Many of you have been waiting patiently for Palladium to post it's policy about the use of
Palladium intellectual property on the Internet. We at Palladium appreciate your patience.

Since early summer, we've been considering a number of competing (and related) issues,
trying to come up with a policy that is fair to all concerned; gamers, the industry, and
copyright holders alike. We at Palladium (like most of you) wear all of these hats at one time
or another; some of the time we're creators who are concerned with legitimate protection of
the "sweat of our brow". Other times, our greatest concern is the fun of playing. Balancing
these interests, we've come up with a policy (please see below). We hope that this policy is
acceptable to all of you, and that it will help all of us wear all of the hats we need to in this
industry.

RIGHTS AND LICENSES

Palladium is happy to have individuals play Palladium games and supplements on the net or
other on line services, without royalty, so long as the play is for personal enjoyment and not
financial gain.

Palladium is also happy to have you create derivative works of Palladium text, so long as
these derivative works are used solely on the net or other on line services for personal fun.

We cannot grant permission to create derivative works, or to take any of our other
registered Copyright rights, for commercial purposes or financial gain, unless there is a
separate, written agreement between you and Palladium.

Please note that permission to play on-line does not include permission to down-load hard
copies of Palladiums copy-written materials. If you want a hard copy of a Palladium product,
buy the book! After all, if people stop buying the books, we won't be able to pay our writers
and artists to keep creating, and there will be nothing for anyone!

Palladium and its agents cannot be responsible for any violation of other people's rights
which you might commit while using Palladium products. For example, if someone combines a
Palladium product with another creator's product, thereby infringing the copyright of the
other creator, Palladium is not responsible. In such a case, it is only fair that the person who
commits such a violation is solely responsible for their actions. In addition, the violator is
also responsible for any damages that Palladium may suffer because of the violation.

To implement the policies described in the three paragraphs above, Palladium needs to
formally grant you a "limited license" to use Palladium text. Please consider this paragraph
your formal "limited license" to use Palladium copy-written text and trademarks solely for
your own personal use and enjoyment on the net and other on-line services. In addition,
Palladium grants you a "limited license" to create works which are derivative of Palladium
copy-written text, so long as the resulting "derivative works" are used only on the net and
other on-line services, for personal fun, and NOT for financial gain.

In order to keep this "limited license", you must always use proper Palladium notices (see
section below on "Notices"), and must also comply with all Palladium policies (including but
not limited to policies about liability for your actions on the net and other on-line services)
which we post.

We're going to keep an eye on how our policies are being received and followed. We also
expect some of you to raise issues about our net policies which we should think about. In
short, we expect our net policy to evolve. Palladium therefore reserves the right to change or
even revoke this limited license. Palladium also reserves all rights which are not specifically
granted above.

DERIVATIVE WORKS

Above, we've stated our policies about your use of Palladium intellectual properties. A
related policy involves Palladium's use of works created by you using Palladium characters,
settings, etc.

Under the U.S. Copyright Act, these are "Derivative Works" which, legally we have a right to
prevent (take a look at Section 106 of the Copyright Act). Despite our rights, we are willing
to allow the creation of derivatives of our text strictly for personal use (though not for
financial gain).

In addition, we are not interested in owning the derivative works which you create strictly
for fun and personal use on-line. Unlike some other gaming companies, we are not going to
exploit these derivative works merely because you posted them in a certain place. Rather, if
we are interested in any work which you post, we will negotiate with you to acquire rights. If
we reach an agreement with you, fine. If we don't, you can still use the derivative work for
you personal, non-financial purposes (obviously, you still can't use or license a derivative
work for financial gain in any way, under the Copyright Act).

We sincerely hope that Palladium's new Net policy leads to hours of great gaming on net for
all of us. Let us know what you think!

NOTICES

Because of the way Copyright and Trademark laws work, anyone who up-loads any Palladium
material must include proper Copyright and Trademark notices.

COPYRIGHT NOTICES

For all text and other works covered by the U.S. Copyright Act, insert a copyright notice like
the one that appears in the front of the book. For instance, a proper copyright notice for
Rifts¨ would be:

© 1983, 1987, 1988, 1990 Kevin Siembieda; © 1995 Palladium Books, All rights reserved
world wide. No part of this work may be reproduced in part or whole, in any form or by any
means, without permission from the publisher. All incidents, situations, institutions,
governments and people are fictional and any similarity to characters or persons living or
dead is strictly coincidental."

This kind of notice must be included at least once any time you are uploading any derivative
Palladium material.

TRADEMARK NOTICES

For any use of our trademarks (whether registered or unregistered), the proper notice
should be used whenever the mark is used. There are two (2) kinds of trademark notices. The
simplest type is the ¨ for registered trademarks and the (ª) for unregistered trademarks.
These "simple" notices should be used every time a Palladium mark is used, whether in a title
or text.

The ¨ is used each time a registered mark is used, and the ª is used each time an
unregistered mark is used (see below for lists of Palladium registered and unregistered
marks).

It is sometimes confusing as to when a ¨ or a ª should be used and when it does not have to
be used. If in doubt, use the notice.

In addition to the "simple" notices (see above), you should use a full notice (see below) at the
beginning of any derivative work.

The most common "full" trademark notices are as follows:

FOR REGISTERED TRADEMARKS:

"(insert name of trademark) ¨ is a registered trademark owned and licensed by Kevin
Siembieda and Palladium Books, Inc."

For example, here is a proper trademark for Rifts¨:

"Rifts¨ is a registered trademark owned and licensed by Kevin Siembieda and Palladium
Books, Inc."

Palladium's other registered marks are:

Palladium Books¨, Mechanoids¨ The Mechanoid Invasion¨, Rifts¨, Megaverse¨, RECON¨, and
After the Bomb¨.

FOR OUR UNREGISTERED TRADEMARKS

The proper notice for an unregistered mark is (ª), placed immediately following the mark.

"(insert name of trademark)ª is a trademark owned and licensed by Kevin Siembieda and
Palladium Books, Inc."

For example:

"Cyber-Knight ª, Coalition States ª, and Triax ª are trademarks owned and licensed by Kevin
Siembieda and Palladium Books, Inc."

Our unregistered trademarks include:
Nightbaneª, Nightlandsª, Heroes Unlimitedª, Villains Unlimitedª, Beyond the Supernaturalª,
Boxed Nightmaresª, Ninjas & Superspiesª, Mystic Chinaª, Palladium Fantasy RPGª, Triaxª,
Mindwerksª, Vampire Kingdomsª, The Juicer Uprisingª, Phase Worldª, Wormwoodª,
Psyscapeª, Mega-Damageª, S.D.C.ª, I.S.P.ª, P.P.E.ª, SAMASª, Splugorthª, Cyber-Knightª,
Glitter Boyª, Juicerª, Mind Melterª, Psi-Stalkerª, Coalition Statesª, Northern Gunª, Erin
Tarnª, Naruniª, ... and other names and titles.

We hope this information about intellectual property and notices is useful. Please let us know
what you think.

Maryann and Kevin Siembieda, and Larry Jordan, Esq.