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4.07 Form: Reseller Distribution Agreement
This Agreement made by and between Producer, Inc., a New York
corporation, having an office at Eighth Avenue, New York, New York
("Producer") and Universal Distribution, Inc., a California corporation,
with a place of business at California Street, San Francisco, CA
("Distributor").
WHEREAS, Producer produces Compact Disc-Read Only Memory
("CD-ROM") multimedia titles;
WHEREAS, Distributor promotes, markets and distributes CD-ROM
multimedia titles for use with optical disc readers; and
WHEREAS, Distributor desires to purchase certain CD-ROM titles
from Producer for distribution through Distributor's Dealers and
Affiliates (as hereinafter defined).
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
1.1. Affiliate
"Affiliate" shall mean a parent or subsidiary of Distributor, or any
affiliated companies in which Distributor owns fifty percent (50%) or
more of the stock or otherwise has a controlling interest therein.
1.2. Data Discs
"Data Discs" shall mean compact disc-read only memories or other
optical media, whether now existing or hereinafter devised, containing
data that can be read, accessed or manipulated by optical or laser
technologies.
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1.3. Dealer
"Dealer" shall mean any dealer authorized by the Distributor to
distribute merchandise on the Distributor's behalf.
1.4. Optical Disc Reader
"Optical Disc Reader" shall mean optical disc reader capable of
reading information from Data Discs or other similar optical media.
1.5. Products
"Products" shall mean Data Disc products of 8 centimeter diameter, or
any other format now or hereafter compatible with Optical Disc
Readers, as defined herein, bearing the titles identified in Schedule A.
2. Appointment and Territory
2.1. Appointment
Subject to the terms and conditions of this Agreement, Producer grants
to Distributor the non-exclusive, worldwide right, except as set forth in
Section 2.3 herein, to purchase from Producer prepackaged Data Discs
comprising the Products set forth in Schedule A annexed hereto.
Distributor shall have the right to advertise, market, distribute and sell
the prepackaged Products only to its Dealers and Affiliates for sale to
consumer end users ("End-Users"). Distributor may not copy or
modify the Product, nor may Distributor remove any original contents
of a Product package nor repackage the Product without the prior
written consent of Producer. Distributor agrees to use reasonable
efforts to advertise and aggressively promote the sale and distribution
of the Products, at no cost to Producer.
2.2. Territory
Distributor may only market and sell the Products within the territory
specified in Schedule B (the "Territory").
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2.3. Limited Distributor Exclusive
Producer hereby grants to Distributor a one (1) year exclusive period,
commencing on the date hereof, to purchase and distribute the
Products. The exclusive period shall be extended for one additional
one (1) year period provided that Distributor orders and pays for a
minimum of ten thousand (10,000) copies of each of the Products
during the first year of this Agreement.
3. Price, Quantity, Payment and Shipment
3.1. Price
For each Product shipped to Distributor, Distributor shall pay to
Producer the Distributor Prices as set forth in Schedule C. Producer
retains the right to adjust the suggested retail price of the Products set
forth in Schedule A (the "Suggested Retail Price") upon thirty (30)
days prior written notice to Distributor.
3.2. Quantity
Distributor hereby orders a minimum initial quantity of two thousand
five hundred (2,500) copies of each Product (the "Initial Order"). In
addition, Distributor must order a minimum of one thousand (1,000)
copies of each Product for subsequent re-orders. Distributor may order
up to three hundred (300) copies of each of the Products to be used as
promotional copies, not for resale to End Users. The price for the
promotional copies is set forth in Schedule C.
3.3. Shipment
Packages containing the Product(s) and any applicable Producer
literature or documentation ("Documentation") shall be shipped by
Producer to Distributor, F.O.B. delivery of the Products to a common
carrier at the point of manufacture. Distributor shall reimburse
Producer for any and all shipping charges. Producer shall not insert
any special or extraordinary material, including but not limited to, mail
order or other promotional material, in, or affix any special or
extraordinary stickers or other items on, any Product that it delivers to
Distributor pursuant to this Agreement, without obtaining Distributor's
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prior written consent. As used in this paragraph "special or
extraordinary" shall mean printed material, inserts, stickers or other
promotional material (i)\x11not used by Producer in or on its general
release of the Products, (ii)\x11that quotes a suggested wholesale,
retail or special price for any of the Products, or (iii)\x11that advertises
or promotes other Producer products.
3.4. Terms of Payment
Other than the advanced payment or any special payment terms set
forth in Schedule C, payment for Products and any other charges under
this Agreement is due thirty (30) days from the date of Producer's
invoice. A late payment charge of two percent (2%) per month, or the
highest interest rate allowed by applicable law, shall be charged upon
unpaid balances due for more than thirty (30) days. The Producer
reserves the right to request advance payment of orders and/or to
withhold production and shipment of subsequent orders until all
previous orders and related charges have been paid for in full.
3.5. Taxes
All pricing and fees under this Agreement are exclusive of taxes.
Except for taxes based on Producer's net income and payments
required to be made by Producer in accordance with Section 4.2
herein, Distributor shall pay any federal, state, county, local or other
governmental taxes, fees or duties now or hereinafter imposed on the
sale, export, use or possession of the Products purchased by
Distributor hereunder, or any other transaction contemplated by this
Agreement, as well as any penalties or interest thereon. Without
limiting the foregoing, Distributor shall promptly pay to Producer an
amount equal to any such items actually paid, or required to be
collected or paid by Producer.
3.6. Orders
Distributor's orders for the Products must be in writing and for the
minimum number of copies of the Products per order set forth in
Section 3.2. Orders must be placed at least thirty (30) days prior to the
requested shipment date. Producer shall make every reasonable effort
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to insure shipment of the Products on or before Distributor's requested
shipment date. The terms and conditions of this Agreement shall apply
to all orders submitted to Producer and supersede any different or
additional terms on any Distributor purchase orders. Orders issued by
Distributor to Producer are solely for the purpose of requesting
shipment dates and quantities. All orders are subject to acceptance by
Producer. Producer shall use reasonable efforts to ship accepted orders
but shall not be liable to Distributor or any third party for any delay,
error or failure in filling any orders.
3.7. Acceptance
All orders shall be considered complete and accepted, with no right of
revocation, as of ten (10) days after delivery to Distributor, unless
Distributor gives written notice to Producer within such ten (10) day
period of all items not delivered. Upon Distributor's receipt of all items
not originally delivered, the order shall be considered accepted and
complete, with no right of revocation.
3.8. Advertising
Distributor may use the trade names, trademarks, images, likenesses or
other information specified by Producer in writing ("Approved
Materials") for normal advertising and promotion of the Products,
subject to written direction by Producer. Upon reasonable notice,
Producer may withdraw or modify such authorization. All use of any
Approved Materials in any marketing and promotion, including but not
limited to advertisements and packaging, shall contain such trademark
or other notice of attribution as may be specified by Producer from
time to time. Distributor shall submit to Producer for approval, prior to
use, distribution or disclosure, any advertising, promotion or publicity
in which the Approved Materials are used.
3.9. Packaging
Producer agrees to package the Products ordered by Distributor in
accordance with Distributor's reasonable instructions and
specifications, annexed hereto as Schedule D.
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4. Ownership and Proprietary Rights
4.1. Ownership and Rights
Producer represents (i)\x11that it has all rights in and to copyrights,
trade secrets and trademarks associated with the Products, or otherwise
has the rights that are necessary to grant Distributor the right to
advertise, market, distribute and sell the Products under this
Agreement; (ii)\x11the literary and artistic materials and ideas,
contained or embodied on the Products, containers and advertising
materials, if any, furnished to Distributor by Producer, and the use
thereof in accordance with the terms of this Agreement, will not
violate any law, or infringe upon, or violate any rights of any person,
firm or corporation; and (iii)\x11Producer has no knowledge of any
litigation, proceeding or claim pending or threatened against Producer
which may materially affect Producer's rights in and to the Products,
or the works and performances embodied thereon, the copyrights
pertaining thereto, or the rights, licenses and privileges granted to
Distributor hereunder.
4.2. Royalties and Other Payments
Producer shall be solely responsible for and shall make any payments
required to be made to any individual, entity or group representing
authors, participants in the production of the works or performances
embodied on the Products, publishers or other persons having legal or
contractual rights of any kind to participate in the receipts of such
works or performances as a result of the transaction contemplated by
this Agreement.
4.3. Proprietary Rights
Ownership of all applicable copyrights, trade secrets, patents and other
intellectual property rights in the Products and Documentation shall
remain vested in Producer, or in Producer's licensor. Distributor shall
not remove Producer's copyright notices, restricted rights legends or
any other notices from the Products and Documentation.
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5. Covenants of Distributor
5.1. Covenants
Distributor covenants and represents that (i) Distributor shall make no
representations or warranties on behalf of Producer; (ii) Distributor
shall not sell, transfer, publish, disclose, display or otherwise make
available the Products, to others except as expressly permitted herein;
(iii) Distributor will comply with all credit and copyright obligations
contractually required of Producer by third parties of which Producer
notifies Distributor of in writing; and (iv) Distributor will maintain
accurate books of accounts in connection with any sales made by
Distributor pursuant to this Agreement.
5.2. Indemnification
Distributor agrees to indemnify and hold harmless Producer from and
against any claim, injury, loss or expense, including attorneys' fees,
arising out of (i)\x11the failure of Distributor to comply with the
provisions of Sections 5.1; (ii)\x11any misrepresentations of
Distributor in connection with Producer or the Products; or
(iii)\x11any other wrongful conduct of Distributor, its employees,
representatives, agents or dealers.
6. Warranty
6.1. Limited Warranty
For thirty (30) days after delivery of a Product to Distributor, Producer
warrants that the media upon which the Product is delivered by
Producer shall be of good quality and workmanship. Upon written
notice from Distributor of defective media for a Data Disc, Producer
shall use reasonable efforts to promptly provide replacement media.
6.2. Disclaimer of Warranties
EXCEPT FOR THE LIMITED WARRANTY PROVIDED ABOVE
IN SECTION 6.1, THE PRODUCTS AND DOCUMENTATION
ARE PROVIDED "AS IS." PRODUCER SPECIFICALLY
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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.
7. Limitation of Liability
7.1. Limitation
IN NO EVENT SHALL 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,
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.
7.2. Amounts Paid
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 WITHIN THE TWELVE (12) MONTH
PERIOD IMMEDIATELY PRECEDING THE ACCRUAL OF SUCH
CLAIM.
8. Term and Termination
8.1. Expiration
This Agreement shall commence on the date hereof and shall continue
for an initial term of one (1) year. Thereafter, this Agreement may be
renewed for an additional one (1) year term upon the written approval
of both parties.
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8.2. Termination
This Agreement may be terminated by either party under any of the
following conditions:
(a) if one of the parties shall be declared insolvent or bankrupt;
(b) if a petition is filed in any court and not dismissed in ninety (90)
days to declare one of the parties bankrupt or for a reorganization
under the Bankruptcy Law or any similar statute;
(c) if a trustee in Bankruptcy or a receiver or similar entity is
appointed for one of the parties; or
(d) if the other party otherwise materially breaches the term of this
Agreement, and such breach is not cured within thirty (30) days after
written notice of such breach is given by the other party.
8.3. Duties Upon Termination
The following Sections of this Agreement shall survive its termination:
4.3, 5, 6.2, 7, 10, 11 and 12.3. In the event that Distributor has any
paid-up inventory of the Products as of the date of termination under
Section 8.2, and provided termination is not a result of a material
breach of Sections 4.3 or 10 or pursuant to Section 8.2(d), termination
of this Agreement shall be adjourned for a period not to exceed six (6)
months, during which period Distributor may continue to market and
sell its inventories of the Products. During such six (6) month period,
Distributor shall have no right to order or receive any additional copies
of the Products. Upon termination of this Agreement, or at the
expiration of the six (6) month continuation period, if applicable,
Distributor shall return all Products and Documentation, as well as all
copies of promotional materials, marketing literature, written
information and reports pertaining to the Products that have been
supplied by Producer.
9. Indemnification
9.1. Intellectual Property
Producer shall, at its expense, defend any claim against Distributor that
use of the Products, as delivered to Distributor under this Agreement,
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infringes a United States copyright, trade secret or other intellectual
property right of any third party. Producer shall pay any direct costs
and damages attributable to such claim finally awarded by a court
against Distributor on such claim. Producer shall have no liability for
any such claim if Distributor is in material breach of this Agreement,
or if the claim is based on use of or anything other than an unaltered
Product as delivered by Producer, alone and not in combination with
any other software, data or hardware, if such infringement would have
been avoided by the use of the unaltered Product as delivered by
Producer.
9.2. Cooperation by Distributor
Producer shall have no obligations under Section 9.1 of this
Agreement unless:
(a) Producer shall have been promptly notified of the suit or claim by
Distributor and furnished by Distributor with a copy of each
communication, notice or other action relating to said claim;
(b) Producer shall have the right to assume sole authority to conduct
the trial or settlement of such claim or any negotiations related thereto
at Producer's expense; and
(c) Distributor shall provide reasonable information and assistance
requested by Producer in connection with such claim or suit.
10. Confidentiality
Any specifications, samples, computer programs, technical
information, lists of customers or potential customers or other
proprietary business information or data, written, oral or otherwise,
disclosed by one party to the other ("Confidential Information") shall
remain the property of the disclosing party. The parties agree to hold
all such Confidential Information in strict confidence and not to
disclose same to any third party without the disclosing party's prior
written consent. Upon expiration or termination of this Agreement,
each party shall return to the other all such Confidential Information in
its possession.
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11. General
11.1. Force Majeure
Producer shall not be liable for any delay or failure in performance
under this Agreement, resulting directly or indirectly from acts of God,
or any causes beyond the reasonable control of Producer.
11.2. Comparable Terms
With respect to the purchase, manufacture and delivery of any
Products ordered by Distributor pursuant to this Agreement,
Distributor shall receive terms comparable to those that Producer
offers to any other distributor of the Products.
11.3. Jurisdiction and Venue
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without reference to its
conflicts of laws provisions. Jurisdiction for litigation of any dispute,
controversy or claim arising out of or in connection with this
Agreement, shall be only in a Federal or the State Court having subject
matter jurisdiction located in New York County, New York.
11.4. 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,
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.
11.5. Independent Contractors
It is expressly agreed that Producer and Distributor are acting
hereunder as independent contractors. Under no circumstances shall
any of the employees of one party be deemed the employees of the
other for any purpose.
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11.6. Attorneys' Fees
In any action between the parties to enforce any of the terms of this
Agreement, the prevailing party shall be entitled to recover reasonable
expenses, including reasonable attorneys' fees.
11.7. 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 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.
11.8. Assignment
Neither party may assign its rights under this Agreement without the
prior written consent of the other party, except for an assignment by
Distributor to an Affiliate, or an assignment by Producer to a parent,
subsidiary or affiliate of Producer, or pursuant to a consolidation,
merger or other reorganization. Unless otherwise expressly agreed, no
such assignment shall relieve such assigning party of any of its
obligations hereunder.
11.9. 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.
11.10. Waiver
A waiver by either party of any term or condition of this Agreement in
any instance shall not be deemed or construed as a waiver of such term
or condition for the future, or of any subsequent breach thereof. All
remedies, rights, undertakings, obligations and agreements contained
in this Agreement shall be cumulative, and none of them shall be in
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limitation of any other remedy, right, undertaking, obligation or
agreement of either party set forth herein.
11.1. Other Distribution
Except for exclusivity provision set forth in Section 2.3 herein, nothing
in this Agreement shall be deemed to in any way preclude Producer
from distributing the Products or other products, as it deems
appropriate, or from appointing others to do so, in or outside of the
Territory.
11.2. Authorized Officer
This agreement shall not be effective until signed by an authorized
officer of Producer and Distributor.
12. International
12.1. Export License
Distributor shall be exclusively responsible for the procurement and
renewing of all export or import licenses required under United States
or any foreign law for the export or import of the Products and shall
pay all costs and other expenses in connection with such procurement
and renewal. In addition, Distributor agrees to comply with any
applicable export or import laws of the United States or any foreign
country with respect to its export of the Products from the United
States.
12.2. 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.
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12.3. Indemnification
Distributor shall indemnify and hold Producer harmless from any
claim, loss, cost, fine or expense, including reasonable attorneys fees,
arising out of Distributor's breach of any provision in this Section 12.
IN WITNESS WHEREOF, each party hereto has executed this
Agreement by a duly authorized representative as of the date hereof.
PRODUCER, INC. UNIVERSAL DISTRIBUTION, INC.
By:________________________ By: ________________________
Title:______________________ Title: