INTERNATIONAL LICENSE AND DISTRIBUTION AGREEMENT
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This INTERNATIONAL LICENSE AND DISTRIBUTION AGREEMENT (the "Agreement") is made
and entered into upon the 1st day of November, 2002 (the "Effective Date"),
by and between VIVENDI UNIVERSAL GAMES, INC. and its direct and indirect
subsidiaries, with its principal place of business to 0000 Xxxxxx Xxxxx, 00xx
Xxxxx, Xxx Xxxxxxx, XX 00000 ("COMPANY"), and STAR E MEDIA CORPORATION, a
California corporation, with its principal place of business at 000 Xxxxxxxxxx
Xxxxx, Xxxxx X, Xxxxxx, XX 00000 (DISTRIBUTOR").
RECITALS
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WHEREAS, COMPANY publishes and distributes certain computer software products,
including the products listed in Exhibit A hereto; and
WHEREAS, COMPANY desires to distribute its products in a world market; and
WHEREAS, DISTRIBUTOR has expressed an interest in localizing, and acting as an
independent distributor of, certain COMPANY products pursuant to the terms and
conditions as set forth below;
NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants
and agreements hereinafter set forth, COMPANY and DISTRIBUTOR agree as follows:
1. DEFINITIONS. Whenever used in this Agreement, the following terms shall
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have the following specified meanings:
(a) "COMPANY Software" means computer software programs (including pro-
grams intended for demonstration or tutorial purposes) produced
and/or distributed by COMPANY and identified in the attached Exhibit
A, as Exhibit A may be modified or amended from time to time, and any
and all improvements, corrections, modifications, updates, enhance-
ments and new releases related thereto, but specifically excluded
sequel products.
(b) "COMPANY Documentation" means any and all manuals, specifications,
user guides and other documentation regarding the COMPANY Software.
(c) "COMPANY Products" means COMPANY Software packaged together with the
appropriate COMPANY Documentation.
(d) "Distribution Term" means the time period set forth in the attached
Exhibit A, as Exhibit A may be modified or amended from time to time,
during which DISTRUBITOR has the right to distribute the enumerated
Localized COMPANY Products, as that term is defined hereinbelow, in
the Territory.
(e) "Territory" means only the countries listed in Exhibit A attached
hereto, but only as their political borders exist on the date of this
Agreement. The Territory excludes foreign countries' embassies, and
foreign military and governmental installations, located within the
territory.
(f) "Localization" means the modification of COMPANY Software and COMPANY
Documentation to meet the needs of the non-English-speaking users
in the Territory. This may include code changes, additions and
alterations to the feature set, changes in the data or new art with
the intent to provide more culturally acceptable COMPANY Products.
(g) "Localized COMPANY Products" means COMPANY Software after Locali-
zation, together with the appropriate localized COMPANY Documentation
and pre- approved collateral materials, contained in COMPANY-approved
localized packaging for DISTRIBUTOR's Territory.
(h) "End-User" means an individual or entity which purchases Localized
COMPANY Products for its own use, and not for redistribution.
(i) "Dealer" means an entity which, as authorized hereunder, purchases
Localized COMPANY Products and resells them to End-Users.
(j) "XXXX" means COMPANY's standard form end-user license agreement, a
copy of which is included in COMPANY Documentation for, and/or
displayed on certain screens and as part of the installation of, all
COMPANY Software, as the same may be modified or amended from time to
time.
(k) "Prohibited Country" means a country to which export or re-export of
any Localized COMPANY Products is prohibited by United States law
without first obtaining the permission of the United States Officer of
Export Administration or its successor.
(l) "OEM" means original-equipment manufacturer, which is any natural
person or legal entity which obtains a license from COMPANY to use
COMPANY Products or Localized COMPANY Products for the purpose of
incorporating such COMPANY Products or Localized COMPANY Products, in
whole or in part, either with or within computer hardware, software or
other products for further distribution in conjunction with such
products.
(m) All references in this Agreement to the "sale" or "selling" of COMPANY
Software shall mean the sale of a license to use such COMPANY
Software. All references in this Agreement to the "purchase" of
COMPANY Software shall mean the purchase of a license to use such
COMPANY Software.
2. APPOINTMENT AS AUTHORIZED COMPANY DISTRIBUTOR
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(a) Exclusive Appointment. Subject to the terms and conditions of this
Agreement, COMPANY hereby appoints DISTRIBUTOR as an independent,
exclusive distributor of Localized COMPANY Products solely in the
Territory, and DISTRIBUTOR hereby accepts such appointment. All rights
not expressly granted to DISTRIBUTOR hereunder are reserved by
COMPANY.
(b) Nature of Distribution. The appointment of DISTRIBUTOR only grants to
DISTRIBUTOR a license to distribute Localized COMPANY Products to
DISTRIBUTOR's customers in the Territory in accordance with this
Agreement, and does not grant any right, title or interest in any
COMPANY Product, in whole or in part, to DISTRIBUTOR.
(c) Software License. With respect to the COMPANY Products, COMPANY grants
to DISTRIBUTOR an exclusive, non-transferable license in the Territory
to modify the COMPANY Software and the COMPANY Documentation, only as
commercially necessary and as approved by COMPANY, and to manufacture
or have manufactured, market, distribute and sell only in the
Territory such modified versions of the COMPANY Software and COMPANY
Documentation as Localized COMPANY Products.
(d) On-line Sales. COMPANY hereby grants DISTRIBUTOR the right to market
and sell the Localized COMPANY Products through on-line services and
the Internet only within the Territory. DISTRIBUTOR is prohibited from
distributing any COMPANY Products or Localized COMPANY Products via
electronic means, including downloading. COMPANY reserves the right to
review DISTRIBUTOR's on-line materials regarding the Localized COMPANY
Products, and may at any time require DISTRIBUTOR to modify or remove
such materials. DISTRIBUTOR agrees to immediately comply with such
notice.
(e) Sales Literature. COMPANY shall furnish DISTRIBUTOR with reasonable
quantities (in COMPANY's sole judgment) of COMPANY's existing sales
literature if desired by DISTRIBUTOR for the initial introduction of
the Localized COMPANY Products within the Territory at no charge.
COMPANY reserves the right to charge a reasonable fee for any
additional materials provided by it to DISTRIBUTOR.
(f) COMPANY's Reserved Rights.
(1) Changes in Products. In the event COMPANY believes that further
distribution of any Localized COMPANY Products in the Territory
will expose COMPANY to liability, COMPANY may, without liability
to DISTRIBUTOR, delete such COMPANY Product from the list of
COMPANY products contained in Exhibit A. DISTRIBUTOR agrees to
promptly refrain from any further distribution of the applicable
Localized COMPANY Products following receipt of such notice.
Additionally, COMPANY reserves the right to modify COMPANY
Products during the term hereof in its sole discretion.
(2) COMPANY and Third-Party Distribution of COMPANY Products Within
the Territory. DISTRIBUTOR acknowledges that COMPANY has granted
and/or in the future may grant OEM rights to third parties
relating to one or more of the COMPANY Products (other than
Localized COMPANY Products) in the Territory. In addition,
DISTRIBUTOR further acknowledges that COMPANY and/or third
parties may from time to time distribute COMPANY Products
directly to resellers and end-users in the Territory, but during
the term of this Agreement COMPANY shall not knowingly distribute
Localized COMPANY Products to resellers in the Territory.
(3) COMPANY and Third-Party Distribution of Localized COMPANY
Products Within the Territory. DISTRIBUTOR acknowledges that
COMPANY may in the future grant licenses for distribution of the
Localized COMPANY Products in conjunction with third-party
products. In the event COMPANY enters into such licensing
arrangement, COMPANY shall pay DISTRIBUTOR twenty percent (20%)
of COMPANY's net proceeds resulting therefrom during the term.
3. CERTAIN OBLIGATIONS OF DISTRIBUTOR. DISTRIBUTOR warrants and represents
that it has, and will maintain, the capacity, facilities and personnel
necessary to carry out its obligations pursuant to this Agreement, and in
particular that:
(a) Promotion Efforts. DISTRIBUTOR shall use its best efforts to market,
sell and distribute Localized COMPANY Products both vigorously and
aggressively within the Territory in accordance with the terms of this
Agreement. Notwithstanding the foregoing all promotional, advertising
and/or other marketing items or the like which DISTRIBUTOR may desire
to create must be pre-approved in writing by COMPANY in the form
attached hereto as Exhibit C. As it pertains to Blizzard Entertainment
products, all such advance written approvals must be obtained from
Blizzard Entertainment's Vice President of Business Development or
his/her designee.
(b) Dealer Qualifications. DISTRIBUTOR shall authorize and maintain only
Dealers that have the financial capacity, facilities, technical
capacity and desire to market and sell Localized COMPANY Products
competently.
(c) DISTRIBUTOR-Dealer Agreement. It is a material obligation of
DISTRIBUTOR, prior to engaging in any transaction with a Dealer
involving Localized COMPANY Products, to enter into an agreement with
such Dealer which authorize such Dealer to resell Localized COMPANY
Products, and which provides, inter alia, that as a material condition
of such agreement, such Dealer may resell the Localized COMPANY
Products only within the Territory granted hereunder.
(d) Minimum Commitments. DISTRIBUTOR agrees and guarantees to sell at
least the minimum quantities of each of the Localized COMPANY Products
set forth in Exhibit A (the "Guaranteed Unit Sales") in the time
period set forth in Exhibit A (the "Guarantee Period"). In the event
DISTRIBUTOR does not achieve the Guaranteed Unit Sales during the
Guarantee Period, DISTRIBUTOR agrees to pay, at the expiration of the
Guarantee Period, the difference between the royalties which would
have been payable on the Guaranteed Unit Sales and the royalties paid
or payable for quantities actually sold during the Guarantee Period.
Notwithstanding the foregoing, COMPANY shall have the right but not
the obligation to terminate this Agreement upon 30 days written notice
to DISTRIBUTOR if:
(1) DISTRIBUTOR has not achieved the Guaranteed Unit Sales within the
Guarantee Period; or
(2) DISTRIBUTOR has not achieved one-half (1/2) of the Guaranteed
Unit Sales at the midpoint of the Guarantee Period. Within 30
days of COMPANY's written notice to DISTRIBUTOR of termination
under this Paragraph 3(d)(2), DISTRIBUTOR shall apply the
difference between one-half (1/2) the royalties which would have
been payable on the Guaranteed Unit Sales and the royalties paid
or payable for quantities actually sold up to the midpoint of the
Guarantee Period.
(e) Inventory. DISTRIBUTOR shall maintain an inventory of Localized
COMPANY Products sufficient to serve adequately the needs of Dealers
and End-Users within a commercially reasonable time frame. Not-
withstanding the foregoing, DISTRIBUTOR shall make best efforts to
ensure that its inventory of Localized COMPANY Products are never
out-of-stock for any period that exceeds five (5) consecutive business
days.
(f) Dealer Support. DISTRIBUTOR shall provide Dealers with training,
technical support and other assistance appropriate in promoting
Localized COMPANY Products. DISTRIBUTOR shall transmit to Dealers all
COMPANY literature and other information that COMPANY requests be
transmitted to them.
(g) DISTRIBURTOR Personnel. DISTRIBUTOR shall train and maintain a
sufficient number of capable technical and sales personnel at its
expense; (1) to serve the needs of its Dealers or End-Users for
Localized COMPANY Products, service and support; and (2) otherwise to
carry out the responsibilities of DISTRIBUTOR pursuant to this
Agreement.
(h) Technical Expertise. DISTRIBUTOR and its staff shall be conversant
with the technical language conventional to COMPANY Products and
similar computer products in general.
(i) DISTRIBUTOR-Replicator/Duplicator Agreement. Prior to engaging a
replicator/duplicator to replicate/duplicate Localized COMPANY
Products as contemplated pursuant to Paragraph 3(s) below, DISTRIBUTOR
and such replicator/duplicator shall execute an agreement authorizing
that entity to duplicate Localized COMPANY Products. It is a material
obligation of DISTRIBUTOR to contractually require the replicator/
duplicator to prepare and submit reports to COMPANY in accordance with
Paragraph 4(d) below and to refrain from replication that results in
the production of gold-colored CD-ROMs.
(j) DISTRIBUTOR Covenants. DISTRIBUTOR covenants and agrees:
(1) Efforts. To conduct business in a manner that reflects favorably
on the goodwill and reputation of COMPANY;
(2) Marketing Practices. To avoid deceptive, misleading or unethical
trade practices, including but not limited to making repre-
sentations, warranties or guarantees to customers or to the trade
with respect to the specifications, features or capabilities
of Localized COMPANY Products that are inconsistent with the
literature distributed by COMPANY, including all warranties and
disclaimers contained in COMPANY literature;
(3) Marketing Through Dealers. To refrain from selling Localized
COMPANY Products to any Dealer that cannot agree to comply with
obligations similar to those contained in this Paragraph 3,
entitled "Obligations of DISTIRIBUTOR";
(4) Object Code. To distribute COMPANY Software only in machine-
readable object code format;
(5) Copying. To refrain from permitting the copying COMPANY Software
onto any other media for purposes of redistribution to others
whether for profit, promotion or otherwise, and not to use, copy,
print or display any COMPANY Software, in any manner except in
connection with, and for the purpose of, marketing and selling
copies of COMPANY Software to others in accordance with this
Agreement;
(6) Renting. To refrain from renting or lending any COMPANY Software
or the use, copying, printing or display of any COMPANY Software,
in any manner except in connection with, and for the purpose of,
marketing and selling copies of COMPANY Software to others in
accordance with this Agreement;
(7) XXXX. Not to add to, delete or otherwise vary any of the terms
and conditions of the XXXX;
(8) Trademarks and Trade Names. Not to distribute any Localized
COMPANY Products under any trade names or trademarks other than
those employed by COMPANY with respect thereto without the prior
written approval of COMPANY; and
(9) Withholding Tax. That any withholding tax imposed upon payments
made to COMPANY by DISTRIBUTOR pursuant to this Agreement may be
used as a foreign tax credit in the same fiscal year by COMPANY
against its obligations under applicable United States tax laws.
DISTRIBUTOR understands and agrees that should such tax credits
be disallowed or unusable, the royalty rates set forth in EXHIBIT
A may be unilaterally raised by COMPANY to offset the effect of
the withholding tax.
(k) Warranty Service and Support. DISTRIBUTOR shall comply with COMPANY
programs for in-warranty replacement and post-warranty support for
Localized COMPANY Products. DISTRIBUTOR shall provide a level of
technical support for all Localized COMPANY Products equivalent in all
material respects to that which COMPANY provides its end users.
(l) Compliance with Law. DISTRIBUTOR shall comply with applicable
international, national, state, regional and local laws and
regulations in performing its duties hereunder and in any of its
business with Dealers and with respect to Localized COMPANY Products.
(m) Compliance with U.S. Export Laws. DISTRIBUTOR acknowledges that
COMPANY's export of the COMPANY Products may be subject to compliance
with the Export Administration Act Regulations of the Department of
Commerce of the United States, as amended, and other export controls
of the United States ("export Laws"), which restrict the export and
re-export of software media, technical data and direct products
of technical data. ("Direct Product" as used hereafter means the
immediate product, including processes and services, derived from the
use of COMPANY Products.) DISTRIBUTOR agrees, and shall cause each of
its Dealers, employees, agents and representatives to agree, not to
export or re-export any Localized COMPANY Products or Direct Products
of COMPANY Products to any Prohibited Country. DISTRIBUTOR agrees to
indemnify COMPANY against any claim, demand, action, proceeding,
investigation, loss, liability, cost or expense, including, without
limitation attorney's fees, suffered or incurred by COMPANY and
arising out of or related to any breach (whether intentional or
unintentional) by DISTRIBUTOR, its employees, agent, representatives
or Dealers, of any of the warranties or covenants of this Paragraph
3(m).
(n) Governmental Approval. If any approval with respect to this Agreement,
or the registration thereof, shall be required at any time during the
term of this Agreement, with respect to giving legal effect to this
Agreement in Territory, or with respect to compliance with exchange
regulations or other requirements so as to assure the right of
remittance abroad of U.S. dollars pursuant to Paragraph 6 hereof,
DISTRIBUTOR shall immediately take whatever steps may be necessary in
this respect, and any changes incurred in connection therewith shall
be paid by DISTRIBUTOR. DISTRIBUTOR shall keep COMPANY currently
informed of its efforts in this connection. COMPANY shall be under no
obligation to ship COMPANY Products to DISTRIBUTOR hereunder until
DISTRIBUTOR has provided COMPANY with satisfactory evidence that such
approval or registration is not required or that it has been obtained.
(o) Market Conditions. DISTRIBUTOR shall advise COMPANY promptly con-
cerning any market information that comes to DISTRIBUTOR's attention
regarding Localized COMPANY Products, COMPANY's market position or
the continued competitiveness of Localized COMPANY Products in the
marketplace.
(p) Dealing with End-Users. Prior to accepting any fee or other charge
from any End-User interested in acquiring a copy or copies of COMPANY
Software from DISTRIBUTOR, DISTRIBUTOR shall inform the End-User that
acquisition of such copy is subject to the terms and conditions of the
XXXX. A sample copy of the XXXX shall be available from the
DISTRIBUTOR for review by all prospective End-Users dealing with
DISTRIBUTOR. Should any End-User return to DISTRIBUTOR any unopened
COMPANY Software in the original sealed package in which it was
distributed by DISTRIBUTOR, DISTRIBUTOR shall provide such End-User
with a full refund of all sums paid by the End-User therefore. In no
event shall COMPANY provide any such refund to any End-User who has
obtained the copy or copies in question from or through DISTRIBUTOR.
(q) Adaptation for Local Market. COMPANY and DISTRIBUTOR shall consult in
good faith with respect to the localization of the COMPANY Software
and DISTRIBUTOR shall make such changes to COMPANY Software and
COMPANY Documentation, packaging and related marketing materials
as DISTRIBUTOR and COMPANY agree would be appropriate to adapt
COMPANY Products for use in the Territory. COMPANY shall submit to
DISTRIBUTOR all materials necessary to DISTRIBUTOR's Localization
effort ("Localization Kit"). This might include, but is not limited
to, scripts for speech files, and removable data storage media
containing artwork. COMPANY assures DISTRIBUTOR that it will cooperate
in DISTRIBUTOR's development of the Localized COMPANY Products.
DISTRIBUTOR shall be responsible for translating and manufacturing or
having manufactured COMPANY manuals, advertising and promotional
materials into the language of the Territory if so requested by
COMPANY. Upon receipt of the Localization Kit, DISTRIBUTOR shall
submit, within two (2) weeks, an estimated publishing date for the
localized version of the COMPANY Product, which shall be no later than
four (4) calendar months following receipt of the Localization
Kit. DISTRIBUTOR agrees to use professional actors, which must be
pre-approved in writing by COMPANY, for the voice-overs and agrees
to have each actor contributing content or efforts toward the
Localizations execute the COMPANY Professional Services Agreement
attached in incorporated hereto as Exhibit B. Failure to meet the
publishing date deadline shall be considered a material breach and
shall allow COMPANY to terminate the Agreement upon thirty (30) days
prior written notice. During the completion of the Localization
process, DISTRIBUTOR shall submit all localized materials to COMPANY
for approval. DISTRIBUTOR must receive written approval from COMPANY
prior to any sale or demonstration of Localized COMPANY Products.
If DISTRIBUTOR cannot achieve the quality or technical standards
equivalent to those of the English version of the COMPANY Product
within forth-five (45) calendar days after DISTRIBUTOR's initial
submission of the Localized COMPANY Products to COMPANY for approval,
COMPANY may terminate this Agreement upon seven (7) days prior notice.
COMPANY has the exclusive right to see Localized COMPANY Products
outside the Territory.
(r) Packaging. Except as provided in Paragraphs 3(p) or 3(q), DISTRIBUTOR
shall distribute Localized COMPANY Products with all packaging,
warranties, disclaimers and XXXX intact as on COMPANY Products prior
to Localization, and shall instruct each of its Dealers as to the
nature and terms of the XXXX applicable to the COMPANY Software.
Anything to the contrary notwithstanding, DISTRIBUTOR may not include
any materials in or on the Localized COMPANY Product packaging which
is not either (i) included in the U.S. version of the COMPANY Product
or (ii) pre-approved in writing by COMPANY. For the purpose of
Localization, DISTRIBUTOR agrees to produce packaging and advertising
or sales support material at the same high quality levels used by
COMPANY in the English version of the COMPANY Products. DISTRIBUTOR
must receive written pre-approval from COMPANY on all DISTRIBUTOR-
produced marketing and sales materials, including, but not limited to,
packaging and collateral material that reference COMPANY Software or
Localized COMPNAY Products, prior to release of the materials.
DISTRIBUTOR shall pay for shipping and production of the art media for
the packaging, brochures or other collateral materials used to promote
the Localized COMPANY Products within the Territory.
(s) Media Replication. DISTRIBUTOR shall obtain COMPANY's prior written
approval before replicating any media used in the Localized COMPANY
Products, and COMPANY may withhold such consent in its sole dis-
cretion. Further, DISTRIBUTOR shall submit the name or names of the
particular duplicator/replicator that DISTRIBUTOR intends to use for
such purposes to COMPANY for its prior written approval before
entering into any agreement with said duplicator/replicator.
(t) Quality; Samples.
(1) DISTRIBUTOR acknowledges that if the Localized COMPANY Products
manufactured and sold by it hereunder were of inferior quality in
design, material or workmanship, the substantial goodwill which
COMPANY has established and now possesses in the COMPANY Software
would be impaired. Accordingly, DISTRIBUTOR agrees that the
Localized COMPANY Products shall be of the highest standards and
of such style, appearance and quality as shall be reasonably
adequate and suited to their promotion, distribution, sale and
exploitation to enhance the Localized COMPANY Products and the
goodwill in the COMPANY Software.
(2) COMPANY shall approve each stage of development of the Localized
COMPANY Products from the conception to the production thereof.
DISTRIBUTOR shall at each stage of development of the Localized
COMPANY Products, before it manufactures, distributes, ships or
sells any particular Localized COMPANY Products, furnish COMPANY,
free of cost, for its written approval, the Approval Request form
attached hereto as Exhibit C with each of the following:
i) four (4) samples of preliminary art concept;
ii) four (4) samples of color composite and/or one (1) hand
sample;
iii) four (4) samples of fine art;
iv) one (1) pre-production sample; and
v) one (1) final sample/prototype for the Localized COMPANY
Software together with its cartons and containers, tags,
labels, wrapping material, advertising and promotional
material for use in any media in connection with the
Localized COMPANY Software ("Packaging").
(3) DISTRIBUTOR shall provide COMPANY with six (6) production samples
of the Localized COMPANY Products and all sales, marketing and
advertising materials prepared by DISTRIBUTOR in connection with
its distribution of the Localized COMPANY Products, free of cost,
for COMPANY's written approval prior to distribution of the
Localized COMPANY Software. If COMPANY does not indicate its
approval or disapproval of such submissions within seven (7)
business days from the date of actual receipt of the submission,
COMPANY shall be deemed to have disapproved the Localized COMPANY
Software. If so disapproved, and without limiting COMPANY's
approval rights, upon receipt of a written request from
DISTRIBUTOR, COMPANY shall provide DISTRIBUTOR within five (5)
business days of the proposed modifications that would render
such sample approved. Once Localized COMPANY Software and
collateral materials have been expressly approved, DISTRIBUTOR
shall not depart therefrom in any material respect without first
obtaining COMPANY's written consent in accordance herewith or add
any additional element(s) as in-packed flyers, business reply
cards and so on without COMPANY's approval in each case.
DISTRIBUTOR agrees to periodically furnish COMPANY, at no charge,
with additional samples of each Localized COMPOANY Software and
all sales, marketing and advertising materials which COMPANY may
deem reasonably necessary in order to permit COMPANY to ensure
that the quality of the COMPANY Software has been maintained
and that no deviation and/or modification of COMPANY approved
Localized COMPANY Software has occurred. COMPANY shall have the
right to withdraw its approval of samples if the quality of any
Localized COMPANY Software ceases to be acceptable.
(4) Duly authorized representatives of COMPANY shall have the right,
at any and all reasonable times, to inspect all facilities or
premises maintained by DISTRIBUTOR including, without limitation,
the plants, factories, or other manufacturing or producing
facilities of DISTRIBUTOR or third parties at which the Localized
COMPANY Products and/or all components thereof and to take any
other action which in the opinion of COMPANY is necessary or
proper to assure COMPANY that the nature and quality of the
Localized COMPANY Products and/or all components thereof are in
accordance with the requirements of this Agreement.
(5) Complaints: DISTRIBUTOR will diligently address all legitimate
complaints brought to its attention regarding the Localized
COMPANY Products. DISTRIBUTOR will advise COMPANY promptly
of any category of recurring complaint and of any complaint
which DISTRIBUTOR reasonably believes might result in legal or
administrative action against DISTRIBUTOR or COMPANY.
(6) Cooperation: In an effort to ensure that the Localized COMPANY
Products accurately depict the quality and value of the COMPANY
Software, the parties agree to consult together on the design and
creation of the Localized COMPANY Products.
(u) Good Will and Protection: DISTRIBUTOR acknowledges that:
(1) The COMPANY Software, including without limitation, the charac-
ters, character names, trademarks, service marks, logos and
images associated with the said COMPANY Software, are unique and
original and COMPANY is the owner thereof;
(2) As the result of the exhibition and exploitation of the COMPANY
Software, COMPANY has acquired a substantial and valuable good
will therein;
(3) The names of the characters and their likenesses, as applicable,
and the title of the COMPANY Software have acquired a secondary
meaning as trademarks uniquely associated with merchandise
authorized by COMPANY.
(4) All rights in any additional material, new versions, trans-
lations, rearrangements or other changes in the Localized COMPANY
Products which maybe created by or for DISTRIBUTOR shall be and
will remain the exclusive COMPANY Software of COMPANY from
creation, and;
(5) Any copyrights, trademarks and design patents heretofore obtained
by COMPANY or in connection with the characters and title of the
COMPANY Software are good and valid.
4. INSPECTIONS: RECORDS AND REPORTING.
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(a) Reports. DISTRIBUTOR shall provide to COMPANY written reports for
every one-month period, or when requested by COMPANY, showing
DISTRIBUTOR's shipments of Localized COMPANY Products by units and
local currency volume, and any other information COMPANY reasonably
requests.
(b) Notification. DISTRIBUTOR shall notify COMPANY in writing of any claim
or proceeding involving Localized COMPANY Products within seven (7)
days after DISTRIBUTOR learns of such claim or proceeding. DISTRIBUTOR
shall also immediately report to COMPANY all claimed or suspected
product defects. DISTRIBUTOR shall also notify COMPANY in writing not
more than seven (7) days after any change in the management or control
of DISTRIBUTOR or any transfer of a majority share of DISTRIBUTOR's
voting control or a transfer of substantially all its assets.
(c) Records. DISTRIBUTOR shall maintain, for at least two (2) years after
termination of this Agreement, its records, contracts and accounts
relating to the reproduction and distribution of Localized COMPANY
Products. For the purpose of verifying compliance by the DISTRIBUTOR
with the provisions of this Agreement, DISTRIBUTOR agrees that COMPANY
and its representatives shall be permitted full access to, and shall
be permitted to make copies of or abstracts from, the books and
records of DISTRIBUTOR relating to inventory levels, manufacturing,
sales and distribution. COMPANY shall be permitted to audit such books
and records at reasonable intervals.
(d) Reports from Replicator/Duplicator. DISTRIBUTOR shall contractually
obligate any duplicator/replicator with which it contracts pursuant to
Article 3(s) above to send detailed and accurate reports to COMPANY
stating the following: number of units of Localized COMPANY Products
duplicated and the titles of such Localized COMPANY Products. The
reports shall be submitted to COMPANY no later than the thirtieth of
each and every month that any such duplication/replication takes
place. The reports shall be submitted to: Vivendi Universal Games,
0000 Xxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxxxxx, XX 00000, Attn:
International Sales Auditing.
5. OWNERSHIP AND PROPERTY RIGHTS. DISTRIBUTOR agrees that COMPANY owns all
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right, title and interest in the COMPANY Products and the Localized COMPANY
Products now or hereafter subject to this Agreement, and in all of
COMPANY's patents, trademarks, trade names, character names and likenesses,
inventions, copyrights, know-how, and trade secrets relating to the design,
operation or maintenance of the COMPANY Software. The use by DISTRIBUTOR of
any of these property rights is authorized only of the purposes and under
the terms herein set forth, and upon termination of this Agreement for any
reason, such authorization shall cease. As part of this Agreement, and
without additional compensation, DISTRIBUTOR acknowledges and agrees that
any and all tangible and intangible property and work products, ideas,
inventions, discoveries and improvements, whether or not patentable, which
are conceived/developed/created/obtained or first reduced to practice by
DISTRIBUTOR for COMPANY in connection with the Localization of COMPANY
Products (collectively referred to as the "Work Product"), including,
without limitation, all technical notes, schematics, software source and
object code, prototypes, breadboards, computer models, artwork, sketches,
designs, drawings, paintings, illustrations, computer-generated artwork,
animations, video, film, artistic materials, photographs, literature,
methods, processes, voice recordings, vocal performances, narrations,
spoken word recordings and unique character voices, shall be considered
"works made for hire" and therefore all right, title and interest there-
in (including, without limitation, patents and copyrights) shall vest
exclusively in COMPANY. To the extent that all or any part of such Work
Product does not qualify as a "work made for hire" under applicable law,
DISTRIBUTOR without further compensation therefore does hereby irrevocably
assign, transfer and convey in perpetuity to COMPANY and its successors and
assigns the entire worldwide right, title, and interest in and to the Work
Product including, without limitation, all patent rights, copyrights, mask
work rights, trade secret rights and other proprietary rights therein. Such
assignment includes the transfer and assignment to COMPANY and its
successors and assigns of any and all moral rights which DISTRIBUTOR may
have in the Work Product. DISTRIBUTOR acknowledges and understands that
moral rights include the right of an author: to be know as the author of a
work; to prevent others from being names as the author of the works; to
prevent others from falsely attributing to an author the authorship of a
work which he/she has not in fact created; to prevent others from making
deforming changes in an author's work; to withdraw a published work from
distribution if t no longer represents the views of the author; and to
prevent others from using the work or the author's name in such a way as to
reflect on her/her professional standing.
6. ADVANCES, ROYALITES AND PAYMENT.
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(a) Advances and Royalty Amounts. DISTRIBUTOR agrees to pay to COMPANY the
non-refundable, but recoupable advances and royalty payments set forth
in Exhibit A. Royalties payable to COMPANY pursuant to this Agreement
shall be based on the number of units of the Localized COMPANY
Products distributed by DISTRIBUTOR and shall only be subject
to a deduction for Localized COMPANY Products previously sold by
DISTRIBUTOR which are returned to DISTRIBUTOR by its customers. The
royalty rate for new software developed by COMPANY and added to this
Agreement shall be determined by COMPANY as COMPANY makes such new
software available to DISTRIBUTOR.
(b) Royalty Payments.
(1) Payments by check shall be sent to the following address:
Vivendi Universal Games, Inc.
X.X. Xxx 000000
Xxxxxx, XX 00000-0000
Payments by wire transfer shall be made to the following account:
Bank of America
0000 Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
ABA No. 000-000-000
Account No. 12333-32277
SWIFT No. BOFA-US 6S
Beneficiary: Vivendi Universal Games, Inc.
(2) DISTRIBUTOR shall arrange payment of all royalties so as to make
the funds available for use by COMPANY in the United States not
later than the payment date specified above.
(3) Payment of all royalties and of any other payments required to be
made to COMPANY pursuant to this Agreement shall be made to
COMPANY at its offices in California, U.S.A., or at such banking
institution as COMPANY may direct from time to time, in legal
tender of the Unites States of America.
(4) All advances, royalties or other payments made to COMPANY
hereunder shall be made without deduction from any local,
state, federal or foreign taxes or duties. DISTRIBUTOR shall be
responsible for the payment of any and all taxes, licenses,
duties and fees of DISTRIBUTOR or COMPANY in connection with the
marketing, distribution, sale, possession, use or sublicensing
of the Localized COMPANY Products (inclusive of value added
taxes, but exclusive of taxes based on COMPANY's net income).
DISTRIBUTOR hereby agrees to pay and to indemnify COMPANY from
all such duties, taxes and fees as may be imposed upon COMPANY
with respect to the marketing, distribution, sale, possession,
use or sublicensing of the Localized COMPANY Products pursuant
to this Agreement. In the event DISTRIBUTOR is precluded by
applicable law from making payments free of deductions, then
DISTRIBUTOR shall pay to COMPANY such additional amounts as
necessary so that the actual amount received by COMPANY shall be
the same as though no such deduction had been made.
(c) Audit Rights. DISTRIBUTOR shall maintain accurate books and records
pertaining to the reproduction and distribution of Localized COMPANY
Products. COMPANY's designated auditors shall have the right twice a
year during ordinary business hours and upon reasonable notice, to
gain access to DISTRIBUTOR's accounts and records. This examination
shall be at COMPANY's expense, unless the examination reflects an
underpayment of five percent (5%) or more of the amount that should
have been paid for the period(s) audited, in which case DISTRIBUTOR
shall bear the expense thereof.
7. DISTRIBUTOR DETERMINES ITS OWN PER COPY PRICES. DISTRIBUTOR is free to
---------------------------------------------------
determine unilaterally its own pricing of the COMPANY Software to its
Dealers. Although COMPANY may publish suggested wholesale, retail or Dealer
prices, these are suggestions only and DISTRIBUTOR shall be entirely free
to determine the actual prices at which Localized COMPAHY Products are sold
to its Dealers.
8. DISTRIBUTOR'S WARRANTIES AND REPRESENTATIONS REGARDING TREATMENT OF
-------------------------------------------------------------------------
DEALERS. DISTRIBUTOR hereby warrants and represents to COMPANY as follows:
-------
(a) Dealer Pricing. DISTRIBUTOR shall inform each Dealer that it is free
to determine unilaterally its own prices and that, although COMPANY
may publish lists showing suggested retail prices for Localized
COMPANY Products, those are suggestions only.
(b) Non-Discrimination Among Dealers. In working with its Dealers,
DISTRIBUTOR shall in all respects comply with all laws, regulations or
statutes which regulate the resale of products to Dealers, including
but not limited to those which govern discriminatory pricing.
9. TRADEMARKS, TRADE NAMES AND COPYRIGHTS.
------------------------------------------
(a) Trademark Use During Agreement. During the term of this Agreement,
DISTRIBUTOR is authorized by COMPANY to use the trademarks COMPANY
uses for COMPANY Products solely in connection with DISTRIBUTOR's
advertisement, promotion and distribution of Localized COMPANY
Products. DISTRIBUTOR agrees that it shall cause to be affixed,
conspicuously and legibly on the Localized COMPANY Products sold by it
pursuant to this Agreement and on all advertising incorporating any
part of the COMPANY Software, appropriate copyright and trademark
notices in the name of the COMPANY. DISTRIBUTOR further agrees to
prominently feature the logo of COMPANY on packaging and advertising
of Localized COMPANY Products. DISTRIBUTOR agrees not to alter, erase,
deface, or overprint any such xxxx on anything provided by COMPANY.
(b) No DISTRIBUTOR Rights in Trademarks or Copyrights. DISTRIBUTOR has
paid no consideration for the use of COMPANY's trademarks, logos,
character names and likenesses, copyrights, trade secrets, trade names
or designations, and nothing contained in this Agreement shall give
DISTRIBUTOR any interest in any of them. DISTRIBUTOR acknowledges that
COMPANY owns and retains all proprietary rights in all Localized
COMPANY Products, and agrees that it shall not at any time during or
after this Agreement assert or claim any interest in or do anything
that may adversely affect the validity or enforceability of any
trademark, trade name, trade secret, copyright or logo belonging to or
licensed to COMPANY (including, without limitation, any act, or
assistance to any act, which may infringe or lead to the infringement
of any copyrights in the Localized COMPANY Products).
(c) No Continuing Right. Upon expiration or termination of this Agreement,
DISTRIBUTOR shall cease advertising and use of all COMPANY names,
marks, logos and designations.
(d) Obligation to Protect. DISTRIBUTOR agrees to use reasonable efforts to
protect COMPANY's proprietary rights and to cooperate with COMPANY's
efforts to protect its proprietary rights.
(e) Security. In the case where COMPANY provides DISTRIBUTOR with source
code, DISTRIBUTOR covenants and agrees as follows:
(1) DISTRIBUTOR shall use the source code only for necessary
Localization purposes.
(2) DISTRIBUTOR shall restrict access to the source code to indi-
viduals with a need to know and who are directly engaged in
Localization of the COMPANY Software.
(3) DISTRIBUTOR shall store and modify the source code on only a
single workstation.
(4) DISTRIBUTOR shall maintain a source-code activity log.
(5) DISTRIBUTOR shall provide reasonable safeguards for the pro-
tection of the source code from unauthorized access and damage.
(6) WITHIN SIXTY (60) DAYS AFTER COMPLETION OF LOCALIZATION,
DISTRIBUTOR SHALL RETURN ALL SOURCE CODE TO COMPANY AND SUBMIT TO
COMPANY, FOR COMPANY'S ARCHIVES, A FULL COPY OF THE LOCALIZED
COMPANY PRODUCTS, INCLUDING ANY LOCALIZED SOURCE CODE.
(7) DISTRIBUTOR shall not alter or modify any COMPANY Software,
packaging or marketing materials or any portion or aspect
thereof, or use or refer to any COMPANY Software in the creation
of any derivative work, without COMPANY's prior written consent.
(8) DISTRIBUTOR shall preclude its agents, employees, and contractors
from engaging in any conduct inconsistent with the terms of this
Paragraph 9(e) by means of appropriate agreements and/or such
other security measures as may be necessary in order to preclude
such conduct. COMPANY reserves the right to review DISTRIBUTOR's
agreement and security measures and to require DISTRIBUTOR to
amend agreements and take steps to bolster the security measures
that are necessary in COMPANY's sole judgment.
(9) DISTRIBUTOR shall not at any time market any copy of COMPANY
Product which has not been pre-approved by COMPANY.
(f) Breach. DISTRIBUTOR understands and agrees that COMPANY will suffer
irreparable harm in the event that DISTRIBUTOR fails to comply with
any of its obligations pursuant to this Paragraph 9 and Paragraph 3,
and that monetary damages in such event would be substantial and
inadequate to compensate COMPANY. Consequently, in such event COMPANY
shall be entitled, in addition to such monetary relief as may be
recoverable by law, to such temporary, preliminary and/or permanent
injunctive relief as may be necessary to restrain any continuing or
further breach by DISTRIBUTOR, without showing or proving any actual
damages sustained by COMPANY.
(g) Dealer of End-User Breaches. DISTRIBUTOR shall promptly report to
COMPANY any breach of the XXXX of which DISTRIBUTOR becomes aware.
COMPANY shall have the right, but not the obligation, to pursue any
and all such infringements.
(h) Filing and Recording. Upon request, DISTRIBUTOR agrees to assist
COMPANY in the filing and recording of COMPANY's trade names,
copyrights, patents and trademarks in the Territory, all costs to be
paid by COMPANY.
10. ASSIGNMENT. The rights granted to DISTRIBUTOR hereunder are personal in
----------
nature and DISTRIBUTOR agrees that this Agreement shall not be assignable,
nor may DISTRIBUTOR delegate its duties hereunder without the prior written
consent of COMPANY. Any attempted delegation or assignment without the
required consent shall be void and of no effect.
11. DURATION AND TERMINATION OF AGREEMENT.
-----------------------------------------
(a) Term. Subject to prior termination in accordance with the provisions
contained herein, the term of this Agreement shall commence as of the
Effective Date and expire upon the expiration of all Distribution
Terms for Localized Product distributed pursuant to this Agreement.
(b) Termination for Cause. This Agreement may be terminated forthwith as
set forth below, by one party giving written notice thereof to the
other party, in accordance with Paragraph 16(b) below, stating the
effective date of termination.
(1) By COMPANY if any proceeding in bankruptcy or in reorganization
or for the appointment of a receiver or trustee or any other
proceeding under any law for the relief of debtors shall be
instituted by or against DISTRIBUTOR, or if DISTRIBUTOR shall
make an assignment for the benefit of creditors; or
(2) Subject to Paragraph 3(q) and 13(a) herein, by either party upon
a material breach by the other party of any of the terms of this
Agreement, or any other agreement in force between the parties
hereto, which breach is not remedied by the breaching party to
the non-breaching party's responsible satisfaction within thirty
(30) days of the breaching party's receipt of notice of such
breach from the non-breaching party, in the event of a breach of
Paragraph 6 hereunder, and within forty-five (45) days for all
other breaches;
(3) By COMPANY, if DISTRIBUTOR is merged, consolidated, sells all or
substantially all of its assets or implements or experiences any
substantial change in management or control (the transfer of
twenty-five percent (25%) or more of a DISTRIBUTOR's common stock
or the equivalent, shall be considered a substantial change in
control hereunder);
(4) By COMPANY, if DISTRIBUTOR sells:
i) any copies of the COMPANY Product;
ii) any copies of the Localized COMPANY Products outside the
Territory; or
iii) any copies of the Localized COMPANY Products to any person
or entity which DISTRIBUTOR has reason to believe may sell
the Localized COMPANY Products outside the Territory;
(5) By COMPANY, if DISTRIBUTOR has not achieved one-half (1/2) of the
Guaranteed Unit Sales at the midpoint of the Guarantee Period;
(6) By COMPANY, if DISTRIBUTOR distributes any Localized COMPANY
Products or associated marketing material without first obtaining
the approval(s) of COMPANY required hereunder; or
(7) By COMPANY, the Distribution Term may be terminated as to any
COMPANY Products for which DISTRIBUTOR has failed to produce a
Localized COMPANY Product acceptable to COMPANY within three (3)
months of DISTRIBUTOR's receipt of the Localization Kit for such
COMPANY Product; in the case of such termination, COMPANY shall
retain any advances paid in respect of such COMPANY Product.
(c) Termination at Will. COMPANY shall have the right to terminate this
Agreement for no cause, at will, upon ninety (90) days prior written
notice.
(d) Effect of Termination. Upon termination of this Agreement:
(1) DISTRIBUTOR shall cease using any COMPANY trademark, logo or
trade name.
(2) All COMPANY Software masters, Localization materials, source
code, trademarks, trade names, patents, samples, literature and
sales aids of every kind shall remain the property of COMPANY.
Within thirty (30) days after the termination of this Agreement,
DISTRIBUTOR shall prepare all such items in its possession
for shipment, as COMPANY may direct, at COMPANY's expense.
DISTRIBUTOR shall not make or retain any copies of any confi-
dential or proprietary items or information which may have
been entrusted to it. Effective upon the termination of this
Agreement, DISTRIBUTOR shall cease to use all trademarks, logos,
marks, and trade names of COMPANY.
(3) DISTRIBUTOR shall provide COMPANY with a written report detailing
all inventory of the Localized COMPANY Products in its possession
at the effective date of termination within ten (10) business
days. COMPANY shall then have a period of ten (10) business
days to elect to purchase any portion of said inventory at
DISTRIBUTOR's actual cost of such goods Subject to COMPANY's
option to purchase DISTRIBUTOR's inventory, and unless this
Agreement has been terminated for breach on the part of DIS-
TRIBUTOR, DISTRIBUTOR shall retain the right to sell off its
remaining inventory of Localized COMPANY Products for a period of
three (3) months following the expiration or termination of this
Agreement, subject to DISTRIBUTOR's payment of royalties for such
sales. However, if this Agreement has been terminated for breach
on the part of DISTRIBUTOR, DISTRIBUTOR shall have no sell-off
rights whatsoever and any remaining inventory of Localized
COMPANY Products shall become the property of COMPANY without
any payment by COMPANY to DISTRIBUTOR and shall be promptly
delivered to COMPANY at a destination designated by COMPANY at
DISTRIBUTOR's expense.
(4) If the Agreement was terminated pursuant to Paragraph 11(b)(5)
hereinabove, in addition to any other royalties due, DISTRIBUTOR
shall pay COMPANY the difference between one-half (1/2) of the
royalties which would have been payable on the Guaranteed Unit
Sales and the amount of royalties DISTRIBUTOR had paid COMPANY
for sales up to the midpoint of the Guarantee Period.
(e) Survival. COMPANY's rights and DISTRIBUTOR's obligations to pay
COMPANY all amounts due hereunder, as well as DISTRIBUTOR's obli-
gations pursuant to Paragraph 3(c), 3(d), 3(j)(4) through 3(j)(8),
4(c), 5, 6, 9, 11(d), 11(e) and 12 through 16 shall survive
termination or expiration of this Agreement or any determination that
this Agreement or any portion hereof or exhibit hereto is void or
voidable.
12. RELATIONSHIP OF THE PARTIES. DISTRIBUTOR's relationship with COMPANY during
---------------------------
the term of this Agreement will be that of an independent contractor.
DISTRIBUTOR will not have, and shall not represent that it has, any power,
right or authority to bind COMPANY, or to assume or create any obligation
or responsibility express or implied, on behalf of COMPANY or in COMPANY's
name, except as herein expressly provided. Nothing stated in this Agreement
shall be construed as making partners of DISTRIBUTOR and COMPANY, nor as
creating the relationships of employer/employee, franchisor/franchisee, or
principal/agent between the parties. In all matters relating to this
Agreement, neither DISTRIBUTOR nor its employees or agents are, or shall
act as, employees of COMPANY within the meaning or application of
any obligations or liabilities to COMPANY by reason of an employment
relationship. DISTRIBUTOR shall reimburse COMPANY for and hold it harmless
from any liabilities or obligations imposed or attempted to be imposed upon
COMPANY by virtue of any such law with respect to employees of DISTRIBUTOR
in performance of this Agreement.
13. INDEMNIFICATION.
---------------
(a) DISTRIBUTOR shall defend, indemnify and hold harmless COMPANY, its
parent, subsidiaries, affiliated companies and partners and their
respective officers, directors, employees and agents from and against
any and all liabilities, damages, costs and fees (including reasonable
attorney's fees) resulting from any claims or actions arising out of
or relating to actual or alleged: (i) distribution by DISTRIBUTOR or
its Dealers of COMPANY Products or Documentation or Localized COMPANY
Products outside the Territory; or (ii) breach of any and all
obligations DISTRIBUTOR has undertaken to perform hereunder; or (iii)
breach of any representations and warranties or covenants DISTRIBUTOR
has made hereunder; or (iv) infringement caused by any modification to
the COMPANY Products or Documentation not authorized by COMPANY; or
(v) any third-party claim arising from DISTRIBUTOR's use of any
trademarks or copyrighted material added to the COMPANY Products by
DISTRIBUTOR. Such indemnification obligation of DISTRIBUTOR shall be
conditioned upon COMPANY promptly notifying DISTRIBUTOR in a writing
that sets forth with specificity the claim or action to which such
indemnification obligation applies. DISTRIBUTOR shall have the right
to control the defense of each such claim and any lawsuit or
proceeding arising therefrom. In the event DISTRIBUTOR does not timely
undertake to defend COMPANY from a claim or suit described above,
COMPANY shall have the right to undertake the defense itself and
DISTRIBUTOR promises to repay all liabilities, damages, costs and fees
(including reasonable attorney's fees) resulting from such defense
regardless of the outcome. Except in the event that DISTRIBUTOR does
not undertake the defense of COMPANY as required hereunder, COMPANY
shall not settle any such claim or lawsuit or proceeding arising
therefrom without the prior written approval of DISTRIBUTOR. In
defending against such claim or action, DISTRIBUTOR may (i) contest;
(ii) settle; (iii) procure for COMPANY and its customers the right to
continue using the Localized COMPANY Products, as applicable; or (iv)
modify or replace the Localized COMPANY Products, as applicable, so
that they no longer infringe. DISTRIBUTOR acknowledges that the
warranties and representations herein shall survive the termination of
this Agreement.
(b) No Combination Claims. Notwithstanding Paragraph 14(a), COMPANY shall
not be liable to DISTRIBUTOR for any claim arising from or based upon
the combination, operation or use of any COMPANY Product with
equipment, data or programming not supplied by COMPANY, or arising
from any alteration or modification of COMPANY Products.
14. DISCLAIMER OF WARRANTIES: LIMITED LIABILITY.
--------------------------------------------
(a) Disclaimer of Warranties. DISTRIBUTOR ACKNOLWEDGES THAT NO WARRANTIES
WITH REGARD TO THE COMPANY SOFTWARE, WHETHER OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE, ARE CREATED BY THIS
AGREEMENT AND COMPANY HEREBY DISCLAIMS AND EXCLUDES ALL IMPLIED
WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
COMPANY FURTHER DISCLAIMS ALL WARRANTIES WITH REGARD TO YEAR 2000
COMPLIANCE OF THE COMPANY SOFTWARE. SPECIFICALLY, COMPANY MAKES NO
WARRANTIES THAT THE PERFORMANCE OR FUNCTIONALITY OF THE COMPANY
SOFTWARE WILL NOT BE AFFECTED BY DATES PRIOR TO, DURING OR AFTER THE
YEAR 2000, OR THAT THE COMPANY SOFTWARE WILL BE CAPABLE OF CORRECTLY
PROCESSING, PROVIDING, AND/OR RECEIVING DATE INFORMATION WITHIN AND
BETWEEN CENTURIES, INCLUDING THE PROPER EXCHANGE OF DATE INFORMATION
BETWEEN PRODUCTS OR APPLICATIONS.
(b) Limitation of Liability. UNDER NO CIRCUMSTANCES SHALL COMPANY BE
LIABLE TO DISTRIBUTOR ON ACCOUNT OF ANY CLAIM (WHETHER BASED UPON
PRINCIPLES OF CONTRACT, WARRANTY, NEGLIGENCE OR OTHER TORT, BREACH OF
ANY STATUTORY DUTY, PRINCIPLES OF INDEMNITY, THE FAILURE OF ANY
LIMITED REMEDY TO ACHIEVE ITS ESSENTIAL PURPOSE, OR OTHERWISE) FOR ANY
SPECIAL, CONSEQUENTIAL INCIDENTAL OR EXEMPLARY DAMAGES, INCLUDING BUT
NOT LIMITED TO LOST PROFITS, OR FOR ANY DAMAGES OR SUMS PAID BY
DISTRIBUTOR TO THIRD PARTIES, EVEN IF COMPANY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. DISTRIBUTOR acknowledges and agrees that
(1) DISTRIBUTOR has no expectation and has received no assurances that
its business relationship with COMPANY will continue beyond the stated
term of this Agreement or its earlier termination, and that COMPANY
has not made any promises with respect to DISTRIBUTOR's ability to
recoup any investment by DISTRIBUTOR in the promotion of Localized
COMPANY Products by virtue of this Agreement; and (2) DISTRIBUTOR
shall not have or acquire by virtue of this Agreement or otherwise any
vested, proprietary or other right in the promotion of Localized
COMPANY Products or in any goodwill created by its efforts hereunder.
15. CONFIDENTIALITY. In the course of this Agreement, it is anticipated that
---------------
DISTRIBUTOR will learn confidential or proprietary information about
COMPANY. DISTRIBUTOR shall keep confidential this information and any other
information which DISTRIBUTOR may acquire with respect to COMPANY's
business, including, but not limited to, information developed and relating
to new products, customers, pricing, know-how, processes, and practices,
unless and until COMPANY consents to disclosure, or unless such knowledge
and information otherwise becomes generally available to the public through
no fault of DISTRIBUTOR. DISTRIBUTOR shall not disclose to others, without
COMPANY's consent, the subject of this relationship without first providing
COMPANY with the opportunity to review and offer reasonable objection
to the contemplated publication. This undertaking to keep information
confidential shall survive the termination of this Agreement. It is
understood, however that the restrictions listed above shall not apply to
any portion of confidential information which; (i) was previously known to
DISTRIBUTOR without obligations of confidentiality; (ii) is obtained after
the Effective Date of this Agreement from a third party which is lawfully
in possession of such information and not in violation of any contractual
or legal obligation to COMPANY with respect to such information; (iii) is
or becomes part of the public domain through no fault of DISTRIBUTOR;
(iv) is independently ascertainable or developed by DISTRIBUTOR or its
employees; (v) is required to be disclosed by administrative or judicial
action provided that DISTRIBUTOR immediately after receiving notice of such
action notifies COMPANY of such action to give COMPANY the opportunity to
seek any other legal remedies to maintain such confidential information in
confidence; or (vi) is approved for release by written authorization of
COMPANY. DISTRIBUTOR shall require each of its employees performing
services relating to the Work to execute a Confidentiality Agreement, if
requested by COMPANY. At the termination of this Agreement, DISTRIBUTOR
shall return to COMPANY all drawings, specifications, manuals and other
printed or reproduced material (including information stored on machine
readable media) provided by COMPANY.
16. GENERAL.
-------
(a) Waiver and Modification. No waiver or modification of the Agreement
shall be effective unless in writing and signed by the party against
whom such waiver or modification is asserted. Waiver by either party
in any instance of any breach of any term or condition of this
Agreement shall not be construed as a waiver of any subsequent breach
of the same or any other terms or condition hereof. None of the terms
or conditions of this Agreement shall be deemed to have been waived by
course of dealing or trade usage.
(b) Notices. All notices and demands hereunder shall be in writing and
shall be served by personal delivery, express courier, or mail at the
address of the receiving party set forth in this Agreement (or at such
different address as may be designated by such party by written notice
to the other party), and shall be deemed complete upon receipt. All
notices or demands by mail shall be by certified or registered
airmail, return receipt requested. If receipt of such notice or demand
is refused or a party has changed its address without information the
other, the notice shall be deemed to have been given and received upon
the seventh (7th) day following the date upon which it is first
postmarked by the postal service of the sender's nation.
(c) Attorney's Fees. In the event any litigation is brought by either
party in connection with this Agreement, the prevailing party in such
litigation shall be entitled to recover from the other party all the
costs, attorneys' fees and other expenses incurred by such prevailing
party in the litigation.
(d) Complete Execution. This Agreement shall become effective only after
it has been executed by DISTRIBUTOR and COMPANY.
(e) Choice of Law, Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, USA.
THE APPLICATION OF THE UNITED NATIONS CONVENTION OF CONTRACTS FOR THE
INTERNATIONAL SALE OF GOODS IS EXPRESSLY EXCLUDED. The parties agree
that any claim asserted in any legal proceeding by one party against
the other shall be commenced and maintained in any state or federal
court located within the County of Los Angeles, State of California,
U.S.A., having subject-matter jurisdiction with respect to the dispute
between the parties. Both parties hereby submit to the jurisdiction of
such courts over each of them personally in connection with such
litigation, and waive any objection to venue in such courts and any
claim that such forum is an inconvenient forum. The English-language
version of this Agreement controls when interpreting this Agreement.
(f) Severability. In the event that any provision of this Agreement shall
be held by a court or other tribunal of competent jurisdiction to be
unenforceable, such provision shall be enforced to the maximum extent
permissible and the remaining portions of this Agreement shall remain
in full force and effect. In the event the infirmed provision causes
the contract to fail of its essential purpose, then the entire
Agreement shall fail and become void.
(g) Force Majeure. COMPANY shall not be responsible for any failure to
perform due to unforeseen circumstances or cause beyond COMPANY's
control, including but not limited to acts of God, war, riot,
embargoes; acts of civil or military authorities, fire, floods,
accidents, strikes, or shortages of transportation facilities, fuel,
energy, labor or materials.
(h) Entire Agreement. This Agreement, including all Schedules and Exhibits
hereto, constitutes and contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes any
prior oral or written agreement. Nothing herein contained shall be
binding upon the parties until this Agreement has been executed by
each party and an executed copy has been delivered to the parties.
This Agreement may not be changed, modified, amended or supplemented
except in a writing signed by all parties to this Agreement. Each of
the parties acknowledges and agrees that the other has not made any
representations, warranties or agreements of any kind, except as may
be expressly set forth herein.
(i) Benefits of Agreement. The terms of this Agreement are intended solely
for the benefit of the parties hereto. They are not intended to confer
upon any third party the status of a third-party beneficiary. Except
as otherwise provided for by this Agreement, the terms hereto shall
inure to the benefit of, and be binding upon, the respective
successors and assign of the parties hereto.
IN WITNESS WHEREOF, the parties have entered into this Agreement.
VIVENDI UNIVERSAL GAMES, INC. STAR E MEDIA CORPORATION
/s/ Xxxxxx Larenaudie /s/ E.G. Xxxxxxxxx
-------------------------------- ------------------------------
Title: VP & Asia Director Title: President
Date: 12/11/02 Date: 12/11/02
EXHIBIT A
---------
1. COMPANY PRODUCTS AND ROYALTY RATES:
COMPANY PRODUCT ROYALTY RATE
------------------------------- ------------
JUMPSTART ANIMAL ADVENTURE US$4.00
JUMPSTART ADVANCED 1ST GRADE US$4.00
JUMPSTART ADVANCED PRESCHOOL US$4.00
JUMPSTART ADVANCED KINDERGARTEN US$4.00
(All COMPANY Products listed in this Agreement are to be fully localized in
Arabic language.)
2. ADVANCE PAYMENTS:
DISTRIBUTOR agrees to pay COMPANY the sum of thirty two thousand US dollars
(US$32,000.00) for each COMPANY Product listed in this agreement as a
recoupable advance against future royalties arising from DISTRIBUTOR's
distribution of each localized COMPANY Product, payable in three (3)
installments as follows:
a) Six thousand four hundred US dollars (US$6,400.00) for each COMPANY
Product upon signature of this Agreement.
b) Twelve thousand eight hundred US dollars (US$12,800.00) for each
COMPANY Product upon DISTRIBUTOR's receipt of each localization kit.
c) Twelve thousand eight hundred US dollars (US$12,800.00) for each
COMPANY Product upon COMPANY approval of the localized COMPANY
Product.
4. DISTRIBUTION TERM(S):
Subject to early termination in accordance with the provisions contained
herein, the Distribution Term shall begin on the Effective Date of this
Agreement and continue in full force for a period of twelve (12) months.
The Distribution Term will be from November 1, 2002 to October 31, 2003.
5. GUARANTEE AND GUARANTEE PERIOD:
DISTRIBUTOR guarantees sales of no less than eight thousand (8,000) units
of each COMPANY Product listed in this Agreement.
6. PAYMENT TERMS:
Concurrent or prior with COMPANY's receipt of a Media Replication
Authorization Request Form, attached hereto as Exhibit D, DISTRIBUTOR
agrees to pay COMPANY for the total amount of the applicable request for
replication.
7. TERRITORY:
United Arab Emirates, Saudi Arabia, Oman, Bahrain, Qatar, Kuwait, Jordan,
Palestine, Egypt, Lebanon.
EXHIBIT B
---------
PROFESSIONAL SERVICES AGREEMENT
EXHIBIT C
---------
APPROVAL REQUEST
EXHIBIT D
---------
