SOFTWARE PUBLISHING AGREEMENT
This Software Publishing Agreement (this "Agreement"), dated as of June 17,
1998, is made by and between Cendant Software Corporation, a Delaware
corporation, together with its affiliates, subsidiaries and related entities
("Cendant"), doing business through its subsidiary Sierra On-Line, Inc., at 0000
- 000xx Xxxxx X.X., Xxxxx 000, Xxxxxxxx, XX 00000, and ModaCAD, Inc., doing
business at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxx Xxxx, Xxxxxxxxxx 00000 ("ModaCAD").
Cendant and ModaCAD agree as follows:
RECITALS
A. ModaCAD is co-developing with Intel Corporation an interactive fashion
lifestyle content manager that will consist of a CD-ROM composed of digitized
images of clothing, footwear, accessories and other fashion influences aimed at
young women between the ages of fifteen and twenty eight. This product, code
named "Project New York," will enable users to have a rich visual experience by
allowing users to interact with digital fashion objects, connect to the Internet
to receive updates via push technology, visit other web sites and communicate
electronically with other users. Project New York is scheduled for release
during the 1998 back-to-school season.
B. ModaCAD is also developing an ** code named "Project Paris" which is
currently scheduled for release as set forth in Appendix C. Paris is being
developed as **. A detailed product specification will be delivered pursuant to
a milestone schedule set forth in Appendix C of this Agreement. ModaCAD is also
pursuing a co-development partner for this product.
C. Cendant and ModaCAD are entering into an Agreement to publish both
Project New York and Project Paris pursuant to the schedules and terms set forth
in this Software Publishing Agreement.
D. Cendant wishes to develop an ongoing, long-term relationship with
ModaCAD for the purpose of publishing and distributing future consumer software
products and supporting ModaCAD in its creative and technical growth and
development of products.
E. Cendant acknowledges that ModaCAD is and expects to continue to be
engaged in the development, design, marketing, licensing and support of software
applications using ModaCAD's Core Technology (as defined below) for inclusion in
ModaCAD's proprietary content managers which include digital content creations
and interactive user interfaces which are components thereof, and any existing
or future enhancements to or replacements of such software or its components
(all subject to this Agreement and the noncompetition provisions hereof). Except
as otherwise specifically provided in this Agreement, Cendant will not have or
acquire any rights to ModaCAD's Core Technology under this Agreement.
AGREEMENT
Section 1. Definitions
Whenever used herein, the following terms shall have the following
specified meanings:
"Add-On Product" means any software program designed only to work in
conjunction with a Retail Version and which will not include any application
designed to operate as a stand-alone product, along with any corrections,
enhancements, modifications and/or updates to any such program developed
hereunder.
"Alternative Channel Revenue" means **.
"Alternative Channel Version" means **. Additional details which outline
proposed delivery schedules and basic program functionality are set forth in
Appendix A and Appendix C of this Agreement.
"Cendant Content" means the Cendant Set-Up (if utilized) and all other
Cendant provided content and technology incorporated into any Product.
"Cendant Set-Up" means an installation set-up to be provided by Cendant for
use in Products free of charge (as the same may be modified by Cendant from time
to time).
"Core Technology" means ModaCAD's proprietary rendering and content manager
technologies, including, without limitation, features such as lighting, texture
mapping, UV mapping and modeling as well as database cataloging features such as
rule-based validation and search and retrieval, used in ModaCAD's existing
software applications which is the base technology for ModaCAD's existing and
future content managers.
"Delivery Schedule" means the delivery schedule set forth in Appendix A
hereto, as the same may be amended from time to time by agreement of the
parties.
"Derivative Work" means a consumer software product which extends the
fashion lifestyle experience to be delivered in Project New York and has an
overall look and feel substantially similar to the Retail, OEM and Alternative
Channel Versions of Project New York.
"Errors" means any bug, error or defect in Project New York, Project Paris
or any other product delivered by ModaCAD to Cendant hereunder which (a) causes
Project New York , Project Paris or such other product not to conform to its
specifications, (b) causes incorrect results, (c) causes incorrect functions to
occur, or (d) renders the Project New York, Project Paris or such other product
inoperable. Errors shall not include any defects caused by the Cendant Content.
"Foreign Translation" means any partial or complete translation of a Retail
Version to a language other than English, along with any corrections,
enhancements, modifications and/or updates to any such translation developed
hereunder.
"Intellectual Property Rights" means, collectively, worldwide Patents,
Trade Secrets, Copyrights, moral rights, trade names, Trademarks, rights in
trade dress and all other intellectual property rights and proprietary rights,
whether arising under the laws of the United States or any other state, country
or jurisdiction, including all rights or causes of action for infringement or
misappropriation of any of the foregoing. "Patents" means all patent rights and
all right, title and interest in all letters patent or equivalent rights and
applications for letters patent or rights and any reissuing division,
continuation or continuation in part application throughout the world. "Trade
Secrets" means all right, title and interest in all trade secrets and trade
secret rights arising under the common law, state law, U.S. federal law or laws
of foreign countries. "Copyrights" means all copyright rights, neighboring and
derivative rights, and all other literary property and author rights and all
right, title and interest in all copyrights, copyright registrations,
certificates of copyright and copyrighted interests throughout the world.
"Trademarks" means all trademark and service xxxx rights arising under the
common law, state law, U.S. federal law and laws of foreign countries and all
right, title and interest in all trademarks, service marks, trademark and
service xxxx applications and registrations and trademark and service xxxx
interests throughout the world.
"ModaCAD Technology" means all Intellectual Property Rights contained
within Project New York, Project Paris and any other product delivered by
ModaCAD to Cendant hereunder, excluding the Cendant Content.
"Net Revenue" means **. "Net Revenue" excludes revenue earned from
distribution of products other than a Retail Version. If Cendant earns revenue
from distribution of a Retail Version in combination with one or more other
products, such revenue will be allocated between the Retail Version and such
other products on the basis of the current or most recent ** of a compilation or
bundle. For purposes of calculating gross revenue the following shall apply: if
Cendant distributes a Retail Version directly to an end user, the gross revenue
earned by Cendant from such end user shall be deemed to be Cendant's ** for such
unit of such Retail Version.
"OEM Revenue" means the **, whereby Cendant or ModaCAD (as the case may be)
authorizes such third parties to market, reproduce and distribute physical or
electronic copies of such OEM Version(s) as permitted under this Agreement.
"OEM Version" means a version of the Retail Version that contains limited
functionality and is in the nature of a playable demo of the Retail Version, the
specifications for which are set forth on Appendix A and C concerning Project
New York and Project Paris (and for future Retail Versions, as may be mutually
agreed in writing).
"Platform Extension" means any adaptation of a Retail Version to any other
electronic platform or operating system (e.g., Sony XXX, X00, Sega, set top
boxes, etc.) not described in Appendix A.
"Project New York" means the fashion e-commerce content manager that is
being co-developed by ModaCAD and Intel Corporation and which is targeted at
young women consumers.
"Project Paris" means ** which is to be developed or co-developed by
ModaCAD under this Agreement.
"Retail Version" means the fully featured version of Project New York and
Project Paris identified in Appendix A for delivery to and distribution by
Cendant under this Agreement. The term "Retail Version" will include Sequel
Products, Add-On Products, Platform Extensions and Foreign Translations
developed directly or indirectly by ModaCAD pursuant to Section 2.
"Sequel Product" means any software program for traditional retail
distribution which extends or continues the fashion lifestyle experience
setting, environment, structure, theme, storyline, name or similar elements, is
a Derivative Work, or is a subsequent version of Project New York or Project
Paris, and includes significant enhancements, additional features and
improvements to any such product, along with any corrections, enhancements,
modifications and/or updates to any such program developed hereunder.
Section 2. Development and Delivery of Project New York and Project Paris ;
License; Rights
2.1 Development and Delivery of Project New York and Project Paris. ModaCAD
will develop, make and deliver to Cendant the Retail Versions of Project New
York and Project Paris in accordance with this Agreement (including Appendix A
and Appendix C). Cendant will provide and ModaCAD will implement design and art
input on the Retail Version interface. The Delivery Schedules may be amended in
writing from time to time by mutual written agreement signed by ModaCAD and
Cendant.
ModaCAD shall use its best efforts to ensure that Cendant has a completed
gold master of the first Retail Version for Project New York ready for
duplication on or before ** and the first Retail Version of Project Paris on or
before **. If the U.S. Retail Version of each respective product is not
completed and ready for duplication on or before ** (for Project New York) or **
(for Project Paris), ModaCAD shall be in material breach of this Agreement
(without any cure period) and Cendant shall be entitled to all remedies
available to it under this Agreement (as outlined in Section 5).
ModaCAD shall perform initial quality assurance and other error/bug
testing, but not configuration testing, on Retail Version, OEM and Alternative
Channel Versions prior to delivery to Cendant. Cendant shall conduct final
quality assurance and other error/bug testing on Retail Version, OEM and
Alternative Channel Versions from time to time prior to the commercial release
thereof, and shall conduct configuration testing on such products after the beta
version milestone for each product.
ModaCAD will prepare and deliver to Cendant within ** of signing this
Agreement a product overview and development budget regarding Project Paris.
Pursuant to the milestone schedule set forth in Appendix C , ModaCAD will
deliver a detailed product specification by **. If ModaCAD does not meet the
milestones set forth in Appendix C for the delivery of Project Paris, ModaCAD
shall be in material breach of this Agreement (without any cure period) and
Cendant shall be entitled to all remedies available to it under this Agreement
only as it relates to Project Paris (as outlined in Section 5).
2.2 Non-Compete. **.
2.3 **
2.4 **
2.5 Development of OEM Version and Alternative Channel Version. ModaCAD
shall, **, develop the OEM Versions and Alternative Channel Versions. Such
products will not vary from the applicable specifications set forth in Appendix
A and Appendix C without the mutual consent of Cendant and ModaCAD. Cendant
shall obtain and incorporate any required encryption technology in the
Alternative Channel Version to permit unlocking of the full Retail Version
within each Alternative Channel Version. The parties will work together to
ensure the appropriate design continuity among the Retail Version, OEM Version
and Alternative Channel Version.
2.6 Development Costs for Foreign Translations. If Cendant requests ModaCAD
to develop Foreign Translations, ModaCAD shall develop such Foreign Translations
as promptly as reasonably possible, Cendant shall ** and ModaCAD shall be
responsible for integrating these elements into the Products. The parties shall
mutually agree upon appropriate participation fee milestones and development
schedule. Cendant will pay participation fees to ModaCAD to **. Specific terms
related to participation fees, milestones, delivery schedules, etc. will be
negotiated upon Cendant's request for a foreign translation and added as an
amendment to this Agreement.
2.7 Third Party Software Technology and Content. ModaCAD will be
responsible for obtaining ** any and all third party rights and content
necessary in connection with Cendant's exercise of its rights under this
Agreement, unless otherwise agreed in writing by Cendant. Cendant will provide
reasonable assistance, as necessary, in connection with ModaCAD's acquisition of
such third party rights and content.
2.8 Ownership of Intellectual Property Rights. Ownership of the
Intellectual Property Rights in and to each element of each product developed by
ModaCAD under this Agreement, excluding the Cendant Content associated with each
such product, will vest in ModaCAD, subject to the terms and conditions of this
Agreement. Cendant shall own and retain all Intellectual Property Rights in and
to each element of the Cendant Content.
Cendant agrees not to copy or reverse engineer, decompile, disassemble or
otherwise derive or attempt to derive source code or other trade secrets or
proprietary information of ModaCAD from such tools and hardware. The tools and
hardware that ModaCAD provides to Cendant under this Agreement constitute trade
secrets and confidential information, and Cendant shall protect the same against
unauthorized dissemination, reproduction and use. Cendant shall not disclose to
third parties knowledge about ModaCAD's tools or hardware without prior written
consent from ModaCAD. Subject to the nonexclusive, nontransferable, limited
license granted to Cendant in this Agreement, ModaCAD retains ownership rights
to all of ModaCAD's tools and hardware and all associated Intellectual Property
Rights.
2.9 Trade Names and Other Related Materials. ModaCAD hereby grants to
Cendant a perpetual, worldwide, royalty-free right to use the title of Project
New York and Project Paris and, if applicable, to any other Retail Version
delivered hereunder (which license shall be exclusive to Cendant except for
ModaCAD's rights to use such title as set forth in Section 3.2), the names
"ModaCAD, Inc." and "ModaCAD" (and applicable logos)(which license shall be
nonexclusive to Cendant). Cendant may use Cendant's names and marks to promote
and identify the Products. Cendant shall at all times retain exclusive ownership
of all trademarks and trade names (other than the titles of Project New York and
Project Paris and, if applicable, any Add-On Product, and other than the names
"ModaCAD, Inc.", "ModaCAD", and "Moda" and related logos and third party owned
property) associated with any of the products. If ModaCAD does not (or does not
intend to) utilize the title of Project New York or Project Paris (or any Retail
Version then in distribution) in commerce within ** after the termination or
expiration of this Agreement, then Cendant's perpetual, worldwide, royalty-free,
exclusive license to the title of the products shall continue perpetually
thereafter provided, however, the Cendant will have no rights to the names
"ModaCAD, Inc.", "ModaCAD", and "Moda".
ModaCAD shall have the right to comment in advance on Cendant's proposed
use of ModaCAD's name (including "Moda") or any of ModaCAD's trademarks or
service marks on any marketing or promotional materials. Once ModaCAD has had an
opportunity to comment on a particular use, future similar uses shall not
require ModaCAD's prior comment, and Cendant shall immediately cease any
disapproved use of any ModaCAD name, trademark or servicemark upon notice to
Cendant by ModaCAD of such disapproval. Upon expiration or termination of this
Agreement for any reason whatever, subject ot Cendant's sell-off rights, Cendant
will cease all display, advertising and use of all of ModaCAD's names, marks,
logos and designations and will not thereafter use, advertise or display any
name, xxxx or logo which is, or any part of which is, similar to or confusing
with any such designation associated with ModaCAD or the Retail Versions,
subject only to the conditional post-termination limited right of use set forth
in the immediately preceding paragraph. Cendant acknowledges that Cendant is not
paying, and has not paid, separate consideration for the use of ModaCAD's
trademarks, service marks, logos, copyrights, trade names or designations, and
except as explicitly set forth in this Agreement nothing contained herein shall
give Cendant any interest in any of the same. Cendant shall not affix any
ModaCAD name, trademark, logo or trade name to any non-ModaCAD product, nor use
any ModaCAD name, trademark, logo or trade name in connection with any direct
marketing of any non-ModaCAD product (except as may be incidental in connection
with Cendant's cross marketing programs of its other products, both on
in-product materials and web site marketing.
Cendant and ModaCAD shall each own their respective materials including,
but not limited to package designs, logos, slogans, advertising materials and
promotional materials, and Cendant and ModaCAD shall not have or acquire any
rights thereto, except as specifically provided in this Agreement.
2.10 Packaging; Branding. Cendant will manufacture the Project New York and
Project Paris and, if applicable, other Retail Version packages for its use
(including the box, manuals, registration cards, license agreements and media).
Cendant will consult with ModaCAD about such designs and provide ModaCAD a
reasonable opportunity to comment on such designs. The final design and
manufacture of all packages for Project New York and Project Paris and, if
applicable, other Retail Version (after consultation with ModaCAD and as
required to maintain the product release dates) shall be under the sole
discretion and control of Cendant. Cendant shall ensure that any packaging,
manual or game copy of such products will include credit to ModaCAD using
ModaCAD branding **, with placement of such branding on the **, documentation,
physical product media and related promotional materials. ModaCAD shall ensure
that Sierra Home branding appears ** on all OEM Versions and Alternative Channel
Versions, on physical media, packaging and marketing and promotional material.
Each party shall have the right to review and approve each use of its branding.
The party using the other's branding will provide details on each such proposed
use to the other party and the other party shall have ** of receipt to comment
on such use. If the other party fails to provide comments, within such **
period, the other party shall be deemed to have approved such use. Once use of
its branding has been approved in a particular manner (e.g., use in a particular
marketing campaign), future uses of a substantially similar nature shall not
require additional approval from a party. The parties acknowledge and agree that
as co-developer of Project New York, Intel Corporation may also require some
form of brand presence on marketing materials, packaging and the like. ModaCAD
will manage all aspects of the Intel relationship concerning Intel branding and
approval rights, with reasonable assistance from Cendant as required.
2.11 Corrections; Updates. ModaCAD shall, **, and as promptly as reasonably
possible, correct all Errors of which Cendant notifies ModaCAD prior to or
within six months after the commercial release of the applicable product and
shall promptly furnish such corrections to Cendant. If ModaCAD makes any bug
fixes or minor updates to either Project New York or Project Paris or any other
Retail, OEM or Alternative Channel Versions,ModaCAD shall promptly make all such
corrections and/or updates available to Cendant, on such media as Cendant may
reasonably request.
2.12 Design and Milestone Schedule Changes. In the event Cendant wishes to
materially alter the design specification or Delivery Schedule for Project New
York or Project Paris (or any other Retail Version to be delivered hereunder),
Cendant shall give ModaCAD notice in writing of the changes required (the
"Change Request"). ModaCAD shall respond to a Change Request within seven (7)
days of receipt by a notice (the "Change Proposal") detailing in good faith the
impact of such changes on the milestone schedule and the costs of development if
the changes are implemented immediately. If the parties mutually agree on the
Change Proposal, then the Change Proposal will be incorporated into this
Agreement as an amendment.
Section 3. Manufacturing, Promotion and Distribution; E-Commerce
3.1 Cendant's Manufacturing, Promotion and Distribution Efforts. ModaCAD
appoints Cendant as a worldwide, nonexclusive (subject to Sections 2.2 and 2.3)
publisher under license (or sublicense, as the case may be) to use the ModaCAD
Technology and Core Technology, in object code form only, in order to do
everything necessary to aggressively manufacture, have manufactured, distribute,
market, promote, and sell Retail Versions under this Agreement. The release and
distribution of Retail Versions shall be subject to Cendant's final approval.
Subject to its marketing commitment on the Retail Versions of Project New York
and Project Paris described below, Cendant shall determine in its sole
discretion the nature and scope of any manufacturing, promotional and
distribution efforts undertaken by Cendant with respect to Project New York and
Project Paris and any other Retail Version.
Cendant will commit to a marketing budget concerning the Retail Version of
Project New York of no less than ** in order to stimulate broad end-user
distribution of the Retail Version. Cendant will outline proposed expenditures
for such marketing budget in Appendix E. Such marketing budget and commitment is
conditioned upon timely delivery of the Retail Version, such version to have
specifications as set forth in Appendix A and Appendix C. The foregoing
marketing commitment may be modified by Cendant based on ** the Retail Version
of Project New York. If Cendant materialy modifies its marketing budget for
Project New York, it will notify ModaCAD in writing of the same and the reasons
supporting the change. Cendant will make ** with respect to Project Paris
provided Project New York meets expectations and Project Paris is of similar
quality and supports similar sales forecasts.
Cendant shall manufacture, or have manufactured, the physical media
versions of the Retail Versions, the OEM Versions and the Alternative Channel
Versions. Cendant will provide product fulfillment services to ModaCAD with
respect to the OEM Versions and Alternative Channel Versions under its standard
order and fulfillment terms with reimbursement from ModaCAD due ** after invoice
for Cendant's **.
Cendant will arrange for a call center (which will be readily availble to
consumers of Project New York and Project Paris during each business day) to
manage the full Retail Version unlock feature expected in the Alternative
Channel Versions for the term of this Agreement.
3.2 ModaCAD's Promotion and Distribution Efforts. **.
3.3 Updated Content. **.
3.4 Websites; Internet; E-Commerce. **.
3.5 Electronic End User Registration; Cendant's Tools. ModaCAD will use the
Cendant provided electronic end user registration interface and technology in
Project New York and Project Paris and any other Retail Version delivered
hereunder. Sierra shall, provide to ModaCAD in an acceptable electronic format,
on a quarterly basis (within 45 days of the end of each quarter), all end user
registration information on Project New York and Project Paris and any other
Retail Version delivered hereunder. **. Upon ModaCAD's request, Cendant may, in
its sole discretion, provide ModaCAD other tools owned by Cendant free of charge
for the sole purpose of developing Project New York and Project Paris and any
other Retail Version to be developed hereunder. ModaCAD shall return all copies
of any tools and any hardware provided by Cendant upon Cendant's request
therefor, or in any event upon the earlier of completion of Project New York or
Project Paris and any other Retail Version to be developed hereunder or
termination of this Agreement, and ModaCAD agrees not to copy or reverse
engineer, decompile, disassemble or otherwise derive or attempt to derive source
code or other trade secrets or proprietary information of Cendant from such
tools and hardware. The tools and hardware that Cendant provides to ModaCAD
under this Section 3.5 constitute trade secret and confidential information, and
ModaCAD shall protect the same against unauthorized dissemination, reproduction
and use. ModaCAD shall not disclose to third parties knowledge about Cendant's
tools or hardware without prior written consent from Cendant. Subject to the
nonexclusive, nontransferable, limited license granted to ModaCAD in this
Section 3.5, Cendant retains ownership rights to all of Cendant's tools and
hardware and all associated Intellectual Property Rights.
3.6 ModaCAD Internal Use. Cendant shall provide, at ModaCAD's request, up
to one hundred (100) copies of each Retail Version at no charge for ModaCAD's
internal use. Cendant shall not owe ModaCAD royalties on copies of Retail
Versions provided to ModaCAD.
3.7 Technical Support and Customer Service . Cendant shall provide
front-line technical support to persons acquiring Retail Versions from or
through Cendant. Cendant may, in its discretion, charge for support on a
subscription or other basis. ModaCAD shall provide reasonable backup technical
support to Cendant's engineering personnel with respect to Retail Versions via
telephone, facsimile, e-mail and any other commercially reasonable means
requested by Cendant in order to enable Cendant to provide adequate front-line
technical support for Retail Versions.
Section 4. Compensation
4.1 Participation Fees. Cendant will make ** participation fee payments
(subject to Section 5.3) in accordance with the milestones set forth in the
Delivery Schedule for the Retail Versions of Project Paris and Project New York
as set forth in Appendix A and Appendix C, provided, that the payment for each
milestone on each Retail Version will be subject to Cendant's approval that each
such milestone has been satisfied. Payment will be made within ** of the
occurrence of the event requiring payment. Participation fees for any subsequent
Add-On and Sequel Products will be agreed upon at the time the Delivery Schedule
is negotiated for such Add-On and Sequel Products. In the event that Cendant
does not believe a milestone has been achieved on Project New York or Project
Paris or any other Retail Version to be delivered hereunder, Cendant will notify
ModaCAD of that fact within ** after ModaCAD has submitted the pertinent
deliverable, together with reasonably detailed comments specifying the basis for
the rejection. ModaCAD will then resubmit materials to Cendant within thirty
(30) days of the rejection notification. This procedure will continue until
Cendant is satisfied that the milestone has been achieved or until Cendant
terminates future development efforts of such product in the manner provided in
this Agreement.
4.2 Royalty Fee for Project New York and Project Paris. If ** for the
period from the receipt of the first Net Revenues for the applicable product and
ending ** (for Project New York) and ** (for Project Paris), then commencing
once Net Revenue for each such Retail Version (and any related Foreign
Translation) exceeds **, Cendant will pay ModaCAD a royalty on such Retail
Version (and any related Foreign Translation) at the rate of ** of Net Revenue
and once Net Revenue for such Retail Version exceeds ** then thereafter at a
rate of ** of Net Revenue. If the Retail Version gold master is not ready for
duplication for commercial shipment by ** (for Project New York) or ** (for
Project Paris), the ** and ** royalty rates set forth in the preceeding sentence
of this Section 4.2 for such Retail Version shall be reduced to ** and **,
respectively and the ** break point shall be increased to **. If Net Revenues
are ** or greater for the period from the receipt of the first Net Revenues for
the applicable product and ending ** (for Project New York) and ** (for Project
Paris), then commencing from the first dollar of Net Revenue for each such
Retail Version (and any related Foreign Translation), Cendant will pay ModaCAD a
royalty on such Retail Version (and any related Foreign Translation) at the rate
of ** of Net Revenue (with such payment for the time period ending **, due and
payable along with the royalty report for such quarter) and once Net Revenue for
such Retail Version exceeds ** then thereafter at a rate of ** of Net Revenue.
If the Retail Version gold master is not ready for duplication for commercial
shipment by ** (for Project New York) or ** (for Project Paris), the ** and **
royalty rates set forth in the preceeding sentence of this Section 4.2 for such
Retail Version shall be reduced to ** and **, respectively and the ** break
point shall be increased to **. For the first twelve (12) months after first
commercial shipment, the minimum per unit royalty for distribution of units, net
of returns, of such Retail Version (and any related Foreign Translation) shall
be ** per unit. If such minimum per unit royalty applies during a time period
before the maximum percentage royalty rate applies with respect to a product,
payment to ModaCAD of ** of such minimum per unit royalty will be dependent on
whether Net Revenues are at that time subject to an actual royalty payment to
ModaCAD of either **.
4.3 OEM and Alternative Channel Revenues . Cendant will pay ** of Cendant
generated OEM Revenues to ModaCAD on the payment terms described in Section 4.6.
Cendant will pay to ModaCAD ** of Alternative Channel Revenues and Cendant shall
be entitled to have and retain ** of Alternative Channel Revenues. Cendant will
be responsible for the collection of OEM and Alternative Channel Revenues. The
minimum per unit royalty to Cendant for unlock of units, net of returns, of the
Alternative Channel Version(s) (and any related Foreign Translation) shall be **
per unit. ModaCAD shall pay to Cendant, on the same terms and conditions under
which Cendant makes payments to ModaCAD hereunder, ** of all ModaCAD generated
OEM Revenues.
4.4 Royalty Fee for Sequels and Future Add-On Products. As part of the
negotiations required under Section 2.3 and 2.4, the parties shall negotiate in
good faith and mutually agree upon appropriate royalty rates for Sequel
Products. Add-On Products shall bear the ** as the Retail Version to which such
Add-On Product relates.
4.5 Promotional Copies. Notwithstanding any other provision of this
Agreement, no royalties shall be payable with respect to copies of any products
distributed by Cendant without charge for demonstration, promotional or other
purposes.
4.6 Payment. Within forty-five (45) days following the end of each of
Cendant's fiscal quarters during the term of this Agreement, and for each
royalty payment of more than ** on each product, Cendant will submit to ModaCAD
reports specifying the Net Revenue and the OEM Revenue occurring during the
previous quarter for each product, along with the royalties payable pursuant to
the terms of this Agreement for such quarter. Cendant may adjust any future
royalty payment on any product for any past overpayments that may have occurred
and/or any adjustments to the Net Revenue or OEM Revenue calculation. Each party
shall have the right to offset any amounts owing to the other party hereunder
any past due amounts the other party owes hereunder.
Notwithstanding any other provision of this Agreement, in the event of any
breach or default of this Agreement by ModaCAD, Cendant shall have no obligation
to remit any royalties otherwise earned by ModaCAD pursuant to this Section 4 on
any product, except to the extent that the aggregate amount of royalties
otherwise earned by ModaCAD under this Agreement for all products exceeds the
aggregate royalty advances paid or deemed paid pursuant to this Section 4 or the
Delivery Schedule for such products.
4.7 Records; Inspection. Upon at least fifteen (15) days' advance written
notice to Cendant by ModaCAD, and not more than once in any ** (or as often as
every six (6) months after any such audit has revealed a material discrepancy in
royalties), ModaCAD may have an independent accounting firm gain access during
Cendant's normal business hours to all relevant accounting records in order to
verify the accuracy of Cendant's royalty computations. ModaCAD's right to
inspect Cendant's records is limited to the most recent past ** from the date of
the written notice. Cendant's right to adjust royalty payments made pursuant to
this Section 4 is also limited to the most recent **. Such information is
confidential and proprietary to Cendant and shall not be disclosed or used by
such accounting firm or ModaCAD, except as required for verification. Cendant
shall promptly pay to ModaCAD any underpayment of royalty fees made to ModaCAD
under this Agreement. ModaCAD shall promptly refund to Cendant any overpayment
of royalty fees made to ModaCAD under this Agreement. All expenses incurred in
connection with any such audit shall be borne by ModaCAD; provided, that in the
event any audit discloses an underpayment by Cendant of more than ** with
respect to the royalty fees payable in any quarter, Cendant shall reimburse
ModaCAD for any costs associated with such audit.
4.8 Full Compensation. Payment of the amounts specified in this Section 4
shall constitute full compensation to ModaCAD for the rights granted,
transferred and assigned to Cendant herein and performance of its obligations
hereunder. Cendant may withhold and apply any royalty or other amounts owing to
ModaCAD under this Agreement against any refund or other amounts owing by
ModaCAD to Cendant under this Agreement or otherwise (including, without
limitation, any damages, costs or expenses incurred by Cendant on account of any
breach of ModaCAD's representations, warranties or obligations set forth in this
Agreement).
Section 5. Term
5.1 Term. Subject to termination as provided below, the term of this
Agreement shall be ** from first commercial shipment of the Retail Version.
5.2 Termination by ModaCAD. If Cendant materially defaults in the
performance of any of its obligations under this Agreement and the default is
not cured within ** after ModaCAD gives Cendant written notice of the default,
ModaCAD may immediately terminate this Agreement. A reasonable dispute over
calculation of royalties, as opposed to material failure to account for
royalties, is not considered a breach of the Agreement.
5.3 Termination by Cendant. If ModaCAD defaults in the performance of any
of its material obligations under this Agreement and the default is not cured
within ** after Cendant gives ModaCAD written notice of the default, Cendant may
immediately terminate this Agreement and maintain an action to recover its
damages from such breach. In the event that Cendant terminates this Agreement
during the development of Project New York, Cendant will **. In the event that
Cendant has the right to terminate this Agreement during the development of
Project Paris, Cendant will have the right to cancel only Project Paris **, but
shall continue this Agreement in full force and effect with respect to Project
New York and other Retail Version(s). In the event that ModaCAD obtains a
replacement publisher for either of the aforementioned products that is
cancelled under this Section, ModaCAD shall pay ** of its net revenues generated
from either Project New York or Project Paris, as the case may be, but in no
event shall it **. Upon termination or expiration of this Agreement for any
reason, Cendant shall have the nonexclusive right to sell-off its remaining
unsold inventory for six (6) months thereafter subject to Cendant's obligations
with respect to royalties payable on such sales.
5.4 Survival. Sections 2.8, 4.7, 5, 6 and 7 (together with all other
provisions of this Agreement which may reasonably be interpreted or construed as
surviving termination of this Agreement, including any obligations to pay
royalties as specifically provided herein) shall survive termination of this
Agreement.
Section 6. Representations; Indemnification; Limitation of Liability
6.1 Representations and Warranties by ModaCAD. ModaCAD represents and
warrants to Cendant that: (i) ModaCAD has all right, power and authority
necessary to perform its obligations under this Agreement; (ii) ModaCAD has the
right to grant the rights, sublicenses and licenses granted to Cendant under
this Agreement; (iii) the ModaCAD Technology and any other portions of any
products developed or licensed to Cendant by, through or under ModaCAD do not
and will not infringe any Intellectual Property Rights or other proprietary
right of any third party; (iv) all products developed by ModaCAD under this
Agreement will perform substantially in accordance with Appendix A and Appendix
C (or such other specifications delivered pursuant thereto) and do not contain
any viruses or other harmful code; (v) the medium on which Project New York and
Project Paris are furnished to Cendant will be free from defects in materials
and workmanship; (vi) ModaCAD has not previously and will not grant to any third
party any rights in any products that are inconsistent with or otherwise
conflict with the rights granted to Cendant in this Agreement; (vii) all
products developed by ModaCAD under this Agreement will be created by employees
of ModaCAD within the scope of their employment and under obligation to assign
inventions to ModaCAD, or by independent contractors under written obligations
to assign all rights in the same to ModaCAD except for third party licenses of
components of the same; (viii) the name and trademarks of Project New York and
Project Paris (and, if applicable, any Add-On Products, Foreign Translations and
Sequel Products) and the names "ModaCAD, Inc." and "ModaCAD" (and associated
logos), and use thereof by Cendant as permitted under this Agreement do not and
will not infringe any Intellectual Property Rights or other proprietary rights
of any third party; (ix) ModaCAD will comply with all applicable laws,
regulations, ordinances and statutes in performance of its obligations
hereunder; (x) this Agreement has been duly authorized, executed and delivered
by ModaCAD and constitutes a valid, binding and enforceable agreement of
ModaCAD; and (xi) ModaCAD shall have made or shall make any and all payments
required to be made to all authors, licensors, participants in the production of
the content, works, performances or computer software embodied in all products
developed by ModaCAD under this Agreement or other persons having legal or
contractual rights of any kind to participate in any income arising in respect
of the exploitation of such content, works or performances or the use of such
computer software.
6.2 Representations and Warranties by Cendant. Cendant represents and
warrants to ModaCAD that (i) this Agreement has been duly authorized, executed
and delivered by Cendant and constitutes a valid, binding and enforceable
agreement of Cendant; (ii) the name and trademarks within Cendant's content and
use thereof by ModaCAD as permitted under this Agreement do not and will not
infringe any Intellectual Property Rights or other proprietary rights of any
third party.
6.3 Indemnity. ModaCAD shall indemnify, defend and hold Cendant harmless
from and against any and all claims, costs, losses, liabilities, judgments and
expenses (including reasonable attorneys' fees) resulting from or attributable
to actual or alleged violation of any representations or warranties set forth in
Section 6.1. Without limiting ModaCAD's obligations under the preceding
sentence, in the event that Cendant's ability to rightfully use and exploit any
of the Products as permitted hereunder may be eliminated or impaired as a result
of any actual or alleged breach of ModaCAD's representation and warranty set
forth in Section 6.1(iii), ModaCAD will, at its sole expense, do one of the
following: (a) procure for Cendant the right to continue to use the infringing
items; (b) replace the infringing items with non-infringing items of
substantially the same functionality; or (c) modify the infringing items so as
to not infringe any Intellectual Property Rights of any third party while
retaining substantially the same functionality. Cendant shall indemnify, defend
and hold ModaCAD harmless from and against any and all claims, losses,
liabilities, judgments and expenses (including reasonable attorneys' fees)
resulting from or attributable to actual or alleged violation of any
representations or warranties set forth in paragraph 6.2. The party seeking
indemnification shall promptly notify the indemnifying party to control the
defense and settlement of any claim for which it seeks indemnification under
this Section 6.3, and shall provide reasonable cooperation to the indemnifying
party, at the indemnifying party's sole expense, in the defense or settlement
thereof. The indemnifying party shall control the defense and settlement of any
such claim; provided, that the indemnifying party shall in no event agree or
acquiesce without the prior written consent of the party seeking
indemnification, to be given or withheld in its sole discretion, to any judgment
or settlement involving any acknowledgment, admission or stipulation of any
guilt, fault, wrongdoing or liability on the part of the party seeking
indemnification.
6.4 Exclusion of Implied Warranties. To the extent permitted by applicable
law, Cendant shall not, and Cendant shall ensure that no subdistributor or
dealer of Cendant shall, make or pass on any warranty, guarantee or
representation, whether written or oral, regarding or concerning the Retail
Versions or otherwise on ModaCAD's behalf, except in strict accord xwith the
provisions of this Agreement.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE LIMITED WARRANTY SET FORTH
IN OR IN CONNECTION WITH THE RESPECTIVE RETAIL VERSIONS IS THE ONLY WARRANTY,
EITHER EXPRESS, IMPLIED OR STATUTORY, THAT MODACAD MAKES TO ANY END USER WITH
RESPECT TO ANY PRODUCT DISTRIBUTED BY CENDANT, AND ALL IMPLIED WARRANTIES TO ANY
END USER, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY EXCLUDED.
6.5 Consequential Damages. EXCEPT AS PROVIDED IN SECTION 6.3 ABOVE NEITHER
ModaCAD NOR CENDANT SHALL BE LIABLE TO THE OTHER FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT,
INCLUDING LOSS OF REVENUE OR PROFIT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
Section 7. Miscellaneous
7.1 Conduct of Business. Each party shall conduct its business with respect
to the Products and the manufacture, promotion, distribution and support thereof
in a manner as to reflect favorably upon the reputation of the other party and
to not injure the goodwill of the other party.
7.2 Notices. All notices, demands, requests and other communications shall
be in writing or by written telecommunication, and shall be given when delivered
personally to the addressee or if mailed by certified mail, return receipt
requested, postage prepaid, or sent by written telecommunication, when delivered
to the addresses specified below. Either party may from time to time change its
address, facsimile number or designated individual by notice to the other party.
The addresses for notices are as set forth below:
To "Cendant": Sierra On-Line, Inc.
0000 - 000xx Xxxxx X.X., Xxxxx 000
Xxxxxxxx, XX 00000
Attn: General Counsel
Phone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy at the same address attention: Xxx Xxxxxxx
To "ModaCAD": ModaCAD, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxxxx Xxxxxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
7.3 Successors. ModaCAD shall not assign this Agreement or any of its
rights hereunder, or delegate any of its obligations hereunder (whether
voluntarily, involuntarily, by operation of law or otherwise), to any third
party without Cendant's prior written consent which will not be unreasonably
withheld. Cendant shall not have the right to assign this Agreement to any third
party without ModaCAD's prior written consent which will not be unreasonably
withheld. Subject to the foregoing, this Agreement will be fully binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.
7.4 Force Majeure. Neither party shall be liable for or in breach of this
Agreement on account of any delay or failure to perform as required under this
Agreement as a result of any cause, condition or circumstance beyond such
party's reasonable control, provided that such party takes all reasonable
measures to mitigate any delay or harm to the other party resulting from such
cause, condition or circumstance. This section shall not apply to required
delivery dates and milestones under this Agreement.
7.5 Attorneys' Fees. In the event of any legal, arbitral or similar action
to enforce this Agreement, the party that prevails in such action will be
entitled, in addition to any other relief granted, to recover from the other
party the costs and expenses of such enforcement, including, without limitation,
reasonable attorneys' fees and the fees and expenses of expert witnesses.
7.6 Entire Understanding. The terms set forth in this Agreement, Appendix
A-Eand other written specifications describing any of the Products signed by
both parties constitute the entire agreement of the parties with respect to the
subject matter and supersede and cancel all prior and contemporaneous
understandings and oral agreements.
7.7 Waiver. A waiver by either party of any term or condition of this
Agreement in any instance will not be deemed or construed as a waiver of such
term or condition for the future, or any subsequent breach thereof.
7.8 Applicable Law; Forum. This Agreement shall be interpreted, construed
and enforced in accordance with the laws of the State of California, without
reference to its choice of law rules. The provisions of the 1980 U.N. Convention
on Contracts for the International Sale of Goods shall not apply.
7.9 Nondisclosure; Press Releases. Except as may be required by law,
neither party shall issue, or permit to be issued, any press release or
otherwise make any public statement or disclosure to any third party regarding
the financial or other confidential and/or competitively sensitive terms of this
Agreement without the prior written consent of the other party. ModaCAD shall
provide to Cendant for its prior review and comment any confidential treatment
request considering this Agreement to be filed with the Securities and Exchange
Commission or other third party (such as the NASDQ). ModaCAD may provide, upon
prior notice to Cendant of its intention to do so, periodic press releases
regarding the progress and/or success of the Retail Version. Cendant will have
two (2) business days to respond to any such requests concerning periodic press
releases, but shall only have approval rights over the portions of such release
that refer to Cendant or its publication of the Product. A joint press release
disclosing the publishing relationship between ModaCAD and Cendant is attached
to this Agreement as Appendix F. ModaCAD and Cendant agree to disclose this
announcement upon execution of this Agreement.
7.10 Compliance With Law. Cendant shall comply with all applicable laws and
regulations in performing its duties hereunder and in any of its dealings with
respect to the Retail Versions, and shall take reasonable steps to ensure that
each of its subdistributors and dealers, if any, comply with all laws and
regulations in any of its dealings with respect to the Retail Versions and
ModaCAD's Intellectual Property.
IN WITNESS WHEREOF, the parties have entered into and signed this Agreement
as of the date and year first above written.
"Cendant:" "ModaCAD:"
Cendant Software Corporation ModaCAD, Inc.
By By
------------------------------ ---------------------------------
Its Its
------------------------------ --------------------------------
Date Date
------------------------------ --------------------------------
Appendix A
Project New York Retail Version Description: Project New York is designed for
and will perform on the following minimum machine specifications:
---------------------------- ---------------------------------
Working Title Project New York
---------------------------- ---------------------------------
---------------------------- ---------------------------------
Target Computer Minimum system requirements: **
---------------------------- ---------------------------------
---------------------------- ---------------------------------
Operating System **
---------------------------- ---------------------------------
---------------------------- ---------------------------------
RAM Requirements ** minimum
** Recommended
---------------------------- ---------------------------------
---------------------------- ---------------------------------
Modem ** for Internet features
---------------------------- ---------------------------------
---------------------------- ---------------------------------
Media CD-ROM/**
---------------------------- ---------------------------------
---------------------------- ---------------------------------
Video HW Support Minimum: **
---------------------------- ---------------------------------
---------------------------- ---------------------------------
Add. HW Support Optional: **
---------------------------- ---------------------------------
---------------------------- ---------------------------------
Required Gold Date **
---------------------------- ---------------------------------
Core Features
Project New York is a consumer software title delivered on CD-ROM. Project New
York is comprised of a suite of components based on ModaCAD Core Technology,
which components are:
1. **. Project New York features an interactive ** which is ** and
wherein the user ** that they are interested **. The ** is comprised
of **, with each ** having a **. There will be a mechanism for the
user to ** of interest from the **, such as double-clicking the **.
When the user **, the ** will be replaced by the **. In the **, the
user can ** and **.
2. **. The ** enables the user to ** that they have selected from the **.
The ** fits and displays ** according to a set of rules that governs
the behavior and relationships of the **. An example is **.
3. **. Project New York will have ** provided by ** that caters to
Project New York's intended demographic regarding **. ** will contain
a minimum of ** as well as ** which includes ** from a minimum of **
who don't fit into **. ** also included in this section will include
at least **. At least ** will be posted ** to **.
4. **. The user may wish to bypass the ** and ** and ** based on **. The
** provides this functionality.
5. **. ** will be incorporated in Project New York to ensure that the
user has access to **. ModaCAD has established a ** and infrastructure
for Project New York which ensures ** as maintained by ModaCAD on its
** and the ** on the **.
6. **. Project New York will have technology that enables ** Project New
York users to ** while ** is **.
7. **. Project New York will have an **, which will include **, and other
** related to fashion. Content will include:
Several current **, at least ** current.
** from some of the **.
** that users can send in **.
Approximately ** updated **.
**.
**.
At least ** with an interesting ** updated **.
8. **. Project New York will target a minimum of ** at product launch.
There will be a minimum of ** in Project New York at product launch.
The user's ability to access all of the ** shall not be restricted.
Project New York Retail Version Delivery Schedule:
Date due: **, Cendant pays ** to ModaCAD.
Milestone Description: **.
Delivery of Alpha Version
Date due: **
Cendant pays ** to ModaCAD upon acceptance of this milestone.
Milestone Description: **.
Beta Version
Date due: **
Cendant pays ** to ModaCAD upon acceptance of this milestone.
Milestone Description: **.
Golden Master, U.S.
Date due: **
Cendant pays ** to ModaCAD upon acceptance of this milestone (subject to
Section 2.1).
Milestone Description: A stable build of the product with no serious or fatal
bugs as determined by Cendant's quality assurance.
Project New York OEM Version Specification and Description: This product has the
same PC functionality as the Retail Version with these exceptions:
The OEM Version will ** that is included to ** of ** or **.
There will be no ** for **.
The OEM Version can be ** if the user **, at which time Cendant will
** to the customer.
Project New York Alternative Channel Version Specifications and Description:
This product has the same PC functionality as the Retail Version with these
exceptions:
The Alternative Channel Version will be distributed **, and will be
distributed with **. Access to the ** will be limited ** as described
below.
The Alternative Channel Version will limit ** that is accessible to the
user to ** of the ** or **. The remaining ** will be **.
There will be ** of the Alternative Channel Version, the ** being ** to the
user.
If a particular Alternative Channel Version is **, then that particular
version will include ** for ** only.
The Alternative Channel Version can be ** by **, **. **.
Appendix B
Cendant's OEM Vendor Solicitation List
ModaCAD will grant to Cendant the exclusive right to pursue the following
OEM Vendors for a period of ** from the date of execution of this Agreement
afterwhich Cendant will have the nonexclusive right to continue to pursue the
following OEM Vendors and ModaCAD will have the right to enlist the efforts of
third parties to solicit OEM Vendor relationships for distribution of Project
New York.
**
Appendix C
Project Paris Description
Project Paris Retail Version Description: Project Paris is designed for and will
perform on the following minimum machine specification:
---------------------------- ---------------------------------------
Working Title Project Paris
---------------------------- ---------------------------------------
---------------------------- ---------------------------------------
Target Computer Minimum system requirements: **
---------------------------- ---------------------------------------
---------------------------- ---------------------------------------
Operating System **
---------------------------- ---------------------------------------
---------------------------- ---------------------------------------
RAM Requirements ** Minimum
** Recommended
---------------------------- ---------------------------------------
---------------------------- ---------------------------------------
Media **
---------------------------- ---------------------------------------
---------------------------- ---------------------------------------
Video HW Support Minimum: **
---------------------------- ---------------------------------------
---------------------------- ---------------------------------------
Add. HW Support To Be Determined
---------------------------- ---------------------------------------
---------------------------- ---------------------------------------
Required Gold Date **
---------------------------- ---------------------------------------
Core Features
Project Paris is a consumer software title delivered on **. Project Paris is a
**, and is intended to **. Project Paris will be comprised of a suite of
components based on ModaCAD Core Technology, which components are:
1. **. Project Paris will feature an ** wherein ** are displayed for
selection.
2. **. The ** will enable the user to ** to an ** of their own or other
person's **. The ** will apply the ** to the ** according to a set of
rules to be determined, but which are expected to encompass ** in the
application of **.
3. **. Project New York will have a ** regarding appropriate ** for
particular **.
4. **. Project Paris will have a ** to ** contained in Project Paris,
based upon user parameters.
5. **. ** will be incorporated in Project Paris in order to ** to the
user **.
6. **. Project Paris will have technology that ** while ** the program.
7. **. Project Paris will target a ** at **. There will be sufficient
quantity of **.
Project Paris Retail Version Delivery Schedule
Delivery of Mutually Acceptable Product Specification
Date due: **
Cendant pays ** to ModaCAD upon acceptance of this milestone
Milestone Description: Detailed product specification complete with proposed
user interface and sketches. **.
Delivery of Mutually Acceptable Proof of Technology
Date due: **
Cendant pays ** to ModaCAD upon acceptance of this milestone
Milestone Description: Demonstration of functional **
Delivery of Alpha Version
Date due: **
Cendant pays ** to ModaCAD upon acceptance of this milestone.
Milestone Description: **.
Beta Version
Date due: **
Cendant pays ** to ModaCAD upon acceptance of this milestone.
Milestone Description: **.
Golden Master, U.S.
Date due: **
Cendant pays ** to ModaCAD upon acceptance of this milestone
(subject to Section 2.1).
Milestone Description: A stable build of the product with no serious or fatal
bugs as determined by Cendant's quality assurance.
Project Paris OEM Version Specification and Description: This product has the
same PC functionality as the Retail Version with these exceptions:
The OEM Version will ** that is included to ** or **.
There will be no **.
The OEM Version ** if **, at which time Cendant will **.
Project Paris Alternative Channel Version Specifications and Description: This
product has the same PC functionality as the Retail Version with these
exceptions:
The Alternative Channel Version will be distributed **, and will be
distributed with the **. Access to ** will be ** as described below.
The Alternative Channel Version will ** to ** of ** or **. The remaining
content will be **.
There will be ** of the Alternative Channel Version, the ** being the ** to
the user.
If a particular Alternative Channel Version is **, then that particular
version will include ** only.
The Alternative Channel Version ** to the Retail Version by ** on the product
**. Should the user desire **, they contact Cendant, **, at which time Cendant
**.
Appendix D
Product Websites
**
Appendix E
Marketing Budget Outline
Cendant will commit to allocating a minimum of ** of its present ** marketing
budget for Project New York to discretionary spending, with no more than ** of
the budget allocated to salaries, wages, bonuses, and employee benefits.
Discretionary spending includes package design, production and film,
advertising design, production, and film, point-of-sale materials,
merchandising dollars, media, promotion, and other items that directly impact
Project New York or the marketing and selling of Project New York.
Non-discretionary spending includes such items as salaries, wages, employee
benefits, travel, office supplies, facilities charges and other items that
affect the overall ability to execute the marketing and sales plans.
Appendix F
Press Release
MODACAD AND CENDANT SOFTWARE ANNOUNCE STRATEGIC PARTNERSHIP TO PUBLISH
E-COMMERCE FASHION LIFESTYLE PRODUCTS
Sierra Home to Provide Retail Distribution For
E-Commerce Fashion Solutions and Product Fulfillment Services
LOS ANGELES, CALIFORNIA, June 18, 1998...ModaCAD, Inc. (NASDAQ NMS: MODA)
today announced it has entered into an agreement with Cendant Software
Corporation, a subsdiary of Cendant Corporation, to publish retail-based fashion
software. This innovative software is based upon ModaCAD's previously announced
e-commerce fashion solution, which is being co-developed with Intel Corporation.
The Sierra Home division of Sierra On-Line, Inc. -- a Cendant subsidiary -- will
manage the publication and distribution of these software titles. Additionally,
Sierra Home has agreed to act as ModaCAD's product fulfillment partner for
alternative distribution channels. Specific program functionality, alternative
distribution details and complete pricing information have not been disclosed.
ModaCAD and Sierra Home have agreed to jointly publish a 3D interactive
e-commerce shopping program. Through the use of advanced Internet push
technology, multimedia enhancements and peer-to-peer communication capabilities,
fashion lifestyle titles are designed to deliver a rich personalized shopping
experience. The first fashion lifestyle solution that Sierra Home will
distribute is focused on young female consumers between the ages of 15 - 28.
Xxxxx Xxxxxxxx, ModaCAD's chief executive officer said, "We are thrilled to
be announcing this relationship with Sierra Home. This partnership has strategic
implications that will add significant value to both companies for years to
come. This agreement with Cendant, as well as our relationship with Sierra Home,
signifies a major step towards our goal of developing a complete product line of
e-commerce fashion titles as well as other applications that are intended to
service the broader e-commerce market."
According to Xxx Xxxxxxx, Sierra Home's vice president and general manager,
"ModaCAD and Sierra Home share synergistic goals in introducing visually
compelling software not only into traditional retail channels, but also into
emerging Internet-based channels specifically related to e-commerce. We are
strongly dedicated to expanding our presence within the e-commerce marketplace
and based upon ModaCAD's unique visualization technology, we are confident that
our consumers will greatly benefit from this alliance."
As ModaCAD's product fulfillment arm, Sierra Home will be responsible for
distribution to all users of the fashion software. Sierra will also assume the
responsibilities of technical support and customer service. Xxxxxxxx Xxxxxxxxx,
president and chief operating officer of ModaCAD went on to say, "The Sierra
brand symbolizes quality and years of expertise in developing and distributing
home productivity software. This endorsement will be extremely valuable as we
prepare to release our first fashion program this year. Sierra has one of the
best reputations in providing product fulfillment, technical support and
customer service to consumers which are essential ingredients to ensuring
customer satisfaction. We could not have picked a better partner for this
initiative."
Sierra On-Line(R), Inc is part of Cendant Software, one of the largest PC
consumer software groups in the world, and a leader in entertainment and
educational software. Cendant Software consolidates the sales, manufacturing,
finance, accounting and management of Cendant Corporation's software divisions,
including Sierra On-Line(R) Inc., Knowledge Adventure(R), Davidson & Associates,
Inc. and Blizzard Entertainment(R). Cendant Corporation is the result of the
December 1997 merger between CUC International and HFS Incorporated, creating a
business and consumer services company focused on real estate, travel and
membership.
ModaCAD is rapidly becoming a premier developer and supplier of digital
content management technology enabling advanced product visualization for
electronic commerce. For the past 10 years it has leveraged its core, patented
rendering technology into a variety of electronic merchandising products
primarily targeted at the home design, home furnishings, apparel and industrial
design industries.
# # #
This press release contains forward-looking statements including statements
regarding the timing and composition of revenues, future operating results and
the timing of product introductions, among others. Except for historical
information, the matters discussed in this report are forward-looking statements
that are subject to certain risks and uncertainties that could cause the actual
results to differ materially from those projected. Factors that could cause
actual results to differ materially include the following: (i) the timely
completion of the development of the Company's software products, including
ModaCAD's e-commerce and consumer software and enhanced or updated versions of
the Company's electronic merchandising and CAD software products; (ii)
unforeseen technical or other obstacles in the development or production of such
software; (iii) acceptance of ModaCAD's e-commerce and consumer software by the
publisher/distributors of such software and the release and marketing plans of
the publisher/distributor; (iv) customer acceptance of ModaCAD's e-commerce and
consumer software products and updated or revised versions of the Company's
electronic merchandising and CAD software products; (v) the Company and its
publisher/distributor's ability to produce its products on a cost-effective and
timely basis; and (vi) factors not directly related to the Company, such as
competitive pressures on pricing, market conditions in general, competition,
technological progression, product obsolescence and the changing needs of
potential customers as well as the software, textile, apparel, home furnishings
and home design industries in general.
