Fill and Sign the Form Original Equipment Manufacture

1 4.10 Form: Original Equipment Manufacture Distribution Agreement AGREEMENT, by and between Best Productions, Inc., a New York corporation with offices at North Broadway, White Plains (the "Producer") and Mega Manufacturer, Inc., a New York corporation with offices at Hanover Street, New York, New York 10022 (the "Distributor"). WHEREAS, Producer publishes and produces Compact Disc Read Only Memory ("CD-ROM") discs of multimedia works; and WHEREAS, Distributor is a manufacturer of CD-ROM drives and related equipment; and WHEREAS, Distributor desires to purchase certain CD-ROM discs from Producer as set forth in Exhibit A attached hereto in order to enhance and increase the sale of CD-ROM drives. NOW THEREFORE, the parties agree as follows: 1. Appointment Producer hereby grants to Distributor the non-exclusive, non- transferable right for a period of three (3) years to market and distribute within the United States (the "Territory") Producer's pre- packaged CD-ROM discs comprised of multimedia titles and prices as set forth in Exhibit A (the "Products") in conjunction with the sale of CD-ROM drives. 2. Additional Products Producer agrees to continue ongoing efforts to produce new Products and to offer such new Products to Distributor prior to offering a right of distribution to other CD-ROM drive manufacturers, for Distributor's consideration as to whether Distributor shall elect to add such new Products to Exhibit A at prices to be mutually agreed upon between the parties. 2 3. Indemnification Producer agrees to defend and indemnify Distributor, its dealers, agents, officers, employees, successors and assigns against any loss, damage and liability including costs and expenses for actual or alleged violations of privacy, infringement or improper or unauthorized use, sale or reproductions of any copyrighted, trademarked or patented material including, but not limited to, software, algorithms, text, data, images, photographs, illustrations, animation and graphics, video or audio segments contained in the Product and arising out of the purchase, use or sale by Distributor, its dealers, agents, officers, employees, agents successors or assigns of the Products and Distributor shall promptly notify Producer of any suit, claim or demand involving any such infringement or unauthorized use, and shall permit Producer to defend against or settle such claims. If an injunction is issued or Distributor is prevented in any manner whatsoever from marketing the Products as a result of such infringement or improper use claim, Producer agrees, at Distributor's option to (a)\x11refund to Distributor, upon Distributor's return of the Products, the amount paid to Producer hereunder less the value of those copies sold by Distributor, or (b)\x11furnish Distributor with an acceptable and non-infringing product. Producer further agrees to protect, defend, indemnify and hold harmless Distributor from and against any and all liability and expense resulting from any alleged or claimed defect in the Product, whether latent or patent, including alleged improper construction, manufacture and design, or from failure of the Product to comply with the specifications or with any express or implied warranties of Producer or arising out of the alleged or claimed violation of a statute, ordinance, administrative order, rule or regulation connected with the manufacture, publishing or sale of the Products. Satisfactory evidence of product liability insurance and other business risk insurance shall be submitted to Distributor upon request. For the purposes of this clause "Products" shall be deemed to include any packaging or advertising media furnished by Producer. 3 4. Warranty Producer warrants that all products delivered under this order shall be of new manufacture and merchantable; shall be free from defects in workmanship or material (including damage due to unsatisfactory packaging by Producer); and shall comply with the terms of this Agreement and all orders issued hereunder. In the event of any such defect, Distributor at its option may require Producer to replace the defective item; to correct such defect or failure wholly or in part; or if Distributor directs either no such action or partial action of either type, to comply with any requirement of Distributor and repay an equitable reduction in the price to Distributor forthwith. Such optional rights of Distributor shall not be construed to negate, replace, or limit, but shall be additional to, any rights of Distributor arising at common law or by virtue of otherwise applicable laws or regulations. Producer further warrants that all royalty payments due to any writer, actor, composer, guild, association, artist or other owner or assignees thereof including residuals for the work products embodied or contained in the CD-ROM discs which constitute the Products under this Agreement have been paid and that Producer is fully and legally empowered to grant any and all sales and resale rights to Distributor herein and will further defend and indemnify Distributor from and against any and all claims for royalties, claims of infringement, unlawful licenses, wrongful reproduction, failure to exploit or other claims arising out of or resulting from the Agreement herein contained. All necessary record keeping relating to such payments shall be the responsibility of Producer. EXCEPT FOR THE LIMITED WARRANTY PROVIDED FOR IN THIS SECTION 4, THE PRODUCTS ARE PROVIDED "AS IS." 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. 4 5. Limitation of Liability IN NO EVENT SHALL PRODUCER BE LIABLE FOR ANY LOSS OF PROFIT OR ANY OTHER COMMERCIAL DAMAGE, INCLUDING BUT NOT LIMITED TO DIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR OTHER INDIRECT DAMAGES UNDER ANY CAUSE OF ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, CLAIMS ARISING FROM MALFUNCTION OR DEFECTS IN THE PRODUCTS OR NON-DELIVERY OF THE PRODUCTS, EVEN IF PRODUCER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL PRODUCER'S LIABILITY FOR ANY CLAIM ARISING OUT OF THIS AGREEMENT EXCEED THE AMOUNT PAID TO PRODUCER BY DISTRIBUTOR UNDER THIS AGREEMENT. 6. Termination Either party may cancel this Agreement in whole or in part if either party (a)\x11is unable to pay any uncontested amounts due and owing; (b)\x11terminates or suspends its business; (c)\x11becomes insolvent, makes an assignment for the benefit of creditors, suffers or permits the appointment of a receiver, trustee in bankruptcy, or similar official for any substantial part of its business or assets; or (d)\x11avails itself of or becomes subject to any bankruptcy proceeding under the Federal Bankruptcy Code or any statute of any state relating to insolvency or the protection of the rights of creditors. If at any time either party defaults in the performance of any term or condition which it is obligated to perform hereunder, and if said act of default shall continue without corrective action for a period of twenty (20) days after notice of said default has been transmitted to the defaulting party, then the non-defaulting party may, by written notice, terminate this Agreement in whole or in part, and may pursue any remedy at law or in equity as a result of said default. 7. No Waiver No waiver shall be deemed to have been made by either parties unless expressed in writing and signed by the waiving party. The failure of 5 either party to insist in any one or more instances upon strict performance of any of the terms or provisions of this Agreement, or to exercise any option or election herein contained, shall not be construed as a waiver or relinquishment for the future of such terms, provisions, option or election, but the same shall continue and remain in full force and effect, and no waiver by either party of any one or more of its rights or remedies under this Agreement shall be deemed to be a waiver of any prior or subsequent rights or remedy hereunder or at law. All remedies afforded in this agreement shall be taken and construed as cumulative; that is, in addition to every other remedy available at law or in equity. 8. Trademarks Producer hereby agrees that the Products shall be sold in a package which will display Producer's trademark in addition to other marks referring to the proprietary contents on CD-ROM discs. 9. Training Producer shall provide up to two (2) days free training on the Products to Distributor's sales, technical and marketing personnel, which training can be given at either Producer's facility or at the facility of Distributor. 10. Assignment This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns except that this Agreement shall not assignable by Producer without Distributor's advance written consent and any assignment or attempted assignment in contravention of the foregoing shall be void. 11. 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 6 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. 12. Governing Law This Agreement and performance hereunder shall be governed by and construed in accordance with the laws of the State of New York. Any and all proceedings relating to the subject matter hereof shall be maintained in the courts of the State of New York or the Federal District Courts sitting in New York, which courts shall have exclusive jurisdiction for such purpose. 13. Fees and Orders Distributor will pay Producer fees of _______ ($_______) per one thousand (1,000) Products ordered. All orders shall be in multiples of one thousand (1,000) units. Distributor shall place written orders with Producer on or before the 15th of each calendar month, covering quantities to be delivered during the next three (3) month period beginning at the end of that calendar month. The quantity ordered for delivery for the first month shall be fixed and non-cancelable. The quantity ordered for delivery for the second month shall be fixed and non-cancelable with respect to eighty percent (80%) of the quantity ordered. The quantity ordered for delivery for the third month shall be fixed and non-cancelable with respect to fifty percent (50%) of the quantity ordered. Payments shall be made in cash on delivery (C.O.D.). IN WITNESS WHEREOF, the parties have executed this Agreement as of the date hereof. BEST PRODUCTIONS, INC. MEGA MANUFACTURER, INC. By:_______________________By:__________________________ Title:______________________ Title:_________________________