PC411 DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT (the "Agreement") between PC411, Inc. ("PC411"), and
Hewlett-Packard Company (the "Distributor").
WHEREAS, PC411-Registered Trademark- operates an online directory assistance
service (the "Service") and wishes to license its PC411 for Windows software
(the "Product") to the Distributor for installation on Vectra 500 personal
computers manufactured and sold by the Distributor (such personal computers are
hereinafter referred to as "PCs" and the end-users thereof are hereinafter
referred to as "Purchasers"), and
WHEREAS, the Distributor manufacturers and sells PCs and wishes to make the
Service available to Purchasers by pre-loading the Product.
NOW, THEREFORE, PC411 and the Distributor agree as follows:
1. Duties of PC411.
1.1 Delivery of Product. PC411 will provide the Distributor with the Product
and will provide upgrades to the Product as soon as any such upgrades are
released. PC411 will pre-configure the Product for the correct serial port,
modem type, and modem speed based upon the Distributor's specifications and will
assist the Distributor in testing the Product on the PCs. PC411 will provide
technical or other information relating to the Service and the Product as
requested by the Distributor. PC411 will provide the Distributor with
descriptions, art work, and text and other material relating to the Service and
the Product which may be copied by the Distributor for use in the Distributor's
promotional, marketing, and descriptive material. The Product provided to the
Distributor will be identifiable with one or more serial numbers unique to the
Distributor.
1.2 Product Support. During the term of this Agreement and for a period of six
months after expiration or termination of this Agreement, PC411 shall:
(1) if requested by Distributor, provide Distributor with a one day training
session on the features, installation, use, marketing and support of the
Product (all travel and incidental costs for the training session shall be
paid for by the Distributor);
(2) provide Distributor's customers with PC411's normal complete service
support of the Product;
(3) support Distributor by maintaining a telephone number and technicians to
receive calls; and
(4) support Distributor by receiving bug, error and defect reports from
Distributor and promptly fixing or providing workarounds to such bugs,
errors and defects.
1.3 Records. PC411 shall maintain complete and accurate records in accordance
with generally accepted methods of accounting for all transactions which are the
subject of this Agreement. At Distributor's expense and during regular business
hours, Distributor or an accounting organization retained by Distributor may
examine such records for purposes of auditing the amounts due under this
Agreement. If Distributor determines that an additional payment is due,
Distributor will issue an invoice for such additional amount with supporting
documentation. If a dispute arises over such additional amount, both parties
agree to work in good faith toward a mutually agreeable resolution of the
dispute. Distributor may perform such audit once per calendar year and will
give PC411 15 days notice of its intention to perform an audit. All information
gained by Distributor or its authorized representative from such audit shall be
deemed confidential and used solely for the purpose of verifying the amounts due
under this Agreement.
2. Duties of the Distributor.
2.1 Installation. The Distributor will "install" the Product on the hard
drives of certain PCs for the U.S. Market. Installation means that the serial
port, modem type, and modem speed of the PCs are correctly configured in the
Product and that the Product is executable from the Windows Program Manager.
The Product will be clearly visible as either a PC411 Program Group Icon or a
PC411 Program Window and in all cases will be no less visible than other similar
software applications except for the MSN application provided by Microsoft
Corporation. The Distributor will supply PC411 with the necessary technical
specifications of each PC model in sufficient time to permit PC411 to configure
and test the Product as required under Section 1. During the term of this
Agreement, HP may in its sole discretion determine which PCs, if any, will
contain the Product.
2.2 Promotion. The Distributor will promote the Service in its promotional and
advertising material and will send copies of such material to PC411 prior to
publication for review by PC411 so that PC411 may suggest corrections or
clarifying language.
3. Payment.
3.1 Distribution Fee. PC411 will pay to the Distributor a Distribution Fee and
a Bonus Fee for each Purchaser that becomes a Registered Customer. A Registered
Customer is a Purchaser that (i) has registered with the Service, (ii) has paid
the $15.00 registration fee, and (iii) has remained registered with the service
for 90 days without cancellation. The Distribution Fee will be $3.00 for each
Purchaser that becomes a Registered Customer.
3.2 Bonus Fee. If the number of Registered Customers is equal to or greater
than 20,000 by September 1, 1997, then PC411 shall pay the Distributor an
additional fee ("Bonus Fee") of $3.00 per all such Registered Customers existing
at the time as well as for each new Registered Customer for the remainder of the
term of the Agreement. If the number of Registered Customers is equal to or
greater than 10,000 but less than 20,000 by September 1, 1997, then PC411 shall
pay the Distributor a Bonus Fee of $2.00 per all such Registered Customers
existing at the time as well as for each new Registered Customer for the
remainder of the term of the Agreement. If the number of Registered Customers
is less than 10,000 by September 1, 1997, then no additional fees are owed.
3.3 Payment Period. PC411 will commence the payment of the Distribution Fees
and Bonus Fees at such time as there are 1,000 Registered Customers. PC411 will
pay the Distribution Fee and Bonus Fee within 30 days of the end of each
calendar quarter. Each quarterly payment will include a written report
calculating the number of Registered Customers and the amounts due under this
Agreement. Payment by check and supporting documentation will be mailed to:
Hewlett-Packard France, Personal Computer Division, Attention: Xxxxxxx Xxxxx,
Finance Manager, 5 avenue Xxxxxxx Xxxxxx, Eybens, 38053 Grenoble cedex 9 -
France.
4. License. PC411 hereby grants to the Distributor a royalty-free,
non-exclusive and non-transferable license which is limited to copying the
Product to the hard drives of its PCs and distributing the Product as specified
in this Agreement. The Product constitutes licensed, copyrighted material and
as such the Distributor specifically agrees not to modify or alter, copy,
reproduce or publish in whole or in part, sell, rent, sublicense, distribute, or
otherwise transfer or commercially exploit or in any way generate income from
the Product except as specifically contemplated by this Agreement. Title and
all ownership in the Product shall at all times remain with PC411. All copies
of the Product made by the Distributor shall contain the following copyright
notice: "Copyright -C- 1996 PC411, Inc." The Distributor agrees not to export
the Product outside the United States, except as
authorized and permitted by the laws and regulations of the United States.
PC411 hereby grants to the Distributor the right to use the trademark and logo
used by PC411 to identify the Product in connection with the Distributor's
marketing of the Product.
5. Confidentiality. The terms of this Agreement and any non-public,
proprietary information marked as confidential and disclosed by one party to the
other constitute confidential information and neither party will disclose or
disseminate any confidential information without the permission of the other
party. Notwithstanding the foregoing, each party may disclose the existence of
this Agreement and descriptions of each party's products or services in its
marketing and advertising efforts except that PC411 is not granted any right to
use the Distributor's trademark or logo without the prior written consent of the
Distributor, which consent shall not be unreasonably withheld.
6. Limitation on Liability. PC411 warrants the media on which the Product is
provided to the Distributor to be free from defects in materials and
workmanship. PC411's entire liability and the Distributor's exclusive remedy
with respect to such materials or workmanship defect will be the replacement of
the media.
PC411 does not warrant that the Service or the Product will meet the
requirements of the Distributor or the Distributor's customers or that it will
operate in an error free manner. Except as provided herein, PC411 makes no
warranty or representation, either express or implied, with respect to the
Service or the Product, including its quality, performance, merchantability, or
fitness for a particular purpose. In no event will either PC411 or the
Distributor be liable for indirect, special, incidental, punitive, exemplary, or
consequential damages arising out of the use or inability to use the Service or
the Product or the PCs, whether based upon contract, negligence, strict
liability, or otherwise, even if advised of the possibility of such damages.
Specifically, neither PC411 nor the Distributor are responsible to each other
for any costs, including but not limited to those incurred as the result of lost
profits or revenue, loss of the use of the Product, loss of data, the cost of
recovering such Product or data, the cost of any substitute program, or for
other similar costs.
7. Warranties. PC411 represents and warrants to the Distributor that:
(a) PC411 is the owner of the Product, or has all sufficient rights to grant
the license granted in this Agreement, and that the Product does not
infringe any patent, copyright, trademark, or other intellectual property
or similar rights;
(b) PC411 has no obligation or restriction that would interfere or be
inconsistent with or present a conflict of interest concerning its
performance under this Agreement;
(c) PC411 and the Product comply with all United States laws, statutes,
ordinances, administrative orders, rules or regulations that apply to the
Product; and
(d) the Product does not contain any encrypted code which is prohibited by U.S.
law for distribution outside the U.S.
8. Indemnification. PC411 agrees to indemnify and hold harmless Distributor
from and against any and all damages incurred by Distributor which result from
claims by any third party based on any of the following:
(a) infringement by the Product of any patent, copyright, trademark, trade
name, or other intellectual property or similar rights;
(b) unlawful or unfair trade practices or competition attributable to PC411;
and
(c) breach of any of PC411's warranties set forth in Section 7 above.
9. Termination. This Agreement is effective for three years from the date
hereof and thereafter will continue on a quarter to quarter basis unless
terminated by either party with 90 days prior written notice to the other party.
Upon termination, the Distributor will cease and desist from copying the Product
on to PCs. Either party may terminate this Agreement due to breach by the other
party upon 30 days written notice.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, as applied to contracts
made and performed within the State of California, without regard to principles
of conflicts of law. The parties hereto agree to submit to the non-exclusive
jurisdiction of the courts of the State of California in any action or
proceeding arising out of or relating to this Agreement.
11. Complete Agreement. This Agreement constitutes the entire understanding
between the parties with respect to the Product and supersedes all prior or
contemporaneous understandings or agreements, written or oral, regarding such
subject matter. No amendment to or modification of the Agreement will be
binding unless in writing and signed by an officer of PC411 and the Distributor.
12. Notices. All notices and communications under this Agreement shall be in
writing and shall be delivered to the parties at the addresses given below until
such time as either of the parties shall notify the other as to any change in
such address. All notices shall be deemed duly given five days after posting,
if sent by registered mail, receipt requested.
Addresses of the parties:
PC411, Inc. Hewlett-Packard France
Attention: Xxxxxxxxxxx X. Xxxxxx Attention: Xxxxxxx Xxxx
0000 X. Xx Xxxxxxx Xxxx., Xxxxx 000 5 avenue Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000 Eybens
00000 Xxxxxxxx xxxxx 0 - Xxxxxx
IN WITNESS THEREOF, the parties hereto agree to the foregoing this ____ day of
April, 1996.
PC411, Inc. Hewlett-Packard France
By: By:
----------------------------- -----------------------------
Name: Xxxxxxxxxxx X. Xxxxxx Name: Xxxxxxx Xxxx
Title: President Title: General Manager
