Document:

Exhibit 10.1

YAHOO!
INC.

701
First Avenue

Sunnyvale, California 94089

December 5, 2006

Mr. Daniel L.
Rosensweig

c/o Yahoo! Inc.

701 First Avenue

Sunnyvale, California 94089

Re.                Separation Agreement

Dear
Dan:

This letter agreement (this “Agreement”) will confirm our
understanding with regard to your termination of employment with Yahoo! Inc.
(the “Company”).

1.       Separation.  Your
last day of work with the Company and your employment termination date will be
the earlier of (a) March 31, 2007, or (b) such date as may be mutually agreed
upon in writing by you and the Company (the “Separation Date”).  Notwithstanding the foregoing, between the
date hereof and the Separation Date, the Company may allocate some or all of
your job responsibilities to others and may appoint other persons also as Chief
Operating Officer.  In addition, at the
Company’s request, you shall provide transition services between the date
hereof and the Separation Date.  You
hereby resign as Chief Operating Officer of the Company (and as an officer and
director of the Company and any subsidiary, as well as a fiduciary of any
benefit plan of the Company) as of the Separation Date.  You shall execute such additional documents
as requested by the Company to evidence the foregoing.  From the date hereof until the Separation
Date, the Company will continue to pay your regular base salary, and you shall
continue to be eligible for all benefits and perquisites that you currently
enjoy, provided that you shall not be eligible for any new equity grants
or other new incentive or bonus opportunities.

2.       Base Salary for 2007.  Subject to the provisions of Sections 16 and 17 hereof and the Delay
Period described in Section 18(b)(ii) hereof, you shall be entitled to receive
a lump-sum payment as of the Separation Date equal to your base salary as in
effect as of the Separation Date in respect of the period from the Separation
Date through December 31, 2007.  Such
payment shall be in lieu of any payment to which you would be entitled pursuant
to any other severance plans, programs, arrangements, or policies of the
Company, and shall be considered a part of, and not in addition to, any amount
that may be payable to you under the Worker Adjustment Retraining Notification
Act of 1988 or any similar state statute or regulation.

 

3.       Continued Medical and Dental
Coverage.  Your group health insurance will cease on
your Separation Date.  At that time, you
will be eligible to continue your group health insurance benefits under the
federal COBRA law or, if applicable, state insurance laws.  Subject to the provisions of Sections 16 and
17 hereof, for a period of one (1) year following the Separation Date (the “Benefits
Continuation Period”), the Company shall pay the premiums for the continued
medical and dental benefits (provided that you timely elect COBRA), provided
that in the event that you become covered under substitute benefit plans of
another employer prior to the expiration of the Benefits Continuation Period,
the Company’s obligations under this Section 3 shall immediately cease.  The continuation of benefits provided for in
this Section 3 is subject to the terms and conditions of the applicable benefit
plans as they exist or may change for similarly situated executives from time
to time and in accordance with applicable law. 
The Benefits Continuation Period shall be counted against your
applicable COBRA coverage period.

4.       Payment of 2006 Annual
Bonus.  Subject to the provisions of Sections 16 and
17 hereof, your compliance with the terms of this Agreement through the later
of the Separation Date and the date on which bonuses are paid to other senior
executives of the Company and, if not paid prior to termination of employment,
the Delay Period described in Section 18(b)(ii) hereof, you shall be entitled
to receive in 2007 when bonuses are paid to other senior executives of the
Company an annual bonus for the Company’s fiscal year ending December 31, 2006
in the amount of nine hundred thousand dollars ($900,000).

5.       Treatment of Outstanding Equity
Awards.

(a)          Stock Options.

(i)                         General.  Subject to the provisions of Sections 16 and 17 hereof, except as
provided in clause (ii) of this Section 5(a), all of your outstanding stock
options shall continue to vest through the Separation Date, and shall remain
exercisable following the Separation Date, in accordance with the terms of the
applicable award agreement and the Company’s 1995 Stock Plan (as amended).  For purposes of the stock option granted to
you on May 31, 2006 (the “2006 Option”), you will, in addition, be
vested on the Separation Date in any portion of such stock option grant that
would have vested between the Separation Date and May 31, 2007 if you had
continued employment with the Company through such date, and your termination
of employment on the Separation Date shall be deemed a termination on the basis
described in Section 6(ii) of the award agreement with regard to the grant of
the 2006 Option, and. accordingly, has the three (3) year post-termination
exercise period provided for with regard thereto, subject to the provisions of
Section 5(a)(iii) hereof and the other terms of the Company’s 1995 Stock Plan
(as amended) and the grant.

(ii)                      Underwater Stock Options.  Subject to the provisions of Sections 5(a)(iii) and 5(c) hereof and all
of the other terms and conditions of this Agreement, the post-termination
exercise period for all of your 

 2
 

 

Company
stock options that have or will become vested on or prior to May 31, 2007 (any
such stock options to become vested between the Separation Date and May 31,
2007 shall be deemed vested as of the Separation Date) and that have an
exercise price in excess of the fair market value of a share of the Company’s
common stock as of the date of the meeting for approval of this Agreement by
the Compensation Committee of the Board of Directors of the Company as set
forth on the Schedule of Underwater Stock Options attached hereto as Exhibit
A (the “Underwater Options”) shall be extended for a period of three
(3) years following the Separation Date (or until the expiration of the applicable
stock option term, if earlier).

(iii)                   Notwithstanding the forgoing and the fact
that the Underwater Options and the 2006 Option shall be vested as provided
above, your right to exercise the Underwater Options and the 2006 Option shall
become effective at the rate of sixty percent (60%), twenty percent (20%) and
twenty percent (20%) of the shares subject to each Underwater Option and the
2006 Option on each of the twelve (12)-month, twenty-four (24)-month and thirty
(30)-month anniversaries of the Separation Date, respectively, and shall not be
exercised prior to such permitted date (except as permitted by the
Administrator pursuant to Section 16(b) of the Company’s 1995 Stock Plan (as
amended)); provided, however, that your right to exercise the Underwater
Options and the 2006 Option shall immediately cease and shall immediately
terminate in accordance with the provisions of Section 5(c) hereof, or upon
your breach of Section 10 hereof, or upon a material breach of any other term
or condition of this Agreement; and provided, further, to the
extent that the extension of the post-termination exercise period of the
Underwater Options in accordance with the provisions of Section 5(a)(ii) hereof
would cause the Underwater Options to fail to comply with the applicable
provisions of Code Section 409A, the duration of such extension shall be
limited to the maximum extent permitted under Code Section 409A (such
determination to be made based on the final regulations under Code Section 409A
or, if not issued prior to November 30, 2007, the interim or temporary
regulations then in effect) without causing the Underwater Options to violate
any of the applicable provisions of Code Section 409A, and all of the
Underwater Options shall be exercisable for the thirty (30)-day period
immediately prior to the expiration of the reduced post-termination exercise
period.

(b)         Restricted Stock and Stock Unit
Awards.  Subject to the provisions of Sections 16 and
17 hereof, except as provided in clauses (i) and (ii) of this Section 5(b), all
of your outstanding restricted stock awards and restricted stock unit awards
shall continue to vest through the Separation Date and be paid in accordance
with the terms of the applicable award agreement and the Company’s 1995 Stock
Plan (as amended).

 3
 

 

(i)                                     December 20, 2005 and May 31,
2006 Performance-Based Restricted Stock Unit Awards.  Provided that you comply with your obligations to the Company through
the Separation Date, including the provisions of this Agreement, the
performance-based restricted stock unit awards granted to you under the Company’s
1995 Stock Plan (as amended) on December 20, 2005 and May 31, 2006 shall become
fully vested as of the Separation Date, subject to the achievement of the
applicable performance goals thereunder (other than continued employment beyond
the Separation Date), and, subject to the Delay Period described in Section
18(b)(ii) hereof, be paid in accordance with the terms of the award agreement
and the Company’s 1995 Stock Plan (as amended).

(ii)                                  February 1, 2005 Time-Based
Restricted Stock Award.  Provided that you comply with your
obligations to the Company through the Separation Date, including the
provisions of this Agreement, 146,667 shares of the time-based restricted stock
award granted to you under the Company’s 1995 Stock Plan (as amended) on
February 1, 2005 shall become vested on the Separation Date.

(iii)                               Forfeiture.  In
the event that you do not comply with your obligations to the Company through
the Separation Date, including the provisions of this Agreement, your right to
receive the enhanced vesting conferred under Sections 5(b)(i) and 5(b)(ii)
hereof shall immediately cease and the restricted stock units covered by such
provisions shall be forfeited without any further action of the Company.

(c)          Employment Forfeiture.  If, either prior to the Separation Date or during the three (3) years
following the Separation Date, you in any way directly or indirectly own,
manage, operate, control, accept employment or a consulting position with or
otherwise advise or assist or be actively connected with, or have any financial
interest in, directly or indirectly, either Google Inc. or Microsoft
Corporation (provided, however, that ownership of not more than
one percent (1%) of the equity securities of any of the foregoing entities
shall in no way be prohibited by this Section 5(c)), your right to exercise
your outstanding stock options shall immediately cease and any and all stock
options granted to you that then remain outstanding shall immediately terminate
and be of no further force or effect and, if such failure to comply is prior to
the Separation Date, your right to restricted stock units under Section 5(b)
hereof to the extent not then vested shall terminate and be of no further force
or effect.

6.       Accrued Obligations.  On
the Separation Date, you will be paid for accrued, unused vacation days, if
any, based on your base salary in effect as of your Separation Date, plus any
accrued but unpaid base salary and any unreimbursed business expenses entitled to
reimbursement in accordance with Company policies.  You are entitled to these payments 

 4
 

 

regardless
of whether or not you sign this Agreement or the Supplemental Release described
in Section 17 hereof.

7.       Other Compensation or Benefits.  You
acknowledge that, except as expressly provided in this Agreement, you will not
receive any additional compensation, severance or other benefits after the
Separation Date, with the exception of any benefit (other than a severance type
benefit), the right to which has accrued and vested, under the express terms of
a written employee benefit plan of the Company.

8.       Indemnification.  Your rights to indemnification under the By-Laws of the Company, as
well as under other organizational documents, contractually or at law, shall
continue with regard to actions or inactions by you while an officer of the
Company.  In addition, the Company shall
continue to cover you under the Company’s directors’ and officers’ liability
insurance policies on the same basis as other officers and directors while
liability exists with regard to such actions or inactions.

9.       Return of Company Property.  By
the Separation Date, you agree to return to the Company all Company documents
(and all copies thereof) and other Company property that you have had in your
possession at any time, including, but not limited to, Company files, notes,
notebooks, correspondence, memoranda, agreements, drawings, records, business
plans, forecasts, financial information, specifications, computer-recorded
information, tangible property (including, but not limited to, computers,
pagers, telephones, credit cards, entry cards, identification badges and keys),
and, any materials of any kind that contain or embody any proprietary or
confidential information of the Company (and all reproductions thereof in whole
or in part).  You also agree to erase any
such proprietary or confidential information of the Company contained in any
electronic document or e-mail system in your possession, custody or
control.  Notwithstanding the foregoing,
you may retain the electronic computer and communications equipment at your
home, provided that you deliver any hard drive to the Company so that it
may be erased with regard to Company proprietary and confidential information.

10.    Proprietary Information Obligations.  You acknowledge and agree to comply with your continuing obligations under
your Employment Letter with the Company dated April 21, 2002, including the
Proprietary Information and Assignment of Inventions Agreement attached
thereto; provided, however, that Section 10 of the Proprietary
Information and Assignment of Inventions Agreement shall be amended and
restated in its entirety to read as follows:

“Without
limiting any other provision of this Agreement, I agree that while employed by
the Company and thereafter through September 30, 2008, I will not, directly or
indirectly, (i) induce any employee or full-time contractor of the Company to
leave the employ or other service of the Company, (ii) solicit for hiring or
retention any employee or full-time contractor of the Company or assist any
other person or entity in soliciting for hire or retention any employee or
full-time contractor of the Company (including any person who in the prior six
(6) months had been an employee or full-time contractor of the Company), or
(iii) solicit the 

 5
 

 

business
of any business partner of the Company (other than on behalf of the Company) in
a manner competitive with the Company or interfere with any business partner’s
relationship with the Company; provided, however,
that (A) the provisions with regard to soliciting in clause (i) above shall not
be violated by general advertising not targeted at employees or full-time
contractors of the Company, (B) I may serve as a reference upon request so long
as I am not involved with the person or entity on a business basis, and (C)
this provision shall not be violated by action taken by any person or entity
that I am associated with if I am not personally involved in any manner in the
matter and have not identified such person or entity for soliciting or doing
business with.”

11.    Nondisparagement.  You
agree not to make negative comments or otherwise disparage the Company or its
officers, directors, employees, shareholders or agents, in any manner likely to
be harmful to them or their business, business reputation or personal
reputation.  The Company agrees that the
individuals holding the titles of Chief Executive Officer of the Company, Chief
Yahoo! of the Company and Executive Vice President of the Company as of the date
hereof and the members of the Board of Directors of the Company as of the date
hereof will not, while employed by the Company or serving as a director of the
Company, as the case may be, make negative comments about you or otherwise
disparage you in any manner that is likely to be harmful to your business
reputation.  The foregoing shall not be
violated by truthful statements in response to legal process or required
governmental testimony or filings, and the foregoing limitation on the Company’s
executives and directors shall not be violated by statements that they in good
faith believe are necessary or appropriate to make in connection with
performing their duties to the Company.

12.    Cooperation.  You
agree to reasonably cooperate with and make yourself available on a continuing
basis to the Company and its representatives and legal advisors in connection
with any matters in which you are or were involved during your employment with
the Company or any existing or future claims, investigations, administrative
proceedings, lawsuits and other legal and business matters as reasonably
requested by the Company.  You also agree
to promptly send the Company copies of all correspondence (for example, but not
limited to, subpoenas) received by you in connection with any legal proceedings
involving or relating to the Company, unless you are expressly prohibited by
law from so doing.  You agree not to
cooperate voluntarily in any third party claims against the Company.  You understand that nothing in this Agreement
prevents you from cooperating with any government investigation.

13.     Release of Claims.

(a)          In
consideration for, and as a condition to receiving the benefits described in
Sections 2 through 5 hereof to which you are not otherwise entitled, and in
consideration for your continued employment with the Company through the
Separation Date, you hereby generally and completely release the Company and
its directors, officers, employees, shareholders, partners, agents, attorneys,
predecessors, successors, parent and subsidiary entities, insurers, affiliates,
and assigns (collectively, the “Released Party”) from any and all
claims, liabilities and

 6
 

 

obligations, both known
and unknown, that arise out of or are in any way related to events, acts,
conduct, or omissions occurring at any time prior to and including the date you
sign this Agreement.  This general
release includes, but is not limited to: 
(1) all claims arising out of or in any way related to your employment
with the Company or the termination of that employment; (2) all claims related
to your compensation or benefits from the Company, including wages, salary,
bonuses, commissions, vacation pay, expense reimbursements, severance pay,
fringe benefits, stock, stock options, or any other ownership interests in the
Company; (3) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (4) all
tort claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (5) all federal, state, and local
statutory claims, including claims for discrimination, harassment, retaliation,
attorneys’ fees, or other claims arising under the federal Civil Rights Act of
1964 (as amended), the federal Americans with Disabilities Act of 1990, the
federal Worker Adjustment and Retraining and Notification Act (as amended), the
Employee Retirement Income Security Act of 1974 (as amended), the Family and
Medical Leave Act of 1993, and the California Fair Employment and Housing Act
(as amended).  To the maximum extent
permitted by law, you also promise never directly or indirectly to bring or
participate in an action against any Released Party under California Business
& Professions Code Section 17200 or under any other unfair competition law
of any jurisdiction with respect to your employment with the Company or the
termination thereof.  If, notwithstanding
the above, you are awarded any money or other relief under such a claim, you
hereby assign the money or other relief to the Company.  Your waiver,
release and promises specified in this Section 13(a) do not apply to any rights
or claims that may arise after the date you sign this Agreement.

(b)         Excluded from this release are any claims
which cannot be waived by law in a private agreement between employer and
employee, including but not limited to, the right to enforce this Agreement and
recover for any breach of it, rights under California Labor Code Section 2802,
and the right to file a charge with or participate in an investigation
conducted by the Equal Employment Opportunity Commission (“EEOC”) or
state or local fair employment practices agency.  You waive, however, any right to any monetary
recovery or other relief should the EEOC or any other agency pursue a claim on
your behalf.

14.     Representations.  You acknowledge and represent that you have not suffered any age or
other discrimination, harassment, retaliation, or wrongful treatment by any
Released Party.  You also acknowledge and
represent that you did not and do not have any rights under nor have you been
denied any rights including, but not limited to, rights to a leave or
reinstatement from a leave under the Family and Medical Leave Act of 1993 or
any similar law of any jurisdiction.

15.    Release of Unknown Claims.  You acknowledge that you have read and understand Section 1542 of the
California Civil Code:  “A general release does not extend to claims 

 7
 

 

which
the creditor does not know or suspect to exist in his or her favor at the time
of executing the release, which if known by him or her must have materially
affected his or her settlement with the debtor.”  You hereby expressly waive and relinquish all rights and benefits under
that section and any law of any jurisdiction of similar effect with respect to
your release of any unknown or unsuspected claims.

16.    Time
to Consider; Effectiveness.  By
signing this Agreement, you hereby acknowledge
that:  (a) your waiver and release
specified in Sections 13 and 15 hereof do not apply to any rights or claims
that may arise after the date you sign this Agreement or with respect to your
rights hereunder; (b) you have the right to consult with an attorney prior
to signing this Agreement; (c) you have twenty-one (21) days to consider
this Agreement (although you may choose to sign it earlier); (d) you have
seven (7) days after you sign this Agreement to revoke it; and (e) this
Agreement will not be effective until the date on which the revocation period
has expired, which will be the eighth day after you sign this Agreement, assuming
you have returned it to the Company’s Senior Vice President of Human Resources
by such date.  To revoke your
signature, you must notify the Company in
writing within seven days of the date you signed this
Agreement.  Such notice must be delivered
by 5:00 p.m. of the seventh day and addressed to the Senior Vice President of
Human Resources of the Company.  In the
event that you do not sign this Agreement or if you revoke your signature, you
will not be entitled to the payments and benefits described in Sections 2 through 5 hereof.

17.    Supplemental Release.  As a
condition to receiving the amounts and benefits in Sections 2 through 5 hereof,
you shall sign and deliver to the Company a supplemental release of claims (the
“Supplemental Release”) in the form attached hereto as Exhibit B,
within twenty-one (21) days after the Separation Date and not revoke the same
within the time period provided therein. 
If you do not sign the Supplemental Release or if you revoke it, you
shall not be entitled to receive any of the amounts or benefits under Sections
2 through 5 hereof, but this Agreement (including the release contained herein)
shall otherwise remain in full force and effect.

18.    Tax Matters.

(a)          Withholding.  The Company may withhold from any and all amounts payable under this
Agreement such federal, state and local taxes as may be required to be withheld
pursuant to any applicable law or regulation.

(b)         Section 409A Compliance.

(i)                                     The
intent of the parties is that payments and benefits under this Agreement comply
with Internal Revenue Code Section 409A and the regulations and guidance
promulgated thereunder (collectively “Code Section 409A”) and,
accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be in compliance therewith. 
If you notify the Company (with specificity as to the reason therefore)
that you believe that any provision of this Agreement (or of any award of
compensation, including equity compensation or benefits) would cause you to
incur any additional tax or interest under Code Section 

 8
 

 

409A and the Company
concurs with such belief or the Company (without any obligation whatsoever to
do so) independently makes such determination, the Company shall, after
consulting with you, reform such provision to try to comply with Code Section
409A through good
faith modifications to the minimum extent reasonably appropriate to conform
with Code Section 409A.  To the
extent that any provision hereof is modified in order to comply with Code
Section 409A, such modification shall be made in good faith and shall, to the
maximum extent reasonably possible, maintain the original intent and economic
benefit to you and the Company of the applicable provision without violating
the provisions of Code Section 409A.

(ii)                                  Notwithstanding
any provision to the contrary in this Agreement, if you are deemed on the date
of termination to be a “specified employee” within the meaning of that term
under Code Section 409A(a)(2)(B), then with regard to any payment or the
provision of any benefit that is required to be delayed in compliance with
Section 409A(a)(2)(B) (including any payment or distribution in respect of any
restricted stock units granted to you under the Company’s 1995 Stock Plan (as
amended) as described in Section 5(b) hereof) such payment or benefit shall not
be made or provided (subject to the last sentence of this Section 18(b)(ii))
prior to the earlier of (A) the expiration of the six (6)-month period measured
from the date of your “separation from service” (as such term is defined under
Code Section 409A) or (B) the date of your death (the “Delay Period”).  Upon the expiration of the Delay Period, all
payments and benefits delayed pursuant to this Section 18(b)(ii) (whether they
would have otherwise been payable in a single sum or in installments in the
absence of such delay) shall be paid or reimbursed to you in a lump sum, and
any remaining payments and benefits due under this Agreement shall be paid or
provided in accordance with the normal payment dates specified for them herein,
provided that any payment hereunder that would have been made to you on
or after the Separation Date and prior to or during the Delay Period shall not
be forfeited as a result of your failure to comply with the terms of this
Agreement (other than Sections 16 and 17 hereof) after the date such payment
otherwise would be due.  Notwithstanding
the foregoing, to the extent that the foregoing applies to the provision of any
ongoing welfare benefits to you that would not be required to be delayed if the
premiums therefore were paid by you, you shall pay the full cost of premiums
for such welfare benefits during the Delay Period and the Company shall pay you
an amount equal to the amount of such premiums paid by you during the Delay
Period promptly after its conclusion.

(iii)                               In
no event whatsoever (as a result of Sections 18(b)(i) and 18(b)(ii) hereof or
otherwise) shall the Company be liable for any additional 

 9
 

 

tax, interest or
penalties that may be imposed on you by Code Section 409A or any damages for
failing to comply with Code Section 409A or Sections 18(b)(i) and 18(b)(ii)
hereof.

19.    Public Statements; Press
Releases.  Prior to the Separation Date, to the extent
feasible, the Company shall provide you with a reasonable opportunity prior to
release to review and comment on any formal public statements or press releases
made by the Company relating to your termination of employment with the Company
and shall consider such comments in good faith, but the ultimate determination
of the contents of any such statement or release shall be made by the Company.

20.    Miscellaneous.  This
Agreement, including its Exhibits, the documents referred to in Section 10
hereof (as modified herein), your arbitration agreement with the Company and
your equity grants (as modified herein) constitute the complete, final and
exclusive embodiment of the entire agreement between you and the Company with
regard to this subject matter.  It is
entered into without reliance on any promise or representation, written or
oral, other than those expressly contained herein, and it supersedes any other
such promises, warranties or representations. 
This Agreement may not be modified or amended except in a writing signed
by both you and a duly authorized officer of the Company.  This Agreement will bind the heirs, personal
representatives, successors and assigns of both you and the Company, and inure
to the benefit of both you and the Company, their heirs, successors and
assigns, provided, however, that you may not assign your rights
or obligations hereunder.  If any
provision of this Agreement is determined to be invalid or unenforceable, in
whole or in part, this determination will not affect any other provision of
this Agreement and the provision in question will be modified by the court so
as to be rendered enforceable.  In the
event of a breach or threatened breach of any provision of this Agreement, you
agree that the Company shall be entitled to injunctive or other equitable
relief in a court of appropriate jurisdiction to remedy any such breach or threatened
breach, and you acknowledge that damages would be inadequate and
insufficient.  The existence of this
right to injunctive and other equitable relief shall not limit any other rights
or remedies that the Company may have at law or in equity including, without
limitation, the right to monetary, compensatory and punitive damages.  This Agreement will be deemed to have been
entered into and will be construed and enforced in accordance with the laws of
the State of California as applied to contracts made and to be performed
entirely within California; provided, however, that all matters
related to the treatment of your outstanding equity awards, including under
Section 5 hereof, shall be construed and enforced in accordance with the laws
of the State of Delaware, without regard to the choice of law principles
thereof.

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 10
 

 

IF
THIS AGREEMENT IS ACCEPTABLE TO YOU, PLEASE SIGN BELOW AND RETURN THE ORIGINAL
TO THE COMPANY’S SENIOR VICE PRESIDENT OF HUMAN RESOURCES AT 701 FIRST AVENUE,
SUNNYVALE, CALIFORNIA 94089 BY 5:00 P.M. ON DECEMBER 26, 2006.

I
wish you good luck in your future endeavors.

Sincerely,

YAHOO! INC.

 

	
  By:

  	
  /s/Terry Semel

  	
   

  
	
  Name:

  	
  Terry Semel

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Chief Executive Officer

  	
   

  
						

 

 

Exhibit
A – Schedule of Underwater Stock Options

Exhibit
B – Supplemental Release

AGREED AND VOLUNTARILY
EXECUTED:

 

	
  /s/ Daniel L. Rosensweig

  	
   

  
	
  Daniel L.
  Rosensweig

  

 

 

Dated: 
December 5, 2006

 11

 

EXHIBIT A

Schedule of Underwater
Stock Options of Daniel L. Rosensweig

 

	
  

  

  Grant

  Number

  	
   

  	
  

  

  Grant

  Date

  	
   

  	
  

  

  Plan/Type

  	
   

  	
  

  

  Shares

  	
   

  	
  

  

  Price

  	
   

  	
  

  

  Exercised/

  Released

  at

   12/05/06

  	
   

  	
  

  

  Vested 

  at 

  12/05/06

  	
   

  	
  

  

  Cancelled 

  at 

  12/05/06

  	
   

  	
  

  

  Unvested 

  at 

  12/05/06

  	
   

  	
  

  

  Outstanding/

  Unreleased

  at 

  12/05/06

  	
   

  	
  

  

  Exercisable/

  Releasable 

  at 

  12/05/06

  	
   

  	
  Vested at 

  Separation 

  Date 

  (including 

  vested at 

  12/05/2006)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A9585252

  	
   

  	
  12/16/2004

  	
   

  	
  1995/NQ

  	
   

  	
  150,000

  	
   

  	
  $

  	
  37.08000

  	
   

  	
  0

  	
   

  	
  65,625

  	
   

  	
  0

  	
   

  	
  84,375

  	
   

  	
  150,000

  	
   

  	
  65,625

  	
   

  	
  84,375

  	
   

  
	
  A9590884

  	
   

  	
  2/1/2005

  	
   

  	
  1995/NQ

  	
   

  	
  550,000

  	
   

  	
  $

  	
  34.75000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  550,000

  	
   

  	
  550,000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  A9594660

  	
   

  	
  12/20/2005

  	
   

  	
  1995/NQ

  	
   

  	
  125,000

  	
   

  	
  $

  	
  40.68000

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  125,000

  	
   

  	
  125,000

  	
   

  	
  0

  	
   

  	
  31,250

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  825,000

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  65,625

  	
   

  	
  0

  	
   

  	
  759,375

  	
   

  	
  825,000

  	
   

  	
  65,625

  	
   

  	
  115,625

  	
   

  

 

 A-1

 

EXHIBIT B

SUPPLEMENTAL
RELEASE

Pursuant
to the letter agreement dated December 5, 2006 by and between Yahoo! Inc. (the “Company”)
and me (the “Separation Agreement”), I hereby generally and completely
release the Company and its directors, officers, employees, shareholders,
partners, agents, attorneys, predecessors, successors, parent and subsidiary
entities, insurers, affiliates, and assigns (collectively, the “Released
Party”) from any and all claims, liabilities and obligations, both known
and unknown, that arise out of or are in any way related to events, acts,
conduct, or omissions occurring prior to my signing this Supplemental
Release.  This general release includes,
but is not limited to:  (1) all
claims arising out of or in any way related to my employment with the Company
or the termination of that employment; (2) all claims related to my
compensation or benefits from the Company, including wages, salary, bonuses,
commissions, vacation pay, expense reimbursements, severance pay, fringe benefits,
stock, stock options, or any other ownership interests in the Company;
(3) all claims for breach of contract, wrongful termination, and breach of
the implied covenant of good faith and fair dealing; (4) all tort claims,
including claims for fraud, defamation, emotional distress, and discharge in
violation of public policy; and (5) all federal, state, and local
statutory claims, including claims for discrimination, harassment, retaliation,
attorneys’ fees, or other claims arising under the federal Civil Rights Act of
1964 (as amended), the federal Americans with Disabilities Act of 1990, the
federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”),
the federal Worker Adjustment and Retraining Notification Act (as amended), the
Employee Retirement Income Security Act of 1974 (as amended), the Family and
Medical Leave Act of 1993, and the California Fair Employment and Housing Act
(as amended).  To the maximum
extent permitted by law, I also promise never directly or indirectly to bring
or participate in an action against any Released Party under California
Business & Professions Code Section 17200 or under any other unfair
competition law of any jurisdiction with respect to your employment with the
Company or the termination thereof.  If,
notwithstanding the above, I am awarded any money or other relief under such a
claim, I hereby assign the money or other relief to the Company.  My
waiver, release and promises specified in this paragraph do not apply to any
rights or claims that may arise after the date I sign this Agreement.

Excluded from this general release are any claims which cannot be
waived by law in a private agreement between employer and employee, including
but not limited to, the right to enforce the Separation Agreement and recover
for any breach of it, rights under California Labor Code Section 2802, and the
right to file a charge with or participate in an investigation conducted by the
Equal Employment Opportunity Commission (“EEOC”) or state or local fair
employment practices agency.  I waive,
however, any right to any monetary recovery or other relief should the EEOC or
any other agency pursue a claim on my behalf.

I acknowledge and represent that I have not suffered any age or other
discrimination, harassment, retaliation, or wrongful treatment by any Released
Party.  I also acknowledge and represent
that I did not and do not have any rights under nor have I been denied any
rights 

 B-1
 

 

including,
but not limited to, rights to a leave or reinstatement from a leave under the
Family and Medical Leave Act of 1993 or any similar law of any jurisdiction.

I agree that I am voluntarily executing this Release.  I acknowledge that I am knowingly and
voluntarily waiving and releasing any rights I may have under the ADEA and that
the consideration given for the waiver and release is in addition to anything
of value to which I was already entitled. 
I further acknowledge that I have been advised by this writing, as
required by the ADEA, that:  (a) my
waiver and release specified in this paragraph does not apply to any rights or
claims that may arise after the date I sign this Supplemental Release or my
rights with respect to the Separation Agreement; (b) I have the right to
consult with an attorney prior to signing this Supplemental Release; (c) I
have twenty-one (21) days to consider this Supplemental Release (although I may
choose to sign it earlier); (d) I have seven (7) days after I sign this
Supplemental Release to revoke it; and (e) this Supplemental Release will
not be effective until the date on which the revocation period has expired,
which will be the eighth day after I sign this Supplemental Release, assuming I
have returned it to the Company’s Senior Vice President of Human Resources by
such date (the “Effective Date”).

I UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.  In giving this release,
which includes claims which may be unknown to me at present, I acknowledge that
I have read and understand Section 1542 of the California Civil Code, which
states:  “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his or her favor at the time of executing the release, which if
known by him or her must have materially affected his or her settlement with
the debtor.”  I hereby
expressly waive and relinquish all rights and benefits under that section and
any law of any jurisdiction of similar effect with respect to my release of any
unknown or unsuspected claims I may have against the Company.

IF
THIS AGREEMENT IS ACCEPTABLE TO YOU, PLEASE SIGN BELOW ON OR AFTER THE SEPARATION DATE AND RETURN
THE ORIGINAL TO THE COMPANY’S SENIOR VICE PRESIDENT OF HUMAN RESOURCES AT 701
FIRST AVENUE, SUNNYVALE, CALIFORNIA 94089 BY 5:00 P.M. ON [INSERT DATE 21 DAYS FROM THE SEPARATION DATE].

	
  By:

  	
   

  	
   

  	
  Date:

  	
   

  	
  , 20

  	
   

  	
   

  
	
   

  	
  Daniel L.
  Rosensweig

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 B-2Exhibit
10.1

MediaZone Services Agreement

MEDIAZONE
SERVICES (INCLUDING MEDIAZONE SOCIAL TELEVISION)

AGREEMENT

THIS MEDIAZONE SERVICES (INCLUDING MEDIAZONE SOCIAL TELEVISION)
AGREEMENT (“Agreement”) is made and entered into as of this 10/4, 2006, by and
between MediaZone.com Inc, a California corporation with offices at 1 Circle
Star Way, Third Floor, San Carlos, CA 94070 (“Company”) and Watchit Media, Inc.
a Delaware corporation with offices at 3485 W. Harmon Ave. Las Vegas, Nevada
89103 (“Content Provider”) (collectively the “Parties”).

BACKGROUND

A.  Company carries on business as a
global provider of high quality video/audio on demand and streaming platforms
and services, and also operates broadband content services which are accessible
at various worldwide web sites on the Internet (the “Company Web Sites”). Company
currently provides the following services which enable the distribution of
digital content to. authorized end users: Social Television Channel, VOD
Service and the E-Commerce Upsell Link (the “MediaZone Services”).

B.   Content Provider is in the
business of, among other things, distributing and licensing media assets, and
holds the content distribution rights to certain content as described more
fully in Exhibit A attached hereto (“Content”).

C.   Content Provider wishes to
utilize, and Company is willing to provide, one or more of the MediaZone
Service(s) as specified in Exhibit A in connection with the distribution of the
Content, and Content Provider, as the sole and exclusive owner of, or as the
holder of the requisite legal right to distribute, such Content, desires to
license such Content to Company, all on the basis of and subject to the terms
and conditions of this Agreement.

In consideration
of the promises and the mutual covenants contained in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

1.   Definitions.

In addition to those terms defined either in the body
of this Agreement or in the Memorandum of Terms in Exhibit A hereto, the
following capitalized terms shall have the following meanings where used in
this Agreement:

“Client Application” - a client
application developed by Company that provides a secure, peer-to-peer streamed digital
television experience combined with social Interactivity and which is delivered
via the Internet;

“E-Commerce Upsell
Link” - an upsell link
created by the Company which is associated with specific media Content and
which directs traffic to a third-party website for e-commerce sale of goods or
services;

“Internet” - the global collection of interconnected
computer networks utilizing TCP/IP protocols including the worldwide web but
excluding, for the avoidance of doubt, the use of any closed proprietary
network for delivery to user group;

 1
 

 

“Internet Protocol Television* (“IPTV”) - the
transmission of a program, channel and/or service to a user group utilizing the
IP protocol and a closed proprietary network where typically the operator
controls the physical pipes and infrastructure;

“Net Video
Advertising Revenue” - the
gross revenue actually collected from the sale of video advertising inserted in
the video Content distributed by means of the Selected MediaZone Services, less
any applicable taxes, standard agency commission, any standard industry levies,
refunds and chargebacks, and any other third party costs including costs in
respect of distribution, syndication, production, transmission, hosting,
storage, bandwidth, insertion and related costs;

“Net
Branded Entertainment Revenue” - the
gross revenue actually collected from the sale of branded entertainment
integrated with video Content, including but not limited to sponsorship,
character integration, storyline integration, on-air brand mentions, product
placement, co-marketing, co-branding, and co-promotional opportunities, in
connection with the Selected MediaZone Services less any applicable taxes,
standard agency commission. refunds and charge backs, any standard industry
levies and any other third party costs including without limitation costs in
respect of distribution, syndication, production, transmission, hosting,
storage, bandwidth, insertion and related costs;

“Net Content Revenue”- the gross retail sales revenue
actually collected generated from the distribution of video Content by means of
the Selected MediaZone Services less all applicable taxes, refunds and
chargebacks, and all of Company’s third party costs including without
limitation costs in respect of distribution, syndication affiliate fees,
production, transmission, credit card transactional charges, hosting, encoding,
storage and bandwidth;

“Online Television” - the
transmission of a program, channel or other video content and/or social
interactive service by means of an “open” system of television delivery over
the internet that is based on open Web standards and which is intended for
display on any form of viewing device;

“Social
Television Channel” - a television-like video experience with the
interactive features found online which utilizes the Client Application, The
Social Television Channel is assembled from distinct full-length programs,
short clips/highlights and promotional/advertising programs, and is streamed as
a 24/7 feed. It may be used to create branded entertainment channels for
specific target demographics;

“Video on
Demand Service” (“VOD Service”) -
a video-on-demand service which enables the download of paid or free
downloadable media content, delivered via the Websites and/or the Social
Television Channel on a pay-per-view (PPV) or rental, subscription and/or paid
or free ad-supported download basis.

2.    Provision of MediaZone Services
and License Grant.

A.    Subject to
the terms and conditions of this Agreement:

·       Company undertakes to provide to Content Provider one or more MediaZone
Services as described in Exhibit
A (the “Selected MediaZone Services”); and

·       Content Provider hereby grants to Company and Company hereby accepts a
non­ exclusive, worldwide right and license, including the right of sublicense,
distribution and syndication, during the Term, to perform such acts in
connection with the Content as are

 2
 

 

necessary
for the Selected MediaZone Services . The foregoing license specifically
includes but is not limited to the right for Company to use, edit, translate,
subtitle in any language, digitize, localize, encode, reproduce, distribute,
broadcast, transmit, publish, publicly perform and display, archive, store and
syndicate the Content, alone, in part, or as part of a bundled package with
other products, via any means now or hereinafter in existence (including,
without limitation, by means of physical delivery over the Internet, including
without limitation digital audio transmission and streaming content and Online
Television - a local area network, IPTV, and/or mobile and wireless networks
and devices through the Territory whether such means, forms and/or media exist
now or in the future (and irrespective of whether such means, forms and/or
media are currently foreseeable) for purposes of offering the Content to
authorized end users (“End Users”), in any portion, or its entirety, offer or
provide access to the Content on or through the Company Web Sites and/or such
other web sites as determined by Company, allow End Users to download, store
and copy for non-commercial purposes the Content, incorporate the Content in
Company’s advertisements and promotions and display advertisements in
connection with any display of the Content and to issue sublicenses to enable
syndication partners to do the same (collectively, “Use”).

B. Content Provider hereby
grants to Company a non-exclusive, world-wide right and license to use Content
Provider’s trademarks, service marks or trade names (“Marks’) required in
connection with Company’s Use of the Content. Company agrees to furnish Content
Provider, from time to time as requested, such documentation as reasonably
requested by Content Provider concerning Company’s Use of the Marks. Any use of
such Marks by Company shall inure to the benefit of Content Provider and
Company shall not knowingly take any action that is inconsistent with Content
Provider’s ownership thereof.

3.    Compensation and Payment.

A. In consideration of the provision of the Selected MediaZone Services
by Company and in consideration of the Content license granted by Content
Provider hereunder, the parties shall pay the following fees as specifically
set forth in Exhibit A (the “Fees”):

A. 1 Set
Up and Maintenance Fees

Content Provider shall pay
Company the set up and maintenance fees as specified in Exhibit A in respect of
each Social Television Channel;

A.2 Share of Net Content
Revenue. Net Advertising Revenue and Net Branded Entertainment Revenue

Each of Content Provider and
Company shall pay the other the share of such revenue as specified in Exhibit
A; and

A.3 E-commerce Referral Fee

Content Provider shall pay
Company the referral commission as specified in Exhibit A in respect of the
E-Commerce Upsell Link.

B. The Fees shall be calculated on a quarterly calendar basis (the
“Accounting Period”). Each of Company and Content Provider shall provide the
other with a written account of the Fees owed to such party as applicable for
each Accounting Period no later than thirty (30) days after the termination of
the preceding full quarterly period (i.e., the period commencing on the first
(1st) day of January, April, July and October except that the first and last
calendar periods may be shorter, depending on the effective and termination
dates of this Agreement).

 3
 

 

C.    All fees payable hereunder shall be based on the on the oanda.com
quoted interbank exchange rate on the date on which such payment is due (or if
oanda.com ceases to exist or to provide foreign exchange quotations, then
another recognized currency converter website). All payments shall be made in
U.S. currency by check drawn on a U.S. bank and mailed to the address provided
herein, unless otherwise agreed in writing between the parties.

D.   Each party will maintain accurate books and records with respect to the
calculation of all payments due under this Agreement. Each party shall have the
right, not more than once annually and upon reasonable notice to the other
party, to have an auditor from an accounting firm mutually agreeable to the
parties inspect the other party’s books and records with respect to the subject
matter of this Agreement; provided, however, such auditor executes an agreement
of confidentiality in a form reasonably acceptable to the audited party. The
results of any audit may not be disclosed to any third party without the
written consent of the audited party, except where such disclosure is made
pursuant to a court order or the order of any competent government or
regulatory body.

E.    In the event that such inspection reveals an underpayment by the
audited party of the actual Fees owed to the Company or the Content Provider as
applicable for any Accounting Period, the audited party shall pay the amount of
the underpayment within thirty (30) days of receipt of notice of any undisputed
amount owed, If such underpayment is in excess of ten percent (10%) of the
amount owed for any Accounting Period, then the audited party shall also reimburse
the auditing party for the cost of such audit.

F.  If Content Provider disputes in good faith
the terms of an invoice issued by Company, Content Provider shall raise such
dispute with Company and shall provide details of the basis for its dispute
within 45 days of the Invoice date, failing which Content Provider shall be
deemed to have waived its right to dispute such invoice.

G.  Content Provider acknowledges that:

·    Company makes no representations nor gives any warranty or undertaking
that any particular level of gross receipts or revenue share will be achieved;
and

·    Company reserves the right to issue refunds and charge backs to End
Users, advertisers and/or agencies without Content Provider’s knowledge, if
deemed appropriate by Company in its reasonable determination.

4.
Delivery of Content

A.   Content Provider will have sole responsibility for providing to
Company, at its own expense, all Content in conformance with the description
and technical specifications set forth in Exhibit B attached hereto. Company
shall perform final quality assurance and other error testing. In the event
Company testing determines, at Company’s sole discretion, any quality correction
in the Content is required to meet the specifications, Content Provider shall
resubmit to Company, within five (5) days of Company’s request, Content
conforming to the requirements provided in writing by Company. In the event
that Content Provider fails to deliver the Content in conformance with this
Section 4(A), Company may terminate this Agreement immediately upon notice to
Content Provider.

B.   Content Provider shall, at its sole cost and expense, obtain any and
all necessary consents and licenses relating to Company’s and the End Users’
use of the Content under this Agreement. Content Provider will provide any
intellectual property registrations, licenses or other evidence of rights
relating to the Content as requested by Company.

 4
 

 

C.    All risk of loss for the Content will remain with Content Provider
prior to acceptance by Company of the Content at the location set forth in
Exhibit A. All costs in connection with the manufacture and delivery of the
Content, including the cost of any insurance, will be borne exclusively by
Content Provider.

D.    Company shall have the right, at its sole discretion, to withdraw from
provision to End Users any Content which fails to conform to Company’s rating
standards, as determined solely by the Company and/or which otherwise fails to
comply with the provisions of this Agreement. No Fees shall be paid to Content
Provider for any such withdrawn Content.

5.   Marketing and Hosting.

A.  Company and Content Provider agree to
cooperate in, and share the cost and expense of marketing the Content as
further set forth on Exhibit C hereof.

B.   Company will, at Company’s sole discretion,
be responsible for the hosting, storage and management of the Content. Nothing
herein creates any liability on the part of Company for any interruptions and
errors which may occur from time to time as a result thereof.

C.   Content Provider acknowledges that Company
does not guarantee continuous, uninterrupted or secure operation of and/or
access to the Selected MediaZone Services, and that the operation of the
Selected MediaZone Services and the Websites may be interfered with by numerous
factors outside Company’s reasonable control.

6.   Ownership.

A.   Except as provided hereunder, Content
Provider shall retain all worldwide right, title and interest in and to the
Content (including, but not limited to, ownership of all copyrights and other intellectual
property rights therein), as well as all right, title and interest in and to
its Marks worldwide, including any goodwill associated therewith, subject to the
license granted to Company under this Agreement.

B.    Company and/or its partners and affiliates
will retain all worldwide right, title, and interest in and to all Company Web
Sites, the Client Application and the MediaZone Services (including, but not limited
to, ownership of all copyrights, trademarks, look and feel and other
intellectual property rights therein), as well as all right, title and interest
in and to its trademarks, service marks and trade names worldwide, including
any goodwill associated therewith,

C.    Notwithstanding anything to the contrary
herein, Company shall have sole control over the content, composition, and “look
and feel” of the Company Web Sites, the Client Application and the MediaZone
Services (including the application of trademarks and other intellectual property
rights thereto belonging to Company, its partners or affiliates) and the
Content displayed thereby; provided, however, that Content Provider will
receive attribution, in a form approved by Company, for the Content, including
reference to its Marks.

D.   Company will use commercially reasonable
efforts to provide commercially available digital rights management (“DRM”)
conforming to current industry standards for Content, except where such DRM or
other digital restriction management is prohibited by law or regulation, or where
any Content, as delivered to Company, is subject to DRM or other digital
restriction

 5
 

 

management restrictions or prohibitions.
Content Provider acknowledges that nothing herein guarantees the efficacy or
uninterrupted application of such DRM.

7.    Term.

This Agreement, except as
otherwise provided herein, shall be in full force and effect commencing on the
date of execution by both Parties and shall continue for the period set forth
in the Memorandum of Terms (the “Term”).

8.    Termination, Effect of Termination and Survival.

A.  This Agreement may be terminated by either
Party upon sixty (60) days written notice to the other Party in the event of a
breach of a material provision of this Agreement by the other Party, provided
that in the case of a breach capable of remedy, the breaching Party fails to
cure such breach during such sixty (60) day period;

B.   Upon termination or expiration of this
Agreement, all rights granted herein shall revert to their original owner, and
all payments that have accrued prior to the termination or expiration of this
Agreement will be payable in full within sixty (60) days thereof.

C.   Any termination or expiration of this
Agreement shall be without prejudice to any other rights or remedies a party
may be entitled to hereunder, at law or in equity and shall not affect any
accrued rights or liabilities of either party nor the coming Into or
continuance in force of any provision of this Agreement which is expressly or
by implication intended to come into or continue in force on or after such
termination or expiration.

D.   Company reserves the right to suspend its
performance (or any aspect thereof) under this Agreement at any time for any
act which Company determines in good faith in its sole discretion to be harmful
to the MediaZone Services and/or to any End User, or to be in violation of any applicable
law or regulation.

9.    Confidentiality

A.   Neither Party shall disclose the Confidential
Information, as defined below, of the other Party to any third party (except
its employees, consultants and other contractors) without the written consent
of the disclosing Party. The receiving Party agrees that it will not use Confidential
Information of the disclosing Party for any purpose other than for the
performance of the rights and obligations hereunder during the term of this
Agreement and for a period of five (5) years thereafter, without the prior
written consent of the disclosing Party. The receiving Party further agrees
that Confidential information shall remain the sole property of the disclosing
Party and that it will take all reasonable precautions to prevent any
unauthorized disclosure of Confidential Information by its employees. No
license shall be granted by the disclosing Party to the receiving Party with
respect to Confidential Information disclosed hereunder unless otherwise
expressly provided herein.  For purposes
of this Agreement, “Confidential Information” shall mean any confidential
technical data, trade secret, know-how or other confidential information
disclosed by any Party hereunder in writing, orally, electronically, by drawing
or other form and which is marked or otherwise expressly identified as
confidential at the time of disclosure and/or which would by reason of the nature
of the information and/or the context in which it is disclosed reasonably be
deemed to be confidential.

B.    Notwithstanding anything to the contrary herein, Confidential
Information shall not include information which: (i) is known to the receiving
Party at tine time of disclosure or

 6
 

 

becomes known to the receiving Party without
breach of this Agreement; (ii) is or becomes publicly known through no wrongful
act of the receiving Party or any subsidiary of the receiving Party; (iii) is
rightfully received from a third Party without restriction on disclosure; (iv)
Is independently developed by the receiving Party or any of its subsidiary; (v)
is furnished to any third party by the disclosing Party without restriction on
its disclosure; (vi) is approved for release upon a prior written consent of
the disclosing Party; (vii) disclosed pursuant to judicial order, requirement
of a governmental agency or by operation of law.

C.    Upon the request of the disclosing Party, the receiving Party will
promptly return all Confidential Information furnished hereunder and all copies
thereof.

D.   Except as otherwise set forth In this Agreement, Content Provider will
not make any public statement, press release or other announcement relating to
the terms of or existence of this Agreement without the prior written approval
of the Company, provided that this shall not preclude Content Provider from
publicizing its use of the MediaZone Services without disclosing specific terms
of this Agreement. Except with respect to any lending and financing arrangement,
neither Party shall disclose any of the specific terms of this Agreement to any
third party without the prior written consent of the other Party.
Notwithstanding the foregoing, any Party may disclose information concerning
this Agreement as required by the rules, orders, regulations, subpoenas or
directives of a court, government or governmental agency, after or concurrently
with giving prior notice to the other Party.

10. Warranties and Limitation of
Liability.

A.   Company warrants and represents that: (a)
Company has full right and power to enter into this Agreement; and (b) neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any agreement Company has with
any third party or any constitution, statute, regulation, rule, injunction,
judgment, order, decree ruling, charge or other restriction of any government,
governmental agency, or court to which Company is subject or any provision of
its charter or bylaws.

B.    Content Provider warrants and represents
that: (a) Content Provider has full right and power to enter into this
Agreement; (b) neither the execution and the delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will violate any
agreement Content provider has with any third party or any constitution,
statute, regulation, rule, injunction, judgment, order, decree ruling, charge
or other restriction of any government, governmental agency, or court to which
Content Provider is subject or any provision of its charter or bylaws; (c) all
Content is original or under a valid license to Content Provider with right to
provide the license as set forth hereto to Company; (d) at all times during the
Term of this Agreement it will have obtained and shall continue to hold and
comply with all legal rights and all required authorizations to use, display
and distribute the Content as contemplated by this Agreement (including all
consents, clearances and licenses required from the copyright holders of the Content
and including all necessary music, mechanical transfer and performing rights clearances);
(e) neither the execution and performance of this Agreement nor the
transactions contemplated herein, infringes, misuses, misappropriates or
conflicts with any existing rights, including copyright, patent and
intellectual property rights or other rights or contract rights, licensed to or
from, or owned by. a party other than Content Provider; (e) the Content shall
be in compliance with all applicable laws, rules, regulations, orders and
directions enacted within the applicable jurisdiction or issued from time to
time by any competent regulatory authority with respect to the Content,
including without limitation all applicable privacy laws; (f) neither the Content
nor any part thereof will infringe any intellectual property right, performing
right, right of

 7
 

 

privacy, or other proprietary right or
interest of any third party nor will it constitute a misuse of any confidential
Information of a third party or breach any law or be defamatory, obscene,
libelous or otherwise unlawful within the applicable territory nor shall it
violate any commercial rights to a third party’s name and likeness, or any
privacy or personal rights of any third party; and (g) Content Provider shall
comply with all applicable statutes, regulations and rules related to its
performance hereunder.

C.    Content Provider further represents,
covenants and agrees that it shall not breach or become in default of any of
its contracts, agreements or obligations relating to the licensing of any
know-how, intellectual property, component, software, technology or
documentation required to provide the Content to Company hereunder and that it
shall promptly provide Company with written notice should Content Provider
discover that it is or it anticipates that it may be or it has been notified to
be in breach or in default under such third party agreements. Upon receipt of
such notice, Company may either demand that Content Provider immediately cure
such breach or default, if curable, or Company, at its sole discretion, may
attempt to cure such breach or default on behalf of Content Provider, provided
however, that any attempt by Company to cure such breach or default shall not
release Content Provider from any liability for such breach or default and
Content Provider shall indemnify and hold harmless Company for any and all
claims arising out of Company’s attempt to cure such breach or default. Content
Provider shall repay to Company, Company’s costs and expenses related to the
cure of such breach or default and in addition to any other available remedies
at law or in equity, Company may withhold from any Fees due to Content Provider
the amount of any such costs and expenses not immediately repaid by Content
Provider upon receipt of Company’s demand for such payment.

D.    EXCEPT AS SPECIFIED IN THIS AGREEMENT,
NEITHER COMPANY NOR ITS AFFILIATES OR PARTNERS MAKE ANY WARRANTY OR
REPRESENTATION IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT AND
HEREBY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING ALL IMPLIED WARRANTIES
OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE
REGARDING SUCH SUBJECT MATTER. IN ADDITION TO THE AFOREGOING DISCLAIMER CONTENT
PROVIDER RXPRESSLY ACKNOWLEDGES AND AGREES THAT THE MEDIAZONE SERVICES ARE
PROVIDED ON AN “AS IS” BASIS ONLY AND NEITHER COMPANY NOR ANY OF ITS AFFILIATES
AND/OR PARTNERS MAKES ANY REPRESENTATION OR GIVES ANY WARRANTY THAT SUCH
SERVICES (INCLUDING ANY THIRD PARTY SOFTWARE WHICH IS USED BY THE MEDIAZONE
SERVICES FOR CERTAIN FUNCTIONS INCLUDING BUT NOT LIMITED TO FUNCTIONS SUCH AS ENCODING
AND THE APPLICATION OF SECURITY AND DRM FUNCTIONALITY AND PROTECTIONS) WILL BE
ERROR FREE, WILL ACCOMPLISH THE SPECIFIED INTENT OR THAT THEY WILL PERFORM IN
ACCORDANCE WITH ANY PARTICULAR LEVEL OR STANDARD AS APPLICABLE. NEITHER COMPANY
NOR ITS AFFILIATES OR PARTNERS WILL BE LIABLE TO CONTENT PROVIDER FOR ANY
FAILURE OF THE MEDIAZONE SERVICES AND/OR SUCH THIRD PARTY SOFTWARE OR FOR ANY UNAUTHORIZED
ACCESS TO COPYING OR DOWNLOADING OF THE CONTENT WHICH OCCURS WITHOUT THE
KNOWLEDGE AND/OR CONSENT OF COMPANY AND CONTENT PROVIDER CONTENT PROVIDER
ACKNOWLEDGES FURTHER THAT THE ENTIRE RISK ARISING OUT OF THE USE OF THE
MEDIAZONE SERVICES AND THE CLIENT APPLICATION REMAINS WITH CONTENT PROVIDER,
AND THAT COMPANY MAKES NO REPRESENTATIONS OR WARRANTIES IN RESPECT OF ANY
MATTER IN CONNECTION WITH THE PERFORMANCE OF ANY ACT OR FAILURE TO ACT BY ANY
SYNDICATION

 8
 

 

PARTNER AND COMPANY ASSUMES NO LIABLITY FOR
THE ACTS AND OMISSIONS OF ITS SYNDICATION PARTNERS.

E.  IN NO EVENT SHALL COMPANY, ITS OFFICERS,
DIRECTORS, EMPLOYEES, AFFILIATES, SHAREHOLDERS OR AGENTS BE LIABLE TO CONTENT
PROVIDER OR TO ANY THIRD PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS
OR BUSINESS INTERRUPTION) ARISING OUT OF OR IN ANY WAY RELATED TO COMPANY’S
PERFORMANCE HEREUNDER, EVEN IF APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES
OCCURRING. IN ADDITION IN NO EVENT SHALL COMPANY’S LIABILITY TO CONTENT
PROVIDER AND/OR TO ANY THIRD PARTY IN CONNECTION WITH THIS AGREEMENT EXCEED THE
AMOUNTS ACTUALLY RECEIVED BY COMPANY FROM CONTENT PROVIDER HEREUNDER.

11. Indemnification.

A.   Content Provider shall defend, indemnify and
hold harmless Company, its parent, affiliated companies and partners (including
syndication partners) and their respective officers, directors, employees and
agents and the End Users from and against any and all liabilities, damages costs
and fees (including reasonable attorney’s fees) for any third party claims or actions
arising out of or relating to. (i) any breach of its representations and
warranties made hereunder including without limitation breach of the warranties
with respect to any Content provided by Content Provider to Company pursuant to
this Agreement; or (ii) the failure of the Content(s) to perform to
specification as set forth in Exhibit B; (iii)any third party website which offers
or provides e-commerce sales of goods and/or services to which End Users are
directed by means of the E-Commerce Upsell Link and/or any related e-commerce
transaction; (iv) infringement or
violation of any trademark, copyright, trade secret, patent or other existing proprietary
right with respect to any Content; and (v) allegations of unfair trade
practice, trade libel or misrepresentation based on any promotional material,
packaging, documentation or other materials provided by or prepared by Content
Provider or at Content Provider’s direction with respect to the Content. In the
event that Company is enjoined from distributing and/or otherwise making Use of
any Content due to a claim for which Content Provider is obligated to indemnity
Company pursuant to this Section, at Company’s option, Content Provider shall:
(a) procure a license from any claimants with respect to the challenged Content
that shall enable Company to continue Using the Content; (b) modify the Content
so as to make it non-infringing; or (c) recall any and all affected Content and
pay Company its actual unrecouped expenditures; or (d) cause such injunction to
be vacated or dismissed within sixty (60) days of its issuance so that Company
is able to continue its Use of the Content as set forth herein without
liability. Company reserves the right to remove or otherwise render
inaccessible any illegal, infringing or otherwise inappropriate Content as
determined by Company in its sole discretion.

B.   Company shall defend, indemnify and hold
harmless Content Provider, its parent, affiliated companies and partners and
their respective officers, directors, employees and agents from and against any
and all liabilities, damages, costs and fees (including reasonable attorney’s
fees) for any third party claims or actions arising out of or relating to any
breach of its representations and warranties made hereunder.

C.   If any action shall be brought against one of
the parties hereto in respect to which indemnity may be sought against the
other Party (the “Indemnifying Party” pursuant to Sections 11.A or 11.B the
Indemnifying Party’s obligation to provide such indemnification shall be conditioned
on prompt notice of such claim (including the nature of the claim and the
amount of

 9
 

 

damages and nature of other relief sought)
being provided to the Indemnifying Party by the Party against which such action
is brought (the “Indemnified Party”). The Indemnified Party shall cooperate
with the Indemnifying Party in all reasonable respects in connection with the
defense of any such action at the expense of the indemnifying Party. The
Indemnifying Party may. upon written notice to the Indemnified Party, undertake
to conduct all proceedings or negotiations in connection with the action,
assume the defense thereof, including settlement negotiations in connection with
the action, and shall be responsible for the costs of such defense,
negotiations and proceedings. The indemnifying Party shall have sole control of
the defense and settlement of any claims for which it provides indemnification
hereunder, provided that the Indemnifying Party shall not enter into any
settlement of such claim which involves the imposition of liability on the
Indemnified Party or an admission of wrongdoing by the Indemnified Party
without the prior approval of the Indemnified Party. The Indemnified Party
shall have the right to retain separate counsel and participate in the defense
of the action or claim at its own
expense. In the event that the Indemnifying Party refuses or does not promptly
agree to assume control of the defense and settlement of any claim for which it
must provide indemnification hereunder, then the indemnified Party shall have
sole control of the defense and settlement of such claim, and shall have the
right to enter into any settlement of such claim without the prior approval of
the Indemnifying Party.

12.  Notice.

Any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the Party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to such Party at the address set forth in Exhibit
A, or at such other address as such Party may designate by five (5) days’
advance written notice to the other Party,

13.   Entire Agreement.

This Agreement and the
Exhibits attached hereto and incorporated by reference herein, represent and
contain the entire agreement and understanding between the Parties hereto with
respect to the subject matter of this Agreement, and supersedes any and all
prior oral and written agreements and understandings. No representation,
warranty, condition; understanding or agreement of any kind with respect to the
subject matter shall be relied upon by the Parties except those contained
herein. This Agreement may not be amended or modified except by an agreement
signed by both Parties. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.

14.   Governing Law.

This Agreement shall be construed and governed in all respects by the
laws of the State of California, (excluding principles of conflicts of law), as
if this Agreement were executed in and to be wholly performed in the State of
California. The parties hereby irrevocably waive any and all claims and
defenses either might otherwise have in any action or proceeding based upon any
alleged lack of personal jurisdiction, improper venue, forum non conveniens or
any similar claim or defense. If any dispute arises at any time between the parties
in connection with this Agreement, and the parties are unable to resolve the
dispute within 30 days of the dispute arising, then either party may refer the
matter in dispute for determination by final and binding arbitration conducted
by a single arbitrator in accordance with the commercial arbitration rules of
the American Arbitration Association (“AAA”). The arbitrator shall be appointed
by the relevant appointing authority under the rules of the AAA on the written
request of either party. The arbitration shall be conducted in English in the
State of California.

 10

 

15.   Counterparts.

This Agreement may be
executed in two or more counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same
Instrument This Agreement shall become binding when one or more counterparts,
individually or taken together, shall bear the signatures of both Parties
hereto.

16.   Severability.

If any provision of this
Agreement or the application thereof, shall for any reason and to any extent be
determined by a court of competent jurisdiction to be invalid or unenforceable
under applicable law, the remaining provisions of this Agreement shall be
interpreted so as best to reasonably effect the intent of the Parties hereto.
The Parties further agree to replace any such invalid or unenforceable provisions
with valid and enforceable provisions designed to achieve, to the extent
possible, the business purposes and intent of such invalid and unenforceable
provisions.

17.   Assignment.

Content Provider may assign
this Agreement or the rights and obligations hereunder to an affiliate company
with the prior express written approval of the Company, which approval shall
not be unreasonably withheld or delayed. Company may assign this Agreement and
the rights and obligations hereunder to any third party. This Agreement binds
and inures to the benefit of permitted assigns.

18.   Further Assurances.

Each Party agrees to execute
such further instruments and to take such further action as may reasonably be
necessary to carry out the purposes of and intent of this Agreement.

19.   Waiver.

No failure or delay on the
part of either Party hereto in the exercise of any right hereunder shall impair
such right or be construed to be a waiver of, or acquiescence in, any breach of
any representation, warranty or agreement herein, nor shall any single or
partial or waiver exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing under this
Agreement or the exhibits attached hereto are cumulative to, and not exclusive
of, any rights or remedies otherwise available.

20.   Equitable Relief.

The parties acknowledge that
each Party’s performance of its respective obligations hereunder are of a
unique, unusual, extraordinary and intellectual character which gives them a
special value, the loss of and/or damage to which may not be reasonably or
adequately compensated in damages in an action at law, that a material breach
by either Party of this Agreement may cause the non-breaching Party significant
and irreparable injury and damage and, therefore, that the non-breaching Party
shall be entitled to seek injunctive relief to prevent such injury or damage.

 11
 

 

21.   Attorney’s Fees.

In the event of any
litigation between the parties hereto, the prevailing Party shall be entitled
to recover reasonable attorney’s fees in addition to other relief as the court
may award.

22.   Language.

This Agreement shall be
controlled by the English Language. No version of this Agreement in any
language other than English shall be binding upon the Parties. All
correspondence, notices and documentation, including without limitation,
documentation regarding any dispute regarding this Agreement, shall be in the
English language.

IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound
hereby, have each caused to be affixed hereto its hand on the day indicated.

	
  Company:

  	
  Content Provider Name

  
	
   

  	
   

  
	
  MediaZone.com
  Inc.

  	
  Name:

  	
   Watchit Media, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By.

  	
  /s/ J.R. Lavelle

  	
   

  
	
  Printed Name

  	
   

  	
   

  	
  Printed Name

  	
  J.R. Lavelle

  	
   

  
	
  Title

  	
  VP FINANCE

  	
   

  	
  Title 

  	
  Chief Executive
  Officer

  	
   

  
												

 

 12
 

 

EXHIBIT A

Memorandum of Terms — Year 1

	
  MediaZone.com

  	
   

  	
  Watchit
  Media

  
	
  Address:

  	
   

  	
  Address:

  
	
  1 Circle Star
  Way

  	
   

  	
  655 Montgomery St.,

  
	
  Third Floor

  	
   

  	
  Suite 1000

  
	
  San Carlos, CA
  94070

  	
   

  	
  San Francisco, CA 94111

  
	
   

  	
   

  	
   

  
	
  Attn:

  	
  Mariana
  Danilovic

  	
   

  	
  Attn:

  	
  James R. Lavelle, Chairman & CEO

  
	
  Phone:

  	
  650 801 4419

  	
   

  	
  Phone:

  	
  415 477 9909

  
	
  Fax:

  	
  650 595 8096

  	
   

  	
  Fax:

  	
   

  
	
  Email:

  	
  mariana.danilovic@MediaZone.com

  	
   

  	
  Email:

  	
  james.lavelle@watchitmedia.com

  

 

	
  Selected

  	
   

  	
  1.   Social Television Channel

  
	
  MediaZone

  	
   

  	
  2.   VOD Service

  
	
  Services

  	
   

  	
  3.  E-Commerce Upsell Link

  
	
  Territory

  	
   

  	
   

  
	
  Set-Up
  &

  	
   

  	
  Set Up Fee – one-time fee to
  launch channel of US$    WAIVED....;

  
	
  Maintenance

  	
   

  	
   

  
	
  Fees

  	
   

  	
  Maintenance Fee – monthly fee
  to maintain channel of US$    WAIVED    ,

  

 

	
   

  	
   

  	
  MZ Sale

  	
   

  	
  Content Provider Sale

  	
   

  
	
   

  	
   

  	
  MZ Site

  	
   

  	
  CP Site

  	
   

  	
  MZ Site

  	
   

  	
  CP Site

  	
   

  
	
  Revenue

  	
   

  	
  MZ

  	
   

  	
  CP

  	
   

  	
  MZ

  	
   

  	
  CP

  	
   

  	
  MZ

  	
   

  	
  CP

  	
   

  	
  MZ

  	
   

  	
  CP

  	
   

  
	
  Net Advertising
  Revenue

  	
   

  	
  NA

  	
   

  	
  NA

  	
   

  	
  NA

  	
   

  	
  NA

  	
   

  	
  0

  	
  %

  	
  100

  	
  %

  	
  0

  	
  %

  	
  100

  	
  %

  
	
  Net Branded
  Entertainment Revenue

  	
   

  	
  NA

  	
   

  	
  NA

  	
   

  	
  NA

  	
   

  	
  NA

  	
   

  	
  0

  	
  %

  	
  100

  	
  %

  	
  0

  	
  %

  	
  100

  	
  %

  

 

	
  

  	
   

  	
  MZ Sale

  	
   

  
	
   

  	
   

  	
  MZ Site

  	
   

  	
  CP Site

  	
   

  
	
  Revenue

  	
   

  	
  MZ

  	
   

  	
  CP

  	
   

  	
  MZ

  	
   

  	
  CP

  	
   

  
	
  Net Pay Media
  Revenue

  	
   

  	
  65

  	
  %

  	
  35

  	
  %

  	
  35

  	
  %

  	
  65

  	
  %

  

 

	
  E-commerce

  Referral Fee

  	
  Content Provider shall pay Company a referral
  commission of 20% for e-commerce
  sales/referrals by means of the E-Commerce Upsell Link.

  
	
  Term

  	
  12 months.

  
	
  Description of

  Content

  	
  Watchit Media Network – Network featuring upscale
  entertainment and

  lifestyle from Las Vegas.

  
	
  Content

  Delivery Date

  	
  October 10, 2006

  

 

 13
 

 

Memorandum of Terms — Years 2 and 3

	
  MediaZone.com

  	
   

  	
  Watchit
  Media

  
	
  Address

  	
   

  	
  Address:

  
	
  1 Circle Star
  Way

  	
   

  	
  655 Mcntogomery St.,

  
	
  Third Floor

  	
   

  	
  Suite 1000

  
	
  San Carlos, CA
  94070

  	
   

  	
  San Francisco, CA 94111

  
	
   

  	
   

  	
   

  
	
  Attn:

  	
  Mariana
  Danilovic

  	
   

  	
  Attn:

  	
  James R. Lavelle, Chairman & CEO

  
	
  Phone:

  	
  650 801 4419

  	
   

  	
  Phone:

  	
  415 477 9909

  
	
  Fax;

  	
  650 595 8096

  	
   

  	
  Fax:

  	
   

  
	
  Email:

  	
  mariana.danilovic@MediaZone.com

  	
   

  	
  Email:

  	
  james.lavelle@watchitmedia.com

  

 

	
  Selected

  	
  4.  Social Television Channel

  
	
  MediaZone

  	
  5.   VOD Service

  
	
  Services

  	
  6.   E-Commerce Upsell Link

  
	
  Territory

  	
   

  
	
  Set-Up
  &

  	
  Set Up Fee – one-time fee to
  launch channel of US$   WAIVED....;

  
	
  Maintenance

  	
   

  
	
  Fees

  	
  Maintenance Fee – monthly fee
  to maintain channel US $10,000.per month....

  

 

	
  

  	
   

  	
  MZ Sale

  	
   

  	
  Content Provider Sale

  	
   

  
	
   

  	
   

  	
  MZ Site

  	
   

  	
  CP Site

  	
   

  	
  MZ Site

  	
   

  	
  CP Site

  	
   

  
	
  Revenue

  	
   

  	
  MZ

  	
   

  	
  CP

  	
   

  	
  MZ

  	
   

  	
  CP

  	
   

  	
  MZ

  	
   

  	
  CP

  	
   

  	
  MZ

  	
   

  	
  CP

  	
   

  
	
  Net Advertising Revenue

  	
   

  	
  65

  	
  %

  	
  35

  	
  %

  	
  35

  	
  %

  	
  65

  	
  %

  	
  65

  	
  %

  	
  35

  	
  %

  	
  35

  	
  %

  	
  65

  	
  %

  
	
  Net Branded Entertainment Revenue

  	
   

  	
  65

  	
  %

  	
  35

  	
  %

  	
  35

  	
  %

  	
  65

  	
  %

  	
  65

  	
  %

  	
  35

  	
  %

  	
  35

  	
  %

  	
  65

  	
  %

  

 

	
  

  	
   

  	
  MZ Sale

  	
   

  
	
   

  	
   

  	
  MZ Site

  	
   

  	
  CP Site

  	
   

  
	
  Revenue

  	
   

  	
  MZ

  	
   

  	
  CP

  	
   

  	
  MZ

  	
   

  	
  CP

  	
   

  
	
  Net Pay Media
  Revenue

  	
   

  	
  65

  	
  %

  	
  35

  	
  %

  	
  35

  	
  %

  	
  65

  	
  %

  

 

	
  E-commerce

  Referral Fee

  	
  Content Provider shall pay Company a referral
  commission of 20% for e-commerce
  sales/referrals by means of the E-Commerce Upsell Link.

  
	
  Term

  	
  24 months.

  
	
  Description of

  Content

  	
  Watchit Media Network – Network featuring upscale
  entertainment and

  lifestyle from Las Vegas.

  
	
  Content

  Delivery Date

  	
  October 10, 2006

  

 

 14
 

 

EXHIBIT B

DELIVERY DATES, ENCODING SPECIFICATIONS AND METADATA
REQUIREMENTS

Encoding
Specifications TBD

Metadata
Requirements TBD

MediaZone Encoding Recommendations

To maximize quality,
MediaZone prefers to encode from tape media as close to it’s original as
possible. If media is in digital form AVI, MOV or MPEG2 are preferable.

If we receive media that has
been previously compressed we will transcode the encoded media to our target
format and attempt to maintain quality, but some degradation of the media may
be experienced.

MediaZone currently streams
media at the following specifications:

	
  ·  Audio encoding mode:

  	
  CBR

  	
   

  
	
  ·  Video encoding mode:

  	
  CBR

  	
   

  
	
  ·  Audio Codec:

  	
  Windows Media 9

  	
   

  
	
  ·  Audio Format:

  	
  64 kbps, 44 kHz

  	
   

  
	
  ·  Video Codec:

  	
  Windows Media 9

  	
   

  
	
  ·  Video Bit rate:

  	
  436 kbps

  	
   

  
	
  ·  Video Size:

  	
  320X240

  	
   

  
	
  ·  Frame Rate:

  	
  29.97 fps

  	
   

  
	
  ·  Key Frames:

  	
  8s

  	
   

  
	
  ·  Image Quality:

  	
  75

  	
   

  
	
  ·  Buffer Size

  	
  5s

  	
   

  

 

 15
 

 

EXHIBIT C

MARKETING REQUIREMENTS

1.      MediaZone On-air Integration

a.     On-air Mentions
– at least 4 per 24 hour period

b.     30 second spots – at least 4 per 24 hour period

c.     Other on-air integration – MediaZone/Watchit Segment for the
CES launch to be aired during CES.

2.      MediaZone Social Television On-air Integration

a.     On-air Mentions –two (2) per 24 hour period

b.     30 second spots – two (2) per 24 hour period

c.     Other on-air integration – NA

3.      Integration of MediaZone
Social Television with the Content Provider’s Site – YES

4.      Joint Press Releases – at least one (1) per year

5.      Co-Marketing – Including MediaZone logo in print, TV, online,
mobile, outdoor and other media campaigns – NA

6.      Co-Promotion – Including MediaZone in the co-promotion with events,
five programming, and other channel co-promotional activities – Yes, Inclusion of MediaZone with CES or any
other media, technology, and sports conference prior to CES co-promotional
activities.

 16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}]]