EXHIBIT 10.13
XXXXXXX.XXX, INC.
&
M2 SOFTWARE EQUITY, LLC
DISTRIBUTION AGREEMENT
This distribution agreement ("Agreement") is entered into as of the date
specified on the signature page ("Effective Date") by and between
xxxxxxx.xxx, inc., a Delaware corporation located at 000 Xxxxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 ("Busybox") and M2 Software Equity,
LLC, a California limited liability company locate at 000 Xxxx Xxxxx Xxxxxx,
Xxxxx X, Xxxxxxxx, Xxxxxxxxxx 00000 ("M2").
RECITALS
R1. Busybox commercially distributes digital media content, principally
through its Web site xxx.xxxxxxxxx.xxx.
R2. M2 commercially distributes digital media content, principally through
physical distribution channels.
R3. The parties desire to collaborate for the purpose of leveraging and
commercially exploiting their respective assets and distribution
channels.
R4. The parties hereby agree to be bound under the terms and conditions of
this Agreement.
TERMS & CONDITIONS
1. APPOINTMENT OF DISTRIBUTOR: Each party appoints the other as a
non-exclusive distributor of certain digital media content as more fully
described below.
2. LICENSED CONTENT: Each party shall select and specify its respective
digital media content subject to this Agreement ("Licensed Content"),
which shall be more fully set forth in contemporaneous or subsequent
Exhibit(s) hereto signed by such party's authorized representative.
2.1 MASTER: Each party shall at its own expense deliver the Licensed
Content to the other party in the form of cassette, CD-ROM or such other
suitable storage medium containing the respective digital files
("Master(s)").
3. LICENSE: Each party grants to the other party a revocable,
royalty-bearing, worldwide, non-exclusive license under the licensing
party's intellectual property rights (including copyright, trademark,
moral and related rights) to copy, reproduce, sub-license (pursuant to
End-User License Agreement more fully described below), distribute and
promote licensing party's Licensed Content, as well as to advertise
and promote the
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licensing party's trade identity and branded image, inclusive of
applicable trademarks and service marks, with respect to the same as
more fully set forth below.
3.1 REVOCATION: The licensing party may at any time upon confirming written
notice to the other party revoke the license granted above with respect
to any and all of such Licensed Content previously licensed; provided,
however, that the licensee may for a period of thirty (30) days
thereafter continue to distribute such revoked Licensed Content which
has already been reproduced from the Master(s) and is in licensee's
inventory ("Inventory").
3.1.1 INVENTORY PURCHASE: The above notwithstanding, the licensing party may
elect to reimburse licensee for its duplication cost for such Inventory,
payment terms net-30, in which case the licensee shall have no further
rights of any kind with respect to the same.
3.2 END-USER LICENSE: All Licensed Content distributed to end users shall
be subject to an end-user license Agreement ("End-User License
Agreement") in the form of a template provided by or approved by the
licensing party.
4. ROYALTY RATES: The royalty rates and payment terms for all Licensed
Content under this Agreement shall be set forth in contemporaneous or
subsequent Exhibit(s) hereto signed by both party's authorized
representatives.
5. ADVERTISING & PROMOTION: All advertising and promotion by one party of
the other party's trade identity and branded image, inclusive of
applicable trademarks and service marks, shall be subject to that
party's prior written approval, which shall not be unreasonably
withheld. Each party shall submit to the other party all proposed
advertising and promotional materials, including press releases, at
least fourteen (14) days prior to such proposed use, and all such
submissions shall be deemed approved unless approval is expressly
withheld by written notice delivered to the requesting party at
least seven (7) days prior to such proposed use, and such notice
specifies the reason approval is withheld.
6. WARRANTIES: Each party represents and warrants the following with
respect to the Licensed Content delivered and licensed by it:
- That it owns all right, title and interest in such Licensed Content;
- That it has procured all necessary or applicable releases; and,
- That it has not granted rights to any third party which would
conflict with the rights granted to the other party under this
Agreement.
7. INDEMNITY: Each party shall defend, indemnify, and hold the other party
harmless from and against all liability, loss, damage, cost
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and expense, including reasonable attorneys' fees, paid or incurred by
the other party in connection with the former party's breach of any
representations and warranties above; provided, however, that the
indemnifying party shall have the right to participate in the defense
of all such claims.
8. BOOKS & RECORDS: Each party shall maintain accurate and up-to-date
books and records of account with respect to all Licensed Content
distributed by it ("Books"). Each party may, once within any 12-month
period, request an audit of the other party's Books to be performed by
a reputable certified public accounting firm. The scope of such audit
shall be limited to review and disclosure of information in the Books
relevant to the calculation and payment of royalties to the other
party. All costs and expenses of the audit shall be directly borne by
the auditing party, unless the audit reveals a discrepancy of greater
than FIVE percent (5%), in which case the costs and expenses of the
audit shall be borne by the audited party.
9. CONFIDENTIALITY: Developer shall respect and strictly preserve the
confidentiality of all information of consequence obtained from Busybox
in the course of performance of this Agreement ("Confidential
Information"). Confidential Information shall include, among others,
the technologies, trade secrets, business plans and activities,
customers, and finances of Busybox and its clients and customers.
10. TERM AND TERMINATION: This Agreement shall take effect as of the
Effective Date and continue in effect through March 30, 2001 ("Initial
Term"), thereafter automatically renewing for successive one-year terms
("Renewal Term(s)") until otherwise terminated as set forth below.
10.1 FOR CAUSE: If either party breaches any material term or condition
under this Agreement and fails to cure such breach with thirty (30)
days following written notice thereof, the non-breaching party may
terminate this Agreement immediately upon confirming written notice.
10.2 WITHOUT CAUSE: Either party may terminate this Agreement, effective
upon expiration of the Initial Term or any Renewal Term, as applicable,
upon ninety (90) days prior written notice.
11. INTEGRATION: This Agreement is the complete agreement between the
parties respecting all subject matter addressed herein, superseding
any and all prior oral or written understandings between the
parties relating thereto. In the event of any conflict between this
Agreement, and any Exhibit hereto, the terms and conditions of this
Agreement shall prevail.
12. MODIFICATION: This Agreement may be modified in whole or in part only
in writing signed by the authorized representatives of the parties.
13. GENERAL: If any provision of this Agreement is found illegal or
unenforceable, the legality and enforceability of the other
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provisions of this Agreement will not be affected. No failure of either
party to exercise or enforce any of its rights hereunder will act as a
waiver of such rights.
14. GOVERNING LAW & JURISDICTION: This Agreement shall be interpreted and
governed by the laws of the state of California, excluding its body of
law relating to conflicts of law. All disputes between the parties
arising under this Agreement shall be finally decided through binding
arbitration before Judicial Arbitration & Mediation Services, Inc.
("JAMS/ENDISPUTE") in San Francisco, California, and judgement on any
arbitration award may be entered in any court having jurisdiction
over the parties or their assets. Notwithstanding the foregoing, the
provisions of this section shall not prohibit either party from seeking
injunctive relief to protect its intellectual property rights. The
prevailing party in any dispute under or in connection with this
Agreement will be entitled to recover reasonable attorneys fees and
costs of proceedings.
This Agreement is hereby executed as of this date, February 11, 2000, by and
between Busybox and M2.
XXXXXXX.XXX, INC.: M2 SOFTWARE EQUITY, LLC:
By: /s/ By: /s/
--------------------------- --------------------------
Name: Xxxxxx X. Xxxxxxx Name:
President & Chief Operations Officer Title:
Fed ID:
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EXHIBIT A
SUPPLEMENTAL TERMS & CONDITIONS
1. DESCRIPTION OF SERVICE AND IMPLEMENTATION
1.1 Busybox shall provide commercial distribution of M2 content through
it's web site XXX.XXXXXXXXX.XXX and other web sites that it manages.
1.2 M2 shall provide distribution for Busybox content through M2's
multiple direct mail and catalog distribution channels including but not
limited to Dynamic Graphics, Corbis, Digital Vision, 00-0-xxxxxxx.xxx, the
Video Library, Eyewire, AVID Education Centers, AVID Resellers, Islip Media,
Hot Shots, Cool Cuts, Media 100 Platinum Resellers, Film & Video Stock
Shots. Busybox shall have the right to approve M2 distribution partners,
which will not be unreasonably withheld.
1.3 Busybox shall provide M2 the video clips on D-1 or digibeta formats.
M2 will digitize the clips in the format necessary for mastering for the
distribution channels.
1.4 Busybox shall provide Busybox the video clips of their choice on D-1
or digibeta formats.
1.5 M2 and Busybox shall each provide the other with monthly reports
from their distribution channels within 30 days of the end of each month,
showing the gross sales of the others content by distribution channel.
1.6 Busybox shall review their current footage resources and future
footage acquisitions plans and submit a plan to fulfill at Busybox option
(based on acceptable footage) the following general categories to be filled
in January, February and March:
Active Children
Active Seniors
Aerials
Architectural Icons
Archival 60's
Archival 70's
Archival 80's
Archival Communications
Archival Sports
Archival Technology
Beauty and Health
Body Beautiful
Business on the Move
Business Situations (4)
Computer Technology
Conventions
Couples
Disasters
Domestic Animals
Emergency
Engineering Icons
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Factory at Work
Family Life
Gaming
Glamour
Golf
Home & Garden
Junior Executives
Medical (4)
Office Icons
Romantic Moments
Senior Executives
Time Lapse - City
WW 1
WW 2
The following titles to be filled by May 1, 2000.
Active Lifestyles
Anytown USA 1&2
Archives: 1900's
Business 1 & 2
City Facades
City Life
Clouds & Skies
Digital FX
Exotic Locations
Exploring Space
Face of Industry 1 & 2
Faces of the Century
Fast Forward
Intriguing Locations
Natural Textures
Natures Backdrops
Natures Creatures
Planetary Movements
Rest & Relaxation
Scenic Water
The Great Outdoors
Transportation 1 & 2
Travel & Leisure 1 & 2
Under the Sea
Urban Sprawl
Water Reflections
2. ROYALTY RATES AND PAYMENT TERMS
2.1 Busybox Licensed Content: M2 shall pay Busybox a royalty of twenty
percent (20%) of the gross proceeds from the sale and sublicensing of Busybox
Licensed Content.
2.1.1 xxx.00-0-xxxxxxx.xxx: M2 shall pay Busybox a royalty of forty
percent (40%) of the gross proceeds from the sale and sub-licensing of
Busybox Licensed Content transacted through xxx.00-0-xxxxxxx.xxx, a Web site
owned and operated by M2.
2.2 M2 LICENSED CONTENT: Busybox shall pay M2 a royalty of twenty percent
(20%) of the gross proceeds from the sale and sub-licensing of
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M2 Licensed Content transacted through xxx.xxxxxxxxx.xxx or any other
Busybox affiliated Web site.
2.3 PAYMENT TERMS: All royalty payments shall be made within 30 days of
receipt and shall be accompanied by a reasonably detailed accounting for
the relevant royalty period, identifying the number and identity of the
Licensed Content sold and sub-licensed, and including a calculation of the
royalty payment.
This SCHEDULE A is subject to all terms and conditions contained in
the Agreement.
This Agreement is hereby executed as of this date, February 11, 2000, by
and between Busybox and M2.
XXXXXXX.XXX, INC.: M2 SOFTWARE EQUITY, LLC:
By: /s/ By: /s/
--------------------------- --------------------------
Name: Xxxxxx X. Xxxxxxx Name:
President & Chief Operations Officer Title:
Fed ID:
