EXHIBIT 10.7
INTERNATIONAL DISTRIBUTION RIGHTS AGREEMENT
THIS AGREEMENT is entered into this ____ day of _____________, 2000 and is
to replace and supersede all form agreements, if any, both verbal and/or
written:
BETWEEN: Advanced Knowledge, Inc. AND: _______________________
17337 Ventura Boulevard, Ste. 224 _______________________
Encino, California 91316 _______________________
(hereinafter called "Producer") (hereinafter called "Distributor")
WHEREAS, the Producer is engaged in the business of the production of training
videotapes and other audio-visual materials, "Products"; and
WHEREAS, the Distributor is engaged in the business of distribution of training
videotape and other audio-visual materials; and
WHEREAS, the Producer desires to provide the Distributor, the exclusive
distribution rights of the Product in ____________________ "Territory."
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties do hereby agree as follows:
1. EXCLUSIVITY: Producer hereby grants to distributor the exclusive,
non-broadcast rights to promote, advertise and solicit revenues from qualified
users of the Products, produced by Producer, in the Territory.
2. TERM: The period covered by this agreement shall be three (3) years,
beginning ______ ___________________ and expiring on ___________________ . This
agreement shall automatically renew itself, annually, for a period of one year
unless the Producer or the Distributor shall notify the other party by
Registered Mail, sixty (60) days prior to the expiration date indicated above,
that either party does not desire such renewal.
3. PRICING: Distributor may set its own prices for Preview, Sale, Lease or
Rental. Prices approved are __________________ for sale (approx. $_____ USD) and
____________ (approx. $____________USD).
4. ROYALTY RATE: Distributor agrees to pay to producer a royalty of
twenty-five (25%) percent of the gross revenues, less any government required
withholding taxes, received form Preview, Sale, Lease Rental or any other
exhibition of the Product. Gross Revenues excluded all taxes and shipping and
handling charges, if any.
1
5. ROYALTY STATEMENTS: Distributor agrees to provide Producer with royalty
statements quarterly, withing 30 days of the end of each calendar quarter for
periods ending March 31, June 30, September 30 and December 31, indicating
revenues from preview, rental, lease, sales and all other receipts relative to
the Product.
6. ROYALTY PAYMENT: The royalty statement must be accompanied by a remittance
to Producer in equivalent US funds, payable by bank wire transfer or by check,
in accordance with the amounts of monies owing to Producer under the terms of
this Agreement. Distributor failure to provide Producer with these royalty
statement and remittances with constitute grounds fo termination of this
agreement with sixty (60) day's notice.
7. COPYRIGHT: Producer retains the copyright on all Products. Distributor
agrees to protect the copyrights of Producer to the best of its ability by
securing, at Distributor's expense, whatever protection is available in the
Territory.
8. LICENSE: Distributor agrees that Products are only to be licensed for use
solely withing their client's own organization for internal employee training.
9. BROADCAST: Distributor may not enter into any television, satellite, cable
television, computer, or any other electronic media sale or broadcast
arrangement without the prior written approval of Producer
10. EXCERPTS: Distributor may not enter into any arrangement for excerpts
(stock footage) from the Product.
11. ALTERATION OF PRODUCT: Distributor will not alter the Product or knowing
permit the Product to be altered in any way.
12. OBLIGATIONS: Distributor shall pay for all promotional costs, including
preview service, mailings, customer solicitations, advertising, and any other
marketing methods used to obtain maximum distribution and sales in accordance
with the terms of this agreement. None of these cots shall be deducted from the
royalties due the Producer.
13. REASONABLE EFFORTS: Distributor agrees to receive and maintain all products
and related materials in clean and marketable condition, and to exercise
diligent effort in merchandising the Product through preview, sales, rental,
lease and/or other exhibition of the Product, as allowed herein. Distributor's
failure to make reasonable efforts to market the product will constitute grounds
for termination of this contract, with ninety (90) day's notice.
14. MARKETING PLANS: Distributor agrees to develop and submit for Producer's
approval, in writing, an annual marketing plan for the Product. The first
marketing plan will be due withing sixty (60) days of the signing of this
agreement an updated annually thereafter.
15. PRODUCER CREDITS: Distributor agrees to mention Producer on all promotional
materials and/or catalogs listing the Product.
2
16. SUPPLY AT COST: Producer agrees to supply to Distributor at cost, materials
available and required for fulfillment of the agreement by Distributor. This
includes masters, at lab cost, and promotion materials and accompanying
literature at cost of creation and printing.
17. TRANSLATION: Distributor shall bear all cots relative to the translation
and adaption of the Product into the language(s) required. Distributor will be
allowed to recoup translation costs form the first royalties due Producer,
including cost of masters and support materials purchased from Producer for
purposes of making the translated version(s). Each title translated becomes
subject to this agreement once both parties agree to proceed with the
translation. The master and copyright for each translated title remain the
property of the Producer. Distributor agrees to provide producer with an NTSC
1/2" VHS copy or master of each translated title in Beta SP +NTSC format, as
Producer request. Producer agrees not to allow its usages by any other
Distribution in the Territory for the term of this agreement.
18. AUDITING: Distributor agrees to maintain books of accounts and records
according to Generally Accepted Accounting Practices, and that Producer or
Producer's designees may examine Distributor's records, with at lease thirty
(30) days notice, relating to this agreement at any time during this agreement
at normal business hours, and make extracts therefrom at Producer's expense.
19. ASSIGNMENT: The Distributor, without the prior written consent of the
Producer, may make no assignment.
20. AMENDMENTS: This agreement cannot be amended, modified or changed in any
way whatsoever, except by written instrument duly executed by authorised
representative of the parties hereto.
21. INDEMNIFICATION: Distributor agrees to indemnify, reimburse, defend and
hold Producer Harmless form any claim, demand or judgment made, asserted or
obtained against it, including all costs, disbursement and expenses incurred by
Producer in connection with any claim of liable, slander, unfair competition, or
other alleged business behavior due to the activities of Distributor.
22. CONFIDENTIALITY: Distributor agrees to hold all information relating to
Producer in strictest confident and shall not share information on Producers'
Products, strategies or sales performances with anyone outside Distributor's
organization.
23. WARRANTS AND REPRESENTATIONS: Producer warrant and represent that it owns
all rights granted to Distributor under this Agreement, and that in the event of
any suit or claim against Distributor based upon the claim that the videotape
and print products, (Products) or any materials therein, infringe upon or
violate any rights of any third parties, or upon a claim that Producer has
granted any other parties any rights conflicting with the rights granted herein
to Distributor, Producer agrees to hold Distributor harmless against any and all
direct losses sustained by Distributor, including reasonable attorney fees.
3
24. COMMUNICATION: Distributor represents and warrants that Distributor shall
promptly keep Producer fully advised of all of Distributor's dealings under this
agreement. This agreement and any amendment shall be automatically terminated if
any correspondence from Producer remains unanswered for mor than 30 calendar
days.
25. DYNAMIC TRAINING MEDIA: Distributor and Producer acknowledge and agree that
Dynamic Training Media is appointed as coordinator for communication between the
parties and the copies of all reports, payment notices and communications should
be director through Dynamic Training Media. A communication to or from Dynamic
Training Medai shall be treated as if the communication was to or from the
Producer. Actual payments of royalties are to be made direct to Producer.
26. TERMINATION OR CANCELLATION: If, for any reason, this agreement is
terminated, any and all Producer films, videotapes, masters, copies, literature,
etc. remaining in Distributor's library, whether purchased for resale, or for
preview/rental, and any and all pricing elements shall revert back to Producer.
These films/tapes and other materials are to be returned via the best way,
pre-paid, to Producer within thirty (30) days of termination or expiration of
this Agreement.
27. MISCELLANEOUS:
A. This agreement does not constitute a partnership or joint venture, and
Distributor is not an agent of Producer. Neither party shall incur any debts or
make any commitments for or on behalf of the other.
B. This agreement shall be governed by the laws of the State of California
and is biding on all successor or assigns of the parties. It contains the entire
agreement unless mutually modified in writing as set forth herein. Any
controversy or claim arising out of or relating to this Agreement or the breach
thereof shall be settled by binding arbitration held in Los Angeles California
in accordance with the Rules of the American Arbitration Association, and
judgment upon the award rendered by the Arbitrator(s) may be entered in any
court having jurisdiction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed in their respective names, on the date indicated below.
DISTRIBUTOR:
BY: _______________________________ _______________
DATE
PRODUCER:
BY: _______________________________ _______________
DATE