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ADDENDUM #6 TO LICENSING AND DISTRIBUTION AGREEMENTS

Distribution Agreement

ADDENDUM #6 TO
LICENSING AND DISTRIBUTION AGREEMENTS
 | Document Parties: NAVARRE CORP /MN/ | ENCORE SOFTWARE, INC. | RIVERDEEP INC. You are currently viewing:
This Distribution Agreement involves

NAVARRE CORP /MN/ | ENCORE SOFTWARE, INC. | RIVERDEEP INC.

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Title: ADDENDUM #6 TO LICENSING AND DISTRIBUTION AGREEMENTS
Governing Law: California     Date: 11/14/2005
Industry: Software and Programming     Sector: Technology

ADDENDUM #6 TO
LICENSING AND DISTRIBUTION AGREEMENTS
, Parties: navarre corp /mn/ , encore software  inc. , riverdeep inc.
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EXHIBIT 10.1

ADDENDUM #6 TO
LICENSING AND DISTRIBUTION AGREEMENTS
(2004-2005 and 2005-2007)

     THIS ADDENDUM #6 TO LICENSING AND DISTRIBUTION AGREEMENTS (this “ Addendum ”) is dated as of October 6, 2005 and is effective as of June 30, 2005 (“ Effective Date ”), by and between ENCORE SOFTWARE, INC. , a Minnesota corporation (“ Distributor ”), and RIVERDEEP INC., A LIMITED LIABILITY COMPANY, a Delaware limited liability company (“ Riverdeep ”), with respect to the following Recitals.

RECITALS

     A. WHEREAS, Distributor and Riverdeep have entered into (i) that certain Licensing and Development Agreement (Manufacturing Rights)(2004-2005), dated as of March 29, 2004, as amended and in effect (collectively, “ Agreement One ”), (ii) that certain Licensing and Development Agreement (Manufacturing Rights)(2005-2007), dated as of March 29, 2004, as amended and in effect (collectively, “ Agreement Two ”, and together with Agreement One, as amended, the “ Manufacturing Agreements ”, and (iii) that certain Transition Services Agreement dated April 1, 2004 (the “ Transition Agreement ”); each initially-capitalized term used herein and not otherwise defined shall have the meaning ascribed to such term in the Manufacturing Agreements or the Transition Agreement, as applicable), pursuant to which, among other things, Riverdeep has granted Distributor exclusive rights to replicate, sell, and distribute the Products into the Channel and the Territory, as more particularly described in each of the Agreements.

     B. WHEREAS, the parties now desire to enter into this Addendum to amend certain terms and conditions of the Manufacturing Agreements as specifically set forth herein, and to memorialize the release of certain specific rights as further set forth herein solely with respect to Agreement One and the Transition Agreement; and

     C. WHEREAS, the parties agree to work in good faith to amend and restate Agreement Two to reflect and be consistent with the terms and conditions set forth herein, in addition to other identified amended terms included in any and all other Addenda previously agreed in writing between the parties.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

AGREEMENT

1. Definitions. Capitalized terms used but not defined herein shall have the same meaning as in the Agreements.

2. Reconciliation . The parties hereby acknowledge and agree that each has made good faith efforts in respect of the reconciliation of accounts and records related to Agreement One and the Transition Agreement, and have reached mutual agreement with respect to such amounts, provided however that certain additional adjustments to such reconciliation may be required by the mutual agreement of the parties in the future due to the difficulties of presently ascertaining all possible adjustments to the subject matter of the reconciliation as of the Effective Date of this

 


 

Addendum. Notwithstanding the foregoing, as of the Effective Date the parties are not aware of any outstanding reconciliation items. The parties hereby agree, subject to Section 4 (Offset) below:

 

(i)

 

Payments made by Distributor to Riverdeep have equaled $12,106,360.00, which included both cash payment and acknowledged and agreed discounts on payment, effective as of March 31, 2005 of which $2,624,878 of such amount are pre-paid royalties under Agreement One which Distributor has not yet recouped (“Unearned Royalties”). Distributor shall be entitled to take as prepaid royalties under Agreement One. Notwithstanding the foregoing, to the extent that Distributor has not otherwise earned out any Unearned Royalties by the expiration of the Term of Agreement Two, then the Term of Agreement Two shall be extended until such time as any Unearned Royalties have been recouped, in addition to such extensions as otherwise set forth in Section 4 of Agreement Two. To the extent the Unearned Royalties are recouped by the expiration of the Term of Agreement Two, no such extension shall be triggered.

 

 

 

 

 

(ii)

 

Riverdeep agrees to pay (in the form of a credit against amounts owed by Distributor to Riverdeep) Distributor $1,433,203.04 , or such other amount based upon those adjustments permissible under Section 2(iii) over twelve (12) months beginning on April 1, 2005. Payment will be made in 12 monthly installments, with the April monthly installment due as of May 1, 2005. All remaining payments will be due on the first day of the subsequent month with the last payment due on April 1, 2006. The first seven (7) of those installments shall be of $106,146.05 and the remaining five installment payments shall be of $138,036.14.

 

 

 

 

 

(iii)

 

The parties agree that, as of the Effective Date, certain reconciliation items remain to be finalized and are have been expressly excluded from the releases set forth in this Addendum in addition to items 2(iii)(A)-(D) (the “ Release Exceptions ”). Notwithstanding the foregoing, each party shall diligently work in concert to resolve all such reconciliations, chargebacks, credits and/or payments. Each party agrees that deductions or credits pursuant to Section 2 shall result in corresponding adjustments to the royalties paid to Riverdeep by adjusting the Net Receipts. As of the Effective Date, the parties are aware of the following reconciliation items:

(A) Riverdeep is entitled to payment of $114,282.81 in channel inventory reconciliation with respect to the account of certain Products formerly distributed by Riverdeep and now owned by MyFamily.com pursuant to an agreement by and between Riverdeep and MyFamily.com, provided that Riverdeep represents and warrants that as of the Effective Date, it is the owner of such channel inventory and Riverdeep hereby agrees to indemnify and hold Distributor harmless from any loss, cost, expense or damage (including attorney’s fees) to the extent relating to any action, claim, demand or proceeding instituted by MyFamily.com, Inc. due to payment of such amounts by Distributor to Riverdeep in relation to such channel inventory.

(B) Distributor is entitled to and Riverdeep has credited an amount equivalent to $1,071,040.96 for returns, rebates, product mark-down expenses, MDF credits, and

 


 

Sales Discounts (“ Dilutions ”) incurred by Encore from various retail accounts related to activity prior to the Commencement Date of Agreement One.

(C) Riverdeep is entitled to payment in the amount of $116,471.94 due to Wal-Mart Corporation erroneously crediting Distributor, or Distributor’s parent company with such aforementioned amount, that was actually due to Riverdeep for unresolved account activity in the retail channel prior to the Commencement Date of Agreement One.

(D) Riverdeep may be entitled to credit or reconciliation of amounts up to a maximum of $41,690.57 in relation to post-audit credits relating to sales and distribution by Wal-Mart Corporation prior to the Commencement Date of Agreement One, the parties shall endeavor to research and resolve such post-audit credits within sixty (60) days from the Effective Date hereof .unless such time period is extended by mutual agreement of the parties.

3. Modifications and Release . In consideration of the amendments made herein and such other good and valuable consideration, the receipt and sufficiency of which is acknowledged by each of the parties, with the exception of the Release Exceptions , the parties intend to release any and all potential disputes, claims or potential claims that may arise between Distributor and Riverdeep in relation to Returns received through March 31, 2005 for sales of Channel Inventory attributable to Riverdeep prior to the Effective Date of Agreement One (the “Potential Claim”). In full satisfaction of such Potential Claim,

(A) Riverdeep agrees to:

 

(i)

 

pay Distributor $507,617.75 in three (3) equal annua


 
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