EXHIBIT 10.6
DISTRIBUTION AGREEMENT
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THE DISTRIBUTION AGREEMENT is entered into this 22 day of August 1995 by and
between BRILLIANT INTERACTIVE IDEAS PTY LTD an Australian Company (BII) and
PACKARD XXXX ELECTRONICS INC a California company (PB). This Agreement
incorporates all relevant terms and conditions of the previous Agreement
executed between BII and PB and supersedes the pervious Agreement executed
between BII and PB. Upon the execution of this agreement the previous agreement
becomes null and void
WHEREAS PB is in the business of distributing computer hardware and software in
the USA and around the world and has established a software publishing business.
BII is in the business of developing interactive multimedia software products.
PB is desirous of having BII develop various software products for publishing
and distribution.
NOW THEREFORE THE PARTIES do agree as follows:
1. (i) BII have previously developed six interactive children's story books
for PB as detailed in Attachment A hereinafter referred to as the
Current Titles;
1. (ii) BII shall develop an additional three interactive children's story
books for PB as detailed in Attachment A hereinafter referred to as
the Future Titles;
1. (iii) The Current Titles and Future Titles are hereinafter referred to
collectively as the Product;
2. The Products shall consist of storybooks in a multimedia format,
incorporating sound, animation, hotspots, 10 - 25 pages each, with
music and activties.
3. (i) The Current Titles have been delivered in object code in a form
compatible with IBM PC running under Windows, as well as Macintosh
from Apple computer, and shall be reasonably fit for the purposes
intended, and have been accepted by PB;
3. (ii) The Future Titles shall be delivered in object code in a form
compatible with IBM PC running under Windows, as well as Macintosh
from Apple computer, and shall be reasonably fit for the purposes
intended.
4. BII grants to PB the right to publish, reproduce, sub - license,
distribute and display the Products in North America, Israel and
South Africa. PB shall not be entitled to make any alterations to
the object code of the Products without the written consent of BII.
5. The rights to publish as granted above in 4 are the exclusive retail
rights and shall not conflict with any other rights granted by BII
to other publishers in other territories.
6. (i) PB shall pay to BII the following royalties for each Future Title
shipped:
For the first CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION units shipped of each
Future Title USD CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
For the next CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION units shipped of each
Future Title USD CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
For the next CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION units shipped of each
Future Title USD CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
For all Future Titles shipped to CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
and or CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION the royalty payable to BI
shall be USD CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION per unit.
Until total royalties of USD CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION have
been paid to BII for each Future Title, then the royalty for all
Future Title units shipped shall be USD CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION per unit;
The royalty as stated above is based on a wholesale price of the
Future Title not exceeding USD CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION per
title;
6. (ii) PB shall pay to BII the following royalties for each Current Title
shipped:
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USD CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION per unit shipped except for units
shipped to CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION and or CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION, where the royalty payable to BII shall be USD
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION per unit shipped;
7. (i) PB have paid to BII a sum of USD CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
being a non - refundable development advance which is to be recouped
against payments due to BII for units shipped of the Current Titles
under clause 6(ii) above.
7. (ii) PB shall pay to BII a sum of USD CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
being a non - refundable research and development payment. This
research and development payment is payable as follows:-
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION on the execution of this
Agreement
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION on the delivery of the gold
masters of the Future Titles
8. PB guarantees to release the Future Titles to retailers no later
than 31 JANUARY 199__ (the Retail Marketing Date) subject to the
Products being delivered on time. Any delay in receipt of the Future
Titles shall automatically result in a corresponding delay in the
Retail Marketing Date, subject to any force majeure.
9. In consideration of the above BII further grants to PB the bundle
rights (Bundle Rights) to two (2) of the Current Titles and one (1)
of the Future Titles for all territories in the world where Packard
Xxxx personal computers are sold. These rights are independent of
the other rights as granted above.
10. The Bundle Rights granted above shall entitle PB to incorporate the
Current Titles and Future Titles onto any Packard Xxxx personal
computer within the Microsoft Windows operating environment in
unlimited quantities for a period of
3
12 months from the date that the first bundle Product is shipped provided
that:
PB shall not bundle more that 2 of the 3 selected Products on any
one machine and PB shall include a brochure for the other Products,
in each personal computer that PB bundles the Products in
AND
PB shall have paid to BII or have committed to pay to BII in writing
within 30 days, at the agreed royalty rates under clause 6(i),
royalties on CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION of each Future Title
(cross collateralized) prior to being able to exercise the Bundle
Rights.
11. Left Blank.
12. Left Blank
13. Left Blank
14. BII shall deliver the Future Titles to PB no later than the 30 September
1995. Any delay in the delivery date of the Final Titles shall cause a
corresponding delay in the Retail Marketing Date. In the event that PB
requests any changes to the Products, then these shall be at the expense of
PB and shall be treated as a further advance against royalties and shall be
recoupable against Products shipped.
15. PB shall use it's best endeavors to promote and expand the sale of the
Products in all parts of North America, Israel and South Africa and in all
sectors of the market on the maximum possible scale by all reasonable
means.
16. PB shall keep full and accurate records regarding the production, sale,
shipping and distribution of the Products and the licensing of the Kidstory
name and shall upon 7 days notice from BII allow BII or it's agent to
inspect all of these records and other related documents during normal
working hours.
17. BII may terminate this Agreement immediately upon giving written notice to
PB if:
a. PB fails to make any payment when due or otherwise breaches this
Agreement and has not rectified such breach within 14 days of notice
from BII; or
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b. PB dissolves, liquidates or if bankruptcy, insolvency, winding
up or reorganization procedures are commenced by PB or are
brought against PB.
18. If this Agreement is terminated for any reason, PB shall:
a. immediately return all masters of the Products to BII; and
b. have the right to sell it's existing stocks of the Products
subject to payment to BII of all royalties due under his
agreement.
19. BII shall be responsible for any and all other royalties due on the
Products to third parties including music royalties, animation
royalties and licensing royalties.
20. BII provides no warranty as to names being used including the name
Kidstory and Brilliant Interactive Ideas in the territories in which
Packard Xxxx distributes. In the event a name change is needed for
legal reasons then the parties shall consult as to the new name and
BII shall make the necessary changes with the cost of any requisite
name changes being split evenly and any moneys paid by PB shall be
treated as an advance against retail sales royalties.
21. The name Kidstory or any other agreed to name is the property of BII
and PB shall have no claim to this or any other name being used. BII
agrees to license the name Kidstory to PB for use with other
products that PB distributes. PB shall pay to BII a license fee for
the use of the Kidstory name equal to CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION of the net revenue (gross revenue less returns) received
by PB for all products not developed by BII that PB publishes and
distributes under the Kidstory name.
BII retains any and all of the copyrights contained in the Products
and PB shall have no rights in the copyrights or other intellectual
rights contained in the Products. All Products shipped whether in a
retail or bundled version shall reflect the appropriate copyrights
which shall be provided to PB simultaneously with the masters. Any
press release or advertisement for the Products shall reference BII
as the developer and shall contain the appropriate copyright notices
as provided.
22. All payments due under clauses 6 and 21 of this agreement shall be
paid to BII by PB on a monthly basis within 45 days from the end of
the month.
22. BII shall be liable to PB as expressly provided in this Agreement,
but shall have no other obligation, duty, or liability whatsoever in
contract, tort or otherwise to PB provided that nothing in this
Agreement shall exclude or restrict any liability on the part of BII
where and to the extent that applicable law forbids exclusion or
restriction of that liability on it's part.
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23. BII shall not be liable in any way whatsoever to PB or any person for any
special, indirect or consequential Ion or damage whatsoever (including but
not limited to loss of profit, business, revenue, goodwill, loss of data or
anticipated savings).
24. Each party shall fully indemnify the other against all losses, costs,
charges and expenses arising from or incurred by reason of any claim made
against it arising from any use whatsoever by it of the Products.
25. Each party shall treat as confidential all information of a confidential
nature of the other party which comes into it's possession under this
Agreement.
26. The term of this Agreement shall be for a period of CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION from the date of signing of this Agreement at which time all
rights shall revert back to BIT.
27. This Agreement shall be governed by the laws of the State of California.
By their signatures below the parties agree to be bound by the terms of this
Agreement.
Packard Xxxx Electronics Inc Brilliant Interactive Ideas Pty Ltd
By: /s/ By: /s/ Xxxx Xxxxxx
_____________________________ _________________________________
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Attachment A
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THE CURRENT TITLES ARE:
1. The Yukadoos
2. The Little Engine
3. The Wrong - Way - Around - World
4. The Friends of Xxxxx Xxxxxxxxx
5. Milly Fitzwilly's Mousecatcher
6. The Pirate Who Wouldn't Wash
THE FUTURE TITLES ARE:
1. There's A Dinosaur in the Garden
2. Caitlins Crazy Contraptions
3. Monster on the Loose
