EXHIBIT 10.1
LICENSE AND DISTRIBUTION AGREEMENT
(MANUFACTURING RIGHTS)
(2004-2005)
This License and Distribution Agreement (this "AGREEMENT") is entered
in as of March 29, 2004, by and between Riverdeep Inc., A Limited Liability
Company, a limited liability company organized in Delaware ("RIVERDEEP"), and
Encore Software, Inc., a Minnesota corporation ("DISTRIBUTOR").
WHEREAS, Riverdeep is engaged in the business of developing, licensing
and publishing computer software programs, including the Products (as
hereinafter defined);
WHEREAS, Distributor is engaged in the business of selling and
marketing goods in the Territory (as hereinafter defined), including products
similar or related to the Products; and
WHEREAS, Riverdeep and Distributor wish to enter into an agreement
pursuant to which Distributor will manufacture, sell, and distribute the
Products for sale in the Channel (as hereinafter defined) within the Territory.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS.
1.1 "CHANNEL" shall mean all retail accounts, whether sold to
directly or through distributors, including, without limitation, brick and
mortar stores and Internet-based retailers (such as Amazon.com); provided
however, that Riverdeep shall have the right to sublicense Products to
sublicensees that will in turn sell and distribute them into small retail
accounts pursuant to (i) the sublicenses set forth on Exhibit C attached hereto
provided that copies of the same have been furnished to Distributor prior to the
Commencement Date, and (ii) such future sublicenses as the parties shall
mutually agree to not to be unreasonably withheld or delayed, it being agreed
that Riverdeep shall not amend or modify such sublicenses to add new products
thereto or to expand the channel thereof without Distributor's consent, not to
be unreasonably withheld or delayed; and provided further, that notwithstanding
anything to the contrary in this Agreement, nothing contained herein shall limit
Distributor's parent company from selling or distributing the Products to its
retail customers through such parent company's website. At Riverdeep's request,
no more frequently than on a quarterly basis, Distributor shall provide to
Riverdeep a list of current accounts into which Distributor sells or distributes
the Products. The Channel specifically excludes Riverdeep's channels of
distribution other than the retail channel, including, without limitation, (a)
sales directly to end users (including, without limitation, through television,
magazine, catalog, continuity club, mail, door-to-door, email, web, and
telemarketing offers), (b) sales through the OEM channel and, (c) sales in the
educational/schools channel. Distributor shall not distribute Products to any
account that intends, or is reasonable likely, to resell the Products outside of
the Channel or Territory.
1.2 "COMMENCEMENT DATE" shall mean March 31, 2004.
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1.3 "CONSENT-REQUIRED CONTRACT" shall have the meaning ascribed to
such term in Section 7.1.
1.4 "CONSENT-REQUIRED PRODUCTS" shall have the meaning ascribed to
such term in Section 7.1.
1.5 "DELIVERABLES" shall have the meaning ascribed to such term in
Section 2.9.
1.6 "DOCUMENTATION" shall mean all printed booklets, pamphlets,
user manuals, maintenance manuals, end user license agreements, registration
cards, promotional materials and any other materials which are distributed with
the Products. Such Documentation shall not be modified, translated, supplemented
or omitted without Riverdeep's prior written approval (not to be unreasonably
withheld or delayed) and any such modifications, translations or supplements
shall remain the property of Riverdeep.
1.7 "END USERS" shall mean the customers of Distributor's
Retailers (as hereinafter defined) to whom such Retailers sell Products for use
and not for re-sale.
1.8 "EXCLUDED PRODUCTS" means (i) genealogy-based and
language-based software programs unless otherwise consented to by Distributor in
its sole discretion; and, (ii) such individual SKU's as to which Distributor
determines in its sole discretion it will no longer ship or fulfill retail
orders and notifies Riverdeep of such determination in writing.
1.9 "INTELLECTUAL PROPERTY RIGHTS" means patent rights and
registrations and applications, renewals and extensions therefor, copyright
(including, but not limited to, ownership rights in all titles, computer code,
themes, objects, characters, character names, stories, dialog, catch phrases,
locations, concepts, artwork, animation, sounds, musical compositions,
audio-visual effects and methods of operation, moral rights and any related
documentation), copyright registrations and applications, renewals and
extensions therefor, trademark registrations and applications, renewals and
extensions therefor, rights in trade dress and packaging, trade secrets and
other intellectual property rights recognized by U.S. laws.
1.10 "LICENSED MEDIA" shall mean all (i) computer-readable magnetic
media storage devices for the PC, including CD-Rom and DVD-Rom, (ii) DVD's, and
(iii) electronic learning aids (such as, Leapster and Leapad); provided however,
in the case of DVD's and electronic learning aids, Distributor shall only have
exclusive rights only on a Product-by-Product basis and only if Riverdeep is
able to retain such distribution rights in any negotiations involving the
development of the applicable product, it being understood that Riverdeep shall
use good faith commercially reasonable efforts to retain such rights.
Interactive online (unless otherwise a part of the Product itself) and
electronic download are excluded.
1.11 "LOSS EVENT" means, with respect to any Product, (i) a loss of
rights the effect of which limits or precludes Riverdeep licensing such Product
to Distributor under this Agreement without a default by Riverdeep hereunder;
(ii) Riverdeep's failure to initially procure rights to such Product; (iii)
Riverdeep's failure to make such Product available to Distributor hereunder;
(iv) Riverdeep's failure to provide the Deliverables for such Product as and
when required hereunder; or (v) Riverdeep's decision to discontinue such
Product, or (vi) any other event or occurrence the effect of which limits or
impairs the rights granted to Distributor hereunder in respect of such Product.
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1.12 "MEDIATOR" means a mediator to be chosen by the parties from
time to time to resolve specific disputes hereunder pursuant to a mediation
procedure to be mutually agreed upon by the parties within 30 days after the
Commencement Date.
1.13 "OEM" shall mean: original equipment manufacturers selling
hardware, Non-Traditional OEM's, and Similar Distributors. As used herein, (i)
"Non-Traditional OEM's" shall mean distributors who manufacture Product(s), and
do not sell the Products in the retail channel; and, "Similar Distributors"
shall mean distributors (including entities acting on behalf of Similar
Distributors in licensing software from Riverdeep and other sources) which
advertise, market, distribute and sell products through after-purchase programs
for goods, other than Products, sold in any channel, loyalty programs (defined
as special offers presented to end users who purchase goods from Similar
Distributors, e.g. Frequent Flier Programs, mailers inserted into bills, etc.),
fundraising programs, or direct mail programs, but in any event not selling or
distributing any Product through or into the Channel unless pursuant to a
sublicense approved under Section 1.1 above. As used herein, "after-purchase
programs" shall mean marketing programs through which an end user may receive
the Product for a fee after purchasing another product.
1.14 "PREVIOUSLY-RELEASED PROPERTIES" means interactive software
(and all updates, upgrades, or other modifications thereto) owned or controlled,
or that was owned or controlled, by Riverdeep that is obsolete and no longer
distributed in the Channel.
1.15 "PRODUCT" or "PRODUCTS" shall mean those computer software
product lines of Riverdeep consisting of the individual SKU's for such lines
listed on Exhibit A, as the same may be amended from time to time in accordance
with the provisions of Section 2.6 and 2.7; provided however, that any
Consent-Required Product shall not constitute a Product hereunder until
Riverdeep notifies Distributor that it has received the corresponding Third
Party Consent therefor, whereupon the same shall constitute a Product hereunder.
Riverdeep shall have the right upon 30 days' prior written notice to Distributor
to modify, alter, improve, change, add to or discontinue any or all the Products
in accordance with the provisions of Section 2.6 and 2.7. Notwithstanding
anything to the contrary in this Agreement, including Exhibit A, in no event
shall the Products include any Excluded Products or Previously-Released
Properties. References to "Products" herein shall be deemed to include all SKU's
within such Product other than Previously-Released Properties.
1.16 "RETAILERS" shall mean the business entities in the Channel
and Territory to which Distributor markets and distributes, either directly or
through distributors, Products for resale.
1.17 "SALE" of any Product shall mean the granting of a license to
use such Product and the "PURCHASE" of any Product shall mean the obtaining of a
license to use such Product.
1.18 "SALES DISCOUNTS" shall mean price discounts and price
protection.
1.19 "SALES YEAR" means the twelve-month period commencing on the
Commencement Date.
1.20 "TERM" shall mean that period of time specified in Section 9
of the Agreement.
1.21 "THIRD PARTY CONSENT" shall have the meaning ascribed to such
term in Section 4.4.2.
1.22 "TERRITORY" shall mean the United States.
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2. DISTRIBUTION RIGHTS.
2.1 Rights Granted to Distributor. Riverdeep hereby grants to
Distributor the exclusive right and license to replicate, publish, market, sell,
and distribute the Products on the Licensed Media in the Channel in the
Territory. Riverdeep hereby grants to Distributor a non-exclusive,
non-transferable license to use the names of the Products as well as, where
applicable, the "The Learning Company," "Broderbund," "Edmark," and "Riverdeep"
trademarks, all subject to Riverdeep's standard policies and the approval
processes specified herein. Except as expressly provided herein, Distributor
shall have no right to sublicense or otherwise transfer any of the rights
granted under this Agreement. Distributor may not create derivative works of the
software in the Products, nor may it alter or modify such software in any way.
All other rights not granted herein to Distributor are reserved. Distributor is
not authorized to sell the Products for delivery outside the Territory or for
re-sale outside the Territory. Distributor shall have the right, but not the
obligation, to manufacture the Products and may use third-party manufacturers
for such manufacturing. Such third party manufacturers shall be subject to
Licensor's prior written approval, it being agreed that Riverdeep has approved
all of the third party manufacturers set forth on Exhibit E. All rights granted
herein are specifically subject to the additional covenants, terms and
conditions set forth in Exhibit B attached hereto.
2.2 Documentation. Each Product distributed by Distributor under
this Agreement shall be the full retail version of such Product and shall
include a complete copy of the Product's original Documentation (such
Documentation shall not vary with current Riverdeep practices or future industry
standards), including an end-user license agreement mutually agreed to by the
parties between Riverdeep and such end-users but incorporating Distributor's
warranty and return policy, provided such items are furnished to Distributor on
a timely basis prior to manufacturing of the applicable Products; provided
however, that any items provided by Distributor shall be subject to Riverdeep's
packaging approval requirements provided herein. Riverdeep shall provide an end
user warranty for the Products of form and substance approved by Distributor and
consistent with Distributor's end user return policy. Notwithstanding anything
to the contrary in this Agreement, Distributor shall not be obligated to pay for
any inserts or other promotions for the Products requested by Riverdeep, it
being understood that the manual shall not constitute an insert for purposes of
this sentence. Distributor may, in its sole discretion and expense, put inserts
and promotions into packaging for Products and retain any revenue derived
therefrom, subject to Riverdeep's reasonable approval.
2.3 Assortments, Bundles and Premiums; Porting. The license
granted herein shall include the right to sell and/or distribute the Products:
(i) as individual stand-alone units, including jewel case; (ii) as part of an
Assortment (as used herein, "Assortment" shall mean that a Product (or
portion/component of a Product) is sold with another software product or
products, but such Product is not physically packaged with such other
product(s)); and (iii) as bundles where a Product(s) (or portion/component of a
Product) is physically packaged or included on the same physical media with
other products ("Bundle"). Assortments or Bundles that contain software or
components other than Products shall be referred to as "Mixed Assortments" and
"Mixed Bundles." All jewel case, Bundles and Assortments shall be subject to
Riverdeep's prior written approval, not to be unreasonably withheld or delayed.
"Premiums" shall mean extra item(s) provided to an end user who has purchased
goods, said extra item(s) to be provided for no or nominal additional
compensation. Distributor shall not distribute the Products as Premiums, for
promotional purposes, or in any other manner so as to diminish, tarnish or
otherwise derogate the Riverdeep brands. Distributor will not port or otherwise
transfer Product intended for use on one Licensed Media onto another Licensed
Media without Riverdeep's prior consent, which may be given or withheld in
Riverdeep's sole discretion.
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2.4 Support. During the Term, Distributor shall provide customer
support and technical support via email, telephonic, or online in a manner
consistent with other products distributed by Distributor and industry
standards. On Riverdeep's request, Distributor shall use commercially reasonable
efforts to provide quarterly status reports regarding customer and technical
support, in an agreed format subject to Distributor's existing data limitations,
including such information as number of calls per sku, customer feedback, nature
of bug or other problem. Such delivery shall be within fifteen (15) days of
request.
2.5 Expenses. Except to the extent elsewhere provided in this
Agreement, Distributor will bear all costs and expenses incurred by or on behalf
of Distributor in manufacturing, promoting, marketing and distributing the
Products, including but not limited to manufacturing, shipping, handling and
warehousing costs, marketing expenditures, price protections and returns.
2.6 Changes to the Product List and Products. Riverdeep shall not
have the right to make any changes to the list of Products licensed hereunder to
Distributor except as set forth in this Section.
2.6.1 Upon the occurrence of a Loss Event, Riverdeep shall
notify Distributor as soon as possible, and if such Loss Event arises for any
reason other than a default by Riverdeep under Riverdeep's license agreement for
such Product, Riverdeep shall have the right to replace such Product with a
product of comparable market value and saleability to be agreed upon by the
parties. If the parties are able to reach agreement as to an appropriate
replacement product, such product shall be deemed a "Product" hereunder,
Distributor shall have all rights with respect thereto as provided with respect
to other Products hereunder, and Distributor shall have no further claim against
Riverdeep arising out of the failure to provide the Product so replaced, it
being understood that each party shall retain its rights and obligations in
regard to customer support, representations, warranties, indemnification,
returns, credits, license fees and royalties due on such Product units already
in the Channel. If the parties, operating in good faith and with commercial
reasonableness, are unable to reach agreement on any replacement product within
fifteen (15) days after notification to Distribution of such Loss Event, or if
Riverdeep has lost such rights by reason of a default under its license
agreement for such Product, Distributor shall have all of its rights and
remedies hereunder, at law, or in equity; provided however, that Distributor
shall cease further manufacturing, sales, and distribution of the Product within
15 days after notification of any such Loss Event, if applicable.
2.6.2 Riverdeep shall have the right at any time to add
products to this Agreement, or to modify, upgrade, improve, or enhance Products
under this Agreement, and promptly upon doing so shall provide Distributor with
a replicatible goldmaster and other applicable materials for Distributor's use
hereunder.
2.7 [Intentionally Omitted]
2.8 Exclusive Distributor. Riverdeep shall not license any
currently existing products or future products for the Licensed Media to any
other Distributor for sale or distribution in the Channel and the Territory,
other than Excluded Products.
2.9 Deliverables. In respect of each of the Products on Exhibit A
as of the Commencement Date, Riverdeep shall provide to Distributor the
deliverables set forth on Exhibit D attached hereto (collectively, the
"Deliverables") on the Commencement Date. If Riverdeep shall choose to add
additional Products to this Agreement in accordance with Section 2.6.2, the
parties shall mutually agree upon the ship dates therefor, and thereafter
Riverdeep shall provide the
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Deliverables for such Products no later than by the dates set forth on Exhibit
D. Without implication as to the materiality of a default in respect of any
other Products, Riverdeep's failure to furnish the Deliverables for the eight
highest revenue generating Products over the preceding 12-month period shall be
deemed to constitute a material default by Distributor hereunder unless cured
under the default provisions hereof. In addition to any other rights and
remedies available to Distributor for Riverdeep's failure to provide the
Deliverables for any Product on a timely basis, Riverdeep shall reimburse
Distributor for Distributor's out-of-pocket losses, costs, and expenses incurred
or owed by Distributor arising out of such failure within thirty (30) days after
invoicing Riverdeep therefor.
3. OWNERSHIP AND COPYRIGHT AND TRADEMARK NOTICES.
3.1 Riverdeep retains and shall have ownership of all licensed
intellectual property, including registered and unregistered copyrights and
trademarks (and all good will derived therefrom), character assets, software
code, package design, trade dress and marketing collateral, and any and all
modifications, enhancements and derivative works thereof and all Intellectual
Property Rights embodied therein and related thereto. All package art and
marketing collateral shall be created as a work for hire, owned by Distributor,
except to the extent otherwise required by Riverdeep's licensors. Distributor
shall cooperate with Riverdeep to meet the requirements of such licensors as
pertains to the creation of packaging art and marketing collateral. Upon
Riverdeep's request, no more frequently than once each quarter during the Term,
Distributor shall irrevocably assign and transfer to Riverdeep in perpetuity and
throughout the Universe any and all of Distributor's right, title and interest
(including, without limitation, the rights generally known as "moral rights" to
the extent assignable) in the packaging art and marketing collateral for the
Products created by or on behalf of Distributor, without representation or
warranty other than that Distributor has not itself theretofore assigned or
transferred any rights therein. In addition, upon and within fifteen (15) days
of Riverdeep's request, no more frequently than once each quarter during the
Term, Distributor shall also provide archived files of all such materials in the
same form and format in which Distributor uses such materials at no cost to
Riverdeep. Distributor shall not create a unitary composite mark involving
Riverdeep's trademarks or trade names. Distributor agrees that all use of such
Riverdeep trademarks and trade names shall be pursuant to Riverdeep's use
guidelines, shall inure to the benefit, and be on behalf, of Riverdeep.
3.2 Distributor hereby agrees that at the termination or
expiration of this Agreement, Distributor shall and does assign, transfer and
convey to Riverdeep all trademarks, service marks, copyrights, equities, good
will titles or other rights, titles and interests throughout the world in and to
the Products (including all packaging, marketing collateral and related
materials, but excluding Distributor's logo and any other trademarks propriety
to Distributor and unrelated to the Products) which may have been obtained by
Distributor or which may have vested in Distributor as a result of its
activities under this Agreement, and that Distributor shall immediately execute
any instruments requested by Riverdeep to accomplish or confirm the foregoing.
No consideration other than the mutual covenants and considerations of this
Agreement shall be necessary for any such assignment, transfer, or conveyance.
Distributor expressly understands and agrees that following termination or
expiration of this Agreement it retains no right to exploit or continue to
exploit or in any way deal with copies of, in any fashion and/or by any means,
the Products or any elements thereof, or packaging, promotion or advertising
related thereto or to the Products, and/or other works which embody the Products
in whole or in part which it created pursuant to this Agreement, without
Riverdeep's prior consent.
3.3 Distributor may not adopt any trademark, trade name, design,
logo or symbol, which is similar to or likely to be confused with or to dilute
any Riverdeep mark, name, logo or other intellectual property. Any sale of a
Product shall include the copyright, trademark and other proprietary rights
notices as are contained on the masters of such Product (including the
documentation) or as may be
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specified from time to time by Riverdeep. The Products shall feature the
Riverdeep brands. Distributor shall mark all packaging to indicate itself as the
manufacturer and distributor of the products, under license from Riverdeep Inc.,
a Limited Liability Company, and its licensors. All packaging is subject to
Riverdeep's approval. Riverdeep's approval of such packaging shall be deemed to
constitute Distributor's compliance with the packaging requirements of this
Agreement.
4. LICENSE FEES; GUARANTEED ROYALTY; THIRD PARTY LICENSING REIMBURSEMENT.
4.1 Earned License Fees. Distributor shall pay Riverdeep the
license fee(s) set forth on Exhibit B of this Agreement according to the terms
set forth on Exhibit B.
4.2 Guaranteed Royalty.
4.2.1 *
4.2.2. Distributor shall pay the Guaranteed Royalty as
follows. Distributor shall have deposited, together with this Agreement, an
initial payment in the amount of [*] (the "Initial Payment") into an escrow
arrangement that is mutually agreeable to Riverdeep and Distributor, which shall
be paid from such escrow to Riverdeep upon the Commencement Date. The remaining
balance shall be payable in twelve equal monthly installments, the first of
which shall be payable forty-five (45) days after the release of the Initial
Payment from escrow, the second of which shall be payable on that date that
falls thirty (30) days after the payment date of the first installment, and each
installment thereafter shall be payable on the day of each month thereafter on
which the second installment was paid (i.e., if the second installment was paid
on the 23rd day of the applicable month, each installment thereafter shall be
paid on the 23rd day). If on the date on which the final installment of the
Guaranteed Royalty is due the entire Guaranteed Royalty has not been paid, then
any remaining balance shall be paid on the last business day of the Sales Year.
4.2.3 The Guaranteed Royalty for the Sales Year shall be
fully recoupable by Distributor from royalties earned by Riverdeep on Products
during such year; provided however, that if at the end of the Sales Year,
Distributor has not fully recouped the Guaranteed Royalty for such Sales Year,
then Distributor shall have forty-two additional months to sell and distribute
the Products to fully recoup the Guaranteed Royalty; provided however, that if
at any time during such forty-two month period, a Loss Event shall occur, then
in addition to any other rights and remedies that Distributor shall have, such
forty-month period shall be extended for such additional time thereafter as
Distributor shall need to fully recoup the Guaranteed Royalty. Distributor shall
have the same rights and remedies for Loss Events occurring during such extended
recoupment periods as during the initial recoupment period.
5. UNDERTAKINGS OF THE PARTIES.
5.1 Marketing of the Products. Distributor shall use commercially
reasonable efforts to promote the sale of the Products in the Territory and
Channel. Distributor shall undertake channel marketing of the Products
throughout the Territory, consistent with industry standards. Distributor shall
maintain a commercially reasonable sales organization which can be best utilized
for the promotion of the sales of the Products.
* The material has been omitted pursuant to a request for confidential
treatment and the material has been filed separately with the Office of the
Secretary of the Securities and Exchange Commission.
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5.2 Conduct of Business. Distributor will conduct its business in
a manner that will reflect favorably at all times on the Products and the good
name, goodwill and reputation of Riverdeep; avoid deceptive, misleading or
unethical practices or advertisements that are or might be detrimental to
Riverdeep, the Products, or the public; and not publish or employ or cooperate
in the publication or employment of any misleading or deceptive advertising
materials. Distributor agrees that the Products replicated and distributed by
Distributor shall at all times shall be of high standard and of such style,
appearance and quality as to protect and enhance the Products and the good will
pertaining thereto, shall meet Riverdeep's reasonable quality standards and
specifications as stated herein, and shall be manufactured, sold, distributed
and promoted in accordance with all applicable, Federal, state and local laws
and regulations. Distributor may not sell Products that Distributor knows to be
damaged or defective or which it would reasonably consider to be "seconds" based
on industry standards.
5.3 Compliance with Laws. Distributor will comply in all material
respects with the laws and regulations of all applicable local, state and
federal jurisdictions relating to Distributor's activities hereunder, including,
but not limited to, all state and federal laws and regulations governing product
warranties for the Products.
5.4 Sales Materials. Subject to Riverdeep providing underlying
data for the Sales Materials, Distributor may reproduce sales materials,
including technical specifications, drawings, advertisements and samples
(collectively, "Sales Materials") as reasonably required, provided that all
copyright, trademark and other property markings are reproduced. Such materials
remain the property of Riverdeep, and, except insofar as they are distributed by
Distributor in the course of its performance of its duties under this Agreement,
must be promptly returned to Riverdeep upon the expiration or termination of
this Agreement without charge to Riverdeep.
6. PUBLIC ANNOUNCEMENT; CONFIDENTIALITY OF INFORMATION AND MATERIALS. The
parties shall mutually agree upon a written communication to the Channel
customers to be prepared promptly following the Commencement Date. Neither party
may issue a press release or make other public announcement regarding the
existence of this Agreement, without the express written consent of the other
except to the extent reasonably interpreted to be required by applicable laws,
rules or regulations, and in such case, Distributor shall endeavor, but shall
not be obligated, to provide Riverdeep with notice of such announcement and an
opportunity for review. The parties each shall hold in strict confidence and
shall not disclose to others (except for affiliates, investors, advisers and
consultants on a need to know basis and subject to confidentiality, or otherwise
as required by law) or use, either before or after termination or expiration of
this Agreement, any technical or business information, manufacturing technique,
process, experimental work, trade secret or other confidential matter relating
to the Products, except to the extent disclosure is reasonably required in
connection with Distributor's marketing activities in the Territory and except
to the extent that Riverdeep may assign the proceeds under this Agreement as set
forth in Section 12.3.
7. REPRESENTATIONS AND WARRANTIES.
7.1 Riverdeep. Riverdeep represents and warrants that (i) it is
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, and that it has the full rights,
power, legal capacity and authority to enter into this Agreement, and to carry
out the terms hereof; (ii) this Agreement has been executed by its duly
authorized representative and is a valid, legally binding and enforceable
obligation of Riverdeep; (iii) Riverdeep is either the owner of
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the Products and all Intellectual Property Rights therein or has procured all
necessary rights and licenses from the owners of such rights to enter into and
carry out the terms of this Agreement; (iv) the Products have not been sold,
assigned, leased, licensed or in any other way disposed of or mortgaged, pledged
or encumbered in a manner that would violate the license granted to Distributor
hereunder, and that it is under no contractual or other legal obligation which
would interfere in any way with the full, prompt, and complete performance of
its obligations pursuant to this Agreement (including with regard to Riverdeep's
contracts with COKeM that relate to the Products); (v) no consent of any person
or entity not a party to this Agreement is required or necessary for Riverdeep
to carry out its obligations hereunder other than the licensors under the
license agreements (the "Consent-Required Contracts") pursuant to which
Riverdeep procures the rights to the Products listed on Exhibit F (the
"Consent-Required Products") and only then until a Third Party Consent is
received in respect of any such Consent-Required Product upon the occurrence of
which this representation shall be deemed true and correct with respect to the
third party licensors under any such Consent-Required Contracts; (vi) there is
no litigation, claim or proceeding of any nature pending or threatened in
writing against or relating to the Products or any Intellectual Property Rights
related thereto which would have any material adverse effect on the rights
granted to Licensee hereunder; (vii) no default has occurred under any agreement
or contract to which Riverdeep is a party pursuant to which Riverdeep licenses
any Product from a third party, nor has any event occurred, which, with the
giving of notice or the passage of time, would constitute a default under any
such agreement or contract; and (viii) neither the Products, nor any of the
deliverables, nor the use of the Products or such deliverables by Distributor in
the manner specifically authorized hereunder, nor the grant of the rights under
this Agreement, is or will be an infringement of or otherwise in violation of
the rights of any third party in the Territory, including, without limitation,
the Intellectual Property Rights, or will violate any applicable laws, rules, or
regulations.
7.1.1 In this regard, Riverdeep hereby acknowledges and
agrees that Distributor shall be entitled to use and exploit in connection with
its rights under this Agreement all artwork and features and elements thereof
and all other materials provided by Riverdeep to Distributor under this
Agreement without being obligated to independently verify that, to the extent
the same has or may have been provided to Riverdeep by a third party, Riverdeep
has cleared all rights to Distributor's use and exploitation of such materials.
Without limiting the generality of the preceding sentence, Distributor at any
time shall have the right in its sole discretion to require that Riverdeep
provide to it evidence satisfactory to Distributor that all such rights to any
such materials have been cleared with all third parties, and upon receipt of
such request, Riverdeep shall promptly do so. In no event shall any such request
for verification by Distributor or disclosure by Riverdeep concerning the
impairment of such rights be deemed to abrogate or otherwise limit or affect the
protections afforded to Distributor under this Agreement in respect of
Distributor's use or exploitation of such materials.
7.2 Riverdeep further represents and warrants the goldmaster
candidate for each Product shall (i) correspond to, and perform in all material
respects in accordance with, any relevant specifications, functional or other
descriptions contained in the written materials accompanying the Products and in
all of Riverdeep's advertising and promotional materials (including, any final
demonstration versions of the Products, produced, released or approved by
Riverdeep), without interruption or error, (ii) function in all respects on the
hardware and software specified, (iii) be free from viruses, bugs, and
operational limiting routines, the effect of which would materially impair the
ability of the end-user to use and enjoy the Product as so intended, (iv) not
contain any viruses, worms, date bombs, time bombs, or other code designed to
cause the Products to cease operating or to damage, interrupt, or interfere with
any end-user's hardware, software or data, and (v) be free of other material
defects. If any goldmaster candidate fails to comply with Riverdeep's
representation and warranty under this Section, without limiting any right or
remedy in this Agreement, Riverdeep
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shall provide patches or fixes to such Product that prevents it from functioning
as represented to Distributor or otherwise keeps it from satisfying the
requirements of this Section, any such patches or fixes to be provided as soon
as commercially reasonable following Distributor's request therefor, but in no
event later than 15 days thereafter for any material bug attributable to
Riverdeep's product coding and 30 days for all other Products, it being
understood that any such patch or fix so provided shall be deemed to cure
Riverdeep's breach of the foregoing representation so long as such patch or fix,
taken together with the Product itself, would not have resulted in a breach of
such representation, and other than for any out-of-pocket losses, costs, or
expenses incurred or owed by Distributor as a result of such breach. Distributor
shall notify Riverdeep of crash bugs promptly after becoming aware of the
existence thereof and of any other impairment event in a commercially reasonable
period of time thereafter.
7.3 Riverdeep shall pay all amounts due under each of its licenses
for the Products and shall otherwise maintain the same in effect through the
term thereof. Riverdeep shall not grant any waiver or forebearance with respect
thereto if the effect of such waiver or forebearance would be to accelerate the
date of the expiration or termination thereof from the original term.
EXCEPT AS SET FORTH IN THIS SECTION, RIVERDEEP MAKES NO REPRESENTATION
OR WARRANTY WITH RESPECT TO ANY PRODUCT OR THE RELATED DOCUMENTATION AND TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW THE PRODUCTS ARE DELIVERED "AS IS." THE
WARRANTY STATED HEREIN IS EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT, AND
SUCH WARRANTY CONSTITUTES THE ONLY WARRANTY MADE BY Riverdeep WITH RESPECT TO
THIS AGREEMENT OR THE PRODUCTS, ARTICLES, MATERIALS, REPLACEMENT PARTS OR
SERVICES TO BE SUPPLIED HEREBY.
7.4 Distributor. Distributor covenants, represents and warrants
that (i) it is duly incorporated, validly existing and in good standing under
the laws of the jurisdiction in which it is incorporated, and that it has the
full rights, power, legal capacity and authority to enter into this Agreement,
and to carry out the terms hereof; (ii) this Agreement has been executed by its
duly authorized representative and is a valid, legally binding and enforceable
obligation of Riverdeep; (iii) Distributor's exercise of its rights and
performance of its obligations hereunder will not violate any laws or other
legal requirements; (iv) Distributor will not create, incur or permit any
encumbrance, lien, security interest, mortgage, pledge, assignment or other
hypothecation upon the License or Products or permit the commencement of any
proceeding or foreclosure action on a lien created by Distributor or any of its
agents or contractors on the License or Products, or to obtain any assignment
thereof, whether or not involving any judicial or nonjudicial foreclosure sales.
8. INDEMNIFICATION AND INSURANCE
8.1 Riverdeep Indemnity. Riverdeep shall indemnify, defend, and
hold Distributor harmless from and against all claims, suits, demands, actions
and proceedings, judgments, penalties, damages, costs and expenses (including
reasonable legal fees and costs), losses or liabilities ("DAMAGES") arising out
of (i) any trademark, trade dress, copyright, or patent infringement claim,
claim involving appropriation of trade secrets, claim arising out of the use and
exploitation of a person's appearance, performance, voice, or likeness in a
Product or Previously-Released Property, or claim arising out of anyone's right
to publicity or invasion of privacy contained in a Product or
10
Previously-Released Property; (ii) any amounts due to third parties for license
fees, royalties, dues, fees, or other amounts arising out of the content of or
included in any Product (including without limitation, public performance fees,
music sync license fees, and amounts due to any guilds, unions or collective
societies in connection with such content and the use and exploitation thereof);
(iii) any product liability claim or other claim for injury or damage done to
any person arising out of the use or operation of the software in the Product;
(iv) any claim arising out of or relating to the manufacturing, marketing, sale,
distribution, or other exploitation of Previously-Released Properties or
Products existing in the Channel prior the Commencement Date excluding amounts
for which Distributor is responsible under Section 5 and 6 of Exhibit B; (v) any
Damages incurred by Distributor resulting from a breach by Riverdeep of any
provision of this Agreement; (vi) Distributor's costs of goods and out-of-pocket
losses arising out of a Loss Event in respect of any Product, without regard to
whether such Product is replaced pursuant to Section 2.6 or any reduction to the
Guaranteed Royalty; or, (vii) any liabilities associated with inventory
deposited into the Channel by Riverdeep or any third-party appointed or
permitted to place Product into the Channel by Riverdeep from and after the
expiration or sooner termination of the Term.
8.1.1 Riverdeep shall not be obligated to defend or be
liable for costs and/or damages under this Section 8 to the extent that the
alleged infringement arises out of or is in any manner attributable to any
modification of any Product by Distributor (or any of Distributor's resellers),
including packaging and marketing collateral.
8.1.2 If any intellectual property claim which Riverdeep is
obligated to defend has occurred, or in Riverdeep's opinion is likely to occur,
Distributor agrees to permit Riverdeep, at Riverdeep's option and expense,
either to procure for Distributor (or its customers) the right to continue using
the subject Product or to replace or modify such Product so that it becomes
non-infringing; provided that any such action is at no cost or expense to
Distributor and any replacement is in accordance with Section 2.6 hereof.
8.2 Distributor Indemnity. Distributor shall indemnify and hold
Riverdeep harmless from and against all Damages which may arise or result from
or relate to (i) contract claims between Distributor and any of its
distributors, resellers, replicators, or retailers relating to any of the
Products; (ii) any Damages incurred by Riverdeep as a result of any sale by
Distributor of any Product outside of the Territory; (iii) any Damages incurred
by Riverdeep resulting from a breach by Distributor of any provision of this
Agreement; (iv) any third party claims of misleading advertising by Distributor;
(v) any trademark, trade dress, copyright, or patent infringement claim, claim
involving appropriation of trade secrets, claim arising out of the use and
exploitation of a person's appearance or likeness, in each case solely arising
out of any Product packaging created by or on behalf of Distributor, or claim
arising out of anyone's right to publicity or invasion of privacy contained in
any such Product packaging other than any claim relating to underlying art
assets or other materials provided by or on behalf of Riverdeep to Distributor;
(vi) any unfair trade practice, antitrust, or consumer protection claims
relating to the manufacture, marketing, sale or distribution of the Products by
Distributor; (vii) any personal injury claims relating to Distributor's
manufacture, sale, marketing or distribution of the Products, except to the
extent arising from the software in the Products; and (viii) any claims by
Riverdeep's licensors arising from or related to Distributor's incomplete or
inaccurate reporting relating to the sale of the Products (it being understood
that Distributor shall not be liable under this clause (viii) for incomplete or
inaccurate information provided to it by a third party).
8.3 The indemnifications provided for herein are conditioned upon
the indemnified party's furnishing the indemnifying party with prompt written
notice of any such claim or suit and upon
11
reasonable cooperation in defense of such claim or suit. In such event, the
indemnifying party shall have the option to undertake and conduct the defense of
any such claim or suit. The indemnifying party shall not settle any claim or
suit without the prior written consent of the indemnified party, which shall not
be unreasonably withheld or delayed. The indemnifications hereunder shall
survive the termination of this Agreement.
8.4 NEITHER PARTY SHALL UNDER ANY CIRCUMSTANCES BE LIABLE FOR ANY
CONSEQUENTIAL, INDIRECT, SPECIAL, INCIDENTAL OR EXEMPLARY DAMAGES, INCLUDING
WITHOUT LIMITATION, ANY LOSS OF REVENUES, PROFITS, OR BUSINESS OR OTHER ECONOMIC
LOSS ARISING OUT OF OR IN CONNECTION WITH THE SERVICES PROVIDED HEREUNDER,
ARISING UNDER CONTRACT, TORT OR OTHERWISE, AND EVEN IF ADVISED OF THE
POSSIBILITY OF SUCH LOSS, EXCEPT AS SPECIFICALLY PROVIDED FOR ELSEWHERE IN THIS
AGREEMENT. THE FOREGOING SHALL NOT LIMIT EITHER PARTY'S INDEMNIFICATION
OBLIGATIONS HEREUNDER TO THE EXTENT THAT A THIRD PARTY CLAIMS ANY SUCH DAMAGES
AGAINST A PARTY HEREUNDER.
8.5 Insurance. Distributor shall obtain, at its own expense,
general liability, including product liability, insurance providing adequate
protection for Riverdeep in amounts no less than One Million Dollars
($1,000,000.00) for bodily injury to any person per any one occurrence and One
Hundred Thousand Dollars ($100,000.00) for property damage per any one
occurrence. Simultaneously with the execution of this Agreement, Distributor
shall submit to Riverdeep fully paid policies or certificates of insurance
naming Riverdeep as an additional insured party and, providing that coverage
shall extend to all claims or suits arising out of the use of the Products
manufactured or sold under this Agreement, and further requiring that the
insurer shall not terminate or materially modify such without written notice to
Riverdeep at least twenty (20) days in advance thereof.
9. TERM OF AGREEMENT.
9.1 This Agreement shall commence on the Commencement Date and
shall continue in effect for a period of one (1) year thereafter(the "TERM"), as
the same may be extended for any extended recoupment period under Section 4
hereof.
10. TERMINATION.
10.1 Termination For Cause. Either party may terminate this
Agreement, without further notice, for cause as follows:
10.1.1 Either party may immediately terminate this Agreement
upon written notice to the other party in the event that proceedings in
bankruptcy or insolvency are instituted by or against the other party, or a
receiver is appointed, or if any substantial part of the assets of the other
party is the object of attachment, sequestration or other type of comparable
proceeding, and such proceeding is not vacated or terminated within sixty (60)
days after its commencement or institution.
10.1.2 Either party may terminate this Agreement if the
other party commits a material breach of any of the terms or provisions of this
Agreement and does not cure such breach within thirty (30) days (or such shorter
period as may be expressly provided for in such applicable term or provision)
after receipt of written notice given. Distributor shall hold its affiliates,
third party manufacturers and authorized sublicensees to the same standards that
Distributor is held. If any of
12
Distributor's affiliates, third party manufacturers or authorized sublicensees
commits any activity which would be a breach of the Agreement by Distributor if
Distributor had committed such activity, Distributor shall within three business
days following notice thereof take commercially reasonable efforts to terminate
such activity. Thereafter, if the activity is not terminated within the earlier
of thirty (30) days or the period allowed for cure, pursuant to the applicable
agreement with such third party manufacturer or sublicensee, Distributor shall
terminate the contractual relationship with such third party.
10.2 Rights Upon Termination. Upon termination of this Agreement,
by expiration of the Term or otherwise, all further rights and obligations of
the parties shall cease, except that the parties shall not be relieved of (i)
their respective obligations to pay any monies due or which become due as of or
subsequent to the date of termination, and (ii) any other respective obligations
under this Agreement which specifically survive or are to be performed after the
date of termination. Riverdeep shall provide written notice to the Channel that
Riverdeep or its new distributor will take responsibility for all returns, Sales
Discounts, and MDF from and after such expiration or sooner termination.
Distributor and any authorized sublicensees shall immediately cease all
manufacturing, selling, marketing, distributing, advertising and/or promoting of
the Products. Distributor shall not increase sales in the Channel prior to
expiration of the Agreement in a manner inconsistent with standard industry
practices and Distributor's inventory management practices during the Term. In
the event of expiration or termination for Riverdeep's breach, Distributor
shall, at Riverdeep's direction, destroy Products in Distributor's possession,
or transfer all Products in its possession to Riverdeep, [*]. Such Mediator
shall be advised at the time of engagement to invoice each party for 50% of fees
and costs. In the event of termination for Distributor's breach, Distributor
shall, at Riverdeep's direction, destroy Products in Distributor's possession,
or transfer Products in its possession to Riverdeep, provided that Riverdeep
shall reimburse Distributor the actual cost of goods plus shipping and handling
fees for all units transferred to Riverdeep. Upon termination or expiration of
the Agreement for Distributor's breach, Distributor's payment obligation for
earned and guaranteed royalties shall survive and shall be due and payable upon
the same terms and conditions as provided for herein subject to any obligation
under applicable law to mitigate damages suffered by virtue of Distributor's
breach.
10.3 Unforeseen Circumstances. No delay or failure by the parties
hereto in the performance of any obligation of this Agreement shall be deemed a
breach of this Agreement nor shall it create any liability, if the same shall
arise by reason of any cause beyond the reasonable control of the affected
party, including, but not limited to, labor disputes, strikes, wars, terrorism,
riots, insurrection, civil commotion, accident, shortage of materials or
equipment, government regulations, fire, flood, storm, or any other acts of God,
including defects and/or breakdowns of equipment and programming errors not
within the reasonable control of the affected party, provided that the party so
affected shall use commercially reasonable efforts to avoid or remove such cause
of nonperformance and shall continue performance hereunder as soon as
practicable. The foregoing shall not excuse the performance of any financial
obligations hereunder under any circumstance. In the event such cause occurs and
exceeds sixty (60) calendar days, the party not so affected may cancel this
Agreement upon written notice.
10.4 Bankruptcy. The parties hereby agree and intend that this
Agreement is an executory contract governed by Section 365 of the Bankruptcy
Code.
(a) In the event of Distributor's bankruptcy, the parties intend that
any royalties earned under this Agreement during the bankruptcy period be deemed
administrative claims under the Bankruptcy Code because the parties recognize
and agree that the bankruptcy estate's enjoyment of this Agreement will
* The material has been omitted pursuant to a request for confidential
treatment and the material has been filed separately with the Office of the
Secretary of the Securities and Exchange Commission.
13
(i) provide a material benefit to the bankruptcy estate during its
reorganization and (ii) deny Riverdeep the benefit of the exploitation of the
rights through alternate means during the bankruptcy reorganization.
(b) The parties acknowledge and agree that any delay in the decision of
trustee of the bankruptcy estate to assume or reject the Agreement (the
"Decision Period") materially harms Riverdeep by interfering with Riverdeep's
ability to alternatively exploit the rights granted under this Agreement during
a Decision Period of uncertain duration. The parties recognize that arranging
appropriate alternative exploitation would be a time consuming and expensive
process and that it is unreasonable for Riverdeep to endure a Decision Period of
extended uncertainty. Therefore, the parties agree that the Decision Period
shall not exceed sixty (60) days.
(c) Riverdeep, in its interest to safeguard its valuable interests
(including, without limitation, its intellectual property rights in the
Products), has relied on the particular skill and knowledge base of Distributor.
Therefore, the parties acknowledge and agree that in a bankruptcy context this
Agreement is a license of the type described by Section 365(c)(1) of the
Bankruptcy Code and may not be assigned without the prior written consent of
Riverdeep.
10.5 Survival of Terms. Sections 3, 4, 6, 7, 8, 10.2, 10.5, 11 and
12 of this Agreement shall survive any termination of this Agreement.
11. BOOKKEEPING OBLIGATIONS AND INSPECTION RIGHTS.
11.1 Distributor shall maintain true and complete books of account
containing an accurate record of all data necessary for the proper computation
of payments hereunder, and Riverdeep shall have the right, by a certified public
accountant appointed by it and reasonably approved by Distributor, to examine
such books at all reasonable times (but not more than once in each calendar year
and not during the first fifteen days of any quarter) for the purpose of
verifying the accuracy of the reports and computation rendered by Distributor.
Upon reasonable advance written notice (but in no event less than 15 days), such
examination shall be made during normal business hours at the principal place of
business of Distributor. If such examination reveals that reports furnished by
Distributor were inaccurate by more than five percent (5%) and that amounts in
excess of those paid to Riverdeep are due, the cost of such examination shall be
borne by Distributor, and Distributor shall pay the amount of any discrepancy to
Riverdeep, plus interest at the rate of nine percent (9%) per year or part
thereof on any deficiencies.
11.2 Distributor will make commercially reasonable efforts to
facilitate Riverdeep's ability to enter and inspect all premises and facilities
(including, without limitation, storage and shipping facilities) of Distributor
and its manufacturer(s) and distributor(s), and its and their warehousers and/or
shippers, in order to ensure that the manufacture, packaging, labeling,
advertising and promotion and distribution of Products comply with Distributor's
obligations hereunder and all applicable laws. Distributor will make
commercially reasonable efforts to provide all information reasonably requested
by Riverdeep regarding the testing, manufacture, quality control, storage and
shipment of the Products.
11.3 Distributor shall, without cost or expense to itself,
cooperate with Riverdeep in connection with any audit of Riverdeep's books and
records by its third party licensors of the Products.
14
12. MISCELLANEOUS.
12.1 Entire Agreement. This Agreement contains the entire
understanding of the parties hereto relating to the Products, supersedes any
prior written or oral agreement or understandings between the parties with
respect to the Products, and cannot be changed or terminated orally. This
Agreement may be amended only by a writing signed by the parties hereto.
12.2 Enforceability. The invalidity or unenforceability of any
provision of this Agreement will not affect the validity or enforceability of
any other provision of this Agreement.
12.3 Assignment. Neither party shall assign this Agreement without
the prior consent of the other, not to be unreasonably withheld or delayed,
except to an entity which controls, is controlled by, or under common control
with such party ("control" defined as the power to directly or indirectly direct
the management of the applicable entity or ownership of 50% or more of the
voting shares thereof) or a merger of a party into another business entity, the
sale or transfer of the ownership interest or control of a party, or the sale or
transfer of more than 50% of a party's assets
12.4 Successors. All rights and obligations arising out of this
Agreement shall inure the benefit of, and be binding on and enforceable by the
parties and their respective successors and permitted assigns.
12.5 Currency. All dollar amounts herein are expressed in United
States funds.
12.6 Governing Law. This Agreement and its validity, construction
and performance shall be governed in all respects by the laws of the State of
California.
12.7 Notices. All notices or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be considered as properly given or made if hand delivered, mailed first class
mail, postage prepaid, sent by prepaid telegram (or telex or other facsimile
transmission) or sent by express overnight courier service:
If to Riverdeep, to: If to Distributor, to:
Riverdeep Inc. A Limited Liability Company Encore Software, Inc.
500 Redwood Blvd. 16920 S. Main Street
Novato, CA 94947 Gardena, CA 90248
Attention: Chief Operating Officer Attention: Michael A. Bell
Fax: (415) 763-4931 Fax: (310) 768-1822
With a copy to: With a copy to:
Riverdeep, Inc. Encore Software, Inc.
500 Redwood Boulevard 16920 S. Main Street
Novato, California 94947 Gardena, CA 90248
Attention: Counsel Attn: General Counsel
Fax: (415) 763-4931
15
or to such other address as any such party may have designated by like notice
forwarded to the other party hereto.
12.8 Dispute Resolution; Election of Remedy. Any dispute,
controversy, or claim arising out of, in connection with, or in relation to this
Agreement or the breach thereof shall be resolved in a state or federal court
venued in Marin or San Francisco County, the jurisdiction of which is
stipulated. The parties waive any right to claim forum non conveniens, or to
otherwise object to jurisdiction or venue. Unless expressly set forth to the
contrary, either party's election of any remedies provided for in this Agreement
will not be exclusive of any other remedies available hereunder or otherwise at
law or in equity.
12.9 Injunctive Relief. Distributor understands and agrees that
Riverdeep will suffer irreparable harm in the event that Distributor fails to
comply with the any of its obligations under Section 2.1 or Section 3, above,
and that monetary damages in such event would be substantial and inadequate to
compensate Riverdeep. Consequently, in such event Riverdeep will be entitled, in
addition to such monetary relief as may be recoverable by law, to such
temporary, preliminary and/or permanent injunctive relief as may be necessary to
restrain any continuing or further breach by Distributor, without showing or
proving any actual damages sustained by Riverdeep.
12.10 Independent Contractors. The parties hereto are independent
contractors and neither party is an employee, agent, partner or joint venturer
of the other. Neither party shall have the right to bind the other party,
whether directly or indirectly, to any agreement with a third party or to incur
any obligation or liability on behalf of such other party, whether directly or
indirectly.
12.11 No Third Party Beneficiaries. Except for the parties hereto,
no other party shall be entitled to any rights, benefits, or privileges under
this Agreement.
12.12 Offset. Notwithstanding any provision of this Agreement, at
any time during the Term or any extension of this Agreement and after expiration
or termination of this Agreement, either party has the right to offset any and
all amounts or credits which such party owes to the other party hereunder
against any and all amounts which other party owes such party hereunder.
16
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
signed under seal as of the date first set forth above.
RIVERDEEP INC., A LIMITED LIABILITY ENCORE SOFTWARE, INC.
COMPANY
By: ______________________________ By: _______________________________
Name: John Rim Name:
Its: VP, Asst. Treasurer, Riverdeep Title:
Interactive Learning USA, Inc., Sole
Member of Riverdeep Inc.,
a Limited Liability Company
17
INDEX OF EXHIBITS
EXHIBIT A - SCHEDULE OF PRODUCTS
EXHIBIT B - CERTAIN ADDITIONAL TERMS
EXHIBIT C - SCHEDULE OF APPROVED SUBLICENSES
EXHIBIT D - SCHEDULE OF DELIVERABLES FOR EACH PRODUCT
EXHIBIT E - SCHEDULE OF APPROVED THIRD PARTY MANUFACTURERS
EXHIBIT F - SCHEDULE OF CONSENT-REQUIRED PRODUCTS
EXHIBIT G - ROYALTY REPORT TEMPLATE
18
EXHIBIT A
SCHEDULE OF PRODUCTS
SKU TITLE
- ---------------------------------------------------------------------------
OGG3844AE 1000 GREAT GAMES VAL
- ---------------------------------------------------------------------------
382114 101 GRTST XP GAMES 2 VAL
- ---------------------------------------------------------------------------
381842 101 GRTST XP GAMES VAL
- ---------------------------------------------------------------------------
382817 101 XP APS & UTLITIES VAL
- ---------------------------------------------------------------------------
383204 3D HOME DSGN 6 STE
- ---------------------------------------------------------------------------
383204X 3D HOME DSGN 6 STE SNSRMTC
- ---------------------------------------------------------------------------
385497 3D HOME DSGN STE 5 PRO
- ---------------------------------------------------------------------------
382169 3D HOME DSGN STE 5 PRO LGBX
- ---------------------------------------------------------------------------
381158 3D HOME INTERIORS 2 DLX VAL
- ---------------------------------------------------------------------------
385498 3D HOME LNDSCPE 5 DLX
- ---------------------------------------------------------------------------
382068 3D HOME LNDSCPE 5 VAL
- ---------------------------------------------------------------------------
382068X 3D HOME LNDSCPE 5 VAL SNSRMTC
- ---------------------------------------------------------------------------
383205 3D HOME LNDSCPE DSGN 6
- ---------------------------------------------------------------------------
383205X 3D HOME LNDSCPE DSGN 6 SNSRMTC
- ---------------------------------------------------------------------------
381159 3DHA 3 DLX VAL
- ---------------------------------------------------------------------------
381159X 3DHA 3 DLX VAL SNSRMTC
- ---------------------------------------------------------------------------
381541 3DHA 5 DLX
- ---------------------------------------------------------------------------
385356 3DHA 5 PRO
- ---------------------------------------------------------------------------
382067 3DHA 5 VAL
- ---------------------------------------------------------------------------
383206 3DHA 6 DLX
- ---------------------------------------------------------------------------
383206X 3DHA 6 DLX SNSRMTC
- ---------------------------------------------------------------------------
383206XW 3DHA 6 DLX WAL SNSRMTC
- ---------------------------------------------------------------------------
583311P ACHIEVE BONUS ASST CSCO 403
- ---------------------------------------------------------------------------
381931R ACHIEVE MATH & SCI GRD 1-3 CLB
- ---------------------------------------------------------------------------
381933 ACHIEVE MATH & SCI GRD 1-3 MM
- ---------------------------------------------------------------------------
381877 ACHIEVE MATH & SCI GRD 3-6
- ---------------------------------------------------------------------------
381876R ACHIEVE MATH & SCI GRD 3-6 CLB
- ---------------------------------------------------------------------------
381881 ACHIEVE MATH & SCI GRD 3-6 MM
- ---------------------------------------------------------------------------
381934R ACHIEVE PHONICS GRD 1-3 CLUB
- ---------------------------------------------------------------------------
381936 ACHIEVE PHONICS GRD 1-3 MM
- ---------------------------------------------------------------------------
381879 ACHIEVE WRTNG & LA GRD 3-6
- ---------------------------------------------------------------------------
381878R ACHIEVE WRTNG & LA GRD 3-6 CLB
- ---------------------------------------------------------------------------
381880 ACHIEVE WRTNG & LA GRD 3-6 MM
- ---------------------------------------------------------------------------
381676 ADV STUART LITTLE
- ---------------------------------------------------------------------------
381677 ADV STUART LITTLE MM
- ---------------------------------------------------------------------------
381429 ADV WKSHP 3 GRD 1-3
- ---------------------------------------------------------------------------
381434 ADV WKSHP 3 GRD 1-3 MM
- ---------------------------------------------------------------------------
381426R ADV WKSHP 3 GRD 1-3 R1 CLB
- ---------------------------------------------------------------------------
381434R ADV WKSHP 3 GRD 1-3 R1 MM
- ---------------------------------------------------------------------------
381432 ADV WKSHP 3 GRD 4-6 MM
- ---------------------------------------------------------------------------
381432R ADV WKSHP 3 GRD 4-6 R1 MM
- ---------------------------------------------------------------------------
381433R ADV WKSHP 3 GRD PRE-1 R1 MM
- ---------------------------------------------------------------------------
382251 ADV WKSHP 4 GRD 1-3
- ---------------------------------------------------------------------------
382197 ADV WKSHP 4 GRD 1-3 MM
- ---------------------------------------------------------------------------
382252 ADV WKSHP 4 GRD 4-6
- ---------------------------------------------------------------------------
382199 ADV WKSHP 4 GRD 4-6 MM
- ---------------------------------------------------------------------------
583683J ADV WKSHP 5 ASST BJS 204
- ---------------------------------------------------------------------------
583464P ADV WKSHP 5 ASST CSCO 104
- ---------------------------------------------------------------------------
19
SKU TITLE
- ---------------------------------------------------------------------------
383361 ADV WKSHP 5 GRD 1-3
- ---------------------------------------------------------------------------
383331 ADV WKSHP 5 GRD 1-3 CLB
- ---------------------------------------------------------------------------
383330 ADV WKSHP 5 GRD 1-3 MM
- ---------------------------------------------------------------------------
383362 ADV WKSHP 5 GRD 4-6
- ---------------------------------------------------------------------------
383333 ADV WKSHP 5 GRD 4-6 CLB
- ---------------------------------------------------------------------------
383332 ADV WKSHP 5 GRD 4-6 MM
- ---------------------------------------------------------------------------
383360 ADV WKSHP 5 GRD PRE-1
- ---------------------------------------------------------------------------
383329 ADV WKSHP 5 GRD PRE-1 CLB
- ---------------------------------------------------------------------------
383328 ADV WKSHP 5 GRD PRE-1 MM
- ---------------------------------------------------------------------------
582993J ADV WKSHP ASST BJ 303
- ---------------------------------------------------------------------------
582351P1 ADV WKSHP ASST CSCO 103A
- ---------------------------------------------------------------------------
583009P ADV WKSHP ASST CSCO 403
- ---------------------------------------------------------------------------
381427R ADV WKSHP GRD 4-6 V3 R1 CLUB
- ---------------------------------------------------------------------------
381431 ADV WKSHP GRD PRE-1 MASS MIX 3
- ---------------------------------------------------------------------------
381428R ADV WKSHP GRD PRE-1 V3 R1 CLUB
- ---------------------------------------------------------------------------
382250 ADV WKSHP GRD PRE-1 V4
- ---------------------------------------------------------------------------
382195 ADV WKSHP GRD PRE-1 V4 MM
- ---------------------------------------------------------------------------
360368 ADV WKSHP SCHLSTC ED CLB
- ---------------------------------------------------------------------------
360367 ADV WKSHP SCHLSTC ED MM
- ---------------------------------------------------------------------------
360367X ADV WKSHP SCHLSTC EDMM SNSRMTC
- ---------------------------------------------------------------------------
382339 ADV WKSHP SEUSS GRD PRE-1 CLB
- ---------------------------------------------------------------------------
382340 ADV WKSHP SEUSS GRD PRE-1 MM
- ---------------------------------------------------------------------------
378331S AG 2 PRINT PREMIUM SAMS
- ---------------------------------------------------------------------------
379755 AG 3 PRINT PREMIUM
- ---------------------------------------------------------------------------
385377 AG 7 SCRAPBOOKS & MORE VAL
- ---------------------------------------------------------------------------
385376 AG 7 SPIRITUAL EXP VAL
- ---------------------------------------------------------------------------
ACS3844AEC AG CAC 2 VAL CUSA
- ---------------------------------------------------------------------------
378300 AG CAC 4
- ---------------------------------------------------------------------------
385375 AG CAC 7 CRAFTS VAL
- ---------------------------------------------------------------------------
385290 AG CAC 7 SILVER VAL
- ---------------------------------------------------------------------------
385569 AG CAC 8 GOLD
- ---------------------------------------------------------------------------
382789X AG CAC 8 GOLD MM SNSRMTC
- ---------------------------------------------------------------------------
385571 AG CAC 8 PLATINUM
- ---------------------------------------------------------------------------
385567 AG CAC 8 SILVER VAL
- ---------------------------------------------------------------------------
382220 AG SCRAPBOOK & CRAFT DUAL VAL
- ---------------------------------------------------------------------------
382219 AG SLVR & SPIRTUAL DUAL VAL
- ---------------------------------------------------------------------------
381211 ARTHUR GRD 1 MM
- ---------------------------------------------------------------------------
381210 ARTHUR GRD KIND MM
- ---------------------------------------------------------------------------
382341 ARTHUR K STRFLY ALIEN BNDL
- ---------------------------------------------------------------------------
382342 ARTHUR K STRFLY ALIEN BNDL MM
- ---------------------------------------------------------------------------
381859 ARTHUR MATH GAMES VAL
- ---------------------------------------------------------------------------
382247 ARTHUR MINI 2 PACK
- ---------------------------------------------------------------------------
382421 ARTHUR PET CHASE V1 MM
- ---------------------------------------------------------------------------
382423 ARTHUR SAND CASTLE CNTST MM V1
- ---------------------------------------------------------------------------
582893P BATMAN & SD ASST CSCO 303
- ---------------------------------------------------------------------------
582892S BATMAN & SD ASST SAMS 303
- ---------------------------------------------------------------------------
582916J BATMAN & SD MM ASST BJ 303
- ---------------------------------------------------------------------------
381914 BATMAN JUSTICE UNBALANCED
- ---------------------------------------------------------------------------
382141 BATMAN JUSTICE UNBALANCED MM
- ---------------------------------------------------------------------------
381913 BATMAN TOXIC CHILL
- ---------------------------------------------------------------------------
382140 BATMAN TOXIC CHILL MM
- ---------------------------------------------------------------------------
381543-BK BK CIG TO TF HOME REPAIR
- ---------------------------------------------------------------------------
20
SKU TITLE
- ---------------------------------------------------------------------------
381328 BODYWORKS 4 DUAL VAL
- ---------------------------------------------------------------------------
882922 BOUNTY HUNTER OT ADV
- ---------------------------------------------------------------------------
383298-BX BX GUARDIAN SCRTY STE
- ---------------------------------------------------------------------------
385488 CA 250K (SSL)
- ---------------------------------------------------------------------------
382249 CA 3 FONTS DLX
- ---------------------------------------------------------------------------
60402A CA 300K IMAGE PACK
- ---------------------------------------------------------------------------
385489 CA 400K
- ---------------------------------------------------------------------------
382309 CA 50K VALUE
- ---------------------------------------------------------------------------
385490 CA 750K
- ---------------------------------------------------------------------------
385490X CA 750K SNSRMTC
- ---------------------------------------------------------------------------
382385 CA FONTS VALUE
- ---------------------------------------------------------------------------
LHCAPCCV1M CAPCOM COIN OP COL V1 SNSRMTC
- ---------------------------------------------------------------------------
382790 CAPCOM STREETFGHTR 1 VAL
- ---------------------------------------------------------------------------
382790X CAPCOM STREETFGHTR 1 VAL SNSR
- ---------------------------------------------------------------------------
382382 CC 10
- ---------------------------------------------------------------------------
382383 CC 10 DLX
- ---------------------------------------------------------------------------
382965 CC 10 DLX MP5
- ---------------------------------------------------------------------------
382383X CC 10 DLX SNSRMTC
- ---------------------------------------------------------------------------
382382X CC 10 SNSRMTC
- ---------------------------------------------------------------------------
385345 CC 8 VAL
- ---------------------------------------------------------------------------
385346 CC 9
- ---------------------------------------------------------------------------
385372 CC 9 DLX NTWK MED KIT
- ---------------------------------------------------------------------------
383322 CC 9 VAL
- ---------------------------------------------------------------------------
382336 CF ADV PACK
- ---------------------------------------------------------------------------
382664 CF ADV PACK V1
- ---------------------------------------------------------------------------
382461 CF ADV PACK V1 MM
- ---------------------------------------------------------------------------
882459 CF BACKLOT BANSHEE BOOK 96PG
- ---------------------------------------------------------------------------
381579 CF GRD 3 ADV MATHRA V2.4
- ---------------------------------------------------------------------------
381643 CF GRD 3 ADV MATHRA V2.4 MM
- ---------------------------------------------------------------------------
381644 CF GRD 4 ADV PYRAMID V2.4 MM
- ---------------------------------------------------------------------------
381573 CF INCRED TOY STORE V1.1
- ---------------------------------------------------------------------------
381648 CF INCRED TOY STORE V1.4 MM
- ---------------------------------------------------------------------------
381646 CF MATH ADV HIMALAYAS V2.4 MM
- ---------------------------------------------------------------------------
882458 CF MYS OF MICROSNEEZIA 96PG
- ---------------------------------------------------------------------------
381860 CF READING AGE 9-12 VAL
- ---------------------------------------------------------------------------
581882P CF RR ASST V1 CSCO
- ---------------------------------------------------------------------------
383318 CF S&S & MYS MANSION VAL
- ---------------------------------------------------------------------------
382343 CF TOY ZOOMBINI LOG BNDL
- ---------------------------------------------------------------------------
382344 CF TOY ZOOMBINIS LOG BNDL MM
- ---------------------------------------------------------------------------
383049 CK SCRPBK DSGNR DLX
- ---------------------------------------------------------------------------
383049J CK SCRPBK DSGNR DLX BJS
- ---------------------------------------------------------------------------
383049P CK SCRPBK DSGNR DLX CSCO
- ---------------------------------------------------------------------------
383551X CK SCRPBK DSGNR DLX MM SNSRMTC
- ---------------------------------------------------------------------------
383049S CK SCRPBK DSGNR DLX SAMS
- ---------------------------------------------------------------------------
383049X CK SCRPBK DSGNR DLX SNSRMTC
- ---------------------------------------------------------------------------
WUS3744AE CLAS:WHERE US CARMN RTL W/95/M
- ---------------------------------------------------------------------------
583411J CLFRD & MATH MISSIONS ASST BJ 104
- ---------------------------------------------------------------------------
334397 CLIFRD LEARNING ACTIVITES
- ---------------------------------------------------------------------------
334399 CLIFRD LEARNING ACTIVITES MM
- ---------------------------------------------------------------------------
344355 CLIFRD MUSICAL MEMORY GAMES VAL
- ---------------------------------------------------------------------------
344342 CLIFRD MUSICAL MMRY GAMES
- ---------------------------------------------------------------------------
344347 CLIFRD MUSICAL MMRY GAMES MM
- ---------------------------------------------------------------------------
21
SKU TITLE
- ---------------------------------------------------------------------------
356508 CLIFRD PHONICS
- ---------------------------------------------------------------------------
356535 CLIFRD PHONICS MM
- ---------------------------------------------------------------------------
321537 CLIFRD READING
- ---------------------------------------------------------------------------
334586 CLIFRD READING MM
- ---------------------------------------------------------------------------
367976 CLIFRD READING VAL
- ---------------------------------------------------------------------------
559182 CLIFRD SIDE BY SIDE BNDL
- ---------------------------------------------------------------------------
559207 CLIFRD SIDE BY SIDE BNDL MM
- ---------------------------------------------------------------------------
321545 CLIFRD THINKING
- ---------------------------------------------------------------------------
335434 CLIFRD THINKING MM
- ---------------------------------------------------------------------------
367978 CLIFRD THINKING VAL
- ---------------------------------------------------------------------------
00CM2510CC CLIPART & MORE 2,000,000
- ---------------------------------------------------------------------------
382238 CS MINI 2 PACK
- ---------------------------------------------------------------------------
882455 CS USA ADV 160PG
- ---------------------------------------------------------------------------
381034 CS USA VAL
- ---------------------------------------------------------------------------
882456 CS WORLD ADV 160PG
- ---------------------------------------------------------------------------
379985 CS WRLD VAL
- ---------------------------------------------------------------------------
382404 DAVE MIRRA BMX VAL
- ---------------------------------------------------------------------------
300162 DINOSAUR HNTR VAL
- ---------------------------------------------------------------------------
382403 DUCATIWORLD VAL
- ---------------------------------------------------------------------------
582895P1 EDU ASST CSCO 403
- ---------------------------------------------------------------------------
310243 EMERGENCY 2 VAL
- ---------------------------------------------------------------------------
382039 EMPERORS MAHJONG MM VAL
- ---------------------------------------------------------------------------
383014 EMPERORS MAHJONG VAL
- ---------------------------------------------------------------------------
300198 EXPLRE 3D WRLD ATLAS PWR PK
- ---------------------------------------------------------------------------
300188 EXPLRE SPACE PWR PK
- ---------------------------------------------------------------------------
385455 FAM LWYR 2003 ESS VAL
- ---------------------------------------------------------------------------
385446 FAM LWYR 2003 H&B DLX
- ---------------------------------------------------------------------------
382651 FAM LWYR 2004 DLX H&B
- ---------------------------------------------------------------------------
382917X FAM LWYR 2004 DLX H&B MM SNSR
- ---------------------------------------------------------------------------
382651X FAM LWYR 2004 DLX H&B SNSRMTC
- ---------------------------------------------------------------------------
300130 FIRST FRNDSHPS FUN PK
- ---------------------------------------------------------------------------
335485 FORMTOOL 2004
- ---------------------------------------------------------------------------
335485X FORMTOOL 2004 SNSRMTC
- ---------------------------------------------------------------------------
382978 GUARDIAN AD ELIMINATOR
- ---------------------------------------------------------------------------
382979 GUARDIAN DATA PRTCTR VAL
- ---------------------------------------------------------------------------
382980 GUARDIAN FREWALL INSCRE IM VAL
- ---------------------------------------------------------------------------
382981 GUARDIAN PC CLEANER VAL
- ---------------------------------------------------------------------------
383298 GUARDIAN SCRTY STE
- ---------------------------------------------------------------------------
383299 GUARDIAN SCRTY STE MM
- ---------------------------------------------------------------------------
383298X GUARDIAN SCRTY STE SNSRMTC
- ---------------------------------------------------------------------------
382982 GUARDIAN SPAM ELMNTR VAL
- ---------------------------------------------------------------------------
382983 GUARDIAN WORM KILLER VAL
- ---------------------------------------------------------------------------
382209 HAMTARO WAKE UP SNOOZER
- ---------------------------------------------------------------------------
382210 HAMTARO WAKE UP SNOOZER MM
- ---------------------------------------------------------------------------
335438 HIJAAK DIGITAL PHOTO STUDIO
- ---------------------------------------------------------------------------
00JPA510CC HIJAAK PHOTAGS
- ---------------------------------------------------------------------------
335495X HIJAAK PHOTAGS SNSRMTC
- ---------------------------------------------------------------------------
335437 HIJAAK PHOTO ART
- ---------------------------------------------------------------------------
382884 HM DEPOT 3D HM LNDSCP DES DLX
- ---------------------------------------------------------------------------
382883 HM DEPOT 3D HOME 5 DES DLX
- ---------------------------------------------------------------------------
300171 I LOVE MATH PWR PK
- ---------------------------------------------------------------------------
300134 I LOVE PHONICS PWR PK
- ---------------------------------------------------------------------------
22
SKU TITLE
- ---------------------------------------------------------------------------
300111 I LOVE USA VAL
- ---------------------------------------------------------------------------
348585 I SPY COL
- ---------------------------------------------------------------------------
356519 I SPY FANTASY
- ---------------------------------------------------------------------------
356538 I SPY FANTASY MM
- ---------------------------------------------------------------------------
356519X I SPY FANTASY SNSRMTC
- ---------------------------------------------------------------------------
321658 I SPY JR PUPPET PLYHSE VAL
- ---------------------------------------------------------------------------
313729 I SPY JUNIOR VAL
- ---------------------------------------------------------------------------
321588 I SPY SCHOOL DAYS
- ---------------------------------------------------------------------------
358179 I SPY SCHOOL DAYS MM
- ---------------------------------------------------------------------------
367977 I SPY SCHOOL DAYS VAL
- ---------------------------------------------------------------------------
559180 I SPY SIDE BY SIDE BNDL
- ---------------------------------------------------------------------------
559206 I SPY SIDE BY SIDE BNDL MM
- ---------------------------------------------------------------------------
358178 I SPY SPOOKY MANSION MM
- ---------------------------------------------------------------------------
313728 I SPY SPOOKY MANSION VAL
- ---------------------------------------------------------------------------
334394 I SPY TREASURE HUNT
- ---------------------------------------------------------------------------
334396 I SPY TREASURE HUNT MM
- ---------------------------------------------------------------------------
382058 ID THEFT PRTCTOR
- ---------------------------------------------------------------------------
382804 ID THEFT PRTCTOR MM
- ---------------------------------------------------------------------------
382804X ID THEFT PRTCTOR MM SNSRMTC
- ---------------------------------------------------------------------------
382058S ID THEFT PRTCTOR SAMS
- ---------------------------------------------------------------------------
383162 IMSECURE PRO
- ---------------------------------------------------------------------------
383162X IMSECURE PRO SNSRMTC
- ---------------------------------------------------------------------------
381920 INTELLIVSN GRTST HITS VAL
- ---------------------------------------------------------------------------
310243Z-JCB JCB EMERGENCY 2
- ---------------------------------------------------------------------------
382115Z-JCB JCB MAVIS 12
- ---------------------------------------------------------------------------
382319 KASPAROV CHESSMATE MM VAL
- ---------------------------------------------------------------------------
382319X KASPAROV CHESSMT MMVAL SNSRMTC
- ---------------------------------------------------------------------------
383315 KID PIX 4 DLX MM
- ---------------------------------------------------------------------------
378180 KIDPIX 3 DLX
- ---------------------------------------------------------------------------
381178 KIDPIX 3 DLX MM
- ---------------------------------------------------------------------------
378180O KIDPIX 3 DLX OM
- ---------------------------------------------------------------------------
385310 KIDPIX DLX & 100 GREAT VAL
- ---------------------------------------------------------------------------
380863 KIDPIX DLX VAL
- ---------------------------------------------------------------------------
382345 KIDPIX STUART LITTLE BNDL
- ---------------------------------------------------------------------------
382346 KIDPIX STUART LITTLE BNDL MM
- ---------------------------------------------------------------------------
385036 LEARN WIN XP & EXCEL XP VAL
- ---------------------------------------------------------------------------
378379 LEGACY OF KAIN SOUL REAVER VAL
- ---------------------------------------------------------------------------
382236 LITTLE BEAR DUAL VAL
- ---------------------------------------------------------------------------
356515 LITTLE BILL
- ---------------------------------------------------------------------------
356537 LITTLE BILL MM
- ---------------------------------------------------------------------------
356537X LITTLE BILL MM SNSRMTC
- ---------------------------------------------------------------------------
335496 LOR RETURN OF THE KING VAL
- ---------------------------------------------------------------------------
382406 MARYKATE & ASHLEY DANCE VAL
- ---------------------------------------------------------------------------
356504 MATH MISSIONS GRD 3-5
- ---------------------------------------------------------------------------
356533 MATH MISSIONS GRD 3-5 MM
- ---------------------------------------------------------------------------
356503 MATH MISSIONS GRD K-2
- ---------------------------------------------------------------------------
356532 MATH MISSIONS GRD K-2 MM
- ---------------------------------------------------------------------------
382115 MAVIS 12 VAL
- ---------------------------------------------------------------------------
381499 MAVIS 15 DLX
- ---------------------------------------------------------------------------
385478 MAVIS 15 DLX MM
- ---------------------------------------------------------------------------
381500 MAVIS 15 STD
- ---------------------------------------------------------------------------
381610 MAVIS 15 STD MM
- ---------------------------------------------------------------------------
23
SKU TITLE
- ---------------------------------------------------------------------------
382159 MAVIS 16
- ---------------------------------------------------------------------------
382158 MAVIS 16 DLX
- ---------------------------------------------------------------------------
382166 MAVIS 16 DLX MM
- ---------------------------------------------------------------------------
382167 MAVIS 16 MM
- ---------------------------------------------------------------------------
382159X MAVIS 16 SNSRMTC
- ---------------------------------------------------------------------------
112915 MAVIS 9.0 MAC RTL
- ---------------------------------------------------------------------------
582688J MAVIS TPR MNDPWR ASST BJ 203
- ---------------------------------------------------------------------------
882925 MIGHTY MATH FLSH CRDS DIVISION
- ---------------------------------------------------------------------------
882924 MIGHTY MATH FLSH CRDS FRACTION
- ---------------------------------------------------------------------------
882926 MIGHTY MATH FLSH CRDS MULTI
- ---------------------------------------------------------------------------
882680 MIGHTY MATH GRD 2-3 320PG
- ---------------------------------------------------------------------------
882677 MIGHTY MATH MONEY DCMLS 32PG
- ---------------------------------------------------------------------------
882676 MIGHTY MATH MULT DVSION 32PG
- ---------------------------------------------------------------------------
381667 MNDPWR MATH HIGH SCHL
- ---------------------------------------------------------------------------
381670 MNDPWR MATH HIGH SCHL MM
- ---------------------------------------------------------------------------
381668 MNDPWR MATH MDL SCHL
- ---------------------------------------------------------------------------
381669 MNDPWR MATH MDL SCHL MM
- ---------------------------------------------------------------------------
381804 MNDPWR SCI GRD 7-12 MM
- ---------------------------------------------------------------------------
381803 MNDPWR SCI GRD 7-12 WMAC
- ---------------------------------------------------------------------------
385321 MOVIESHOP 6 DLX
- ---------------------------------------------------------------------------
385549 MOVIESHOP 6 MM
- ---------------------------------------------------------------------------
882961P MTY MATH 2ND-3RD WRKBK CD CSCO
- ---------------------------------------------------------------------------
300196 MY FIRST BIBLE STORIES MM
- ---------------------------------------------------------------------------
00NTX540CC NET ACCELERATOR V4
- ---------------------------------------------------------------------------
357990 NICKELODEON TOON TWISTER
- ---------------------------------------------------------------------------
357990P NICKELODEON TOON TWISTER CSCO
- ---------------------------------------------------------------------------
357992 NICKELODEON TOON TWISTER MM
- ---------------------------------------------------------------------------
357992X NICKELODEON TOON TWISTER MM
- ---------------------------------------------------------------------------
383209 OCEAN AQUARIUM
- ---------------------------------------------------------------------------
383209X OCEAN AQUARIUM SNSRMTC
- ---------------------------------------------------------------------------
383015 OCEAN AQUARIUM VAL
- ---------------------------------------------------------------------------
383015 OCEAN AQUARIUM VAL
- ---------------------------------------------------------------------------
380859 OREGON TRAIL 5
- ---------------------------------------------------------------------------
381183 OREGON TRAIL 5 MM
- ---------------------------------------------------------------------------
381032 OREGON TRAIL II VALUE V1.3
- ---------------------------------------------------------------------------
381917 PADDINGTON WRLD MYST TOUR VAL
- ---------------------------------------------------------------------------
385481 PC COPY CENTER 2 VAL
- ---------------------------------------------------------------------------
300187 PEOPLE LND HSTRY PWR PK
- ---------------------------------------------------------------------------
382312 PHOTOSHOW 2 VAL
- ---------------------------------------------------------------------------
382737 PHOTOSHOW DLX
- ---------------------------------------------------------------------------
582877J PHOTOSHW ZONE AG ASST BJ 303
- ---------------------------------------------------------------------------
381321 PM 12 GOLD
- ---------------------------------------------------------------------------
385500 PM 15 GOLD
- ---------------------------------------------------------------------------
385500X PM 15 GOLD SNSRMTC
- ---------------------------------------------------------------------------
385505 PM 15 GREETING CARDS DLX
- ---------------------------------------------------------------------------
385505X PM 15 GREETING CARDS DLX SNSRMTC
- ---------------------------------------------------------------------------
385501 PM 15 PLATINUM
- ---------------------------------------------------------------------------
385502 PM 15 PLATINUM DVD
- ---------------------------------------------------------------------------
385501X PM 15 PLATINUM SNSRMTC
- ---------------------------------------------------------------------------
385499 PM 15 SILVER VAL
- ---------------------------------------------------------------------------
385499X PM 15 SILVER VAL SNSRMTC
- ---------------------------------------------------------------------------
382986 PM 16 GOLD
- ---------------------------------------------------------------------------
24
SKU TITLE
- ---------------------------------------------------------------------------
382987 PM 16 PLAT
- ---------------------------------------------------------------------------
382988 PM 16 PLAT DVD
- ---------------------------------------------------------------------------
382984 PM 16 SILVER VAL
- ---------------------------------------------------------------------------
382985 PM 16 STE
- ---------------------------------------------------------------------------
582371J PM PS ASST BJS 103
- ---------------------------------------------------------------------------
582371J1 PM PS ASST BJS 103A
- ---------------------------------------------------------------------------
378726 POST IT NOTES VAL
- ---------------------------------------------------------------------------
381680 POWERPUFF GIRLS MOJO JOJO MM
- ---------------------------------------------------------------------------
382207 POWERPUFF GIRLS SNREBUCKS
- ---------------------------------------------------------------------------
382208 POWERPUFF GIRLS SNREBUCKS MM
- ---------------------------------------------------------------------------
379853-PPK PPK INVENT IT PACK
- ---------------------------------------------------------------------------
583237J PRODCTVTY BNDL ASST BJ 403
- ---------------------------------------------------------------------------
582746 PRODCTVTY BNDL AST CSCO 203
- ---------------------------------------------------------------------------
583303 PRODCTVTY CD MIX A
- ---------------------------------------------------------------------------
583304 PRODCTVTY CD MIX B
- ---------------------------------------------------------------------------
583305 PRODCTVTY CD MIX C
- ---------------------------------------------------------------------------
583306 PRODCTVTY CD MIX D
- ---------------------------------------------------------------------------
378329 PS 10 ESS
- ---------------------------------------------------------------------------
379853M PS 11 DLX MASS
- ---------------------------------------------------------------------------
382795 PS 15 VAL
- ---------------------------------------------------------------------------
382795X PS 15 VAL SNSRMTC
- ---------------------------------------------------------------------------
382222 PS 20
- ---------------------------------------------------------------------------
382223 PS 20 DLX
- ---------------------------------------------------------------------------
182223 PS 20 DLX DIRECT
- ---------------------------------------------------------------------------
382227 PS 20 DLX DVD
- ---------------------------------------------------------------------------
382415 PS 20 DLX MP5
- ---------------------------------------------------------------------------
582878S PS 20 DLX PM 15 ASST SAMS 303
- ---------------------------------------------------------------------------
382223X PS 20 DLX SNSRMTC
- ---------------------------------------------------------------------------
382221 PS 20 ESS
- ---------------------------------------------------------------------------
382221X PS 20 ESS SNSRMTC
- ---------------------------------------------------------------------------
382225 PS 20 PRO PUB
- ---------------------------------------------------------------------------
382224 PS 20 PRO PUB DLX
- ---------------------------------------------------------------------------
382416 PS 20 PRO PUB DLX MP5
- ---------------------------------------------------------------------------
382224X PS 20 PRO PUB DLX SNSRMTC
- ---------------------------------------------------------------------------
382225X PS 20 PRO PUB SNSRMTC
- ---------------------------------------------------------------------------
382222X PS 20 SNSRMTC
- ---------------------------------------------------------------------------
382226P PS 20 STE DLX CSCO
- ---------------------------------------------------------------------------
382882 PS 8 MAC
- ---------------------------------------------------------------------------
385013 PS BUS CARD CREATOR
- ---------------------------------------------------------------------------
383323 PS BUS CARD MAKER VAL
- ---------------------------------------------------------------------------
381244 PS CD LABEL CREATOR
- ---------------------------------------------------------------------------
382692X PS ESSENTIALS 20 MM SNSRMTC
- ---------------------------------------------------------------------------
381238 PS FOR MAC
- ---------------------------------------------------------------------------
385528 PS HOME & OFFICE LABELS VAL
- ---------------------------------------------------------------------------
385528X PS HOME & OFFICE LBL VAL SNSRMTC
- ---------------------------------------------------------------------------
385491 PS LABEL CREATOR DLX
- ---------------------------------------------------------------------------
382317 PS LTRHD ENV & MORE VAL
- ---------------------------------------------------------------------------
382316 PS PHOTO WORKSHOP VAL
- ---------------------------------------------------------------------------
00QVC580CC01 QUICKVERSE ESS 7.0
- ---------------------------------------------------------------------------
311043 QUICKVERSE ESS VAL
- ---------------------------------------------------------------------------
300599 RAINBOW FISH VAL
- ---------------------------------------------------------------------------
882923 RIDE TO RESCUE OT ADV
- ---------------------------------------------------------------------------
25
SKU TITLE
- ---------------------------------------------------------------------------
383482 RR 1ST & 2ND GRD READING SYSTEM TOY
- ---------------------------------------------------------------------------
383480 RR 1ST GRD LEARNING SYSTEM TOY
- ---------------------------------------------------------------------------
882695 RR ABC ORDER 32 PG
- ---------------------------------------------------------------------------
882387 RR ALPHABET BOOK 32PG
- ---------------------------------------------------------------------------
381862 RR BABY VAL
- ---------------------------------------------------------------------------
882940W RR BOOK CD PHONICS WAL
- ---------------------------------------------------------------------------
882941W RR BOOK CD RDNG READINESS WAL
- ---------------------------------------------------------------------------
882942W RR BOOK CD SPELLING WAL
- ---------------------------------------------------------------------------
583301 RR CLAMSHELL WRKBK ASST 403
- ---------------------------------------------------------------------------
882389 RR COLORS & SHAPES BOOK 32PG
- ---------------------------------------------------------------------------
882931 RR FLSH CRDS ALPHABET
- ---------------------------------------------------------------------------
882930 RR FLSH CRDS COLORS SHAPE
- ---------------------------------------------------------------------------
882929 RR FLSH CRDS PHONICS
- ---------------------------------------------------------------------------
882932 RR FUN WITH 123s
- ---------------------------------------------------------------------------
882933 RR FUN WITH ABC
- ---------------------------------------------------------------------------
882934 RR FUN WITH COLORS
- ---------------------------------------------------------------------------
882935 RR FUN WITH SHAPES
- ---------------------------------------------------------------------------
381588 RR GRD 1 2002 V1.1 MM
- ---------------------------------------------------------------------------
381464 RR GRD 1 CLASSIC VAL
- ---------------------------------------------------------------------------
582946 RR GRD 1 JCB & WRTNG WRKBK
- ---------------------------------------------------------------------------
583188 RR GRD 1 JCB WRKBK BNDL
- ---------------------------------------------------------------------------
381489P RR GRD 1 V1.1 CSCO
- ---------------------------------------------------------------------------
382792 RR GRD 1 VAL
- ---------------------------------------------------------------------------
382792X RR GRD 1 VAL SNSRMTC
- ---------------------------------------------------------------------------
882959P RR GRD 1 WRKBK & CD CSCO
- ---------------------------------------------------------------------------
882334 RR GRD 1 WRKBK 320PGS
- ---------------------------------------------------------------------------
381587 RR GRD 2 2002 V1.1 MM
- ---------------------------------------------------------------------------
382348 RR GRD 2 STRFLY ROYAL BNDL MM
- ---------------------------------------------------------------------------
381585 RR GRD KIND 2002 V1.1 MM
- ---------------------------------------------------------------------------
381462 RR GRD KIND CLASSIC VAL
- ---------------------------------------------------------------------------
582948 RR GRD KIND JCB & READNG WRKBK
- ---------------------------------------------------------------------------
582950 RR GRD KIND JCB & RHYME WRKBK
- ---------------------------------------------------------------------------
583187 RR GRD KIND JCB WRKBK BNDL
- ---------------------------------------------------------------------------
382337 RR GRD KIND LEARNING PACK CLUB
- ---------------------------------------------------------------------------
382793 RR GRD KIND VAL
- ---------------------------------------------------------------------------
382793X RR GRD KIND VAL SNSRMTC
- ---------------------------------------------------------------------------
382633 RR GRD KIND VARIETY PACK
- ---------------------------------------------------------------------------
382468 RR GRD KIND VARIETY PACK MM
- ---------------------------------------------------------------------------
882958P RR GRD KIND WRKBK & CD CSCO
- ---------------------------------------------------------------------------
882333 RR GRD KIND WRKBK 320PG
- ---------------------------------------------------------------------------
381493 RR GRD PRE 2002 V1.1
- ---------------------------------------------------------------------------
381583 RR GRD PRE 2002 V1.1 MM
- ---------------------------------------------------------------------------
381463 RR GRD PRE CLASSIC VAL
- ---------------------------------------------------------------------------
382794 RR GRD PRE CLASSIC VAL
- ---------------------------------------------------------------------------
382794X RR GRD PRE CLASSIC VAL SNSRMTC
- ---------------------------------------------------------------------------
582947 RR GRD PRE JCB & ALPHA WRKBK
- ---------------------------------------------------------------------------
582949 RR GRD PRE JCB & COLOR WRKBK
- ---------------------------------------------------------------------------
583186 RR GRD PRE JCB WRKBK BNDL
- ---------------------------------------------------------------------------
382632 RR GRD PRE VARIETY PACK
- ---------------------------------------------------------------------------
382467 RR GRD PRE VARIETY PACK MM
- ---------------------------------------------------------------------------
882957P RR GRD PRE WRKBK & CD CSCO
- ---------------------------------------------------------------------------
882332 RR GRD PRE WRKBK 320PG
- ---------------------------------------------------------------------------
26
SKU TITLE
- ---------------------------------------------------------------------------
383479 RR KIND LEARNING SYSTEM TOY
- ---------------------------------------------------------------------------
381514 RR LTR PHONICS GRD 1-2
- ---------------------------------------------------------------------------
381582 RR LTR PHONICS GRD 1-2 MM
- ---------------------------------------------------------------------------
381516 RR LTR PHONICS GRD PRE-KIND
- ---------------------------------------------------------------------------
381584 RR LTR PHONICS GRD PRE-KIND MM
- ---------------------------------------------------------------------------
382814 RR LTR SYS 3IN MM
- ---------------------------------------------------------------------------
382814X RR LTR SYS 3IN MM SNSRMTC
- ---------------------------------------------------------------------------
882682 RR MATH ADD & SUBTRACT 32 PG
- ---------------------------------------------------------------------------
380928 RR MATH ADV AGE 4-6 VAL
- ---------------------------------------------------------------------------
380929 RR MATH ADV AGE 6-9 VAL
- ---------------------------------------------------------------------------
381201 RR MATH ADV AGES 4-6 W/RR3 VAL
- ---------------------------------------------------------------------------
381202 RR MATH ADV AGES 6-9 W/RR3 VAL
- ---------------------------------------------------------------------------
882928 RR MATH FLSH CRDS ADDITION
- ---------------------------------------------------------------------------
883163 RR MATH FLSH CRDS SUBTRACTION
- ---------------------------------------------------------------------------
882681 RR MATH GRD KIND-1 WRKBK 320 PG
- ---------------------------------------------------------------------------
882960P RR MATH K-1ST WRKBK & CD CSCO
- ---------------------------------------------------------------------------
882683 RR MATH MONEY & TIME 32 PG
- ---------------------------------------------------------------------------
882390 RR PHONICS BOOK 32PG
- ---------------------------------------------------------------------------
383481 RR PRE & KIND READING SYSTEM TOY
- ---------------------------------------------------------------------------
383478 RR PRE LEARNING SYSTEM TOY
- ---------------------------------------------------------------------------
381861 RR READING 6-9 VAL
- ---------------------------------------------------------------------------
882694 RR READING CMPRHNSION 32 PG
- ---------------------------------------------------------------------------
882388 RR RHYMING WORDS BOOK 32PG
- ---------------------------------------------------------------------------
882386 RR SOUNDS BOOK 32PG
- ---------------------------------------------------------------------------
882937 RR SPELLING CHALLENGE 2ND GRD
- ---------------------------------------------------------------------------
882936 RR SPELLING CHALLENGE GRD 1
- ---------------------------------------------------------------------------
381425 RR THNKG ADV VAL
- ---------------------------------------------------------------------------
381586 RR TODDLER 2002 MM
- ---------------------------------------------------------------------------
381491 RR TODDLER 2002 V3
- ---------------------------------------------------------------------------
383477 RR TODDLER LEARNING SYSTEM TOY
- ---------------------------------------------------------------------------
882693 RR WRITING MECHANICS 32 PG
- ---------------------------------------------------------------------------
582765J SCHLSTC BNDL ASST BJ 203
- ---------------------------------------------------------------------------
582894P SCHOLASTIC ASST CSCO 303
- ---------------------------------------------------------------------------
582894P1 SCHOLASTIC ASST CSCO 403
- ---------------------------------------------------------------------------
382205 SD CASE FILE 2 STONE DRAGON
- ---------------------------------------------------------------------------
382206 SD CASE FILE 2 STONE DRAGON MM
- ---------------------------------------------------------------------------
382205X SD CASE FILE 2 STONE DRAGON SNSRMTC
- ---------------------------------------------------------------------------
382206X SD CASE FILE2 STONE MM SNSRMTC
- ---------------------------------------------------------------------------
381681 SD GLOWING BUG MAN
- ---------------------------------------------------------------------------
381682 SD GLOWING BUG MAN MM
- ---------------------------------------------------------------------------
380849 SD JINX AT SPHINX
- ---------------------------------------------------------------------------
381166 SD JINX AT SPHINX MM
- ---------------------------------------------------------------------------
383321 SD JINX AT THE SPHINX VAL
- ---------------------------------------------------------------------------
380325 SD PHANTOM KNIGHT
- ---------------------------------------------------------------------------
381185 SD PHANTOM KNIGHT MM
- ---------------------------------------------------------------------------
381184 SD SHOWDOWN GHOST TOWN MM
- ---------------------------------------------------------------------------
382807 SD SHWDWN GHOSTWN VAL
- ---------------------------------------------------------------------------
382807X SD SHWDWN GHOSTWN VAL SNSRMTC
- ---------------------------------------------------------------------------
382232 SNO CROSS EXTREME VAL
- ---------------------------------------------------------------------------
383449 SPAM SHREDDER
- ---------------------------------------------------------------------------
382466X STRBRYSHRTCK AMZNG SNSRMTC
- ---------------------------------------------------------------------------
582890S STRWBRY & PPUFF ASST SAMS 303
- ---------------------------------------------------------------------------
27
SKU TITLE
- ---------------------------------------------------------------------------
382465 STRWBRY SHRTCKE AMZING COOKIE
- ---------------------------------------------------------------------------
382465X STRWBRY SHRTCKE AMZING SNSRMTC
- ---------------------------------------------------------------------------
382466 STRWBRYSHRTCKE AMZNG COOKIE MM
- ---------------------------------------------------------------------------
382797 STUART LITTLE LEARNING ADV
- ---------------------------------------------------------------------------
300082 SW MATH CMPLTE
- ---------------------------------------------------------------------------
300083 SW MATH CMPLTE MM
- ---------------------------------------------------------------------------
300193 SW MATH SUCCESS MM
- ---------------------------------------------------------------------------
300084 SW MID & HIGH SCHL MATH
- ---------------------------------------------------------------------------
300085 SW MID & HIGH SCHL MATH MM
- ---------------------------------------------------------------------------
300086 SW MID SCHL MATH & SCI
- ---------------------------------------------------------------------------
300087 SW MID SCHL MATH & SCI MM
- ---------------------------------------------------------------------------
300099 SW SCI CMPLTE
- ---------------------------------------------------------------------------
300101 SW SCI CMPLTE MM
- ---------------------------------------------------------------------------
380049 TEST DRIVE OFFROAD 2 VAL
- ---------------------------------------------------------------------------
382352 TPR INSIDE SAT ACT 04 DLX
- ---------------------------------------------------------------------------
382353 TPR INSIDE SAT ACT 04 DLX MM
- ---------------------------------------------------------------------------
382352X TPR INSIDE SAT ACT 04 DLX SNSRMTC
- ---------------------------------------------------------------------------
382353X TPR SAT ACT 04 DLX MM SNSRMTC
- ---------------------------------------------------------------------------
382237 TREASURE COVE & MTN DUAL VAL
- ---------------------------------------------------------------------------
382405 TRICKSTYLE VAL
- ---------------------------------------------------------------------------
335469 TURBOCAD 2D 3D
- ---------------------------------------------------------------------------
335469P TURBOCAD 2D 3D CSCO
- ---------------------------------------------------------------------------
335469X TURBOCAD 2D 3D SNSRMTC
- ---------------------------------------------------------------------------
335481 TURBOCAD DLX
- ---------------------------------------------------------------------------
335481P TURBOCAD DLX CSCO
- ---------------------------------------------------------------------------
335481X TURBOCAD DLX SNSRMTC
- ---------------------------------------------------------------------------
310414 VALUE 4 PACK SAMS
- ---------------------------------------------------------------------------
583189 VALUE MIX 403
- ---------------------------------------------------------------------------
382230 WAR COMMANDER VAL
- ---------------------------------------------------------------------------
382230X WAR COMMANDER VAL SNSRMTC
- ---------------------------------------------------------------------------
882921 WESTWARD BOUND AN OT ADV
- ---------------------------------------------------------------------------
382675 WILLWRITER 2004 V3 VAL
- ---------------------------------------------------------------------------
381553 ZOBOOMAFOO CREATURE QUEST
- ---------------------------------------------------------------------------
382901 ZOBOOMAFOO CREATURE QUEST VAL
- ---------------------------------------------------------------------------
582920S1 ZONE 4 ID THEFT ASST SAMS 303A
- ---------------------------------------------------------------------------
381569 ZONE ALARM 3 PRO
- ---------------------------------------------------------------------------
382438 ZONE ALARM PRO 4
- ---------------------------------------------------------------------------
382666 ZONE ALARM PRO 4 MM
- ---------------------------------------------------------------------------
382487 ZONE ALARM PRO 4 MP5
- ---------------------------------------------------------------------------
382438X ZONE ALARM PRO 4 SNSRMTC
- ---------------------------------------------------------------------------
382272 ZONE ALARM PRO MM
- ---------------------------------------------------------------------------
381180 ZOOMBINIS 2 LOGICAL JRNY MM
- ---------------------------------------------------------------------------
381664 ZOOMBINIS ISLAND ODYSSEY
- ---------------------------------------------------------------------------
381678 ZOOMBINIS ISLAND ODYSSEY MM
- ---------------------------------------------------------------------------
382239 ZOOMBINIS MINI 2 PACK
- ---------------------------------------------------------------------------
385498J ZZ 3D HOME LNDSCPE 5 DLX BJ
- ---------------------------------------------------------------------------
381492 ZZ RR GRD KIND 2002 V1.1
- ---------------------------------------------------------------------------
28
EXHIBIT B
SCHEDULE OF CERTAIN ADDITIONAL TERMS
1. Intentionally Omitted.
2. Royalties and Payment Terms:
a) [Intentionally Omitted].
b) Earned Royalty. Riverdeep shall earn royalties for sales of Products
during the Sales Year as provided below, provided that the same shall not be
payable until Distribution has recouped from such amounts the corresponding
Guaranteed Royalty for such year.
[*]
"NET RECEIPTS" is defined as gross sales from the sale of
Products, less actual credits granted for returns, rebates,
product mark-down expenses, and Sales Discounts. To the extent
gross sales or dilutions relate to Mixed Assortments or Mixed
Bundles, then Distributor may only apply such gross sales or
deduct dilutions in an amount proportional to the percentage
of Products in said Mixed Assortment or Mixed Bundle. With
each royalty statement, Distributor may take a reasonable
reserve for anticipated returns, [*]. With each monthly
statement, Distributor will liquidate each reserve held, and
pay to Riverdeep any royalties then due that are in excess of
the liquidated reserve. Distributor may not deduct: cash
discounts granted as terms of payment; promotional/new store
discounts; costs, taxes or duties incurred in manufacturing,
handling, shipping, importing, or selling. At Riverdeep's
request, Distributor shall review its customer credit status
with Riverdeep on a regular basis, but not more than once each
quarter.
Distributor, in consultation with Riverdeep, will develop and
designate wholesale pricing strategies, pricing envelopes, and
lifecycle management pricing guidelines around which
Distributor may operate on a day-to-day basis independent of
Riverdeep consultation; provided however, deviations from
current pricing models outside of these parameters will
require that Distributor consult with Riverdeep and
Distributor will develop and designate any such pricing
strategies, pricing envelopes, and lifecycle management
pricing guidelines that so deviate from the current models.
Distributor shall have full discretion with respect to the
price it charges its retail customers. At such time as a
Product reaches late-stage "closeout" status, Distributor
shall request Riverdeep's consent to closeout the Product
inventory through one or more closeout distributors. If
Riverdeep shall fail to grant such consent within fifteen (15)
days thereafter, then Riverdeep shall be required to purchase
such inventory for an amount equal to Distributor's cost of
goods therefor.
* The material has been omitted pursuant to a request for confidential
treatment and the material has been filed separately with the Office of the
Secretary of the Securities and Exchange Commission.
29
c) [Intentionally Omitted.]
d) Reporting and Payment. Detailed reporting and payment of earned
royalties shall be provided no later than twenty-one (21) days following the end
of each calendar month. Royalty reports shall contain such information as is
included in a template report attached hereto as Exhibit G.
e) Late Charges. Any payments which are made to Riverdeep or
Distributor hereunder more than thirty (30) days after the due date therefor,
shall bear interest at the rate of 9% per annum from the date such payments are
due to the date of payment. Each party's right hereunder to interest on late
payments shall not preclude such party from exercising any of its other rights
or remedies pursuant to this Agreement or otherwise with regard to the other
party's failure to make timely remittances.
3. Marketing Plan And Reports: Distributor shall provide Riverdeep, within 90
days of the Commencement Date, with a retail forecast for each Product licensed
hereunder. In the event that Products are added to Exhibit A, Distributor shall
provide Riverdeep with a retail forecast for each such Product no less than
within a reasonable period of time prior to Riverdeep's planned ship date for
each such Product. For Riverdeep's review and approval, not to be unreasonably
withheld or delayed, as to the first such plan, and consultation as to all
subsequent plans, Distributor will provide Riverdeep (a) with a sales and
marketing plan and forecast including such reasonably detailed information, on a
quarterly basis; (b) a ninety (90) day rolling retail forecast for each active
Product provided on a monthly basis; (c) on the first business day of each week
during the Term, Distributor will provide Riverdeep with a report detailing
gross shipments by Retailer for the previous week. Distributor will provide
Riverdeep with the following reports on a monthly basis within nine (9) business
days of the end of every month: SKU by reporting Retailer; EDI Sell-Through;
Product Returns authorized; and Inventory Report. Distributor will provide
Riverdeep with the following reports within thirty (30) business days of the end
of every month (concurrent with royalty reporting): SKU by Sublicensee (if any
approved); and Product units sold and/or distributed by Sublicensee (if any
approved).
Distributor shall use commercially reasonable efforts to market and sell the
Products and to promote the Products at industry trade shows specified by
Riverdeep and agreed to by Distributor, which agreement shall not be
unreasonably withheld. Distributor shall submit all marketing campaigns to
Riverdeep for review and approval, not to be unreasonably withheld or delayed.
Distributor shall use commercially reasonable efforts to meet all product
availability commitments made by Riverdeep (prior to the Commencement Date) to
retail accounts, including meeting replenishment orders for fixed plan-o-grams,
provided that Riverdeep shall have furnished Distributor with all deliverables
and information Distributor may require to do so on a timely basis.
Distributor will not discriminate against the Products in favor of Distributor's
other similar products.
Distributor shall not liquidate or deep-discount the Products, or otherwise
distribute in a manner that may reasonably be expected to reduce the good will
associated with or otherwise tarnish the Riverdeep brands. Products will only be
sold to Retailers, or to distributors for resale, shipment and/or distribution
to Retailers, who Distributor has a good faith belief will sell such Products in
the Territory and Channel to the public in the same general manner in which
merchandise of the same general description is customarily marketed, displayed
and sold. In the event Distributor learns that any Retailer is treating the
Products in a manner less favorably than similar merchandise, Distributor will
inform Riverdeep and will make commercially reasonable efforts to have the
problem corrected to Riverdeep's satisfaction. If
30
Riverdeep is not satisfied within a reasonable period then, upon written request
of Riverdeep, Distributor will discontinue future shipments to such Retailer and
will not provide such Retailer with Licensed Article(s) thereafter without
Approval.
4. Approvals. Distributor shall create and produce its own packaging, labels,
disc art, end-user documentation, marketing and promotional materials, all
subject to Riverdeep review, guidance, feedback and approval at the following
stages:
- Concept design
- Alpha package design, including copy
- Final mechanical.
A submission shall be approved or disapproved within ten (10) business days from
receipt of the materials except the final mechanical, which will be approved
within five (5) business days of receipt of materials. Approval shall not be
unreasonably withheld or delayed. A submission shall in no instance be deemed
approved. If approval is not granted, Riverdeep shall identify the reasons for
disapproval and such corrective measures which, when taken, will result in
approval upon resubmission. Among other reasons, Riverdeep may reasonably
withhold approval in relation to the maintenance of brand and trade dress
consistency between versions, product lines, and in its other channels.
Distributor acknowledges that some of Riverdeep's licensors may have approval
rights regarding packaging, software development and their proprietary brands
and other names. Distributor shall reasonably cooperate with Riverdeep when
third-party licensor approval is required. Distributor shall provide archived
files of all approved materials, suitable for reproduction and in a form and
format specified by Riverdeep, within 10 days of Riverdeep's approval.
Neither Distributor (any permitted sublicensees) nor third party manufacturers
shall manufacture Products without Riverdeep's prior written approval of the
materials to be reproduced unless such materials have been furnished to it by
Riverdeep. Notwithstanding such approval, Distributor (any permitted
sublicensees), and third party manufacturers shall be responsible to include on
all Products and Packaging any third-party licensor's name, trademark, and logo,
and all applicable notices. Riverdeep's approval shall not relieve Distributor
of this obligation; provided however, Riverdeep's approval of any given
packaging shall be deemed to constitute Distributor's compliance with the
packaging requirements hereof.
5. Warehouse Inventory. Distributor shall purchase from Riverdeep all owned,
sellable on-hand inventory (including components), and work in process, of the
Products as of the Commencement Date, including consignment inventory in the
Channel, excluding however any genealogy-based or language-based inventory.
Riverdeep shall provide a list of all such inventory as of the Commencement
Date. Title shall transfer, with Distributor taking title, ownership and risk of
loss, as of the Commencement Date; provided however, that Riverdeep shall
nonetheless maintain insurance on such inventory in the same coverage as prior
the Commencement Date and shall name Distributor as an additional insured with
respect thereto, and upon any casualty with respect thereto, Riverdeep shall pay
any proceeds received in respect thereof to Distributor within ten (10) days of
receipt. Distributor shall pay Riverdeep, as the purchase price for such
inventory, Riverdeep's actual out-of-pocket cost of goods (such amount not to
exceed $3,500,000), and reasonable handling and storage costs for such inventory
based on a written breakdown of rates to be provided to Distributor, and
shipping charges to be reasonably agreed upon between the parties. Payment for
cost of goods shall be payable within 60 days after the sale of such inventory
by Distributor, and payment for such handling, shipping and storage costs to be
made net 30 of invoice. Distributor will use good faith efforts to sell such
inventory.
31
6. Channel Inventory. From and after the Commencement Date, all amounts received
by Riverdeep on account of Product distributed into the Channel shall be payable
to Distributor, and to the extent any such funds are received by Riverdeep, the
same shall be reported and paid thereto within fifteen (15) days of receipt
thereof. During the Term, Distributor shall: (a) accept returns of Channel
Inventory; and (b) provide Distributor's retail accounts with the Channel
Inventory Credits. Distributor shall be entitled to credit against the next
succeeding installment of the Guaranteed Royalty (and subsequent installments
thereof until such credit has been fully applied) in the amount of Distributor's
cost (1) for Channel Inventory Credits provided by Distributor to its Retailers
during the Term and (2) for credits issued for the return of Channel Inventory
to Distributor but not to exceed 16% of the aggregate wholesale value of the
Channel Inventory as of the Commencement Date, unless such returns are the
function of the natural events of a product's lifecycle. The parties shall
mutually cooperate as to the review and issuance of Channel Inventory Credits
and return authorizations for the ninety day period following the Commencement
Date.
"Channel Inventory" shall mean inventory of the Products in the Channel and the
Territory as of the Commencement Date that was not sold by Distributor.
"Channel Inventory Activities" shall mean the marketing development funds,
co-operative advertising, Sales Discounts (including price protection), and
stock-balancing for the Channel Inventory.
"Channel Inventory Credits" shall mean the credits issued by Distributor to its
retail customers for Channel Inventory Activities to which Riverdeep committed
in writing, and for which the Retailer met its obligations, both prior to the
Commencement Date.
32
EXHIBIT C
SCHEDULE OF APPROVED SUBLICENSES
[*]
* The material has been omitted pursuant to a request for confidential
treatment and the material has been filed separately with the Office of the
Secretary of the Securities and Exchange Commission.
33
EXHIBIT D
SCHEDULE OF DELIVERABLES
DUE DATE (Based On Number Of Days Before The
DELIVERABLES Agreed Upon Ship Date)
- ----------------------------------------------------------------------------------------------------------------
Layered, high resolution files for available artwork for
Packaging as well as all but not limited to available
marketing copy, legal copy, twenty screenshots,
product/corporate logos, and key art 90
- ----------------------------------------------------------------------------------------------------------------
Manual in electronic format:
Draft 45
Final Version 30
- ----------------------------------------------------------------------------------------------------------------
Documentation 90
- ----------------------------------------------------------------------------------------------------------------
Layered, high resolution files for available sell sheets and
other promotional materials 90
- ----------------------------------------------------------------------------------------------------------------
25, 50, 100, and 200 word product descriptions, title
treatments (where available) 90
- ----------------------------------------------------------------------------------------------------------------
Press accolades, awards, reviews, endorsements (where available) 90
- ----------------------------------------------------------------------------------------------------------------
Product demos and .avi's (where applicable and available) 90
- ----------------------------------------------------------------------------------------------------------------
Product walk-through documents (where available) 90
- ----------------------------------------------------------------------------------------------------------------
Competitive analysis - development features 90
- ----------------------------------------------------------------------------------------------------------------
Product design document 90
- ----------------------------------------------------------------------------------------------------------------
System requirements 90
- ----------------------------------------------------------------------------------------------------------------
ESRB Rating (if applicable) and certificate 45
- ----------------------------------------------------------------------------------------------------------------
Age range / grade level 90
- ----------------------------------------------------------------------------------------------------------------
Retailer and promotional history (where available) 90
- ----------------------------------------------------------------------------------------------------------------
6 samples of existing product 90
- ----------------------------------------------------------------------------------------------------------------
goldmaster candidate Submission - three copies 45
- ----------------------------------------------------------------------------------------------------------------
Replicatable Goldmaster - three copies 30
- ----------------------------------------------------------------------------------------------------------------
34
EXHIBIT E
SCHEDULE OF APPROVED THIRD PARTY MANUFACTURERS
ACUPRINT 5920 Bowcroft Street
Los Angeles, CA 90016
ADVANCED COLOR GRAPHICS 245 York Place
Claremont, CA 91711
ADVANCE PAPER BOX 6100 S Gramercy Place
Los Angeles, CA 90047
BERT-CO GRAPHICS 3800 North Mission Road
Los Angeles, CA. 90031
COLOUR CONCEPTS 1525 Third St - Suite E
Riverside, CA 92507
DELTA PRINTING SOLUTIONS 28210 N Avenue Stanford
Valencia, CA 91355
FUTURE MEDIA PRODUCTIONS 24811 Ave Rockefeller
Valencia, CA 91355
PRIMARY COLOR 2361 McGaw Avenue
Irvine, CA 92614
RITEK GLOBAL MEDIA 18560 San Jose Ave.
City of Industry, CA 91748
SONOPRESS LLC 108 Monticello Rd.
Weaverville, NC 28787
TECHNICOLOR 3233 E. Mission Oaks Blvd
Camarillo, CA 93012
35
EXHIBIT F
SCHEDULE OF CONSENT-REQUIRED PRODUCTS AND ALLOCABLE PERCENTAGES
[*]
* The material has been omitted pursuant to a request for confidential
treatment and the material has been filed separately with the Office of the
Secretary of the Securities and Exchange Commission.
36
EXHIBIT G
ROYALTY REPORT TEMPLATE
[see attached]
37