Fill and Sign the Form Large Quantity Sales Distribution Agreement

1 4.15 Form: Large Quantity Sales Distribution Agreement This Agreement by and between Graphic Productions, Inc., a New York corporation, having an office at Columbus Circle, New York, New York, ("Producer") and United Distribution, Inc., a New York corporation, having an office at Shoreline Drive, Redwood City, California ("Distributor"). WHEREAS, Producer is in the business of producing and distributing multimedia titles including those multimedia products described fully in Schedule A attached hereto produced in CD-ROM format for use on IBM or IBM-compatible personal computers (hereinafter referred to as the "Products"); and WHEREAS, Distributor desires to purchase a quantity of the Products from Producer for distribution through its authorized dealers. NOW, THEREFORE, the parties agree as follows: 1. Distribution Rights Subject to the terms and conditions of this Agreement, the Producer grants to Distributor the non-exclusive, non-transferable, worldwide right to market and distribute Producer's Products set forth in Schedule A hereto through its network of authorized dealers. Producer reserves the right to at any time change, modify or discontinue any of the Products and to amend Schedule "A" accordingly. Additionally, Producer may, but is not obligated to, add additional Products to Schedule "A" which may then be distributed as provided herein, except that such new Products may be subject to additional terms and conditions. 2. Product Pricing Distributor will purchase Producer's Products at ______ percent (__%) off Producer's suggested retail price for each respective Product. Producer shall provide at least sixty (60) days written notice of any changes in the suggested retail price of any Product, and shall allow Distributor to purchase such Products before the effective date of such 2 price increases. Producer shall provide Distributor pricing equivalent to pricing given to all distributors of Producer's Products for equal volumes and terms of purchases. 3. Agreement Term and Renewal The initial term of this agreement shall commence upon the date set forth above and shall continue for two (2) years from the date hereof, unless earlier terminated as provided herein, and shall be automatically renewed for successive one (1) year periods following expiration of the initial or any subsequent term of the agreement unless either party gives written notice to the contrary to the other party not less than ninety (90) days prior to the expiration of the then-current term. During each twelve (12) consecutive month period during the term of this Agreement, Distributor shall purchase a minimum of 6 thousand (6,000) copies (the "Minimum Annual Order") of each Product, and no single order shall be for less than one thousand (1,000) copies of the Product. Distributor's initial order shall be one-half of the Minimum Annual Order, i.e. three thousand (3,000) copies, and shall be deemed placed as of the execution of this Agreement. 4. Shipping and Freight All shipments shall be made F.O.B. Distributor shall pay all freight charges. Producer shall use reasonable efforts to ship Products within two (2) weeks after receipt of order. Should Producer be unable to fill promptly and ship Products purchased, Producer shall provide to Distributor a reasonable estimation of when any backorder shall be filled, barring unforeseen delays caused by uncontrollable factors. Producer shall allow Distributor, without penalty, the ability to cancel or reschedule the shipment of purchase orders subject to Distributor's provision of at least two (2) weeks warning of said cancellation or rescheduling. Distributor shall pay all customs, import, excise, sales, and other similar duties and taxes payable in respect of the Products shipped to Distributor, obtain any licenses, authorizations, permissions, and other documents, and comply with all formalities in each state for the import, export, distribution, sale and/or other disposal of the Products in and from that state. 3 5. Invoices Producer shall invoice Distributor monthly for orders placed during the prior calendar month. Payment shall be made within thirty (30) days after receipt of invoice, and late payments shall accrue interest at the maximum rate allowed by law, compounded on a monthly basis. Producer reserves a purchase money security interest in merchandise shipped to Distributor to secure Distributor's payment obligations, and Distributor agrees to provide reasonable cooperation requested by producer to perfect such security interests. 6. Product Returns Producer agrees to buy back any Product that is unsold at the end of a ninety (90) day period beginning with the day the Product is received by Distributor, which is in a resalable condition (including within its original, unopened packaging), at __________ percent (__%) of the invoice price paid by Distributor for the Product. Producer will allow Distributor to return all Products that are defective and will refund the full invoice price for such defective Products, provided Producer can verify the defective nature of the Product. Producer will notify Distributor sixty (60) days in advance of all Product upgrades, and provide the option of swapping all Products currently in stock for upgraded Products at any additional incremental changes equal to _____ percent (__%) of the difference between Producer's suggested retail price of the original and upgraded Products. 7. Support and Training Producer shall provide reasonable amounts of telephone support and consultation to the sales and support staff of Distributor. Producer shall also supply Distributor with all reasonably necessary Product support and training to enable Distributor sales representatives to resell Producer's Products. Producer shall provide, with advance approval and notice from both parties, sales and Product training at Distributor's place of business. 4 8. Proprietary Rights Ownership of all applicable copyrights, trade secrets, patents and other intellectual property rights in the Products shall remain vested in the Producer, or in the Producer's licensors. Distributor shall not remove the Producer's copyright notices, restricted rights legends or any other notices from the Products. 9. Indemnity Producer shall defend, indemnify, and hold harmless Distributor from and against all costs incurred by Distributor arising from the infringement of any patents, copyrights, or trademarks in the manufacture or marketing of the Products, or any suit based upon defamatory material contained in the Product provided that Distributor promptly notifies Producer of the charge of infringement or defamation. Distributor shall defend, indemnify and hold harmless Producer from any and all suites, claims, actions and liabilities of any nature arising in any manner from Distributor's actions. 10. Disclaimer of Warranties EXCEPT FOR THE LIMITED WARRANTY PROVIDED ABOVE IN SECTION 8, THE PRODUCTS ARE PROVIDED "AS IS." THE PRODUCER SPECIFICALLY DISCLAIMS ALL OTHER WARRANTIES EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AS TO ANY PRODUCTS OR SERVICES PROVIDED UNDER THIS AGREEMENT. 11. Limitation IN NO EVENT SHALL THE PRODUCER BE LIABLE FOR ANY LOSS OF PROFIT OR ANY OTHER COMMERCIAL DAMAGE, INCLUDING BUT NOT LIMITED TO SPECIAL, INCIDENTAL, CONSEQUENTIAL OR OTHER INDIRECT DAMAGES UNDER ANY CAUSE OF ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, 5 CLAIMS ARISING FROM MALFUNCTION OR DEFECTS IN THE PRODUCTS OR NON-DELIVERY OF THE PRODUCTS, EVEN IF THE PRODUCER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL THE PRODUCER'S LIABILITY FOR ANY CLAIM ARISING OUT OF THIS AGREEMENT EXCEED THE AMOUNT PAID TO THE PRODUCER BY DISTRIBUTOR UNDER THIS AGREEMENT WITHIN THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEDING THE ACCRUAL OF SUCH CLAIM. 12. Promotions and Incentives Producer will provide Distributor similar benefits price promotions, marketing promotion, and special incentives given to all distributors of Producer's Products. 13. No Joint Venture Nothing contained in this Agreement shall be deemed or construed as creating a joint venture or partnership between Producer and Distributor. Neither party, by virtue of this Agreement, is authorized as an agent, employee or legal representative of the other. Except as specifically set forth herein, neither party shall have the power to control the activities and operations of the other and their status is, and at all times will continue to be, that of independent contractors. Neither party shall have any power or authority to bind or commit the other. 14. Compliance with Local Laws Distributor shall be exclusively responsible at its own expense for compliance with all local laws relating to the Products in the countries in which Distributor markets the Products. 15. Entire Agreement This Agreement, including the Schedules attached hereto, constitutes the entire agreement between the parties with respect to this subject matter and supersedes all previous proposals, both oral and written, 6 negotiations, representations, commitments, writings and all other communications between the parties. This Agreement may not be released, discharged or modified except by an instrument in writing signed by the parties. 16. Severability If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the validity or enforceability of any other part or provision of this Agreement. 17. Notice Any notice required to be given by either party to the other shall be deemed given if in writing and sent by confirmed facsimile transmission, in writing and actually delivered or deposited in the United States mail in registered or certified form with return receipt requested, postage paid, addressed to the notified party at the address set forth above. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date hereof. GRAPHIC PRODUCTIONS, INC. UNITED DISTRIBUTION, INC. By:__________________________ By:________________________ Title:_________________________Title:_______________________