Distribution and Marketing Agreement
Made July 27, 1999
This letter agreement between Nova Development Corporation ("Nova") and all
Serif subsidiaries of Vizacom Inc. located at 0X Xxx Xxxx, Xxxxxxxxx, XX 00000
sets forth the terms under which Vizacom will purchase, and make available by
way of its direct marketing efforts, Nova's Art Explosion 250,000 for Windows
software ("Software").
1. Offer: Vizacom may offer the most recent version of the Software in its
various direct mail pieces and as part of its outbound telemarketing program
worldwide except for Australia, Belgium, Israel, Korea, the Netherlands, Sweden,
Turkey, Japan and such other countries as Nova may exclude from time to time
because of exclusive distribution relationships in those countries.
2. Software Specifications: With the exception of the First Delivery, the
Software may be a flat-pack of Nova's Art Explosion 250,000 for Windows software
(i.e., no chipboard box and certain other modifications) and shall not contain
Print Artist, MGI PhotoSuite or AGFA fonts.
3. Term and Termination: This Agreement shall begin as of the date hereof and
continue for a period of one year ("Term"), after which time Vizacom (i) Shall
take delivery of any outstanding units of the Software required to fulfill its
Minimum Commitment as defined in section 6 and (ii) may sell off any Software
which remains in inventory. Either party may terminate this Agreement for
material breach given 30 days notice to cure and for reasons of the other
party's filing for bankruptcy protection or insolvency.
4. Price. The price shall be twenty-three US dollars ($23.00) per unit of the
Software. Prices are FOB Nova's manufacturing facility in City of Industry,
California or Calabasas, California, in Nova's discretion. Nova shall ship
product to Vizacom's US warehouse or other facility from time to time as
directed by Vizacom using the freight forwarder of Vizacom's choice.
5. Terms. For each shipment, pursuant to Vizacom's Delivery Instructions,
Vizacom shall pay Nova for one-half of its order in advance and the other half
within forty-five (45) days of Nova's shipment of the corresponding order.
Notwithstanding the foregoing, Vizacom may pay for the total amount of its First
Delivery within forty-five (45) days. Interest shall accrue on unpaid balances
at the rate of the lesser of (i) 18% per annum or (ii) the maximum rate
allowable by law.
6. Overall Minimum Commitment. Vizacom shall issue a purchase order to Nova
within seven (7) days of the date hereof for 10,000 units of the Software, which
10,000 units shall constitute Vizacom's "Minimum Commitment" during the Term.
Vizacom shall then from time to time transmit to Nova delivery instructions in
connection with that purchase order for no fewer than 1000 units of the Software
at a time ("Delivery Instructions"). If within seven (7) days of the one-year
anniversary of this Agreement, Nova has not received Delivery Instructions for a
total of 10,000 units, Vizacom shall immediately transmit Delivery Instructions
for the remaining units to Nova, and Nova may at Nova's option nonetheless ship
the shortfall quantity of Software to Vizacom.
7. Sales Projections. Vizacom shall use its best efforts to provide Nova with
delivery projections from time to time.
8. Initial Deliveries. Vizacom will issue Delivery Instructions for 195 units of
the Software ("First Delivery"), specifically, 125 units to Vizacom's US
warehouse and 70 to Vizacom's UK warehouse, which Software will differ from the
specifications set forth in Section 2 in that it will be Nova's ordinary retail
build. Within seven (7) days of the date hereof, Vizacom shall also issue
delivery instructions for no fewer than 1000 units of the Software, in
fulfillment of which Nova will begin shipping the Software pursuant to those
specifications set forth in Section 2.
Distribution and Marketing Agreement
Page2
9. Nova's Duties. Nova shall provide Vizacom with promotional materials and
applicable artwork as requested by Vizacom to aid Vizacom in the development of
the mail piece and use its best efforts to fill orders on a timely basis.
10. Vizacom's Duties. Vizacom shall be solely responsible for development of,
and costs and risks associated with, direct mail advertising, the logistics of
mailing, telemarketing, and fulfillment of orders.
11. Trademark License, Copy Approval Nova hereby grants Vizacom the right to use
its trademarks in the promotion of the Software. Vizacom will give Nova the
opportunity to approve references to the Software made in promoting its offers.
No printing or outbound calls will occur until Nova has approved the piece or
telemarketing script, as the case may be.
12. Returns: Vizacom may, at Vizacom's expense, return Software with actual
physical defects in exchange for replacement product sent back at Nova's
expense. Aside from this limited right to return, all sales are final.
13. Names: As further consideration for the Software, Vizacom shall on a
quarterly basis, or at such other times as Nova may reasonably request, provide
Nova with the names, addresses and e-mail addresses of all buyers of the
Software, in text format on disk. Knowing that a degree of programming will be
required to facilitate this, Vizacom's MIS department will immediately begin
work on setting up such reports so that they can be produced as soon as possible
and in advance of the first quarter's delivery.
14. Limitation of Rights. The rights conveyed in this Agreement are limited to
distribution and marketing rights as set forth herein. No right to manufacture
is granted herein, and no right, title or interest in or to the proprietary
rights in the Software shall vest in Vizacom.
15. Limitation as to Customer. Vizacom shall use its best efforts to sell the
Software only to end-using consumers. No "sideways sales" are permitted (i.e.,
no sales to resellers). Without in any way limiting Nova's other remedies in the
case of such a breach, Vizacom shall pay Nova liquidated damages of one hundred
dollars ($100) per unit of Software sold to resellers.
16. Confidentiality: Terms of this Agreement shall be held in strict
confidence by the parties for a period of 3 years of the date hereof.
17. Miscellaneous: Nova and Vendor are independent contractors; no partnership
or joint venture has been created. This Agreement shall be binding upon and
inure to the benefit of each of the parties to this Agreement and their
respective legal successors and assigns. This Agreement shall be governed by the
laws of the State of California.
In witness whereof, the parties to this Agreement have executed this Agreement
as of the date first set forth above.
Signed Date
--------------------------------- -------------------
for and on behalf of Nova
Signed Date
--------------------------------- -------------------
for and on behalf of Vizacom
