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EXHIBIT 10.1
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT ("Agreement") is made this 16th day of September,
1997 by and between U.S. Robotics Access Corp. ("USR"), a Delaware corporation
with its principal place of business at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and PC411, Inc. ("PC411"), a Delaware corporation having its
principal place of business at ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇. ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇.
1. DEFINITIONS
1.1. PROGRAM. "Program" means the information, entertainment, communications
or other program(s) and any related materials, including computer
software programs and related documentation, described in Exhibit A,
attached hereto and incorporated herein, including any upgrades,
enhancements, new releases or new versions thereof that Vendor may
release.
1.2. CD-ROM DEVICE. "CD-ROM Device" means an optical disc storage device
containing Programs and using the technology commonly known as compact
disc read-only-memory ("CD-ROM") or any subset, format, enhancement or
other version of it, whether now known or developed in the future
(including but not limited to CDHD, CD-ROM-XA, CD-I, 3D-O, and CDTV).
1.3. PRODUCTS. "Products" means USR's "Sportster" line of modems and all
successor models to the "Sportster" line. "Products" also may include,
in USR's sole discretion, other USR product lines, such as "Courier,"
"Megahertz," telephony and other USR information access products.
1.4. TERRITORY. "Territory" means the United States and Canada.
2. GRANT OF RIGHTS
2.1. GRANT. Vendor grants to USR the non-exclusive, royalty-free rights,
under copyright and otherwise, to copy and duplicate, or have copied
and duplicated, in CD-ROM Devices the Program(s), to advertise those
CD-ROM Devices and to market and distribute those CD-ROM Devices in
packages of the Products, during the Term and in the Territory, and to
authorize USR subsidiaries and affiliates in the Territory to do so.
USR may also distribute those CD-ROM Devices to its customers who have
previously purchased its products. USR may use wholesalers,
distributors, value-added resellers or other third parties to
distribute the CD-ROM Devices, and is authorized to use distribution
methods including, without limitation, bulk orders, telephone orders,
and direct mail orders.
2.3. LIMITATION OF RIGHTS. USR's uses of the rights granted in this
Agreement will be subject to any restrictions imposed by Vendor's
agreements with its licensors and other third parties, as set forth on
Exhibit B, attached hereto and incorporated herein. Except as set forth
in Exhibit B, as between Vendor and USR, Vendor is the owner of all
right, title and interest in and to the Program.
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3. PAYMENTS
3.1. FEES. Vendor shall pay USR the fees set forth in Exhibit C, attached
hereto and incorporated herein, for the CD-ROM Devices distributed
during the Term, or after expiration or termination of this Agreement
pursuant to Section 5.1 herein. Such fees shall be paid to USR for so
long as Vendor receives revenues or advertising exposure arising out of
the distribution of such CD-ROM Devices, irrespective of the expiration
or termination of this Agreement.
3.2. PAYMENT. Vendor will compute and make all payments for fees due USR
according to Section 3.1 herein, accompanied by accounting statements,
within thirty (30) days after the end of each quarter for which
payments are due. USR will compute and issue invoices, accompanied by
accounting statements, for CD-ROM Device booklet advertisements to
Vendor within thirty (30) days after the beginning of each calender
quarter for shipments forecasted within that quarter. USR will also
compute and issue invoices or credits, accompanied by accounting
statements, that reconcile discrepancies between forecasted and actual
shipments of CD-ROM Device booklet advertisements to Vendor within
thirty (30) days after the end of each calender quarter. Payment for
such advertising invoices is due within thirty (30) days from date of
invoice. All payments shall be remitted to: Connections CD-ROM, U.S.
Robotics, ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
3.3. RECORDS AND ACCOUNTING. Vendor shall maintain complete and accurate
records, in accordance with generally accepted accounting practices, of
all amounts payable to USR for three (3) years from the date such
amounts are paid to USR. USR or its authorized representative may, at
USR's expense and upon reasonable notice, examine Vendor's books and
records relating to amounts due to USR under this Agreement, during
Vendor's regular business hours and at the place where the books and
records are regularly kept, for the purpose of auditing such books and
records, for so long as such books and records are required to be
maintained. Such examination shall take place no more than once within
any consecutive twelve (12) month period.All information gained by USR
or its authorized representative from such audit shall be deemed
Confidential Information and used solely for the purpose of verifying
the accuracy of the payments made to USR hereunder. If USR asserts that
additional payment is due, USR will issue to Vendor a written demand
for such additional amount with supporting documentation. In the event
a dispute arises over amounts due to USR, both parties agree to work in
good faith toward a mutually agreeable resolution of the dispute.
3.4. MECHANICAL ROYALTIES AND OTHER THIRD PARTY PAYMENTS. Vendor will make
all payments to third parties, including without limitation payments to
holders of rights (including copyrights) in musical compositions,
master recordings, literary material, audio and audiovisual elements,
computer software programs, graphics, technology, artwork, photographs,
names and likenesses, required by reason of the use of the Program in
the duplication, modification or distribution of the CD-ROM Devices.
3.5. NO PAYMENTS BY USR. USR shall not be obligated to make any royalty or
other payments of any kind to Vendor under this Agreement.
4. DUPLICATION AND CONTENT
4.1. DUPLICATION MATERIALS. Vendor will furnish to USR, within ten (10)
business days of
USR's request and at Vendor's expense: (a) any master, duplicating or other
materials relating to the Program that USR may require for the manufacture of
first class quality CD-ROM Devices suitable for commercial distribution; and (b)
any technical assistance and information (including but not limited to
copyright, trademark, patent and credit information) that USR requires to
duplicate CD-ROM Devices.
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USR shall be responsible for all costs it incurs respecting such duplication.
Vendor will deliver a replacement master to USR within a reasonable period of
time after the commercial release of any upgrades, enhancements, new releases or
new versions of the Program, and USR will reproduce and distribute this later
version of the Program as soon as commercially practicable.
4.2. CONTENT OF PROGRAM. Vendor has the right to design and control the
content of the Program, subject only to USR's rights under Section 5.3
herein.
4.3. COMPATIBILITY. Vendor agrees to exert its best efforts to make the
Program compatible (a) with USR Products, (b) with Windows 3.11 and up
and Windows 95, as those computer programs may be updated in the
future, and (c) if Vendor desires that the Program shall be distributed
with USR Products for use with Macintosh computers, with System 7.0 and
up, as that computer program may be updated in the future.
4.4. ADDITIONAL MATERIALS. Upon agreement of the parties, Vendor may provide
additional materials for inclusion with the Programs distributed with
the Products. Such materials may include instructional, informational
or promotional matter, in printed or electronic media. Vendor shall be
responsible for duplication of such materials in sufficient quantities
to be included with all copies of the Program being distributed, and
shall bear all costs associated with the development and duplication of
such materials.
5. TERM AND TERMINATION
5.1. TERM, TERMINATION AND POST-TERMINATION SALES. The term of this
Agreement (the "Term") shall begin on the date set forth above and
shall expire one (1) year from that date. For six (6) months after the
end of the Term, USR may advertise and distribute CD-ROM Devices
duplicated or in the process of duplication by USR at the end of the
Term, except that USR shall have no such right in the event Vendor
terminates this Agreement for breach by USR pursuant to Section 5.2
below.
5.2. TERMINATION FOR BREACH. If either party materially defaults in the
performance of or compliance with any provision of the Agreement and
does not cure such default within thirty (30) days after receiving
written notice of such breach from the other party, the party giving
notice may then give further notice terminating this Agreement, and the
rights granted hereunder shall terminate on the date specified in such
further notice.
5.3. TERMINATION FOR DISAPPROVAL OF CONTENT. USR shall have the right to
disapprove the content of the Program if USR, in its sole discretion,
believes that the content violates the personal or property rights of
USR or a third party or is otherwise inconsistent with USR's business
policies. In the event USR so disapproves the content of the Program
and Vendor fails to make corrections to the Program reasonably
satisfactory to USR within five (5) days after notice from USR, then
USR shall have the right to terminate this Agreement immediately upon
further written notice to Vendor.
6. ADVERTISING, PROMOTION, SUPPORT
6.1. PERFORMERS. USR shall have the right to use and authorize others to use
the names, likenesses and voices of any performers and other persons
who have rendered services in connection with the Programs, and
biographical information about them, for advertising and purposes of
trade in connection with the CD-ROM Devices and in institutional
advertising for USR in all formats, markets and media now known or
hereafter devised.
6.2. SYNOPSES AND EXCERPTS. USR may use synopses and excerpts from the
Program and pre-existing advertising, publicity and promotional
materials for the Program, in advertising, promoting and
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publicizing the CD-ROM Devices in any medium and by any method, and may
authorize others to do so, without payment to Vendor.
6.3. TRADEMARKS. USR shall have the right to reproduce and use trademarks,
trade names, designs and artwork owned, controlled, or distributed by
Vendor on the CD-ROM Devices and in packaging, advertising and other
marketing materials for them.
6.4. PROMOTION BY VENDOR. Vendor may advertise and promote the Program at
its own expense in any manner it desires; provided, however, Vendor
shall provide USR with prior notice and copies of any such advertising
or promotional materials that relate specifically to USR, use of USR's
trademarks, trade names, designs and art work, or the distribution of
the Program with the CD-ROM Devices.
.
6.6. TRADE SHOWS; USR DEMO UNITS. Upon Vendor's request, USR may, in its
sole discretion, give to Vendor one or more modems for the purpose of
trade show demonstrations of the Program. Vendor shall take title to
the modems. USR will provide such modems, if at all, on an "AS IS"
basis, without any warranties whatsoever, either express or implied.
Vendor shall clearly display USR tent cards and/or collateral when
demonstrating Vendor products with the USR modems, and shall otherwise
use USR trademarks and trade names in accordance with USR's
instructions. USR shall have the right to require Vendor, at any time,
to cease using the USR trademarks and trade names.
6.7. CUSTOMER SUPPORT. Vendor will offer and provide "front-line" customer
support to end users of the Program. Vendor's customer support will be
available Monday through Friday, except customary holidays, during
normal business hours (8:00am to 5:00pm local time). Vendor will
prominently display its customer support telephone number(s) and
address(es) within the Program software and/or documentation. Vendor
also will provide, at USR's request, a reasonable amount of second-line
customer support training to USR support personnel, at no charge to
USR. USR shall pay its own expenses associated with such
training.Unless otherwise agreed, such training shall take place at
PC411's place of business USR may terminate this agreement Pusuant to
Section 5.2 if Vendor fails to provide reasonable customer support
services to end users or to USR.
6.8. USR BRANDING OF PROGRAM. Vendor agrees to modify the Program to include
the US Robotics logo embedded within the user interface for the version
distributed to US Robotics. Size, positioning, and location of the logo
shall be mutually agreed upon by the parties, which agreement shall not
be unreasonably withheld by either party. Vendor shall use the logo
according to the usage guidelines provided by USR from time to time,
and shall use the logo in no other manner except as set forth in this
paragraph.
6.9. REGISTRATION DATABASE. Vendor agrees to provide access to its database
of customers who purchase or subscribe to its products and/or services
as a result of the bundle with USR products hereunder. The information
to be made available to USR shall include the customers' names,
addresses, phone numbers, fax numbers, email addresses, and any other
customer data gathered during the Vendor's registration process. USR or
its authorized representative may, at USR's expense and upon reasonable
notice, obtain this information in a mutually agreed upon format on a
quarterly basis. All information obtained by USR or its authorized
representative shall be deemed Confidential Information and used solely
for the purpose of USR's marketing and research programs.
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7. WARRANTIES AND REPRESENTATIONS
7.1. RIGHT TO CONTRACT. Vendor warrants and represents that it has the right
and power to enter into and fully perform this Agreement.
7.2. INFRINGEMENT. Vendor warrants and represents that the Program and any
related materials, including computer software programs, technology,
graphics, dramatic, literary, musical, or artistic elements, ideas, or
other intellectual properties contained in or furnished by Vendor for
use in connection with the Program or the packaging, advertising,
promotion or marketing of CD-ROM Devices made from them, or any use of
them in accordance with this Agreement, will not violate any law or
infringe upon the rights of any person or entity.
8. INDEMNIFICATION
8.1. BREACH OF WARRANTY. Vendor will at all times indemnify and hold USR
harmless from and against any and all claims, losses, damages and costs
(including without limitation legal expenses and reasonable counsel
fees), arising out of any breach by Vendor of any warranty or
representation made by Vendor in this Agreement.
8.2. THIRD PARTIES. Vendor will at all times indemnify and hold USR harmless
from and against any and all claims, losses, damages and costs
(including without limitation legal expenses and reasonable counsel
fees), arising out of any claim of a third party (including Vendor's
licensors) respecting the content of the Program or intellectual
property rights or other rights or interest in the Program or revenues
generated by the distribution of the Program in the CD-ROM Devices.
9. CONFIDENTIALITY
9.1. CONFIDENTIALITY. Each party agrees that it will not permit the
duplication, use, publication or disclosure of any such Confidential
Information to any person (other than its own employees under this
Agreement), unless authorized in writing by the other party. Except as
specifically authorized herein, neither party shall use the name(s),
trademark(s) or trade name(s) of the other party in publicity releases
or advertising or in any other manner, including customer lists,
without the prior written approval of the other party, which shall not
be unreasonably withheld. "Confidential Information" means any terms of
this Agreement, any confidential information or data, either oral or
written, received from and designated as such by the other party, or
any proprietary information or data; but does not include information
that is already known by recipient, becomes publicly known through no
wrongful act of the recipient, or received from a third party without
similar restriction and without breach of this Agreement.
10. DISCLAIMER OF WARRANTIES AND LIMITATION OF LIABILITY
10.1. DISCLAIMER OF WARRANTIES. EXCEPT AS SPECIFICALLY SET FORTH ABOVE,
NEITHER PARTY MAKES ANY WARRANTIES, AND BOTH PARTIES HEREBY DISCLAIM
ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
USE OR PURPOSE.
10.2. LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO
THE OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL
DAMAGES, INCLUDING LOSS OF PROFITS, REVENUE, DATA, OR USE, INCURRED BY
EITHER PARTY OR ANY THIRD PARTY, WHETHER IN AN ACTION IN CONTRACT OR
TORT OR BASED ON A WARRANTY, EVEN IF THE OTHER PARTY OR ANY OTHER
PERSON HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
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11. MISCELLANEOUS
11.1. ASSIGNMENT. Vendor shall not transfer, delegate or assign this
Agreement or any of its rights or obligations hereunder without USR's
prior written consent, which shall not be unreasonably withheld. This
Agreement shall be binding upon and inure to the benefit of USR and
Vendor and their respective successors, permitted assigns and legal
representatives.
11.2. NOTICES. All notices, requests, demands or other communications
required or permitted to be made under this Agreement shall be in
writing and shall be either delivered personally, sent by fax (with
hard copy to follow), sent by guaranteed prepaid overnight delivery
service or mailed by U.S. mail, certified or registered, return receipt
requested, with appropriate postage prepaid, in each case to the
addressees and/or fax numbers on the first page of the Agreement, (and
with respect to items sent to USR, with a copy to U.S. Robotics
Corporation, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn. Legal
Department, Fax No. ▇▇▇-▇▇▇-▇▇▇▇), or to such other addresses as may be
designated in writing by notice given in the manner provided herein.
Such notices and communication shall be deemed given (i) upon actual
delivery thereof, if delivered by hand, (ii) one (1) business day
following overnight delivery service, if delivered by overnight
delivery service, (iii) one (1) business day following delivery, if
sent by fax and electronic confirmation of complete transmission to the
recipient's fax number is obtained by the sender, or (iv) three (3)
business days following deposit in the U.S. mail, if sent by mail,
whether or not delivery is accepted.
11.3. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Illinois, without
giving effect to its conflicts of law principles. Any suit arising out
of or relating to this Agreement shall be brought only in the state or
federal courts in Chicago, Illinois, unless USR shall select another
venue or shall otherwise consent in writing, and Vendor hereby submits
to the jurisdiction of such courts in any matter or proceeding arising
out of or relating to this Agreement and hereby waives any objections
to venue being in such courts.
11.4. FORCE MAJEURE. Any delay in or failure of performance by either party
under this Agreement (other than payment obligations) shall not be
considered a breach of this Agreement and shall be excused if and to
the extent caused by any occurrence, foreseeable or unforeseeable,
beyond the reasonable control of the party affected, including without
limitation: acts of God or the public enemy; fire; flood; embargoes;
governmental restrictions; strikes or labor difficulties; riots; wars
or other military action; civil disorders; shortages of labor, fuel,
power, materials, supplies, or transportation; delays in deliveries by
suppliers; or any other cause or causes beyond such party's reasonable
control.
11.5. INDEPENDENT CONTRACTORS. Neither party is the employee, partner, joint
venturer agent or legal representative of the other party for any
purpose. Neither party shall have the authority to enter into any
contracts in the name of or on behalf of the other party.
11.6. WAIVER. No term or provision hereof shall be deemed waived and no
breach excused unless such waiver or consent shall be in writing and
signed by the party claimed to have waived or consented.
11.7. SEVERABILITY. In the event that one or more of the terms, conditions or
covenants contained in this Agreement or any portion of them is
determined to be unenforceable or invalid, such unenforceability or
invalidity shall not affect the enforceability or the validity of the
remaining terms, conditions or covenants and portions thereof, and each
unenforceable or invalid term, condition or covenant or portion thereof
shall be severable from the remainder of this Agreement.
11.8. ATTORNEYS' FEES. In the event of any controversy, claim or dispute
between the parties hereto arising out of or relating to this
Agreement, the prevailing party shall be entitled to recover from
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the non-prevailing party its reasonable expenses including, but not by
way of limitation, attorneys' fees.
11.9. REMEDIES CUMULATIVE. No remedy or election under this Agreement shall
be deemed exclusive but shall, wherever possible, be cumulative with
all other remedies at law or in equity.
11.10. SURVIVAL. The parties' obligations under this Agreement which by their
nature are intended to continue beyond the expiration or termination of
this Agreement shall survive the expiration or termination of this
Agreement, including Sections 3.1, 3.3, 5.1, 8.1, 8.2, 9.1, 10.1, 10.2
and 11.
11.11. ENTIRE AGREEMENT. This Agreement, together with Exhibits A through C,
constitutes the entire agreement between Vendor and USR and supersedes
all proposals, representations and agreements, oral and written,
between the parties on this subject. This Agreement may not be amended,
except by a writing signed by authorized representatives of each party.
VENDOR COMPANY NAME U.S. ROBOTICS ACCESS CORP.
By: By:
----------------------------- ---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------- -------------------------------
Title: PRESIDENT/CEO Title: VP & GENERAL MANAGER
PERSONAL COMMUNICATIONS DIV
Date: Date:
--------------------------- -------------------------------
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EXHIBIT A
PROGRAM
The Program, as defined in Section 1.1 of the CD-ROM Distribution Agreement, is
described as follows:
The company's freely distributed electronic enrollment Program to activate
subscriptions to PC411 for Windows database using PC411 2.0 and or 3.0 client
application.
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EXHIBIT B
THIRD PARTY RIGHTS
The license grant set forth in section 2.1 of the CD-ROM Distribution Agreement
is subject to the following rights and restrictions of Vendor's licensors and
other third parties:
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EXHIBIT C
PAYMENTS TO USR
Pursuant to Section 3.1 of the Distribution Agreement, Vendor will pay USR the
following amount(s) for all New Customers. A New Customer is defined as an
individual or entity residing in the United States or Canada (a) who purchases
the product, license, subscription or service offered by Vendor through the
Program(s) distributed in the CD-ROM Deviceswho remains a paying customer for at
least ninety (90) consecutive days after the date of purchase; and (b) in the
case of a license, subscription or service purchased through recurring payments,
who remains a paying customer for at least sixty (60) consecutive days after the
date of renewal of original
1b. BOUNTY (ONE-TIME FEE). Vendor will pay USR a one-time fee of thirty
five percent (35%) of the gross amount due and owing by each New
Customer at the time of purchase.
2b. ANNUITY (COMMISSION). Vendor will pay USR a commission equal to thirty
five percent (_35_%) of the annual payments made by each New Customer
for so long as the New Customer makes annual payments for the license,
subscription or service, up to a maximum of three (_3_) years
3. UPGRADES. Vendor will pay USR a commission equal to thirty five percent
(35_%) of all gross revenues received by Vendor from each New Customer
who purchases or licenses upgrades, enhancements or new versions of the
Program for a period of _thirty six (_36) months from the date that
each such New Customer subscribes to the Program.
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