DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT ("Agreement") is made this 15th day of April, 1996 by and between U.S. Robotics Access Corp. ("USR"), a
Delaware corporation with its principal place of business at 8100 N. McCormick Blvd., Skokie, Illinois 60076, and PC411, Inc. ("Vendor"), a Delaware corporation having its principal place of business at 9800 La Cienega Blvd., Suite 411, Inglewood, California
1. DEFINITIONS
1.1. PROGRAM. "Program" means the information, entertainment, communications
or other program(s) and any related materials, including computer
software programs, 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-1, 3D-O, and CDTV).
1.3. PRODUCTS. "Products" means USR's "Sportster" line of modems and all
successor models to the "Sportster" line. "Products" can also indicate
other USR product lines, such as "Courier", "Megahertz", telephony and
other communication products as specified herein.
1.4. TERRITORY. "Territory" means the United States and Canada.
2. GRANT OF RIGHTS
2.1. GRANT. Vendor grants to USR the non-exclusive rights, under copyright
and otherwise, to copy and duplicate 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.
2.2. 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.
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.
3.2. PAYMENT. Vendor will compute and make all payments due USR, accompanied
by accounting statements, within thirty (30) days after the end of each
quarter for which payments are due.
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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, examine Vendor's books and records relating to amounts due to
USR under this Agreement, after the close of each calendar quarter,
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. USR will give the Vendor 15 days notice of its intention to
perform an audit. 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, promptly upon 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. 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 will have the right to design and control the
content of the Program, subject to the approval of USR, which shall not
be unreasonably withheld.
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.
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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
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. Except in the event Vendor terminates this
Agreement for breach by USR pursuant to Section 5.2 below, 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.
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