EXHIBIT 10.2
FILM & VIDEOTAPE
DISTRIBUTION AGREEMENT
THIS AGREEMENT is entered into as of February 1, 1998, by and
between AIMS Multimedia (Producer) and Advanced Knowledge
(Distributor) collectively referred to as the "Parties" and
individually as "Party."
1. DISTRIBUTORSHIP: Producer hereby grants to Distributor the
non-exclusive right to promote and advertise to qualified users
in the United States selected video programs, hereinafter
referred to as the "Product." Distributor agrees to exercise
diligent efforts in merchandising the Product in a manner
mutually acceptable and profitable to the parties. Distributor
agrees to pay an initial fee of $1,000.00 to be applied against
opening orders.
2. TERM: The initial term of this Agreement is for a period from
April 1, 1998, through and including April 1, 2001. This
Agreement will be automatically extended for a 12-month period of
time unless written notice is provided as described in paragraph
12.
3. PROMOTION: Promotion will be the responsibility of the
Distributor unless otherwise agreed to by the parties. Promotion
includes, but is not limited to, the production of promotional
materials required to provide maximum Distributor activity and
telemarketing services.
4. PRICING: Current catalog prices will be guaranteed through
December 31, 1998, but will be subject to change on an annual
basis.
5. OBLIGATIONS: Producer will provide Distributor with 3/4"
preview masters of all designated programs for $50.00 per copy,
from which Distributor will make 1/2" VHS preview copies for
direct shipment to its customers. Producer will also provide a
copy of ancillary support materials to the Distributor, which may
be Xeroxed and used for previews to its customers. Should it be
necessary for AIMS Multimedia to fulfill a preview request,
Advanced Knowledge will be billed $40.00 per title (no discount)
plus shipping and handling.
6. TERMS OF SALE: Sale and/or rental copies will be shipped by
Producer to the Distributor or to the Distributor's customers per
faxed orders, and billed to Distributor, less 45%. Shipping and
handling charges will be added to the invoice as follows; $3.50
per title, $8.95 minimum. Request for special handling will
require additional charges. Invoice terms shall be F.O.B.
Producer's facility, net thirty (30) days. Distributor will be
responsible for all invoicing to its customers.
7. RESTRICTIONS: No showing of any Produce shall be allowed on
television except by written consent of Producer, which consent
may be withheld for any reason. In addition, Producer may impose
other reasonable restrictions so long as Distributor is given
advance written notice thereof. Distributor agrees not to commit
any act which would infringe on or destroy any copyright or other
proprietary interest of Producer in the product.
8. TITLE: Distributor acknowledges that title to all Product
remains with Producer and further acknowledges that Distributor
has no right to vest title or any right or liens in favor of
itself or any third party. Distributor shall not alter the
Product without the consent of the Producer.
9. INDEPENDENT CONTRACTOR: Distributor is an independent
contractor in regard to services rendered by it under this
Agreement. This Agreement does not create a Status in Distributor
of Agent or Representative of Producer.
10. INDEMNIFICATION: The Producer and Distributor agree to
indemnify, reimburse, defend and hold each other and their
subsidiaries harmless from any claim, demand or judgment made,
asserted or obtained against them including all costs,
disbursements and expenses incurred in connection with any claim
of copyright infringement libel, slander, unfair competition or
other alleged unethical business behavior due to the activities
of the Producer or Distributor. Producer shall not be liable for
damages or breach of any warranty herein unless given written
notice within five (5) days after any such damage or alleged
breach, and details thereof by Distributor as well as full
control of the defense and statement of such claim including the
right to engage counsel of its choice. Producer shall not be
liable for loss of profits or consequential damages. Distributor
shall cooperate fully with Producer in the defense or adjustment
of any such claim.
11. LIMITATION OF LIABILITY: Neither the Producer nor the
Distributor shall be liable for any act, delay or omission
occasioned by an act of God or the public enemy, or by riot,
insurrection, strikes, labor disturbances or any failure or delay
by any transportation company or agency for any act, delay or
omission due to their negligence.
12. NOTICE: This Agreement may be terminated by either party by
providing thirty (30) days notification at the address set forth
on the last page here of which notice shall be deemed sufficient
when sent by registered mail, properly addressed, with full
postage affixed, unless otherwise herein provided. Upon
termination, all unsold inventory will be returned to the
Producer.
13. ARBITRATION CLAUSE:
a) With respect to any and all disputes and/or claims arising out
of, or related to, this agreement and/or all previous agreements
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between Producer and Distributor, both parties agree to
resolution by arbitration. The claim, or arbitration matter,
shall be settled by in persona arbitration in Los Angeles County
in accordance with the then rules of the American Arbitration
Association ("AAA") provided, however, that the AAA shall be
directed by the parties to appoint and designate a single
arbitrator who is a retired Judge of the Superior Court of the
State of California. Determination of the arbitration on all
matters referred to it hereunder shall be final and binding on
the parties hereto. The award of such arbitration may be
confirmed or enforced in any court jurisdiction. The arbitrator
designated shall have full access to such records and physical
facilities of the parties hereto as may be required by such
arbitrator. With respect to such arbitration, the parties shall
have all rights of discovery available pursuant to the California
Code of Civil Procedure and they hereby incorporate the
provisions of California Code of Civil Procedure 1283.05 into
this agreement.
b) The costs and expenses of the arbitrator and the attorneys'
fees and costs of each of the parties incurred in such
arbitration shall be apportioned between the parties by such
arbitrator based upon such arbitrator's determination of the
merits of the respective positions.
EXECUTED as of the day and year aforesaid.
PRODUCER: DISTRIBUTOR:
AIMS Multimedia Advanced Knowledge
By:/s/ Jeffrey M. Sherman By:/s/ Buddy Young, Pres.
Jeffrey M. Sherman Buddy Young
President President
Date: 3/31/98 Date: 3/16/98
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