EXHIBIT 10.6
INDEPENDENT SALES REPRESENTATIVE AGREEMENT BETWEEN
ADVANCED KNOWLEDGE, INC. AND _______________________________
This agreement is made as of the ____ day of __________ 200__ between
Advanced Knowledge, Inc., 17337 Ventura Blvd., Encino, CA 91316 (hereinafter
referred to as "Producer") and _______ ________________ whose address is
_______________________________________________ (hereinafter referred to as
"Distributor")
Whereas Producer is in the business of producing, manufacturing and
distributing training videotapes and related training materials and whereas
Distributor desires to distribute preview, rental and sale copies of Producer's
titles and in consideration of the covenants and agreements herein contained,
the above named parties hereby mutually agree to the following:
1. LICENSE
Producer hereby grants to the Distributor for the term and under the
conditions of this Agreement the non-exclusive right to preview, rent or sell
those videos produced and/or distributed by Producer, in hard copy videocassette
format only, and related materials mutually agreed upon in writing by both
Producer and Distributor.
2. TERM OF AGREEMENT
2.1. The term of this license shall begin upon execution of this Agreement
and expire, if not terminated earlier, one year from the date of this Agreement.
This Agreement, if not terminated, will be automatically renewed on a year to
year basis on its Anniversary Date. After the first Anniversary Date, this
Agreement may be terminated with 30 days notice at any time by either party by
serving written notice to the other party.
2.2. Should Distributor terminate such Agreement, Producer agrees to honor
all orders received from Distributor, subject to the terms and conditions
contained in Paragraph 4. "Distributor Orders, Commission and Invoicing" for a
period of 90 days following the date of termination to allow Distributor to
follow up on current sales efforts.
3. TERRITORY
Distributor's territory shall be only within the continental United States,
Alaska, and Hawaii. Distributor understands, acknowledges and agrees that
Distributor is expressly prohibited from soliciting business in any other
territory other than the continental United States, Alaska and Hawaii, and that
Producer has no obligation to fulfill orders from any other area.
1
4. DISTRIBUTOR ORDERS, COMMISSION AND INVOICING
4.1. Distributor shall send orders to Producer by FAX. Distributor must
include all Distributor's customer pricing on orders sent to Producer, including
retail costs less any applicable discounts, such as preview or rental credits.
Producer will ship all sales and rental Programs, and any related material
directly to Distributor's Client. Producer will then send to Distributor an
invoice noting the price of the Program and any related materials shipped, less
any applicable discounts and amount due Producer from Distributor.
4.2. Producer will invoice Distributor for Producer's retail list price for
products, less any applicable discounts, less commission net of discounts, plus
shipping costs.
4.3. Distributor will receive the following commissions:
Video Sales/Rentals ___%
Non-Video Products ___%
Non-Video Products includes, but is not limited to, all workbook, facilitator
manual, and book sales.
4.4. Producer agrees to send Distributor regular invoices on or after
shipment date of the product and a monthly statement of invoices outstanding on
account.
4.5. Producer agrees to credit Distributor's preview and/or rental invoice
toward the purchase price of an order of the same product by the same customer
if the order is placed within ninety (90) days of the preview and/or rental
order.
4.6. Distributor may opt to fulfill preview orders from their office.
Distributor must acquire preview stock from Producer for the cost of the
materials at price set by producer.
4.7. Distributor agrees to pay postage for all orders fulfilled by
Producer. The current minimum postage cost is $12.50 for shipment of one
videocassette, via a 2 to 3 day shipping method. If shipping rates change,
Producer agrees to advise Distributor promptly and Distributor agrees to pay the
new rates. If Producer agrees to honor a no-charge preview, Distributor still
agrees to pay Producer the invoiced shipping amount. Producer reserves the right
to fulfill any order with any shipping carrier and service which will deliver
the Product by Distributor's required date.
4.8. If a Distributor's customer upgrades a preview or rental order with
Producer directly within 90 days following the preview date, Producer will treat
the upgraded order as if the Distributor had placed the order on behalf of their
customer and Distributor will be credited and invoiced appropriately.
4.9. Producer reserves the right to bill Distributor's customer directly on
any order, if the Distributor account with Producer is past due by more than 30
days. In such cases, Distributor will invoice Producer for commission due on
order, and Producer will issue payment to Distributor after the full payment is
received from customer.
2
4.10. Distributor will devote its best efforts to promote and sell
Producer's programs.
4.11. Distributor will devote its best efforts to follow Producer's
marketing and promotional policies as notified by Producer.
4.12. Distributor will notify Producer promptly of any violations of
Producer's copyright, and will cooperate in any actions against violators.
5. PRODUCT PRICING AND QUANTITY DISCOUNTS
5.1 Distributor agrees to notify their customers of the current published
and advertised prices set by Producer for videocassette preview, rental and sale
as well as other related materials. The quantity discount schedule Producer
agrees to honor for multiple purchases on one order is as follows:
2 - 3 10%
4 - 6 15%
7 - 9 20%
10 - 19 25%
20 & over Call for quote
5.2 Distributor agrees to quote only those Retail List prices published by
Producer and Producer is only responsible to honor such published Retail list
prices and is not obligated to honor any lesser price order unless an
alternative price is agreed to in writing in advance.
6. PAYMENTS TO PRODUCER
6.1 Distributor agrees to make full payment to the Producer in such manner
that payment shall be received by Producer within 30 days of the date of
invoice. Producer may terminate this contract in the event of late or
non-payment of monies owed by the Distributor to the Producer. Such termination
shall not relieve Distributor from all of Distributor's obligations hereunder.
If this Agreement is terminated under these conditions termination shall be
immediate. In addition, should this agreement be terminated under the conditions
noted above Distributor agrees to pay Producer a one and one-half percent (1.5%)
per month late fee on all past due invoices, not to exceed eighteen percent
(18%) per annum.
6.2 Producer reserves the right to require payment in advance by
Distributors at any time for Distributor's orders if the Distributor account
with Producer is past due 60 days, or if the creditworthiness of the Distributor
is, in the sole discretion of the Producer, deemed to be impaired.
7. OTHER TERMS OF CANCELLATION
7.1. If either party fails to comply with all the terms and conditions of
this Agreement or should either party become involved in solvency proceedings,
receivership, bankruptcy or become acquired by a third party the other party may
serve notice of termination. If this Agreement is terminated under these
conditions, the date of termination shall be immediate.
3
7.2. Upon termination notification sent by either party to the other,
Distributor agrees, to return to Producer all sample copy videocassettes of all
Producer Programs in its possession and shall cease all marketing efforts on
behalf of Producers Programs. Additionally, Distributor agrees to make payment
in full of any unpaid invoices owed to Producer when due.
8. DISTRIBUTOR IN-HOUSE PROGRAM SAMPLES
Producer agrees to provide Distributor one (1) complimentary preview
videocassette of each product for distribution during the term of this
Agreement. These sample prints are to be used by Distributor only to provide
preview of Producers products at Distributors screening room facilities or for
use in familiarizing Distributor sales personnel with the product. Distributor
agrees to keep all sample tapes in good physical condition. Should a tape become
damaged it may be returned to Producer for replacement.
9. ADVERTISING APPROVAL
Distributor agrees to send Producer samples or copies of all proposed sales
advertising, catalogs or other promotional materials designed to market any
title covered by this agreement and to withdraw any promotional materials which
the Producer judges to be inaccurate or contains unauthorized photos or data.
10. AGREEMENT EXCLUSIONS
10.1. Distributor acknowledges and agrees that Distributor is expressly
prohibited from broadcasting or cablecasting or transmitting Producer's Programs
in any manner and that Distributor will not sell, rent or otherwise distribute
the Programs to any organization, individual or business entity that intends to
broadcast the Programs in any manner without prior written permission of the
Producer.
10.2. Distributor acknowledges and agrees that duplication of any of the
Producer's Programs or related materials in any form or for any reason without
the prior express written permission of the Producer is strictly prohibited.
10.3. Distributor arees to send all orders for any title directly to
Producer and Distributor acknowledges and agrees that fulfillment of any order
for any title by any other means is strictly prohibited.
11. WARRANTIES AND INDEMNIFICATION
Both Producer and Distributor warrant and represent that they possess the
authority to enter into this license and perform its respective obligations
hereunder. Producer warrants and represents that the materials in the titles do
not violate any proprietary right of any third party and that all clearances
necessary to distribute the titles in the market and territory listed have been
obtained.
4
12. RELATIONSHIP AND TAXES
12.1. The relationship between Producer and Distributor shall be that of
independent contractors. Nothing in this license shall be construed to
constitute employment, partnership or any other association. Neither party shall
be liable for any debts, liability, expenses or obligations of the other. Also,
neither party shall have the authority to obligate the other in any manner
whatsoever without prior written consent and authorization.
12.2. Distributor agrees to pay any and all inventory and/or property taxes
levied on Producer's Products by the city, county, and/or state within which
Distributor is located and Distributor acknowledges and agrees that any such
taxes due will not affect the amount of any monies due Producer.
13. ARBITRATION
Any controversy or claim arising out of or relating to this Agreement or
breach thereof, except controversies involving less than two thousand five
hundred dollars ($2,500.00) shall be settled by arbitration in accordance with
the Rules of the American Arbitration Association, and judgment on the award
rendered may be entered in any court having jurisdiction thereof.
14. ASSIGNMENT
Distributor may not assign any of its rights or obligations hereunder
without the express, prior written consent of Producer and any purported
assignment in violation of this provision shall be void and of no force and
effect.
15. AMENDMENTS
This agreement cannot be amended unless in writing and signed by each party
hereto.
16. CONDITION
This agreement shall constitute the entire agreement between the parties
hereto with respect to the subject matter hereof and shall supersede all other
agreements written and oral with respect hereto.
17. NOTICE PROVISION
All notices and statements required to be given hereunder must be in
writing and delivered by hand or FAX and followed by first class mail
confirmation copy to the address set forth above or to such other address as
notifying party has been advised in writing by the other party hereto.
5
18. CONFLICT RESOLUTION
18.1 Any legal action or proceeding or arbitration with respect to this
agreement may be brought in the courts of the State of California or in the
Federal Courts for the Central District of California or through the American
Arbitration Association office in Los Angeles, California as party filing such
legal action, proceeding or arbitration shall elect.
18.2 This agreement and the rights and obligations of the parties hereto
shall be governed exclusively by and construed and enforced in accordance with
the internal laws of the State of California regarding the conflict or choice of
laws.
18.3 Service of all writs, processes, and summonses in any action, suit, or
proceeding instituted by a party hereto in any of the courts of the State of
California or of the U.S.A. or pursuant to the Rules of the American Arbitration
Association may be made upon any party hereto by any means permitted by law, and
to the extent permitted by law, by the mailing of copies of the same to such
party, enclosed in registered or certified mail cover, at the address designated
for the applicable party herein above, such service to become effective 10 days
after such mailing.
19. AUTHORITY
The person signing this Agreement warrants that he/she has the authority to
do so on behalf of Distributor, and, by so signing, binds Distributor to the
terms and conditions herein.
Signed and Agreed to for DISTRIBUTOR:
___________________________ _________________
Date
For Advanced Knowledge, Inc.:
___________________________ _________________
Howard Young Date
Advanced Knowledge, Inc.