INTERNATIONAL LICENCE AND DISTRIBUTION AGREEMENT
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This INTERNATIONAL LIVENSE AND DISTRIBUTION AGREEMENT (the "Agreement") is made
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and entered into up on the 25th day of July, 2001 (the "Effective Date"), by and
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between VIVENDI UNIVERSAL INTERACTIVE PUBLISHING NORTH AMERICA, INC. and its
direct and indirect subsidiaries, with its principal place of business at 0000
Xxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxxxxx, XX 00000 ("COMPANY"), and STAR E MEDIA
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CORPORATION, a California corporation, with its principal place of business at
000 Xxxxxxxxxx Xx., Xxxxx X, Xxxxxx, XX 00000 ("DISTRIBUTOR").
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RECITALS
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WHEREAS, COMPANY publishes and distributes certain computer software products,
including the products listed in Exhibit A hereto; and
WHEREAS, COMPANY desires to distribute its products in a world market; and
WHEREAS, DISTRIBUTOR has expressed an interest in localizing, and acting as an
independent DISTRIBUTOR of, certain COMPANY products pursuant to the terms and
conditions set forth below;
NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants
and agreements hereinafter set forth, COMPANY and DISTRIBUTOR agree as follows:
1. DEFINITIONS. Whenever used in this Agreement, the following terms shall
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have the following specified meanings:
(a) "COMPANY Software" means computer software programs (including programs
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intended for demonstration or tutorial purposes) produced and/or distributes by
COMPANY and identified in the attached Exhibit A, as Exhibit A may be modified
or amended from time to time, and any and all improvements, corrections,
modifications, updates, enhancements and new releases related thereto, but
specifically excluding sequel products.
(b) "COMPANY Documentation" means any and all manuals, specifications, user
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guides no other documentation regarding the COMPANY Software.
(c) "COMPANY Products" means COMPANY Software packaged together with the
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appropriate COMPANY Documentation.
(d) "Distribution Term" means the time period set forth in the attached
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Exhibit A, as Exhibit A may be modified or amended from time to time, during
which DISTRIBUTOR has the right to distribute the enumerated Localized COMPANY
Products, as that terms is defined hereinbelow, in the Territory.
(e) "Territory" means only the countries listed in Exhibit A attached
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hereto, but only as their political borders exist on the date of this Agreement.
The Territory excludes foreign countries' embassies, and foreign military and
governmental installations, located within the territory.
(f) "Localization" means the modification of COMPANY Software and COMPANY
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Documentation to meet the needs of the non-English-speaking users in the
Territory. This may include code changes, additions and alterations to the
feature set, changes in the data or new art with the intent to provide more
culturally acceptable COMPANY Products.
(g) "Localized COMPANY Products" means COMPANY Software after Localization,
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together with the appropriate localized COMPANY Documentation and preapproved
collateral materials, contained in COMPANY-approved localized packaging for
DISTRIBUTOR's Territory.
(h) "End-User" means an individual or entity which purchases Localized
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COMPANY Products for its own use, and not for redistribution.
(i) "Dealer" means an entity which, as authorized hereunder, purchases
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Localized COMPANY Products and resells them to End-Users.
(j) "XXXX" means COMPANY's standard form end-user license agreement, a copy
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of which is included in COMPANY Documentation for, and/or displays on certain
screens and as part of the installation of, all COMPANY Software, as the same
may be modified or amended from time to time.
(k) "Prohibited Country" means a country to which export or re-export of any
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Localized COMPANY Products is prohibited by United States law without first
obtaining the permission of the United States Office of Export Administration or
its successor.
(l) "OEM" means original-equipment manufacturer, which is any natural person
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or legal entity which obtains a license from COMPANY to use COMPANY Products or
Localized COMPANY Products from the purpose of incorporating such COMPANY
Products or Localized COMPANY Products, in whole or in part, either with or
within computer hardware, software or other products for further distribution in
conjunction with such products.
(m) All references in this Agreement to the "sale" or "selling" of COMPANY
Software shall mean the sale of a License to use such COMPANY Software. All
references in this Agreement to the "purchase" of COMPANY Software shall mean
the purchase of a license to use such COMPANY Software.
2. APPOINTMENT AS AUTHORIZED COMPANY DISTRIBUTOR.
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(a) Exclusive Appointment. Subject to the terms and conditions of this
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Agreement, COMPANY hereby appoints DISTRIBUTOR as an independent, exclusive
DISTRIBUTOR of Localized COMPANY Products solely in the Territory, and
DISTIBUTOR hereby accepts such appointment. All rights not expressly granted to
DISTRIBUTOR hereunder are reserved by COMPANY.
(b) Nature of Distribution. The appointment of DISTRIBUTOR only grants to
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DISTRIBUTOR a license to distribute Localized COMPANY Products to DISTRIBUTOR's
customers in the Territory in accordance with this Agreement, and does not grant
any right, title or interest in any COMPANY Product, in whole or in part, To
DISTRIBUTOR.
(c) Software License. With respect to the COMPANY Products, COMPANY grants
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to DISTRIBUTOR an exclusive, non-transferable license in the Territory to modify
the COMPANY Software and the COMPANY Documentation, only as commercially
necessary and as approved by COMPANY, and to manufacture or have manufactured,
market, distribute and sell only in the Territory such modified versions of the
COMPANY Software and COMPANY Documentation as Localized COMPANY Products.
(d) On-Line Sales. COMPANY hereby grants DISTRIBUTOR the right to market
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and sell the Localized COMPANY products through on-line services and the
Internet only within the Territory. DISTRIBUTOR is prohibited from distributing
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any COMPANY Products or Localized COMPANY Products via electronic means,
including downloading. COMPANY reserves the right to review DISTRIBUTOR's
on-line materials regarding the Localized COMPANY Products, and may at any time
require DISTRIBUTOR to modify or remove such materials. DISTRIBUTOR agrees to
immediately comply with such notice.
(e) Sale Literature. COMPANY shall furnish DISTRIBUTOR with reasonable
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quantities (in COMPANY's sole judgment) of COMPANY's existing sales literature
if desired by DISTRIBUTOR for the initial introduction of the Localized COMPANY
Products within the Territory at no charge. COMPANY reserves the right to charge
a reasonable fee for any additional materials provided by it to DISTRIBUTOR.
(f) COMPANY's Reserved Rights.
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(1) Changes in Products. In the event COMPANY believes that further
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distribution of any Localized COMPANY Products in the Territory will expose
COMPANY to liability, COMPANY may, without liability to DISTRIBUTOR, delete
such COMPANY Product from the list of COMPANY Products contained in Exhibit
A. DISTRIBUTOR agrees to promptly refrain from any further distribution of
the applicable Localized COMPANY Products following receipt of such notice.
Additionally, COMPANY reserves the right to modify COMPANY Products during
the term hereof in its sole discretion.
(2) COMPANY and Third-Party Distribution of COMPANY Products Within
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the Territory. DISTRIBUTOR acknowledges that COMPANY has granted and/or
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in the future may grant OEM rights to third parties relating to one or more
of the COMPANY ProductS (other than Localized COMPANY Products) in the
Territory. In addition, DISTRIBUTOR further acknowledges that COMPANY
and/or third parties may from time to time distribute COMPANY Products
directly to resellers and end-users in the Territory, but during the term
of this Agreement COMPANY shall not knowingly distribute Localized COMPANY
Products to resellers in the Territory.
(3) COMPANY and Third-Party Distribution of Localized COMPANY Products
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Within the Territory. DISTRIBUTOR acknowledges that COMPANY may in the
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future grant licenses for distribution of the Localized COMPANY Products in
conjunction with third-party products. In the event COMPANY enters into
such a licensing arrangement, COMPANY shall pay DISTRIBUTOR twenty percent
(20%) of COMPANY's net proceeds resulting there from during the term.
3. CERTAIN OBLIGATIONS OF DISTRIBUTOR. DISTRIBUTOR warrants and represents
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that it has, and will maintain, the capacity, facilities and personnel necessary
to carry out its obligations pursuant to this Agreement, and in particular that:
(a) Promotion Efforts. DISTRIBUTOR shall use its best efforts to market,
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sell and distribute Localized COMPANY Products both vigorously and aggressively
within the Territory in accordance with the terms of this Agreement.
Notwithstanding the foregoing, all promotional, advertising and/or other
marketing items or the like which DISTRIBUTOR may desire to create must be
pre-approved in writing by COMPANY in the form attached hereto as Exhibit C. As
it pertain to the Blizzard Entertainment products, all such advance written
approvals must be obtained from Blizzard Entertainment's Vice President of
Business Development or his/her designee.
(b) Dealer Qualifications. DISTRIBUTOR shall authorize and maintain only
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Dealers that have the financial capacity, facilities, technical capacity and
desire to market and sell Localized COMPANY Products competently.
(c) DISTRIBUTOR-Dealer Agreement. It is a material obligation of DIST-
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RIBUTOR, prior to engaging in any transaction with a Dealer involving
Localized COMPANY Products, to enter into an agreement with such Dealer which
authorizes such Dealer to resell Localized COMPANY Products, and which provides,
inter alia, that as a material condition of such agreement, such Dealer may
resell the Localized COMPANY Products only within the Territory granted
hereunder.
(d) Minimum Commitments. DISTRIBUTOR agrees to and guarantees to sell at
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least the minimum quantities of each of the Localized COMPANY Products set forth
in Exhibit A (the "Guaranteed Unit Sales") in the time period set forth in
Exhibit A (the "Guarantee Period"). In the event DISTRIBUTOR does not achieve
the Guaranteed Unit Sales during the Guarantee Period, DISTRIBUTOR agrees to
pay, at the expiration of the Guarantee Period, the difference between the
royalties which would have been payable on the Guaranteed Unit Sales and the
royalties paid of payable for quantities actually sold during the Guarantee
Period. Notwithstanding the foregoing, COMPANY shall have the right but not
the obligation to terminate this agreement upon 30 days written notice to
DISTRIBUTOR if:
(1) DISTRIBUTOR has not achieved the Guaranteed Unit sales within
the Guarantee Period; or
(2) DISTRIBUTOR has not achieved one-half (1/2) of the Guaranteed unit
Sales at the midpoint of the Guarantee Period. Within 30 days of COMPANY's
written notice to DISTRIBUTOR of termination under the Paragraph 3(d)(2),
DISTRIBUTOR shall pay the difference between one-half (1/2) the royalties
which would have been payable on the Guaranteed Unit Sales and the
royalties for quantities actually sold up to the midpoint of the Guarantee
Period.
(e) Inventory. DISTRIBUTOR shall maintain an inventory of Localized COMPANY
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Products sufficient to serve adequately the needs of Dealers and End-Users
within a commercially reasonable time frame. Notwithstanding the foregoing,
DISTRIBUTOR shall make best efforts to ensure that its inventory of Localized
COMPANY products are never out-of-stock for any period that exceeds five (5)
consecutive business days.
(f) Dealer Support. DISTRIBUTOR shall provide Dealers with training,
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technical support and other assistance appropriate in promoting Localized
COMPANY Products. DISTRIBUTOR shall transmit to Dealers all COMPANY literature
and other information that COMPANY requests to be transmitted to them.
(g) DISTRIBUTOR Personnel. DISTRIBUTOR shall train and maintain a sufficient
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number of capable technical and sales personnel at it's expense; (1) to serve
the needs of its Dealers or End-Users for Localized COMPANY Products, service
and support; and (2) otherwise to carry out the responsibilities of DISTRIBUTOR
pursuant to this Agreement.
(h) Technical Expertise. DISTRIBUTOR and its staff shall be conversant with
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the technical language conventional to COMPANY Products and similar computer
products in general.
(i) DISTRIBUTOR - Replicator/Duplicator Agreement. Prior to engaging a
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replicator/duplicator to replicate/duplicate Localized COMPANY Products as
contemplated pursuant to Paragraph 3(s) below, DISTRIBUTOR and such replicator/
duplicator shall execute an agreement authorizing that entity to duplicate
Localized COMPANY Products. It is a material obligation of DISTRIBUTOR to
contractually require the duplicator/replicator to prepare and submit reports to
COMPANY in accordance with Paragraph 4(d) below and to refrain from replication
that results in the production of gold-colored CD-ROMs.
(j) DISTRIBUTOR Covenants. DISTRIBUTORRIBUTOR covenants and agrees:
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(1) Efforts. To conduct business in a manner that reflects favorably
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on the goodwill and reputation of COMPANY;
(2) Marketing Practices. To avoid deceptive, misleading or unethical
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trade practices, including but not limited to making representations,
warranties or guarantees to customers or to the trade with respect to the
specifications, features or capabilities of Localized COMPANY products that
are inconsistent with the literature distributed by COMPANY, including all
warranties and disclaimers contained in COMPANY literature;
(3) Marketing Through Dealers. To refrain from selling Localized
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COMPANY Products to any Dealer that cannot agree to comply with obligation
similar to those continued in the Paragraph 3, entitled "Obligations to
DISTRIBUTOR";
(4) Object Code. To distribute COMPANY Software only in machine-read-
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able object code format;
(5) Copying. To refrain from permitting the copying of COMPANY
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Software onto any other media for purposes of redistribution to others
whether for profit, promotion or otherwise, and not to use, copy, print or
display any COMPANY Software, or permit any Dealer to use, copy, print or
display any COMPANY Software in any manner except in connection with and
for the purpose of, marketing and selling copies of COMPANY Software to
others in accordance with this Agreement;
(6) Renting. To refrain from renting or lending any COMPANY Software or
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the use, copying, printing or display of any COMPANY Software, in any
manner except in connection with, and for the purpose of marketing and
selling copies of COMPANY Software to other s in accordance with this
Agreement;
(7) XXXX. Not to add to, delete or otherwise vary any of the terms
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and conditions of the XXXX;
(8) Trademarks and Trade Names. Not to distribute any Localized
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COMPANY Products under any trade names or trademarks other than those
employed by COMPANY with respect thereto without the prior written approval
of COMPANY; and
(9) Withholding Tax. That any withholding tax imposed upon payments
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made to COMPANY by DISTRIBUTOR pursuant to this Agreement may be used as a
foreign tax credit in the same fiscal year by COMPANY against its
obligations under applicable United States tax laws. DISTRIBUTOR under-
stands and agrees that should such tax credits be disallowed or unusable,
the royalty rates set forth in EXHIBIT A may be unilaterally raised by
COMPANY to offset the effect of the withholding tax.
(k) Warranty Service and Support. DISTRIBUTOR shall comply with COMPANY
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programs for in-warranty replacement and post-warranty support for Localized
COMPANY Products. DISTRIBUTOR shall provide a level of technical support for all
Localized COMPANY Products equivalent in all material respects to that which
COMPANY provides its end users.
(l) Compliance with Law. DISTRIBUTOR shall comply with applicable inter-
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national, national, state, regional and local laws and regulations in performing
its duties hereunder and in any of its business with Dealers and with respect to
Localized COMPANY Products.
(m) Compliance with U. S. Export Laws. DISTRIBUTOR acknowledges that
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COMPANY's export of the COMPANY Products may be subject to compliance with the
Export Administration Act Regulations of the Department of Commerce of the
United States, as amended, and other export controls of the United States
("Export Laws"), which restrict the export and re-export of software media,
technical data, and direct products of technical data. ("Direct Product" as used
hereafter means the immediate product, including processes and services, drive
from the use of COMPANY Products.) DISTRIBUTOR agrees, and shall cause each of
its Dealers, employees, agents and representatives to agree, not to export or
re-export any Localized COMPANY Product or Direct Products of COMPANY Products
to any Prohibited Country. DISTRIBUTOR agrees to indemnify COMPANY against any
claim, demand, action, proceeding, investigation, loss liability, cost or
expense, including, with out limitation attorney's fees, suffered or incurred by
COMPANY and arising out of or related to any breach (whether intentional
or unintentional) by DISTRIBUTOR, its employees, agents, representatives or
Dealers, of any of the warranties or covenants of this Paragraph 3(1).
(n) Governmental Approval. If any approval with respect to this Agreement,
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or the registration thereof, shall be required at any time during the term of
this Agreement, with respect to giving legal effect to this Agreement in the
Territory, or with respect to compliance with exchange regulations or other
requirements so as to assure the right of remittance abroad of U.S. dollars
pursuant to Paragraph 6 hereof, DISTRIBUTOR Shall immediately take whatever
steps may be necessary in this respect, and any charges incurred in connection
therewith shall be paid by DISTRIBUTOR. DISTRIBUTOR shall keep COMPANY currently
informed of its efforts in this connection. COMPANY shall be under no obligation
to ship COMPANY Product to DISTRIBUTOR hereunder until DISTRIBUTOR has provided
COMPANY with satisfactory evidence that such approval or registration is not
required or that it has been obtained.
(o) Market Conditions. DISTRIBUTOR shall advise COMPANY promptly concerning
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any market information that comes to DISTRIBUTOR's attention regarding Localized
COMPANY Products, COMPANY's market position or the continued competitiveness of
Localized COMPANY Products in the marketplace.
(p) Dealing with End-Users. Prior to accepting any fee or other charge from
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any End-User interested in acquiring a copy or copies of COMPANY Software from
DISTRIBUTOR, DISTRIBUTOR shall inform the End-User that acquisition of such copy
is subject to the terms and conditions of the XXXX. A sample copy of the XXXX
shall be available from the DISTRIBUTOR for review by all prospective End-Users
dealing with DISTRIBUTOR. Should any End-User return to DISTRIBUTOR any unopened
COMPANY Software in the original sealed package in which it was distributed by
DISTRIBUTOR, DISTRIBUTOR shall provide End-User with a full refund of all sums
paid by the End-User therefore. In no event shall COMPANY provide any such
refund to any End-User who has obtained the copy or copies in question from or
through DISTRIBUTOR.
(q) Adaptation for Local Market. COMPANY AND DISTRIBUTOR shall consult
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in good faith with respect to the localization of the COMPANY Software
and DISTRIBUTOR shall make such changes to COMPANY Software and COMPANY
Documentation, packaging and related marketing materials as DISTRIBUTOR and
COMPANY agree would be appropriate to adapt COMPANY Product or use in the
Territory. COMPANY shall submit to DISTRIBUTOR all material necessary to
DISTRIBUTOR's Localization effort ("Localization Kit"). This might include, but
is not limited to, scripts for speech files, and removable data storage media
containing artwork. COMPANY assures DISTRIBUTOR that it will cooperate in
DISTRIBUTOR's development of the Localized COMPANY Products. DISTRIBUTOR shall
be responsible for translating and manufacturing or having manufactured COMPANY
manuals, advertising and promotional materials into into the language of the
Territory if so requested by COMPANY. Upon receipt of the Localization Kit,
DISTRIBUTOR shall submit within two (2) weeks, an estimated publishing date for
the localized version of the COMPANY Product, which shall be no later than four
(4) calendar months following receipt of the Localization Kit. DISTRIBUTOR
agrees to use professional actors, which must be pre-approved in writing by
COMPANY, for the voice-overs and agrees to have each actor contributing content
or efforts toward the Localizations execute the COMPANY Professional Services
Agreement attached and incorporated hereto as Exhibit B. Failure to meet the
publishing date deadline shall be considered a material breach and shall allow
COMPANY to terminate the Agreement upon thirty (30) days prior written notice.
During the completion of the Localization process, DISTRIBUTOR shall submit all
localized materials to COMPANY for approval. DISTRIBUTOR must receive written
approval from COMPANY prior to any sale or demonstration of Localized COMPANY
Products. If DISTRIBUTOR cannot achieve the quality or technical standards
equivalent to those of the English version of the COMPANY Product within
forty-five (45) calendar days after DISTRIBUTOR's initial submission of the
Localized COMPANY Products to COMPANY for approval, COMPANY may terminate this
Agreement upon seven (7) days prior notice. COMPANY has the exclusive right to
sell Localized COMPANY Products outside the Territory.
(r) Packaging. Except as provided in Paragraph 3(p) or 3(q), DISTRIBUTOR
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shall distribute Localized COMPANY Products with all packaging, warranties,
disclaimers and XXXX intact as on COMPANY Products prior to Localization,
and shall instruct each of its Dealers as to the nature and terms of the
XXXX applicable to the COMPANY Software. Anything to the contrary notwith-
standing, DISTRIBUTOR may not include any materials in or on the Localized
COMPANY Product packaging which is not either (i) included in the U.S. version
of the COMPANY Product or (ii) pre-approved in writing by COMPANY. For the
purpose of Localization, DISTRIBUTOR agrees to produce packaging and advertising
or sales support material at the same high quality levels used by COMPANY in the
English version of the COMPANY Products. DISTRIBUTOR must receive written
pre-approval from COMPANY on all DISTRIBUOR-produced marketing and sales
materials, including, but not limited to, packaging and collateral material that
reference COMPANY Software or Localized COMPANY Products, prior to release of
the materials. DISTRIBUTOR shall pay for shipping and production of the art
media for the packaging, brochures or other collateral materials used to promote
the Localized COMPANY Products within the Territory.
(s) Media Replication. DISTRIBUTOR shall obtain COMPANY's prior written
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approval before replicating any media used in the Localized COMPANY Products,
and COMPANY may withhold such consent in its sole discretion. Further,
DISTRIBUTOR shall submit the name or names of the particular duplicator/
replicator that DISTRIBUTOR intends to use for such purposes to COMPANY for its
prior written approval before entering into any agreement with said
duplicator/replicator.
(t) Quality; Samples.
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(1) DISTRIBUTOR acknowledges that if the Localized COMPANY Products
manufactured and sold by it hereunder were of inferior quality in design,
material or workmanship, the substantial goodwill which COMPANY has
established and now possesses in the COMPANY Software would be impaired.
Accordingly, DISTRIBUTOR agrees that the Localized COMPANY Products shall
be of the highest standards and of such style, appearance and quality as
shall be reasonably adequate and suited to their promotion, distribution,
sale and exploitation to enhance the Localized COMPANY Products and the
good will in the COMPANY Software.
(2) COMPANY shall approve each stage of development of the Localized
COMPANY Product from the conception to the production thereof. DISTRIBUTOR
shall at each stage of development of the Localized COMPANY Products,
before it manufactures, distributes, shops or sells any particular
Localized COMPANY Products, furnish COMPANY, free of cost, for its written
approval, the Approval Request form attached hereto as Exhibit C with each
of the following:
i) four (4) samples of preliminary art concept;
ii) four (4) samples of color composite and/or one (1) hand sample;
iii) four (4) samples of fine art;
iv) one (1) pre-production sample; and
v) one (1) final sample/prototype for the Localized COMPANY Software
together with its carton and containers, tags, labels, wrapping material,
advertising and promotional material for use in any media in connection
with the Localized COMPANY Software ("Packaging").
(3) DISTRIBUTOR shall provide COMPANY with six (6) production samples
of the Localized COMPANY Products in all sales, marketing and advertising
materials prepared by DISTRIBUTOR in connection with its distribution of
the Localized COMPANY Products, free of cost, for COMPANY's written
approval prior to distribution of the Localized COMPANY Software. If
COMPANY does not indicate its approval or disapproval of such submissions
within seven (7) business days from the date of actual receipt of the
submission, COMPANY shall be deemed to have disapproved the Localized
COMPANY Software. If so disapproved, and without limiting COMPANY's
approval rights, upon receipt of a written request from DISTRIBUTOR,
COMPANY shall provide DISTRIBUTOR within five (5) business days of the
proposed modifications that would render such sample approved. Once
Localized COMPANY Software and collateral materials have been expressly
approved, DISTRIBUTOR agrees to periodically furnish COMPANY, at no charge,
with additional samples of each Localized COMPANY Software and all sales
marketing and advertising materials which COMPANY may deem reasonably
necessary in order to permit COMPANY to ensure that the quality of the
COMPANY Software has been maintained and that no deviation and/or
modification of COMPANY approved Localized COMPANY Software has occurred.
COMPANY shall have the right to withdraw its approval of samples if the
quality of any Localized COMPANY Software ceases to be acceptable.
(4) Duly authorized representatives of COMPANY shall have the right, at
any and all reasonable times, to inspect all facilities or premises
maintained by DISTRIBUTOR including, without limitation, the plants,
factories or other manufacturing or producing facilities of DISTRIBUTOR or
third parties at which the Localized COMPANY Products and/or any components
of products are being manufactured or produced. Said representatives shall
have the right to inspect and test any Localized COMPANY Products and/or
all components thereof and to take any other action which in the opinion of
COMPANY is necessary or proper to assure COMPANY that the nature and
quality of the Localized COMPANY Products and/or all components thereof are
in accordance with the requirements of this Agreement.
(5) Complaints: DISTRIBUTOR will diligently address all legitimate
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complaints brought to its attention regarding the Localized COMPANY
Products. DISTRIBUTOR will advise COMPANY promptly of any category of
recurring complaint and of any complaint which DISTRIBUTOR reasonably
believes might result in legal or administrative action against DISTRIBUTOR
or COMPANY.
(6) Cooperation: In an effort to ensure that the Localized COMPANY
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Products accurately depict the quality and value of the COMPANY Software,
the parties agree to consult together on the design and creation of the
Localized COMPANY Products.
(u) Good Will and Protection: DISTRIBUTOR acknowledges that:
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(1) The COMPANY Software, including without limitation, the characters,
character names, trademarks, service marks, logos and images associated
with the said COMPANY Software, are unique and original and COMPANY is the
owner thereof;
(2) As the result of the exhibition and exploitation of the COMPANY
Software, COMPANY has acquired a substantial and valuable good will
therein;
(3) The names of the characters and their likenesses, as applicable
and the title of the COMPANY Software have acquired a secondary meaning as
trademarks uniquely associated with merchandise authorized by COMPANY;
(4) All rights in any additional material, new versions, translations,
rearrangements or other changes in the Localized COMPANY Products which may
be created by or for DISTRIBUTOR shall be and will remain the exclusive
COMPANY Software of COMPANY from creation, and;
(5) Any copyrights, trademarks and design patents heretofore obtained
by COMPANY or in connection with the characters and title of the COMPANY
Software are good and valid.
4. INSPECTIONS: RECORDS AND REPORTING.
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(a) Reports. DISTRIBUTOR shall provide to COMPANY written reports for every
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one-month period, or when requested by COMPANY, showing DISTRIBUTOR's shipments
of Localized COMPANY Products by units and local currency volume, and any other
information COMPANY reasonable requests.
(b) Notification. DISTRIBUTOR shall notify COMPANY in writing of any claim
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or proceeding involving Localized COMPANY Products within seven (7) days after
DISTRIBUTOR learns of such claim or proceeding. DISTRIBUTOR shall also
immediately report to COMPANY all claimed or suspected product defects.
DISTRIBUTOR shall also notify COMPANY in writing not more than seven (7) days
after any change in the management or control of DISTRIBUTOR or any transfer of
a majority share of DISTRIBUTOR's voting control or a transfer of substantially
all its assets.
(c) Records. DISTRIBUTOR shall maintain, for at least two (2) years after
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termination of this Agreement, its records, contracts and accounts relating to
the reproduction and distribution of Localized COMPANY Products. For the purpose
of verifying compliance by the DISTRIBUTOR with the provisions of this
Agreement, DISTRIBUTOR agrees that COMPANY and its representatives shall be
permitted full access to, and shall be permitted to make copies of or abstracts
from, the books and records of DISTRIBUTOR relating to inventory levels,
manufacturing, sales and distribution. COMPANY shall be permitted to audit such
books and records at reasonable intervals.
(d) Reports from Replicator/Duplicator. DISTRIBUTOR shall contractually
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obligate any duplicator/replicator with which it contracts pursuant to Article
3(s) above to send detailed ad accurate reports to COMPANY stating the
following: number of units of Localized COMPANY Products duplicated and the
titles of such Localized COMPANY Products. The reports shall be submitted to
COMPANY no later than the thirtieth of each and every month that any such
duplication/replication takes place. The reports shall be submitted to: Havas
Interactive, 00000 Xxxxxxx Xxxxxx, Xxxxxxxx, XX 00000, Attn: International
Sales Auditing.
5. OWNERSHIP AND PROPERTY RIGHTS. DISTRIBUTOR agrees that COMPANY owns all
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right, title and interest in the COMPANY Products and the Localized COMPANY
Products now or hereafter subject to this Agreement, and in all of COMPANY's
patents, trademarks, trade names, character names and likenesses, inventions,
copyrights, know-how, and trade secrets relating to the design, operations or
maintenance of the COMPANY Software. The use by DISTRIBUTOR of any of these
property rights is authorized only for the purposes and under the terms herein
set forth, and upon termination of this Agreement for any reason, such
authorization shall cease. As part of this Agreement, and without additional
compensation, DISTRIBUTOR acknowledges and agrees that any and all tangible and
intangible property and work products, ideas, inventions, discoveries and
improvements, whether or not patentable, which are conceived/developed/created/
obtained or first reduced to practice by DISTRIBUTOR for COMPANY in connection
with the Localization of COMPANY Products collectively referred to as the "Work
Product"), including, without limitation , all technical notes, schematics,
software source and object code, prototypes, breadboards, computer models,
art work, sketches, designs, drawings, paintings, illustrations, computer-
generated artwork, animations, video, film, artistic materials, photographs,
literature, methods, processes, voice recordings, vocal performances, nar-
rations, spoken word recordings and unique character voices, shall be
considered "works made for hire" and therefore all right, title and interest
therein (including, without limitation, patents and copyrights) shall vest
exclusively in COMPANY. To the extent that all or any part of such Work Product
does not qualify as a "work made for hire" under applicable law, DISTRIBUTOR
without further compensation therefore does hereby irrevocably assign, transfer
and convey in perpetuity to COMPANY and its successors and assigns the entire
worldwide right, title, and interest in and to the Work Product including,
without limitation, all patent rights, copyrights, mask work rights, trade
secret rights and other proprietary rights therein, Such assignment includes the
transfer and assignment to COMPANY and its successors and assigns of any and all
moral rights which DISTRIBUTOR may have in the Work Product. DISTRIBUTOR
acknowledges and understands that moral rights include the right of an author:
to be known as the author or a work; to prevent others from being named as the
author of the works; to prevent others from falsely attributing to and author
the authorship of a work which he/she has not in fact created; to prevent others
from making deforming changes in a an author's work; to withdraw a published
work from distribution if it no longer represents the views of the author; and
to prevent others from using the work or the author's name in such a way as to
reflect on his/her professional standing.
6. ADVANCES, ROYALTIES AND PAYMENT.
----------------------------------
(a) Advances and Royalty Amounts. DISTRIBUTOR agrees to pay to COMPANY the
-----------------------------
non-refundable, but recoupable advances and royalty payments set forth in
Exhibit A. Royalties payable to COMPANY pursuant to this Agreement shall be
based on the number of units of the Localized COMPANY Products distributed by
DISTRIBUTOR and shall only be subject to a deduction for Localized COMPANY
Products previously sold by DISTRIBUTOR which are returned to DISTRIBUTOR by its
customers. The royalty rate for new software developed by COMPANY and added to
this Agreement shall be determined by COMPANY as COMPANY makes such new software
available to DISTRIBUTOR.
(b) Royalty Payments.
-----------------
(1) Royalties shall be paid monthly, no later than thirty (30) days
after the end of the month in which sales occurred and shall be accompanied
by a statement setting forth in reasonable detail the basis for the royalty
computation and payment. Payments by check shall be sent to the following
address:
Havas Interactive, Inc.
X.X. Xxx 000000
Xxxxxx, XX 00000-0000
Payments by wire transfer shall be made to the following account:
Bank of America
0000 Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
ABA No. 000-000-000
Account No. 12333-32277
SWIFT No. BOFA-US-6S
Beneficiary: Havas Interactive, Inc.
(2) DISTRIBUTOR shall arrange payment of all royalties so as to make
the funds available for use by COMPANY in the United States not later than
the payment date specified above.
(3) Payment of all royalties and of any other payments required to be
made to COMPANY pursuant to this Agreement shall be made to COMPANY at its
offices in California, U.S.A., or at such banking institution as COMPANY
may direct from time to time, in legal tender of the United States of
America. DISTRIBUTOR hereby agrees to procure a Letter of Credit or other
suitable form of bank guarantee (the "LC") in the amount of twenty-five
thousand US dollars (US -- $25,000) to serve as collateral for any and all
payments due COMPANY hereunder and to maintain such LC during the entire
term, including any renewal periods, of this Agreement and for a period of
ninety (90) days following the expiration of the term, including any
renewal periods, of this Agreement. The LC shall be procured from an
internationally recognized banking institution acceptable to COMPANY, such
acceptance not to be unreasonably withheld, within sixty (60) days of the
date of execution of this Agreement and such LC shall be in a form
acceptable to COMPANY. DISTRIBUTOR agrees that such LC shall contain a
provision that if any action or proceeding for bankruptcy or insolvency is
instituted against or by DISTRIBUTOR, COMPANY shall have the right to make
an immediate draw up on the LC. The obligation of DISTRIBUTOR to obtain the
LC as set forth above is material obligation and the failure of DISTRIBUTOR
to obtain and keep in force the LC shall be considered a material breach
hereunder.
(4) All advances, royalties or other payments made to COMPANY hereunder
shall be made without deduction for any local, state, federal or foreign
taxes or duties. DISTRIBUTOR shall be responsible for the payment of any
and all taxes, licenses, duties and fees of DISTRIBUTOR or COMPANY in
connection with the marketing, distribution, sale, possession, use or
sublicensing of the Localized COMPANY Products (inclusive of value added
taxes, but exclusive of taxes based on COMPANY's net income). DISTRIBUTOR
hereby agrees to pay and to indemnify COMPANY from all such duties, taxes
and fees as may be imposed upon COMPANY with respect to the marketing,
distribution, sale, possession, use or sublicensing of the Localized
COMPANY Products pursuant to this Agreement. In the even DISTRIBUTOR is
precluded by applicable law from making payments free of deductions, then
DISTRIBUTOR shall pay to COMPANY such additional amounts as necessary sot
that the actual amount received by COMPANY shall be the same as though no
such deduction had been made.
(c) Audit Rights. DISTRIBUTOR shall maintain accurate books and records
-------------
pertaining to the reproduction and distribution of Localized COMPANY Products.
COMPANY's designated auditors shall have the right twice a year during ordinary
business hours and upon reasonable notice, to gain access to DISTRIBUTOR's
accounts and records. This examination shall be at COMPANY's expense, unless the
examination reflects and underpayment of five percent (5%) or more of the amount
that should have been paid for the period(s) audited, in which case DISTRIBUTOR
shall bear the expense thereof.
------
7. DISTRIBUTOR DETERMINES ITS OWN PER COPY PRICES. DISTRIBUTOR is free to
------------------------------------------------
determine unilaterally its own pricing of the COMPANY Software to its Dealers.
Although COMPANY may publish suggested wholesale, retail or Dealer prices, these
are suggestions only and DISTRIBUTOR shall be entirely free to determine the
actual prices at which Localized COMPANY Products are sold to its Dealers.
8. DISTRIBUTOR'S WARRANTIES AND REPRESENTATIONS REGARDING TREATMENT OF
-------------------------------------------------------------------------
DEALERS. DISTRIBUTOR hereby warrants and represents to COMPANY as follows:
--
(a) Dealer Pricing. DISTRIBUTOR shall inform each Dealer that it is free to
---------------
determine unilaterally its own prices and that, although COMPANY may publish
lists showing suggested retail prices for Localized COMPANY Products, those are
suggestions only.
(b) Non-Discrimination Among Dealers. In working with its Dealers, DISTRI-
---------------------------------
BUTOR shall in all respects comply with all laws, regulations or statutes
which regulate the resale of products to Dealers, including but not limited to
those which govern discriminatory pricing.
9. TRADEMARKS, TRADE NAMES AND COPYRIGHTS.
------------------------------------------
(a) Trademark Use During Agreement. During the term of this Agreement,
---------------------------------
DISTRIBUTOR is authorized by COMPANY to use the trademarks COMPANY uses
for COMPANY Products solely in connection with DISTRIBUTOR's advertisement,
promotion and distribution of Localized COMPANY Products. DISTRIBUTOR agrees
that it shall cause to be affixed, conspicuously and legibly on the Localized
COMPANY Products sold by it pursuant to this Agreement and on all advertising
incorporating any part of the COMPANY Software, appropriate copyright and
trademark notices in the name of COMPANY. DISTRIBUTOR further agrees to
prominently feature the logo of COMPANY on packaging and advertising of
Localized COMPANY Products. DISTRIBUTOR agrees not to alter, erase, deface, or
overprint any such xxxx on anything provided by COMPANY.
(b) No DISTRIBUTOR Rights in Trademarks or Copyrights. DISTRIBUTOR has paid
-------------------------------------------------
no consideration for the use of COMPANY's trademarks, logos, character names and
likenesses, copyrights, trade secrets, trade names or designations, and nothing
contained in this Agreement shall give and retains all proprietary rights in all
Localized COMPANY Products, and agrees that it shall not at any time during or
after this Agreement assert or claim any interest in or do anything that may
adversely affect the validity or enforceability of any trademark, trade name,
trade secret, copyright or logo belonging to or licensed to COMPANY (including,
without limitation, any act, or assistance to any act, which may infringe or
lead to the infringement of any copyright in the Localized COMPANY Products.)
(c) No Continuing Right. Upon expiration or termination of this Agreement,
--------------------
DISTRIBUTOR shall cease advertising and use of all COMPANY names, marks, logos
and designations.
(d) Obligation to Protect. DISTRIBUTOR agrees to use reasonable efforts to
----------------------
protect COMPANY's proprietary rights and to cooperate with COMPANY's efforts to
protect its proprietary rights.
(e) Security. In the case where COMPANY provides DISTRIBUTOR with source
--------
code, DISTRIBUTOR covenants and agrees as follows:
(1) DISTRIBUTOR shall use the source code only for necessary Locali-
zation purposes;
(2) DISTRIBUTOR shall restrict access to the source code to individuals
with a need to know and who are directly engaged in Localization of the
COMPANY Software;
(3) DISTRIBUTOR shall store and modify the source code on only a
single workstation;
(4) DISTRIBUTOR shall maintain a source-code activity log;
(5) DISTRIBUTOR shall provide reasonable safeguards for the protection
of the source code from unauthorized access and damage;
(6) WITHIN SIXTY (60) DAYS AFTER COMPLETION OF LOCALIZATION DISTRIBUTOR
SHALL RETURN ALL SOURCE CODE TO COMPANY AND SUBMIT TO COMPANY, FOR COMPANY'S
ARCHIVES, A FULL COPY OF LOCALIZED COMPANY PRODUCTS, INCLUDING ANY LOCALIZED
SOURCE CODE.
(7) DISTRIBUTOR shall not alter or modify any COMPANY Software, pack-
aging or marketing materials, or any portion or aspect thereof, or use or
refer to any COMPANY Software in the creation of any derivative work,
without COMPANY's prior written consent.
(8) DISTRIBUTOR shall preclude its agents, employees, and contractors
from engaging in any conduct inconsistent with the terms of this Paragraph
9(e) by means of appropriate agreements and/or such other security measures
as may be necessary in order to preclude such conduct. COMPANY reserves the
right to review DISTRIBUTOR's agreement and security measures and require
DISTIBUTOR to amend agreements and take steps to bolster the security
measures that are necessary in COMPANY's sole judgment.
(9) DISTRIBUTOR shall not at any time market any copy of COMPANY
Product which has not been pre-approved by COMPANY.
(f) Breach. DISTRIBUTOR understands and agrees that COMPANY will suffer
------
irreparable harm in the event that DISTRIBUTOR fails to comply with any of its
obligations pursuant to this Paragraph 9 and Paragraph 3, and that monetary
damages in such event would be substantial and inadequate to compensate COMPANY.
Consequently, in such event COMPANY shall be entitled, in addition to such
monetary relief as may be recoverable by law, to such temporary, preliminary and
or/permanent injunctive relief as may be necessary to restrain any continuing or
further breach by DISTRIBUTOR, without showing or proving any actual damages
sustained by COMPANY.
(g) Dealer or End-User Breaches. DISTRIBUTOR shall promptly report to
------------------------------
COMPANY any breach of the XXXX of which DISTRIBUTOR becomes aware. COMPANY shall
have the right, but not the obligation, to pursue any and all such
infringements.
(h) Filing and Recording. Upon request, DISTRIBUTOR agrees to assist
----------------------
COMPANY in the filing and recording of COMPANY's trade names, copyrights,
patents and trademarks in the Territory, all costs to be paid by COMPANY.
10. ASSIGNMENT. The rights granted to DISTRIBUTOR hereunder are personal in
----------
nature and DISTRIBUTOR agrees that this Agreement shall not be assignable, nor
may DISRIBUTOR delegate its duties hereunder without the prior written consent
of COMPANY. Any attempted delegation or assignment without the required consent
shall be void and of no effect.
11. DURATION AND TERMINATION OF AGREEMENT.
-----------------------------------------
(a) Term. Subject to prior termination in accordance with the provisions
----
contained herein, the term of this Agreement shall commence as of the Effective
Date, and expire upon the expiration of all Distribution Terms of Localized
Product distributed pursuant to this Agreement.
(b) Termination for Cause. This Agreement may be terminated forthwith as
-----------------------
set forth below, by one party giving written notice thereof to the other party,
in accordance with Paragraph 16(b) below, stating the effective date of
termination.
(1) By COMPANY if any proceeding in bankruptcy or in reorganization
or for the appointment of a receiver or trustee or any other proceeding
under any law for the relief of debtors shall be instituted by or against
DISTRIBUTOR, or if DISTRIBUTOR shall make an assignment for the benefit of
creditors; or
(2) Subject to Paragraph 3(q) and 13(a) herein, by either party
upon a material breach by the other party of any of the terms of this
Agreement, or any other agreement in force between the parties hereto,
which breach is not remedied by the breaching party to the non-breaching
party's reasonable satisfaction within thirty (30) days of the breaching
party's receipt of notice of such breach from the non-breaching party, in
the event of a breach of Paragraph 6 hereunder, and within forty-five (45)
days for all other breaches;
(3) By COMPANY, if DISTRIBUTOR is merged, consolidated, sells all
or substantially all of its assets or implements or experiences any
substantial change in management or control, (the transfer of twenty-five
percent (25%) or more of a DISTRIBUTOR's common stock or the equivalent,
shall be considered a substantial change in control hereunder);
(4) By COMPANY, if DISTRIBUTOR sells:
i) any copies of the COMPANY Product;
ii) any copies of the Localized COMPANY Products outside the
Territory; or
iii) any copies of the Localized COMPANY Products to any person
or entity which DISTRIBUTOR has reason to believe may sell the
Localized COMPANY Products outside the Territory;
(5) By COMPANY, if DISTRIBUTOR has not achieved one-half (1/2) of the
Guaranteed Unit Sales at the midpoint of the Guarantee Period;
(6) By COMPANY, if DISTRIBUTOR distributes any Localized COMPANY
Products or associated marketing material without first obtaining the
approval(s) of COMPANY required hereunder; or
(7) By COMPANY, the Distribution Term may be terminated as to any
COMPANY Product for which DISTRBUTOR has failed to produce a Localized
COMPANY Product acceptable to COMPANY within three (3) months of
DISTRIBUTOR's receipt of the Localization Kit for such COMPANY Product; in
the case of such termination, COMPANY shall retain any advances paid in
respect of such COMPANY Product.
(c) Termination at Will. COMPANY shall have the right to terminate this
---------------------
Agreement for no cause, at will, upon ninety (90) days prior written notice.
(d) Effect of Termination. Upon Termination of this Agreement:
-----------------------
(1) DISTRIBUTOR shall cease using any COMPANY trademark, logo or trade
name.
(2) All COMPANY Software masters, Localization materials, source code,
trademarks, trade names, patents, samples, literature and sales aids of
every kind shall remain the property of COMPANY. Within thirty (30) days
after the termination of this Agreement, DISTRIBUTOR shall prepare all such
items in its possession for shipment, as COMPANY may direct, at COMPANY's
expense. DISTRIBUTOR shall not make or retain any copies of any con-
fidential or proprietary items or information which may have been
entrusted to it. Effective upon the termination of this Agreement,
DISTRIBUTOR shall cease to use all trademarks, logos, marks, and trade
names of COMPANY.
(3) DISTRIBUTOR shall provide COMPANY with a written report detailing
all inventory of the Localized COMPANY Products in its possession at the
effective date of termination within ten (10) business days. COMPANY shall
then have a period of ten (10) business days to elect to purchase any
portion of said inventory at DISTRIBUTOR's actual cost of such goods
Subject to COMPANY's option to purchase DISTRIBUTOR's inventory, and unless
this Agreement has been terminated for breach on the part of DISTRIBUTOR,
DISTRIBUTOR shall retain the right to sell off it's remaining inventory of
Localized COMPANY Products for a period or three (3) months following the
expiration or termination of this Agreement, subject to DISTRIBUTOR's
payment of royalties for such sales. However, if this Agreement has been
terminated for breach on part of DISTRIBUTOR, DISTRIBUTOR shall have no
sell-off rights whatsoever and any remaining inventory of Localized COMPANY
Products shall become the property of COMPANY without any payment by
COMPANY to DISTRIBUTOR and shall be promptly delivered to COMPANY at a
destination designated at DISTRIBUTOR's expense.
(4) If the Agreement was terminated pursuant to Paragraph 11 (b)(5)
hereinabove, in addition to any other royalties due, DISTRIBUTOR shall pay
COMPANY the difference between one-half (1/2) of the royalties which would
have been payable on the Guaranteed Unit Sales and the amount of royalties
DISTRIBUTOR had paid COMPANY for sales up to the midpoint of the Guarantee
Period.
(e) Survival. COMPANY's rights and DISTRIBUTOR's obligations to pay COMPANY
--------
all amounts due hereunder, as well as DISTRIBUTOR's obligations pursuant to
Paragraph 3(c), 3(d), 3(j)(4) through 3(j)(8), 3(m), 4(c), 5, 6, 9, 11(d), 11(e)
and 12 through 16 shall survive termination or expiration of this Agreement or
any termination that this Agreement or any portion hereof or exhibit hereto is
void or voidable.
12. RELATIONSHIP OF THE PARTIES. DISTRIBUTOR's relationship with COMPANY
------------------------------
during the term of this Agreement will be that of any independent contractor.
DISTRIBUTOR will not have, and shall not represent that it has, any power, right
or authority to bind COMPANY, or to assume or create any obligation or
responsibility express or implied, on behalf of COMPANY or in COMPANY's name,
except as herein expressly provided. Nothing stated in this Agreement shall be
construed as making partners of DISTRIBUTOR and COMPANY, nor as creating the
relationships of employer/employee, franchiser/franchisee, or principal/agent
between the parties. In all matters relating to this Agreement, neither
DISTRIBUTOR nor its employees or agents are, or shall act as, employees of
COMPANY within the meaning or application of any obligations or liabilities to
COMPANY by reason of an employment relationship. DISTRIBUTOR shall reimburse
COMPANY for and hold it harmless from any liabilities or obligations imposed or
attempted to be imposed upon COMPANY by virtue of any such law with respect to
employees of DISTRIBUTOR in performance of this Agreement.
13. INDEMNIFICATION.
---------------
(a) DISTRIBUTOR shall defend, indemnify and hold harmless COMPANY, its
parent, subsidiaries, affiliated companies and partners and their respective
officers, directors, employees and agents from and against any and all
liabilities, damages, costs and fees (including reasonable attorney's fees)
resulting from any claims or actions arising out of or relating to actual or
alleged: (i) distribution by DISTRIBUTOR or its Dealers of COMPANY Products or
Documentation or Localized COMPANY Products outside the Territory; or (ii)
breach of any and all obligations DISTRIBUTOR has undertaken to perform
hereunder; or (iii) breach of any representations and warranties or covenants
DISTRIBUTOR has made hereunder; or (iv) infringement caused by any modification
to the COMPANY Products or Documentation not authorized by COMPANY; or (v)
any third-party claim arising from DISTRIBUTOR's use of any trademarks or
copyrighted material added to the COMPANY Products by Distributor. Such
indemnification obligation or DISTRIBUTOR shall be conditioned upon COMPANY
promptly notifying DISTRIBUTOR in a writing that sets forth with specificity the
claim or action to which such indemnification obligation applies. DISTRIBUTOR
shall have the right to control the defense of each such claim and any lawsuit
or proceeding arising therefrom. In the event DISTRIBUTOR does not timely
undertake to defend COMPANY from a claim or suit described above, COMPANY shall
have the right to undertake the defense itself and DISTRIBUTOR promises to repay
all liabilities, damages, costs and fees (including reasonable attorney's fees)
resulting from such defense regardless of the outcome. Except in the event that
DISTRIBUTOR does not undertake the defense of COMPANY as required hereunder,
COMPANY shall not settle any such claim or lawsuit or proceeding arising
therefrom without the prior written approval of DISTRIBUTOR. In defending
against such claim or action, DISTRBUTOR may (i) contest; (ii) settle; (iii)
procure for COMPANY and its customers the right to continue using the Localized
COMPANY Products, as applicable; or (iv) modify or replace the Localized COMPANY
Products, as applicable; so that they no longer infringe. DISTRIBUTOR
acknowledges that the warranties and representations herein shall survive the
termination of this Agreement.
(b) No Combination Claims. Notwithstanding Paragraph 14(a), COMPANY shall
-----------------------
not be liable to DISTRIBUTOR for any claim arising from or based upon the
combination, operation or use of any COMPANY Product with equipment, data or
programming not supplied by COMPANY, or arising from any alteration or
modification of COMPANY Products.
14. DISCLAIMER OF WARRANTIES; LIMITED LIABILITY.
-----------------------------------------------
(a) Disclaimer of Warranties. DISTRIBUTOR ACKNOWLEDGES THAT NO WARRANTIES
--------------------------
WITH REGARD TO THE COMPANY SOFTWARE, WHETHER OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR OTHERWISE, ARE CREATED BY THIS AGREEEMNT AND COMPANY
HEREBY DISCLAIMS AND EXLUDES ALL IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. COMPANY FURTHER DISCLAIMS ALL WARRANTIES WITH
REGARD TO YEAR 2000 COMPLIANCE OF THE COMPANY SOFTWARE. SPECIFICALLY, COMPANY
MAKES NO WARRANTIES THAT THE PERFORMANCE OR FUNCTIONALITY OF THE COMPANY
SOFTWARE WILL NOT BE AFFECTED BY DATES PRIOR TO, DURING OR AFTER THE YEAR 2000,
OR THAT THE COMPANY SOFTWARE WILL BE CAPABLE OF CORRECTLY PROCESSING, PROVIDING,
AND/OR RECEIVING DATE INFORMATION WITHIN AND BETWEEN CENTURIES, INCLUDING THE
PROPER EXCHANGE OF DATE INFRMATION BETWEEN PRODUCTS OR APPLICATIONS.
(b) Limitation of Liability. UNDER NO CIRCUMSTANCES SHALL COMPANY BE LIABLE
-----------------------
TO DISTRIBUTOR ON ACCOUNT OF ANY CLAIM (WHETHER BASED UPON PRINCIPLES OF
CONTRACT, WARRANTY, NEGLIGENCE OR OTHER TORT, BREACH OR ANY STATUTORY DUTY,
PRINCIPLES OR INDEMNITY, THE FAILURE OF ANY LIMITED REMEDY TO ACHIEVE ITS
ESSENTIAL PURPOSE, OR OTHERWISE) FOR ANY SPECIAL, CONSEQUENTIAL INCIDENTAL OR
EXEMPLARY DAMAGES, INCLUDING BUT NOT LIMETED TO LOST PROFITS, OR FOR ANY DAMGES
OR SUMS PAID BY DISTRIBUTOR TO THIRD PARTIES, EVEN IF COMPANY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. DISTRIBUTOR acknowledges and agrees that (1)
DISTRIBUTOR has no expectation and has received no assurances that its business
relationship with company will continue beyond the stated term of this Agreement
or its earlier termination, and that COMPANY has not made any promises with
respect to DISTRIBUTOR's ability to recoup any investment by DISTRIBUTOR in the
promotion of Localized COMPANY Products by virtue of this Agreement; and (2)
DISTRIBUTOR shall not have or acquire by virtue of this Agreement or otherwise
any vested, proprietary or other right in the promotion of Localized COMPANY
Products or in any goodwill created by its efforts hereunder.
15. CONFIDENTIALITY. In the course of this Agreement, it is anticipated
---------------
that DISTRIBUTOR will learn confidential or proprietary information about
COMPANY. DISTRIBUTOR shall keep confidential this information and any other
information which DISTRIBUTOR may acquire with respect to COMPANY's business,
including, but not limited to, information developed and relating to new
products, customers, pricing, know-how, processes, and practices, unless and
until COMPANY consent to disclosure, or unless such knowledge and information
otherwise becomes generally available to the public through no fault of
DISTRIBUTOR. DISTRIBUTOR shall not disclose to others, without COMPANY's
consent, the subject of this relationship without first providing COMPANY with
the opportunity to review and offer reasonable objection to the contemplated
publication. This undertaking to keep information confidential shall survive the
termination of this Agreement. It is understood, however that the restrictions
listed above shall not apply to any portion of confidential information which:
(i) was previously known to DISTRIBUTOR without obligations of confidentiality;
(ii) is obtained after the Effective Date of this Agreement from a third party
which is lawfully in possession of such information and not in violation of any
contractual or legal obligation to COMPANY with respect to such information;
(iii) is or becomes part of the public domain through no fault of DISTRIBUTOR;
(iv) is independently ascertainable or developed by DISTRIBUTOR or its
employees; (v) is required to be disclosed by administrative or judicial action
provided that DISTRIBUTOR immediately after receiving notice of such action
notifies company of such action to give COMPANY the opportunity to seek any
other legal remedies to maintain such confidential information in confidence; or
(vi) is approved for release by written authorization of COMPANY. DISTRIBUTOR
shall require each of its employees performing services relation to the Work
execute a Confidentiality Agreement, if requested by COMPANY. At the termination
of this Agreement, DISTRIBUTOR shall return to COMPANY all drawings, speci-
fications, manuals and other printed or reproduced material (including
information stored on machine readable media) provided by COMPANY.
16. GENERAL.
-------
(a) Waiver and Modification. No waiver or modification of the Agreement
-------------------------
shall be effective unless in writing and signed by the party against whom such
waiver or modification is asserted. Waiver by either party in any instance of
any breach of any term or condition of this Agreement shall not be construed as
a waiver of any subsequent breach of the same or any other term or condition
hereof. None of the terms or conditions of this Agreement shall be deemed to
have been waived by course of dealing or trade usage.
(b) Notices. All notices and demands hereunder shall be in writing and
-------
shall be served by personal delivery, express courier, or mail at the address of
the receiving party set forth in this Agreement (or at such different address as
may be designated by such party by written notice to the other party), and shall
be deemed complete upon receipt. All notices or demands by mail shall be by
certified or registered airmail, return receipt requested. If receipt of such
notice or demand is refused or a party has changed its address without informing
the other, the notice shall be deemed to have been given and received upon the
seventh (7th) day following the date upon which it is first postmarked by the
postal service of the sender's nation.
(c) Attorney's Fees. In the event any litigation is brought by either party
---------------
in connection with this Agreement, the prevailing party in such litigation shall
be entitled to recover from the other party all the costs, attorney's fees and
other expenses incurred by such prevailing party in the litigation.
(d) Complete Execution. This Agreement shall become effective only after it
------------------
has been executed by DISTRIBUTOR and COMPANY.
(e) Choice of Law, Jurisdiction. This Agreement shall be governed by and
------------------------------
construed in accordance with the law of the sate of California, USA. THE
APPLICATION OF THE UNITED NATIONS CONVENTION OF CONTRACTS FOR THE INTERNATIONAL
SALE OF GOODS IS EXPRESSLY EXCLUDED. The parties agree that any claim asserted
in any legal proceeding by one party against the other shall be commenced and
maintained in any state or federal court located within the County of Los
Angeles, State of California, U.S.A., having subject-matter jurisdiction with
respect to the dispute between the parties. Both parties hereby submit to the
jurisdiction of such courts overreach of them personally in connection with such
litigation, and waive any objection to venue in such courts and any claim that
such forum is an inconvenient forum. The English-language version of this
Agreement controls when interpreting this Agreement.
(f) Severability. In the event that any provision of this Agreement shall
------------
be held by a court or other tribunal of competent jurisdiction to be
unenforceable, such provision shall be enforced to the maximum extent
permissible and the remaining portions causes the contract to fail of its
essential purpose, then the entire Agreement shall fail and become void.
(g) Force Majeure. COMPANY shall not be responsible for any failure to
--------------
perform due to unforeseen circumstances or cause beyond COMPANY's control,
including but not limited to acts of God, war, riot, embargoes; acts of civil or
military authorities, fire, floods, accidents, strikes, or shortages of
transportation facilities, fuel, energy, labor or materials.
(h) Entire Agreement. This Agreement, including all Schedules and Exhibits
-----------------
hereto, constitutes and contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes any prior oral or written
agreement. Nothing herein contained shall be binding upon the parties until this
Agreement has been executed by each party and an executed copy has been
delivered to the parties. This Agreement may not be changed, modified, amended
or supplemented except in a writing signed by all parties to this Agreement.
Each of the parties acknowledges and agrees that the other has not made any
representations, warranties or agreements of any kind, except as may be
expressly set forth herein.
(i) Benefits of Agreement. The terms of this Agreement are intended solely
----------------------
for the benefit of the parties hereto. They are not intended to confer upon any
third party the status of a third-party beneficiary. Except as otherwise
provided for by this Agreement, the terms hereto shall inure to the benefit of,
and be binding upon, the respective successors and assign of the parties hereto.
IN WITNESS WHEREOF, the parties have entered into this Agreement.
VIVENDI UNIVERSAL INTERACTIVE STAR E MEDIA CORPORATION
PUBLISHING NORTH AMERICA
By: Signer not known Officer: /s/ E. G. Xxxxxxxxx
------------------------- ----------------------------
Title: CEO Title: President
--- ---------
Date: August 10, 2001 Date: August 10, 2001
----------------- -----------------
EXHIBIT A
---------
1. COMPANY PRODUCTS AND ROYALTY RATES:
COMPANY PRODUCT ROYALTY RATE
---------------- -------------
Jumpstart 1st Grade US$4.00
Jumpstart 2nd Grade US$4.00
Jumpstart 3rd Grade US$4.00
Jumpstart Pre-Kindergarten US$4.00
Jumpstart Kindergarten US$4.00
Jumpstart Toddlers US$4.00
Jumpstart Preschool US$4.00
Mega Math Blaster US$4.00
My 1st Encyclopedia US$4.00
(All COMPANY Products listed in this Agreement are the 1998 version and are
to be released as Bilingual with both English and fully Localized Arabic
languages).
2. ADVANCE PAYMENTS:
DISTRIBUTOR agrees to pay COMPANY the sum of eight thousand US dollars
(US$8,000.00) for each COMPANY Product listed in this agreement as a recoupable
advance against future royalties arising from DISTRIBUTOR's distribution of each
localized COMPANY Product, payable in three (3) installments as follows:
a) One thousand, six hundred US dollars (US$1,600.00) for each COMPANY
product upon signature of this Agreement.
b) Three thousand, two hundred US dollars (US$3,200.00) for each COMPANY
Product upon DISTRIBUTOR's receipt of each localization kit.
c) Three thousand, two hundred US dollars (US$3,200.00) for each COMPANY
Product upon COMPANY approval of the localized COMPANY Product.
4. DISTRIBUTION TERM(S):
Subject to early termination in accordance with the provisions contained herein,
the Distribution Term shall begin on the Effective Date of this Agreement and
continue in full force for a period of twelve (12) months. The Distribution Term
will be from July 25, 2001 to July 24, 2002.
5. GUARANTEE AND GUARANTEE PERIOD:
DISTRIBUTOR guarantees sales of no less two thousand (2000) units of each
COMPANY Product listed in this Agreement.
6. TERRITORY:
Middle East
EXHIBIT B
---------
PROFESSIONAL SERVICES AGREEMENT
Beginning on the ____ day of _____________ 199__, ______________ ("Contractor")
agrees to perform services for _________________________ ("Localizer") pursuant
to the following terms ad conditions:
1. Acting as an independent contractor, Contractor shall render the services
as stated in Exhibit 1 ("Services"). Contractor shall take direction from and
report to _______________________.
2. In consideration for performance of the Services and up on Localizer's
acceptance of completion of same, Contractor shall receive from Localizer a fee
which is payable in accordance with Exhibit 1.
3. Contractor understands that he/she is not authorized to incur any
expenses on behalf of Localizer without prior written consent, and all
statements for the Services and expenses shall be in the form prescribed by
localizer and shall be approved by _________________________, or his/her
supervisor.
4. Localizer has the right, in its sole discretion, to terminate this
Agreement for any reason with seven (7) days prior written notice. In the event
of such a termination, Localizer's sole obligation shall be to pay Contractor,
pro rata, for the fees with respect to all milestones achieved or Services
performed, as applicable, which shall have been accepted as of that date by
Localizer. Localizer shall have no further obligation, whether financial or
otherwise, to Contractor after such cancellation. Localizer may terminate this
Agreement immediately up on Contractor's refusal or inability to perform
pursuant to, or Contractor's breach of, any provision of this Agreement.
5. Contractor shall not, either during or subsequent to the term of this
Agreement, directly or indirectly disclose any information designated as
confidential by Localizer; nor shall Contractor disclose to anyone other than a
Localizer employee or use in any way other than in the course of the performance
of this Agreement any information regarding Localizer, including but not limited
to Localizer's product, market, financial or other plans, product designs and
any other information not known to the general public whether acquired or
developed by Contractor during performance of this Agreement or obtained from
Localizer employees; nor shall Contractor, either during or subsequent to the
term of this Agreement, directly or indirectly disclose or publish any such
information without prior written authorization from Localizer to do so. Unless
otherwise specifically agreed to in writing, all information about and relating
to projects under development by Localizer and/or parties doing work under
contract to Localizer including the Services rendered hereunder by Contractor
shall be considered Confidential information. Contractor acknowledges and agrees
that all of the foregoing information is proprietary to Localizer, that such
information is a valuable and unique asset of Localizer, and that disclosure of
such information to third parties or unauthorized use of such information would
cause substantial and irreparable injury to Localizer's ongoing business for
which there would be no adequate remedy at law. Accordingly, in the event of any
breach or attempted or threatened breach of any of the terms of this Paragraph
5, Contractor agrees that Localizer shall be entitled to seek injunctive and
other equitable relief, without limiting the applicability of any other
remedies.
6. Contractor shall return to Localizer any Localizer property that has come
into his/her possession during the term of this Agreement, when and as requested
to do so by Localizer and in all events upon termination of Contractor's
engagement hereunder, unless Contractor receives written authorization from
Localizer to keep such property. Contractor shall not remove any Localizer
property from Localizer premises without written authorization from Localizer.
7. As part of this Agreement, and without additional compensation, Contactor
acknowledges and agrees that any and all tangible and intangible property and
work products, ideas, inventions, discoveries and improvements, whether or not
patentable, which are conceived/developed/created/obtained or first reduced to
practice by Contactor for Localizer in connection with the performance of the
Services (collectively referred to as the "Work Product"), including, without
limitation, all technical notes, schematics, software source and object code,
prototypes, breadboards, computer models, artwork sketches, designs, drawings,
paintings, illustrations, computer generated artwork, animations, video,
film, artistic materials, photographs, literature, methods, processes, voice
recordings, vocal performances, narrations, spoken word recordings and unique
character voices, shall be considered "works made for hire" and therefore all
right, title and interest therein (including, without limitation, patents and
copyrights) shall vest exclusively in Localizer. To the extent that all or any
part of such Work Products does not qualify as a "work made for hire" under
applicable law, Contactor without further compensation therfor does hereby
irrevocably assign, transfer and convey in perpetuity to Localizer and its
successors and assign the entire worldwide right, title, and interest in an to
the Work Product including, without limitation, all patent rights, copyrights,
mask work rights, trade secret rights and other proprietary rights therein. Such
assignment includes the transfer and assignment to Localizer and its successors
and assigns of any and all moral rights which Contractor may have in the Work
Product. Contactor acknowledges and understands that moral rights include the
right of an author: to be known as the author of a work; to prevent others from
being named as the author of the works; to prevent others from falsely
attributing to an author the authorship of a wok which he/she has not in fact
created; to prevent others from making deforming changed in an author's works;
to withdraw a published work from distribution if it no longer represents the
views of the author; and to prevent others from using the work or the author's
name in such a way as to reflect on his/her professional standing.
8. None of the Work Product is to be used by Contractor on any other project
or with any other client except with Localizer's written consent. If any part
of such Work Product is the work of a subcontractor employed by Contractor, then
Contractor shall require such subcontractors to execute an assignment document
so as to secure for Localizer exclusive ownership in such Work Product. In
the event Contractor is unable to obtain exclusive ownership from such
subcontractors, Contractor shall obtain a license for the benefit of Localizer.
Contractor shall promptly thereafter deliver such originally executed assignment
or license documents to Localizer.
9. With respect to all subject matter including ideas, processes, designs
and methods which Contractor discloses or uses in the performance of the
Services: a) Contractor warrants that Contractor has the right to make
disclosure and use thereof without liability or compensation to others; b) to
the extent that Contractor has patent applications, patents or other rights in
the subject matter, Contractor hereby grants Localizer, subsidiaries and
affiliates a royalty-free, irrevocable world-wide, non-exclusive license to
make, have made, sell, use and disclose such subject matter, excluding only such
subject matter, if any, which is set forth in writing in Exhibit 1 and which is
agreed to specifically by Localizer as being excluded from the grant; and c)
Contractor agrees to defend indemnify and hold Localizer harmless from any
claims, litigations. actions, damages or fees of any kind (including reasonable
attorneys fees) arising from Localizers or Contractor's use or disclosure of
subject matter which Contractor knows or reasonably should know others have
rights in. except, however, for subject matter and the identity of others having
rights therein that Contractor discloses to Localizer in writing before
Localizer uses the subject matter.
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10. It is understood and agreed that in performing the Services for
Localizer hereunder, Contractor shall act in the capacity of an independent
contractor and not as an employee or agent of Localizer. Contractor agrees that
it shall not represent itself as the agent or legal representative of Localizer
for any purpose whatsoever. When Contractor is working on the premises of
Localizer, Contractor shall observe the working hours, working rules, and
security procedures established by Localizer. No right or interest in this
Agreement shall be assigned by Contractor without the prior written permission
of Localizer, and no delegation of the performance of the Services or other
obligations owed by Contractor to Localizer shall be made without the prior
written consent of Localizer. This Agreement shall be deemed to have been made
and executed in the State of California and any dispute arising hereunder shall
be resolved in accordance with the law of California. This Agreement may be
amended, altered or modified only by an instrument in writing, specifying such
amendment, alteration or modification, executed by both parties. This Agreement
constitutes and contains the entire agreement between the parties with respect
to the subject matter hereof and supersedes any prior oral or written
agreements. Nothing herein contained shall be binding upon the parties until
this Agreement has been executed by an officer or agent of each and has been
delivered to the parties.
Agreed to and Accepted:
Localizer Contractor
Signature Signature
Date: __________________________ Date: __________________________
EXHIBIT 1
1. SERVICES
--------
The expected completion date is __________________
DATE MILESTONES PAYMENTS
---- ---------- --------
___-___-9___ Signed Contract $
___-___-9___
___-___-9___
___-___-9___
___-___-9___
___-___-9___
___-___-9___
___-___-9___
___-___-9___ Final Delivery
* Dates listed above are for informational purposes only. Payment shall always
be contingent upon timely delivery and acceptance of each milestone.
2. PAYMENT
-------
Contractor shall be paid for the Services in increments as set forth above after
acceptance at each stage of the work performed. Anything to the contrary
notwithstanding, the compensation for the Services performed hereunder shall not
exceed $___________ without the express, written consent
of___________________________________.
3. EXPENSES
--------
The following authorized expenditures are the maximum that Contractor shall be
eligible to receive as a reimbursement. Contractor must produce receipts for all
pre-approved expenses for which Localizer shall reimburse Contractor within
fifteen (15) business days of receiving such receipts and expense reports. All
expenses incurred by Contractor not specifically approved herein shall be the
sole responsibility of Contractor.
AMOUNT APPROVED EXPENSES
------ ------------------
4. PAYMENT SCHEDULE
-----------------
Localizer shall pay Contractor within fifteen (15) business days following the
receipt of Contractor's invoice and the approved and accepted Work Product. All
invoices must be sent to the designated representative set forth in Section 1
above, with a Xerox copy of that invoice to be forwarded to Localizer's Contract
Administrator.
5. INTELLECTUAL PROPERTY EXCLUSIONS
----------------------------------
The following includes all subject matter that is excluded from the grant set
forth in Section 9(b):
1. None
2.
3.
4.
