Fill and Sign the Form Publisher Oriented Multimedia

1 4.13 Form: Publisher Oriented Multimedia Product Publication Agreement AGREEMENT by and between Multimedia Productions, Inc. ("Producer"), a New York corporation with offices at Third Avenue, New York, New York, and Multimedia Publishing, Inc. ("Publisher"), a North Carolina corporation with offices at Research Triangle Park, North Carolina. WHEREAS, Producer has developed an interactive multimedia product described in Schedule A hereto (the "Product") compatible with IBM personal computers operating under the Windows operating system which Producer desires to license to Publisher for purposes of publication and distribution; WHEREAS, the functional specifications for the Product are set forth in Schedule B hereto (the "Specifications"); and WHEREAS, Publisher desires to license the Product from Producer for purposes of publication and distribution. NOW THEREFORE, in consideration of the mutual promises contained herein, it is hereby agreed as follows: 1. Preparation and Delivery 1.1. Specifications Within ten (10) business days after the execution of this Agreement, Producer shall prepare and deliver to Publisher a master copy of the Product in CD-ROM format, and related documentation and deliverables described on Schedule B (the "Deliverables"). 1.2. Testing Within sixty (60) days after receipt of the Deliverables, Publisher shall test the Product in accordance with such procedures as Publisher shall deem suitable. If, in the Publisher's discretion, the Product satisfies the Specifications, Publisher shall give Producer written notice that it has 2 accepted the Product. If Publisher does not accept the Product or does not notify Producer of its non-acceptance in accordance with the terms hereof within such sixty (60) days, Producer shall have the right to terminate this Agreement with no further obligation, to retain the initial advance against royalties payable upon execution of this Agreement, and to request the destruction of the Deliverables in accordance with Section 11 hereunder. 1.3. Deficiency In the event the Product is not acceptable, Publisher shall return the Deliverables to Producer with a written request to correct any identified failure to satisfy the Specifications. Producer shall have a reasonable time, not less than thirty (30) days and, unless otherwise agreed, not more than sixty (60) days from receipt of such notification, to make such corrections. Upon correction of the identified deficiencies, Producer shall return the Deliverables to Publisher for retesting pursuant to the procedures set forth in this section. 1.4. Failure to Deliver In the event that Producer fails to deliver the complete Product within ten (10) days after the applicable delivery date, or Producer fails to deliver an acceptable corrected Product within the time as specified herein, Publisher shall have the right, in its discretion: (i)\x11to give Producer written notice of its intention to terminate this Agreement pursuant to Section 11 herein; or (ii)\x11in the event the Product which fails to meet the Specifications, make such other arrangements as Publisher deems advisable to complete, correct, or revise the Product, in which event the reasonable costs of such arrangements may be charged, in Publisher discretion, against any sums accruing to Producer under this Agreement. 1.5. Revision Subject to Producer's approval, which will not be unreasonably withheld, Publisher shall have the right to require editorial revisions and changes in the Product as it deems necessary and which are technically feasible. 3 1.6. Proofs of Written Materials Publisher shall provide to Producer, and Producer shall read, correct and return promptly to Publisher, all printed proofs of all written materials forming part of the Product which will be published. If Producer requests any alterations in type, illustrations, or diagrams which are not corrections of typographical, drafting or Publisher's errors and which exceed twenty percent (20%) of the cost of original composition and artwork independent of the cost of such Producer's alteration, the cost of the excess alterations shall be charged against any sums accruing to Producer under this Agreement. 2. Rights Conveyed In accordance with the terms herein, Producer grants to Publisher and Publisher accepts from Producer a license to the exclusive rights to duplicate the Product in CD-ROM format as now known and as hereafter to become known, use for promotional purposes, market, distribute and sublicense the right to market and distribute the Product throughout the world. Any sublicense of the rights herein shall be substantially in the form of Schedule C hereto. Producer appoints Publisher as its attorney-in-fact to execute any documents Publisher deems necessary to record any of these grants with the United States Copyright Office or elsewhere. 3. Producer's Warranty 3.1. Ownership Producer represents to Publisher that: (1) Producer has the power and authority to enter into this Agreement; (2) Producer is the owner and copyright holder of the Product; (3) Producer is the owner or licensee of all rights necessary and appropriate to grant the licenses hereunder with respect to the Product and any portions thereof, including, but not limited to, text, data, images, photographs, illustrations, animation and graphics, video and audio segments contained in the Product; (4) the Product is original except for material in the public domain and such excerpts from other works as may be included with the written license of the copyright owners; (5) the Product does not contain any libelous 4 material; (6) the Product does not infringe any trade name, trademark, trade secret, or copyright; and (7) the Product does not invade or violate any right of privacy, personal or proprietary right, or other common law or statutory right. 3.2. Performance Producer further represents and warrants to Publisher that the Product shall perform in accordance with the Specifications for a period of one (1) year after the first sale or licensing of the Product, whichever occurs first. In the event of any breach of the foregoing, Producer shall promptly correct the Product to meet such Specifications at Producer's own expense. If Producer fails for any reason to promptly correct the Product, Publisher may make such other arrangements to correct the Product as Publisher shall consider appropriate and charge the reasonable costs of doing so to sums accruing to Producer under this Agreement. 3.3. Publisher Modifications If any modifications are made to the Product by Publisher without the Producer's participation or consent, this warranty shall be immediately terminated as to such modified copy and all copies thereof. 3.4. Disclaimer THE ABOVE IS A LIMITED WARRANTY AND IT IS THE ONLY WARRANTY MADE BY PRODUCER. EXCEPT AS EXPRESSLY PROVIDED HEREIN PRODUCER MAKES AND PUBLISHER RECEIVES NO WARRANTY EXPRESS OR IMPLIED AND THERE IS EXPRESSLY EXCLUDED ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. PRODUCER SHALL HAVE NO LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT FOR CONSEQUENTIAL, EXEMPLARY, OR INCIDENTAL DAMAGES EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE STATED EXPRESS WARRANTIES ARE IN LIEU OF ALL OTHER LIABILITIES OR OBLIGATIONS OF PRODUCER FOR DAMAGES ARISING OUT 5 OF OR IN CONNECTION WITH THE DELIVERY, USE, OR PERFORMANCE OF THE ITEMS LICENSED HEREUNDER. 3.5. Survival The provisions of this Section 3 shall survive any termination of this Agreement. 3.6. Warranty Producer shall indemnify Publisher and all of its licensees and assignees under this Agreement (other than end-users of the Product) and hold them harmless from any and all losses, damages, liabilities, costs, charges, and expenses, including reasonable attorneys' fees, arising out of any breach of any of Producer's representations contained in this Section 3 or third-party claims (including those brought by end-users) relating to the matters covered by these representations. 4. Publication After giving written notice to Producer that it has accepted the Product, Publisher shall make all reasonable efforts to publish the Product, except when it determines, in its sole discretion, that market conditions or competitive products may adversely affect such publication. 5. Copyrights, Trademarks and Other Proprietary Rights 5.1. Trade Secrets The Product and all other items licensed hereunder and all copies thereof constitute valuable and confidential trade secrets of Producer, are proprietary to Producer and its licensors and title thereto remains therein. All applicable copyrights, trade secrets, patent and other intellectual and proprietary rights in the Product and all other items licensed hereunder are and remain in Producer or its licensors. It is expressly understood that no title to or ownership of the Product, or any part thereof, is hereby transferred to Publisher. 6 5.2. Copyright Notice All copies of the Product (including all written materials distributed therewith) shall have the following notices conspicuously placed thereon: Copyright Multimedia Productions, Inc., 19__. 5.3. Packaging Publisher shall have the right to package and market the Product in such style and with such trademarks, service marks and imprints of Publisher as Publisher shall deem suitable, and Publisher shall have the right to sell or license the Product at such prices as it shall deem suitable. 6. Royalties 6.1 Net Receipts For the rights granted herein, Publisher shall pay to Producer the following royalties: _____ percent of Sales Income on the first _____ copies _____ percent of Sales Income on the next _____ copies _____ percent of Sales Income on all copies over _____. As used herein, "Sales Income" shall mean all gross revenues received by Publisher in connection with any sale, license, lease or other exploitation of the Product less: (i)\x11transportation and shipping charges, including insurance; (ii)\x11sales, use and excise taxes and duties paid or allowed by Publisher and any other governmental charges imposed upon Publisher for the production, use, sale or license of the Product; (iii)\x11actual credits, discounts, allowances and returns granted to customers; (iv)\x11normal and customary trade and quantity discounts and allowances; and (v)\x11credits for uncollected or uncollectible accounts. Except as herein provided, Sales Income shall be determined by using generally accepted accounting principles consistently applied. 7 6.2. Statement Publisher shall render to Producer, on a quarterly basis, commencing with the quarter during which the first distribution of the Product takes place, a detailed written statement of the royalties due to Producer. Such statement shall be accompanied by a remittance of such amount as shown to be due. Each statement shall be rendered within forty-five (45) days following the end of each quarterly period; provided, however, that no statement shall be furnished for any such period in which there are no fees due to, or accrued by Producer. 6.3. Late Payment If Publisher is more than thirty (30) days late in any payment provided herein, Producer may give Publisher written notice of non-payment. If Publisher fails within thirty (30) days following such notice to pay Producer all sums at that time due and owing, Publisher in addition to the payment due shall be liable for interest on the payment from the due date until paid at a rate of one and one half percent (1.5%) per month. 6.4. Advance Publisher shall pay the author a cash advance to be charged against royalties of __________ dollars ($__________), payable as follows: an initial advance against royalties of ________ dollars ($__________) payable upon execution of this Agreement and an additional advance against royalties of __________ dollars ($___________) payable upon delivery of the Product. No further royalty payments shall be due until the amount of accrued royalties exceeds the advances actually paid. The advances are non-refundable, except that the advances upon signing shall be refunded if the Agreement is terminated pursuant to Section 11 herein. 6.5. Audit Publisher shall allow Producer and/or its agent or agents, upon five (5) days' prior written notice, to inspect, audit and analyze all of Publisher's records relating to the items licensed hereunder, all of 8 Publisher's shipping records relating to the items licensed hereunder, and all of Publisher's records relating to discounts, credits, and returns, during business hours at Publisher's regular place of business. Producer shall bear the cost of such inspection and audit. 7. Competing Works While this Agreement is in effect, Producer shall not, without the prior written consent of Publisher prepare, publish, promote, or cause to be prepared, published or promoted any other version, conversion or edition of the Product which competes, interferes with or injures the sales or licensing of the Product by Publisher as permitted under this Agreement, or permit the use of Producer's name in connection with any such work ("Competing Work"). 8. Producer's Copies Publisher shall give Producer ten (10) copies of the Product upon publication, free of charge, and sell to Producer as many additional copies as Producer wishes for personal use, and not for resale, at a discount of twenty-five percent (25%) off Publisher's then list price. 9. Assistance Producer shall provide reasonable assistance when requested by Publisher in connection with Publisher's telephone customer support service. 10. Discontinuance of Publication 10.1. Discontinuance When, in the judgment of Publisher, demand for the Product is no longer sufficient to warrant its continued publication, Publisher shall have the right to discontinue publication of it in which event Producer shall be so advised. 9 10.2. Failure to Distribute If, within six (6) months of the date of this Agreement, the Product is not being distributed in at least one (1) edition published by Publisher or under license from Publisher, and within six (6) months after written demand by Producer, Publisher or its licensee fails to distribute at least one (1) such edition, all rights granted under this Agreement automatically revert to Producer. 11. Initial Term The initial term of this Agreement shall run for the period commencing on the date of signing and ending two (2) years after the date of signing. In the event of a material breach of this Agreement by any Party, the other party can terminate this agreement by providing notice of its intent to terminate and an opportunity to cure the breach no less than thirty (30) days from the date such notice is given. In the event of termination for Producer's commission of a material breach, any unearned advances against royalty shall be returned to Publisher within five (5) business days of termination. Upon the termination of this Agreement for any reason, Publisher shall within twenty (20) days from the date of termination, destroy all copies of the Deliverables, whether in tangible form or in computer memory, and any accompanying written materials, and shall certify to that destruction in writing to Producer. 12. Confidentiality Publisher and Producer acknowledge that each party is the owner of valuable trade secrets, technology, know-how and other confidential information and that the parties shall be given access to the same pursuant to this Agreement. Each party agrees that it shall not disclose to any third party such confidential information of the other party which it learns during the course of its performance of this Agreement, without the prior written 10 consent of such other party. This obligation shall survive the cancellation or other termination of this Agreement. 13. General 13.1. Notices All notices required by this Agreement shall be in writing and shall be deemed given as of the day dispatched by overnight courier or comparable service, postage prepaid, and addressed to the addresses set forth above. 13.2. Modifications This is the complete and exclusive statement of the Agreement between the parties, which supersedes and merges all prior proposals, understandings and all other agreements, oral and written, between the parties relating to this Agreement. This Agreement may not be modified or altered except by written instrument duly executed by both parties. 13.3. Force Majeure Neither party shall be liable or deemed to be in default for any delay or failure in performance under this Agreement resulting, directly or indirectly, from acts of God, civil or military authority, acts of the public enemy, war, riots, civil disturbances, insurrections, accidents, fire, explosions, earthquakes, floods, the elements, strikes, labor disputes, shortages of labor or transportation or any causes beyond the reasonable control of such party. 13.4. Invalidity If any provision of this Agreement is invalid under any applicable statute or rule of law, it is to that extent to be deemed omitted and the remaining provisions of this Agreement shall in no way be affected or impaired thereby. 11 13.5 Assignment This Agreement may not be assigned by either Producer or Publisher without the prior written consent of the other party, which shall be not unreasonably withheld. 13.6. Waiver The waiver or failure of either party to exercise in any respect any right provided for herein shall not be deemed a waiver of any further right hereunder. 13.7. Governing Law This Agreement shall be governed and construed in accordance with the laws of the State of New York. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date hereof. MULTIMEDIA PUBLISHING, INC. By:___________________________ MULTIMEDIA PRODUCTIONS, INC. By:_____________________________