DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (this "AGREEMENT") is entered into as of May 1, 2000
(the "EFFECTIVE DATE") by and between XXXXXXXXXX XXX., a New York corporation
with offices at 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("SCHOLASTIC") and STAR
E-MEDIA CORPORATION, a Nevada corporation with offices at 000 Xxxxxxxxxx Xxxxx,
Xxxxx X, Xxxxxx, Xxxxxxxxxx 00000 ("DISTRIBUTOR").
RECITALS
WHEREAS, Scholastic designs, develops, manufactures, markets and distributes
certain multimedia and interactive software in various formats and for various
platforms.
WHEREAS, Distributor markets and distributes certain multimedia and interactive
software for selected platforms through its channels of distribution, including
without limitation the Permitted Channels, as defined herein.
WHEREAS, Distributor desires the right to market, distribute and sell the
Scholastic software described herein and Scholastic desires to grant Distributor
the right to so market, distribute and sell such software on the terms and
conditions set forth herein.
THEREFORE, in consideration of the promises, agreements, covenants, representa-
tions and warranties herein contained, Scholastic and Distributor agree as
follows:
1. CERTAIN DEFINITIONS. For purposes of this Agreement, the following terms
have the indicated meanings:
1.1 "CD-ROM" means Compact Disc-Read Only Memory.
1.2 "DERIVATIVE WORK" means: (a) without limitation, any computer program,
work product, service, improvement, supplement, modification, alteration,
addition, revision, enhancement, new version, new edition, remake, sequel,
translation, adaptation, design, plot, theme, character, story line, concept,
scene, audio-visual display, interface, element or aspect, in any medium,
format, use or form whatsoever, whether interactive or linear and whether now
known or unknown (including but not limited to sound recordings, phono records,
computer-assisted media, games, books, magazines, periodicals, merchandise,
animation, home videos, radio, motion pictures, cable and television), that is
derived in any manner, directly or indirectly, from any Scholastic Property or
Product, or any part or aspect of any thereof, or that uses or incorporates and
Scholastic Property or Product, or any part or aspect of any thereof; (b) any
"derivative work" of any Scholastic Property or Product, or any part or aspect
of any thereof, as defined in the Copyright Law of the U.S., Title 17 U.S.C.
(101 et seq. (the "COPYRIGHT LAW"); and (c) any material or documentation
related to any of the foregoing.
1.3 "SCHOLASTIC AFFILIATES" means Scholastic and all of its related,
affiliated and subsidiary companies.
1.4 "SCHOLASTIC PROPERTIES" means, with respect to any product, Translated
Product and collectively with respect to all Products and Translated Products
(as the context may require), all scenes and characters (together with their
likenesses and names) and designs (including without limitation marks and
logos), and all art, animation, video and other audiovisual material, sound,
music, and text (including without limitation fonts), owned or licensed by
Scholastic which are depicted or used in such Product, Products, Translated
Product or Translated Products.
1.5 "DOLLARS" and the sign "$" each mean lawful money of the U.S.
1.6 "END USER" means any third party that acquires a Translated Unit for
personal use and/or in classroom use (without a view to resell, lease, license
or otherwise further commercially distribute such Unit or any component thereof)
from Distributor.
1.7 "FLOPPY DISK" means a 3.5 inch disk capable of storing computer data.
1.8 "INTELLECTUAL PROPERTY RIGHTS" means any and all (by whatever name or
term known or designated) tangible and intangible and now known or hereafter
existing (a) rights associated with works of authorship throughout the universe,
including but not limited to copyrights (including without limitation the sole
and exclusive right to prepare "derivative works" (as defined in the Copyright
Law) of the copyrighted work and to copy, manufacture, reproduce, distribute
copies of, modify, publicly perform and publicly display the copyrighted work
and all derivative works thereof), moral rights (including without limitation
any right to identification of authorship and any limitation on subsequent
modification) and mask-works, (b) rights in and relation to the protection of
trademarks, service marks, trade names, goodwill, rights in packaging, rights of
publicity, merchandising rights, advertising rights and similar rights, (c)
rights in and relating to the protection of trade secrets and confidential
information, (d) patents, designs, algorithms and other industrial property
rights and rights associated therewith, (e) other intellectual and industrial
property and proprietary rights (of every kind and nature throughout the
universe and however designated) relating to intangible property that are
analogous to any of the foregoing rights (including without limitation logos,
character rights, "rental" rights and rights to remuneration), whether arising
by operation of law, contract, license or otherwise, (f) registrations,
applications, renewals, extensions, continuations, divisions or reissues thereof
now or hereafter in force throughout the universe (including without limitation
rights in any of the foregoing), and (g) rights in and relating to the sole and
exclusive possession, ownership and use of any of the foregoing throughout the
universe, including without limitation the right to license and sublicense,
franchise, assign, pledge, mortgage, sell, transfer, convey, grant, gift over,
divide, partition and use (or not use) in any way any of the foregoing now or
hereafter (including without limitation any claims and causes of action of any
kind with respect to, and any other rights relating to the enforcement of, any
of the foregoing).
1.9 "PERMITTED CHANNELS" means Trade Channels and School Channels. As
used herein: "Trade Channels" means wholesalers, jobbers, independent sales
representatives, direct mail, telemarketing, catalog sales, retail chains and
independent retailers where software is sold; "School Channels" mean any and all
private schools, public schools, religious schools, school districts, school
boards, and state or local departments of education, including any educational
use by handicapped and/or disabled students, community centers, neighbor-
hood houses, hospitals or other health institutions, after school programs,
libraries, juvenile houses or halls, camps or camping organizations, direct mail
to school, and catalog excluding without limitation the following which shall be
exclusively reserved for Scholastic and Scholastic Affiliates: all United States
Department of Defense, U.S. Embassy dependent schools and programs, American
schools and programs, International schools and programs and U.S. Military
schools wherever located; Scholastic Book Clubs, Scholastic Software Clubs and
Scholastic-branded Fairs and Scholastic Affiliates within the Territory. As used
herein: "Scholastic Book Club" means through the use of Scholastic-branded
flyers; "Scholastic Software Club" means through the use of Scholastic-branded
flyers; and Scholastic-branded Fair" means Scholastic-branded fairs.
1.10 "PRODUCT OR PRODUCTS" means the software products developed by or for
Scholastic listed on Exhibit A attached hereto.
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1.11 "TRANSLATION OR TRANSLATED" means all revisions, modifications, dele-
tions, additions, localizations, translations and/or adaptations of the Products
and Units in the Spanish language and appropriate to the customs of Brazil,
Colombia, Venezuela, Peru, Argentina, Costa Rica, Guatemala, El Salvador, Mexico
and Spain and translated by Distributor under this Agreement.
1.12 "TRANSLATED PRODUCT OR TRANSLATED PRODUCTS" means the Translated
version of the Products in the Spanish language only and translated by
Distributor under this Agreement.
1.13 "UNIT" means a single, shrink-wrapped package of a Product containing
one CD-ROM or Floppy Disk, as applicable, and its related User Documentation.
1.14 "TRANSLATED UNIT" means a single, shrink-wrapped package of a Trans-
lated Product containing one CD-ROM or Floppy Disk, as applicable, and its
related Translated User Documentation.
1.15 "USER DOCUMENTATION" means, with respect to any Product and collect-
tively with respect to all Products (as the context may require), (a) the user's
manual for such Product, in booklet form, which shall be printed "four color" on
the front and back and in black and white on all text pages; (b) the end user
license agreement and related warranties and disclaimers for such Product, which
in Scholastic's sole discretion, shall be included either as a part of the
user's manual for such Product or in a separate black and white booklet (the
"End User License"); (c) other information not otherwise included in the user's
manual or End User License for such Product further instructing End Users in the
use and operation of such Product (such as an errata sheet, technical notes, and
additional warranties and disclaimers and customer support information); (d) all
registration cards and other related materials for such Product; (e) a separate
sticker, blow-in insert, or pre-printed sleeve, bag or envelope, in each case
advising of the contents of the End User License so that the same may be read
without opening the sealed package containing the CD-ROM or Floppy Disk for such
Product; (f) promotional inserts (such as catalogs, brochures or flyers) and
such other documents included with such Product as Scholastic may provide or
approve in its sole discretion; (g) all packaging and label artwork and
information.
1.16 "TRANSLATED USER DOCUMENTATION" means, with respect to any Translated
Product and collectively with respect to all Translated Products (as the context
may require), (a) the user's manual for such Translated Product, in booklet form
, which shall be printed "four color" on the front and back and in black and
white on all text pages; (b) the end user license agreement and related
warranties and disclaimers for such Translated Product, which, in Scholastic's
sole discretion, shall be included either as a part of the user's manual for
such Translated Product or in a separate black and white booklet (the
"Translated End User License"); (c) other information not otherwise included in
the user's manual or Translated End User License for such Translated Product
further instructing End Users in the use and operation of such Translated
Product (such as an errata sheet, technical notes, additional warranties and
disclaimers and customer support information); (d) all registration cards and
other related materials for such Translated Product; (e) a separate sticker,
blow-in insert, or pre-printed sleeve, bag or envelope, in each case advising of
the contents of the Translated End User License so that the same may be read
without opening the sealed package containing the CD-ROM or Floppy Disk for such
Translated Product; (f) promotional inserts (such as Translated Product as
Scholastic may provide or approve in its sole discretion; (g) all packaging and
label artwork and information.
1.17 "TERMINATION DATE" means the date upon which any termination of this
Agreement, for any reason whatsoever (including expiration in accordance with
the terms hereof due solely to the passage of time), becomes effective.
1.18 "TERRITORY" is Brazil, Colombia, Venezuela, Peru, Argentina, Costa
Rica, Guatemala, El Salvador, Mexico and Spain (excluding any non-contiguous
possessions, territories, dependencies or protectorates of such countries.)
1.19 "TRANSLATED UNIT ROYALTY OR TRANSLATED UNIT ROYALTIES", for each
Translated Product, means the royalty paid by Distributor to Scholastic for each
Translated Unit sold by Distributor thereof hereunder, determined in accordance
with Section 7.1 and Exhibit A hereof.
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1.20 "WORK PRODUCT" means any and all results or proceeds of the services of
Distributor, and of all persons and entities rendering services, in connection
with any promotional materials, Translated Promotional Materials and/or
Translations from the inception of Distributor's and such persons' or entities'
efforts with respect thereto, in each case including all physical embodiments
thereof, (as such term is defined in Section 6.1 hereof) and each and every
constituent portion and element thereof (including without limitation all
original designs, artwork, characters and slogans) produced, by or on behalf
of Distributor. Notwithstanding the foregoing, Distributor and Scholastic
expressly intend to exclude from this definition of Work Product, Distributor's
proprietary trademark and logo which pre-exist this Agreement.
1.21 "TRANSLATED STORYLINE SCRIPTS" means the Spanish-language storyline
scripts supplied to Distributor by Scholastic for the following Products:
Chato's Kitchen and Why Mosquitoes Buzz in People's Ears.
1.22 "TRANSLATED JEWEL-CASE UNIT" means a single, shrink-wrapped package in
a jewel case of a Translated Product containing one CD-ROM or Floppy Disk, as
applicable, and the Translated User Documentation without the box packaging.
1.23 "SCHOLASTIC PURCHASE PRICE", for each Translated Product, means the
price at which Scholastic purchases a Translated Unit or a Translated Jewel-Case
Unit thereof hereunder, determined in accordance with Section 7.7 and Exhibit B
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hereof.
1.24 "SCHOLASTIC ROYALTY OR ROYALTIES", for each Translated Unit or Trans-
lated Jewel-Case Unit, means the royalty paid by Scholastic to Distributor for
each Translated Unit or Translated Jewel-Case Unit sold by Scholastic thereof
hereunder, determined in accordance with Sections 3.5 and 7.8 and Exhibit B
hereof.
1.25 "SCHOLASTIC TERRITORY" means worldwide excluding Brazil, Colombia,
Venezuela, Peru, Argentina, Costa Rica, Guatemala, El Salvador, Mexico and
Spain.
1.26 "TRANSLATED MASTER DISCS" means duplication-ready, compact disc-read
only memories or other optical media, whether now existing or hereinafter
devised, containing data that can be read, accessed or manipulated by optical or
laser technologies bearing the Translated version of the Product titles
identified in Exhibit A.
1.27 "TRANSLATED MASTER PRINT COMPONENTS" means camera-ready Translated user
Documentation and labels for the Translated Master Discs for the Product titles
identified in Exhibit A hereof.
1.28 "SCHOLASTIC TRANSLATION OR TRANSLATIONS" means the Spanish-language
version of the Units that has been translated by Scholastic and supplied by
Scholastic to Distributor under this Agreement.
2. TERM
2.1. TERM. The term of this Agreement shall commence upon the Effective
Date (provided that it has been executed and delivered by both parties hereto),
and shall continue until March 31, 2002 unless terminated earlier in accordance
with Section 16.1 or Section 16.2 hereof (the "TERM").
2.2. NO RENEWAL. Neither party shall be under any obligation to renew or
extend the operation of this Agreement or to enter into any new agreement with
the other party following the expiration of the Term. Neither party shall be
under any obligation of any kind whatsoever to the other party by reason of any
failure or refusal to renew or extend the operation of this Agreement or to
enter into any new agreement with the other party, following the expiration of
the Term.
3. APPOINTMENT AS DISTRIBUTOR AND TERRITORY.
3.1. GRANT OF RIGHTS.
(a) Subject to the terms and conditions of this Agreement, Scholastic
grants to Distributor a non-exclusive right to Translate the products and
Units pursuant to Section 4, reproduce copies of the Translated Products
and Translated Units and the exclusive right to advertise, market,
distribute and sell such Translated Units within the Territory and solely
through the Permitted Channels during the Term.
(b) This Agreement does not permit Distributor to, and Distributor
shall not, under any circumstances, advertise, market, sell or distribute
any Translated Unit (i) outside the Permitted Channels' (ii) in any other
channel or market (whether labor, business, professional, industry or
institutional), (iii) in any manner where Distributor knows, or in the
exercise of prudent business judgment should know, that such activity
ultimately will result in the exporting of such Translated Unit outside the
Territory, (iv) to governmental or public benefit entities or authorities,
or (v) in "Duty Free" shops.
(c) This Agreement does not permit Distributor to and Distributor
shall not under any circumstances without Scholastic's prior written
approval distribute any Translated Product other than as individual
stand-alone Translated Units, in each case with all packaging and
Translated User Documentation intact and in the form approved by
Scholastic. Without limiting the foregoing, Distributor is expressly
forbidden from distributing any Translated Product by any means of
electronic distribution or transmission (including without limitation, over
the Internet, via any online service or through television, cable or
satellite) provided, however, Distributor may distribute Products hereunder
when Distributor obtains orders therefore from the Internet when such
orders are placed by customers within the Territory and within the
Permitted Channels and Distributor fulfills such orders by shipping Units
within the Territory and Permitted Channels only.
(d) Distributor shall directly distribute to sub-distributors and
End Users all Translated Units authorized for distribution hereunder.
Distributor acknowledges, agrees and shall ensure that any such sub-
distributor shall be obligated to comply with all of the terms of this
Agreement. Distributor shall bear all costs of distribution of Translated
Units under this Agreement.
3.2. NO RIGHT TO REPRODUCE, MODIFY OR REVERSE ENGINEER. Except as provided
in Sections 4.1 (a) and for the Translations only, nothing in this Agreement
shall be construed as giving Distributor any right to, and Distributor agrees
that it shall not, and shall not permit or assist any employee, officer,
director, agent, contractor, parent, subsidiary, affiliate, joint venturer or
partner of Distributor (each a "DISTRIBUTOR AFFILIATE"), or any other party to
manufacture, modify or adapt all or any part of any Translated Unit, Unit,
Translated Product or Product or otherwise make copies of all or part of any
Translated Unit, Unit, Translated Product or Product onto any media (whether for
error correction or other License and as set forth above in Section 3.1 (a).
Distributor agrees that it shall not, and shall not permit or assist any
Distributor Affiliate or other party to, disassemble, decompile or reverse
engineer all or any part of any Product or Translated Product. Without limiting
the materiality of any other term of this Agreement, the failure of Distributor
to comply with the provisions of this Section 3.2 shall be considered a material
breach of this Agreement.
3.3. RESALE REQUIRED. Distributor shall not, and shall not permit or assist
any Distributor Affiliate or other party to, lend or rent any Unit or Translated
Unit to any other person or entity. Distributor shall not, and shall not permit
or assist any Distributor Affiliate or other party to, use or display any Unit
or Translated Unit in any manner except in accordance with this Agreement.
3.4. NO CONFUSINGLY SIMILAR PRODUCTS. Distributor recognizes and acknow-
ledges the vital importance to Scholastic of the characters and other
proprietary material Scholastic owns and creates, and the association of the
Scholastic name therewith. In order to prevent the denigration of Scholastic's
property and the value of its association with the Scholastic name, and in order
to ensure the dedication of Distributor's best efforts to preserve and maintain
that value, Distributor agrees that, in the Territory and during the Term,
Distributor shall not advertise, market, sell or distribute any software or
other materials embodying or displaying any artwork, music, designs or other
representation which Scholastic determines, to be substantially similar to or
likely to cause confusion with any Scholastic Property or other Scholastic
proprietary material. Distributor shall not utilize the Scholastic name or the
names of any of the characters or other proprietary material owned by Scholastic
in any products or in the title of any products owned or distributed by
distributor, other than the Translated Products.
3.5. RESERVED RIGHTS. All rights not specifically and expressly granted by
Scholastic to Distributor are hereby reserved by Scholastic. Without limiting
the foregoing, Scholastic reserves to itself and the other Scholastic Affiliates
the right, directly or through third parties, to manufacture, package,
advertise, market, distribute or sell any Product or Units thereof through all
United States Department of Defense, U.S. Embassy dependent schools and
programs, American schools and programs, International schools and programs,
American schools and programs, International schools and programs and U.S.
Military schools wherever located; Scholastic Book Clubs, Scholastic Software
Clubs and Scholastic-branded Fairs in the School to Home Market and Scholastic
Affiliates within the Territory during the Term and to Translate such Products
or Units.
Scholastic reserves to itself and the other Scholastic Affiliates the exclusive
right, directly or through third parties, to purchase from Distributor
Translated Units and Translated Jewel-Case Units at a per Translated Unit or a
per Translated Jewel-Case Unit price determined in accordance with Section 7.7
and Exhibit B hereof, and to advertise, market and distribute or sell any
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Translated Units and Translated Jewel-Case Units thereof in the Scholastic
Territory during the Term.
Scholastic further reserves to itself and other Scholastic Affiliates the non-
exclusive right, directly or through third parties, to manufacture Translated
Programs from the Translated Master Discs of the Product titles identified
in Exhibit A and the non-exclusive right to manufacture Translated User
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Documentation from the Translated Master Print Components of the product titles
identified in Exhibit A and the exclusive right to advertise, market, distribute
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and sell such Translated Units solely within the Scholastic Territory during the
Term paying to Distributor the Scholastic Royalty determined in accordance with
Section 7.8 and Exhibit B hereof.
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4. TRANSLATIONS AND APPROVALS
4.1. TRANSLATIONS. Subject to Scholastic's approval as set forth herein,
all Translations to the Products and Units done by or on behalf of Distributor,
including but not limited to the Translated Products' titles, shall be faithful
and accurate with only such modifications to the Products as may be necessary to
achieve a competent and idiomatic translation. Such modifications shall not
materially change the meaning or otherwise materially alter the Products.
Distributor shall Translate the titles of the Products into Spanish and only use
such Translated titles. Additions to abridgments of or other modifications in
the text or Product title may be made only with the prior written approval of
Scholastic. Distributor shall use the text of the Translated Storyline Scripts
for the story portions of the Translated products, Chato's Kitchen and Why
Mosquitoes Buzz in People's Ears only, with such usage being faithful and
accurate. Distributor shall provide its own Translation of all other portions
of the Translated Products and Translated Units, Chato's Kitchen and Why
Mosquitoes Buzz in People's Ears.
4.2. Materials Submitted for Scholastic's Review and Approval. Subject to
the approval of Scholastic as set forth herein, Distributor shall have the
non-exclusive right: 1) to place its logo on the Translated Products and
Translated Units on the front cover of the packaging, the rear cover of the
packaging, the front cover of the Translated User Documentation, the bumper
screen of the Translated Product, the labels of the CD-ROMs or Floppy disks
containing the Translated Products, and Translated Promotional Materials (as
defined herein) and 2) and obligation to create and use the Translated User
documentation in connection with the Translated Units. Distributor shall submit
copies of the following materials for Scholastic's prior written approval:
(a) all packaging, labels, advertising and Translated Promotional
Materials.
(b) All Translated user Documentation and instructional materials.
(c) A written functional specification of all purposed modifications
to the Products including but not limited to the Products' script, images,
artwork, navigation, menus, screens, animation, music, sound effects, game
content and/or voices.
(d) A written statement explaining all proposed revisions to the
content, style packaging and navigation of the Products, including but not
limited to the Products' script, artwork, navigation, menus, screens,
animation, music, sound effects, game content, and/or voices.
(e) Functional sample screens, including any bumper or credit
screens.
(f) "Alpha and Beta Disks". As used in this section, "Alpha Disk"
means a version of the Translated Product in which all of the Translated
Product's components are present, all features are implemented, all
navigational and interface issues are resolved and all text and copy is
written and in final form and any existing errors do not interfere with
functionality; "Beta Disk means a version of the Translated Product in
which all of the Translated Product's features are implemented, all movies,
sounds and Translated Product's features are implemented, all movies,
sounds and other multimedia elements are complete, all final settings (such
as but not limited to system requirements, extensions and fonts) are in
place and all "Material Errors", "Priority 1 Errors" and "Priority 2
Errors" have been corrected. "Material Errors" means errors in software
execution that cause abnormal termination of the functionality of the
Translated Product on the computer; "Priority 1 Errors" mean function
errors that terminate execution of the Translated Product or force the user
to restart the user's computer; and "Priority 2 Errors" means function
errors that do not force the user to quit the Translated Product or restart
the computer, but prohibit 100% performance of the Translated Product. 4.3.
SCHOLASTIC'S APPROVAL. Scholastic shall use reasonable business efforts to
provide Distributor with such approval and/or disapproval on all submitted
materials within fourteen (14) business days of Scholastic's receipt of
such materials. All revisions, modifications, additions and Translations of
the Products shall be subject to the prior written approval of Scholastic,
including but not limited to Distributor's inclusion of its logo and the
placement thereof on the Translated Units. However, no submitted materials
shall be deemed approved unless Distributor receives from Scholastic such
approval in writing.
4.4. EXPENSES. All expenses associated with the Translations of the Units
shall be borne solely by Distributor.
4.5 CREDITS. Distributor shall Translate and reproduce all materials in the
Units, including but not limited to all existing creative, performing and
production credits in and on the Products and Units and in the packaging or
promotion of the Units exactly as they appear in the Products and Units, unless
otherwise instructed by Scholastic. At the sole discretion of Scholastic,
Distributor shall place Scholastic's name, trademark, and logo, and all
applicable notices on the Translated Units where appropriate, subject to
Scholastic's prior written approval.
5. MARKETING EFFORTS AND RELEASE DATES.
5.1. MARKETING COMMITMENT. Distributor shall use best efforts to vigorously
and aggressively advertise, market, distribute and sell Translated Units
throughout the Permitted Channels within the Territory and, in doing so, shall
ensure that its marketing and advertising efforts are in accordance with high
quality and good taste and will be comparable to the highest quality marketing
efforts in the Territory for competitive products. All Translated Product
selections, catalog placements, advertising (including catalogs), marketing and
publicity and every association of Distributor with Scholastic (including any
reference to the "Scholastic" name and any Scholastic character), shall be
subject to Scholastic's prior written approval in accordance with the procedure
for the approval of Translated Promotional Materials set forth in Section 6.1
hereof. Distributor shall submit a marketing plan to Scholastic no later than
November 1, 2000.
5.2. PRODUCT MANAGER. At all times during the Term, distributor shall
provide Scholastic with a "Product Manager" who shall be primarily (though not
exclusively) dedicated to the Translated Products and who shall be satisfactory
to Scholastic. The Product Manager shall be a designated individual employee of
distributor who shall be available to Scholastic during Distributor's regular
business hours. The Product Manager shall maintain continuous, but not
necessarily daily, contact with such personnel of Scholastic as Scholastic may
from time to time designate, shall be fully familiar with Scholastic's method of
operation in general and the Scholastic Products in particular, shall coordinate
the performance by distributor of its obligations under this Agreement, and
shall promptly respond to all Scholastic inquiries, both oral and written. XXXX
XXXXXXXXX is hereby initially appointed by Distributor and is deemed reasonably
satisfactory by Scholastic, as the Product Manager. The Product Manager's
contact at Scholastic for all issues related to the Translated Products or to
this Agreement shall initially be the DIRECTOR, INTERNATIONAL MARKETING, XXXXX
XXXXX, or such other person as named by Scholastic.
5.3. MARKETING PRACTICES. Distributor shall (a) conduct business in a
manner that reflects favorably at all times on the Translated Units and the good
name, goodwill and reputation of Scholastic; (b) avoid deceptive, misleading or
unethical practices that are or might be detrimental to Scholastic, and
Translated Product or the public, including, but not limited to, disparagement
of Scholastic or any Translated Product; (c) make no false or misleading
representations with regard to Scholastic or any Translated Product; (d) not
publish or employ or cooperate in the publication or employment of any
misleading or deceptive advertising material; (e) make no representations,
warranties or guaranties to anyone with respect to the specifications, features
or capabilities of any Translated Product that are inconsistent with its related
Translated User Documentation or any literature distributed by Scholastic; and
(f) not engage in illegal or deceptive trade practices such as bait and switch
techniques or any other practices proscribed hereunder.
5.4. RELEASE DATE. Distributor shall release for sale the Translated Units
in the Territory on the following date (the "RELEASE DATE"): by December 1,
2000.
6. PROMOTIONAL RIGHTS.
6.1 Subject to Section 4.2 above, Scholastic hereby grants to Distributor a
non-exclusive license to: 1) Translate and reproduce the Scholastic Properties
and create Translated User Documentation solely for use within the Territory
during the Term in advertising and promotional materials in connection with
the Translated Units, (advertising and promotional materials incorporating
Scholastic Properties are referred to collectively herein as the "Translated
Promotional Materials", and 2) use Translated User Documentation in connection
with the Translated Units; provided however, that Distributor shall submit the
Translated Promotional Materials and Translated User Documentation to Scholastic
for its written approval prior to any use thereof. Distributor shall procure
Scholastic's approval of Translated Promotional Materials and Translated user
Documentation in two steps: first, when Distributor has put the Translated
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Promotional Materials in rough or story board format and the Translated User
Documentation in rough draft; and second, when Distributor has put the
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Translated Promotional Materials and Translated User Documentation in final
form. Printed matter submitted to Scholastic for approval hereunder shall be
submitted with two (2) additional copies thereof. If Scholastic provides
Distributor with forms for use in the submission of Translated Promotional
Material and/or Translated User Documentation approval requests, Distributor
shall use the same. Scholastic shall endeavor to provide its approvals
or disapprovals of Translated Promotional Materials and Translated User
Documentation submitted at each step reasonably promptly; provide however, that
all Translated Promotional Materials and Translated User documentation not
approved in writing by Scholastic within ten (10) days of Scholastic's written
receipt of Distributor's request for approvals shall be deemed disapproved.
Scholastic's approval or disapproval of Translated Promotional Materials
submitted at each step shall be in Scholastic's sole discretion, and the use of
unapproved Translated Promotional Materials or Translated User Documentation is
strictly prohibited. Translated Promotional Materials and Translated User
Documentation not approved by Scholastic in writing shall be deemed unlicensed
and shall not be utilized. During the Term, Distributor shall provide
Scholastic with such reasonable quantities of samples of the Translated
Promotional Materials to the extent it exists in final form as Scholastic may
from time to time request and at no expense to Scholastic.
6.2 All costs of all advertising and promotions shall be borne by
Distributor. At Distributor's request, Scholastic may (in Scholastic's sole
discretion) support the creative production of Translated Promotional Materials,
such as providing art and copy. Scholastic may from time to time make available
for purchase by Distributor point-of-sale materials and promotional items
prepared by Scholastic. If Distributor elects to purchase such materials and/or
items for use in connection with its promotional efforts for the Translated
Products, the cost thereof shall be paid by Distributor upon being invoiced
by Scholastic. Upon such purchase, such point-of-purchase materials and
promotional items shall be deemed "Translated Promotional Materials" for all
purposes of this Agreement except the approval requirements of Section 6.1
hereof.
6.3 Distributor shall obtain prior written approval, not to be unreasonably
withheld, of Scholastic regarding any promotional activity relating to
Translated Units or Translated Products and shall not, without Scholastic's sole
discretion), sell or otherwise provide any Translated Unit for use in fund-
raisers, sweepstakes, contests or similar activities or provide Translated Units
for use as prizes, premiums or give-aways.
6.4 Distributor shall not utilize the Translated Promotional Materials or
any part thereof in connection with any Products or services other than the
Translated Units or solely to promote Distributor and, without limiting the
materiality of any other Term of this Agreement, such use shall be considered a
material breach of this Agreement.
6.5 In designing and implementing Translated Promotional Materials,
Distributor shall be entitled, subject to the other provisions of this Section 6
and to the provisions of Sections 12 and 13 hereof, to use such trademarks and
trade names as are provided by Scholastic to distributor for this purpose;
provided that (a) Distributor shall not create a unitary composite xxxx
involving any such trademark or trade name and (b) Distributor agrees that all
use of such trademarks and trade names shall inure to the benefit, and be on
behalf, of Scholastic.
7. CONSIDERATION AND PAYMENT.
7.1. TRANSLATED UNIT ROYALTIES. During the Term, Distributor shall pay to
Scholastic the Translated Unit Royalty rate as set forth on Exhibit A attached
---------
hereto.
7.2. PAYMENT FORMS. All payments due hereunder shall be made within thirty
(30) days of Distributor's sale via check sent to Xxxxxxxxxx Xxx., New Media
Division Finance Department, 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention:
Xxxxx Xxxxxxx. However, Scholastic may change such recipient of all payments
due hereunder, by providing Distributor with written notice of such change. All
payments shall be made in Dollars, free of any currency control or other
restriction. Where applicable, the currency exchange rate for any payment shall
be calculated as of the applicable due date therefor.
7.3. SALES REPORTS. Within ten (10) days after the end of each calendar
month during which any Translated Units are sold, Distributor shall provide
Scholastic with a written report setting forth, for the applicable month, the
number of Translated Units of each Translated Product sold.
7.4. AUDITS. Distributor agrees to keep and preserve, for at least three
(3) years after the Termination Date, accurate records of all transactions
relating to this Agreement. In particular, Distributor shall ensure that all
its records shall identify the Translated Units separately from other goods not
licensed hereunder. At all times during the Term and for a period of three (3)
years thereafter Scholastic and its agents, employees, and representatives shall
have the right, at any time during Distributor's normal business hours and upon
reasonable prior to notice to Distributor, to examine and make extracts of all
such records, including invoices, book of account, computer and database
information, and documents, correspondence and other records that relate to
the sale and distribution of Translated Units. All information obtained by
Scholastic as a result of any audit pursuant to this Section 7.4 shall be
subject to the confidentiality restrictions set forth in Section 14 hereof.
7.5. DISTRIBUTOR TO DETERMINE ITS OWN RESALE PRICES. Distributor is free to
determine its own resale prices for Translated Units unilaterally. Although
Scholastic may publish suggested wholesale or retail prices for any Translated
Unit, these are suggestions only and Distributor shall be entirely free to
determine the actual prices at which Translated Units are to be sold to its
customers. Each party understands that neither Scholastic nor any employee or
representative of Scholastic may give any special treatment (favorable or
unfavorable) to Distributor as a result of its selection of prices. No employee
or representative of Scholastic nor anyone else associated or affiliated with
Scholastic has any authority to tell Distributor what its prices for Translated
Units must be or to inhibit in any way Distributor's pricing discretion with
respect to Translated Units.
7.6. TAXES. Distributor shall be solely responsible for any applicable
sales, use value, added or other tax, tariff, duty or assessment levied or
imposed (including without limitation any withholding thereof which Distributor
may be required to make or collect on payments to Scholastic hereunder) arising
out of or related to any of the transactions contemplated under this Agreement
(including without limitation the distribution of the Translated Units and, if
applicable, the production and manufacture of Translated Units thereof), other
than any tax based on Scholastic's net income in the U.S. Distributor shall pay
directly, or reimburse or gross-up Scholastic for, the amount of such sales,
use, value added or other tax, tariff, duty or assessment which Scholastic is at
any time obligated to pay or collect. Distributor shall promptly furnish
Scholastic with the official receipt of any payment of such sales, use, value
added or other tax, tariff, duty or assessment by Distributor to the appropriate
taxing authority. Upon Scholastic's request therefor, Distributor shall also
provide Scholastic with copies of resale certificates or other documents evi-
dencing to Scholastic's reasonable satisfaction any exemption which Distributor
claims from any sales, use, value added or other tax (including without
limitation any withholding tax), tariff, duty or assessment that Scholastic
reasonably determines it would have to pay or collect arising out of or related
to any of the transactions contemplated under this Agreement in the absence of
such an exemption.
Distributor shall take out and file the appropriate withholding taxes with the
appropriate taxing authorities for the monies paid to Scholastic hereunder and
provide Scholastic with a receipt and proof of payment of all such filings.
7.7. SCHOLASTIC TRANSLATED UNIT AND TRANSLATED JEWEL-CASE UNIT PURCHASE
PRICE. During the Term, Scholastic may purchase Translated Units and Translated
Jewel-Case Units from Distributor for distribution through the Scholastic
Territory at a per Translated Unit or a per Translated Jewel-Case Unit price
determined in accordance with Exhibit B hereof.
----------
7.8. SCHOLASTIC ROYALTIES. During the Term, Scholastic shall pay to
Distributor the Scholastic Royalty rate as set forth on Exhibit B attached
---------
hereto for Translated Units and/or Translated Jewel-Case Units that are created
by Distributor and do not incorporate Scholastic translations. Scholastic shall
not pay Scholastic Royalties on the following Translated Units and/or Trans-
lated Jewel-Case Units, which will be created using Scholastic Translations:
Usborne's Animated First Thousand Words and I'm Ready for Kindergarten: Huggly's
Sleepover.
8. MINIMUM GUARANTEE, SELL-OFF AND DESTRUCTION.
8.1. MINIMUM GUARANTEE. Distributor shall pay Scholastic eighty thousand five
hundred dollars ( $80,500.00) as a non-refundable, recoupable, non cross
collateralized Minimum Guarantee which is recoupable against the Translated Unit
Royalties (the "MINIMUM GUARANTEE"). Distributor shall pay the Minimum Guarantee
to Scholastic as follows: (a) thirty-eight thousand five hundred twenty-five
dollars ($38,525.00) for the Translated Units I'm Ready for Kindergarten:
Huggly's Turtle Rescue, I'm Ready for Kindergarten: Huggly's Sleepover,
Scholastic SuperPrint Deluxe, Math Shop Deluxe, and Usborne's Animated First
Thousand Words upon mutual execution of this Agreement; (b) eighteen thousand
nine hundred seventy-five dollars ($18,975.00) for the Translated Units I'm
ready for Kindergarten: Huggly's Turtle Rescue, I'm Ready for Kindergarten:
Huggly's Sleepover, Scholastic SuperPrint Deluxe, Math Shop Deluxe and Usborne's
Animated First Thousand Words on or before February 1, 2001; (c) fifteen
thousand four hundred ten dollars ($15,410.00) for the Translated Units Chato's
Kitchen and Why Mosquitoes Buzz in People's Ears on or before November 1, 2001;
and (d) seven thousand five hundred ninety dollars ($7,590.00) for the
Translated Units Chato's Kitchen and Why Mosquitoes Buzz in People's Ears on or
before March 1, 2002.
8.2. SELL-OFF, REPURCHASE OR DESTRUCTION. Scholastic reserves the right to
buy back, as of the Termination Date, any excess, unsold Translated Units in
Distributor's inventory, at Distributor's cost or instruct Distributor to
destroy such Translated Units and provide Scholastic with an affidavit attesting
to the destruction of such Translated Units. For any inventory of Translated
units that Scholastic did not buy back or have Distributor destroy, Distributor
may sell such Translated Units from such inventory solely within the Territory
provided that such sales are made by within three (3) months of such termination
date and provided further that this Agreement expired in accordance with its
terms solely due to the passage of time and Distributor has fully complied with
the terms of this Agreement. This Section is expressly subject to Section 2.2
above.
9. PRODUCT AVAILABILITY AND PRODUCT CHANGES.
9.1 Without further obligation to Distributor of any kind whatsoever,
Scholastic reserves the right in its sole discretion at any time to (i)
discontinue the production, distribution or licensing of any Product and/or
Translated Product; (ii) change the design or specifications of any Product
and/or Translated Product and any part thereof; and (iii) change its service,
warranty or other policies regarding any Product and/or Translated Product.
Scholastic agrees to attempt to consult with Distributor prior to the occurrence
of any event indicated in the preceding sentence. However, Distributor ack-
nowledges that Scholastic's ability to so consult with Distributor may be
limited by competitive, marketing and other factors (including without limi-
tation trade secret and confidentiality concerns), and accordingly agrees that
Scholastic shall not be liable in any respect should Scholastic fail to consult
with Distributor prior to actually taking any action that results in any such
event. Notwithstanding the foregoing, Scholastic shall notify Distributor in
writing no later than thirty (30) days after the occurrence of any such event.
Within thirty (30) days after its receipt of such notice, Distributor shall
adjust its marketing and distribution activities permitted hereunder to take
into account such event. Distributor agrees to execute an amendment or addendum
to this Agreement relating to any of the foregoing, to the extent deemed
necessary or appropriate by Scholastic.
9.2 Although Scholastic may consider requests from Distributor to add
additional Scholastic Products to Exhibit A during the Term, the addition of any
---------
such additional Scholastic product shall be determined by Scholastic in its sole
discretion and Scholastic shall have no obligation whatsoever to make any such
additional Scholastic product available to Distributor for the purpose of this
Agreement. The addition any such additional Scholastic product to Exhibit A
---------
hereto, if Scholastic is prepared to agree to the same, shall be conditioned
upon Scholastic and Distributor agreeing to mutually acceptable arrangements
with respect to such additional Scholastic product (including without limitation
the applicable Translated Unit Royalties for such additional Scholastic product)
and the execution by Scholastic and Distributor of an amendment or addendum to
this Agreement setting forth the relevant details with respect thereto.
10. TRANSLATED PRODUCT SUPPORT.
10.1. RESPONSIBILITY GENERALLY. Distributor will manage all customer service
matters concerning the sale, installation and use of Translated Products and/or
Translated Units.
10.2. TRANSLATED PRODUCT EXPERTISE. Distributor and its staff shall be
conversant with the Translated Products and similar software Products in
general, and shall develop sufficient knowledge of the industry, of the
Translated Products and of Products competitive with the Translated Products
(including specifications, features and benefits) so as to be able to explain
the Translated Products in detail to End Users and potential End Users.
Distributor shall conduct or provide for any training of its personnel that may
be necessary to impart such knowledge.
10.3. TRANSLATED UNIT RETURNS. Distributor agrees to honor any refund
requests received from End Users pursuant to the terms of the applicable
Translated Unit warranty. Distributor may return any such returned Translated
Unit to its inventory if the Translated Unit is in salable condition.
Distributor shall instruct End Users to make all refund requests with respect to
Translated Units sold by Distributor directly to Distributor and not to
Scholastic.
10.4. NOTIFICATION OF CLAIMED OR SUSPECTED DEFECTS. No later than ten (10)
days after Distributor learns of the same (whether directly or through an End
User), Distributor shall notify Scholastic in writing of any claimed or
suspected defect in any Translated product. DISTRIBUTOR SHALL HAVE THE RIGHT TO
CORRECT ANY SUCH DEFECT, AND Scholastic MAKES NO WARRANTY, AND HEREBY
SPECIFICALLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, THAT ANY SUCH DEFECT
BROUGHT TO ITS ATTENTION WILL BE CORRECTED.
10.5. ONLINE INFORMATION. Subject to Sections 3.1 (c) and 6.1, Distributor
shall have the right to provide information regarding the Translated Products
for customer service and information purposes only, on an Internet Web page
owned by Distributor (or such other equivalent network system now or hereafter
developed) ("On-line information"). Notwithstanding anything to the contrary,
Distributor shall have no right under this Agreement to solicit or accept orders
for any Translated Products and/or Translated Units through the use of any
On-line Information, except as specified in Section 3.1(c) herein.
11. OWNERSHIP OF PROPRIETARY RIGHTS.
11.1. Except as specifically and clearly granted herein, it is understood
that Scholastic s not granting to Distributor, and Distributor does not acquire,
by the operation of this Agreement or otherwise, any right to, or interest in,
the name "Scholastic" or any derivation of the name "Scholastic", any Scholastic
Property or any Intellectual Property Right of any Scholastic Affiliate.
11.2. Except as specifically and clearly set forth in this Agreement,
nothing herein, nor the exercise of any rights granted Distributor hereunder,
conveys to Distributor, and Distributor shall not have or acquire, and shall not
purport to have or acquire, whether for any platform or in any format or
otherwise, any Intellectual Property Rights or any other right, interest or
title to any Product, Unit, Translated Product or Translated Unit. Distributor
agrees that it shall not at any time assert or claim any interest in, or do
anything that may adversely affect the validity or enforceability of, any
Intellectual Property Right belonging to or licensed by Scholastic. Distributor
acknowledges and agrees that Scholastic is the creator and author of the
Products and Translated Products and all Intellectual Property Rights and every
other right, interest and title therein, including without limitation the
copyrights (and all renewals and extension thereof) in and to each of the
foregoing, are and shall be the Property of Scholastic.
11.3. As between Scholastic and Distributor, Scholastic retains all Intel-
lectual Property Rights in and to the Products, the Units, the Translated
Products, the Translated Units, Translated Promotional Materials and any and all
Materials that may be provided by Scholastic, and Distributor shall not have or
acquire, and shall not purport to have or acquire, any right, title, or interest
in any of the foregoing, Distributor agrees that any and all Work Product shall
be deemed produced, specially ordered and commissioned at Scholastic's request
and direction, and shall be considered works-made-for-hire for Scholastic.
Scholastic, its successors, privies and assigns, shall exclusively own all
Intellectual Property Rights, in perpetuity and in all languages, embodied in or
pertaining to all Work Product and all Derivative Works, and Distributor hereby
makes a full, irrevocable, present assignment and transfer, in perpetuity, to
Scholastic of (a) all such Intellectual Property Rights, (b) all contracts,
agreements, assignments, licenses, documents and/or instruments pursuant to
which Distributor may have heretofore acquired or may hereafter acquire such
Intellectual Property Rights, and (c) all releases, warranties, indemnities and
undertakings acquired by Distributor in connection with Distributor's services
with respect to any Work Product. Distributor acknowledges that there are, and
may be future Rights that Distributor may otherwise become entitled to with
respect to any Work Product or any Derivative Work that do not yet exist, as
well as new uses, media, means and forms of exploitation throughout the universe
employing current and/or future technology yet to be developed; the parties
specifically intend the foregoing full, irrevocable, present and perpetual
assignment and transfer of Rights to Scholastic to include all such now known
and unknown uses, media, means and forms of exploitation, throughout the
universe.
11.4. Nothing herein, nor the exercise of any Rights granted Distributor
hereunder, conveys to Distributor, and Distributor shall not have or acquire,
and shall not purport to have or acquire, any Intellectual Property right or any
other right or title to, or interest in, any Product, Translated Product or any
part or aspect thereof (including without limitation any Scholastic Property),
any Work Product or any Derivative Work. Distributor agrees that it shall not
at any time during or after the Term assert or claim any interest in, or do
anything that may adversely affect the validity or enforceability of, any
Intellectual Property Right belonging to or licensed by Scholastic (including
any act, or assistance to any act, which may infringe or lead to the
infringement of any such right in any Work Product). In the event Distributor
has any Intellectual Property Rights in and to any Work Product or any
Derivative Work that cannot be assigned or transferred to Scholastic as provided
above, Distributor hereby unconditionally waives, and agrees not to assert, such
Rights (including without limitation any and all moral Rights, including
any right to identification of authorship or any limitation on subsequent
modification). Distributor also shall procure that each person and entity who
contributes to any Work Product or any Derivative Work wave and agree not to
assert any such Rights (including without limitation any and all moral Rights,
including any right to identification of authorship or any limitation on
subsequent modification that such person or entity may have therein. In the
event Distributor has any Intellectual Property Rights in and to any Work
Product or any Derivative Work that cannot be assigned or transferred to
Scholastic as provided above and cannot be so waived, Distributor hereby grants
to Scholastic an irrevocable, exclusive, worldwide, royalty-free license in
perpetuity to exercise all Intellectual Property Rights in and to the foregoing.
11.5. Scholastic shall be deemed the creator and author of all Work Product
and all Intellectual Property Rights and every other right, interest and title
therein shall be the Property of Scholastic when produced. Scholastic shall be
entitled to full ownership of the original and all copies of all Work Product.
Distributor acknowledges that Scholastic may register in the Territory or
elsewhere the copyright for any Work Product or any Derivative Work thereof now
existing or hereafter developed in any and all media, or delivered through any
and all means of delivery, now known or hereafter conceived or created, in its
own name or that of any of its designees for the full term of copyright and
all renewals and extensions thereof. Scholastic may utilize, distribute and
otherwise exploit in any manner any Work Product and derivative Work thereof now
existing or hereafter developed without any royalty or other obligation to
Distributor.
11.6. Scholastic shall have the sole and exclusive right to possession and
custody of all Work Product and Materials provided by Scholastic. Possession by
Distributor or any third party of any Work Product or any such material is
solely for the purpose of fulfilling Distributor's obligations under this
Agreement and in now way shall be deemed or construed to grant, license or
otherwise convey any Rights to Distributor or any other party in the same, by
any means, including without limitation, any insolvency, creditor or other laws
of any jurisdiction. Scholastic may at any time require Distributor to deliver
to Scholastic or its designee any or all Work Product, in whatever state
of completion, or any Materials provided by Scholastic. Upon receipt of
Scholastic's written request therefore, Distributor shall immediately deliver to
Scholastic or its designee such originals or copies of such Work Product or any
such material as Scholastic shall have indicated in such request. Distributor
retains no Rights to use any Work Product or any such material and agrees not o
challenge the validity of the ownership by Scholastic of Rights therein and
shall promptly deliver the same to Scholastic upon completion of Distributor's
services under this Agreement. Distributor further agrees that at all times
during the term, Scholastic and its agents, employees and representatives shall
have the right, at any time during Distributor's normal business hours and with
prior notice to Distributor, to enter Distributor's premises in order to take
repossession of all Work Product and all Materials provided by Scholastic, in
which case Distributor shall forthwith surrender to Scholastic such Work Product
and such Materials.
11.7. Distributor shall, and shall cause every party acting under it in
relation to this Agreement to, execute any and all documents and do such other
acts requested at any time by Scholastic as may be required to evidence,
perfect, confirm and/or further effect the Rights granted Scholastic under this
section 11. in the event Distributor fails to execute and deliver any such
documents and instruments promptly upon request therefore by Scholastic,
Scholastic is hereby authorized and appointed attorney-in-fact of and for
Distributor to make, execute and deliver any and all such documents and
instruments, it being understood that such power is coupled with an interest and
is therefore irrevocable.
12. PROTECTION OF PROPRIETARY RIGHTS.
12.1. Distributor shall implement adequate control measures to protect
Scholastic's Intellectual Property Rights and to cooperate in Scholastic's
efforts to protect such Intellectual Property Rights. Without limiting the
foregoing, Distributor shall maintain all Units, Translated Units, Products,
Translated Products, Promotional Materials, Translated Promotional Materials and
any Materials provided by Scholastic hereunder in a safe and secure condition
and shall take commercially reasonable measures to ensure adequate security at
its facilities to prevent unauthorized duplication, loss or theft of any such
Unit, Translated Unit, Product, Translated Product, Promotional Materials,
Translated Promotional material or any other material provided by Scholastic.
12.2. Scholastic shall provide Distributor with appropriate notices of copy-
right in Scholastic's name, and Distributor shall place, in such manner and
form as Scholastic shall direct, such copyright notices on all Translated
Promotional Materials. In no event shall Distributor alter, remove, obscure,
erase or deface or otherwise hide from view, any such notices or any other
copyright, trademark or other proprietary Rights notice of scholastic contained
on or incorporated in any Translated Promotional material, any Translated Unit,
or any other material provided by Scholastic.
12.3. Distributor shall not do any act or omit to take any act or permit any
act to be taken or not to be taken that would cause any Product or Translated
Product to vest in the public domain anywhere in the territory, and if any
notice shall be necessary to protect any of Scholastic's Intellectual Property
Rights in any Product or Translated Product, Distributor shall, in accordance
with and subject to the provisions of section 6 hereof, cause such notice to be
affixed to each Translated Unit thereof there circulated, in accordance with the
terms of all pertinent domestic and international conventions pertaining to
Intellectual Property Rights.
12.4. This Agreement only grants to Distributor a license to transfer
Translated Units to end users, and does not transfer any right, title, or
interest in or to any Unit, Translated Unit, Product or Translated Product to
Distributor, or any Distributor Affiliate. Notwithstanding any "purchase" or
"sale" or similar language contained herein, Distributor acknowledges that the
Translated Units are licensed as indicated in this section 12.4.
13. LITIGATION.
Distributor shall promptly report to Scholastic (a) any infringement of any of
Scholastic's Intellectual Property Rights by any Distributor Affiliate or any
other person or entity, (b) any infringement by any such person or entity of any
right granted to Distributor hereunder and (any unauthorized copying or
distribution of any Product, Translated Product, Unit or Translated Unit or any
component thereof (including without limitation any artwork or music contained
therein) by any such person or entity. Scholastic may, in its sole discretion,
undertake to prosecute necessary actions to prevent such infringement or any
unlicensed or unauthorized distribution. In the event Distributor shall be
joined in any such litigation, the decisions of the counsel of Scholastic with
reference to matters of procedure, conduct of such litigation and/or the
handling thereof, shall prevail and Distributor shall cooperate with and assist
Scholastic's counsel. Any recovery shall be the sole property of Scholastic.
14. CONFIDENTIAL INFORMATION
14.1. Confidential Information Defined. Both parties may, under this
Agreement, have access to and acquire knowledge from, material, data, systems
and other information concerning the operation, business, financial affairs,
products, customers and Intellectual Property Rights or other aspects of the
other party that may not be accessible or known to the general public (referred
to herein as "CONFIDENTIAL INFORMATION"). 'Confidential Information" also
includes (the terms of this Agreement and the fact of its existence and (any
information or materials that either party obtains from any third party that
such party treats as proprietary or designates as Confidential Information,
whether or not owned by such party. "Confidential Information" does not include
information that either party can document in reasonable detail and to the other
party's satisfaction: (i) is known by the receiving party at the time of receipt
from the other party and is not subject to any other non-disclosure agreement
between the parties; (ii) is now, or hereafter becomes, generally known to the
industry through no fault of the receiving party; or (iii) is otherwise lawfully
and independently developed by the receiving party, or lawfully acquired from a
third party without any obligation of confidentiality.
14.2. NO DISCLOSURE. Any Confidential Information acquired by either party
shall not be used, published or divulged by such party to any other person or
entity in any manner whatsoever without the prior clear and express written
approval of the other party, which approval other party may withhold in its sole
discretion.
The existence of this Agreement and such details regarding its subject matter as
are reasonably necessary to permit performance of Distributor's obligations
hereunder may be disclosed by Distributor to persons and entities to be engaged
by Distributor in connection with its services under this Agreement; provided
however, prior to any such engagement Distributor shall cause each such person
and entity to sign an employment or nondisclosure agreement that contains
provisions in substance similar to those included in this Section 14 prohibiting
the further disclosure and use by such person or entity of any Confidential
Information. Distributor agrees to deliver copies of all such agreements to
Scholastic upon request. Distributor shall, and shall cause its employees,
agents and every other person and entity it employs in connection with
its services under this Agreement to, protect and safeguard the Confidential
Information by using the same degree of care, but no less than a reasonable
degree of care, to prevent the unauthorized use or disclosure of the
Confidential Information as Distributor uses to protect its own confidential or
proprietary information of a like nature. In the event that Distributor is
directed by court order to disclose any portion of any Confidential Informa-
tion or any other materials proprietary to Scholastic in conjunction with
a governmental or judicial proceeding or arbitration, Distributor shall
immediately notify Scholastic both orally and in writing. Distributor agrees to
provide Scholastic with reasonable cooperation and assistance in obtaining a
suitable protective order and in taking any other steps to preserve confi-
dentiality. Upon any termination or expiration of this Agreement or upon
Scholastic's request, Distributor shall immediately return all materials
embodying Confidential Information to Scholastic. Without limiting any other
non-disclosure obligation of Distributor or any other rights and remedies that
Scholastic may have under this Agreement, Distributor specifically acknowledges
that Distributor's disclosure of amounts payable to Scholastic hereunder could
have a detrimental effect on Scholastic's business, the extent of which could be
difficult, if not impossible to establish and that any disclosure of such
information by Distributor in violation of the terms hereof shall be deemed a
material breach of this Agreement.
14.3. PUBLISHED REPORTS. Without limiting the generality of any of the fore-
going, the parties specifically agree that any reports concerning Confidential
Information that are not made or authorized by Scholastic and that appear
publicly prior to Scholastic's official disclosure of such Confidential
Information shall not release Distributor from its obligations hereunder with
respect to such Confidential Information.
14.4. NO CONFIDENTIAL INFORMATION OF OTHER PARTIES. Distributor represents
and warrants that it shall not use in the course of its performance hereunder,
and shall not disclose to Scholastic, any confidential information of any third
party (including competitors of Scholastic or Distributor) unless Distributor is
expressly authorized in writing by such third party to do so.
14.5. PUBLICITY. Each party agrees that any press release it proposes to
issue with regard to the execution of this Agreement shall be subject to
the prior written consent of the other party, which consent shall not be
unreasonably withheld. Notwithstanding anything to the contrary contained in
Section 5.1 hereof, Distributor shall not directly or indirectly issue or permit
the issuance of any publicity regarding, or grant any interview, or make any
public statements whatsoever concerning, ( Scholastic, this Agreement or
Distributor's services hereunder without prior coordination with and approval by
Scholastic, which approval may be granted or withheld in Scholastic's sole
discretion, or ( any Product or Translated Product without prior coordination
with and approval by Scholastic, which approval shall not be unreasonably
withheld or delayed. In particular and without limiting any of the foregoing,
Distributor shall not pre release any Translated Product or any portion thereof
without prior coordination with and approval by Scholastic, which approval may
be granted or withheld in Scholastic's sole discretion. Distributor shall not,
and shall have no right to, release, distribute or disclose to any third party
any of the materials provided by Scholastic hereunder without the prior written
consent of Scholastic, which consent may be granted or withheld by Scholastic in
its sole discretion.
14.6 SPECIFIC PERFORMANCE. The parties specifically acknowledge and agree
that the provisions of this Section 14 are reasonable and necessary for the
protection of the Confidential Information and to prevent damage or loss to
Scholastic. Distributor understands and agrees that Scholastic may suffer
irreparable harm if Distributor fails to comply with any of its obligations
under this Section 14, and that monetary damages in such event would be
inadequate to compensate Scholastic. Consequently, Distributor agrees that in
such event Scholastic shall be entitled, in addition to such monetary relief as
may be recoverable at law, to such injunctive or other equitable relief as may
be necessary to restrain any threatened, continuing or further breach by
Distributor, without showing or proving any actual damages sustained by
Scholastic, without bond.
15. REPRESENTATIONS, WARRANTIES, LIMITATIONS AND INDEMNIFICATION
15.1. REPRESENTATIONS AND WARRANTIES OF DISTRIBUTOR. Distributor represents
and warrants that (a) it has the right, power and authority to enter into this
Agreement and to fully perform its obligations under this Agreement and to grant
the rights granted or agreed to be granted hereunder; (b) the making of this
Agreement by it does not violate any agreement existing between it and any other
person or entity, and throughout the Term it shall not make any agreement with
any person or entity that is inconsistent with any of the provisions of this
Agreement; (c) it complies, and at all times during the Term shall comply with
all applicable laws in effect at the time duties are performed under this
Agreement and in all dealings with respect to the Products, Units, Translated
Products, Translated Units and Translated User Documentation; (d) it is, and at
all times during the Term shall be, the holder of all consents necessary, if
any, for it to perform its obligations hereunder; (e) it has the experience and
skill to perform the services required to be performed by it hereunder; (f) it
shall perform such services in accordance with generally accepted professional
standards and in an expeditious and economical manner consistent with sound
professional practices; (g) it is adequately financed to meet any financial
obligation that it may be required to incur under this Agreement; (h) the
Translations, Translated Promotional Materials and Translated User Documentation
do not infringe upon any proprietary right of a third party, including but not
limited to any copyright, trademark, trade secret and/or patent; and (i)
Distributor shall not issue any press releases or use the Scholastic name,
trademark and/or logo or any other property of Scholastic other than as
specifically set forth herein.
15.2. NO EXPECTATIONS. Distributor acknowledges and agrees that (a) it has
no expectation and has received no assurances that its business relationship
with Scholastic will continue beyond the Termination Date, that any investment
by it in the Translation, promotion or distribution of Translated Units will be
recovered or recouped, or that it will obtain any anticipated amount of profits
by virtue of this Agreement; and (b) it shall not have or acquire by virtue of
this Agreement any vested, proprietary or other right in the Translations or
promotion of Translated Units or Translated Products or in any goodwill created
by its efforts.
15.3. INDEMNIFICATION BY DISTRIBUTOR. Distributor agrees to, and shall,
indemnify, defend and hold harmless Scholastic and all other Scholastic
Affiliates and their respective directors, shareholders, officers, agents,
employees, successors and assigns from and against any and all claims, demands,
suits, actions, judgments, damages, costs, losses, expenses (including attorneys
fees and expenses) and other liabilities arising from, in connection with or
related in any way to, directly or indirectly, (a) its performance of this
Agreement, (b) any and all promotional activities relating to Translated Units
or Translated Products, (c) any breach or alleged breach of any of the
representations, warranties, undertakings or agreements made by it under this
Agreement or (d) any act or omission of it or any Distributor Affiliate in
connection with this Agreement. Scholastic shall promptly notify Distributor of
any such claim. Distributor shall bear full responsibility for the defense
(including any settlements); provided however, that (i) Distributor shall keep
Scholastic informed of, and consult with Scholastic in connection with the
progress of such litigation or settlement; and (ii) Distributor shall not have
any right, without Scholastic's written consent, to settle any such claim if
such settlement arises from or is part of any criminal action, suit or
proceeding or contains a stipulation to or admission or acknowledgment of, any
liability or wrongdoing (whether in contract, tort or otherwise) on the part of
any Scholastic Affiliate.
15.4 REPRESENTATIONS AND WARRANTIES OF SCHOLASTIC.
(a) Scholastic represents and warrants that (it has the right,
power and authority to enter into this Agreement; and (the making of this
Agreement by it does not violate any agreement existing between it and any
other person or entity.
(b) Except for the foregoing representations and warranties, THE
PRODUCTS AND UNITS ARE PROVIDED "AS IS". SCHOLASTIC SPECIFICALLY DISCLAIMS
ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO (i)
ANY WARRANTY THAT ANY PRODUCT, TRANSLATED PRODUCT, UNIT OR TRANSLATED UNIT
OR ANY PART OR ASPECT THEREOF DOES NOT INFRINGE UPON OR VIOLATE ANY
INTELLECTUAL PROPERTY RIGHT OF ANY PARTY, AND (ii) IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AS TO ANY PRODUCTS,
UNITS OR SERVICES PROVIDED BY SCHOLASTIC UNDER THIS AGREEMENT.
15.5 LIMITATION OF LIABILITY.
(a) IN NO EVENT SHALL SCHOLASTIC BE LIABLE UNDER OR IN CONNECTION
WITH THIS AGREEMENT FOR ANY LOSS OF PROFIT OR ANY OTHER COMMERCIAL DAMAGE,
INCLUDING WITHOUT LIMITATION INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY,
PUNITIVE OR OTHER DIRECT OR INDIRECT DAMAGES OF ANY NATURE, FOR ANY REASON,
INCLUDING WITHOUT LIMITATION THE BREACH OF THIS AGREEMENT, ANY EXPIRATION
OR TERMINATION OF THIS AGREEMENT, CLAIMS ALLEGING THAT ANY PRODUCT,
TRANSLATED PRODUCT, UNIT OR TRANSLATED UNIT OR ANY PART OR ASPECT THEREOF
INFRINGES UPON OR VIOLATES ANY INTELLECTUAL PROPERTY RIGHT OF ANY PARTY OR
CLAIMS ARISING FROM THE MALFUNCTION OF OR DEFECTS IN ANY PRODUCT OR UNIT,
WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT,
(INCLUDING NEGLIGENCE OR STRICT LIABILITY) OR OTHERWISE, EVEN IF SCHOLASTIC
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(b) IN NO EVENT SHALL SCHOLASTIC'S LIABILITY FOR ANY CLAIM ARISING
OUT OF THIS AGREEMENT EXCEED THE AGGREGATE AMOUNT PAID TO SCHOLASTIC BY
DISTRIBUTOR UNDER THIS AGREEMENT DURING THE CALENDAR QUARTER IN WHICH SUCH
CLAIM ACCRUES.
(c) THIS SECTION 15.5 HAS BEEN INCLUDED AS A MATERIAL INDUCEMENT
FOR SCHOLASTIC TO ENTER INTO THIS AGREEMENT AND DISTRIBUTOR ACKNOWLEDGES
AND AGREES THAT SCHOLASTIC WOULD NOT HAVE ENTERED INTO THIS AGREEMENT BUT
FOR THE LIMITATIONS OF LIABILITY IN THIS AGREEMENT.
15.6. NO PASS THROUGH OF WARRANTY OBLIGATIONS. SCHOLASTIC DOES NOT MAKE BY
VIRTUE OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN, AND SCHOLASTIC
HEREBY EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY TO ANY END USER,
DEALER OR OTHER THIRD PARTY, WITH RESPECT TO ANY TRANSLATED UNIT PURCHASED OR
DISTRIBUTED BY DISTRIBUTOR PURSUANT TO THIS AGREEMENT, INCLUDING, BUT NOT
LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. DISTRIBUTOR SHALL NOT HAVE THE RIGHT TO MAKE OR PASS ON, AND
SHALL TAKE ALL MEASURES NECESSARY TO INSURE THAT NEITHER IT NOR ANY OF ITS
EMPLOYEES OR AGENTS MAKES OR PASSES ON, OR ATTEMPTS TO MAKE OR PASS ON, ANY SUCH
REPRESENTATION OR WARRANTY ON BEHALF OF SCHOLASTIC TO ANY END USER, DEALER OR
OTHER THIRD PARTY.
15.7 INDEMNIFICATION BY SCHOLASTIC. Scholastic shall defend, at its sole
expense, any suit or proceeding brought against Distributor insofar as such suit
or proceeding shall be based upon a claim in respect of any of the warranties
set forth in Section 15.4(a) hereof. Scholastic shall pay any damages and costs
finally awarded by a court against Distributor on such a claim, provided that:
(a) Scholastic shall have been promptly notified of the suit or
claim by Distributor and provided with a copy of each communication, notice
or other action relating to said claim;
(b) Scholastic shall have the right to assume sole authority to
conduct the trial or settlement of such claim or any, negotiations related
thereto at Scholastic's expense; and
(c) Distributor shall have provided Scholastic all information and
assistance reasonably requested by Scholastic in connection with such claim
or suit.
The foregoing shall not apply, and Scholastic shall have no obligations to
Distributor to the extent any such claim is based on (x) any use of any
Translated Unit in combination with any product, equipment, software or data not
manufactured or marketed by Scholastic or identified by Scholastic as being
compatible with any Translated Unit, (y) any alteration or modification of any
Translated Unit beyond those permitted hereunder, or (z) marketing, distribution
or use of any Translated Units after written notice that Distributor should
cease such activity due to such claim.
16. TERMINATION
16.1. Without prejudice to any other rights or remedies available to
Scholastic, Scholastic shall have the right, in its sole discretion, to
immediately terminate this Agreement upon written notice to Distributor in the
event of the occurrence of one or more of the following:
(a) Distributor discontinues its marketing and distribution business
or fails to meet the Release Date through no fault of delay caused by
Scholastic; or
(b) Scholastic is prevented from manufacturing, publishing, distribu-
ting, marketing, selling, licensing or providing any Product or Unit by
law or as a result of a suit, claim or proceeding (including settlement
thereof) brought by a third party against Scholastic; or
(c) Distributor (i) asserts any Intellectual Property Right in or
to any Translated Product, Product, Scholastic Property or any material
provided by Scholastic or (ii) fails to perform any obligation, warranty,
duty or responsibility, or is in breach of or in default, with respect to
any other term or condition undertaken by Distributor under this Agreement
which pertains to or affects any other proprietary right of Scholastic; or
(d) Distributor fails to make any payment or furnish any statement as
herein provided and such failure continues for a period of five (5) days
following receipt of notice of such failure; or
(e) there is any violation of Section 3.1 hereof; or
(f) subject to Section 19.7 hereof, an event therein described
occurs; or
(g) Distributor makes any assignment for the benefit of creditors or
files a petition in bankruptcy or is adjudged bankrupt or becomes insolvent
or is placed in the hands of a receiver or if the equivalent of any of the
proceedings or acts referred to in this clause, though known and/or
designated by some other name or term in any part of the Territory, shall
occur; or
(h) Distributor breaches any other material term or provision of
this Agreement and fails to cure such breach within ten (10) days after
Scholastic delivers written notice thereof to Distributor.
16.2. Distributor shall have the right to terminate this Agreement in the
event Scholastic (a) breaches a material term or provision of this Agreement and
fails to cure such breach within ten (10) days after Distributor delivers
written notice thereof to Scholastic, or (b) makes any assignment for the
benefit of creditors or files a petition in bankruptcy or is adjudged bankrupt
or becomes insolvent or is placed in the hands of a receiver or if the
equivalent of any of the proceedings or acts referred to in this clause, though
known and/or designated by some other name or term in any part of the Territory,
shall occur.
16.3. For purposes of this Agreement, any act or failure to act by any third
party contractor of Distributor, or any employee of Distributor or such third
party contractor shall be deemed an act or failure to act by Distributor.
16.4. Subject to Distributor's limited sell-off right pursuant to Section
8.2 above, on the Termination Date, all rights granted to Distributor under or
pursuant to this Agreement shall revert to Scholastic, and Distributor shall no
longer distribute any Translated Units.
16.5. No expiration or termination of this Agreement shall release
Distributor from its obligation to pay Scholastic the Minimum Guarantee and any
amounts payable to Scholastic under this Agreement which accrued prior to the
Termination Date or which may accrue after the Termination Date.
16.6. In the event of the expiration or termination of this Agreement for
any reason (including a material breach of this Agreement by Scholastic),
subject to Distributor's limited right of sell-off set forth in Section 8.2
hereof, Distributor shall promptly deliver to Scholastic Translated Promotional
Materials and all materials provided by Scholastic (including all copies
thereof). Distributor further agrees that Scholastic and its agents, employees,
and representatives shall have the right, with prior notice to Distributor, to
enter Distributor's premises in order to take repossession of such Translated
Promotional Materials and materials, in which case Distributor shall forthwith
surrender to Scholastic such materials. In no event shall Distributor have any
right to (a) recover or obtain any Intellectual Property Rights or other rights
in or to any Product, Translated Product, promotional material, Translated
Promotional Material or any material provided by Scholastic, or (b) enjoin
or otherwise interfere with Scholastic's development, licensing, publishing,
marketing, distribution or provision of any Product or Translated Product.
16.7. Except as set forth in Section 16.2 above, no breach of this Agreement
by Scholastic shall entitle Distributor to terminate or rescind this Agreement
or to injunctive or other equitable relief, it being agreed that Distributor's
sole remedy, if any, in the event of such a breach shall be an action for
damages.
16.8. The obligations in this Agreement which are intended, by their terms
or by necessary implication, to survive the expiration or termination of this
Agreement shall so survive. In addition, and without limiting the generality of
the preceding sentence, Sections 3.2, 7.4, 7.6, 11 through 15, 17, 18 and 19
hereof shall survive the expiration or termination of this Agreement for any
reason.
17. INDEPENDENT CONTRACTOR NO AGENCY
17.1. Distributor is, and shall remain, an independent contractor with
respect to services performed pursuant to this Agreement.
17.2. Personnel supplied by Distributor shall work exclusively for same
and shall not, for any purpose, be considered employees or agents of Scholastic.
Distributor assumes full responsibility for the actions of such personnel while
performing services pursuant to this Agreement and shall be exclusively
responsible for, shall solely bear the costs and expenses of, and shall
indemnify Scholastic and hold it harmless from claims relating to, their super-
vision, daily direction and control (including without limitation Distributor's
and such personnel's compliance with any applicable laws), compensation,
benefits (including without limitation any pension or welfare plan and workers'
compensation program) and taxes (including without limitation any withholding
taxes, payroll taxes, disability insurance payments, unemployment taxes, and
other similar taxes, assessments, contributions or charges on the payments made
or required to be made by Distributor to such personnel). Distributor shall file
all returns and reports that may be required by any governmental or professional
agency with respect to any of the foregoing.
17.3 Scholastic shall have no obligation whatsoever to compensate Distributor
or any person or entity engaged by Distributor on account of any damages or
injuries which Distributor or such person or entity may sustain as a result or
in the course of the performance by such person or entity of services for or on
behalf of Distributor pursuant to this Agreement.
17.4. Nothing contained herein shall be construed to constitute either of
the parties as principal and agent, employer and employee, partners or joint
venturers, nor shall any similar relationship be deemed to exist between the
parties. Except as specifically provided herein, neither party shall have any
power to obligate or bind the other party.
18. INSURANCE
Distributor shall maintain in full force and effect at all times while this
Agreement is in effect and for two (2) years thereafter comprehensive general
and commercial liability insurance, including broad form contractual and
products liability coverage waiving subrogation with combined single limits of
no less than two million dollars ($2,000,000) and naming Scholastic as an
additional insured. Distributor shall deliver to Scholastic a certificate or
certificates of insurance evidencing satisfactory coverage and indicating that
Scholastic shall receive written notice of cancellation, non-renewal or any
material change in coverage at least thirty (30) days prior to the effective
date thereof. All insurance required hereunder shall be written by reputable
insurers accorded a rating by A.M. Best Company, Inc. of B+:Vll or higher at the
time of issuance of any policy pertaining to such insurance. Compliance herewith
in no way limits Distributor's indemnity obligations, except to the extent that
Distributor's insurance company actually pays Scholastic amounts which
Distributor would otherwise pay Scholastic.
19. GENERAL PROVISIONS
19.1. NOTICES. All notices which either party is required or may desire to
serve upon the other party shall be in writing and in English, addressed to the
party to be served as follows:
(a) if to Scholastic:
Xxxxxxxxxx Xxx.
000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Senior Vice President-Business and Legal Affairs
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Xxxxxxxxxx Xxx.
000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: International Marketing Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) if to Distributor:
Star E-Media Corporation
000 Xxxxxxxxxx Xxxxx, Xxxxx X
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any such notice may be served personally or by courier, mail (postage prepaid),
facsimile (provided oral confirmation of receipt is immediately obtained or a
hard copy is concurrently sent by internationally commercially recognized
overnight delivery service) or internationally commercially recognized overnight
delivery service. Notice shall be deemed served upon the date sent; provided
however, that Scholastic shall be deemed to have been served with a notice of a
request for approval of materials under this Agreement only upon Scholastic's
actual receipt of the request and of any required accompanying materials.
Materials, including language, which require approval by Scholastic shall be
sent by mail (postage prepaid), internationally commercially recognized over-
night delivery service, or served personally or by courier. Either party may
change the address to which notices are to be delivered by written notice to the
other party served as provided in this Section 19.1.
19.2. ENTIRE AGREEMENT. This Agreement, together with the exhibit attached
hereto and hereby incorporated herein by reference, constitutes the complete,
final and exclusive understanding and agreement between Scholastic and
Distributor with respect to the transactions contemplated herein, and supersedes
any and all prior or contemporaneous oral or written representation, under-
standing, agreement, correspondence or communication between Scholastic and
Distributor concerning the subject matter hereof. Neither party is relying upon
any warranties, representations, assurances or inducements not expressly set
forth herein.
19.3. AMENDMENTS. All amendments or modifications of this Agreement shall be
binding upon the parties despite any lack of consideration so long as the same
shall be in writing and executed by each of the parties hereto. It is expressly
understood and agreed that no usage of trade or other regular practice or method
of dealing between the parties hereto shall be used to modify, interpret,
supplement or alter in any manner the express terms of this Agreement or any
part hereof.
19.4. WAIVER. No waiver of any provision of this Agreement or any rights or
obligations of either party hereunder shall be effective, except pursuant to a
written instrument signed by the party waiving compliance, and any such waiver
shall be effective only in the specific instance and for the specific purpose
stated in such writing.
19.5. NO OTHER OBLIGATIONS. Neither party shall have any obligation that is
not expressly set forth in this Agreement.
19.6. CUMULATIVE REMEDIES. Except as may be specifically set forth in this
Agreement with respect to certain matters, the rights and remedies of each party
as set forth in this Agreement are not exclusive and are in addition to any
other rights and remedies provided under this Agreement or now or hereafter
provided by law.
19.7. FORCE MAJEURE. Neither party shall be deemed in default hereunder, nor
shall it hold the other party responsible for, any cessation, interruption or
delay in the performance of its obligations hereunder due to causes beyond its
reasonable control including, but not limited to: earthquake, flood, fire, storm
or other natural disaster, epidemic, accident, explosion, casualty, act of God,
lockout, strike, labor controversy or threat thereof, riot, insurrection, civil
disturbance or commotion, boycott, disruption of the public markets, war or
armed conflict (whether or not officially declared), sabotage, act of a public
enemy, embargo, delay of a common carrier, the inability to obtain sufficient
material, supplies, labor, transportation, power or other essential commodity or
service required in the conduct of its business, or any change in or the
adoption of any law, ordinance, rule, regulation, order, judgment or decree;
provided that the party relying upon this Section 19.7 (a) shall have given the
other party written notice thereof promptly and, in any event, within five (5)
days of discovery thereof and (b) shall take all steps reasonably necessary
under the circumstances to mitigate the effects of the force majeure upon which
such notice is based; provided further, that in the event of a force majeure
described in this Section 19.7 extends for a period in excess of thirty (30)
days, the other party may, pursuant to Section 16 hereof, immediately terminate
this Agreement.
19.8. NO THIRD PARTY BENEFICIARIES. Except as expressly provided in Section
14 hereof, nothing in this Agreement is intended or shall be construed to give
any person, other than the parties hereto, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provisions contained
herein.
19.9. ASSIGNMENT. Scholastic shall have the right at any time to assign,
delegate or otherwise transfer this Agreement, in whole or in part, or any or
all of Scholastic's rights, duties or obligations hereunder to any third party.
This Agreement and Distributor's rights, duties and obligations hereunder are
personal to Distributor and may not be assigned, delegated or otherwise
transferred by Distributor, or by operation of law, without the prior written
consent of Scholastic, which consent may be granted or withheld by Scholastic in
its sole discretion. Without limiting the materiality of any other term of this
Agreement, any attempted assignment, delegation or other transfer (including
without limitation any license or sublicense, mortgage or pledge) without such
consent shall be null and void and shall constitute a material breach of this
Agreement. The sale, transfer or encumbrance of fifty percent (50%) or more of
the ownership interest in, or outstanding voting stock of, Distributor, or the
merger of Distributor into or with any other third party or entity, shall be
deemed an assignment for purposes of this Section 19.9.
19.10. FURTHER ASSURANCES. Distributor agrees to do and perform all such
further acts and things and shall execute and deliver such other agreements,
certificates, instruments and documents necessary or that Scholastic may deem
advisable in order to carry out the intent and accomplish the purposes of this
Agreement and to evidence, perfect or otherwise confirm Scholastic's rights
hereunder.
19.11. CONSTRUCTION. This Agreement shall be fairly interpreted and construed
in accordance with its terms and without strict interpretation or construction
in favor of or against either party. Distributor has had the opportunity to
consult with counsel in the negotiation of this Agreement.
19.12. HEADINGS. The section and paragraph headings appearing in this
Agreement are inserted only as a matter of convenience. Such headings in no way
define, govern, limit, modify or construe the scope or extent of the provisions
of this Agreement to which they may relate and therefore shall not be given any
legal effect.
19.13. SEVERABILITY. While the restrictions and covenants set forth in, and
the other provisions of, this Agreement are considered by the parties to be
reasonable under the circumstances hereof, it is recognized that restrictions
and covenants of such nature may be unenforceable for reasons unforeseen.
Accordingly, if any of such restrictions, covenants or provisions shall be
adjudged by a court of competent jurisdiction to be void as going beyond what is
reasonable in all the circumstances for the protection of the interests of the
party seeking to enforce such restriction, covenant or provision, but would be
valid if part of the wording thereof were deleted or the time periods (if any)
thereof were reduced or the range of activities or area dealt with thereby
reduced in scope, such restriction, covenant or provision shall apply with such
modifications as may be necessary to make it valid and effective. In the event
that any provision of this Agreement should be found by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
19.14. GOVERNING LAW, FORUM AND JURISDICTION. The validity, construction,
interpretation and legal effect of this Agreement shall be governed by the laws
and judicial decisions of the State of New York and the U.S. without giving
effect to principles of conflicts of law. Scholastic and Distributor expressly
agree that any action at law or in equity arising out of or relating to this
Agreement shall be filed only in the courts of the State of New York, or the
United States District Court for the Southern District of New York. The parties
hereby consent and submit to the personal jurisdiction of such courts for the
purposes of litigating any such action.
19.15. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which shall be deemed an original
and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the duly authorized representatives of each of the parties
hereto have entered into this Agreement as of the Effective Date.
XXXXXXXXXX XXX. STAR E-MEDIA CORPORATION
By /s/ Xxxxxxx Xxxxxxxx By /s/ E.G. Xxxxxxxxx
------------------------ ----------------------
Name: Xxxxxxx Xxxxxxxx Name: E. G. Xxxxxxxxx
-------------------- ------------------
Title: Vice President Title: President
----------------- ------------
Date: May 3, 2001 Date: April 16, 2001
-------------- -----------------
EXHIBIT A
---------
PRODUCTS AND TRANSLATED UNIT ROYALTIES
--------------------------------------
PRODUCTS
--------
I'm Ready for Kindergarten: Huggly's Turtle Rescue
I'm Ready for Kindergarten: Huggly's Sleepover
Usborne's Animated First Thousand Words
Scholastic SuperPrint Deluxe
Math Shop Deluxe
Why Mosquitoes Buzz in People's Ears
Chato's Kitchen
TRANSLATED UNIT ROYALTIES
---------------------------
- For I'm Ready for Kindergarten: Huggly's Turtle Rescue: One dollar and fifty
cents ($1.50) per each Translated Unit sold.
- For I'm Ready for Kindergarten: Huggly's Sleepover: One dollar and fifty cents
($1.50) per each Translated Unit sold.
- For Usborne's Animated First Thousand Words: One dollar and fifty cents
($1.50) per each Translated Unit sold.
- For Scholastic SuperPrint Deluxe: One dollar and fifty cents ($1.50) per each
Translated Unit sold.
- For Math Shop Deluxe: One dollar and fifty cents ($1.50) per each Translated
Unit sold.
- For Why Mosquitoes Buzz in People's Ears: One dollar and fifty cents ($1.50)
per each
Translated Unit sold.
- For Chato's Kitchen: One dollar and fifty cents ($1.50) per each Translated
Unit sold.
EXHIBIT B
---------
TRANSLATED PRODUCTS. SCHOLASTIC PURCHASE PRICES AND SCHOLASTIC ROYALTIES
------------------------------------------------------------------------
TRANSLATED PRODUCTS
--------------------
Usborne's Animated First Thousand Words
Math Shop Deluxe
Scholastic SuperPrint Deluxe
Why Mosquitoes Buzz in People's Ears
Chato's Kitchen
I'm Ready for Kindergarten: Huggly's Sleepover
I'm Ready for Kindergarten: Huggly's Turtle Rescue
SCHOLASTIC PURCHASE PRICES
----------------------------
Two dollars and fifty cents ($2.50) per Translated Jewel Unit
Three dollars and fifty cents ($3.50) per Translated Unit
SCHOLASTIC ROYALTIES
---------------------
Fifty cents ($.50) per each Translated Unit or Translated Jewel-Case Unit sold.
Scholastic Royalties shall only apply to Translated Units and/or Translated
Jewel-Case Units that are created by Distributor and do not incorporate
Scholastic Translations. Scholastic shall not pay Scholastic Royalties on the
following Translated Units, and/or Translated Jewel-Case Units which will be
created using Scholastic Translations: Usborne's Animated First Thousand Words;
I Spy; and I'm Ready for Kindergarten:
Huggly's Sleepover.
XXXXXXXXXX XXX.
AMENDMENT TO
DISTRIBUTION AGREEMENT
DATED MAY 1, 2000
This Amendment is entered into and effective as of March 8, 2001 between
Xxxxxxxxxx Xxx., a New York corporation with offices at 000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 ("Scholastic"); and Star E-Media, a Nevada corporation
with offices at 000 Xxxxxxxxxx Xxxxx, Xxxxx X, Xxxxxx, Xxxxxxxxxx 00000
("Distributor"), and sets forth the amendment to the Distribution Agreement
dated March 15, 1999 between the parties (the "Agreement").
Whereas Scholastic and Distributor desire to amend the Agreement as follows:
1. SECTION 5.1 MARKETING COMMITMENT is amended by adding the following:
Distributor shall submit a marketing plan to Scholastic for the Translated
Products, I Spy and I Spy Spooky Mansion and I Spy Junior, no later than July 1,
2001.
2. SECTION 2.1 TERM is amended by adding the following:
For the Translated Products and Translated Units, I Spy and I Spy Spooky Mansion
and I Spy Junior, the Term of this Agreement shall commence upon March 8, 2001
(provided that this Amendment has been fully executed and delivered by both
parties), and shall continue until March 7, 2003 (the "Second Termination Date")
unless terminated earlier in accordance with Section 16.1 or Section 16.2
hereof.
3. SECTION 5.4 RELEASE DATE is amended by adding the following:
Distributor shall release for sale the Translated Units, I Spy and I Spy Spooky
Mansion and I Spy Junior, in the Territory on the following date (the "Second
Release Date") by December 1, 2001.
4. SCHOLASTIC ROYALTIES is amended by adding the following:
Scholastic shall not pay Scholastic Royalties on the following Translated Units
and/or Translated Jewel-Case Units, which will be created using Scholastic
Translations: I Spy.
5. SECTION 8.1. MINIMUM GUARANTEE is amended by deleting the "AND" before
-----
"(B)" and by adding the following:
---
; (c) twenty-three thousand one hundred fifteen dollars ($23,115.00) for
the Translated Units I Spy and I Spy Spooky Mansion and I Spy Junior upon
mutual execution of this Amendment; and (d) eleven thousand three hundred
eighty-five dollars ($11,385.00) for the Translated Units I Spy and I Spy
Spooky Mansion and I Spy Junior on or before May 1, 2001.
6. EXHIBIT A. PRODUCTS is amended by adding the following:
I Spy
I Spy Spooky Mansion
I Spy Junior
7. SECTION 16.1(A) is amended by deleting its entirety and replacing it with
the following:
(a) Distributor discontinues its marketing and distribution business
or fails to meet the Release Date or the Second Release Date; or
8. EXHIBIT A. TRANSLATED UNIT ROYALTIES is amended by adding the following:
- For I Spy: One dollar and fifty cents ($1.50) per each Translated Unit
sold.
- For I Spy Spooky Mansion: One dollar and fifty cents ($1.50) per
each Translated Unit sold.
- For I Spy Junior: One dollar and fifty cents ($1.50) per each Trans-
lated Unit sold.
9. EXHIBIT B. TRANSLATED PRODUCTS is amended by adding the following:
I Spy
I Spy Spooky Mansion
I Spy Junior
All other terms and conditions of the Agreement shall remain in full force and
effect. All defined terms in this Amendment shall have the same definitions as
those defined terms set forth in the Agreement.
Accepted and agreed to effective as of the date first set forth above by:
SCHOLASTIC: DISTRIBUTOR:
XXXXXXXXXX XXX. STAR E-MEDIA CORPORATION
By /s/ Xxxxxxx Xxxxxxxx By /s/ E.G. Xxxxxxxxx
------------------------- -----------------------
Name: Xxxxxxx Xxxxxxxx Name: E. G. Xxxxxxxxx
-------------------- --------------------
Title: Vice President Title: President
------------------ ------------
XXXXXXXXXX XXX.
AMENDMENT #2 TO
DISTRIBUTION AGREEMENT
DATED MAY 1, 2000
This Amendment #2 is entered into and effective as of June 1, 2001 between
Xxxxxxxxxx Xxx., a New York corporation with offices at 000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 ("Scholastic"); and Star E-Media, a Nevada corporation
with offices at 000 Xxxxxxxxxx Xxxxx, Xxxxx X, Xxxxxx, Xxxxxxxxxx 00000
("Distributor"), and sets forth the amendment to the Distribution Agreement
dated March 15, 1999 between the parties (the "Agreement") and the amendment
dated March 8, 2001 between the parties (the Amendment").
Whereas Scholastic and Distributor desire to amend the Agreement as follows:
1. SECTION 1.12 TRANSLATED PRODUCT OR TRANSLATED PRODUCTS is amended by
deleting its entirety and replacing it with the following:
Translated Product or Translated Products means the Translated version of the
Products in the Spanish language only as a bilingual Spanish/English Translated
Product or Translated Unit.
2. SECTION 2.1 TERM is amended by adding the following:
For the Translated Products and Translated Units, Xxxxxxxx Reading and Xxxxxxxx
Thinking Adventures and I Spy Junior: Puppet Playhouse, the Term of this
Agreement shall commence upon June 1, 2001 (provided that this Amendment has
been fully executed and delivered by both parties), and shall continue until May
31, 2003 (the "Third Termination Date") unless terminated earlier in accordance
with Section 16.1 or Section 16.2 hereof.
3. SECTION 5.1 MARKETING COMMITMENT is amended by adding the following:
Distributor shall submit a marketing plan to Scholastic for the Translated
Products, Xxxxxxxx Reading and Xxxxxxxx Thinking Adventures and I Spy Junior:
Puppet Playhouse, no later than November 30, 2001.
4. SECTION 5.4 RELEASE DATE is amended by adding the following:
Distributor shall release for sale the Translated Units, Xxxxxxxx Reading and
Xxxxxxxx Thinking Adventures and I Spy Junior: Puppet Playhouse, in the
Territory on the following date (the "Third Release Date") by December 31, 2001.
5. SECTION 8.1. MINIMUM GUARANTEE is amended by deleting the " before " and
by adding the following:
-; (e) eleven thousand dollars ($11,000.00) for the Translated Units, Xxxxxxxx
Reading and Xxxxxxxx Thinking Adventures and I Spy Junior: Puppet Playhouse,
upon mutual execution of this Amendment; (f) thirteen thousand dollars
($13,000.00) for the Translated Units, Xxxxxxxx Reading and Xxxxxxxx Thinking
Adventures and I Spy Junior: Puppet Playhouse, on or before February 1, 2002;
(g) eleven thousand dollars ($11,000.00) for the Translated Units, Xxxxxxxx
Reading and Xxxxxxxx Thinking Adventures and I Spy Junior: Puppet Playhouse, on
or before April 1, 2002; and (h) four thousand dollars ($4,000.00) for the
Translated Unit, I Spy Junior: Puppet Playhouse, on or before July 1, 2002.
6. SECTION 16.1(A) is amended by deleting its entirety and replacing it with
the following:
(a) Distributor discontinues its marketing and distribution business or
fails to meet the Release Date or the Second Release Date or the Third Release
Date through no fault of delay caused by Scholastic; or
7. EXHIBIT A. PRODUCTS is amended by adding the following:
Xxxxxxxx Reading
Xxxxxxxx Thinking Adventures
I Spy Junior: Puppet Playhouse
8. EXHIBIT A. TRANSLATED UNIT ROYALTIES is amended by adding the following:
- For Xxxxxxxx Reading: One dollar and fifty cents ($1.50) per each
Translated Unit sold.
- For Xxxxxxxx Thinking Adventures: One dollar and fifty cents ($1.50) per
each Translated Unit sold.
- For I Spy Junior: Puppet Playhouse: One dollars and fifty cents ($1.50)
for each Translated Unit sold.
9. EXHIBIT B. TRANSLATED PRODUCTS is amended by adding the following:
Xxxxxxxx Reading
Xxxxxxxx Thinking Adventures
I Spy Junior: Puppet Playhouse
10. EXHIBIT B. SCHOLASTIC PURCHASE PRICES is amended by adding the
following:
For the Translated Units, Xxxxxxxx Reading and Xxxxxxxx Thinking Adventures and
I Spy Junior: Puppet Playhouse only:
Three dollars and fifty cents ($3.50 per Translated Jewel-Case Unit
Four dollars and fifty cents ($4.50) per Translated Unit.
All other terms and conditions of the Agreement as amended shall remain in full
force and effect. All defined terms in this Amendment #2 shall have the same
definitions as those defined terms set forth in the Agreement as amended.
Accepted and agreed to effective as of the date first set forth above by:
SCHOLASTIC: DISTRIBUTOR:
XXXXXXXXXX XXX. STAR E-MEDIA CORPORATION
By /s/ Xxxxxxx Xxxxxxxx By /s/ E.G. Xxxxxxxxx
------------------------- -----------------------
Name: Xxxxxxx Xxxxxxxx Name: E. G. Xxxxxxxxx
-------------------- --------------------
Title: Vice President Title: President
------------------ ------------
Date: May 3, 2001 Date: April 16, 2001
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