Software Distribution Agreement

SOFTWARE DISTRIBUTION AGREEMENT


BETWEEN


TECH DATA CORPORATION


AND


PIRANHA INTERACTIVE PUBLISHING, INC.


[Confidential portions of this exhibit have been deleted and filed separately with the Securities and Exchange Commission] 2
SOFTWARE DISTRIBUTION AGREEMENT


THIS AGREEMENT, DATED AS OF THIS 23RD DAY OF SEPTEMBER, 1996 (THE "EFFECTIVE DATE"), IS BETWEEN TECH DATA CORPORATION, A FLORIDA CORPORATION ("TECH DATA"), WITH ITS PRINCIPAL CORPORATE ADDRESS AT 5350 TECH DATA DRIVE, CLEARWATER, FLORIDA 34620 AND PIRANHA INTERACTIVE PUBLISHING, INC. AN ARIZONA CORPORATION ("PIRANHA"), WITH ITS PRINCIPAL CORPORATE ADDRESS AT 1839 WEST DRAKE, SUITE B, TEMPE, AZ 85283.


RECITALS


A. Tech Data desires to purchase certain Products from Piranha from time to time and Piranha desires to sell certain Products to Tech Data in accordance with the terms and provisions set forth in this Agreement.


B. Piranha desires to appoint Tech Data as its non-exclusive distributor to market Products within the territory defined below and Tech Data accepts such appointment on the terms set forth in this Agreement.


NOW, THEREFORE, in consideration of the Recitals, the mutual covenants contained in this Agreement and other good and valuable consideration, Tech Data and Piranha hereby agree as follows:


ARTICLE I. DEFINITIONS, APPOINTMENT AND TERM OF AGREEMENT


1.1 Definitions. The following definitions shall apply to this Agreement.


(a) "Customers" of Tech Data shall include dealers, resellers, value
added resellers, mail order resellers and other entities that
acquire the Products from Tech Data for resale, specifically
excluding End Users.


(b) "DOA" shall mean Product, or any portion thereof, which fails to
operate properly on initial "burn in", boot, or use, as applicable.


(c) "Documentation" shall mean user manuals, training materials,
product descriptions and specifications, brochures, technical
manuals, license agreements, supporting materials and other printed
information relating to the Products, whether distributed in print,
electronic, or video format.


(d) "End Users" shall mean the final retail purchasers or licensees
who have acquired Products for their own use and not for resale,
remarketing or redistribution.


(e) "Non-Sellable Products" shall mean any Product that has been
returned to Tech Data by its Customers that has had the outside
shrink wrapping or other packaging seal broken or any components of
the original package are missing, damaged or modified.


(f) "Products" shall mean, individually or collectively, the sealed
software packages comprised of the computer programs encoded on
media together with manuals, materials and other contents of the
packages associated therewith, if any, as more fully described in
Schedule 5.1 attached hereto.


(g) "Services" means any warranty, maintenance, advertising,
marketing or technical support and any other services performed or
to be performed by Piranha.


Tech Data__ 2 Piranha__ 3
(h) "Territory" shall mean worldwide, subject only to Product
distribution restrictions, if any, set forth in Schedule 5.1.


1.2 Term of Agreement. The term of this Agreement shall commence on the
Effective Date and, unless terminated by either party as set forth in this
Agreement, shall remain in full force and effect for a term of one (1)
year, and will be automatically renewed for successive one (1) year terms
unless prior written notification of termination or non-renewal is
delivered by one of the parties in accordance with the notice provision of
this Agreement.


1.3 Appointment as Distributor. Piranha hereby grants to Tech Data the
non-exclusive right and license to distribute Products during the term of
this Agreement within the Territory, together with any updates or
enhancements to the Products and any new releases related to the Products.
This license includes the right to order, possess and distribute the
Products to Customers and to provide the Products to Customers for use on
demonstration units. Piranha and Tech Data acknowledge and agree that the
license to use the Product is solely between Piranha and the End User and
is governed by the terms of the Piranha's standard use license enclosed
with the Product. This Agreement does not grant Piranha or Tech Data an
exclusive right to purchase or sell Products and shall not prevent either
party from developing or acquiring other vendors or customers or competing
Products. Tech Data will use commercially reasonable efforts to promote
distribution of the Products. Piranha agrees that Tech Data may obtain
Products in accordance with this Agreement for the benefit of subsidiaries
of Tech Data. Wholly owned subsidiaries of Tech Data shall be entitled to
order Products directly from Piranha pursuant to this Agreement.


ARTICLE II. PURCHASE ORDERS


2.1 Issuance and Acceptance of Purchase Order.


(a) This Agreement shall not obligate Tech Data to purchase any
Products or services except as specifically set forth in a written
purchase order.


(b) Tech Data may issue to Piranha one or more purchase orders
identifying the Products Tech Data desires to purchase from Piranha.
The terms and provisions of this Agreement shall govern all purchase
orders except that purchase order may include other terms and
provisions which are consistent with the terms and provisions of
this Agreement, or which are mutually agreed to by Tech Data and
Piranha. Purchase orders will be placed by Tech Data by fax or
electronically transferred. On or after the date of shipment,
Piranha shall invoice Tech Data for the purchase of the Product.


(c) A purchase order shall be deemed accepted by Piranha unless
Piranha notifies Tech Data in writing within five (5) days after
receiving the purchase order that Piranha does not accept the
purchase order.


2.2 Purchase Order Alterations or Cancellations. Prior to shipment of
Products, Piranha shall accept alterations or cancellation to a
purchase order in order to: (i) change a location for delivery, (ii)
modify the quantity or type of Products to be delivered or (iii)
correct typographical or clerical errors.


2.3 Evaluation or Demonstration Purchase Orders. Piranha shall provide to
Tech Data a reasonable number of demonstration or evaluation products
at no charge.


Tech Data__ 3 Piranha__ 4 2.4 Product Shortages. If for any reason Piranha's production is not on
schedule, Piranha may allocate available inventory to Tech Data and make
shipments based upon a fair and reasonable percentage allocation among
Piranha's customers. Such allocations shall not impact the calculation of
performance rebates.


ARTICLE III. DELIVERY AND
ACCEPTANCE OF PRODUCTS


3.1 Acceptance of Products. Tech Data shall, after a reasonable time to
inspect each shipment, accept Product (the "Acceptance Date") if the
Products and all necessary documentation delivered to Tech Data are in
accordance with the purchase order. Such reasonable time shall not exceed
thirty (30) days. Any Products not ordered or not otherwise in accordance
with the purchase order, (e.g. mis-shipments, overshipments) may be
returned to Piranha at Piranha's expense (including without limitation
costs of regular/ground shipment or storage). Piranha shall refund to Tech
Data within ten (10) business days following notice thereof, all monies
paid in respect to such rejected Products. Tech Data shall not be required
to accept partial shipment unless Tech Data agrees prior to shipment.


3.2 Title and Risk of Loss. FOB Destination. Risk of loss or damage to
Products shall pass to Tech Data at the time that the Products are
delivered to Tech Data warehouse. Piranha and Tech Data agree that no
title or ownership of the proprietary rights to any software code is
transferred by virtue of this Agreement notwithstanding the use of terms
such as "purchase", "sale" or the like within this Agreement. Piranha
retains all ownership rights and title to any software code within the
Products.


3.3 Transportation of Products. Piranha shall deliver the Products clearly
marked on the Product package with serial number (if applicable), product
description and machine readable UPC bar code to Tech Data at the location
shown and on the delivery date set forth in the applicable purchase order
or as otherwise agreed upon by the parties. Charges for regular/ground
transportation of the Products from Piranha to Tech Data's warehouse or
other delivery site that the parties have agreed upon shall be paid by
Piranha. Piranha shall use only those common carriers preapproved by Tech
Data or listed in Tech Data's published routing instructions, unless prior
written approval of Tech Data is received.


ARTICLE IV. RETURNS


4.1 Inventory Adjustment. Piranha agrees to accept return of overstocked
Products as determined by Tech Data, in Tech Data's reasonable discretion.
Such Products may include any ordered under the initial order. Shipments
of Product being returned shall be new, unused and in sealed cartons.
Piranha shall credit Tech Data's account in the amount of the price paid
by Tech Data therefor less any price protection credits (the "Return
Credit").


4.2 Defective Products/Dead on Arrival (DOA). Tech Data shall have the right
to return to Piranha for credit any DOA Product that is returned to Tech
Data within sixty (60) days after the initial delivery date to the End
User and any Product that fails to perform in accordance with Piranha's
product warranty. Piranha shall bear all costs of regular/ground shipping
and risk of loss of DOA and in-warranty Products to Piranha's location and
back to Tech Data or Tech Data's Customer. If Piranha delivers defective
and DOA Product of more than [*] percent ([*]%) in any fiscal quarter of
Tech Data, Piranha shall issue an additional [*] percent ([*]%) discount
credit to Tech Data's account for all Products purchased during any such
quarter.


4.3 Obsolete or Outdated Product. Tech Data shall have the right to return for
full credit, without limitation as to the dollar amount, all Products that
become obsolete or Piranha discontinues, updates, revises or are removed
from Piranha's current price list, provided Tech Data returns


Tech Data__ 4 Piranha__


[*] Confidential portion deleted and filed separately with the Securities and
Exchange Commission.


5
such Products within one hundred fifty (150) days after Tech Data receives
written notice from Piranha that such Products are obsolete, superseded by
a newer version, discontinued or are removed from Piranha's price list.


4.4 Miscellaneous Returns.


(a) Bad Box. Tech Data shall return for credit Products which have
boxes that are or become damaged. Piranha will supply to Tech Data,
at no charge, any and all material(s) which are missing in the
original Product package.


(b) Non-Sellable. Tech Data may return Non-Sellable Product to
Piranha for credit.


ARTICLE V. PAYMENT TO VENDOR


5.1 Charges, Prices and Fees for Products. Charges, prices, quantities and
discounts, if any, for Products shall be determined as set forth in
Schedule 5.1, or as otherwise mutually agreed upon by the parties in
writing, and may be confirmed at the time of order. In no event shall
charges exceed Piranha's then current established charges. Tech Data shall
not be bound by any of Piranha's suggested prices.


5.2 Payment. Except as otherwise set forth in this Agreement, any undisputed
sum due to Piranha pursuant to this Agreement shall be payable as follows:
[*]% prepay, 2%-10, net sixty (60) days after the invoice receipt. Piranha
shall invoice Tech Data no earlier than the applicable shipping date for
the Products covered by such invoice. Products which are shipped from
outside the United States shall not be invoiced to Tech Data prior to the
Products being placed on a common carrier within the United States for
final delivery to Tech Data. The due date for payment shall be extended
during any time the parties have a bona fide dispute concerning such
payment. Notwithstanding anything herein to the contrary, for the initial
order under this Agreement, or any initial order of a new Product, payment
shall be made by Tech Data upon resale of the Products.


[*]


5.3 Invoices. A "correct" invoice shall contain (i) Piranha's name and invoice
date, (ii) a reference to the purchase order or other authorizing
document, (iii) separate descriptions, unit prices and quantities of the
Products actually delivered, (iv) credits (if applicable), (v) shipping
charges (if applicable) (vi) name (where applicable), title, phone number
and complete mailing address as to where payment is to be sent, and (vii)
other substantiating documentation or information as may reasonably be
required by Tech Data from time to time.


5.4 Taxes. Tech Data shall be responsible for franchise taxes, sales or use
taxes or shall provide Piranha with an appropriate exemption certificate.
Piranha shall be responsible for all other taxes, assessments, permits and
fees, however designated, which are levied upon this Agreement or the
Products, except for taxes based upon Tech Data's income. Piranha shall be
responsible for any V.A.T. tax which may be imposed upon any sale of
Products to Tech Data; Tech Data shall be responsible for any V.A.T. tax
which may be imposed on any sale of Products by Tech Data to Tech Data's
Customers. No taxes of a ...