EXHIBIT 10.1
LICENSE AND DISTRIBUTION AGREEMENT
(MANUFACTURING RIGHTS)
(2004-2005)
This License and Distribution Agreement (this "AGREEMENT") is entered in
as of March 29, 2004, by and between Riverdeep Inc., A Limited Liability
Company, a limited liability company organized in Delaware ("RIVERDEEP"), and
Encore Software, Inc., a Minnesota corporation ("DISTRIBUTOR").
WHEREAS, Riverdeep is engaged in the business of developing, licensing and
publishing computer software programs, including the Products (as hereinafter
defined);
WHEREAS, Distributor is engaged in the business of selling and marketing
goods in the Territory (as hereinafter defined), including products similar or
related to the Products; and
WHEREAS, Riverdeep and Distributor wish to enter into an agreement
pursuant to which Distributor will manufacture, sell, and distribute the
Products for sale in the Channel (as hereinafter defined) within the Territory.
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. DEFINITIONS.
1.1 "CHANNEL" shall mean all retail accounts, whether sold to directly
or through distributors, including, without limitation, brick and mortar stores
and Internet-based retailers (such as Xxxxxx.xxx); provided however, that
Riverdeep shall have the right to sublicense Products to sublicensees that will
in turn sell and distribute them into small retail accounts pursuant to (i) the
sublicenses set forth on Exhibit C attached hereto provided that copies of the
same have been furnished to Distributor prior to the Commencement Date, and (ii)
such future sublicenses as the parties shall mutually agree to not to be
unreasonably withheld or delayed, it being agreed that Riverdeep shall not amend
or modify such sublicenses to add new products thereto or to expand the channel
thereof without Distributor's consent, not to be unreasonably withheld or
delayed; and provided further, that notwithstanding anything to the contrary in
this Agreement, nothing contained herein shall limit Distributor's parent
company from selling or distributing the Products to its retail customers
through such parent company's website. At Riverdeep's request, no more
frequently than on a quarterly basis, Distributor shall provide to Riverdeep a
list of current accounts into which Distributor sells or distributes the
Products. The Channel specifically excludes Riverdeep's channels of distribution
other than the retail channel, including, without limitation, (a) sales directly
to end users (including, without limitation, through television, magazine,
catalog, continuity club, mail, door-to-door, email, web, and telemarketing
offers), (b) sales through the OEM channel and, (c) sales in the
educational/schools channel. Distributor shall not distribute Products to any
account that intends, or is reasonable likely, to resell the Products outside of
the Channel or Territory.
1.2 "COMMENCEMENT DATE" shall mean March 31, 2004.
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1.3 "CONSENT-REQUIRED CONTRACT" shall have the meaning ascribed to such
term in Section 7.1.
1.4 "CONSENT-REQUIRED PRODUCTS" shall have the meaning ascribed to such
term in Section 7.1.
1.5 "DELIVERABLES" shall have the meaning ascribed to such term in
Section 2.9.
1.6 "DOCUMENTATION" shall mean all printed booklets, pamphlets, user
manuals, maintenance manuals, end user license agreements, registration cards,
promotional materials and any other materials which are distributed with the
Products. Such Documentation shall not be modified, translated, supplemented or
omitted without Riverdeep's prior written approval (not to be unreasonably
withheld or delayed) and any such modifications, translations or supplements
shall remain the property of Riverdeep.
1.7 "END USERS" shall mean the customers of Distributor's Retailers (as
hereinafter defined) to whom such Retailers sell Products for use and not for
re-sale.
1.8 "EXCLUDED PRODUCTS" means (i) genealogy-based and language-based
software programs unless otherwise consented to by Distributor in its sole
discretion; and, (ii) such individual SKU's as to which Distributor determines
in its sole discretion it will no longer ship or fulfill retail orders and
notifies Riverdeep of such determination in writing.
1.9 "INTELLECTUAL PROPERTY RIGHTS" means patent rights and registrations
and applications, renewals and extensions therefor, copyright (including, but
not limited to, ownership rights in all titles, computer code, themes, objects,
characters, character names, stories, dialog, catch phrases, locations,
concepts, artwork, animation, sounds, musical compositions, audio-visual effects
and methods of operation, moral rights and any related documentation), copyright
registrations and applications, renewals and extensions therefor, trademark
registrations and applications, renewals and extensions therefor, rights in
trade dress and packaging, trade secrets and other intellectual property rights
recognized by U.S. laws.
1.10 "LICENSED MEDIA" shall mean all (i) computer-readable magnetic media
storage devices for the PC, including CD-Rom and DVD-Rom, (ii) DVD's, and (iii)
electronic learning aids (such as, Leapster and Leapad); provided however, in
the case of DVD's and electronic learning aids, Distributor shall only have
exclusive rights only on a Product-by-Product basis and only if Riverdeep is
able to retain such distribution rights in any negotiations involving the
development of the applicable product, it being understood that Riverdeep shall
use good faith commercially reasonable efforts to retain such rights.
Interactive online (unless otherwise a part of the Product itself) and
electronic download are excluded.
1.11 "LOSS EVENT" means, with respect to any Product, (i) a loss of
rights the effect of which limits or precludes Riverdeep licensing such Product
to Distributor under this Agreement without a default by Riverdeep hereunder;
(ii) Riverdeep's failure to initially procure rights to such Product; (iii)
Riverdeep's failure to make such Product available to Distributor hereunder;
(iv) Riverdeep's failure to provide the Deliverables for such Product as and
when required hereunder; or (v) Riverdeep's decision to discontinue such
Product, or (vi) any other event or occurrence the effect of which limits or
impairs the rights granted to Distributor hereunder in respect of such Product.
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1.12 "MEDIATOR" means a mediator to be chosen by the parties from time to
time to resolve specific disputes hereunder pursuant to a mediation procedure to
be mutually agreed upon by the parties within 30 days after the Commencement
Date.
1.13 "OEM" shall mean: original equipment manufacturers selling hardware,
Non-Traditional OEM's, and Similar Distributors. As used herein, (i)
"Non-Traditional OEM's" shall mean distributors who manufacture Product(s), and
do not sell the Products in the retail channel; and, "Similar Distributors"
shall mean distributors (including entities acting on behalf of Similar
Distributors in licensing software from Riverdeep and other sources) which
advertise, market, distribute and sell products through after-purchase programs
for goods, other than Products, sold in any channel, loyalty programs (defined
as special offers presented to end users who purchase goods from Similar
Distributors, e.g. Frequent Flier Programs, mailers inserted into bills, etc.),
fundraising programs, or direct mail programs, but in any event not selling or
distributing any Product through or into the Channel unless pursuant to a
sublicense approved under Section 1.1 above. As used herein, "after-purchase
programs" shall mean marketing programs through which an end user may receive
the Product for a fee after purchasing another product.
1.14 "PREVIOUSLY-RELEASED PROPERTIES" means interactive software (and all
updates, upgrades, or other modifications thereto) owned or controlled, or that
was owned or controlled, by Riverdeep that is obsolete and no longer distributed
in the Channel.
1.15 "PRODUCT" or "PRODUCTS" shall mean those computer software product
lines of Riverdeep consisting of the individual SKU's for such lines listed on
Exhibit A, as the same may be amended from time to time in accordance with the
provisions of Section 2.6 and 2.7; provided however, that any Consent-Required
Product shall not constitute a Product hereunder until Riverdeep notifies
Distributor that it has received the corresponding Third Party Consent therefor,
whereupon the same shall constitute a Product hereunder. Riverdeep shall have
the right upon 30 days' prior written notice to Distributor to modify, alter,
improve, change, add to or discontinue any or all the Products in accordance
with the provisions of Section 2.6 and 2.7. Notwithstanding anything to the
contrary in this Agreement, including Exhibit A, in no event shall the Products
include any Excluded Products or Previously-Released Properties. References to
"Products" herein shall be deemed to include all SKU's within such Product other
than Previously-Released Properties.
1.16 "RETAILERS" shall mean the business entities in the Channel and
Territory to which Distributor markets and distributes, either directly or
through distributors, Products for resale.
1.17 "SALE" of any Product shall mean the granting of a license to use
such Product and the "PURCHASE" of any Product shall mean the obtaining of a
license to use such Product.
1.18 "SALES DISCOUNTS" shall mean price discounts and price protection.
1.19 "SALES YEAR" means the twelve-month period commencing on the
Commencement Date.
1.20 "TERM" shall mean that period of time specified in Section 9 of the
Agreement.
1.21 "THIRD PARTY CONSENT" shall have the meaning ascribed to such term
in Section 4.4.2.
1.22 "TERRITORY" shall mean the United States.
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2. DISTRIBUTION RIGHTS.
2.1 Rights Granted to Distributor. Riverdeep hereby grants to
Distributor the exclusive right and license to replicate, publish, market, sell,
and distribute the Products on the Licensed Media in the Channel in the
Territory. Riverdeep hereby grants to Distributor a non-exclusive,
non-transferable license to use the names of the Products as well as, where
applicable, the "The Learning Company," "Broderbund," "Edmark," and "Riverdeep"
trademarks, all subject to Riverdeep's standard policies and the approval
processes specified herein. Except as expressly provided herein, Distributor
shall have no right to sublicense or otherwise transfer any of the rights
granted under this Agreement. Distributor may not create derivative works of the
software in the Products, nor may it alter or modify such software in any way.
All other rights not granted herein to Distributor are reserved. Distributor is
not authorized to sell the Products for delivery outside the Territory or for
re-sale outside the Territory. Distributor shall have the right, but not the
obligation, to manufacture the Products and may use third-party manufacturers
for such manufacturing. Such third party manufacturers shall be subject to
Licensor's prior written approval, it being agreed that Riverdeep has approved
all of the third party manufacturers set forth on Exhibit E. All rights granted
herein are specifically subject to the additional covenants, terms and
conditions set forth in Exhibit B attached hereto.
2.2 Documentation. Each Product distributed by Distributor under this
Agreement shall be the full retail version of such Product and shall include a
complete copy of the Product's original Documentation (such Documentation shall
not vary with current Riverdeep practices or future industry standards),
including an end-user license agreement mutually agreed to by the parties
between Riverdeep and such end-users but incorporating Distributor's warranty
and return policy, provided such items are furnished to Distributor on a timely
basis prior to manufacturing of the applicable Products; provided however, that
any items provided by Distributor shall be subject to Riverdeep's packaging
approval requirements provided herein. Riverdeep shall provide an end user
warranty for the Products of form and substance approved by Distributor and
consistent with Distributor's end user return policy. Notwithstanding anything
to the contrary in this Agreement, Distributor shall not be obligated to pay for
any inserts or other promotions for the Products requested by Riverdeep, it
being understood that the manual shall not constitute an insert for purposes of
this sentence. Distributor may, in its sole discretion and expense, put inserts
and promotions into packaging for Products and retain any revenue derived
therefrom, subject to Riverdeep's reasonable approval.
2.3 Assortments, Bundles and Premiums; Porting. The license granted
herein shall include the right to sell and/or distribute the Products: (i) as
individual stand-alone units, including jewel case; (ii) as part of an
Assortment (as used herein, "Assortment" shall mean that a Product (or
portion/component of a Product) is sold with another software product or
products, but such Product is not physically packaged with such other
product(s)); and (iii) as bundles where a Product(s) (or portion/component of a
Product) is physically packaged or included on the same physical media with
other products ("Bundle"). Assortments or Bundles that contain software or
components other than Products shall be referred to as "Mixed Assortments" and
"Mixed Bundles." All jewel case, Bundles and Assortments shall be subject to
Riverdeep's prior written approval, not to be unreasonably withheld or delayed.
"Premiums" shall mean extra item(s) provided to an end user who has purchased
goods, said extra item(s) to be provided for no or nominal additional
compensation. Distributor shall not distribute the Products as Premiums, for
promotional purposes, or in any other manner so as to diminish, tarnish or
otherwise derogate the Riverdeep brands. Distributor will not port or otherwise
transfer Product intended for use on one Licensed Media onto another Licensed
Media without Riverdeep's prior consent, which may be given or withheld in
Riverdeep's sole discretion.
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2.4 Support. During the Term, Distributor shall provide customer support
and technical support via email, telephonic, or online in a manner consistent
with other products distributed by Distributor and industry standards. On
Riverdeep's request, Distributor shall use commercially reasonable efforts to
provide quarterly status reports regarding customer and technical support, in an
agreed format subject to Distributor's existing data limitations, including such
information as number of calls per sku, customer feedback, nature of bug or
other problem. Such delivery shall be within fifteen (15) days of request.
2.5 Expenses. Except to the extent elsewhere provided in this Agreement,
Distributor will bear all costs and expenses incurred by or on behalf of
Distributor in manufacturing, promoting, marketing and distributing the
Products, including but not limited to manufacturing, shipping, handling and
warehousing costs, marketing expenditures, price protections and returns.
2.6 Changes to the Product List and Products. Riverdeep shall not have
the right to make any changes to the list of Products licensed hereunder to
Distributor except as set forth in this Section.
2.6.1 Upon the occurrence of a Loss Event, Riverdeep shall notify
Distributor as soon as possible, and if such Loss Event arises for any reason
other than a default by Riverdeep under Riverdeep's license agreement for such
Product, Riverdeep shall have the right to replace such Product with a product
of comparable market value and saleability to be agreed upon by the parties. If
the parties are able to reach agreement as to an appropriate replacement
product, such product shall be deemed a "Product" hereunder, Distributor shall
have all rights with respect thereto as provided with respect to other Products
hereunder, and Distributor shall have no further claim against Riverdeep arising
out of the failure to provide the Product so replaced, it being understood that
each party shall retain its rights and obligations in regard to customer
support, representations, warranties, indemnification, returns, credits, license
fees and royalties due on such Product units already in the Channel. If the
parties, operating in good faith and with commercial reasonableness, are unable
to reach agreement on any replacement product within fifteen (15) days after
notification to Distribution of such Loss Event, or if Riverdeep has lost such
rights by reason of a default under its license agreement for such Product,
Distributor shall have all of its rights and remedies hereunder, at law, or in
equity; provided however, that Distributor shall cease further manufacturing,
sales, and distribution of the Product within 15 days after notification of any
such Loss Event, if applicable.
2.6.2 Riverdeep shall have the right at any time to add products to
this Agreement, or to modify, upgrade, improve, or enhance Products under this
Agreement, and promptly upon doing so shall provide Distributor with a
replicatible goldmaster and other applicable materials for Distributor's use
hereunder.
2.7 [Intentionally Omitted]
2.8 Exclusive Distributor. Riverdeep shall not license any currently
existing products or future products for the Licensed Media to any other
Distributor for sale or distribution in the Channel and the Territory, other
than Excluded Products.
2.9 Deliverables. In respect of each of the Products on Exhibit A as of
the Commencement Date, Riverdeep shall provide to Distributor the deliverables
set forth on Exhibit D attached hereto (collectively, the "Deliverables") on the
Commencement Date. If Riverdeep shall choose to add additional Products to this
Agreement in accordance with Section 2.6.2, the parties shall mutually agree
upon the ship dates therefor, and thereafter Riverdeep shall provide the
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Deliverables for such Products no later than by the dates set forth on Exhibit
D. Without implication as to the materiality of a default in respect of any
other Products, Riverdeep's failure to furnish the Deliverables for the eight
highest revenue generating Products over the preceding 12-month period shall be
deemed to constitute a material default by Distributor hereunder unless cured
under the default provisions hereof. In addition to any other rights and
remedies available to Distributor for Riverdeep's failure to provide the
Deliverables for any Product on a timely basis, Riverdeep shall reimburse
Distributor for Distributor's out-of-pocket losses, costs, and expenses incurred
or owed by Distributor arising out of such failure within thirty (30) days after
invoicing Riverdeep therefor.
3. OWNERSHIP AND COPYRIGHT AND TRADEMARK NOTICES.
3.1 Riverdeep retains and shall have ownership of all licensed
intellectual property, including registered and unregistered copyrights and
trademarks (and all good will derived therefrom), character assets, software
code, package design, trade dress and marketing collateral, and any and all
modifications, enhancements and derivative works thereof and all Intellectual
Property Rights embodied therein and related thereto. All package art and
marketing collateral shall be created as a work for hire, owned by Distributor,
except to the extent otherwise required by Riverdeep's licensors. Distributor
shall cooperate with Riverdeep to meet the requirements of such licensors as
pertains to the creation of packaging art and marketing collateral. Upon
Riverdeep's request, no more frequently than once each quarter during the Term,
Distributor shall irrevocably assign and transfer to Riverdeep in perpetuity and
throughout the Universe any and all of Distributor's right, title and interest
(including, without limitation, the rights generally known as "moral rights" to
the extent assignable) in the packaging art and marketing collateral for the
Products created by or on behalf of Distributor, without representation or
warranty other than that Distributor has not itself theretofore assigned or
transferred any rights therein. In addition, upon and within fifteen (15) days
of Riverdeep's request, no more frequently than once each quarter during the
Term, Distributor shall also provide archived files of all such materials in the
same form and format in which Distributor uses such materials at no cost to
Riverdeep. Distributor shall not create a unitary composite xxxx involving
Riverdeep's trademarks or trade names. Distributor agrees that all use of such
Riverdeep trademarks and trade names shall be pursuant to Riverdeep's use
guidelines, shall inure to the benefit, and be on behalf, of Riverdeep.
3.2 Distributor hereby agrees that at the termination or expiration of
this Agreement, Distributor shall and does assign, transfer and convey to
Riverdeep all trademarks, service marks, copyrights, equities, good will titles
or other rights, titles and interests throughout the world in and to the
Products (including all packaging, marketing collateral and related materials,
but excluding Distributor's logo and any other trademarks propriety to
Distributor and unrelated to the Products) which may have been obtained by
Distributor or which may have vested in Distributor as a result of its
activities under this Agreement, and that Distributor shall immediately execute
any instruments requested by Riverdeep to accomplish or confirm the foregoing.
No consideration other than the mutual covenants and considerations of this
Agreement shall be necessary for any such assignment, transfer, or conveyance.
Distributor expressly understands and agrees that following termination or
expiration of this Agreement it retains no right to exploit or continue to
exploit or in any way deal with copies of, in any fashion and/or by any means,
the Products or any elements thereof, or packaging, promotion or advertising
related thereto or to the Products, and/or other works which embody the Products
in whole or in part which it created pursuant to this Agreement, without
Riverdeep's prior consent.
3.3 Distributor may not adopt any trademark, trade name, design, logo or
symbol, which is similar to or likely to be confused with or to dilute any
Riverdeep xxxx, name, logo or other intellectual property. Any sale of a Product
shall include the copyright, trademark and other proprietary rights notices as
are contained on the masters of such Product (including the documentation) or as
may be
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specified from time to time by Riverdeep. The Products shall feature the
Riverdeep brands. Distributor shall xxxx all packaging to indicate itself as the
manufacturer and distributor of the products, under license from Riverdeep Inc.,
a Limited Liability Company, and its licensors. All packaging is subject to
Riverdeep's approval. Riverdeep's approval of such packaging shall be deemed to
constitute Distributor's compliance with the packaging requirements of this
Agreement.
4. LICENSE FEES; GUARANTEED ROYALTY; THIRD PARTY LICENSING REIMBURSEMENT.
4.1 Earned License Fees. Distributor shall pay Riverdeep the license
fee(s) set forth on Exhibit B of this Agreement according to the terms set forth
on Exhibit B.
4.2 Guaranteed Royalty.
4.2.1 Distributor shall pay a guaranteed, irrevocable,
non-refundable payment (recouped against royalties as hereinafter provided) for
the Sales Year (as the same may be increased in accordance with this Section
4.2.1 below, the "Guaranteed Royalty") in the amount of $13,000,000. If and to
the extent that, within sixty (60) days after the Commencement Date, Riverdeep
receives third party consents from one or more licensors sufficient to enable it
to license the Consent-Required Products to Distributor in accordance with the
terms of this Agreement (collectively, "Third Party Consents"), then, Riverdeep
shall notify Distributor as to the Consent-Required Products as to which it has
received such Third Party Consent prior to the end of such 60-day period and
upon the expiration of such period, Distributor shall increase the Guaranteed
Royalty by an amount equal to the product of (i) $2,000,000, and (ii) the sum of
the allocable percentages corresponding to those Consent-Required Products as to
which Riverdeep has received such Third Party Consents by the end of such 60-day
period. If a request for a Third Party Consent is denied by a licensor, the
Product shall be removed from Exhibit A and the same shall not be deemed to
constitute a Loss Event with respect thereto.
4.2.2. Distributor shall pay the Guaranteed Royalty as follows.
Distributor shall have deposited, together with this Agreement, an initial
payment in the amount of US$3,000,000 (the "Initial Payment") into an escrow
arrangement that is mutually agreeable to Riverdeep and Distributor, which shall
be paid from such escrow to Riverdeep upon the Commencement Date. The remaining
balance shall be payable in twelve equal monthly installments, the first of
which shall be payable forty-five (45) days after the release of the Initial
Payment from escrow, the second of which shall be payable on that date that
falls thirty (30) days after the payment date of the first installment, and each
installment thereafter shall be payable on the day of each month thereafter on
which the second installment was paid (i.e., if the second installment was paid
on the 23rd day of the applicable month, each installment thereafter shall be
paid on the 23rd day). If on the date on which the final installment of the
Guaranteed Royalty is due the entire Guaranteed Royalty has not been paid, then
any remaining balance shall be paid on the last business day of the Sales Year.
4.2.3 The Guaranteed Royalty for the Sales Year shall be fully
recoupable by Distributor from royalties earned by Riverdeep on Products during
such year; provided however, that if at the end of the Sales Year, Distributor
has not fully recouped the Guaranteed Royalty for such Sales Year, then
Distributor shall have forty-two additional months to sell and distribute the
Products to fully recoup the Guaranteed Royalty; provided however, that if at
any time during such forty-two month period, a Loss Event shall occur, then in
addition to any other rights and remedies that Distributor shall have, such
forty-month period shall be extended for such additional time thereafter as
Distributor shall need to fully recoup the Guaranteed Royalty. Distributor shall
have the same
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rights and remedies for Loss Events occurring during such extended recoupment
periods as during the initial recoupment period.
5. UNDERTAKINGS OF THE PARTIES.
5.1 Marketing of the Products. Distributor shall use commercially
reasonable efforts to promote the sale of the Products in the Territory and
Channel. Distributor shall undertake channel marketing of the Products
throughout the Territory, consistent with industry standards. Distributor shall
maintain a commercially reasonable sales organization which can be best utilized
for the promotion of the sales of the Products.
5.2 Conduct of Business. Distributor will conduct its business in a
manner that will reflect favorably at all times on the Products and the good
name, goodwill and reputation of Riverdeep; avoid deceptive, misleading or
unethical practices or advertisements that are or might be detrimental to
Riverdeep, the Products, or the public; and not publish or employ or cooperate
in the publication or employment of any misleading or deceptive advertising
materials. Distributor agrees that the Products replicated and distributed by
Distributor shall at all times shall be of high standard and of such style,
appearance and quality as to protect and enhance the Products and the good will
pertaining thereto, shall meet Riverdeep's reasonable quality standards and
specifications as stated herein, and shall be manufactured, sold, distributed
and promoted in accordance with all applicable, Federal, state and local laws
and regulations. Distributor may not sell Products that Distributor knows to be
damaged or defective or which it would reasonably consider to be "seconds" based
on industry standards.
5.3 Compliance with Laws. Distributor will comply in all material
respects with the laws and regulations of all applicable local, state and
federal jurisdictions relating to Distributor's activities hereunder, including,
but not limited to, all state and federal laws and regulations governing product
warranties for the Products.
5.4 Sales Materials. Subject to Riverdeep providing underlying data for
the Sales Materials, Distributor may reproduce sales materials, including
technical specifications, drawings, advertisements and samples (collectively,
"Sales Materials") as reasonably required, provided that all copyright,
trademark and other property markings are reproduced. Such materials remain the
property of Riverdeep, and, except insofar as they are distributed by
Distributor in the course of its performance of its duties under this Agreement,
must be promptly returned to Riverdeep upon the expiration or termination of
this Agreement without charge to Riverdeep.
6. PUBLIC ANNOUNCEMENT; CONFIDENTIALITY OF INFORMATION AND MATERIALS. The
parties shall mutually agree upon a written communication to the Channel
customers to be prepared promptly following the Commencement Date. Neither party
may issue a press release or make other public announcement regarding the
existence of this Agreement, without the express written consent of the other
except to the extent reasonably interpreted to be required by applicable laws,
rules or regulations, and in such case, Distributor shall endeavor, but shall
not be obligated, to provide Riverdeep with notice of such announcement and an
opportunity for review. The parties each shall hold in strict confidence and
shall not disclose to others (except for affiliates, investors, advisers and
consultants on a need to know basis and subject to confidentiality, or otherwise
as required by law) or use, either before or after termination or expiration of
this Agreement, any technical or business information, manufacturing technique,
process, experimental work, trade secret or other confidential matter relating
to the Products, except to the extent disclosure is reasonably required in
connection with Distributor's marketing activities in the Territory and
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except to the extent that Riverdeep may assign the proceeds under this Agreement
as set forth in Section 12.3.
7. REPRESENTATIONS AND WARRANTIES.
7.1 Riverdeep. Riverdeep represents and warrants that (i) it is duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, and that it has the full rights,
power, legal capacity and authority to enter into this Agreement, and to carry
out the terms hereof; (ii) this Agreement has been executed by its duly
authorized representative and is a valid, legally binding and enforceable
obligation of Riverdeep; (iii) Riverdeep is either the owner of the Products and
all Intellectual Property Rights therein or has procured all necessary rights
and licenses from the owners of such rights to enter into and carry out the
terms of this Agreement; (iv) the Products have not been sold, assigned, leased,
licensed or in any other way disposed of or mortgaged, pledged or encumbered in
a manner that would violate the license granted to Distributor hereunder, and
that it is under no contractual or other legal obligation which would interfere
in any way with the full, prompt, and complete performance of its obligations
pursuant to this Agreement (including with regard to Riverdeep's contracts with
COKeM that relate to the Products); (v) no consent of any person or entity not a
party to this Agreement is required or necessary for Riverdeep to carry out its
obligations hereunder other than the licensors under the license agreements (the
"Consent-Required Contracts") pursuant to which Riverdeep procures the rights to
the Products listed on Exhibit F (the "Consent-Required Products") and only then
until a Third Party Consent is received in respect of any such Consent-Required
Product upon the occurrence of which this representation shall be deemed true
and correct with respect to the third party licensors under any such
Consent-Required Contracts; (vi) there is no litigation, claim or proceeding of
any nature pending or threatened in writing against or relating to the Products
or any Intellectual Property Rights related thereto which would have any
material adverse effect on the rights granted to Licensee hereunder; (vii) no
default has occurred under any agreement or contract to which Riverdeep is a
party pursuant to which Riverdeep licenses any Product from a third party, nor
has any event occurred, which, with the giving of notice or the passage of time,
would constitute a default under any such agreement or contract; and (viii)
neither the Products, nor any of the deliverables, nor the use of the Products
or such deliverables by Distributor in the manner specifically authorized
hereunder, nor the grant of the rights under this Agreement, is or will be an
infringement of or otherwise in violation of the rights of any third party in
the Territory, including, without limitation, the Intellectual Property Rights,
or will violate any applicable laws, rules, or regulations.
7.1.1 In this regard, Riverdeep hereby acknowledges and agrees that
Distributor shall be entitled to use and exploit in connection with its rights
under this Agreement all artwork and features and elements thereof and all other
materials provided by Riverdeep to Distributor under this Agreement without
being obligated to independently verify that, to the extent the same has or may
have been provided to Riverdeep by a third party, Riverdeep has cleared all
rights to Distributor's use and exploitation of such materials. Without limiting
the generality of the preceding sentence, Distributor at any time shall have the
right in its sole discretion to require that Riverdeep provide to it evidence
satisfactory to Distributor that all such rights to any such materials have been
cleared with all third parties, and upon receipt of such request, Riverdeep
shall promptly do so. In no event shall any such request for verification by
Distributor or disclosure by Riverdeep concerning the impairment of such rights
be deemed to abrogate or otherwise limit or affect the protections afforded to
Distributor under this Agreement in respect of Distributor's use or exploitation
of such materials.
7.2 Riverdeep further represents and warrants the goldmaster candidate
for each Product shall (i) correspond to, and perform in all material respects
in accordance with, any relevant
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specifications, functional or other descriptions contained in the written
materials accompanying the Products and in all of Riverdeep's advertising and
promotional materials (including, any final demonstration versions of the
Products, produced, released or approved by Riverdeep), without interruption or
error, (ii) function in all respects on the hardware and software specified,
(iii) be free from viruses, bugs, and operational limiting routines, the effect
of which would materially impair the ability of the end-user to use and enjoy
the Product as so intended, (iv) not contain any viruses, worms, date bombs,
time bombs, or other code designed to cause the Products to cease operating or
to damage, interrupt, or interfere with any end-user's hardware, software or
data, and (v) be free of other material defects. If any goldmaster candidate
fails to comply with Riverdeep's representation and warranty under this Section,
without limiting any right or remedy in this Agreement, Riverdeep shall provide
patches or fixes to such Product that prevents it from functioning as
represented to Distributor or otherwise keeps it from satisfying the
requirements of this Section, any such patches or fixes to be provided as soon
as commercially reasonable following Distributor's request therefor, but in no
event later than 15 days thereafter for any material bug attributable to
Riverdeep's product coding and 30 days for all other Products, it being
understood that any such patch or fix so provided shall be deemed to cure
Riverdeep's breach of the foregoing representation so long as such patch or fix,
taken together with the Product itself, would not have resulted in a breach of
such representation, and other than for any out-of-pocket losses, costs, or
expenses incurred or owed by Distributor as a result of such breach. Distributor
shall notify Riverdeep of crash bugs promptly after becoming aware of the
existence thereof and of any other impairment event in a commercially reasonable
period of time thereafter.
7.3 Riverdeep shall pay all amounts due under each of its licenses for
the Products and shall otherwise maintain the same in effect through the term
thereof. Riverdeep shall not grant any waiver or forebearance with respect
thereto if the effect of such waiver or forebearance would be to accelerate the
date of the expiration or termination thereof from the original term.
EXCEPT AS SET FORTH IN THIS SECTION, RIVERDEEP MAKES NO REPRESENTATION OR
WARRANTY WITH RESPECT TO ANY PRODUCT OR THE RELATED DOCUMENTATION AND TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW THE PRODUCTS ARE DELIVERED "AS IS." THE
WARRANTY STATED HEREIN IS EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT, AND
SUCH WARRANTY CONSTITUTES THE ONLY WARRANTY MADE BY Riverdeep WITH RESPECT TO
THIS AGREEMENT OR THE PRODUCTS, ARTICLES, MATERIALS, REPLACEMENT PARTS OR
SERVICES TO BE SUPPLIED HEREBY.
7.4 Distributor. Distributor covenants, represents and warrants that (i)
it is duly incorporated, validly existing and in good standing under the laws of
the jurisdiction in which it is incorporated, and that it has the full rights,
power, legal capacity and authority to enter into this Agreement, and to carry
out the terms hereof; (ii) this Agreement has been executed by its duly
authorized representative and is a valid, legally binding and enforceable
obligation of Riverdeep; (iii) Distributor's exercise of its rights and
performance of its obligations hereunder will not violate any laws or other
legal requirements; (iv) Distributor will not create, incur or permit any
encumbrance, lien, security interest, mortgage, pledge, assignment or other
hypothecation upon the License or Products or permit the commencement of any
proceeding or foreclosure action on a lien created by Distributor or any of its
agents or contractors on the License or Products, or to obtain any assignment
thereof, whether or not involving any judicial or nonjudicial foreclosure sales.
10
8. INDEMNIFICATION AND INSURANCE
8.1 Riverdeep Indemnity. Riverdeep shall indemnify, defend, and hold
Distributor harmless from and against all claims, suits, demands, actions and
proceedings, judgments, penalties, damages, costs and expenses (including
reasonable legal fees and costs), losses or liabilities ("DAMAGES") arising out
of (i) any trademark, trade dress, copyright, or patent infringement claim,
claim involving appropriation of trade secrets, claim arising out of the use and
exploitation of a person's appearance, performance, voice, or likeness in a
Product or Previously-Released Property, or claim arising out of anyone's right
to publicity or invasion of privacy contained in a Product or
Previously-Released Property; (ii) any amounts due to third parties for license
fees, royalties, dues, fees, or other amounts arising out of the content of or
included in any Product (including without limitation, public performance fees,
music sync license fees, and amounts due to any guilds, unions or collective
societies in connection with such content and the use and exploitation thereof);
(iii) any product liability claim or other claim for injury or damage done to
any person arising out of the use or operation of the software in the Product;
(iv) any claim arising out of or relating to the manufacturing, marketing, sale,
distribution, or other exploitation of Previously-Released Properties or
Products existing in the Channel prior the Commencement Date excluding amounts
for which Distributor is responsible under Section 5 and 6 of Exhibit B; (v) any
Damages incurred by Distributor resulting from a breach by Riverdeep of any
provision of this Agreement; (vi) Distributor's costs of goods and out-of-pocket
losses arising out of a Loss Event in respect of any Product, without regard to
whether such Product is replaced pursuant to Section 2.6 or any reduction to the
Guaranteed Royalty; or, (vii) any liabilities associated with inventory
deposited into the Channel by Riverdeep or any third-party appointed or
permitted to place Product into the Channel by Riverdeep from and after the
expiration or sooner termination of the Term.
8.1.1 Riverdeep shall not be obligated to defend or be liable for
costs and/or damages under this Section 8 to the extent that the alleged
infringement arises out of or is in any manner attributable to any modification
of any Product by Distributor (or any of Distributor's resellers), including
packaging and marketing collateral.
8.1.2 If any intellectual property claim which Riverdeep is
obligated to defend has occurred, or in Riverdeep's opinion is likely to occur,
Distributor agrees to permit Riverdeep, at Riverdeep's option and expense,
either to procure for Distributor (or its customers) the right to continue using
the subject Product or to replace or modify such Product so that it becomes
non-infringing; provided that any such action is at no cost or expense to
Distributor and any replacement is in accordance with Section 2.6 hereof.
8.2 Distributor Indemnity. Distributor shall indemnify and hold
Riverdeep harmless from and against all Damages which may arise or result from
or relate to (i) contract claims between Distributor and any of its
distributors, resellers, replicators, or retailers relating to any of the
Products; (ii) any Damages incurred by Riverdeep as a result of any sale by
Distributor of any Product outside of the Territory; (iii) any Damages incurred
by Riverdeep resulting from a breach by Distributor of any provision of this
Agreement; (iv) any third party claims of misleading advertising by Distributor;
(v) any trademark, trade dress, copyright, or patent infringement claim, claim
involving appropriation of trade secrets, claim arising out of the use and
exploitation of a person's appearance or likeness, in each case solely arising
out of any Product packaging created by or on behalf of Distributor, or claim
arising out of anyone's right to publicity or invasion of privacy contained in
any such Product packaging other than any claim relating to underlying art
assets or other materials provided by or on behalf of Riverdeep to Distributor;
(vi) any unfair trade practice,
11
antitrust, or consumer protection claims relating to the manufacture, marketing,
sale or distribution of the Products by Distributor; (vii) any personal injury
claims relating to Distributor's manufacture, sale, marketing or distribution of
the Products, except to the extent arising from the software in the Products;
and (viii) any claims by Riverdeep's licensors arising from or related to
Distributor's incomplete or inaccurate reporting relating to the sale of the
Products (it being understood that Distributor shall not be liable under this
clause (viii) for incomplete or inaccurate information provided to it by a third
party).
8.3 The indemnifications provided for herein are conditioned upon the
indemnified party's furnishing the indemnifying party with prompt written notice
of any such claim or suit and upon reasonable cooperation in defense of such
claim or suit. In such event, the indemnifying party shall have the option to
undertake and conduct the defense of any such claim or suit. The indemnifying
party shall not settle any claim or suit without the prior written consent of
the indemnified party, which shall not be unreasonably withheld or delayed. The
indemnifications hereunder shall survive the termination of this Agreement.
8.4 NEITHER PARTY SHALL UNDER ANY CIRCUMSTANCES BE LIABLE FOR ANY
CONSEQUENTIAL, INDIRECT, SPECIAL, INCIDENTAL OR EXEMPLARY DAMAGES, INCLUDING
WITHOUT LIMITATION, ANY LOSS OF REVENUES, PROFITS, OR BUSINESS OR OTHER ECONOMIC
LOSS ARISING OUT OF OR IN CONNECTION WITH THE SERVICES PROVIDED HEREUNDER,
ARISING UNDER CONTRACT, TORT OR OTHERWISE, AND EVEN IF ADVISED OF THE
POSSIBILITY OF SUCH LOSS, EXCEPT AS SPECIFICALLY PROVIDED FOR ELSEWHERE IN THIS
AGREEMENT. THE FOREGOING SHALL NOT LIMIT EITHER PARTY'S INDEMNIFICATION
OBLIGATIONS HEREUNDER TO THE EXTENT THAT A THIRD PARTY CLAIMS ANY SUCH DAMAGES
AGAINST A PARTY HEREUNDER.
8.5 Insurance. Distributor shall obtain, at its own expense, general
liability, including product liability, insurance providing adequate protection
for Riverdeep in amounts no less than One Million Dollars ($1,000,000.00) for
bodily injury to any person per any one occurrence and One Hundred Thousand
Dollars ($100,000.00) for property damage per any one occurrence. Simultaneously
with the execution of this Agreement, Distributor shall submit to Riverdeep
fully paid policies or certificates of insurance naming Riverdeep as an
additional insured party and, providing that coverage shall extend to all claims
or suits arising out of the use of the Products manufactured or sold under this
Agreement, and further requiring that the insurer shall not terminate or
materially modify such without written notice to Riverdeep at least twenty (20)
days in advance thereof.
9. TERM OF AGREEMENT.
9.1 This Agreement shall commence on the Commencement Date and shall
continue in effect for a period of one (1) year thereafter(the "TERM"), as the
same may be extended for any extended recoupment period under Section 4 hereof.
10. TERMINATION.
10.1 Termination For Cause. Either party may terminate this Agreement,
without further notice, for cause as follows:
12
10.1.1 Either party may immediately terminate this Agreement upon
written notice to the other party in the event that proceedings in bankruptcy or
insolvency are instituted by or against the other party, or a receiver is
appointed, or if any substantial part of the assets of the other party is the
object of attachment, sequestration or other type of comparable proceeding, and
such proceeding is not vacated or terminated within sixty (60) days after its
commencement or institution.
10.1.2 Either party may terminate this Agreement if the other party
commits a material breach of any of the terms or provisions of this Agreement
and does not cure such breach within thirty (30) days (or such shorter period as
may be expressly provided for in such applicable term or provision) after
receipt of written notice given. Distributor shall hold its affiliates, third
party manufacturers and authorized sublicensees to the same standards that
Distributor is held. If any of Distributor's affiliates, third party
manufacturers or authorized sublicensees commits any activity which would be a
breach of the Agreement by Distributor if Distributor had committed such
activity, Distributor shall within three business days following notice thereof
take commercially reasonable efforts to terminate such activity. Thereafter, if
the activity is not terminated within the earlier of thirty (30) days or the
period allowed for cure, pursuant to the applicable agreement with such third
party manufacturer or sublicensee, Distributor shall terminate the contractual
relationship with such third party.
10.2 Rights Upon Termination. Upon termination of this Agreement, by
expiration of the Term or otherwise, all further rights and obligations of the
parties shall cease, except that the parties shall not be relieved of (i) their
respective obligations to pay any monies due or which become due as of or
subsequent to the date of termination, and (ii) any other respective obligations
under this Agreement which specifically survive or are to be performed after the
date of termination. Riverdeep shall provide written notice to the Channel that
Riverdeep or its new distributor will take responsibility for all returns, Sales
Discounts, and MDF from and after such expiration or sooner termination.
Distributor and any authorized sublicensees shall immediately cease all
manufacturing, selling, marketing, distributing, advertising and/or promoting of
the Products. Distributor shall not increase sales in the Channel prior to
expiration of the Agreement in a manner inconsistent with standard industry
practices and Distributor's inventory management practices during the Term. In
the event of expiration or termination for Riverdeep's breach, Distributor
shall, at Riverdeep's direction, destroy Products in Distributor's possession,
or transfer all Products in its possession to Riverdeep, provided that Riverdeep
shall reimburse Distributor the actual cost of goods for eleven (11) weeks of
projected channel sell-through of the Products as of the date of expiration or
termination, plus shipping and handling fees for all units transferred to
Riverdeep. In the event that the parties cannot agree on eleven (11) weeks of
projected channel sell-through for the Products, the matter shall be referred to
the Mediator to determine the quantity based upon such data as the parties each
shall submit in support of their respective position. Such Mediator shall be
advised at the time of engagement to invoice each party for 50% of fees and
costs. In the event of termination for Distributor's breach, Distributor shall,
at Riverdeep's direction, destroy Products in Distributor's possession, or
transfer Products in its possession to Riverdeep, provided that Riverdeep shall
reimburse Distributor the actual cost of goods plus shipping and handling fees
for all units transferred to Riverdeep. Upon termination or expiration of the
Agreement for Distributor's breach, Distributor's payment obligation for earned
and guaranteed royalties shall survive and shall be due and payable upon the
same terms and conditions as provided for herein subject to any obligation under
applicable law to mitigate damages suffered by virtue of Distributor's breach.
10.3 Unforeseen Circumstances. No delay or failure by the parties hereto
in the performance of any obligation of this Agreement shall be deemed a breach
of this Agreement nor shall it create any liability, if the same shall arise by
reason of any cause beyond the reasonable control of the affected
13
party, including, but not limited to, labor disputes, strikes, wars, terrorism,
riots, insurrection, civil commotion, accident, shortage of materials or
equipment, government regulations, fire, flood, storm, or any other acts of God,
including defects and/or breakdowns of equipment and programming errors not
within the reasonable control of the affected party, provided that the party so
affected shall use commercially reasonable efforts to avoid or remove such cause
of nonperformance and shall continue performance hereunder as soon as
practicable. The foregoing shall not excuse the performance of any financial
obligations hereunder under any circumstance. In the event such cause occurs and
exceeds sixty (60) calendar days, the party not so affected may cancel this
Agreement upon written notice.
10.4 Bankruptcy. The parties hereby agree and intend that this Agreement
is an executory contract governed by Section 365 of the Bankruptcy Code.
(a) In the event of Distributor's bankruptcy, the parties intend that
any royalties earned under this Agreement during the bankruptcy period be deemed
administrative claims under the Bankruptcy Code because the parties recognize
and agree that the bankruptcy estate's enjoyment of this Agreement will (i)
provide a material benefit to the bankruptcy estate during its reorganization
and (ii) deny Riverdeep the benefit of the exploitation of the rights through
alternate means during the bankruptcy reorganization.
(b) The parties acknowledge and agree that any delay in the decision of
trustee of the bankruptcy estate to assume or reject the Agreement (the
"Decision Period") materially xxxxx Riverdeep by interfering with Riverdeep's
ability to alternatively exploit the rights granted under this Agreement during
a Decision Period of uncertain duration. The parties recognize that arranging
appropriate alternative exploitation would be a time consuming and expensive
process and that it is unreasonable for Riverdeep to endure a Decision Period of
extended uncertainty. Therefore, the parties agree that the Decision Period
shall not exceed sixty (60) days.
(c) Riverdeep, in its interest to safeguard its valuable interests
(including, without limitation, its intellectual property rights in the
Products), has relied on the particular skill and knowledge base of Distributor.
Therefore, the parties acknowledge and agree that in a bankruptcy context this
Agreement is a license of the type described by Section 365(c)(1) of the
Bankruptcy Code and may not be assigned without the prior written consent of
Riverdeep.
10.5 Survival of Terms. Sections 3, 4, 6, 7, 8, 10.2, 10.5, 11 and 12 of
this Agreement shall survive any termination of this Agreement.
11. BOOKKEEPING OBLIGATIONS AND INSPECTION RIGHTS.
11.1 Distributor shall maintain true and complete books of account
containing an accurate record of all data necessary for the proper computation
of payments hereunder, and Riverdeep shall have the right, by a certified public
accountant appointed by it and reasonably approved by Distributor, to examine
such books at all reasonable times (but not more than once in each calendar year
and not during the first fifteen days of any quarter) for the purpose of
verifying the accuracy of the reports and computation rendered by Distributor.
Upon reasonable advance written notice (but in no event less than 15 days), such
examination shall be made during normal business hours at the principal place of
business of Distributor. If such examination reveals that reports furnished by
Distributor were inaccurate by more than five percent (5%) and that amounts in
excess of those paid to Riverdeep are due, the cost of such examination shall be
borne by Distributor, and Distributor shall pay the amount of any discrepancy to
Riverdeep, plus interest at the rate of nine percent (9%) per year or part
thereof on any deficiencies.
14
11.2 Distributor will make commercially reasonable efforts to facilitate
Riverdeep's ability to enter and inspect all premises and facilities (including,
without limitation, storage and shipping facilities) of Distributor and its
manufacturer(s) and distributor(s), and its and their warehousers and/or
shippers, in order to ensure that the manufacture, packaging, labeling,
advertising and promotion and distribution of Products comply with Distributor's
obligations hereunder and all applicable laws. Distributor will make
commercially reasonable efforts to provide all information reasonably requested
by Riverdeep regarding the testing, manufacture, quality control, storage and
shipment of the Products.
11.3 Distributor shall, without cost or expense to itself, cooperate with
Riverdeep in connection with any audit of Riverdeep's books and records by its
third party licensors of the Products.
12. MISCELLANEOUS.
12.1 Entire Agreement. This Agreement contains the entire understanding
of the parties hereto relating to the Products, supersedes any prior written or
oral agreement or understandings between the parties with respect to the
Products, and cannot be changed or terminated orally. This Agreement may be
amended only by a writing signed by the parties hereto.
12.2 Enforceability. The invalidity or unenforceability of any provision
of this Agreement will not affect the validity or enforceability of any other
provision of this Agreement.
12.3 Assignment. Neither party shall assign this Agreement without the
prior consent of the other, not to be unreasonably withheld or delayed, except
to an entity which controls, is controlled by, or under common control with such
party ("control" defined as the power to directly or indirectly direct the
management of the applicable entity or ownership of 50% or more of the voting
shares thereof) or a merger of a party into another business entity, the sale or
transfer of the ownership interest or control of a party, or the sale or
transfer of more than 50% of a party's assets
12.4 Successors. All rights and obligations arising out of this Agreement
shall inure the benefit of, and be binding on and enforceable by the parties and
their respective successors and permitted assigns.
12.5 Currency. All dollar amounts herein are expressed in United States
funds.
12.6 Governing Law. This Agreement and its validity, construction and
performance shall be governed in all respects by the laws of the State of
California.
12.7 Notices. All notices or other communications required or permitted
to be given pursuant to this Agreement shall be in writing and shall be
considered as properly given or made if hand delivered, mailed first class mail,
postage prepaid, sent by prepaid telegram (or telex or other facsimile
transmission) or sent by express overnight courier service:
If to Riverdeep, to: If to Distributor, to:
------------------- ---------------------
Riverdeep Inc. A Limited Liability Company Encore Software, Inc.
000 Xxxxxxx Xxxx. 00000 X. Xxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxxx, XX 00000
15
Attention: Chief Operating Officer
Fax: (000) 000-0000 Attention: Xxxxxxx X. Xxxx
Fax: (000) 000-0000
With a copy to:
With a copy to:
Riverdeep, Inc.
000 Xxxxxxx Xxxxxxxxx Encore Software, Inc.
Xxxxxx, Xxxxxxxxxx 00000 00000 X. Xxxx Xxxxxx
Xxxxxxxxx: Xxxxxxx Xxxxxxx, XX 00000
Fax: (000) 000-0000 Attn: General Counsel
or to such other address as any such party may have designated by like notice
forwarded to the other party hereto.
12.8 Dispute Resolution; Election of Remedy. Any dispute, controversy, or
claim arising out of, in connection with, or in relation to this Agreement or
the breach thereof shall be resolved in a state or federal court venued in Marin
or San Francisco County, the jurisdiction of which is stipulated. The parties
waive any right to claim forum non conveniens, or to otherwise object to
jurisdiction or venue. Unless expressly set forth to the contrary, either
party's election of any remedies provided for in this Agreement will not be
exclusive of any other remedies available hereunder or otherwise at law or in
equity.
12.9 Injunctive Relief. Distributor understands and agrees that Riverdeep
will suffer irreparable harm in the event that Distributor fails to comply with
the any of its obligations under Section 2.1 or Section 3, above, and that
monetary damages in such event would be substantial and inadequate to compensate
Riverdeep. Consequently, in such event Riverdeep will 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 Riverdeep.
12.10 Independent Contractors. The parties hereto are independent
contractors and neither party is an employee, agent, partner or joint venturer
of the other. Neither party shall have the right to bind the other party,
whether directly or indirectly, to any agreement with a third party or to incur
any obligation or liability on behalf of such other party, whether directly or
indirectly.
12.11 No Third Party Beneficiaries. Except for the parties hereto, no
other party shall be entitled to any rights, benefits, or privileges under this
Agreement.
12.12 Offset. Notwithstanding any provision of this Agreement, at any time
during the Term or any extension of this Agreement and after expiration or
termination of this Agreement, either party has the right to offset any and all
amounts or credits which such party owes to the other party hereunder against
any and all amounts which other party owes such party hereunder.
16
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
signed under seal as of the date first set forth above.
RIVERDEEP INC., A LIMITED LIABILITY ENCORE SOFTWARE, INC.
COMPANY
By: _____________________________
Name: Xxxx Rim By: _______________________________
Its: VP, Asst. Treasurer, Riverdeep Name:
Interactive Learning USA, Inc., Sole Title:
Member of Riverdeep Inc., a Limited
Liability Company
17
INDEX OF EXHIBITS
EXHIBIT A - SCHEDULE OF PRODUCTS
EXHIBIT B - CERTAIN ADDITIONAL TERMS
EXHIBIT C - SCHEDULE OF APPROVED SUBLICENSES
EXHIBIT D - SCHEDULE OF DELIVERABLES FOR EACH PRODUCT
EXHIBIT E - SCHEDULE OF APPROVED THIRD PARTY MANUFACTURERS
EXHIBIT F - SCHEDULE OF CONSENT-REQUIRED PRODUCTS
EXHIBIT G - ROYALTY REPORT TEMPLATE
18
EXHIBIT A
SCHEDULE OF PRODUCTS
[see attached]
19
EXHIBIT A
SCHEDULE OF PRODUCTS
SKU TITLE
--- -----
OGG3844AE 1000 GREAT GAMES VAL
382114 101 GRTST XP GAMES 2 VAL
381842 101 GRTST XP GAMES VAL
382817 101 XP APS & UTLITIES VAL
383204 3D HOME XXXX 0 XXX
000000X 3D HOME DSGN 6 STE SNSRMTC
385497 3D HOME DSGN STE 5 PRO
382169 3D HOME DSGN STE 5 PRO LGBX
381158 3D HOME INTERIORS 2 DLX VAL
385498 3D HOME XXXXXXX 0 XXX
000000 3D HOME LNDSCPE 5 VAL
382068X 3D HOME LNDSCPE 5 VAL SNSRMTC
383205 3D HOME LNDSCPE XXXX 0
000000X 3D HOME XXXXXXX XXXX 0 SNSRMTC
381159 3DHA 3 DLX VAL
381159X 3DHA 0 XXX XXX XXXXXXX
000000 3DHA 5 DLX
385356 3DHA 5 PRO
382067 3DHA 5 VAL
383206 3DHA 6 DLX
383206X 3DHA 0 XXX XXXXXXX
000000XX 3DHA 6 DLX WAL SNSRMTC
583311P ACHIEVE BONUS ASST CSCO 403
381931R ACHIEVE MATH & SCI GRD 1-3 CLB
381933 ACHIEVE XXXX & XXX XXX 0-0 XX
000000 ACHIEVE MATH & SCI GRD 3-6
381876R ACHIEVE MATH & SCI GRD 3-6 CLB
381881 ACHIEVE XXXX & XXX XXX 0-0 XX
000000X ACHIEVE PHONICS GRD 1-3 CLUB
381936 ACHIEVE PHONICS GRD 1-3 MM
381879 ACHIEVE WRTNG & LA GRD 3-6
381878R ACHIEVE WRTNG & LA GRD 3-6 CLB
381880 ACHIEVE WRTNG & LA GRD 3-6 MM
381676 ADV XXXXXX XXXXXX
381677 ADV XXXXXX XXXXXX MM
381429 ADV XXXXX 0 XXX 0-0
000000 ADV WKSHP 3 GRD 1-3 MM
381426R ADV XXXXX 0 XXX 0-0 X0 XXX
381434R ADV XXXXX 0 XXX 0-0 X0 XX
381432 ADV WKSHP 3 GRD 4-6 MM
381432R ADV WKSHP 3 GRD 4-6 R1 MM
381433R ADV WKSHP 3 GRD PRE-1 R1 MM
382251 ADV XXXXX 0 XXX 0-0
000000 ADV WKSHP 4 GRD 1-3 MM
382252 ADV XXXXX 0 XXX 0-0
000000 ADV WKSHP 4 GRD 4-6 MM
583683J ADV WKSHP 5 ASST BJS 204
583464P ADV WKSHP 5 ASST CSCO 104
SKU TITLE
--- -----
383361 ADV XXXXX 0 XXX 0-0
000000 ADV XXXXX 0 XXX 0-0 XXX
383330 ADV WKSHP 5 GRD 1-3 MM
383362 ADV XXXXX 0 XXX 0-0
000000 ADV XXXXX 0 XXX 0-0 XXX
383332 ADV WKSHP 5 GRD 4-6 MM
383360 ADV WKSHP 5 GRD PRE-1
383329 ADV WKSHP 5 GRD PRE-1 CLB
383328 ADV WKSHP 5 GRD PRE-1 MM
582993J ADV WKSHP ASST BJ 303
582351P1 ADV WKSHP ASST CSCO 103A
583009P ADV WKSHP ASST CSCO 403
381427R ADV WKSHP GRD 4-6 V3 R1 CLUB
381431 ADV WKSHP GRD PRE-1 MASS MIX 3
381428R ADV WKSHP GRD PRE-1 V3 R1 CLUB
382250 ADV XXXXX XXX XXX-0 X0
000000 ADV WKSHP GRD PRE-1 V4 MM
360368 ADV WKSHP SCHLSTC ED CLB
360367 ADV WKSHP SCHLSTC ED MM
360367X ADV WKSHP SCHLSTC EDMM SNSRMTC
382339 ADV WKSHP SEUSS GRD PRE-1 CLB
382340 ADV WKSHP SEUSS GRD PRE-1 MM
378331S AG 2 PRINT PREMIUM SAMS
379755 AG 3 PRINT PREMIUM
385377 AG 7 SCRAPBOOKS & MORE VAL
385376 AG 7 SPIRITUAL EXP VAL
ACS3844AEC AG CAC 2 XXX XXXX
378300 AG CAC 4
385375 AG CAC 7 CRAFTS VAL
385290 AG CAC 7 SILVER VAL
385569 AG CAC 8 GOLD
382789X AG CAC 8 GOLD MM SNSRMTC
385571 AG CAC 8 PLATINUM
385567 AG CAC 8 SILVER VAL
382220 AG SCRAPBOOK & CRAFT DUAL VAL
382219 AG SLVR & SPIRTUAL DUAL VAL
381211 XXXXXX GRD 1 MM
381210 XXXXXX GRD KIND MM
382341 XXXXXX K STRFLY ALIEN BNDL
382342 XXXXXX K STRFLY ALIEN BNDL MM
381859 XXXXXX MATH GAMES VAL
382247 XXXXXX MINI 2 PACK
382421 XXXXXX PET CHASE V1 MM
382423 XXXXXX SAND CASTLE CNTST MM V1
582893P BATMAN & SD ASST CSCO 303
582892S BATMAN & SD ASST SAMS 303
582916J BATMAN & SD MM ASST BJ 303
381914 BATMAN JUSTICE UNBALANCED
382141 BATMAN JUSTICE UNBALANCED MM
381913 BATMAN TOXIC CHILL
382140 BATMAN TOXIC CHILL MM
381543-BK BK CIG TO TF HOME REPAIR
SKU TITLE
--- -----
381328 BODYWORKS 4 DUAL VAL
882922 BOUNTY HUNTER OT ADV
383298-BX BX GUARDIAN SCRTY STE
385488 CA 250K (SSL)
382249 CA 3 FONTS DLX
60402A CA 300K IMAGE PACK
385489 CA 400K
382309 CA 50K VALUE
385490 CA 750K
385490X CA 750K SNSRMTC
382385 CA FONTS VALUE
LHCAPCCV1M CAPCOM COIN OP COL V1 SNSRMTC
382790 CAPCOM XXXXXXXXXXX 0 XXX
000000X XXXXXX XXXXXXXXXXX 1 VAL SNSR
382382 CC 10
382383 CC 10 DLX
382965 CC 10 DLX MP5
382383X CC 00 XXX XXXXXXX
000000X CC 10 SNSRMTC
385345 CC 8 VAL
385346 CC 9
385372 CC 9 DLX NTWK MED KIT
383322 CC 9 VAL
382336 CF ADV PACK
382664 CF ADV PACK V1
382461 CF ADV PACK V1 MM
882459 CF BACKLOT BANSHEE BOOK 96PG
381579 CF GRD 3 ADV MATHRA V2.4
381643 CF GRD 3 ADV MATHRA V2.4 MM
381644 CF GRD 4 ADV PYRAMID V2.4 MM
381573 CF INCRED TOY STORE V1.1
381648 CF INCRED TOY STORE V1.4 MM
381646 CF MATH ADV HIMALAYAS V2.4 MM
882458 CF MYS OF MICROSNEEZIA 96PG
381860 CF READING AGE 9-12 VAL
581882P CF RR ASST V1 CSCO
383318 CF S&S & MYS MANSION VAL
382343 CF TOY ZOOMBINI LOG BNDL
382344 CF TOY ZOOMBINIS LOG BNDL MM
383049 CK SCRPBK XXXXX XXX
000000X CK SCRPBK XXXXX XXX XXX
000000X XX XXXXXX XXXXX XXX CSCO
383551X CK SCRPBK DSGNR DLX MM SNSRMTC
383049S CK SCRPBK XXXXX XXX XXXX
000000X XX XXXXXX XXXXX XXX SNSRMTC
WUS3744AE CLAS:WHERE US CARMN RTL W/95/M
583411J CLFRD & MATH MISSIONS ASST BJ 104
334397 CLIFRD LEARNING ACTIVITES
334399 CLIFRD LEARNING ACTIVITES MM
344355 CLIFRD MUSICAL MEMORY GAMES VAL
344342 CLIFRD MUSICAL MMRY GAMES
344347 CLIFRD MUSICAL MMRY GAMES MM
SKU TITLE
--- -----
356508 CLIFRD PHONICS
356535 CLIFRD PHONICS MM
321537 CLIFRD READING
334586 CLIFRD READING MM
367976 CLIFRD READING VAL
559182 CLIFRD SIDE BY SIDE BNDL
000000 XXXXXX XXXX XX XXXX XXXX XX
000000 CLIFRD THINKING
335434 CLIFRD THINKING MM
367978 CLIFRD THINKING VAL
00CM2510CC CLIPART & MORE 2,000,000
382238 CS MINI 2 PACK
882455 CS USA ADV 160PG
381034 CS USA VAL
882456 CS WORLD ADV 160PG
379985 CS WRLD VAL
382404 XXXX XXXXX BMX XXX
300162 DINOSAUR HNTR VAL
382403 DUCATIWORLD VAL
582895P1 EDU ASST CSCO 403
310243 EMERGENCY 2 VAL
382039 EMPERORS MAHJONG MM VAL
383014 EMPERORS MAHJONG VAL
300198 EXPLRE 3D WRLD ATLAS PWR PK
300188 EXPLRE SPACE PWR PK
385455 FAM LWYR 2003 ESS VAL
385446 FAM LWYR 2003 H&B DLX
382651 FAM LWYR 2004 DLX H&B
382917X FAM LWYR 2004 DLX H&B MM SNSR
382651X FAM LWYR 2004 DLX H&B SNSRMTC
300130 FIRST FRNDSHPS FUN PK
335485 FORMTOOL 2004
335485X FORMTOOL 2004 SNSRMTC
382978 GUARDIAN AD ELIMINATOR
382979 GUARDIAN DATA PRTCTR VAL
382980 GUARDIAN FREWALL INSCRE IM VAL
382981 GUARDIAN PC CLEANER VAL
383298 GUARDIAN SCRTY STE
383299 GUARDIAN SCRTY STE MM
383298X GUARDIAN SCRTY STE SNSRMTC
382982 GUARDIAN SPAM ELMNTR VAL
382983 GUARDIAN WORM KILLER VAL
382209 HAMTARO WAKE UP SNOOZER
382210 HAMTARO WAKE UP SNOOZER MM
335438 HIJAAK DIGITAL PHOTO STUDIO
00JPA510CC HIJAAK PHOTAGS
335495X HIJAAK PHOTAGS SNSRMTC
335437 HIJAAK PHOTO ART
382884 HM DEPOT 3D HM LNDSCP DES DLX
382883 HM DEPOT 3D HOME 5 DES DLX
300171 I LOVE MATH PWR PK
300134 I LOVE PHONICS PWR PK
SKU TITLE
--- -----
300111 I LOVE USA VAL
348585 I SPY COL
356519 I SPY FANTASY
356538 I SPY FANTASY MM
356519X I SPY FANTASY SNSRMTC
321658 I SPY JR PUPPET PLYHSE VAL
313729 I SPY JUNIOR VAL
321588 I SPY SCHOOL DAYS
358179 I SPY SCHOOL DAYS MM
367977 I SPY SCHOOL DAYS VAL
559180 I SPY SIDE BY SIDE BNDL
559206 I SPY SIDE BY SIDE BNDL MM
358178 I SPY SPOOKY MANSION MM
313728 I SPY SPOOKY MANSION VAL
334394 I SPY TREASURE XXXX
334396 I SPY TREASURE XXXX XX
382058 ID THEFT PRTCTOR
382804 ID THEFT PRTCTOR MM
382804X ID THEFT PRTCTOR MM SNSRMTC
382058S ID THEFT PRTCTOR SAMS
383162 IMSECURE PRO
383162X IMSECURE PRO SNSRMTC
381920 INTELLIVSN GRTST HITS VAL
310243Z-JCB JCB EMERGENCY 2
382115Z-JCB JCB XXXXX 12
382319 XXXXXXXX CHESSMATE MM VAL
382319X XXXXXXXX CHESSMT MMVAL SNSRMTC
383315 KID PIX 4 DLX MM
378180 KIDPIX 3 DLX
381178 KIDPIX 3 DLX MM
378180O KIDPIX 3 DLX OM
385310 KIDPIX DLX & 100 GREAT VAL
380863 KIDPIX DLX VAL
382345 KIDPIX XXXXXX XXXXXX BNDL
382346 KIDPIX XXXXXX XXXXXX BNDL MM
385036 LEARN WIN XP & EXCEL XP VAL
378379 LEGACY OF KAIN SOUL XXXXXX XXX
382236 LITTLE BEAR DUAL VAL
356515 XXXXXX XXXX
356537 XXXXXX XXXX MM
356537X XXXXXX XXXX MM SNSRMTC
335496 LOR RETURN OF THE XXXX XXX
382406 XXXXXXXX & ASHLEY DANCE VAL
356504 MATH MISSIONS GRD 3-5
356533 MATH MISSIONS GRD 3-5 MM
356503 MATH MISSIONS GRD K-2
356532 MATH MISSIONS GRD K-2 MM
382115 XXXXX 12 XXX
381499 XXXXX 15 DLX
000000 XXXXX 00 XXX XX
000000 XXXXX 15 STD
381610 XXXXX 15 STD MM
SKU TITLE
--- -----
382159 XXXXX 16
382158 XXXXX 16 DLX
000000 XXXXX 00 XXX XX
000000 XXXXX 16 MM
382159X XXXXX 16 SNSRMTC
112915 XXXXX 9.0 MAC RTL
582688J XXXXX TPR MNDPWR ASST BJ 203
882925 MIGHTY MATH FLSH CRDS DIVISION
882924 MIGHTY MATH FLSH CRDS FRACTION
882926 MIGHTY MATH FLSH CRDS MULTI
882680 MIGHTY MATH GRD 2-3 320PG
882677 MIGHTY MATH MONEY DCMLS 32PG
882676 MIGHTY MATH MULT DVSION 32PG
381667 MNDPWR MATH HIGH SCHL
381670 MNDPWR MATH HIGH SCHL MM
381668 MNDPWR MATH MDL SCHL
381669 MNDPWR MATH MDL SCHL MM
381804 MNDPWR SCI GRD 7-12 MM
381803 MNDPWR SCI GRD 7-12 WMAC
385321 XXXXXXXXX 0 XXX
000000 MOVIESHOP 6 MM
882961P MTY MATH 2ND-3RD WRKBK CD CSCO
300196 MY FIRST BIBLE STORIES MM
00NTX540CC NET ACCELERATOR V4
357990 NICKELODEON TOON TWISTER
357990P NICKELODEON TOON TWISTER CSCO
357992 NICKELODEON TOON TWISTER MM
357992X NICKELODEON TOON TWISTER MM
383209 OCEAN AQUARIUM
383209X OCEAN AQUARIUM SNSRMTC
383015 OCEAN AQUARIUM VAL
383015 OCEAN AQUARIUM VAL
380859 OREGON TRAIL 5
381183 OREGON TRAIL 5 MM
381032 OREGON TRAIL II VALUE V1.3
381917 PADDINGTON WRLD MYST TOUR VAL
385481 PC COPY CENTER 2 VAL
300187 PEOPLE LND HSTRY PWR PK
382312 PHOTOSHOW 2 VAL
382737 PHOTOSHOW DLX
582877J PHOTOSHW ZONE AG ASST BJ 303
381321 PM 12 GOLD
385500 PM 15 GOLD
385500X PM 15 GOLD SNSRMTC
385505 PM 15 GREETING CARDS DLX
385505X PM 15 GREETING CARDS DLX SNSRMTC
385501 PM 15 PLATINUM
385502 PM 15 PLATINUM DVD
385501X PM 15 PLATINUM SNSRMTC
385499 PM 15 SILVER VAL
385499X PM 15 SILVER VAL SNSRMTC
382986 PM 16 GOLD
SKU TITLE
--- -----
382987 PM 16 PLAT
382988 PM 16 PLAT DVD
382984 PM 16 SILVER VAL
382985 PM 16 STE
582371J PM PS ASST BJS 103
582371J1 PM PS ASST BJS 103A
378726 POST IT NOTES VAL
381680 POWERPUFF GIRLS MOJO XXXX MM
382207 POWERPUFF GIRLS SNREBUCKS
382208 POWERPUFF GIRLS SNREBUCKS XX
000000-XXX XXX XXXXXX XX PACK
583237J PRODCTVTY BNDL ASST BJ 403
582746 PRODCTVTY BNDL AST CSCO 203
583303 PRODCTVTY CD MIX A
583304 PRODCTVTY CD MIX B
583305 PRODCTVTY CD MIX C
583306 PRODCTVTY CD MIX D
378329 PS 10 ESS
379853M PS 11 DLX MASS
382795 PS 15 VAL
382795X PS 15 VAL SNSRMTC
382222 PS 20
382223 PS 20 DLX
182223 PS 20 DLX DIRECT
382227 PS 20 DLX DVD
382415 PS 20 DLX MP5
582878S PS 20 DLX PM 15 ASST SAMS 303
382223X PS 20 DLX SNSRMTC
382221 PS 20 ESS
382221X PS 20 ESS SNSRMTC
382225 PS 20 PRO PUB
382224 PS 20 PRO PUB DLX
382416 PS 20 PRO PUB DLX MP5
382224X PS 20 PRO PUB DLX SNSRMTC
382225X PS 20 PRO PUB SNSRMTC
382222X PS 20 SNSRMTC
382226P PS 20 STE DLX CSCO
382882 PS 8 MAC
385013 PS BUS CARD CREATOR
383323 PS BUS CARD MAKER VAL
381244 PS CD LABEL CREATOR
382692X PS ESSENTIALS 20 MM SNSRMTC
381238 PS FOR MAC
385528 PS HOME & OFFICE LABELS VAL
385528X PS HOME & OFFICE LBL VAL SNSRMTC
385491 PS LABEL CREATOR DLX
382317 PS LTRHD ENV & MORE VAL
382316 PS PHOTO WORKSHOP VAL
00QVC580CC01 QUICKVERSE ESS 7.0
311043 QUICKVERSE ESS VAL
300599 RAINBOW FISH VAL
882923 RIDE TO RESCUE OT ADV
SKU TITLE
--- -----
383482 RR 1ST & 2ND GRD READING SYSTEM TOY
383480 RR 1ST GRD LEARNING SYSTEM TOY
882695 RR ABC ORDER 32 PG
882387 RR ALPHABET BOOK 32PG
381862 RR BABY VAL
882940W RR BOOK CD PHONICS WAL
882941W RR BOOK CD RDNG READINESS WAL
882942W RR BOOK CD SPELLING WAL
583301 RR CLAMSHELL WRKBK ASST 403
882389 RR COLORS & SHAPES BOOK 32PG
882931 RR FLSH CRDS ALPHABET
882930 RR FLSH CRDS COLORS SHAPE
882929 RR FLSH CRDS PHONICS
882932 RR FUN WITH 123s
882933 RR FUN WITH ABC
882934 RR FUN WITH COLORS
882935 RR FUN WITH SHAPES
381588 RR GRD 1 2002 V1.1 MM
381464 RR GRD 1 CLASSIC VAL
582946 RR GRD 1 JCB & WRTNG WRKBK
583188 RR GRD 1 JCB WRKBK BNDL
381489P RR GRD 1 V1.1 CSCO
382792 RR GRD 1 VAL
382792X XX XXX 0 XXX XXXXXXX
000000X XX XXX 0 XXXXX & CD CSCO
882334 RR GRD 1 WRKBK 320PGS
381587 RR GRD 2 2002 V1.1 MM
382348 XX XXX 0 XXXXXX XXXXX XXXX XX
000000 RR GRD KIND 2002 V1.1 MM
381462 RR GRD KIND CLASSIC VAL
582948 RR GRD KIND JCB & READNG WRKBK
582950 RR GRD KIND JCB & RHYME WRKBK
583187 RR GRD KIND JCB WRKBK BNDL
382337 RR GRD KIND LEARNING PACK CLUB
000000 XX XXX XXXX XXX
000000X RR GRD KIND VAL SNSRMTC
382633 RR GRD KIND VARIETY PACK
382468 RR GRD KIND VARIETY PACK MM
882958P RR GRD KIND WRKBK & CD CSCO
882333 RR GRD KIND WRKBK 320PG
381493 RR GRD PRE 2002 V1.1
381583 RR GRD PRE 2002 V1.1 MM
381463 RR GRD PRE CLASSIC VAL
382794 RR GRD PRE CLASSIC VAL
382794X RR GRD PRE CLASSIC VAL SNSRMTC
582947 RR GRD PRE JCB & ALPHA WRKBK
582949 RR GRD PRE JCB & COLOR WRKBK
583186 RR GRD PRE JCB WRKBK BNDL
382632 RR GRD PRE VARIETY PACK
382467 RR GRD PRE VARIETY PACK XX
000000X XX XXX XXX XXXXX & CD CSCO
882332 RR GRD PRE WRKBK 320PG
SKU TITLE
--- -----
383479 RR KIND LEARNING SYSTEM TOY
381514 RR LTR PHONICS GRD 1-2
381582 RR LTR PHONICS GRD 1-2 MM
381516 RR LTR PHONICS GRD PRE-KIND
381584 RR LTR PHONICS GRD PRE-KIND MM
382814 RR LTR SYS 3IN MM
382814X RR LTR SYS 3IN MM SNSRMTC
882682 RR MATH ADD & XXXXXXXX 00 XX
000000 RR MATH ADV AGE 4-6 VAL
380929 RR MATH ADV AGE 6-9 VAL
381201 RR MATH ADV AGES 4-6 W/RR3 VAL
381202 RR MATH ADV AGES 6-9 W/RR3 VAL
882928 RR MATH FLSH CRDS ADDITION
883163 RR MATH FLSH CRDS SUBTRACTION
882681 XX XXXX XXX XXXX-0 XXXXX 000 PG
882960P RR MATH K-1ST WRKBK & CD CSCO
882683 RR MATH MONEY & TIME 32 PG
882390 RR PHONICS BOOK 32PG
383481 RR PRE & KIND READING SYSTEM TOY
383478 RR PRE LEARNING SYSTEM TOY
381861 XX XXXXXXX 0-0 XXX
000000 XX XXXXXXX CMPRHNSION 32 PG
882388 RR RHYMING WORDS BOOK 32PG
882386 RR SOUNDS BOOK 32PG
882937 RR SPELLING CHALLENGE 2ND GRD
882936 RR SPELLING CHALLENGE GRD 1
381425 RR THNKG ADV VAL
381586 RR TODDLER 2002 MM
381491 RR TODDLER 2002 V3
383477 RR TODDLER LEARNING SYSTEM TOY
882693 RR WRITING MECHANICS 32 PG
582765J SCHLSTC BNDL ASST BJ 203
582894P SCHOLASTIC ASST CSCO 303
582894P1 SCHOLASTIC ASST CSCO 403
382205 SD CASE FILE 2 STONE DRAGON
382206 SD CASE FILE 2 STONE DRAGON MM
382205X SD CASE FILE 2 STONE DRAGON SNSRMTC
382206X SD CASE FILE2 STONE MM SNSRMTC
381681 SD GLOWING BUG MAN
381682 SD GLOWING BUG MAN MM
380849 SD JINX AT SPHINX
381166 SD JINX AT SPHINX MM
383321 SD JINX AT THE SPHINX VAL
380325 SD PHANTOM KNIGHT
381185 SD PHANTOM XXXXXX XX
381184 SD SHOWDOWN GHOST TOWN MM
382807 SD SHWDWN GHOSTWN VAL
382807X SD SHWDWN GHOSTWN VAL SNSRMTC
000000 XXX XXXXX XXXXXXX XXX
000000 SPAM SHREDDER
382466X XXXXXXXXXXXX XXXXX XXXXXXX
000000X STRWBRY & PPUFF ASST SAMS 303
SKU TITLE
--- -----
382465 STRWBRY SHRTCKE AMZING COOKIE
382465X STRWBRY SHRTCKE AMZING SNSRMTC
382466 STRWBRYSHRTCKE AMZNG COOKIE MM
382797 XXXXXX XXXXXX LEARNING ADV
300082 SW MATH CMPLTE
000000 XX XXXX XXXXXX XX
000000 SW MATH SUCCESS MM
300084 SW MID & HIGH SCHL MATH
300085 SW MID & HIGH SCHL MATH MM
300086 SW MID SCHL MATH & SCI
300087 SW MID SCHL MATH & SCI MM
300099 SW SCI CMPLTE
000000 XX XXX XXXXXX XX
000000 TEST DRIVE OFFROAD 2 VAL
382352 TPR INSIDE SAT ACT 04 DLX
382353 TPR INSIDE SAT ACT 04 DLX MM
382352X TPR INSIDE SAT ACT 04 DLX SNSRMTC
382353X TPR SAT ACT 04 DLX MM SNSRMTC
382237 TREASURE COVE & MTN DUAL VAL
382405 TRICKSTYLE VAL
335469 TURBOCAD 2D 3D
335469P TURBOCAD 2D 3D CSCO
335469X TURBOCAD 2D 3D SNSRMTC
335481 TURBOCAD DLX
335481P XXXXXXXX XXX XXXX
000000X TURBOCAD DLX SNSRMTC
310414 VALUE 4 PACK SAMS
583189 VALUE MIX 403
382230 WAR COMMANDER VAL
382230X WAR COMMANDER VAL SNSRMTC
882921 WESTWARD BOUND AN OT ADV
382675 WILLWRITER 2004 V3 VAL
381553 ZOBOOMAFOO CREATURE QUEST
382901 ZOBOOMAFOO CREATURE QUEST VAL
582920S1 ZONE 4 ID THEFT ASST SAMS 303A
381569 ZONE ALARM 3 PRO
382438 ZONE ALARM PRO 4
382666 ZONE ALARM PRO 4 MM
382487 ZONE ALARM PRO 4 MP5
382438X ZONE ALARM PRO 4 SNSRMTC
382272 ZONE ALARM PRO MM
381180 ZOOMBINIS 2 LOGICAL JRNY MM
381664 ZOOMBINIS ISLAND ODYSSEY
381678 ZOOMBINIS ISLAND ODYSSEY MM
382239 ZOOMBINIS MINI 2 PACK
385498J ZZ 3D HOME XXXXXXX 0 XXX XX
000000 ZZ RR GRD KIND 2002 V1.1
EXHIBIT B
SCHEDULE OF CERTAIN ADDITIONAL TERMS
1. Intentionally Omitted.
2. Royalties and Payment Terms:
a) [Intentionally Omitted].
b) Earned Royalty. Riverdeep shall earn royalties for sales of Products
during the Sales Year as provided below, provided that the same shall not be
payable until Distribution has recouped from such amounts the corresponding
Guaranteed Royalty for such year.
25% of Net Receipts for finished goods.
"NET RECEIPTS" is defined as gross sales from the sale of Products,
less actual credits granted for returns, rebates, product xxxx-down
expenses, and Sales Discounts. To the extent gross sales or
dilutions relate to Mixed Assortments or Mixed Bundles, then
Distributor may only apply such gross sales or deduct dilutions in
an amount proportional to the percentage of Products in said Mixed
Assortment or Mixed Bundle. With each royalty statement, Distributor
may take a reasonable reserve for anticipated returns, not to exceed
20% of royalties earned for the applicable reporting period. With
each monthly statement, Distributor will liquidate each reserve
held, and pay to Riverdeep any royalties then due that are in excess
of the liquidated reserve. Distributor may not deduct: cash
discounts granted as terms of payment; promotional/new store
discounts; costs, taxes or duties incurred in manufacturing,
handling, shipping, importing, or selling. At Riverdeep's request,
Distributor shall review its customer credit status with Riverdeep
on a regular basis, but not more than once each quarter.
Distributor, in consultation with Riverdeep, will develop and
designate wholesale pricing strategies, pricing envelopes, and
lifecycle management pricing guidelines around which Distributor may
operate on a day-to-day basis independent of Riverdeep consultation;
provided however, deviations from current pricing models outside of
these parameters will require that Distributor consult with
Riverdeep and Distributor will develop and designate any such
pricing strategies, pricing envelopes, and lifecycle management
pricing guidelines that so deviate from the current models.
Distributor shall have full discretion with respect to the price it
charges its retail customers. At such time as a Product reaches
late-stage "closeout" status, Distributor shall request Riverdeep's
consent to closeout the Product inventory through one or more
closeout distributors. If Riverdeep shall fail to grant such consent
within fifteen (15) days thereafter, then Riverdeep shall be
required to purchase such inventory for an amount equal to
Distributor's cost of goods therefor.
c) [Intentionally Omitted.]
20
d) Reporting and Payment. Detailed reporting and payment of earned
royalties shall be provided no later than twenty-one (21) days following the end
of each calendar month. Royalty reports shall contain such information as is
included in a template report attached hereto as Exhibit G.
e) Late Charges. Any payments which are made to Riverdeep or Distributor
hereunder more than thirty (30) days after the due date therefor, shall bear
interest at the rate of 9% per annum from the date such payments are due to the
date of payment. Each party's right hereunder to interest on late payments shall
not preclude such party from exercising any of its other rights or remedies
pursuant to this Agreement or otherwise with regard to the other party's failure
to make timely remittances.
3. Marketing Plan And Reports: Distributor shall provide Riverdeep, within 90
days of the Commencement Date, with a retail forecast for each Product licensed
hereunder. In the event that Products are added to Exhibit A, Distributor shall
provide Riverdeep with a retail forecast for each such Product no less than
within a reasonable period of time prior to Riverdeep's planned ship date for
each such Product. For Riverdeep's review and approval, not to be unreasonably
withheld or delayed, as to the first such plan, and consultation as to all
subsequent plans, Distributor will provide Riverdeep (a) with a sales and
marketing plan and forecast including such reasonably detailed information, on a
quarterly basis; (b) a ninety (90) day rolling retail forecast for each active
Product provided on a monthly basis; (c) on the first business day of each week
during the Term, Distributor will provide Riverdeep with a report detailing
gross shipments by Retailer for the previous week. Distributor will provide
Riverdeep with the following reports on a monthly basis within nine (9) business
days of the end of every month: SKU by reporting Retailer; EDI Sell-Through;
Product Returns authorized; and Inventory Report. Distributor will provide
Riverdeep with the following reports within thirty (30) business days of the end
of every month (concurrent with royalty reporting): SKU by Sublicensee (if any
approved); and Product units sold and/or distributed by Sublicensee (if any
approved).
Distributor shall use commercially reasonable efforts to market and sell the
Products and to promote the Products at industry trade shows specified by
Riverdeep and agreed to by Distributor, which agreement shall not be
unreasonably withheld. Distributor shall submit all marketing campaigns to
Riverdeep for review and approval, not to be unreasonably withheld or delayed.
Distributor shall use commercially reasonable efforts to meet all product
availability commitments made by Riverdeep (prior to the Commencement Date) to
retail accounts, including meeting replenishment orders for fixed plan-o-grams,
provided that Riverdeep shall have furnished Distributor with all deliverables
and information Distributor may require to do so on a timely basis.
Distributor will not discriminate against the Products in favor of Distributor's
other similar products.
Distributor shall not liquidate or deep-discount the Products, or otherwise
distribute in a manner that may reasonably be expected to reduce the good will
associated with or otherwise tarnish the Riverdeep brands. Products will only be
sold to Retailers, or to distributors for resale, shipment and/or distribution
to Retailers, who Distributor has a good faith belief will sell such Products in
the Territory and Channel to the public in the same general manner in which
merchandise of the same general description is customarily marketed, displayed
and sold. In the event Distributor learns that any Retailer is treating the
Products in a manner less favorably than similar merchandise, Distributor will
inform Riverdeep and will make commercially reasonable efforts to have the
problem corrected to Riverdeep's satisfaction. If Riverdeep is not satisfied
within a reasonable period then, upon written request of Riverdeep, Distributor
21
will discontinue future shipments to such Retailer and will not provide such
Retailer with Licensed Article(s) thereafter without Approval.
4. Approvals. Distributor shall create and produce its own packaging, labels,
disc art, end-user documentation, marketing and promotional materials, all
subject to Riverdeep review, guidance, feedback and approval at the following
stages:
- Concept design
- Alpha package design, including copy
- Final mechanical.
A submission shall be approved or disapproved within ten (10) business days from
receipt of the materials except the final mechanical, which will be approved
within five (5) business days of receipt of materials. Approval shall not be
unreasonably withheld or delayed. A submission shall in no instance be deemed
approved. If approval is not granted, Riverdeep shall identify the reasons for
disapproval and such corrective measures which, when taken, will result in
approval upon resubmission. Among other reasons, Riverdeep may reasonably
withhold approval in relation to the maintenance of brand and trade dress
consistency between versions, product lines, and in its other channels.
Distributor acknowledges that some of Riverdeep's licensors may have approval
rights regarding packaging, software development and their proprietary brands
and other names. Distributor shall reasonably cooperate with Riverdeep when
third-party licensor approval is required. Distributor shall provide archived
files of all approved materials, suitable for reproduction and in a form and
format specified by Riverdeep, within 10 days of Riverdeep's approval.
Neither Distributor (any permitted sublicensees) nor third party manufacturers
shall manufacture Products without Riverdeep's prior written approval of the
materials to be reproduced unless such materials have been furnished to it by
Riverdeep. Notwithstanding such approval, Distributor (any permitted
sublicensees), and third party manufacturers shall be responsible to include on
all Products and Packaging any third-party licensor's name, trademark, and logo,
and all applicable notices. Riverdeep's approval shall not relieve Distributor
of this obligation; provided however, Riverdeep's approval of any given
packaging shall be deemed to constitute Distributor's compliance with the
packaging requirements hereof.
5. Warehouse Inventory. Distributor shall purchase from Riverdeep all owned,
sellable on-hand inventory (including components), and work in process, of the
Products as of the Commencement Date, including consignment inventory in the
Channel, excluding however any genealogy-based or language-based inventory.
Riverdeep shall provide a list of all such inventory as of the Commencement
Date. Title shall transfer, with Distributor taking title, ownership and risk of
loss, as of the Commencement Date; provided however, that Riverdeep shall
nonetheless maintain insurance on such inventory in the same coverage as prior
the Commencement Date and shall name Distributor as an additional insured with
respect thereto, and upon any casualty with respect thereto, Riverdeep shall pay
any proceeds received in respect thereof to Distributor within ten (10) days of
receipt. Distributor shall pay Riverdeep, as the purchase price for such
inventory, Riverdeep's actual out-of-pocket cost of goods (such amount not to
exceed $3,500,000), and reasonable handling and storage costs for such inventory
based on a written breakdown of rates to be provided to Distributor, and
shipping charges to be reasonably agreed upon between the parties. Payment for
cost of goods shall be payable within 60 days after the sale of such inventory
by Distributor, and payment for such handling, shipping and storage costs to be
made net 30 of invoice. Distributor will use good faith efforts to sell such
inventory.
22
6. Channel Inventory. From and after the Commencement Date, all amounts received
by Riverdeep on account of Product distributed into the Channel shall be payable
to Distributor, and to the extent any such funds are received by Riverdeep, the
same shall be reported and paid thereto within fifteen (15) days of receipt
thereof. During the Term, Distributor shall: (a) accept returns of Channel
Inventory; and (b) provide Distributor's retail accounts with the Channel
Inventory Credits. Distributor shall be entitled to credit against the next
succeeding installment of the Guaranteed Royalty (and subsequent installments
thereof until such credit has been fully applied) in the amount of Distributor's
cost (1) for Channel Inventory Credits provided by Distributor to its Retailers
during the Term and (2) for credits issued for the return of Channel Inventory
to Distributor but not to exceed 16% of the aggregate wholesale value of the
Channel Inventory as of the Commencement Date, unless such returns are the
function of the natural events of a product's lifecycle. The parties shall
mutually cooperate as to the review and issuance of Channel Inventory Credits
and return authorizations for the ninety day period following the Commencement
Date.
"Channel Inventory" shall mean inventory of the Products in the Channel and the
Territory as of the Commencement Date that was not sold by Distributor.
"Channel Inventory Activities" shall mean the marketing development funds,
co-operative advertising, Sales Discounts (including price protection), and
stock-balancing for the Channel Inventory.
"Channel Inventory Credits" shall mean the credits issued by Distributor to its
retail customers for Channel Inventory Activities to which Riverdeep committed
in writing, and for which the Retailer met its obligations, both prior to the
Commencement Date.
23
EXHIBIT C
SCHEDULE OF APPROVED SUBLICENSES
AGREEMENT TITLE DATE OF AGREEMENT: BY AND BETWEEN RIVERDEEP AND:
--------------- ------------------ -----------------------------
OEM License Agreement March 30, 2003 MPS Multimedia, Inc.
OEM License Agreement June 15, 2003 MPS Multimedia, Inc.
OEM License Agreement June 30, 2003 ROI
OEM License Agreement June 30, 2003 COKeM
OEM License Agreement September 30, 2003 Digital1Stop
June 30, 2003 Big Island
September 30, 2002 Software Mackiev
PC Treasures
[Last three licenses subject to review by Distributor]
24
EXHIBIT D
SCHEDULE OF DELIVERABLES
DUE DATE (Based On Number Of Days Before The
DELIVERABLES Agreed Upon Ship Date)
------------ ----------------------
Layered, high resolution files for available artwork for 90
Packaging as well as all but not limited to available marketing
copy, legal copy, twenty screenshots, product/corporate logos,
and key art
Manual in electronic format:
Draft 45
Final Version 30
Documentation 90
Layered, high resolution files for available sell sheets and 90
other promotional materials
25, 50, 100, and 200 word product descriptions, title 90
treatments (where available)
Press accolades, awards, reviews, endorsements (where available) 90
Product demos and .avi's (where applicable and available) 90
Product walk-through documents (where available) 90
Competitive analysis - development features 90
Product design document 90
System requirements 90
ESRB Rating (if applicable) and certificate 45
Age range / grade level 90
Retailer and promotional history (where available) 90
6 samples of existing product 90
goldmaster candidate Submission - three copies 45
25
Replicatable Goldmaster - three copies 30
26
EXHIBIT E
SCHEDULE OF APPROVED THIRD PARTY MANUFACTURERS
ACUPRINT 0000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
ADVANCED COLOR GRAPHICS 000 Xxxx Xxxxx
Xxxxxxxxx, XX 00000
ADVANCE PAPER BOX 0000 X Xxxxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
XXXX-CO GRAPHICS 0000 Xxxxx Xxxxxxx Xxxx
Xxx Xxxxxxx, XX. 00000
COLOUR CONCEPTS 0000 Xxxxx Xx - Xxxxx X
Xxxxxxxxx, XX 00000
DELTA PRINTING SOLUTIONS 00000 X Xxxxxx Xxxxxxxx
Xxxxxxxx, XX 00000
FUTURE MEDIA PRODUCTIONS 00000 Xxx Xxxxxxxxxxx
Xxxxxxxx, XX 00000
PRIMARY COLOR 0000 XxXxx Xxxxxx
Xxxxxx, XX 00000
RITEK GLOBAL MEDIA 00000 Xxx Xxxx Xxx.
Xxxx xx Xxxxxxxx, XX 00000
SONOPRESS LLC 000 Xxxxxxxxxx Xx.
Xxxxxxxxxxx, XX 00000
TECHNICOLOR 0000 X. Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
27
EXHIBIT F
SCHEDULE OF CONSENT-REQUIRED PRODUCTS AND ALLOCABLE PERCENTAGES
Consent-Required Product Allocable Percentage
Batman 3.02%
Hamtaro 1.40%
Power Puff 6.35%
Scholastic 7.52%
Scooby Doo 25.40%
Strawberry Shrtck 6.56%
Zone Alarm 49.75%
IMSI Products 0%
GSP (DK line) 0%
Supermentor (Xxxxxx Xxxxxx) 0%
DIC (Liberty's Kids) 0%
Home Depot branded product 0%
Acendi (Family Lawyer, Identity Theft,
and Anti-Spam) 0%
Nickelodeon 0%
Princeton Review 0%
100.00%
28
EXHIBIT G
ROYALTY REPORT TEMPLATE
[see attached]
29
