Exclusive Distribution Agreement - Bowvau Records Ltd. and Open Door Music Distribution
BOWVAU DISTRIBUTION AGREEMENT
EXCLUSIVE 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
"Distributor").
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
basis.
"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
writing.
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
Products.
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
Products.
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
Agreement.
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
Agreement.
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
termination.
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.
below.
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
By:
Quincy Vaughn
Title: President and CEO
<PAGE>
EXHIBIT A
Products
--------
The Doobeez, Drama in Jersey
Millenium Men 4000k, Forever
Gee Rock & the CND Coalition
EXHIBIT B
Supplier Customers
------------------
<PAGE>
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.
<PAGE>
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.