DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT ("Agreement") is made this 15th day of April, 1996
by and between U.S. Robotics Access Corp. ("USR"), a Delaware corporation with
its principal place of business at 0000 X. XxXxxxxxx Xxxx., Xxxxxx, Xxxxxxxx
00000, and PC411, Inc. ("Vendor"), a Delaware corporation having its principal
place of business at 0000 Xx Xxxxxxx Xxxx., Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxx
00000.
1. DEFINITIONS
1.1. PROGRAM. "Program" means the information, entertainment, communications
or other program(s) and any related materials, including computer
software programs, described in Exhibit A, attached hereto and
incorporated herein, including any upgrades, enhancements, new releases
or new versions thereof that Vendor may release.
1.2. CD-ROM DEVICE. "CD-ROM Device" means an optical disc storage device
containing Programs and using the technology commonly known as compact
disc read-only-memory ("CD-ROM") or any subset, format, enhancement or
other version of it, whether now known or developed in the future
(including but not limited to XXXX, XX-XXX-XX, XX-0, 0X-X, and CDTV).
1.3. PRODUCTS. "Products" means USR's "Sportster" line of modems and all
successor models to the "Sportster" line. "Products" can also indicate
other USR product lines, such as "Courier", "Megahertz", telephony and
other communication products as specified herein.
1.4. TERRITORY. "Territory" means the United States and Canada.
2. GRANT OF RIGHTS
2.1. GRANT. Vendor grants to USR the non-exclusive rights, under copyright
and otherwise, to copy and duplicate in CD-ROM Devices the Program(s), to
advertise those CD-ROM Devices and to market and distribute those CD-ROM
Devices in packages of the Products, during the Term and in the
Territory, and to authorize USR subsidiaries and affiliates in the
Territory to do so. USR may also distribute those CD-ROM Devices to its
customers who have previously purchased its products. USR may use
wholesalers, distributors, value-added resellers or other third parties
to distribute the CD-ROM Devices, and is authorized to use distribution
methods including, without limitation, bulk orders, telephone orders, and
direct mail orders.
2.2. LIMITATION OF RIGHTS. USR's uses of the rights granted in this Agreement
will be subject to any restrictions imposed by Vendor's agreements with
its licensors and other third parties, as set forth on Exhibit B,
attached hereto and incorporated herein. Except as set forth in Exhibit
B, as between Vendor and USR, Vendor is the owner of all right, title and
interest in and to the Program.
3. PAYMENTS
3.1. FEES. Vendor shall pay USR the fees set forth in Exhibit C, attached
hereto and incorporated herein, for the CD-ROM Devices distributed during
the Term, or after expiration or termination of this Agreement pursuant
to Section 5.1 herein.
3.2. PAYMENT. Vendor will compute and make all payments due USR, accompanied
by accounting statements, within thirty (30) days after the end of each
quarter for which payments are due.
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3.3. RECORDS AND ACCOUNTING. Vendor shall maintain complete and accurate
records, in accordance with generally accepted accounting practices, of
all amounts payable to USR for three (3) years from the date such amounts
are paid to USR. USR or its authorized representative may, at USR's
expense, examine Vendor's books and records relating to amounts due to
USR under this Agreement, after the close of each calendar quarter,
during Vendor's regular business hours and at the place where the books
and records are regularly kept, for the purpose of auditing such books
and records, for so long as such books and records are required to be
maintained. USR will give the Vendor 15 days notice of its intention to
perform an audit. All information gained by USR or its authorized
representative from such audit shall be deemed Confidential Information
and used solely for the purpose of verifying the accuracy of the payments
made to USR hereunder. If USR asserts that additional payment is due,
USR will issue to Vendor a written demand for such additional amount with
supporting documentation. In the event a dispute arises over amounts due
to USR, both parties agree to work in good faith toward a mutually
agreeable resolution of the dispute.
3.4. MECHANICAL ROYALTIES AND OTHER THIRD PARTY PAYMENTS. Vendor will make
all payments to third parties, including without limitation payments to
holders of rights (including copyrights) in musical compositions, master
recordings, literary material, audio and audiovisual elements, computer
software programs, graphics, technology, artwork, photographs, names and
likenesses, required by reason of the use of the Program in the
duplication, modification or distribution of the CD-ROM Devices.
3.5. NO PAYMENTS BY USR. USR shall not be obligated to make any royalty or
other payments of any kind to Vendor under this Agreement.
4. DUPLICATION AND CONTENT
4.1. DUPLICATION MATERIALS. Vendor will furnish to USR, promptly upon USR's
request and at Vendor's expense: (a) any master, duplicating or other
materials relating to the Program that USR may require for the
manufacture of first class quality CD-ROM Devices suitable for commercial
distribution; and (b) any technical assistance and information (including
but not limited to copyright, trademark, patent and credit information)
that USR requires to duplicate CD-ROM Devices. USR shall be responsible
for all costs it incurs respecting such duplication. Vendor will deliver
a replacement master to USR within a reasonable period of time after the
commercial release of any upgrades, enhancements, new releases or new
versions of the Program, and USR will reproduce and distribute this later
version of the Program as soon as commercially practicable.
4.2. CONTENT OF PROGRAM. Vendor will have the right to design and control the
content of the Program, subject to the approval of USR, which shall not
be unreasonably withheld.
4.3. COMPATIBILITY. Vendor agrees to exert its best efforts to make the
Program compatible (a) with USR Products, (b) with Windows 3.11 and up
and Windows 95, as those computer programs may be updated in the future,
and (c) if Vendor desires that the Program shall be distributed with USR
Products for use with Macintosh computers, with System 7.0 and up, as
that computer program may be updated in the future.
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4.4. ADDITIONAL MATERIALS. Upon agreement of the parties, Vendor may provide
additional materials for inclusion with the Programs distributed with the
Products. Such materials may include instructional, informational or
promotional matter, in printed or electronic media. Vendor shall be
responsible for duplication of such materials in sufficient quantities to
be included with all copies of the Program being distributed, and shall
bear all costs associated with the development and duplication of such
materials.
5. TERM AND TERMINATION
5.1. TERM, TERMINATION AND POST-TERMINATION SALES. The term of this Agreement
(the "Term") shall begin on the date set forth above and shall expire one
(1) year from that date. Except in the event Vendor terminates this
Agreement for breach by USR pursuant to Section 5.2 below, for six (6)
months after the end of the Term, USR may advertise and distribute CD-ROM
Devices duplicated or in the process of duplication by USR at the end of
the Term.
5.2. TERMINATION FOR BREACH. If either party materially defaults in the
performance of or compliance with any provision of the Agreement and does
not cure such default within thirty (30) days after receiving written
notice of such breach from the other party, the party giving notice may
then give further notice terminating this Agreement, and the rights
granted hereunder shall terminate on the date specified in such further
notice.
5.3. TERMINATION FOR DISAPPROVAL OF CONTENT. In the event USR reasonably
disapproves the content of the Program pursuant to Section 4.2 hereof and
Vendor fails to make corrections to the Program reasonably satisfactory
to USR within five (5) days after notice from USR, then USR shall have
the right to terminate this Agreement immediately upon further written
notice to Vendor.
6. ADVERTISING AND PROMOTION
6.1. PERFORMERS. USR shall have the right to use and authorize others to use
the names, likenesses and voices of any performers and other persons who
have rendered services in connection with the Programs, and biographical
information about them, for advertising and purposes of trade in
connection with the CD-ROM Devices and in institutional advertising for
USR in all formats, markets and media now known or hereafter devised.
6.2. SYNOPSES AND EXCERPTS. USR may use synopses and excerpts from the
Program and pre-existing advertising, publicity and promotional materials
for the Program, in advertising, promoting and publicizing the CD-ROM
Devices in any medium and by any method, and may authorize others to do
so, without payment to Vendor.
6.3. TRADEMARKS. USR shall have the right to use trademarks, trade names,
designs and artwork owned, controlled, or distributed by Vendor on the
CD-ROM Devices and in packaging, advertising and other marketing
materials for them.
6.4. PROMOTION BY VENDOR. Vendor may advertise and promote the Program at its
own expense in any manner it desires; provided, however, Vendor shall
provide USR with prior notice and copies of any such advertising or
promotional materials that relate specifically to USR or to the
distribution of the Program with the CD-ROM Devices.
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7. WARRANTIES AND REPRESENTATIONS
7.1. RIGHT TO CONTRACT. Vendor warrants and represents that it has the right
and power to enter into and fully perform this Agreement.
7.2. INFRINGEMENT. Vendor warrants and represents that the Program and any
related materials, including computer software programs, technology,
graphics, dramatic, literary, musical, or artistic elements, ideas, or
other intellectual properties contained in or furnished by Vendor for use
in connection with the Program or the packaging, advertising, promotion
or marketing of CD-ROM Devices made from them, or any use of them in
accordance with this Agreement, will not violate any law or infringe upon
the rights of any person or entity.
8. INDEMNIFICATION
8.1. BREACH OF WARRANTY. Vendor will at all times indemnify and hold USR
harmless from and against any and all claims, losses, damages and costs
(including without limitation legal expenses and reasonable counsel
fees), arising out of any breach by Vendor of any warranty or
representation made by Vendor in this Agreement.
8.2. THIRD PARTIES. Vendor will at all times indemnify and hold USR harmless
from and against any and all claims, losses, damages and costs (including
without limitation legal expenses and reasonable counsel fees), arising
out of any claim of a third party (including Vendor's licensors)
respecting the content of the Program or intellectual property rights or
other rights or interest in the Program or revenues generated by the
distribution of the Program in the CD-ROM Devices.
9. CONFIDENTIALITY
9.1. CONFIDENTIALITY. Each party acknowledges that all information concerning
this Agreement is confidential. Each party agrees that it will not
permit the duplication, use or disclosure of any such Confidential
Information to any person (other than its own employees under this
Agreement), unless authorized in writing by the other party. Except as
specifically authorized herein, neither party shall use the name(s),
trademark(s) or trade name(s) of the other party in publicity releases or
advertising or in any other manner, including customer lists, without the
prior written approval of the other party, which shall not be
unreasonably withheld. Not withstanding the foregoing, it is understood
that Vendor will disclose in one or more press releases that Vendor has
entered into the Agreement and that the Program is available on the
CD-ROM Device distributed with the Products.
10. DISCLAIMER OF WARRANTIES AND LIMITATION OF LIABILITY
10.1. DISCLAIMER OF WARRANTIES. EXCEPT AS SPECIFICALLY SET FORTH ABOVE,
NEITHER PARTY MAKES ANY WARRANTIES, AND BOTH PARTIES HEREBY DISCLAIM ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR USE OR
PURPOSE.
10.2. LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES,
INCLUDING LOSS OF PROFITS, REVENUE, DATA, OR USE, INCURRED BY EITHER
PARTY OR ANY THIRD PARTY, WHETHER IN AN ACTION IN CONTRACT OR TORT OR
BASED ON A WARRANTY, EVEN IF THE OTHER PARTY OR ANY OTHER PERSON HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
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11. MISCELLANEOUS
11.1. ASSIGNMENT. Neither party shall transfer, delegate or assign this
Agreement or any of its rights or obligations hereunder without the other
party's prior written consent except that USR may assign this Agreement
without Vendor's consent to an affiliate of USR. This Agreement shall be
binding upon and inure to the benefit of USR and Vendor and their
respective successors, permitted assigns and legal representatives.
11.2. NOTICES. All notices, requests, demands or other communications required
or permitted to be made under this Agreement shall be in writing and
shall be either delivered personally, sent by fax (with hard copy to
follow), sent by guaranteed prepaid overnight delivery service or mailed
by U.S. mail, certified or registered, return receipt requested, with
appropriate postage prepaid, in each case to the addressees and/or fax
numbers on the first page of the Agreement, (and with respect to items
sent to USR, with a copy to U.S. Robotics Corporation, 0000 X. XxXxxxxxx
Xxxxxxxxx, Xxxxxx, XX 00000, Attn. Legal Department, Fax No.
708/000-0000), or to such other addresses as may be designated in writing
by notice given in the manner provided herein. Such notices and
communication shall be deemed given (i) upon actual delivery thereof, if
delivered by hand, (ii) one (1) business day following overnight delivery
service, if delivered by overnight delivery service, (iii) one (1)
business day following delivery, if sent by fax and electronic
confirmation of complete transmission to the recipient's fax number is
obtained by the sender, or (iv) three (3) business days following deposit
in the U.S. mail, if sent by mail, whether or not delivery is accepted.
11.3. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Illinois, without
giving effect to its conflicts of law principles. Any suit arising out
of or relating to this Agreement shall be brought only in the state or
federal courts in Chicago, Illinois, unless USR shall select another
venue or shall otherwise consent in writing, and Vendor hereby submits to
the jurisdiction of such courts in any matter or proceeding arising out
of or relating to this Agreement and hereby waives any objections to
venue being in such courts.
11.4. FORCE MAJEURE. Any delay in or failure of performance by either party
under this Agreement (other than payment obligations) shall not be
considered a breach of this Agreement and shall be excused if and to the
extent caused by any occurrence, foreseeable or unforeseeable, beyond the
reasonable control of the party affected, including without limitation:
acts of God or the public enemy; fire; flood; embargoes; governmental
restrictions; strikes or labor difficulties; riots; wars or other
military action; civil disorders; shortages of labor, fuel, power,
materials, supplies, or transportation; delays in deliveries by
suppliers; or any other cause or causes beyond such party's reasonable
control.
11.5. INDEPENDENT CONTRACTORS. The parties are not employees or legal
representatives of the other party for any purpose. Neither party shall
have the authority to enter into any contracts in the name of or on
behalf of the other party.
11.6. WAIVER. No term or provision hereof shall be deemed waived and no breach
excused unless such waiver or consent shall be in writing and signed by
the party claimed to have waived or consented.
11.7 SEVERABILITY. In the event that one or more of the terms, conditions or
covenants contained in this Agreement or any portion of them is
determined to be unenforceable or invalid, such unenforceability or
invalidity shall not affect the enforceability or the validity of the
remaining terms, conditions or covenants and portions thereof, and each
unenforceable or invalid term, condition or covenant or portion thereof
shall be severable from the remainder of this Agreement.
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11.8. ATTORNEYS' FEES. In the event of any controversy, claim or dispute
between the parties hereto arising out of or relating to this Agreement,
the prevailing party shall be entitled to recover from the non-prevailing
party its reasonable expenses including, but not by way of limitation,
attorneys' fees.
11.9. REMEDIES CUMULATIVE. No remedy or election under this Agreement shall be
deemed exclusive but shall, wherever possible, be cumulative with all
other remedies at law or in equity.
11.10. SURVIVAL. The parties' obligations under this Agreement which by their
nature are intended to continue beyond the expiration or termination of
this Agreement shall survive the expiration or termination of this
Agreement, including Sections 3.1, 3.3, 5.1, 8.1, 8.2 and 9.1.
11.11. ENTIRE AGREEMENT. This Agreement, together with Exhibits A through C,
constitutes the entire agreement between Vendor and USR and supersedes
all proposals, representations and agreements, oral and written, between
the parties on this subject. This Agreement may not be amended, except
by a writing signed by authorized representatives of each party.
PC411, INC. U.S. ROBOTICS ACCESS CORP.
By: By:
---------------------------------- ----------------------------------
Name: XXXXXXXXXXX X. XXXXXX Name
---------------------------------
Title: PRESIDENT Title
---------------------------------
Date: MARCH 26, 1996 Date
---------------------------------
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EXHIBIT A
PROGRAM
The Program, as defined in Section 1.1 of the CD-ROM Distribution Agreement, is
described as follows:
The Program means PC411 FOR WINDOWS RELEASE 1.2. The Program was
designed for and requires Microsoft Windows version 3.1 or 3.11 for
Workgroups. The Program also functions with Microsoft Windows NT,
Microsoft Windows 95, and IBM OS/2 Warp version 3.0. The Program
requires a personal computer with (i) an Intel 386 series or faster
central processing unit, (ii) a minimum of 4 MB of RAM, (iii) 4 MB of
available hard disk storage, and (iv) a U.S. Robotics compatible modem.
The Program includes but is not limited to the following key files:
- PC411.EXE
- PC411.HLP
- PC411.INI
- WIDGETS.DLL
The above code includes the following key features and functions:
- modem access to the PC411 database of telephone directories
- telephone list management functions such as editing and
sorting
- import, export and printing functions
- ten (10) free searches within the first 30 days after
registration
The Program and any packaging, installation guides, booklets, advertising or
other promotional material furnished under Section 4 or used by either party
under Section 6 of the CD-ROM Distribution Agreement will state that the Program
requires a "U.S. Robotics compatible" modem.
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EXHIBIT B
THIRD PARTY RIGHTS
The license grant set forth in section 2.1 of the CD-ROM Distribution Agreement
is subject to the following rights and restrictions of Vendor's licensors and
other third parties:
The entire contents of the PC411 service are copyrighted as a collective
work under the United States Copyright laws. The listings provided by
PC411 to its customers are licensed to PC411 by Pro CD, Inc., Danvers, MA
("Pro CD") and are hereby sublicensed to PC411's customers. Title and
all ownership in the listings are and shall at all times remain with Pro
CD. The listings constitute licensed material and in order to protect
them, PC411's customer specifically agrees not to sell, rent, loan,
lease, sublicense, assign, distribute, transfer or provide the listings
to others and agrees not to transfer the listings to any computer other
than a computer employed by such customer.
10/28/96 Page 8 of 9
EXHIBIT C
PAYMENTS TO USR
Pursuant to Section 3.1 of the Distribution Agreement, Vendor will pay USR the
following amount(s) for all New Customers. A New Customer is defined as an
individual or entity residing in the United States or Canada who purchases the
product, license, subscription or service ("Purchase") offered by Vendor through
the Program(s) distributed in the CD-ROM Devices and who remains a paying
customer for at least sixty (60) consecutive days after the date of Purchase or
after the end of any initial free trial period offered by Vendor.
ANNUITY (COMMISSION). Vendor will pay USR a commission equal to
thirty-five percent (35%) of the Net Service Revenues (as defined herein)
received from each New Customer for use of the Vendor's service for a
period of three (3) years from the date of purchase by each New Customer.
If fifteen months after the date first set forth above the number of New
Customers exceeds 200,000, then the amount(s) payable thereafter will be
increased to 40% of the Net Service Revenues. Net Service Revenues
include all revenues earned from use of the Product less any returns,
refunds or credits issued to the New Customers.
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