CDME shall maintain the
domain and all corresponding domain entries. If CART ceases to have rights to
the domain CART.com (for instance, following a registration dispute), the
parties will use their best efforts to provide a new address and cooperate to
ensure that there shall be minimal interruption in service for the Site.
3. CONTRIBUTIONS OF THE PARTIES
3.1 CDME agrees to utilize the following technology, intellectual
property, and hardware and software resources in connection with coverage of the
Events: Quokka Sports Immersion(TM) tools, technologies, rights, and know-how
including, but not limited to, the Quokka Replication System, race viewers,
Quokka Sports Feed, and production processes. CART shall have no rights to use
the foregoing for any purpose, nor shall CART acquire any rights in the
foregoing, and all rights therein shall remain with CDME or Quokka Sports, Inc.
3.2 CDME shall be responsible for constructing at its own expense and
risk the Site, including the design of the Interface, construction of the Site
infrastructure and production of Original Content. A delivery schedule is
attached as Exhibit E. If the Site has not been launched by April 1, 1999, CDME
shall pay all expenses for CART to continue its current contract for CART.com
with U.N. Productions from April 1, 1999 through the date of launch.
3.2.1 Subject to Section 2.1.3 and 2.1.4, CDME shall maintain
responsibility for all editorial, design and content aspects of the Site and
CDME shall utilize the best efforts of its creative, editorial, engineering,
technical, operations and production staff to improve the level of the current
CART digital interactive media coverage from its present state so as to remain a
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leader in digital interactive media involving the Internet as well as successor
or future interactive networks.
3.2.2 As a part of the Site, CDME will provide a corporate relations
section as well as a restricted access section for press relations. Upon request
of CART, additional non-revenue generating sections will also be added, which
may result in a charge to CART . Such charge, if any, shall be based upon actual
costs to CDME. CDME shall provide to CART a quote for the provision of such
services. If CART finds a third party which will provide such services at less
cost, then CART may contract with such third party, except that prior to such
contract, CDME shall be given the opportunity to match the offer from the third
party. In the event that CDME matches the third party pricing, CART shall use
CDME for the provision of such service. The parties shall mutually agree to the
overall image for the website which in all cases shall be consistent with CART's
overall marketing strategies, branding characteristics and creative look in the
marketplace.
3.2.3 CDME will provide its QSI infrastructure (including interfaces
into the venue management system for results and scoring, remote publishing,
telemetry, QSI information system, etc.) in connection with the Site.
3.2.4 CDME will provide full and complete management of and operations
of hosting infrastructure (T3, hardware, software, 24x7 support, etc.) for the
Site. At CDME's request, CART shall continue its current contract with U.N.
Productions with respect to CART.com from January 1, 1999 to March 31, 1999.
CDME shall reimburse CART for such expense at a total sum for such period not to
exceed per month.
3.2.5 CDME will provide all customer service functions (web master,
etc.) associated with the Site, except for corporate relations, press customer
service functions, and other requested non-revenue generation section functions
which will be handled directly by CART and for which CART shall generate all
content. CDME will provide templates, remote publishing tools and support for
CART to manage these areas expeditiously and autonomously. CDME shall perform
all functions in conjunction with its role as host server for the Site,
consistent with those services normally provided by web Site servers. CDME will
use its best efforts to provide continuous, uninterrupted operation of the Site.
CDME will provide comprehensive Site maintenance, changes, additions and any
other steps reasonably necessary to maintain the integrity, quality and
performance of the Site. All major changes to the Site shall be made in a timely
manner pursuant to an agreed upon review process, before being made available to
the general public.
3.2.6 CDME will specify and manage all traffic verification as well as
analysis and research services for the Site through I-Pro, or such other
recognized independent verification group as the parties may agree upon, with
respect to mutually agreed upon audience metrics.
3.2.7 CDME will use best efforts to integrate into the Site reciprocal
links between the Site and the web sites of the racing teams, drivers, Events
and CART official sponsors (e.g. Omega and Federal Express), and all reasonable
efforts related to other major motorsport sites.
3.2.8 CDME will provide on-line Site promotion and marketing subject to
CART approval, which shall not be unreasonably withheld or delayed, and will
work closely with CART Marketing. CDME shall provide to CART the details for
such proposed efforts, it being understood that these efforts shall be
commensurate with the activities undertaken in conjunction
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with the Whitbread Race Around the World or the Around Alone Race, whichever
shall be greater.
3.2.9 CART shall provide a full-time liaison, based at the CART office,
to coordinate with CART, at CDME's expense. The liaison shall be subject to the
parties' periodic mutual approval. The amount CDME shall provide under this
paragraph shall not exceed annually, plus annual increases not to
exceed per annum.
3.2.10 CDME agrees to consider providing on the Site an additional
section covering the 29th Car Concept. In connection therewith, CDME shall study
such concept and present a proposal to CART no later than September 30, 1999
with respect to inclusion of such concept in the Site during the 2000 season. In
the event that CDME, in its reasonable judgment, determines that any such
section is not technically feasible or financially sustainable for 2000, then
the parties shall mutually agree upon a plan for reconsidering the concept. Any
revenues from such concept shall be included within Gross Revenues hereunder. In
addition to the percent set forth in Section 6.1, an
additional percent of any subscription revenues shall be
paid to CART, but credited against the guarantee, if applicable.
3.2.11 CDME also agrees to consider providing on the Site additional
sections suggested by CART. Any revenues from such sections shall be included
within Gross Revenues hereunder. In the event that CDME, in its reasonable
judgment, determines that any such section is technically feasible and
financially sustainable, but nevertheless elects not to undertake such section,
then CART shall be free to pursue such project with any third party or in its
own name, provided (1) that CDME is the systems integrator and takes primary
responsibility for integrating such section into the Site and (2) that there
shall be no use of Original Content without the payment of a mutually acceptable
sum to CDME which shall be comparable to then-existing industry charges, but at
a minimum will cover all actual costs to CDME.
3.3 As between CDME and CART, CDME shall retain all rights to the
technology, intellectual property, and resources contributed solely by CDME as
well as any Software, Interface and Original Content developed by it or its
agent(s) for CDME in connection with the Events.
3.4 Each party shall provide the other during the Term a non-exclusive,
royalty free license to use and access all content developed by it as well as
all third party content licensed by it, to the extent permitted by such third
parties, solely for use in connection with any publicity and promotion of the
Events or Site.
3.5 In connection with CDME's efforts hereunder, to the extent such
rights are available for CART to provide, CART shall provide the following at no
cost to CDME:
3.5.1 Real-time access and ability to use all audio feeds and
communications associated with the Events (e.g., CART Radio Network; driver/pit
crew; and track announcer).
3.5.2 Subject to Section 5.2.3 below, real-time access and ability to
use real-time results, timing and scoring systems and feeds. During 1999, and as
long as Omega/Swiss Timing is CART's official timekeeper, access to timing and
scoring feeds Omega/Swiss Timing and Omega/Swiss
Timing receiving appropriate branding recognition on the Site. Thereafter, any
successor CART timing and scoring provider shall receive appropriate branding
recognition on the Site, which shall be comparable to that provided as of the
effective date of this Agreement.
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3.5.3 Real-time access and ability to use official CART/Event
photographs in connection with the Site and for promotion purposes only, it
being understood that any specific sale of such photographs shall be subject to
Section 2.1.8.
3.5.4 Reasonable efforts with Event participants (e.g. teams, drivers,
crews) to provide Event Data which CART does not own, control, or have the
rights to utilize. CART may include in future participant agreements various
additional assets to be made available to CDME for the Site.
3.5.5 Access to and ability to use all historical and other relevant
information, photographs, video, audio, statistics and data under the control or
license of CART.
3.5.6 Reasonable efforts to promote the Site URL to the widest extent
possible, such reasonable efforts to include placement of the URL in TV and
radio advertisements and in broadcasts on the CART Radio Network and in
broadcasts outside the United States and placement of the URL on the starter
vest, letterhead, business cards, advertisements and other forms of printed
matter, electronic material, or broadcast material distributed by CART. CART
will also use reasonable efforts to assist CDME to secure placement of banners
or signs with the URL on high visibility spots (for spectators and broadcast
cameras) at the venues and in such other locations as may be mutually agreed, it
being understood that such additional exposure may be at an incremental cost to
CDME.
3.5.7 Subject to CART's existing agreement
CART will exercise reasonable efforts with to permit CDME
access to and use of on the Site and
for promotion of the URL. To the extent that
are available, CART will use reasonable efforts to provide access to
CDME recognizes that there
may be some restrictions on the use of such assets.
3.5.8 Reasonable efforts to assist CDME in obtaining a reasonable
number of preferred venue credentials, Event tickets, parking passes and
hospitality access passes (to the extent available) for its employees, sponsors
and guests, at the expense of CDME.
3.5.9 Annual all access credentials for working CDME personnel and will
exercise reasonable efforts to provide parking passes for such CDME personnel,
subject to availability.
3.5.10 Reasonable efforts to assist CDME in meeting its logistics and
venue operations needs, it being understood that, depending on the size and
amount of equipment to be utilized, a fee, in certain circumstances, may be
payable to the event promoter. CART shall use reasonable efforts to assist CDME
in its negotiations of such fees with the promoter. At least ten (10) days prior
to an Event, CDME shall provide details regarding its proposed requirements.
3.5.11 Unrestricted access to CART venues with cameras, microphones and
other equipment as necessary for CDME to acquire digital assets and set up venue
operations, subject to the provisions and restrictions in this Agreement,
including but not limited to CART's existing contractual obligations to
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3.5.12 Reasonable access to CART's current on-line database, fan club
database and affinity database as well as all marketing demographics, surveys,
television ratings, and other information which may assist CDME in its marketing
and sales efforts hereunder.
4. TERM
The Term of this Agreement shall commence on January 1, 1999, and shall continue
through and until December 31, 2003, unless extended as set forth herein.
5. RIGHT TO TERMINATE
5.1 CART shall have the right to terminate this Agreement for the
reasons set forth below:
5.1.1 If CDME fails to maintain state of the art quality and
technological enhancements, subject to notice and an opportunity to cure as set
forth below. CART shall notify CDME in writing with respect to any alleged
failure and the parties shall meet within one (1) week thereafter to discuss
such notification. Thereafter, CDME shall have thirty (30) days in which to cure
any failure. If the default cannot be cured within thirty (30) days, but
reasonable good faith efforts have been undertaken to cure the default within
that time period, a reasonable extension of time in which to cure the default
shall be given and agreed upon between the parties.
5.1.2 If CDME fails to attain the minimum Site traffic level in any
quarter as set forth in the attached Exhibit F, subject to notice and an
opportunity to cure as set forth below. CART shall notify CDME in writing with
respect to any such failure and the parties shall meet within one (1) week
thereafter to discuss such notification. Thereafter, CDME shall have ninety (90)
days in which to increase traffic to the Site to the required level. If the Site
traffic cannot be restored within ninety (90) days, but reasonable good faith
efforts have been undertaken to cure the default within that time period, a
reasonable extension of time in which to increase the Site traffic to levels as
required by Exhibit F shall be given and agreed upon between the parties.
5.1.3 In the event that CDME or Quokka Sports, Inc. provides similar
services to an open wheel professional auto racing sanctioning body, league or
series currently domiciled in the United States which promotes products or
services competitive with those of CART.
5.1.4 If more than forty nine percent (49%) of the ownership or other
beneficial interest in CDME or Quokka Sports, Inc. is transferred, sold, or
otherwise assigned, either voluntarily or by operation of law, in one or more
transactions, to an individual or entity whose products or services are
competitive or in conflict with those of CART. Such right of termination shall
be exercised, if at all, by CART within thirty (30) days of such change in
ownership.
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5.2 CDME shall have the right to terminate this Agreement for the
reasons set forth below:
5.2.1 The failure of the parties to reach a mutually acceptable manner
in which to incorporate e-commerce revenue opportunities within the Site
following the conclusion of the discussions provided for in Section 2.1.10
above.
5.2.2 If more than forty nine percent (49%) of the ownership or other
beneficial interest in CART is transferred, sold, or otherwise assigned, either
voluntarily or by operation of law, in one or more transactions, to an
individual or entity whose products or services are competitive or in conflict
with those of CDME or Quokka Sports, Inc. Such right of termination shall be
exercised, if at all, by CDME within thirty (30) days of such change in
ownership.
5.2.3
5.3 Either party shall have the right to terminate this Agreement upon
the material breach of any term of this Agreement which is not cured within
sixty (60) days after notice of such breach to the other party.
5.4 Upon termination or expiration of this Agreement, all intellectual
property rights shall revert to their owners, as determined by this Agreement.
5.4.1 Upon the request of CART, CDME shall ensure that the Site shall
remain active and be serviced by CDME for up to 180 days following termination
or expiration of this Agreement, which shall allow CART sufficient time to
obtain another provider. Upon the expiration of 180 days, or CART's notice to
CDME, servicing of the Site by CDME shall cease. If CART opts to exercise this
option, a fee payment from CART to CDME shall be mutually agreed upon.
6. REVENUES
6.1 As a license fee for all rights and services herein, CDME shall pay
to CART percent of all Gross Receipts generated hereunder over the Term
with a minimum guarantee of which
minimum guarantee shall be payable as follows: Year 1-- shall be payable upon
execution of this Agreement; Year 2-- ; Year 3-- ; Year 4-- ; and
Year 5-- . The guaranteed sums for years 2, 3, 4 and 5
shall be paid in two (2) equal installments, not later January 1 and July 1 of
each such year. Gross Receipts shall mean all revenue (including value in-kind)
actually received by CDME, including, but not limited to revenue from ,
and . . Gross receipts shall not
include any sums received by CDME which are returned for any reason at law or
equity. Value in-kind will be valued based upon best customer pricing, as
determined by the applicable vendor. No commercial partnerships or advertising
shall be sold by CDME in conjunction with other Quokka Sports' projects unless
the following procedure has transpired. All sales shall be subject to the
restrictions of Section 7. At any time, CDME or CART may
. CART shall have the right for a period
of twenty one (21) days thereafter to
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<PAGE> 11
Having purchased a
category, CART or Quokka Sports would be free to resell such packages at a
higher price if it so chooses without any duty to account for or otherwise share
revenues over and above the agreed price.
6.2 In addition to the sums set forth in Section 6.1, CDME shall also
pay a Referral Fee of percent of the first years' Net Sales Price
(as defined below) to CART, the CART racing teams, the CART drivers or CART
event promoters, as the case may be, for the successful referral of any
commercial partner to CDME for the Site for the first year of any deal.
Thereafter, in the case of any multi-year deal, the Referral Fee shall
be of the Net Sales Price for each such additional year of such agreement,
including any option periods exercised as provided for in such agreement. Net
Sales Price shall mean the gross sales price of the contract less any applicable
agency commission or fee. For an entity or person to qualify for a Referral Fee,
that person or entity must have provided substantial and material assistance and
ongoing support in obtaining a binding contract. Substantial and material
assistance shall mean the introduction of CDME to the person who ultimately
agrees to the binding contract or an employee of the contracting company, or an
agent who was involved in the sales process. For a Referral Fee to be paid to a
person or entity, a commercial partner must enter into a binding contract with
CDME. Only one Referral Fee shall be payable on any contract. Any Referral Fee
shall only be computed on a quarterly basis and shall be due and payable only on
any sums actually received in connection with such contract.
6.3 CDME shall compute its Gross Receipts on a quarterly basis in
accordance with generally accepted accounting principles and shall distribute to
CART any excess sums due over and above the minimum guaranteed license fee with
a statement thereof within ninety (90) days after the conclusion of each
calendar year. CART shall have the right to examine CDME's books and records
with respect to any statements rendered. Except as stated below, such
examination shall be at CART's sole expense and shall be commenced not earlier
than ten (10) days after the date of such notice by any independent accountant
designated by CART provided any such person shall sign a standard
confidentiality agreement reasonably acceptable to CDME. If the examination
reveals that CDME failed to account for and properly pay fees due to CART
hereunder in an amount exceeding five percent (5%) of the fees actually paid and
accounted for, then CDME shall pay CART such past due amounts with interest at
the Prime Rate as determined by the Wall Street Journal, and reimburse CART for
the total cost of the examination. Such examinations shall be made during CDME's
usual business hours and CDME shall make available to CART for inspection any
and all books and records reasonably requested in the format maintained with
respect to such statements. CART shall have the right to audit CDME's books and
records no more than once in any twelve (12) month period. CART agrees that it
shall not have any right to audit any item more than two (2) years old and may
not seek information on or dispute any items not included within the audit
period.
7. COMMERCIAL PARTNERSHIPS AND SITE ADVERTISING
CDME will provide for all in connection with the
Site, subject to the terms and conditions contained in this Agreement. In
connection with the sale of commercial partnership opportunities and advertising
on the Site,
: (1)
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; (2)
, which approval would
not be unreasonably withheld; (3)
, which approval would not be
unreasonably withheld; (4) would meet on such regular basis as is
necessary in order to ensure that there is substantial communication and
continuity between the parties with respect to their individual endeavors to
secure
and ; it is understood that the parties will
work together in good faith to assist each other in , and if
necessary, the parties will each agree ; and (5)
. All commercial partnership and
advertising sales shall, to CART's reasonable satisfaction, be in good taste.
8. EQUITY CONSIDERATION
Concurrently with the execution and delivery of this Agreement, CDME will cause
Quokka Sports, Inc. to issue to CART the Quokka Warrants as set forth in Exhibit
G.
9. CART SPONSOR PROTECTION
CDME will provide for all advertising and commercial partnership sales in
connection with the Site, subject to the following conditions: (i) CART will
identify a limited number of categories where CDME will only approach one
company designated by CART about a commercial partnership. These companies shall
be designated in a list of current CART official sponsors to be appended hereto
as Exhibit H, such list to identify the expiration dates of such sponsor
relationships. Once a current CART sponsor agreement expires, then such company
will be handled in accordance with the procedures set forth in subsection (iii)
hereof. If CDME were unable to sell such company any commercial partnership
packages, then CDME will not approach any competitors; (ii) CART will use all
appropriate efforts to introduce the CDME sales team to key personnel at the
companies designated under (i) above; (iii) As to other important CART
customers, CDME will negotiate first with such companies for such packages. If
CDME is unable to reach an agreement with such companies, then CDME is free to
approach and sell a package to any competitor; (iv) CART and CDME shall have the
opportunity to purchase one or more of the categories at a predetermined price.
Having purchased a category, CDME or CART is free to resell such packages at a
higher price if it so chooses without any duty to account for or otherwise share
revenues with the other party; and (v) Notwithstanding the foregoing, it is
understood that as to sponsor negotiations currently in progress by CART,
website involvement already committed by CART shall be honored and shall not be
considered as advertising and commercial partnership sales for purposes of this
Agreement. Subject to the terms stated above, CART releases all categories of
commercial partnership to CDME (except for tobacco and subject to the other
constraints described in this Agreement) for the duration of this Agreement.
CDME will agree not to sell site commercial partnerships competitive with CART
sponsors identified in Exhibit H until the current respective agreement
terminates, at which time the specific category would be released by CART to
CDME, as provided above. Prior to the release of the category, CDME will agree
to continue all applicable brand identification on the site in no less
prominence than currently exists.
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10. SANCTIONING
CART warrants that the Events are CART sanctioned and will be conducted in
accordance with all applicable rules and regulations and all international,
foreign, federal, state, and local laws.
11. NAME AND LIKENESS
To the extent that CART owns or licenses such rights, CDME and any of its
licensees shall have the right and, to the extent provided for in this
Agreement, may grant to others the right to reproduce, print, publish or
disseminate in any medium the names, likenesses, voice and biographical material
of CART, the participants in the Events, including their sponsors, or any person
appearing in or connected with the Events as news or information, for use on the
Site or for Site advertising purposes (including without limitation
institutional advertising) and including but not limited to the advertising and
promotion of the coverage hereunder and in connection therewith the products or
services of any advertiser or commercial partner thereof; provided, however,
that there shall be no direct or implied endorsement by any such persons of any
product or service without such person's prior written consent.
12. WARRANTIES OF CART
CART warrants, represents and undertakes to CDME as follows:
12.1 that it is a company duly incorporated under the laws of the State
of Delaware and that it has the power and authority to enter into and to perform
all obligations under this Agreement;
12.2 that nothing in the Event Data, the Marks, the Content or the
other data and information which is provided to CDME hereunder by CART shall
infringe the copyright, trade marks or other intellectual property rights of any
person or entity;
12.3 that CART has the right to grant to CDME all of the rights granted
in this Agreement, that CART is not presently a party to any Agreement which
conflicts with the rights and terms hereof and that CART will not grant any
rights which might interfere or derogate the rights granted herein;
12.4 that CART shall conduct a minimum of 18 Events pursuant to an
annually published schedule;
12.5 that the participants in the Events shall be of comparable ability
to those participating in previous versions of the Events;
12.6 that all representations to CDME by CART and all representations
made by CART to third parties about any and all elements of the Events are and
shall be accurate and true in every respect.
12.7 that all publicity which it issues or disseminates or otherwise
makes available concerning all elements of the Events will be accurate and true
in all respects, to the best of CART's own knowledge.
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<PAGE> 14
13. WARRANTIES OF CDME
CDME warrants, represents and undertakes to CART as follows:
13.1 that it is a company duly organized under the laws of the state of
Delaware and that it has the power and authority to enter into and to perform
all obligations under this Agreement;
13.2 that nothing generated by CDME with respect to coverage of the
Events shall infringe the copyright, trade marks or other intellectual property
right of any person or entity.
13.3 that all representations to CART by CDME and all representations
made by CDME to third parties about any and all elements of the Site are and
shall be accurate and true in every respect.
14. DISCLAIMER
THE WARRANTIES SET FORTH IN SECTIONS 12 AND 13 OF THIS AGREEMENT ARE THE SOLE
AND EXCLUSIVE WARRANTIES OF THE PARTIES HERETO IN CONNECTION WITH THIS
AGREEMENT, AND THE PARTIES HEREBY EXPRESSLY DISCLAIM ANY OTHER WARRANTIES
WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF
TITLE, NON-INFRINGEMENT, FITNESS FOR A PARTICULAR PURPOSE AND MERCHANTABILITY.
15. INDEMNIFICATION
15.1 CART shall indemnify and hold harmless CDME, its members and
employees and any person, firm or corporation deriving rights from CDME from and
against any and all claims, damages, liabilities, costs and expenses (including
reasonable counsel fees), arising out of: (1) any use of the coverage as
permitted hereunder (including without limitation the Event Data); and (2) a
breach of any warranty, representation or undertaking made by or undertaken by
CART herein. CDME shall promptly notify CART of any claim to which the above
indemnity applies and CART shall defend the same at its own expense. CDME will
cooperate in the defense of any such claim at the reasonable request and at the
expense of CART. Notwithstanding the foregoing, CART shall not indemnify CDME to
the extent that the foregoing would not have occurred but for the actions of
CDME.
15.2 CDME shall indemnify and hold harmless CART and its employees and
any person, firm or corporation deriving rights from CART from and against any
and all claims, damages, liabilities, costs and expenses (including reasonable
counsel fees), arising out of: (1) CDME's actual coverage of the Events; or (2)
a breach of any warranty, representation or undertaking made by or undertaken by
CDME herein . CART shall promptly notify CDME of any claim to which the above
indemnity applies and CDME shall defend the same at its own expense. CART will
cooperate in the defense of any such claim at the reasonable request and at the
expense of CDME. Notwithstanding the foregoing, CDME shall not indemnify CART to
the extent that the foregoing would not have occurred but for the actions of
CART
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<PAGE> 15
16. COPYRIGHT AND OTHER RIGHTS
16.1 Each Party shall own all worldwide copyright and other
intellectual property interests in the content it has provided to the Site;
i.e., CDME shall retain its rights in all Original Content, Interfaces and
Software as stated in Section 3.3 above, and CART shall retain its rights in all
Content. Each party shall have the unrestricted and unencumbered right to use
and reuse or to assign, license, sell or otherwise exploit, the copyright and
other property right interests which it owns hereunder except as otherwise
provided in this Agreement. The copyright notice on the Site shall include the
following notation: "(C) (year) CART Digital Media Enterprises, L.L.C.; Material
provided by CART (C) (year) Championship Auto Racing Teams, Inc.," with a link
to a page which will describe in reasonable detail the copyrighted and other
contributions of the parties.
16.2 CDME shall own all rights to the information about and access to
the people who visit or register with the Site, to the extent that it may
lawfully own such rights. Notwithstanding the foregoing, certain information as
listed hereafter shall be jointly owned by CDME and CART. Such jointly owned
information shall consist solely of information sent to or coming through
[email protected] [mailto:[email protected]], [email protected] [mailto:[email protected]],
subscriber information with respect to the CART Newsletter, CART Winners Circle
Club, CART Kids Coloring Contest, individuals purchasing through the CART Store
and such other areas of the Site as may be mutually agreed, as well as mutually
agreed Site traffic information. Such Site traffic information may be published
by CART. All other information provided by CDME to CART is for internal CART use
and may only be distributed with the prior written approval of CDME. Any usage
of subscriber information shall be subject to the limitations of the Site's
Privacy Policy which shall be mutually agreed upon by the parties.
16.3 Unless otherwise agreed, CART and CDMEs' suppliers and providers
will retain all worldwide copyright and other intellectual property interest in
the content they provide to the Site and CDME shall include an appropriate
notice.
17. FORCE MAJEURE
17.1 If CDME's coverage of any of the Events is prevented or omitted in
its entirety because of acts of God; accident; fire; lockout; strike or other
labor dispute; riot or civil commotion; act of public enemy; enactment, rule,
order or act of any government or any governmental authority or instrumentality
(whether federal, state, local or foreign); failure of technical facilities
beyond the reasonable control of CDME; or other cause of a similar or different
nature beyond CDME's control ("Force Majeure Event"); it shall not be, and shall
not be deemed to be, a breach of this Agreement by CDME to perform its
obligations hereunder during the duration of a Force Majeure Event, and
performance of CDME's obligations in connection with the affected Events shall
be excused for the duration of the Force Majeure Event and for a reasonable
period thereafter; provided that CDME shall use reasonable efforts to minimize
the extent of the delay in performance caused by the Force Majeure Event.
17.2 Notwithstanding anything to the contrary in Section 17.1, if for
any reason beyond CART's control (including without limitation adverse weather
conditions) any of the Events are not held on the scheduled dates, CART shall
immediately notify CDME of the rescheduled date(s) of the Events, if any, and
CDME, at its sole election, shall have the right either (i) to continue with
coverage of the Events on the rescheduled date(s) pursuant to the terms and
conditions hereof; or (ii) to choose not to cover any such delayed Event. In the
event that CDME
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<PAGE> 16
chooses option (ii) above, such choice shall not be, and shall not be deemed to
be, a breach of this Agreement, and the terms and conditions of this Agreement
otherwise shall remain in full force and effect.
18. INDEPENDENT CONTRACTORS
Nothing herein contained shall constitute or be construed as the creation of any
agency, partnership 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.
19. CONFIDENTIALITY
The parties acknowledge that this Agreement and its terms shall be confidential,
except as required or reasonably necessary 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. 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. Neither party will at any time either (i)
publish, disclose or otherwise divulge any of the other party's Confidential
Information to any person, except its officers and employees 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 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 use or benefit of the
disclosing party's Confidential Information or personnel who had access to the
same; (4) is received from a third party without similar restriction and without
breach of any obligation of confidentiality; or (5) is required to be disclosed
pursuant to a statutory or regulatory provision or court order, to the demanding
body and to the extent of such required disclosure only following notification
by the receiving party to the disclosing party of the request and notification
to the court or regulatory body of the confidential nature of the information.
Additionally, neither party shall be prohibited from disclosing the terms and
conditions of this agreement for any financing purposes if such is subject to
confidentiality agreements as protective as this Section 19. This paragraph
shall survive the termination or expiration of this Agreement.
20. NOTICE
All notices, approvals, consents, waivers, and other communications intended to
have legal effect with regard to this Agreement must be given in writing and
delivered to the other party at the address set forth below by (a) postage
pre-paid, certified mail (return receipt requested); (b) Federal Express; or
(c)facsimile transmission (receipt confirmed, with a copy sent by postage
pre-
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paid, certified mail), and will be effective upon receipt. Each party may
change its address for receipt of notices by giving notice of the new address to
the other party.
21. FURTHER ASSURANCES
Each party agrees to execute and provide all such assurances, acts, documents
and things (including, without limitation, further or other legal or beneficial
assignments, transfers, grants, charges, copyright registrations and any
formalities required by any jurisdiction in any part of the universe) in such
location and such manner as the other party may from time to time reasonably
require in connection with perfecting or protecting or enforcing any provision
of this Agreement including assignments or rights granted to such party
hereunder.
22. LIMITATION IN LIABILITY; REMEDIES
Neither party shall be liable to the other party for any incidental, indirect,
consequential, special, or punitive damages of any kind or nature arising under
or relating to this Agreement, whether such liability is asserted on the basis
of contract, tort (including negligence or strict liability), or otherwise, even
if either party has warned or been warned of the possibility of any such loss or
damage. This Section 22 is not intended to limit the indemnification obligation
of the parties with respect to third party claims pursuant to Section 15 hereof.
23. GENERAL PROVISIONS
23.1 This Agreement is the entire agreement of the parties. All prior
understandings, oral or written, if any, including but not limited to that
certain Letter of Agreement executed by the parties on January 4, 1999, have
been merged herein, or, if not merged, are hereby canceled. No representations
have been made except those expressly set forth herein.
23.2 Any amendment or discharge of this Agreement must be in writing
and signed by an officer of the party.
23.3 This Agreement may not be assigned in whole nor in part by either
party without the other party's prior written consent, which consent shall not
be unreasonably withheld. This agreement shall be binding upon both CART and
CDME and their successors and permitted assignees.
23.4 Nothing in this Agreement shall be construed so as to require the
commission of any act contrary to law, and whenever there is any conflict
between any provision of this Agreement and any material statute, law,
ordinance, rule or regulation, the latter shall prevail, but in such event, any
provisions of this Agreement so affected shall be curtailed and limited only to
the extent necessary to bring them within the applicable requirements, and the
remainder of this Agreement shall continue in full force and effect. The parties
hereby agree that they shall comply with the requirements of the U.S. Foreign
Corrupt Practices Act (the "Act") and shall refrain from any payments to third
parties which would cause either party to violate the Act.
23.5 Any dispute arising under this Agreement shall be promptly
submitted to and heard and determined by the American Arbitration Association
pursuant to its commercial arbitration rules in effect at the time of any
dispute. The determination of the arbitrator shall be binding on the parties,
shall not be appealable, and judgment on the award rendered may be entered in
any court having jurisdiction on the matter. The prevailing party (as determined
by the
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arbitrator) shall be entitled to recover from the other party all costs and
expenses (including but not limited to attorney fees) incurred in enforcing its
rights under the arbitration process.
23.6 A waiver by either party of any term or condition of this
Agreement in any instance shall not be deemed or construed as a waiver of such
term or condition for the future or any subsequent breach thereof. 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.
23.7 The headings hereunder are for ease of reference only and are not
part of this Agreement.
In Witness Whereof, the parties hereto have signed this Agreement this ___ day
of March 1999.
CHAMPIONSHIP AUTO RACING TEAMS, INC.
By:________________________
Name:______________________
Title:_____________________
CART DIGITAL MEDIA ENTERPRISES, LLC.
By:_______________________________________________
Alan S. Ramadan
Dated:____________________________________________
By:_______________________________________________
Gerald R. Forsythe
Dated:____________________________________________
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EXHIBIT A
LIST OF ASSETS TO BE PROVIDED AS EVENT DATA
(subject to editorial guidelines)
Official Radio Broadcaster Audio (subject to CART Radio Network Agreement)
Pace Car Communications (CDME shall be responsible for compliance with all
applicable laws, rules and regulations, including FCC compliance)
Driver/Pit Crew (Team Radio) Communications (subject to agreement with each
team; CDME shall be responsible for compliance with all applicable laws, rules
and regulations, including FCC compliance)
Track Announcer Audio (subject to informing and agreement by CART's race
promoters)
Results and Scoring Feeds and Data
Timing Data in its final form
Statistical Data
Historical Information, Data, and Statistics (including photographs, video and
audio) related to the events and the racers
Official Rulings
Circuit Data
Official Still Photographs
Written materials in which CART owns the copyright
Participant Biographical Information
Event Access
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EXHIBIT B
TRADEMARKS
CART - name & logo
FEDEX CHAMPIONSHIP SERIES - name & logo
INDY LIGHTS SERIES - name & logo
TOYOTA ATLANTIC SERIES - name & logo
CART KIDS - name & logo
CART WINNER'S CIRCLE CLUB - name & logo
CHAMP CARS
CHAMPIONSHIP CARS
FEEL THE SPEED
Future Event-related marks will be provided subject to mutual agreement.
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EXHIBIT C
COPYRIGHT AND TRADEMARK NOTICES
All contents of this Web site are:(C)1999 CART Digital Media Enterprises, LLC;
Material provided by CART(C)1999 Championship Auto Racing Teams, Inc. All rights
reserved.
[list from exhibit] are trademarks or registered trademarks of Championship Auto
Racing Teams, Inc. Other product and company names mentioned herein may be the
trademarks of their respective owners.
USE LIMITATIONS
This Web Site is for the User's personal, non-commercial use. User may not
modify, copy, distribute, transmit, display, perform, reproduce, publish,
license, create derivative works from, transfer, or sell any information,
software, products or services obtained from this Web Site. As a condition of
use of this Web Site, User warrants to CDME and CART that User will not use this
Web Site for any purpose that is unlawful or prohibited by these terms,
conditions, and notices.
LIABILITY DISCLAIMER
THE INFORMATION, SOFTWARE, PRODUCTS, AND SERVICES PUBLISHED ON THIS WEB SITE MAY
INCLUDE INACCURACIES OR TYPOGRAPHICAL ERRORS. CHANGES ARE PERIODICALLY ADDED TO
THE INFORMATION HEREIN. CART DIGITAL MEDIA ENTERPRISES, LLC (CDME) AND
CHAMPIONSHIP AUTO RACING TEAMS, INC. (CART) MAY MAKE IMPROVEMENTS AND/OR CHANGES
IN THIS WEB SITE AT ANY TIME.
CDME AND CART MAKE NO REPRESENTATIONS ABOUT THE SUITABILITY OF THE INFORMATION,
SOFTWARE, PRODUCTS, AND SERVICES CONTAINED ON THIS WEB SITE FOR ANY PURPOSE. ALL
SUCH INFORMATION, SOFTWARE, PRODUCTS, AND SERVICES ARE PROVIDED "AS IS" WITHOUT
WARRANTY OF ANY KIND. CDME AND CART HEREBY DISCLAIM ALL WARRANTIES AND
CONDITIONS WITH REGARD TO THIS INFORMATION, SOFTWARE, PRODUCTS, AND SERVICES,
INCLUDING ALL IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT. IN NO EVENT SHALL CDME OR CART
BE LIABLE FOR AND DIRECT, INDIRECT, PUNITIVE, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE USE OF
THIS WEB SITE OR WITH THE DELAY OR INABILITY TO USE THIS WEB SITE, OR OTHERWISE
ARISING OUT OF THE USE OF THIS WEB SITE, WHETHER BASED ON CONTRACT, TORT, STRICT
LIABILITY, OR OTHERWISE, EVEN IF CDME OR CART HAS BEEN ADVISED OF THE
POSSIBILITY OF DAMAGES. BECAUSE SOME STATES/JURISDICTIONS DO NOT ALLOW THE
EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES,
THE ABOVE LIMITATION MAY NOT APPLY TO YOU.
[privacy policy - to be added]
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EXHIBIT D
CART LICENSED PRODUCTS
SLIDING SCALE COMMISSION FOR 1999
Base --
If Gross Sales Exceed the Base by Commission to be paid on all
Gross Sales shall be
0-50% ..............................
51% - 100% .........................
101% - 150% ........................
151% - 200% ........................
201% + .............................
Commissions shall be paid on a quarterly basis. Based upon the annual Gross
Sales figures, CART Licensed Products shall provide any incremental commission
payment to CDME by February 1, 2000.
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EXHIBIT E
DELIVERY SCHEDULE
cart.com Phase 1
*Basic site
*Key QSI elements
*CART business section
Assemble Team December, 1998
Start Production January 1, 1999
Initial Creative Complete January 15, 1999
Alpha Site February 15, 1999
Beta/Preview Site March 3, 1999
Go Live March 16, 1999
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EXHIBIT F
SITE TRAFFIC
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
YEAR 1998 1999 2000 2001 2002 2003
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Visits
(millions)
- ---------------------------------------------------------------------------
% Change year approx.
on year
- ---------------------------------------------------------------------------
</TABLE>
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EXHIBIT G
WARRANTS
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EXHIBIT H
SPONSORSHIP CATEGORIES
<TABLE>
<CAPTION>
- --------------------------------- ---------------------------------------------------------------------------------------
YEARS OF CONTRACT
- --------------------------------- ---------------------------------------------------------------------------------------
OFFICIAL SPONSOR 1998 1999 2000 2001 2002 CATEGORY
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Anheuser- Busch Official Beer
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
Sears Craftsman* Official Tools and Battery
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
Featherlite Official Trailer & Coach
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
Federal Express (1)
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
Ford SVO Official Safety
Technology Supplier
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
Holmatro
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
Honda* Official Motorcycle/Power
Equipment
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
K & K Insurance*
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
MCI Official Communications
Company(2)
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
Mercedes-Benz Official Car
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
Racing Radios/Motorola* Official Two Way Radio
Communications Provider
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
Swiss Timing/Omega Official Timekeeper
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
PPG Co-Series Sponsor or
Co-Title Sponsor
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
Toyota* Official Truck
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
Valvoline Official Fuel
Supplier/Motor Oil
- --------------------------------- ----------- -------- ------------ -------------- ---------- ---------------------------
</TABLE>
* Currently in renewal discussions
- ------------------------------
1 Sponsor category means the movement of packages, documents and freight,
utilizing logistics, electronic and integrated air/ground networks, when such
companies may associate with race teams competing in the series.
2 Official communications company encompasses long distance calling services;
local calling services; calling cards; prepaid calling cards; and wireless
services (including cellular and paging services), and is subject to CART's
agreement.
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NO. PWC-12
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
WARRANT TO PURCHASE SHARES
OF SERIES C PREFERRED STOCK OF
QUOKKA SPORTS, INC.
(VOID AFTER MARCH 19, 2004)
This certifies that CHAMPIONSHIP AUTO RACING TEAMS, INC. or its assigns (the
"Holder"), for value received, is entitled to purchase from QUOKKA SPORTS, INC.,
a Delaware corporation (the "Company") having a place of business at 525 Brannan
Street, San Francisco, California, a maximum of ( ) fully paid and
nonassessable shares of Warrant Stock (as defined below) for cash at such
time(s) as set forth below and at a purchase price of $ per share (the
"Stock Purchase Price") up to and including 5:00 p.m. (Pacific time) on the date
five (5) years from the date of this Warrant, such date being referred to herein
as the "Expiration Date," upon surrender to the Company at its principal office
(or at such other location as the Company may advise the Holder in writing) of
this Warrant properly endorsed with the Form of Subscription attached hereto
duly filled in and signed and, if applicable, upon payment in cash or by check
of the aggregate Stock Purchase Price for the number of shares for which this
Warrant is being exercised determined in accordance with the provisions hereof.
The Stock Purchase Price and the number of shares purchasable hereunder are
subject to adjustment as provided in Section 3 of this Warrant. The term
"Warrant Stock" refers to the Company's Series C Preferred Stock and any other
securities at any time receivable or issuable upon exercise of this Warrant.
Notwithstanding anything contained herein to the contrary, in the event the
Agreement (the "Agreement"), dated effective as of January 1, 1999, between the
Holder and CART DIGITAL MEDIA ENTERPRISES, LLC ("CDME"), or any other agreement
entered into among the Holder, the Company and CDME (or any combination thereof)
pursuant to the Agreement, is terminated, either by the Company or CDME as a
result of uncured material breach by Holder or by Holder for other than an
uncured material breach by the Company or CDME, such an event (the "Termination
Event") will cause this Warrant to become immediately void and the date of such
Termination Event (the "Termination Date") will be deemed the "Expiration Date"
for purposes hereof. Notwithstanding anything contained herein to the contrary
however, upon a Termination Event, the Holder will have ninety (90) days from
the Termination Date to exercise this Warrant to the extent of the Vested
Portion as of the Termination Date (as determined under Section 1.1 below).
<PAGE> 28
This Warrant is subject to the following terms and conditions:
1. VESTING; EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
1.1 VESTING. The portion of this Warrant that is exercisable at any
given time is determined by the chart below and is referred to as the "Vested
Portion."
<TABLE>
<CAPTION>
---------------------------------------------------------- ---------------------------
VESTED PORTION VESTING DATE: STOCK PURCHASE PRICE
DATE SHARES ARE FIRST EXERCISABLE
---------------------------------------------------------- ---------------------------
<S> <C> <C>
$
---------------------------------------------------------- ---------------------------
</TABLE>
1.2 EXERCISE. The Vested Portion of this Warrant is exercisable at the
option of the Holder, at any time or from time to time up to the Expiration Date
for all or any part of the shares of Warrant Stock (but not for a fraction of a
share) which may be purchased hereunder. The Company agrees that the shares of
Warrant Stock purchased under this Warrant shall be and are deemed to be issued
to the Holder hereof as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered, properly
endorsed, the completed, executed Form of Subscription delivered and payment
made for such shares. Certificates for the shares of Warrant Stock so purchased,
together with any other securities or property to which the Holder hereof is
entitled upon such exercise, shall be delivered to the Holder hereof by the
Company at the Company's expense within a reasonable time after the rights
represented by this Warrant have been so exercised. In case of a purchase of
less than all the shares which may be purchased under this Warrant, the Company
shall cancel this Warrant and execute and deliver a new Warrant or Warrants of
like tenor for the balance of the shares purchasable under the Warrant
surrendered upon such purchase to the Holder hereof within a reasonable time.
Each stock certificate so delivered shall be in such denominations of Warrant
Stock as may be requested by the Holder hereof and shall be registered in the
name of such Holder.
1.3 NET ISSUE EXERCISE. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of the Company's Warrant Stock
is greater than the Stock Purchase Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant for cash, the Holder may elect
to receive shares equal to the value (as determined below) of this Warrant (or
the portion thereof being canceled) by surrender of this Warrant at the
principal office of the Company together with the properly endorsed Form of
Subscription and notice of such election in which event the Company shall issue
to the Holder a number of shares of Warrant Stock computed using the following
formula:
X = Y (A-B)
-----
A
Where X = the number of shares of Warrant
Stock to be issued to the Holder
Y = the number of shares of Warrant
Stock purchasable under the Warrant
or, if only a portion of the Warrant
is being
2
<PAGE> 29
exercised, the portion of
the Warrant being canceled (at the
date of such calculation)
A = the fair market value of one share of
the Company's Warrant Stock (at the
date of such calculation)
B = Stock Purchase Price (as adjusted to the
date of such calculation)
For purposes of the above calculation, fair market value of one share of Warrant
Stock shall be determined by the Company's Board of Directors in good faith;
provided, however, that in the event the Company makes an initial public
offering of its Common Stock (the "Initial Public Offering") the fair market
value per share shall be the product of (i) the per share offering price to the
public of the Initial Public Offering if the exercise occurs upon the closing of
the Company's Initial Public Offering or, if later, the closing price of the
Company's Common Stock on the date of exercise, and (ii) the number of shares of
Common Stock into which each share of Warrant Stock is convertible at the time
of such exercise.
2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company
covenants and agrees that all shares of Warrant Stock which may be issued upon
the exercise of the rights represented by this Warrant (and shares of its Common
Stock for issuance on conversion of such Warrant Stock) will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees
that, during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Warrant Stock and Common Stock, or other securities and property, when
and as required to provide for the exercise of the rights represented by this
Warrant. The Company will take all such action as may be necessary to assure
that such shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange upon which the Warrant Stock or Common Stock may be listed; provided,
however, that the Company shall not be required to effect a registration under
Federal or State securities laws with respect to such exercise. The Company will
not take any action which would result in any adjustment of the Stock Purchase
Price (as set forth in Section 3 hereof) (i) if the total number of shares of
Warrant Stock issuable after such action upon exercise of all outstanding
warrants, together with all shares of Warrant Stock then outstanding and all
shares of Warrant Stock then issuable upon exercise of all options and upon the
conversion of all convertible securities then outstanding, would exceed the
total number of shares of Warrant Stock then authorized by the Company's
Certificate of Incorporation, or (ii) if the total number of shares of Common
Stock issuable after such action upon the conversion of all such shares of
Warrant Stock, together with all shares of Common Stock then issuable upon
exercise of all options and upon the conversion of all such shares of Warrant
Stock, together with all shares of Common Stock then outstanding and all shares
of Common Stock then issuable upon exercise of all options and upon the
conversion of all convertible securities then outstanding would exceed the total
number of shares of Common Stock then authorized by the Company's Certificate of
Incorporation.
3.
<PAGE> 30
3. ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase (subject to the other provisions hereof), at the Stock Purchase Price
resulting from such adjustment, the number of shares obtained by multiplying the
Stock Purchase Price in effect immediately prior to such adjustment by the
number of shares purchasable pursuant hereto immediately prior to such
adjustment, and dividing the product thereof by the Stock Purchase Price
resulting from such adjustment.
3.1 SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall at
any time subdivide its outstanding shares of Warrant Stock into a greater number
of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Warrant Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.
3.2 DIVIDENDS IN WARRANT STOCK, OTHER STOCK, PROPERTY,
RECLASSIFICATION. If at any time or from time to time the Holders of Warrant
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
(a) Warrant Stock or any shares of stock or other securities
which are at any time directly or indirectly convertible into or exchangeable
for Warrant Stock, or any rights or options to subscribe for, purchase or
otherwise acquire any of the foregoing by way of dividend or other distribution,
(b) any cash paid or payable otherwise than as a cash
dividend, or
(c) Warrant Stock or additional stock or other securities or
property (including cash) by way of spinoff, split-up, reclassification,
combination of shares or similar corporate rearrangement, (other than shares of
Warrant Stock issued as a stock split or adjustments in respect of which shall
be covered by the terms of Section 3.1 above), then and in each such case, the
Holder hereof shall, upon the exercise of this Warrant, be entitled to receive,
in addition to the number of shares of Warrant Stock receivable thereupon, and
without payment of any additional consideration therefor, the amount of stock
and other securities and property (including cash in the cases referred to in
clause (b) above and this clause (c)) which such Holder would hold on the date
of such exercise had he been the holder of record of such Warrant Stock as of
the date on which holders of Warrant Stock received or became entitled to
receive such shares or all other additional stock and other securities and
property.
3.3 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE. If
any recapitalization, reclassification or reorganization of the capital stock of
the Company, or any consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets or other
transaction shall be effected in such a way that holders of Warrant Stock shall
be entitled to receive stock, securities, or other assets or property (an
"Organic Change"), then, as a condition of such Organic Change, lawful and
adequate provisions
4.
<PAGE> 31
shall be made by the Company whereby the Holder hereof shall thereafter (subject
to the other provisions hereof) have the right to purchase and receive (in lieu
of the shares of the Warrant Stock of the Company immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby)
such shares of stock, securities or other assets or property as may be issued or
payable with respect to or in exchange for a number of outstanding shares of
such Warrant Stock equal to the number of shares of such stock immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby; provided, however, that in the event the value of the stock,
securities or other assets or property (determined in good faith by the Board of
Directors of the Company) issuable or payable with respect to one share of the
Warrant Stock of the Company immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby is in excess of the Stock
Purchase Price hereof effective at the time of a merger and securities received
in such reorganization, if any, are publicly traded, then this Warrant shall
expire unless exercised prior to such Organic Change. In the event of any
Organic Change, appropriate provision shall be made by the Company with respect
to the rights and interests of the Holder of this Warrant to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Stock Purchase Price and of the number of shares purchasable and receivable
upon the exercise of this Warrant) shall thereafter be applicable, in relation
to any shares of stock, securities or assets thereafter deliverable upon the
exercise hereof. The Company will not effect any such consolidation, merger or
sale unless, prior to the consummation thereof, the successor corporation (if
other than the Company) resulting from such consolidation or the corporation
purchasing such assets shall assume by written instrument reasonably
satisfactory in form and substance to the Holders of a majority of the warrants
to purchase Warrant Stock then outstanding, executed and mailed or delivered to
the registered Holder hereof at the last address of such Holder appearing on the
books of the Company, the obligation to deliver to such Holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such Holder may be entitled to purchase.
3.4 CONVERSION OF WARRANT STOCK. In case all or any portion of the
authorized and outstanding shares of Warrant Stock of the Company are redeemed
or converted or reclassified into other securities or property pursuant to the
Company's Certificate of Incorporation or otherwise, or the Warrant Stock
otherwise ceases to exist, then, in such case, the Holder of this Warrant, upon
exercise hereof at any time after the date on which the Warrant Stock is so
redeemed or converted, reclassified or ceases to exist (the "Triggering Date"),
shall receive, in lieu of the number of shares of Warrant Stock that would have
been issuable upon such exercise immediately prior to the Triggering Date, the
shares of Common Stock of the Company that would have been received if this
Warrant had been exercised in full and the Warrant Stock received thereupon had
been simultaneously converted immediately prior to the Triggering Date, all
subject to further adjustment as provided in this Warrant. Additionally, the
Stock Purchase Price shall be immediately adjusted to equal the quotient
obtained by dividing (x) the aggregate Stock Purchase Price of the maximum
number of shares of Warrant Stock for which this Warrant was exercisable
immediately prior to the Triggering Date by (y) the number of shares of Common
Stock of the Company for which this Warrant is exercisable immediately after the
Triggering Date, all subject to further adjustment as provided herein.
3.5 CERTAIN EVENTS. If any change in the outstanding Warrant Stock of
the Company or any other event occurs as to which the other provisions of this
Section 3 are not strictly applicable or if strictly applicable would not fairly
protect the purchase rights of the
5.
<PAGE> 32
Holder of the Warrant in accordance with such provisions, then the Board of
Directors of the Company shall make an adjustment in the number and class of
shares available under the Warrant, the Stock Purchase Price or the application
of such provisions, so as to protect such purchase rights as aforesaid. The
adjustment shall be such as will give the Holder of the Warrant upon exercise
for the same aggregate Stock Purchase Price the total number, class and kind of
shares as he would have owned had the Warrant been exercised prior to the event
and had he continued to hold such shares until after the event requiring
adjustment.
3.6 NOTICES OF CHANGE. Immediately upon any adjustment in the number or
class of shares subject to this Warrant and of the Stock Purchase Price, the
Company shall give written notice thereof to the Holder, setting forth in
reasonable detail and certifying the calculation of such adjustment.
4. ISSUE TAX. The issuance of certificates for shares of Warrant Stock
upon the exercise of the Warrant shall be made without charge to the Holder of
the Warrant for any issue tax (other than any applicable income taxes) in
respect thereof; provided, however, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the then
Holder of the Warrant being exercised.
5. CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any warrant or of any shares of Warrant Stock
issued or issuable upon the exercise of any warrant in any manner which
interferes with the timely exercise of this Warrant.
6. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a shareholder of
the Company or any other matters or any rights whatsoever as a shareholder of
the Company. No dividends or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by the
holder to purchase shares of Warrant Stock, and no mere enumeration herein of
the rights or privileges of the holder hereof, shall give rise to any liability
of such Holder for the Stock Purchase Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by its creditors.
7. TRANSFER. Subject to compliance with applicable federal and state
securities laws, this Warrant and all rights hereunder are transferable, in
whole or in part, without charge to the holder hereof (except for transfer
taxes), upon surrender of this Warrant properly endorsed. Each taker and holder
of this Warrant, by taking or holding the same, consents and agrees that this
Warrant, when endorsed in blank, shall be deemed negotiable, and that the holder
hereof, when this Warrant shall have been so endorsed, may be treated by the
Company, at the Company's option, and all other persons dealing with this
Warrant as the absolute owner hereof for any purpose and as the person entitled
to exercise the rights represented by this Warrant, or to the transfer hereof on
the books of the Company any notice to the contrary notwithstanding; but until
such transfer on such books, the Company may treat the registered owner hereof
as the owner for all purposes.
6.
<PAGE> 33
The Holder, by acceptance hereof, agrees that, absent an effective registration
statement filed with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "1933 Act"), covering the disposition or sale of
this Warrant or the Warrant Stock, and registration or qualification under
applicable state securities laws, such Holder will not sell, transfer, pledge or
hypothecate any or all such Warrants or Warrant Stock, unless either (i) the
Company has received an opinion of counsel, in form and substance reasonably
satisfactory to the Company, to the effect that such registration is not
required in connection with such disposition or (ii) the sale of such securities
is made pursuant to Rule 144 of the 1933 Act. Notwithstanding the foregoing, the
Company hereby confirms its intent, after delivery of the opinion described
above, to consent to the sale, transfer, pledge or hypothecation of this Warrant
to holders of membership interests in the Holder.
The Holder, by acceptance hereof, agrees that, it will not transfer or dispose
of any Warrant Stock or Common Stock (or other securities) that it may acquire
upon exercise of rights under this Warrant for a period specified by the
representatives of the underwriters of Common Stock (or other securities) of the
Company not to exceed one hundred eighty (180) days following the effective date
of the Company's Initial Public Offering.
8. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and
obligations of the Company, of the holder of this Warrant and of the holder of
shares of Warrant Stock, shall survive the exercise of this Warrant.
9. MODIFICATION AND WAIVER. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
10. NOTICES. Any notice, request or other document required or
permitted to be given or delivered to the holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to each such
holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant or such
other address as either may from time to time provide to the other.
11. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets. All of the obligations of
the Company relating to the Warrant Stock issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant. All of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the holder hereof.
12. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California.
13. LOST WARRANTS. The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such
7.
<PAGE> 34
mutilation upon surrender and cancellation of such Warrant, the Company, at its
expense, will make and deliver a new Warrant, of like tenor, in lieu of the
lost, stolen, destroyed or mutilated Warrant.
14. FRACTIONAL SHARES. No fractional shares shall be issued upon
exercise of this Warrant. The Company shall, in lieu of issuing any fractional
share, pay the holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the then effective Stock Purchase Price.
15. INVESTORS' RIGHTS AGREEMENT. Promptly following the date hereof,
the Company shall seek the necessary stockholder approval to amend and restate
the Amended and Restated Investors' Rights Agreement dated December 23, 1998
(the "Investors' Rights Agreement") to include this Warrant (and any other
Warrants issued to Holder) as a Warrant (as such term is defined in the
Investors' Rights Agreement) (such amendment and restatement being referred to
hereinafter as the "Amended and Restated Investors' Rights Agreement"). Promptly
following such stockholder approval, each of the Company and the Holder shall
execute and deliver to the other an Amended and Restated Investors' Rights
Agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK]
8.
<PAGE> 35
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized this ______ day of March,
1999.
QUOKKA SPORTS, INC.
a Delaware corporation
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
ATTEST:
- ------------------------------------
Secretary
<PAGE> 36
EXHIBIT A
SUBSCRIPTION FORM
Date: _________________, 19___
Quokka Sports, Inc.
525 Brannan Street
Ground Floor
San Francisco, CA 94107
Attn: President
Ladies and Gentlemen:
[ ] The undersigned hereby elects to exercise Warrant No. PWC-12 (the
"Warrant") issued to it by Quokka Sports, Inc. (the "Company") and
dated ________________, 1999 and to purchase thereunder
__________________________________ shares of the Warrant Stock of the
Company (the "Shares") at a purchase price of __________ per Share or
an aggregate purchase price of __________________________________
Dollars ($__________) (the "Purchase Price").
[ ] The undersigned hereby elects to convert _______________________
percent (____%) of the value of the Warrant pursuant to the provisions
of Section 1.3 of the Warrant.
Pursuant to the terms of the Warrant the undersigned has delivered the
Purchase Price herewith in full in cash or by certified check or wire transfer.
Very truly yours,
CHAMPIONSHIP AUTO RACING TEAMS, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
