Sample Business Contracts

Exclusive Distribution Agreement - Bowvau Records Ltd. and Open Door Music Distribution

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                          BOWVAU DISTRIBUTION AGREEMENT


This Distribution Agreement  ("Agreement") is entered into as of the 12th day of
April,  1999 between  Quincy Vaughn and Norman  Bowman doing  business as Bowvau
Records,  LTD., a New Jersey  Corporation with its principal location c/o Anetra
Tilley,  50 Greenwood  Avenue,  D23,  Montclair,  New Jersey 07042  (hereinafter
referred  to  as  "Artist,"   "Label"  or   "Supplier")   and  Open  Door  Music
Distribution, a Rhode Island corporation with its principal place of business at
10 Dorrance Street, Providence,  Rhode Island, 02903 (hereinafter referred to as

WHEREAS, the Supplier is in the business of developing, marketing and supporting
certain  Products as defined below and the  Distributor  wishes to distribute to
the dealers and the re-marketers of these Products and assures the Supplier that
it has the facilities,  personnel,  and technical  expertise necessary to market
the Products. The Supplier is willing to grant to the Distributor, the exclusive
right to distribute  these Products to such dealers and  re-marketers as qualify
and as  defined  below for  resale  purposes.  In  consideration  for the mutual
promises,  covenants,  and Agreements made below,  the parties,  intending to be
legally bound, agree as follows:

1. Definitions.

     "End-User." Any person or entity who purchases or licenses the Product(s).

     "Information."  The  technical  or  business  information,  either  oral or
written  that the Supplier or the  Distributor  furnishes to the other marked as
proprietary or confidential  or simply treated as such by the disclosing  party.
It  includes  research,  development  or  business  activities,   including  any
unannounced  Products  and  services,  as well as any  information  relating  to
services,  developments,  processes, plans, financial information,  customer and
Supplier lists,  forecasts and  projections.  Information  will also include the
terms of this Agreement.

     "Intellectual  Property  Rights."  Any work of  authorship,  regardless  of
copyrightability,  including  copyrights and any moral rights recognized by law;
and any other  similar  rights,  in each case on a  national  and  international

     "Products."  The audio,  digital or any other  technical form, now known or
later developed,  of the musical,  theatrical or literary performances developed
or owned by the  Supplier  that are  specifically  listed in Exhibit A attached,
along  with  enhancements,  revisions,  remixes  or  modifications  made  to the
Products by the Supplier.

2.0 Term. This Agreement will begin on the date first written and will terminate
Twenty-Four  (24) months  following  the start date,  unless  sooner or later in
accordance  with the terms of this  Agreement.  Certain  sections,  as indicated
below,  will survive and remain  effective  even after the  termination  of this
Agreement.  all other  rights  and  obligations  of each party to the other will
terminate upon the termination of this Agreement.

3.0 Exclusive Distributor.  The Supplier grants the Distributor,  an irrevocable
exclusive  right and  license to  distribute  the  Products  alone or with other
Products and to affix its own label in addition to the Suppliers on prior notice
and consultation  with Supplier.  Except as providee,  the Distributor will have
sole  control  over  methods  of  distributing,   marketing,   pricing,  naming,
packaging,  labeling,  advertising,  and the terms and  conditions  of any sale,
unless otherwise provided for herein.

3.1 Independent  Contractors.  The Supplier and the Distributor agree that their
relationship is not that of joint venturers, principals or agents, or franchiser
and franchisees. Both are independent contractors acting for their own accounts,
and neither is authorized to make any commitment or  representation,  express or
implied,  on the  other's  behalf  unless  authorized  to do so by the  other in

3.2 Use of Trademarks and Trade Names. No right,  title or interest in or to any
trademarks, trade names, professional names, slogans, labels and designs used by
either the Supplier or the Distributor,  nor the goodwill connected, is conveyed
by this Agreement. All Parties may, in connection with the promotion and sale of
the  Products  pursuant  to the terms of this  Agreement,  refer to the  other's
applicable  trade names or trademarks  provided that all such  references are in
conformance  with  requirements  regarding  such use, as such  requirements  are
communicated in writing from time to time by the Parties.

4.0  Distribution  Rights.  In  recognition  of the investment to be made by the
Distributor in connection  with its marketing and  distribution of the Products,
the parties agree to the following:  The Supplier  hereby grants the Distributor
the exclusive  right to distribute the Products in all countries in the world in
which it is legal to sell the Products,  subject to the limitations below and in
Section  4.1.  The  Distributor  shall  distribute  the  Products to any and all
wholesale and retail outlets, chains,  franchises, one stops, individual stores,
or specialty stores or any store who normally and  traditionally  sell audio and
video products  embodying the  performances  of musical,  literary or theatrical
talent. These outlets include, without limitation,  to any "Internet," "On-line"
or new technological sales outlets now known or developed in the future.

The exclusive  distribution  rights granted to the Distributor  pursuant to this
Agreement  expires  Twenty-Four (24) months (the "Primary Contract Period") from
the date first written above. Notwithstanding anything in the previous sentence,
the Supplier  controls the exclusive right to extend and renew this Agreement by
exercising options ("Option  Periods") as defined in this Paragraph.  The length
of each consecutive option shall be for a period of One (1) year commencing upon
the expiration of the Primary Contract Period or the then current Option Period.
Each option will be deemed  automatically  exercised by Supplier unless Supplier
delivers  notice to  Distributor  of its intention to terminate.  Said notice to
terminate shall be delivered to Distributor no later than Thirty (30) days prior
to the expiration of the current Primary Contract or Option Period.  It shall be
made in writing and mailed to  distributor  by  Certified  or  Registered  mail,
return receipt requested in order to be deemed delivered. The Supplier agrees to
not sell any  products or compete with the rights and  responsibilities  granted
herein to the Distributor.

4.1 Reservation of Rights by Supplier. Despite the exclusive distribution rights
granted to the  Distributor  pursuant  to Section 4, the  Supplier  specifically
reserves the following rights with respect to the sale of the Products.

5.0  Distributor's  Responsibilities.  During  the term of this  Agreement,  the
Distributor  agrees to  distribute  the  Products to any  authorized  dealers as
defined  herein.  The  Distributor  will  maintain an  inventory of Products and
warehousing facilities sufficient to adequately serve the demands of its dealers
on a timely basis.

5.1 Promotional  Efforts.  Excluding Section 5.2, the Distributor  shall, at its
discretion,  advertise and promote the Products in the advertising  media of its
choice after prior notice to and consultation with Supplier.

5.2.  Participation  by Distributor.  For Products  selling One Thousand (1,000)
units and for each increment of One Thousand units sold thereafter,  Distributor
agrees  to  hold  from  its  share  of  royalties  and to  place  in a  separate
Advertising  Escrow  Account,  an amount equal to Fifty  ($0.50)  cents per unit
sold.  Said account to be used for the purpose of advertising  and promoting the
Product.  This expense will be deemed a  non-recoupable  advance to the Supplier
and is meant to promote, expose and market the Products.

5.2.1 Participation by Supplier. For Products selling One thousand (1,000) units
and  for  each  increment  of  One  Thousand  units  sold  thereafter,  Supplier
authorizes  Distributor  to hold from its share of  royalties  and to place in a
separate, interest bearing, Advertising Escrow Account, an amount equal to Fifty
($0.50) cents per unit sold. Said escrowed amounts to be used for the purpose of
advertising and promoting the Product.

5.2.2  Use of  Advertising  Escrow  Account.  It is the sole  discretion  of the
Supplier to direct the Distributor, in writing, as to whether funds deposited in
its  Advertising  Escrow  Account are to be used for  advertising  space or time
solely for the promotion of its Products or as part of  cooperative  advertising
buys in which Supplier is promoted along with other Suppliers or Artists of like
or similar style,  image and audience appeal.  If Supplier agrees to participate
in cooperative  advertising  buys,  Distributor  agrees to allocate  advertising
space,  type size,  placement and all other aspects of the  advertising  equally
among the participant Suppliers.

Notwithstanding anything in Paragraph 11.1.1, upon expiration of this Agreement,
including all extensions and renewals,  the Supplier's  share,  in the amount of
Fifty (50%) percent of the balance,  remaining in the Advertising Escrow Account
will be credited against any recoupable advances,  expenses or costs advanced to
the  Supplier by the  Distributor.  Any  remaining  funds will be payable to the
Supplier,  in the form of a certified check, during the quarterly payment period
directly after the date of expiration.

5.3 Supplier  Packaging.  The  Distributor  will  distribute  Products  with all
packaging,  warranties, and disclaimers shipped by the Supplier and will require
all the Dealers to adhere to the terms applicable to such Products.

5.4 Reports.  The  Distributor  will mail to supplier no later than Fifteen (15)
days after the end of each month during the term of this Agreement including any
extensions,  renewals or revisions  and quarterly  for  Twenty-four  (24) months
after the expiration or termination of this Agreement,  a report,  customized to
the Supplier's  needs,  showing the preceding  month's current inventory of each
Product,  the quantity of each Product shipped, the number of returns or refunds
on Products,  the balance of  Supplier's  Advertising  Escrow  Account and other
relevant information for the prior month.

5.5  Compliance  with  Laws.  The  Distributor  will  comply  with all  material
applicable  present  and  future  federal,  state,  county,  local,  and,  where
necessary, foreign laws, ordinances, and regulations relating to the sale of the

5.6 Service Support. Subject to the Distributor's customer service policy as set
forth herein, and in union with the Supplier, the Distributor will provide sales
support including without limitation,  returns  processing,  End-User inquiries,
field account maintenance and mutually approved sales incentives, in the form of
"free goods,  etc." The Supplier  agrees to provide  quality control support and
will  adjust or change  manufacturing  sources in the event  that an  inordinate
amount of Product is found to be  defective  and is returned to the  Distributor
for replacement or credit by End-Users.

6.0 Orders. The Distributor hereby places, upon execution of this Agreement,  an
initial  inventory  order for Product to be received no later than fourteen days
from  the  date of the  written  order.  Said  order to be  deemed  the  Initial
Inventory (the "Initial Inventory"). All subsequent orders will be in writing or
if placed orally, will be confirmed in writing within Five (5) business days via
fax,  e-mail or regular mail and shipped to be received by  Distributor no later
than fourteen days from the date the order is first written. All orders, whether
in writing or verbal will specify the quantity and  description of the Products,
requested  delivery  dates and any  special  instructions.  All  orders  will be
governed solely by the terms and conditions of this Agreement  unless  otherwise
agreed  upon,  in writing,  by the  Parties.  No Partial  shipment  will be made
without the Distributor's prior written approval.  At no charge, the Distributor
may at any time with at least  fourteen (14) days' prior  written  notice to the
Supplier, reschedule and postpone for up to Thirty (30) days the delivery of any

6.1 Cancellation of Orders. Any order under this Agreement,  including,  without
limitation,  the Initial Order will be cancelable  by the  Distributor,  without
charge,  upon an adverse ruling in the form of a restraining order,  injunction,
or other remedy  issued by any court of  competent  jurisdiction  preventing  or
restraining the Supplier from selling,  or the distributor  from reselling,  the
Products. In the event of such an adverse court ruling the supplier will, at its
own expense,  immediately  procure for the Distributor the right to continue the
use, sale or resale of such Products  purchased  under this  Agreement or having
failed to obtain such right,  replace or modify such  products in order that the
Distributor  may continue to use,  sell or resell such products or having failed
to replace or modify such Products in order that the Distributor may continue to
sue,  sell or resell such  Products  or having  failed to replace of modify such
Products,  refund to the Distributor  any related  reasonable  expenses,  future
advertising,  marketing or merchandising expenses that cannot be canceled or any
other financial expense incurred by the Distributor in conjunction with the sale
and distribution of the Products.  If the Supplier  reasonably elects to replace
or  modify  any  of  the  Products,   such  replacement  or  modification   will
substantially meet the respective  performance and quality specifications of the
replaced or modified Products.  Cancellations of deliveries  scheduled more than
Forty-Five  (45)  days  from the date of the  cancellation  may be made  without
charge to the Distributor.

6.2 Supplier Cancellation.  The Supplier reserves the right to cancel any orders
placed by the  Distributor  and  accepted  by the  Supplier,  or refuse or delay
thereof,  if the  Distributor  fails to make any  payment  as  provided  in this

6.3  Freight  and Tax  Charges.  The  Supplier  will pay the cost of freight and
taxes, levies, duties or fees of any kind, whatsoever applicable to the shipment
of any Products to the Distributor.  The Distributor will not be required to pay
taxes if tax exemption  certificates  or licenses  acceptable to the appropriate
taxing authorities are in its possession.  If the Distributor fails to designate
in writing,  not less than Fourteen  (14)  business days prior to shipment,  the
carrier,  the amount of  insurance  and nature of  coverage,  the  Supplier  may
specify any item not so designated.

6.4 Payment  Terms.  Distributor  will pay to  Supplier,  on a quarterly  basis,
Seventy-Five  (75%) Percent of the purchase price as set forth in Exhibit "B" of
this Agreement.

6.5 Packaging.  The supplier will provide appropriate  packaging as requested by
the Distributor to permit Products to be shipped directly into the Distributor's
system  without  reopening  the boxes or  re-handling  the finished  goods.  The
Distributor  may  request  that  the  Supplier  ship  directly  to any  location
designated by the Distributor. The Supplier agrees to comply with these requests
at no additional  charge (other than  transportation  charges) provided that the
Distributor  furnishes the supplier with shipping instructions at least Five (5)
days prior to  shipment.  The  Supplier  agrees to supply art,  graphics,  film,
biographical  material,  press  clippings  or any  other  item  to be  used  for
promotional or advertising  purposes by the Distributor.  The Distributor agrees
to provide  displays,  rack  dividers or other forms of "in-store"  display,  on
prior notice and consultation with Supplier,  as required or by its distribution
outlets.  The  Distributor's  costs,  with prior  notice and  consultation  with
Supplier,  would be recoupable  expenses,  deductible from Supplier's  royalties
payable, itemized and included on the Reports as defined in Section 5.4 herein.

6.6  Warehousing.  The Distributor may request that the Supplier ship to its own
warehouse,  or to another  warehouse owned by a third party.  In the event,  the
Supplier's  shipment will constitute  delivery to the Distributor.  The supplier
will procure  insurance to cover damage or loss to these  shipments while in the
warehouse  awaiting  final  delivery  to the  Distributor  as set  forth in this
Agreement.  The  Supplier  will  arrange  for final  shipment  to the dealers or
warehouse designated at the Distributor's instruction. The Distributor agrees to
procure  insurance  to  cover  damage  or loss to these  shipments  while in the
warehouse  awaiting  final  delivery to dealers or customers as se forth in this

7.0 Financial Condition.  The Distributor represents and warrants that it is and
at all times  during the term of this  Agreement  will remain in good  financial
condition,  solvent  and able to pay its bills when due.  From time to time,  on
reasonable  notice  to the  Distributor,  an  audit  of the  Books  and  Records
pertaining  to this  Agreement  can be scheduled as long as it is during  normal
business hours,  at Supplier's  sole expense,  at a place and time designated by
Distributor  and no  more  frequently  than  once in any  contract  year of this
Agreement.  If errors or discrepancies  are found,  the responsible  Party shall
reimburse or correct the error within  Thirty (30)  business  days together with
Supplier's  reasonable  audit  costs.  Interest  will  accrue on any  delinquent
amounts owed to the  Supplier at the rate of One (1%)  percent per month,  or at
the maximum permitted by applicable law, whichever is less.

7.1 Pricing.  The Supplier is free to determine its own suggested  resale prices
for the Products.

8.0 Risk of Loss.  The  Supplier  assumes  the  risk of loss and  damage  of the
Products  in  transit  from  the  Supplier's  shipping  point  to the  point  of
destination while the Distributor assumes the risk once Product is warehoused.

8.1  Shipment.  All Products  will be shipped  F.O.B.  the  Supplier's  point of
shipment  to  the  Distributor's  identified  warehouse  facilities  or  freight
forwarded to be received no later than fourteen days from the date the order was
first  written.  Unless  specified in the order,  the  Supplier  will select the
carrier  and mode of  shipment.  Unless  the  Distributor  clearly  advises  the
Supplier to the contrary in writing,  the Supplier may make partial shipments of
the Distributor's  orders. Delay in delivery of any installment will not relieve
the  Distributor  of its obligation to accept the remaining  deliveries,  unless
canceled pursuant to this Agreement. The Supplier will use reasonable efforts to
meet the Distributor's  requested delivery  schedules.  Should orders exceed the
Supplier's  available  inventory,  the  Supplier  will  allocate  its  available
inventory and make  deliveries on a basis the Supplier deems  equitable,  in its
sole  discretion,  and without  liability to the  Distributor  on account of the
method of allocation chosen.

9.0 Warranty to  Distributor's  Customers.  The Distributor  will pass on to its
End-User customers a One-Year Limited  Warranty--For one (1) year after the date
of shipment to End-User the  Supplier  will at its sole  discretion,  replace or
furnish  credit for any Product  purchased by End-User  that, in the  Supplier's
judgment,  has a defect in  material  or  workmanship  provided  the  Product is
returned,  transportation  charges prepaid,  to the Supplier with the Supplier's
prior permission and return authorization  number, and provided further that the
Product has not been misused (including  electrostatic  discharge) or improperly
operated.  If the Supplier's  examination does not disclose a defect in material
or workmanship on a Product clai9med to be defective, the End-User agrees to pay
the Supplier's  established charges for unpacking,  testing, and repackaging the
Product for  re-shipment to the End-User.  This provision  states the End-User's
exclusive and sole remedy for Supplier's breach of warranty. This provision does
not extend the original warranty period of any Product that has been replaced by
the Supplier.  It may be modified or amended only by a written instrument signed
by a  corporate  officer of the  Supplier  and  accepted  by the  End-User.  The
Supplier"  liability under the warranty will be limited to replacement or credit
for the customer's  purchase  price. In no event will the Supplier be liable for
the cost of procurement of substitute  goods by the customer or for any special,
consequential or incidental damages for breach of warranty.

9.1 Distributor Duties. The Distributor agrees to honor all replacement requests
from  Dealers  or  End-Users  pursuant  to the terms of the  End-User  Agreement
pertaining to the defective units. The Distributor will instruct all the Dealers
to submit all replacement requests to the Distributor.

9.2 Additional  Protection.  If, within any Six (60) month period,  Twenty (20%)
percent or more of the Products,  while within the warranty period  specified in
this Agreement,  exhibit  defects of the same kind and nature,  and such defects
are the result of faulty design or workmanship  or defects in materials  arising
from any cause for which the Supplier is  responsible,  then the Supplier agrees
to give compensation,  or render assistance,  at the Supplier's sole expense, to
the Distributor by delivery of replacement Products found to be defective to the
place designated by the Distributor. The Distributor will provide the Supplier a
written report of all warranty claims at least once every Three (3) months.

9.3 Indemnification.  The Supplier will indemnify the Distributor from any claim
brought against the Distributor on Product  liability.  The supplier will defend
or settle and the Supplier agrees,  at its own expense,  to defend or settle any
claim brought against the Distributor on the issue of Product liability, subject
to the  limitations in this Agreement.  The Supplier  agrees to pay,  subject to
this  Agreement,   any  final,   non-appealable  judgment  entered  against  the
Distributor  on such  issue in any  such  suit  defended  by the  Supplier.  The
Supplier will be relieved of the foregoing obligations unless the Distributor or
its Customer  notifies the Supplier  promptly in writing or such claim and gives
the Supplier authority to proceed as contemplated herein, and, at the Supplier's
expense,  gives proper and full  information  and assistance to settle or defend
any such claim.  The  foregoing  provisions  of this  Section  states the entire
liability  and  obligations  of the  Supplier  and the  exclusive  remedy of the
Distributor  and its Customers,  with respect to any alleged  Product  liability
suit related to the Products or any part thereof.

10.0  Ownership  Warranty  and  Indemnification.  The  Supplier  warrants to the
Distributor that the Products are the originals with the Supplier,  the Products
do not infringe upon any copyright or other  proprietary  rights of others,  the
Supplier has full power and authority to grant the rights herein  granted to the
Distributor  and the Supplier has not previously or otherwise  granted any other
rights in the Products to any third party that  conflict with the rights in this
Agreement  granted  to the  Distributor.  The  supplier  agrees to defend at its
expense and hold the distributor harmless from any claim against the Distributor
resulting  from a breach of any of the warranties set forth above and to pay any
reasonable costs,  damages, or expenses (including attorneys' fees) arising from
any such  claim.  The  Supplier  will  have sole  control  of the  defense,  all
negotiations  and settlement.  The Distributor will promptly notify the Supplier
in writing of any such claim and, at the Supplier's request and expense, provide
the Supplier with all available information to enable the Supplier to defend the
same.  Following  notice of a claim or a threatened or actual suit, the Supplier
will immediately,  at its own expense,  procure for the Distributor the right to
continue  the use of the  Products  subject to such claim,  demand,  or,  having
failed to obtain  such  right,  replace  or modify  such  Products  to make them
non-infringing,  or having failed to replace or modify the  Products,  refund to
the  Distributor the purchase price of all unsold  Products.  If the distributor
elects to replace any of the Products,  such replacement will substantially meet
the  performance  and interface  specifications  of the replaced  Products.  The
warranties  stated in this Section will survive the expiration or termination of
this Agreement.

11.0 Termination  Events.  This Agreement may be terminated by either Party upon
the  occurrence  of any  assignment  for the  benefit of the  creditors,  or any
bankruptcy,   reorganization,  or  other  proceeding  under  any  bankruptcy  or
insolvency law which is initiated by the other party, or is initiated against it
and not dismissed or stayed  within  Thirty (30) days, a material  breach by the
other party of any of the terms of this Agreement,  which breach is not remedied
by the other  party  within  thirty  930) days of the other  party's  receipt of
notice  of such  breach  or upon the sale or  distribution  of the  Products  in
violation of the  Distributor's  exclusive  distribution  rights as described in
Section 4.1.  Distributor warrants and represents that Supplier's Products shall
be  distributed  via Valley  Media.  Distributor  shall  notify  Supplier if its
Products ceases to be distributed  via Valley Media,  in which case  Distributor
has Ninety (90) days to secure  comparable  distribution  or supplier shall have
the right to terminate this Agreement. The written notice of termination will be
given by  registered  or  certified  mail,  in which event this  Agreement  will
terminate  thirty  (30) days from the date of mailing  of the  notice  providing
Distributor  is not able to cure  said  breach  during  that  time  and  without
relinquishing   any  of  Supplier's   rights  to  pursue   remedies  other  than

11.1  Supplier's  Early  Termination.  This  Agreement  may be terminated by the
Supplier  at any time  during the Primary  Contract  Period or any other  option
period,  upon  receipt of a bona fide offer to Supplier  from a major  record or
distribution company, major being defined by the standards and traditions of the
Music Industry (i.e. Sony,  Universal,  etc.).  Notwithstanding  anything in the
foregoing sentence, the Distributor is hereby granted the right of first refusal
providing Distributor with the opportunity to submit a counter-offer, that is of
a comparable or more favorable  term, to the Supplier  within Three (3) business
days of said bona fide offer. If Supplier accepts  Distributor's  counter-offer,
then both Parties agree to negotiate the new agreement in good faith.

11.1.1 Early Termination. If supplier declines Distributor's counter-offer,  and
chooses to terminate,  entering into a new recording or distribution  agreement,
as  defined  herein  within  Twelve  (12)  months  from  the  date of the  early
termination,  Supplier  agrees  to pay  or  cause  to be  paid  directly  to the
Distributor  a sum  equal to One (1%)  percent  of retail  sales on any  product
released  by supplier  during the term of any new  agreement.  Distributor  will
continue  to  distribute   any   distributed   under  this  Agreement  to  date.
Notwithstanding any rates as set forth in Exhibit "C," upon early termination of
this Agreement,  the following Post Term Royalty rates will apply to the Product
set forth on Exhibit  "A" and be payable to the  Distributor  as  follows:  Year
One--After  Early  termination--Fifteen  (15%)  percent;  year  Two-After  Early
Termination--Ten  (10%) percent; Year Three--After Early  Termination--Five (5%)
percent; and Nothing thereafter. Further, Supplier agrees to provide Distributor
with adequate  inventory levels,  and to abide by all other terms and provisions
governing the distribution,  sale,  quality control and End-User services as set
forth herein  including,  but not limited to the Supplier's  Advertising  Escrow
account.  The  Distributor  may, at its  discretion,  choose to manufacture  the
distributed  product in order to  maintain  inventory  levels as needed.  In the
event that Distributor does manufacture  Products,  all expenses and costs shall
be  deemed  recoupable  advances  and be  deductible  from  Supplier's  share of
royalties  as set forth  herein.  Upon  expiration  of the Post Term  term,  all
rights,  inventories,  Product,  royalties,  and Supplier's share of Advertising
Escrow Account will revert back to Supplier.

11.1.2 Early Termination Buy Out.  Notwithstanding  anything stated in the above
Sections,  in the event of Early  Termination  as set forth in  Section  11.1.1,
Supplier  may elect to buy out  Distributor  by way of a flat fee buy out.  Said
amount to be  negotiated  at the time of Early  Termination,  in good  faith and
agreed upon,  in writing by all Parties.  In the event of a flat fee buy out all
rights, product,  inventory,  royalties,  future overrides,  accrued Advertising
Escrow  Accounts,  art,  masters or other item as set forth  herein would revert
back to Supplier.

12.0  Fulfillment  of  Obligations.  Any  termination of this Agreement will not
otherwise  release  either party from its  obligation to pay any sum that may be
then or  thereafter  owing to the  other  party nor  operate  to  discharge  any
liability  incurred  by either  party prior to any such  termination.  Except as
qualified  by the  preceding  sentences,  neither  party will,  by reason of the
termination of this  Agreement,  be liable to the other for any damages  arising
out of any such termination.

12.1  Effect  of  Termination  and  Survival.  Except  in  the  event  of  Early
Termination,  the Distributor shall cease all display,  advertising,  and use of
all the  Supplier  names,  trademarks,  logos,  and  designations  and  will not
thereafter  use,  advertise,  or display any such names,  logos  trademarks,  or
designations.   Upon  termination  of  this  Agreement,  the  due  date  of  all
outstanding  invoices will  automatically  be accelerated  and all such invoices
will become due and payable.  All orders or portions thereof remaining unshipped
as of the effective date of termination may be canceled by the Supplier,  at its
option,  to the extent they call for  delivery  more than Thirty (30) days after
the date of  termination.  Upon receipt of any Products so  reacquired  from the
Distributor,  the Supplier will issue the appropriate entry to the Distributor's
ledgers and accounts.

13.0  Protection  of  Information.  The  Parties  agree to hold  Information  in
confidence, except as permitted by this Agreement, as it uses to protect its own
confidential  information.  If used in a manner  contrary  to the  terms of this
Section,  the other party will have the right,  to injunctive  relief  enjoining
such  attempts,  it being agreed that legal  remedies are  inadequate.  No press
releases or other like  publicity or  advertising  of any nature  regarding this
Agreement  that mentions the terms and conditions of this Agreement or the other
party by name will be released by a party without the prior written agreement of
the other  party.  Without  the  prior  written  consent  of the  Supplier,  the
Distributor  will  refrain from  copying,  reverse  engineering,  disassembling,
de-compiling,  translating,  or modifying  the  Products,  or granting any other
person or entity the right to do so.

13.1  Notification.  The  Distributor  will promptly  notify the Supplier of any
claims, or notification that its marketing,  licensing,  support, or service may
or will infringe the Intellectual  Property Rights of any other person or entity
and any  determination  or  notification  that any person or entity is or may be
infringing the  Intellectual  Property  Rights of the Supplier.  The Distributor
will assist the  Supplier  in the  protection  and defense of such  Intellectual
Property Rights.

14.0 Assignment.  Except as set forth herein,  neither this Agreement nor any of
its rights,  in whole or in part,  will be assignable or  transferable by either
party without the express  written  consent of the other party.  This  Agreement
will be binding  upon and take  effect for the  benefit  of the  successors  and
assigns of the parties to this Agreement.

14.1 Waiver,  Amendment,  Modification.  No waiver,  amendment or  modification,
including  those by  custom,  usage of  trade,  or  course  of  dealing,  of any
provision of this  Agreement  will be effective  unless in writing and signed by
the party against whom such waiver,  amendment or  modification  is sought to be
enforced.  No waiver by any party of any  default  in  performance  by the other
party under this  Agreement  or of any breach or series of breaches by the other
party of any of the terms or  conditions  of this  Agreement  will  constitute a
waiver of any  subsequent  default in  performance  under this  Agreement or any
subsequent  breach of any terms or conditions of that Agreement.  Performance of
any obligation  required of a party under this Agreement may be waived only by a
written  waiver  signed by a duly  authorized  officer of the other party,  that
waiver will be effective only with respect to the specific obligation  described
in that waiver.

14.2 Force Majeure. Neither party will be deemed in default of this Agreement to
the extent that performance of its obligations,  or attempts to cure any breach,
are  delayed  or  prevented  by reason of  circumstance  beyond  its  reasonable
control,  including  without  limitation  fire,  natural  disaster,  earthquake,
accident or other acts of God ("Force Majeure"), provided that the party seeking
to delay  its  performance  gives  the other  written  notice of any such  Force
Majeure  within 15 days after the  discovery of the Force  Majeure,  and further
provided that such party uses its good faith efforts to cure the Force  Majeure.
If there is a Force Majeure,  the time for  performance or cure will be extended
for a period equal to the duration of the Force  Majeure.  This Article will not
be applicable to any payment obligations of either party.

14.3  Settlement  of Disputes.  Each party  acknowledges  that,  if there is any
breach  including,   without   limitation,   unauthorized  use  of  Confidential
Information,   the  non-breaching  party  will  suffer  injury  that  cannot  be
compensated by money and therefore  will not have an adequate  remedy at law. If
either party  institutes an action to enforce the  provisions of this  Agreement
which may be brought in either Rhode Island or New York County,  such party will
be  entitled to obtain such  injunctive  relief or other  remedy from a court of
competent  jurisdiction  as may be  necessary  to prevent  or  curtail  any such
breach.  These will be in addition to and without prejudice to such other rights
as such party may have in law or in equity.

14.3.1 Any dispute or claim arising out of this  Agreement  other than those set
forth  in   Paragraph   14.3,   or  any  aspect  of  the   creation,   validity,
interpretation,  breach,  or  termination of this Agreement will be submitted to
binding  arbitration  to be held in  Providence,  Rhode Island before a panel of
three arbitrators.  Either party may demand  arbitration in writing,  serving on
the other party a statement of the dispute, controversy, or claim, and the facts
relating to it, in  reasonable  detail,  and the  arbitrator  nominated  by that
party.  Within thirty (30) days after such demand, the other party will name its
arbitrator,  and the two arbitrators  named by the parties will, within ten (10)
days, select a third arbitrator. The arbitration will be filed with and governed
by the Commercial Arbitration Rules of the American Arbitration Association (the
"AAA").  The  reasonable  expenses  of  arbitration  will be borne by the  party
against whom the decision is rendered,  or  apportioned  in accordance  with the
decision of the arbitrators if there is a compromise decision. Judgment upon any
award may be entered in any court of  competent  jurisdiction.  All notices from
one party to the other relating to any arbitration  under this Agreement will be
in writing and will be  effective  if given in  accordance  with  Section  14.7.

14.4 Proprietary  Information.  Each party acknowledges that it may be furnished
with or may receive or have access to  information  or material  that relates to
past,   present  or  future   Products,   and  marketing   plans,   "Proprietary
Information."  The  Parties  agree  to  preserve  the   confidentiality  of  the
Proprietary  Information,  whether  disclosed  to the other  party  before  this
Agreement is signed or afterward, including the terms of this Agreement. A party
will not disclose or disseminate the Proprietary Information for its own benefit
or of any third party.  The  previously  stated  obligations do not apply to any
information  that is publicly  known, is given to a party by someone else who is
not obligated to maintain confidentiality or a party has already developed prior
to the day this  Agreement is signed,  as evidenced by documents.  Neither party
will take or cause to be taken any  physical  forms of  Proprietary  Information
without the other party's  written  permission.  Within three (3) days after the
termination of this Agreement, a party will return to the other party all copies
of Proprietary  Information in tangible  form.  Despite any other  provisions of
this Agreement, this Section will survive termination of this Agreement.

14.5 Cumulative  Rights. Any specific right or remedy provided in this Agreement
will not be exclusive but will be cumulative  upon all other rights and remedies
set forth in this section and allowed under applicable law.

14.6 Governing Law. This Agreement will be governed by the  substantive  laws of
the State of Rhode Island  applicable to Agreements  made and fully performed in
Rhode  Island by Rhode  Island  residents.  The  parties  acknowledge  that this
Agreement  expresses their entire  understanding  and Agreement,  and that there
have been no warranties,  representations,  covenants or understandings  made by
either  party  to the  other  except  such as are  expressly  set  forth in this
section.  This Agreement  supersedes and otherwise renders null and void any and
all prior  Agreements or contracts,  whether written or oral. This Agreement may
be  executed  in  multiple  counterparts,  any one of which  will be  deemed  an
original,  but all of which will constitute one and the same instrument.  If any
provision of this  Agreement is found invalid or  unenforceable  under  judicial
decree or decision of the American  Arbitration  Association or of a Court,  the
remainder will remain valid and enforceable according to its terms.

14.7 Notices.  All notices required or permitted under this Agreement will be in
writing and will be delivered or mailed  certified  return receipt  requested to
the respective parties at the addresses set forth above or at such other address
as such party will specify to the other party in writing. Any notice required or
permitted to be given by the provisions of this  Agreement will be  conclusively
deemed to have been  received on the day it is  delivered  to that party by U.S.
Mail with  Acknowledgment  of Receipt  or by any  commercial  courier  providing
equivalent acknowledgment of receipt. Captions and section headings used in this
Agreement are for convenience only and are not a part of this Agreement and will
not be used in construing it.

         We have  carefully  reviewed  this contract and agree to and accept its
terms and  conditions.  We are executing  this  Agreement as of the day and year
first written above.

SUPPLIER:  Bow Vau Records, LTD              DISTRIBUTOR:  Open Door Music, Inc.

By:  /S/                                     By:  /S/
   -----------------------------                -------------------------------
       Norman Bowman                             David DeBoene, President
Title: Chairman

           Quincy Vaughn
Title:     President and CEO


                                    EXHIBIT A


                          The Doobeez, Drama in Jersey

                          Millenium Men 4000k, Forever

                          Gee Rock & the CND Coalition

                                    EXHIBIT B

                               Supplier Customers


                                    EXHIBIT C

                          Suggested List Price Schedule
                                CDs, Vinyl & EP's

Wholesale          Retail        Supplier's Share**      Distributor's Share**
                                      75.00%                     25.00%
  $4.83              $8.97            $3.62                      $1.21
  $5.29              $9.97            $3.96                      $1.33
  $6.07             $10.97            $4.55                      $1.52
  $6.44             $11.97            $4.83                      $1.61
  $7.18             $12.97            $5.38                      $1.80
  $7.73             $13.97            $5.79                      $1.94
  $8.19             $14.97            $6.14                      $2.05
  $8.83             $15.97            $6.62                      $2.21
  $9.29             $16.97            $6.96                      $2.33
 $10.03             $17.97            $7.52                      $2.51

**In  the  event  wholesale   prices  shall  be  adjusted  upward  or  downward,
corresponding adjustments shall be made to reflect Seventy-Five (75%) percent of
the actual wholesale price for the Supplier or Twenty-Five  (25%) percent of the
actual wholesale price for the Distributor as the case may be.

                          Suggested List Price Schedule
                                Cassettes & EP's

Wholesale          Retail        Supplier's Share**      Distributor's Share**
                                      75.00%                     25.00%
  $2.25              $5.90            $1.69                        .56
  $2.94              $6.98            $2.21                        .74
  $3.77              $7.98            $2.83                        .94
  $4.36              $9.98            $3.27                      $1.09
  $5.34             $10.98            $4.01                      $1.34
  $5.99             $11.98            $4.49                      $1.50
  $6.28             $12.98            $4.71                      $1.57
  $7.14             $13.98            $5.36                      $1.79
  $7.31             $14.98            $5.48                      $1.83
  $7.89             $15.98            $5.92                      $1.97
  $8.76             $16.98            $6.57                      $2.19

**In  the  event  wholesale   prices  shall  be  adjusted  upward  or  downward,
corresponding adjustments shall be made to reflect Seventy-Five (75%) percent of
the actual wholesale price for the Supplier or Twenty-Five  (25%) percent of the
actual wholesale price for the Distributor as the case may be.


                             Cassette Singles & EP's

Wholesale          Retail        Supplier's Share**      Distributor's Share**
                                      75.00%                     25.00%
  $1.75              $4.99            $1.31                       $.44
  $2.25              $5.49            $1.69                       $.56
  $2.65              $5.99            $1.99                       $.66
  $2.80              $6.49            $2.10                       $.70
  $2.94              $6.99            $2.21                       $.74
  $3.77              $7.99            $2.83                       $.94

**In  the  event  wholesale   prices  shall  be  adjusted  upward  or  downward,
corresponding adjustments shall be made to reflect Seventy-Five (75%) percent of
the actual wholesale price for the Supplier or Twenty-Five  (25%) percent of the
actual wholesale price for the Distributor as the case may be.