EXHIBIT 10.1
MASTER DISTRIBUTION AGREEMENT
THIS AGREEMENT is being entered into as of this 24th day of February,
1997, between REALITY INTERACTIVE, INC., a Minnesota corporation with its
principal office at 7500 Flying Cloud Drive, Fourth Floor, Eden Prairie,
Minnesota 55344 ("RII") and INTERACTIVE MEDIA COMMUNICATIONS, a Massachusetts
corporation, with its principal place of business at 000 Xxxxxx Xxxxxx,
Xxxxxxx, XX 00000 ("IMC").
RECITALS
WHEREAS, RII is the developer and publisher of certain interactive
multimedia Products in electronic digital format as identified at EXHIBIT A to
this Agreement (the "Products");
WHEREAS, IMC desires to sell and distribute the Products through its
distribution channels;
WHEREAS, RII is willing to grant IMC the right to sell and distribute the
Products and to allow IMC to earn a Distribution Royalty in accordance with the
terms and conditions as set forth herein.
AGREEMENTS
NOW, THEREFORE, in consideration of the recitals and the mutual
agreements and acknowledgments made herein, the parties agree as follows:
1. APPOINTMENT. RII grants to IMC the nonexclusive right, under
the terms of this Agreement, to sell and distribute the Products through its
distribution channels in the United States and Canada (the "Territory"). RII
agrees not to sell its Products directly through IMC's distributors, unless
mutually agreed to by both RII and IMC in writing. IMC agrees to make
reasonable efforts to ensure that the RII Products are not sold to companies
that would be deemed to be competitors of RII, and IMC agrees to confer with
RII on such matters if IMC is unsure of whether a customer is a competitor of
RII's.
2. CUSTOMER ORDERS. IMC shall notify RII of all customer orders
using the Order Form reflected at EXHIBIT B. RII shall drop ship all orders
received from IMC to IMC directly, unless otherwise noted by IMC. IMC shall
invoice and collect all customer orders that are generated through its
distribution channels. RII shall invoice IMC for the retail value of the
sale, less the amount of the Distribution Royalty calculated in section 3.
3. DISTRIBUTION ROYALTY. IMC shall be entitled to a Distribution
Royalty on the cumulative yearly sales of the Products in accordance with the
following tiers:
RETAIL SALES OF PERCENTAGE
--------------- ----------
$0 - $ 99,999 (***)%
$100,000 - $199,999 (***)%
$200,000 and above (***)%
*** Pursuant to Rule 24b-2 of the Securities and Exchange Act of 1934,
confidential portions of Exhibit 10.1 have been deleted and filed
seperately with the Securities and Exchange Commission pursuant to
a request for confidential treatment.
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Any sales discounts extended by IMC to its customers shall not decrease the
amount owed to RII. Likewise, any sales discounts extended by IMC and
approved by RII shall decrease the amount owed to RII.
4. PAYMENT. IMC agrees to pay RII in accordance with its invoice
payment terms of net 30 days.
5. MARKETING COLLATERAL MATERIALS AND EVALUATION INVENTORY. RII
shall provide all IMC distributors with a starter package of marketing
materials for the Products (the "Marketing Materials") in quantities
reflected at EXHIBIT C. IMC may purchase additional materials from RII, at
RII's cost to produce, by using the order form attached hereto at EXHIBIT D.
IMC agrees to use its best efforts to sell the Products in the Territory.
For product evaluation purposes, RII shall provide each of
IMC's distributors, at no cost, with two (2) units of each Product, and shall
provide IMC, at no cost, with five (5) units of each Product. IMC shall
manage the Product evaluation process, and shall be financially responsible
to RII, except for normal wear and tear, for the cost of Product replacement
in such cases where Product is lost or stolen during the evaluation process.
6. TRAINING. RII shall, at its own cost, provide one training
session to IMC at its main place of business regarding the proper operation
and selling of the Products. IMC shall, at its own cost, provide training to
its distributors regarding the proper operation and selling of the Products.
RII may assist IMC in the training of its distributors primarily through
telephone support.
7. TERM AND TERMINATION. The term of this Agreement is two years
from the date of its execution. The term may be extended by mutual consent
of the parties. This Agreement may be terminated by either party, without
cause, providing the terminating party provides a 30 day written notice.
This Agreement will terminate automatically in the event either party ceases
to do business, in the event of either party's bankruptcy, insolvency, or
assignment for the benefit of creditors.
Upon termination of this Agreement, RII shall buy back from
IMC, at the original IMC purchase price, all unused and undamaged Marketing
Materials. At the same time, IMC shall cease using any references to RII or
its Products. In addition, upon termination of this Agreement, RII agrees to
refrain from contracting with IMC distributors for a period of eighteen (18)
months from the date of such termination.
8. PRICE OF PRODUCTS. RII retains the right to establish the
retail price of the Products (the "Retail Price") and to adjust the Retail
Price from time to time. The initial Retail Price for each Product is set
forth in EXHIBIT A hereto.
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9. QUALITY AND WARRANTIES. RII warrants that the digital media
on which the Products is distributed is free from defects in materials and
workmanship. EXCEPT AS SPECIFICALLY PROVIDED IN THE PRECEDING SENTENCE, RII
MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, WITH RESPECT
TO THE PRODUCTS, INCLUDING ITS CONTENT, QUALITY, PERFORMANCE, MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE. This section shall not limit RII's
liability with respect to intellectual property rights and indemnification.
RII shall extend its standard warranty to purchasers of the Products, a copy
of which is attached as EXHIBIT E, in the form in which it appears on the
Products Registration Card packaged with the Products. IMC shall not
represent that RII makes any warranty other than this standard warranty.
10. OWNERSHIP AND PROPRIETARY RIGHTS. RII represents and
warrants that (i) it has all rights in and to copyrights, trade secrets and
trademarks associated with the Products under this Agreement, (ii) the use of
the literary and artistic materials and ideas contained or embodied in the
Products, containers and advertising materials, if any, furnished to IMC by
RII in accordance with the terms of this Agreement, will not violate any law,
or infringe upon, or violate any rights of any person, firm or corporation,
and (iii) RII has no knowledge of any litigation, proceeding or claim pending
or threatened against RII which may materially affect RII's rights in and to
the Products, or the works and performances embodied thereon, the copyrights
pertaining thereto, or the rights, licenses and privileges granted to IMC
hereunder.
11. INDEMNIFICATION. RII shall indemnify and hold harmless
IMC, its officers, employees and agents, from and against all loss, damages,
liability, and expense, including attorney fees, incurred by reason of any
claims, actions, suits or governmental investigations or proceedings, brought
against or involving them or any of them, and which (i) relate to or arise
out of a breach by RII of its warranties relating to intellectual property
rights, or (ii) are brought by a third party and arise out of a claimed
defect in the Product or a claim that the Products fail to meet warranties,
representations or specifications made by RII.
IMC will indemnify and hold harmless RII, its officers,
employees and agents, harmless from and against all loss, damages, liability,
and expense, including attorney fees, incurred by reason of any claims,
actions, suits or governmental investigations or proceedings, brought against
or involving them or any of them, and which relate to or arise out of a
breach by IMC of its obligations under this Agreement.
12. RELATIONSHIP OF PARTIES. During the term of this Agreement,
the relationship between RII and IMC is that of independent contractors.
Under no circumstances shall any of the employees of one party be deemed the
employees, agents or partners of the other for any purpose.
13. CONFIDENTIALITY. Any proprietary business information or
data, written, oral or otherwise, disclosed by one party to the other
("Confidential Information") shall remain the property of the disclosing
party. The parties agree to hold all such Confidential Information in strict
confidence and not to disclose same to any third party without the disclosing
party's prior written consent. Upon expiration or termination of this
Agreement, each party shall return to the other all such Confidential
Information in its possession.
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14. NOTICE. All notices shall be in writing and will be
delivered personally, by confirmed facsimile transmission, by certified mail,
or overnight courier, to the addresses specified below:
If to IMC: IMC If to RII: Reality Interactive, Inc.
000 Xxxxxx Xxxxxx 7500 Flying Xxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000 Xxxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx Attn: Xxx Xxxxxxxxx, CFO
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Notice will be effective only upon receipt.
15. MISCELLANEOUS.
(a) ASSIGNMENT, AMENDMENT AND SEVERABILITY. Neither this
Agreement nor any rights hereunder or interest herein may be assigned by
either party without the prior written consent of the other. This Agreement
and the Exhibits hereto constitute the entire agreement between RII and IMC.
In the event any provision of this Agreement is found to be void or
unenforceable, all remaining provisions of this Agreement will remain in full
force and effect.
(b) GOVERNING LAW. This Agreement and the relationship
between the parties hereto will be governed by and construed in accordance
with the laws of the State of Minnesota.
(c) MODIFICATION. No modification, amendment, supplement to
or waiver of any provision of this Agreement shall be binding upon the
parties hereto unless made in writing and duly signed by all parties.
(d) ARBITRATION. All disputes arising out of or relating to
this Agreement shall be submitted to arbitration by the American Arbitration
Association ("AAA") in the City of Minneapolis, Minnesota, or the AAA in the
City Boston, Massachusetts, at the option of the petitioner. In no event
shall the arbitrator have the power to include any element of punitive,
incidental or consequential damages in the arbitration award. Judgment on
the arbitration award in accordance with this Agreement may be entered in any
state or federal court of competent jurisdiction.
IN WITNESS WHEREOF, the parties have caused the Agreement to be executed as
of the date written above.
REALITY INTERACTIVE, INC. INTERACTIVE MEDIA COMMUNICATIONS, INC.
BY /S/ Xxxxxx X. Xxxxxxxxx BY /S/ Xxxxx X. Xxxxx
--------------------------- ---------------------------
ITS Chief Financial Officer ITS President
--------------------------- ---------------------------
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EXHIBIT A
PRODUCT AND RETAIL PRICING SCHEDULE
------------------------------------------------------------------------------
ISO 9000 REGISTRATION SERIES RETAIL PRICE
------------------------------------------------------------------------------
The Executive Guide to ISO 9000 $99
------------------------------------------------------------------------------
Understanding the ISO 9000 Process $1,295
------------------------------------------------------------------------------
Preparing for Registration $1,795
------------------------------------------------------------------------------
The Registration Process $1,795
------------------------------------------------------------------------------
Internal Auditing $895
==============================================================================
ISO 9000 Registration Series (5-CD set) $4,995
==============================================================================
ISO 9000 Registration Maintenance Toolkit (2-CD set) $1,995
------------------------------------------------------------------------------
------------------------------------------------------------------------------
QS-9000 COMPLIANCE SERIES RETAIL PRICE
------------------------------------------------------------------------------
Starting the QS-9000 Process $995
------------------------------------------------------------------------------
Managing the QS-9000 Process $995
------------------------------------------------------------------------------
Building and Implementing the QS-9000 Quality System $995
------------------------------------------------------------------------------
Internal Auditing for QS-9000 $995
==============================================================================
QS-9000 Compliance Series $3,595
==============================================================================
------------------------------------------------------------------------------
ISO 14000 EMS CONFORMANCE SERIES AND POLLUTION PREVENTION RETAIL PRICE
------------------------------------------------------------------------------
Understanding ISO 14000 $995
------------------------------------------------------------------------------
Getting Started with ISO 14000 $995
------------------------------------------------------------------------------
Building and Implementing an EMS for ISO 14000 $995
------------------------------------------------------------------------------
Internal Auditing and Management Review for ISO 14000 $995
------------------------------------------------------------------------------
Project Planning for ISO 14000 $995
==============================================================================
ISO 14000 EMS Conformance Series (5-CD set) $4,495
==============================================================================
Pollution Prevention $995
------------------------------------------------------------------------------
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EXHIBIT B
PRODUCT ORDER FORM
FOR INFORMATION ON VOLUME DISCOUNTS, NETWORK PRICING, AND ENTERPRISE LICENSES,
CALL (000) 000-0000. OUTSIDE US AND CANADA
CALL (000) 000-0000. PLEASE FAX THIS ORDER FORM TO (000) 000-0000.
----------------------------------------------------------------------------------------------------------------------------------
ENVIRONMENTAL MANAGEMENT ISO 14000 EMS CONFORMANCE SERIES AND P2 UNIT PRICE QUANTITY TOTAL
----------------------------------------------------------------------------------------------------------------------------------
Understanding ISO 14000 $995
----------------------------------------------------------------------------------------------------------------------------------
Getting Started With ISO 14000 $995
----------------------------------------------------------------------------------------------------------------------------------
Building and Implementing the ISO 14000 EMS $995
----------------------------------------------------------------------------------------------------------------------------------
Managing ISO 14000 Implementation $995
----------------------------------------------------------------------------------------------------------------------------------
Internal Auditing for an ISO 14001 EMS $995
==================================================================================================================================
ISO 14000 EMS Conformance Series (5-CD set) $4,495
==================================================================================================================================
Pollution Prevention (single CD) $995
==================================================================================================================================
Introductory package: Understanding ISO 14000 and Pollution Prevention $1,495
----------------------------------------------------------------------------------------------------------------------------------
QUALITY STANDARDS ISO 9000 REGISTRATION UNIT PRICE QUANTITY TOTAL
SERIES
----------------------------------------------------------------------------------------------------------------------------------
The Executive Guide to ISO 9000 $99
----------------------------------------------------------------------------------------------------------------------------------
Understanding the ISO 9000 Process $1,295
----------------------------------------------------------------------------------------------------------------------------------
Preparing for Registration $1,795
----------------------------------------------------------------------------------------------------------------------------------
The Registration Process $1,795
----------------------------------------------------------------------------------------------------------------------------------
Internal Auditing $895
==================================================================================================================================
ISO 9000 Registration Series (5-CD set) $4,995
----------------------------------------------------------------------------------------------------------------------------------
ISO 9000 Registration Maintenance Toolkit (2-CD set) $1,995
----------------------------------------------------------------------------------------------------------------------------------
AUTOMOTIVE QUALITY QS-9000 COMPLIANCE SERIES UNIT PRICE QUANTITY TOTAL
----------------------------------------------------------------------------------------------------------------------------------
Starting the QS-9000 Process $995
----------------------------------------------------------------------------------------------------------------------------------
Managing the QS-9000 Process $995
----------------------------------------------------------------------------------------------------------------------------------
Building and Implementing the QS-9000 Quality System $995
----------------------------------------------------------------------------------------------------------------------------------
Internal Auditing for QS-9000 $995
==================================================================================================================================
QS-9000 Compliance Series (4-CD set) $3,595
----------------------------------------------------------------------------------------------------------------------------------
Subtotal $
-----------------------------------
Less discount (if applicable) less___% -
-----------------------------------
Shipping $4.00
-----------------------------------
(Minnesota residents please add 6.5% sales tax) $
---------------------
TOTAL ORDER $
---------------------
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METHOD OF PAYMENT: / / VISA / / MASTERCARD / / AMER. EXPRESS CARD #:_________________ EXP DATE:________.
/ / CORPORATE CHECK / / PO PO/CHECK #_______________ SIGNATURE_________________
_______________________
NAME_____________________________ TITLE _____________________________________
COMPANY__________________________ ADDRESS ___________________________________
CITY/STATE/ZIP _________________________________ PHONE (___)_________________
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EXHIBIT C
MARKETING AND SALES STARTER PACKAGE
------------------------------------------------------------------------------
ITEM DESCRIPTION QUANTITY
------------------------------------------------------------------------------
LITERATURE:
------------------------------------------------------------------------------
Marketing Collateral Order Form (May Copy) 1
------------------------------------------------------------------------------
ISO 9000/QS-9000 Demo CD 20
------------------------------------------------------------------------------
Full Product Line Demo CD (Avail. In March) 20
------------------------------------------------------------------------------
ISO 9000 Product Brochures 20
------------------------------------------------------------------------------
QS-9000 Product Brochures 20
------------------------------------------------------------------------------
ISO 14000 Product Brochures 20
------------------------------------------------------------------------------
Pollution Prevention Product Brochures 20
------------------------------------------------------------------------------
PRODUCT:
------------------------------------------------------------------------------
ISO 9000 Registration Series (1 - 5) 1
------------------------------------------------------------------------------
QS-9000 Compliance Series (1 - 4) 1
------------------------------------------------------------------------------
ISO 14000 Conformance Series (1 - 5) 1
Titles 1 and 2 available immediately
Titles 3 and 4 available February 14, 1997
Title 5 available March 15, 1997
------------------------------------------------------------------------------
Pollution Prevention (1) 1
------------------------------------------------------------------------------
The above materials and products are the recommended starter allocations for
each distributor. Reality will ship the necessary start up quantities to IMC
for distribution to the selected agents within your network. Replacement and
supplemental materials can be ordered using the Marketing Collateral Order
Form at Exhibit C.
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EXHIBIT D
MARKETING COLLATERAL ORDER FORM
PLEASE FAX THIS ORDER FORM TO (000) 000-0000
------------------------------------------------------------------------------------------------
DESCRIPTION MINIMUM QUAN. PRICE/UNIT EXTENDED
ORDER PRICE
------------------------------------------------------------------------------------------------
ISO/QS 9000 Demo CD 50 $1.50
------------------------------------------------------------------------------------------------
ISO 9000 Spec Sheet (16 pgs) 25 $0.50
------------------------------------------------------------------------------------------------
ISO 9000 Brochure 25 $0.30
------------------------------------------------------------------------------------------------
QS 9000 Brochure 25 $0.30
------------------------------------------------------------------------------------------------
ISO 14000 Brochure 25 $0.30
------------------------------------------------------------------------------------------------
Pollution Prevention Brochure 25 $0.20
------------------------------------------------------------------------------------------------
Multimedia For Business World Brochure 25 $0.25
------------------------------------------------------------------------------------------------
Quality Profile (Xxxxxxxx, Inc.) 25 $0.10
------------------------------------------------------------------------------------------------
Quality Profile (Lake Air Metal) 25 $0.10
------------------------------------------------------------------------------------------------
Shipping &
Handling
------------------------------
Order Total
------------------------------
METHOD OF PAYMENT: / / Check #______________________________
/ / Credit Card #________________________
Xxx.Xxxx________________
Name:__________________________ Telephone:(____)__________________________
Address:_______________________ Fax:(____)______________________________
City:__________________________ State:______ Zip Code:___________________
Signature:_______________________________________________________________
All order fullfillments are subject to availability of stock. Some items may
need to be backordered.
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EXHIBIT E
STANDARD WARRANTY
Licensor warrants that the optical media on which the Products is
distributed is free from defects in materials and workmanship. Licensor will
replace defective media at no charge, provided you return the defective item
with dated proof of payment to Licensor within ninety (90) days of the date
of delivery. This is your sole and exclusive remedy for any breach of
warranty. EXCEPT AS SPECIFICALLY PROVIDED ABOVE, LICENSOR MAKES NO WARRANTY
OR REPRESENTATION, EITHER EXPRESSED OR IMPLIED, WITH RESPECT TO THE PRODUCTS,
INCLUDING ITS CONTENT, QUALITY, PERFORMANCE, MERCHANTABILITY, OR FITNESS FOR
A PARTICULAR PURPOSE. IN NO EVENT WILL LICENSOR BE LIABLE FOR DIRECT,
INDIRECT, SPECIAL; INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE
OR INABILITY TO USE THE PRODUCTS OR DOCUMENTATION. EVEN IF ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. IN NO CASE SHALL LICENSOR'S LIABILITY EXCEED
THE AMOUNT OF THE LICENSE FEE PAID. THE WARRANTY AND REMEDIES SET FORTH
ABOVE ARE EXCLUSIVE AND IN LIEU OF ALL OTHERS, ORAL OR WRITTEN, EXPRESS OR
IMPLIED. Some states do not allow the exclusion or limitation of implied
warranties or limitation of liability for incidental or consequential
damages, so that the above limitation or exclusion may not apply to you.
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