EXHIBIT 10.4
Distribution Agreement
THIS DISTRIBUTION AGREEMENT is entered into this 22nd day of November 1995 by
and between BRILLIANT INTERACTIVE IDEAS PTY LTD ACN 061 288 668 of Xxx 0, 00 Xxx
Xxxxx, Xxxxx, XXX, 0000, Xxxxxxxxx (hereinafter referred to as "BII") and
CONSUMER ELECTRONICS PTY LTD located at 00 Xxxxxxxx Xxxxxxxx, Xxxxxxxx Ext. 00
Xxxxxxxxx 0000, Xxxxx Xxxxxx, hereinafter referred to as "CE").
WHEREAS CE is in the business of publishing and distributing computer software
in South Africa and neighboring territories and BII are in the business of
developing interactive multimedia software products. CE is desirous of
publishing and distributing the various software products as listed in Appendix
A hereto, that BII have developed.
NOW THEREFORE THE PARTIES do agree as follows:
Territory is defined as South Africa and neighboring territories.
1. BII have developed a range of CD-ROM software titles for CE hereinafter
referred to as the "Products" (as listed in Appendix A).
2(a). The Products shall be delivered in object code in a form compatible with
IBM PC running under Windows V3.x and Windows 95, as well as Macintosh
from Apple Computer.
3(i). BII grants to CE the right to reproduce, publish, distribute, display
and sell the Products in the Territory. CE shall not be entitled to make
any alterations to the object code of the products without the written
consent of BII.
3(ii). CE shall not distribute or export directly or indirectly any copies of
the Product outside the Territory and CE shall not distribute, sell or
make available any copies of the Product to anyone in the Territory,
whom CE knows or ought to know, will export copies of the Product
outside the Territory.
4(i). The rights as granted in clause 3 above are the exclusive rights for the
Territory.
4(ii). BII further grants to CE OEM and bundle rights to the Products for the
Territory. These rights are independent of the other rights as granted
above. CE must request the written permission of BII before entering
into any OEM or bundle deal.
5(i). CE shall pay to BII a royalty of US $CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
(CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE
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COMMISSION Dollars) for each Product sold under clause 3(i) above a
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION of the Net Revenue received by CE for
each Product sold under clause 4(ii) above. Net Revenue is defined as
gross revenue actually received by CE from the sale of Products less
sales tax or VAT. No royalty shall be due on Products distributed at no
charge to distributors, sub-distributors or dealers for promotional or
evaluation purposes, subject to a maximum of CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
(CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION) units of any product, unless
otherwise agreed to by BII.
CE shall retain BII's royalties as enumerated above in respect of all
Products until CE shall have recouped therefrom cumulatively a sum equal
to all advances or guarantees which have been paid to BII under the
terms of this agreement. After said sum is recouped by CE, CE shall
disburse BII's royalties to BII in accordance with clause 5 (ii) hereof.
5(ii). CE shall pay to BII the royalties due under clause 5(i) above, each
calendar month within 30 days after the end of each calendar month.
Such royalty payments are subject to the recoupment of advances from
BII's share as contained in clause 6 below.
5(iii). CE shall provide BII a monthly sales and royalty report, certified as
correct by the managing director of CE (the certified Sales and Royalty
Report) when remitting the royalty payments as detailed in clause 5(ii)
above. Where royalties payable are offset against advances then the
Certified Sales and Royalty report shall still be provided to BII within
30 days from the end of the calendar month.
In the event that the Certified Sales and Royalty report has not been
provided to BII within 45 days from the end of the calendar month than
BII shall be entitled to appoint an independent party to examine CE's
records for the purpose of ascertaining the royalties due for the
relevant period. The cost of the independent party in determining the
royalties due plus any royalties due shall be paid to BII
within 14 days of CE receiving written notification from BII of the
amount due.
6. CE shall pay to BII a sum of US $CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
(CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION) being a non-refundable development
advance to be recouped against royalties due to BII, for each Product
sold under clause 5 above. The advance shall be payable as
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follows:
(a) US $CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION per Product upon the
execution of this agreement, for each Product;
(b) US $CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION per Product within
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION days of the delivery of the
gold master of the Product, for each Product;
(c) US $CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION per Product within
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION days of the delivery of the
gold master of the Product, for each Product;
(d) US $CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION per Product within
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION days of the delivery of the
gold master of the product, for each product;
CE agrees that the payment of the advances in 6(b), 6(c) and 6(d) above
will not be delayed for any reason.
7. Left Blank
8. Left Blank
9. CE shall use it's best efforts to promote and expand the sale of the
Products in all Parts of the Territory and in all sectors of the market
on the maximum possible scale by all means. CE shall fulfill all orders
for the Product within a reasonable time after receipt of the order and
shall not make any false, misleading or deceptive statements in respect
of the Product.
10. CE shall keep complete and accurate records regarding the production,
replication and distribution of the Products and shall upon 10 business
days notice from BII
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allow BII or it's agent to inspect all of these records and other
related documents during normal working hours. In the event of any
discrepancies being noted CE agrees to pay BII within 10 days all
additional moneys owing and where the discrepancy exceeds 5% of the
amount that is due or reported to BII, CE agrees to pay all costs
incurred by BII in conducting the inspection of CE's records. BII's
ability to conduct the above mentioned inspection is restricted to three
times every year and on termination of this Agreement for any reason
whatsoever.
11(i). BII may terminate this Agreement immediately upon giving written notice
to CE if:
(a) CE fails to make any payment when due or otherwise breaches a
provision or warranty of this Agreement and has not rectified
such breach within fourteen (14) days of notice from BII; or
(b) CE dissolves, liquidates or if bankruptcy, insolvency or winding
up procedures are commenced by CE or are brought against CE and
such proceedings are not set aside within thirty (30) days of
their commencement, or if there is a substantial change in the
executive management or board of directors.
12. If this Agreement is terminated for any reason, CE shall:
(a) immediately return all masters of the Products to BII; and
(b) have the right to sell it's existing stocks of the Product for a
period of six (6) months from the date the Agreement is
terminated subject to payment to BII of all royalties due under
this agreement;
(c) at the expiration of the six month period referred to in clause
12(b) above CE shall destroy all remaining stock of the Products
held by CE and provide BII with written notice certifying that
all remaining stock has been destroyed.
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13. BII shall be responsible for any and all other royalties due on the
Products to third parties including music royalties, animation royalties
and licensing royalties.
14. BII provides no warranty as to names being used including the name
Brilliant Interactive Ideas in the territories in which CE distributes.
In the event a name change is needed for legal reasons then the parties
shall consult as to the new name and BII shall make the necessary
changes at CE's expense.
BII warrants that it is not aware of any contravention's caused by the
names that are used.
15(i). The names used are the property of BII and CE shall have no claim to
these or any other names being used.
BII retains any and all of the copyrights contained in the Products and
CE shall have no rights in the copyrights or other intellectual rights
contained in the Products. All Products shipped shall reflect the
appropriate copyrights which shall be provided to CE simultaneously with
the masters. Any press releases or advertisement for the Products shall
reference BII as the developer and shall contain the appropriate
copyright notices as provided.
15(ii). BII hereby authorizes CE to take any and all action that XX xxxxx
necessary to protect and enforce BII's copyright in the Products. CE
shall notify BII in writing of any and all action that CE takes prior to
the commencement of the action and shall keep BII fully informed of the
status and progress of the action. Where as a result of such action by
CE damages are awarded then the amounts so awarded shall be split
equally between CE and BII.
16. Left Blank
17. Left Blank
18. BII represents and warrants that the Products, as delivered to CE, will
not infringe the patent, copyright, trademark, trade secret or other
proprietary or privacy rights of any third party. Each party shall
fully indemnify the other (and its affiliates, shareholders, directors,
officers, employees and agents) against all losses, costs, charges and
expenses arising from such party's negligence in connection with this
Agreement;
19. ADDITIONAL RIGHTS
BII hereby grants to CE and CE hereby accepts the following additional
rights for the Territory and upon the terms and conditions of this
Agreement:
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(a) The right to make written summaries, extracts and synopses of the
Products, for the purpose of advertising, exploiting and
publicizing the Products and to use, exhibit and or broadcast
excerpts of the Products for the purpose of advertising,
publicizing and otherwise promoting the Products including
without limitation the right to incorporate extracts in
catalogues of all kinds, whether electronic or not;
(b) The right to use the trademarks and designs on and in the
Products in association with the sale or hire hereof as permitted
by this Agreement;
20. Each party shall treat as confidential all information of a confidential
nature of the other party which comes into it's possession under this
Agreement.
21. The term of this Agreement shall be for a period of CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION (CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION) CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION from the date of signing of this Agreement.
22. This Agreement shall be governed by the laws of New South Wales,
Australia.
23. ASSIGNMENT
This Agreement may not be assigned by either party without the express
written approval of the other party. Such approval may not be
unreasonably withheld.
24. NOTICES
24.1 Any notice, communication or other document author lead or required to
be given or served pursuant to this Agreement (herein referred to as a
"Notice") shall unless otherwise specifically provided by this Agreement
be in writing addressed as follows:
TO BII: Xxxxx 0, 00 Xxx Xxxxx
Xxxxx
XXX 0000
Xxxxxxxxx
Telephone: (00) 0000 0000
Facsimile: (00) 0000 0000
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For the Attention of: Xxxx Xxxxxx
TO CE: 00 Xxxxxxxx Xxxxxxxx
Xxxxxxxx Xxx 00
Xxxxxxxxx 0000
Xxxxx Xxxxxx
Telephone: (000) 000 0000
Facsimile: (011) 444 0717
For the Attention of: Xxxx Xxxxxx
or such other address as the relevant addresses may hereafter specify
for such purpose to the other party to this Agreement by notice in
writing.
24.2 A notice includes communication by facsimile. The sender of any
communication by facsimile shall forthwith confirm the same by letter,
but failure by the addressee to receive the same shall not prejudice the
validity or effect of such facsimile.
24.3 A notice shall be signed or, in the case of a facsimile, purport to be
signed, by the party originating the notice or by a director or
secretary of that party if it is a corporation.
24.4 A notice which is sent by prepaid mail shall be deemed to be received on
the third day following the day on which it was posted.
24.5 A notice which is sent by facsimile shall be deemed to be received at
the time printed on the log out by the machine on which the notice is
transmitted.
25. RELATIONSHIP OF PARTIES.
Each party is acting as an independent contractor and not as an agent,
pardoner, or Joint venturer with the other party for any purpose.
Except as provided in this Agreement, neither party shall have any
right, power, or authority to act or to create any obligation, express
or implied, on behalf of the other.
26. FORCE MAJEURE.
Neither party shall be responsible for delays or failure of performance
resulting from acts beyond the reasonable control of such party. Such
acts shall include, but not be limited to, acts of God, strikes,
walkouts, riots, acts of war, epidemics, failure of suppliers to
perform, governmental regulations, power failure(s), earthquakes, or
other disasters.
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27. SURVIVAL OF CERTAIN PROVISIONS.
The confidentiality obligations set forth in the Agreement shall survive
the termination of the Agreement by either party for any reason.
28. HEADINGS.
The titles and headings of the various sections and paragraphs in this
Agreement are intended solely for convenience of reference and are not
intended for any other purpose whatsoever, or to explain, modify, or
place any construction upon or on any of the provisions of this
Agreement.
29. ALL AMENDMENTS IN WRITING.
No provisions in either party's purchase orders, or in any other
business forms employed by either party will supersede the terms and
conditions of this Agreement, and no supplement, modification, or
amendment of this Agreement shall be binding, unless executed in writing
by a duly authorized representative of each party to this Agreement.
30. ENTIRE AGREEMENT.
The parties have read this Agreement and agree to be bound by its terms,
and further agree that it constitutes the complete and entire agreement
of the parties and supersedes all previous communications, oral or
written, and all other communications between them relating to the
license and to the subject matter hereof. No representations or
statements of any kind made by either party, which are not expressly
stated herein, shall be binding on such party.
31. WAIVER
Failure by either party to insist upon the performance of any or more of
the conditions hereof shall not be deemed to be a waiver of any rights
and remedies that that party may have and shall not be deemed a waiver
of any subsequent breach or default. No provision of this Agreement
shall be deemed to have been waived unless such waiver shall be in
writing and signed by a person being or purporting to be a director,
manager, secretary or other officer of the party giving notice in that
behalf.
32. SEVERABILITY
If any clause or part hereof shall be held or be deemed invalid or
unenforceable for any reason whatsoever, than such clause or part
thereof shall be deemed to be
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deleted from this Agreement and the Agreement shall otherwise remain in
full force and effect. The parties hereto agree to replace any invalid,
illegal or unenforceable provision with a provision which has the most
similar permissible economic and legal effect to the invalid, illegal or
unenforceable provision.
By their signatures below parties agree to be bound by the terms of this
Agreement.
CONSUMER ELECTRONICS PTY LTD BRILLIANT INTERACTIVE IDEAS
ACN 061 288 668
Name: - Xxxx Xxxxxx Name: - Xxxx Xxxxxx
Position: - General manager Position:- Managing Director
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Appendix A
The Products are:
A. KIDSTHEATRE
1. Plates are People Too
2. The Gumball Shop
3. Play Ball Xxxxxxx
X. CRAFTPAX
1. Activity Pack
2. Magic Trix
C. BEYOND 2000 INTERACTIVE
1. Dream Machines and Their Designers
2. 101 Ways To Save Our Planet
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