EXHIBIT 10.74
SOFTWARE DISTRIBUTION AGREEMENT
THIS AGREEMENT is by and between MegaSystems, LP (hereinafter
"MEGASYSTEMS") with principle offices at 0000-X Xxxxxxxxx Xxxxxxx, Xxxxxx
Xxxxxxx, 00000, XXX and Heartsoft, Inc. (hereinafter "HEARTSOFT"), with
principal offices at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxx Xxxxx, XX 00000 XXX.
WITNESSETH:
WHEREAS, HEARTSOFT has created, owns, and produces certain computer
programs in the form of program packages for use on computer systems and is the
owner of documentation, and related information, including the intellectual
property rights pertaining thereto; and
WHEREAS, MEGASYSTEMS has successfully established a network and process
for the distribution of computer software through a variety of retail channels;
and
WHEREAS, HEARTSOFT desires to distribute its computer software products
through the retail distribution network established by MEGASYSTEMS; and
WHEREAS, Both parties believe that the relationship established herein
will be to their mutual advantage;
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. SERVICES. During the term of this Agreement, MEGASYSTEMS agrees to act
as the sales agent for HEARTSOFT for all retail distribution of the HEARTSOFT
INTERNET SAFARI-TM- (hereinafter "Safari") software product. In its role as
sales agent, MEGASYSTEMS shall actively promote Safari to its retail
representatives, retail distributors and retail companies. It is explicitly
acknowledged by both parties that MEGASYSTEMS shall not act as the sales agent
for Safari within the educational or curriculum marketplaces.
2. TERM. This Agreement shall be for a term of one (1) year, commencing on
July 15, 2001 and ending on July 14, 2002, unless sooner terminated in
accordance with the provisions of this Agreement. Provided that neither
MEGASYSTEMS nor HEARTSOFT has delivered notice to the contrary within thirty
(30) days of the expiration date, this Agreement shall be extended automatically
at the end of the expiration date above for a period of six (6) months under the
same terms and conditions as herein stated. Thereafter, this Agreement shall be
automatically extended for successive six (6) month periods if neither
MEGASYSTEMS nor HEARTSOFT provides termination notice to the other within thirty
(30) days of each applicable extension period.
3. DUTIES OF MEGASYSTEMS. MEGASYSTEMS shall use its best efforts to
promote distribution of Safari throughout its retail distribution channels.
MEGASYSTEMS will act as the
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primary point of contact with its network of retailers, distributors,
representatives and agents (the "retail distribution network"). This would
include (but not be limited to) such activities as:
a) Distribution of samples and sales literature
b) Basic product education
c) Coordination of special sales promotions (all jointly approved with
HEARTSOFT)
d) Accumulation and distribution of sales figures, whenever available
e) Obtaining approval from HEARTSOFT for any "other expenses" (noted in
Section 8 of Agreement) prior to incurring such expenses, examples
being rebate programs, marketing development funds, and promotional
items.
3.1 MEGASYSTEMS shall accept primary responsibility for the processing
of orders received from its retail distribution network. MEGASYSTEMS
agrees that all orders for Safari are subject to acceptance or
rejection by HEARTSOFT. Accordingly, MEGASYSTEMS is hereby granted
only the authority to solicit orders for Safari, and has neither
expressed or implied authority to accept any order on behalf of
HEARTSOFT, or to enter into any written or oral contract or
agreement of any nature on behalf of HEARTSOFT, unless so authorized
in writing by HEARTSOFT.
3.2 MEGASYSTEMS shall also have lead responsibility for generating
invoices to and coordinating payment from the retail distribution
network. MEGASYSTEMS will also coordinate and process product
returns, although any shipping expense for returned product shall be
the responsibility of HEARTSOFT. The goal of these activities is to
provide, whenever practical, a single point-of-contact for the
retail distribution network. MEGASYSTEMS agrees that any product in
resalable condition will be returned to HEARTSOFT and that when
Safari boxes are damaged that the media in the damaged boxes will be
removed and returned to HEARTSOFT.
4. DUTIES OF HEARTSOFT. HEARTSOFT shall be responsible for all
development, manufacturing and packaging of Safari. HEARTSOFT shall also be
responsible for all customer support. This support shall include the
operation of a toll-free customer support telephone line during published
times.
4.1 HEARTSOFT shall be responsible for generating invoices to
MEGASYSTEMS.
4.2 HEARTSOFT shall have the primary responsibility to develop applicable
sales literature. MEGASYSTEMS shall assist in the development of such
sales literature by supplying HEARTSOFT with samples of other sales
literature, and by coordinating input to the sales literature from
the retail distribution network.
4.3 As the manufacturer of Safari, HEARTSOFT recognizes and accepts the
fact that it may, from time to time, be called upon by MEGASYSTEMS to
assist MEGASYSTEMS in the execution of its duties. HEARTSOFT agrees
to assist MEGASYSTEMS on a reasonable basis.
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5. SHIPPING. Unless other arrangements are made beforehand, all orders
for Safari shall be shipped directly from HEARTSOFT's location. HEARTSOFT
shall be responsible for all shipping expense for Safari.
6. LICENSE. It is mutually acknowledged that it will be necessary to
co-brand the MEGASYSTEMS name onto the Safari packaging to facilitate product
distribution through the retail distribution network. MEGASYSTEMS agrees to
license HEARTSOFT to add the MEGASYSTEMS name and logo onto the Safari
packaging. HEARTSOFT accepts this license and agrees to add the MEGASYSTEMS name
and logo to any Safari product delivered to the retail distribution network.
7. COMMISSIONS. HEARTSOFT agrees to pay to MEGASYSTEMS a commission
equal to ___ percent ( %) per copy on list price of all net sales of Safari
within the retail distribution network as payment for services rendered by
MEGASYSTEMS under this agreement. Net Sales shall be defined for purposes of
this paragraph as Total Sales of Safari, less any returns.
8. PAYMENTS. Within ten (10) business days following the receipt of
payment of one or more Safari invoices, MEGASYSTEMS shall remit to HEARTSOFT the
gross payment for Safari product, less an amount equal to any applicable
commissions due MEGASYSTEMS, plus any accumulated shipping expenses and any
other expenses that have been PRE-APPROVED by HEARTSOFT. See attached Exhibit A
for current understanding of pricing, calculation of invoice, MEGASYSTEMS
collection of an invoice and deduction of fees and expenses when remitting
payment to HEARTSOFT. MEGASYSTEMS agrees to provide reasonable audit access to
any relevant portion of its bookkeeping to HEARTSOFT for verification and
validation.
9. REPORTING. MEGASYSTEMS routinely receives on a monthly basis a
collection of reports from the retail distribution network that reflect "sell
to" and "sell through" for certain retail channels. MEGASYSTEMS shall endeavor
to forward to HEARTSOFT such information from these reports that relates to
Safari within seven (7) business days of receipt by MEGASYSTEMS. Although it
cannot guarantee the accuracy or completeness of these reports, MEGASYSTEMS will
attempt to insure that HEARTSOFT receives the best available information.
10. TERMINATION. Either party hereto may, without prejudice to any right
or remedy it may have due to any failure of the other party to perform its
obligations hereunder, terminate this Agreement at any time upon sixty (60) days
written notice hereof. In the event of such termination by Heartsoft,
MEGASYSTEMS shall be entitled to payment for services performed, shipping
charges paid or incurred, pre-approved expenses paid or incurred, commissions
earned prior to the effective date of the termination as well as commissions due
for a period of ninety (90) days following the effective date of termination.
Additionally, HEARTSOFT shall be entitled to payment from MEGASYSTEMS until all
sales conducted under the terms of this Agreement have been fully paid.
11. DEFAULT. A default by either MEGASYSTEMS or HEARTSOFT in the
performance of its obligations hereunder shall be grounds for termination of
this Agreement.
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11.1 In the event of termination by a default on the part of Heartsoft,
MEGASYSTEMS shall be entitled to payment for services performed,
shipping charges paid or incurred, pre-approved expenses paid or
incurred, commissions earned prior to the effective date of the
termination as well as commissions due for a period of ninety (90)
days following the effective date of termination.
11.2 In the event of a default on the part of MEGASYSTEMS, MEGASYSTEMS
shall only be entitled to payment for services performed, shipping
charges paid or incurred, pre-approved expenses paid or incurred,
and commissions earned prior to the effective date of the
termination.
11.3 In addition to the above, both parties shall retain all of their
remedies and rights as me be afforded by law.
12. PROPRIETARY RIGHTS AND CONFIDENTIALITY. MEGASYSTEMS and its agents and
employees shall maintain confidentiality of, and not disclose to others, any
confidential or proprietary information of HEARTSOFT which it may now have or
may hereafter obtain, including without limitation specifications, technical
reports, customer lists and product plans relating to HEARTSOFT's business or
products.
13. INDEPENDENT CONTRACTOR STATUS. MEGASYSTEMS, its principals, agents and
employees, shall perform all services under this Agreement as "Independent
Contractors" and not as employees or agents of HEARTSOFT. MEGASYSTEMS is not
authorized to assume or create any obligations or responsibilities, expressed or
implied, on behalf of, or in the name of HEARTSOFT, or to bind HEARTSOFT in any
manner.
14. INDEMNIFICATION. HEARTSOFT hereby agrees to indemnify and hold
harmless MEGASYSTEMS from any costs, expenses, claims, damages, judgments or
suits (including reasonable attorney's fees) which may be asserted or levied
against MEGASYSTEMS while in the performance of its obligations hereunder;
provided same are not occasioned by acts or deeds of fraud or misrepresentation
on the part of MEGASYSTEMS. In addition, HEARTSOFT hereby agrees to defend,
indemnify and hold MEGASYSTEMS harmless from all losses, damages, liabilities,
costs, and expenses (including reasonable attorney's fees) which may be incurred
by MEGASYSTEMS as a result of any judgment, or proceeding against HEARTSOFT in
which it is determined or alleged that the marketing or use of HEARTSOFT'S
products infringe on any patent, copyright, trademark, trade secret or other
proprietary or contractual right of any third party, provided that MEGASYSTEMS
promptly notifies HEARTSOFT of any such claim or proceeding in writing,
surrogate to HEARTSOFT their right to defend and settle such claim or proceeding
at HEARTSOFT's expense. MegaSystems agrees to cooperate with HEARTSOFT in
defending or settling any such claim or proceeding.
MEGASYSTEMS hereby agrees to indemnify and hold harmless HEARTSOFT from
any costs, expenses, claims, damages, judgments or suits (including reasonable
attorney's fees) which may be asserted or levied against HEARTSOFT while in the
performance of its obligations hereunder; provided same are not occasioned by
acts or deeds of fraud or misrepresentation on the part of
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HEARTSOFT with the exception of costs, expenses, claims, judgments or suits
that HEARTSOFT'S products infringe on any patent, copyright, trademark, trade
secret or other proprietary or contractual right of any third party.
15. NOTICES. All notices required or permitted under this Agreement shall
be in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other part at the address shown above, or at
such other address or addresses as either party may designate in writing to the
other in accordance with this paragraph.
16. PRONOUNS. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular shall include the plural, and vice versa.
17. ENTIRE AGREEMENT. This Agreement and the Addenda and Schedules
attached hereto (if any) shall constitute the entire agreement between the
parties and supercedes all prior agreements and understanding, whether written
or oral, relating to the subject matter of this Agreement.
18. AMENDMENTS. This Agreement may be amended or modified only by a
written instrument executed by both MEGASYSTEMS and HEARTSOFT.
19. SUCCESSORS AND ASSIGNS. This Agreement is nontransferable, without
prior written consent of both parties, and may not be assigned to their
respective heirs, successors or assigns without this consent.
20. GOVERNING LAW. In the event of any dispute between MEGASYSTEMS and
HEARTSOFT, both parties agree that the dispute shall be resolved through
arbitration in a neutral State under the auspices of the American Arbitration
Association within thirty (30) days following the termination of this Agreement.
Any award rendered shall be final and conclusive upon the parties.
21. MISCELLANEOUS.
21.1 No delay or omission by MEGASYSTEMS or HEARTSOFT in exercising
any right under this Agreement shall operate as a waiver of
that or any other right. A waiver or consent given by either
party to the other on one occasion shall be effective only in
that instance and shall not be construed as a bar or waiver of
any right on any subsequent occasion.
21.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit, or
affect the scope or substance of any section of this Agreement.
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21.3 In the event that any provision of this Agreement shall be
deemed invalid, illegal or otherwise unenforceable, the
validity, legality and enforceability or the remaining
provisions shall in no way be affected or impaired thereby.
IN WITNESS THEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as set forth below effective on the date
written above.
MEGASYSTEMS, LP HEARTSOFT, INC.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxxx X. Xxxxx
-------------------------- ----------------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxxxx X. Xxxxx
Title: Vice President Title: CEO
Date: August 7, 2001 Date: August 14, 2001
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