EXHIBIT 10e
WHOLESALE BROKER AGREEMENT
This Agreement is entered into in duplicate this 23rd day of
January, 2000 (the "Effective Date") between Digital Impression &
Xxxxxxx Company, a Utah LLC, with its principal office at 0000
Xxxxx 0000 Xxxx, Xxxx, Xxxx 00000 hereinafter called "DISC" and
xxxXxxxx.xxx, Inc., a Nevada Corporation with its principal office
located at 0000 X. Xxxxxx Xxx Xx., Xxx Xxxxx, XX 00000 hereinafter
called "Broker".
1. Appointment of Broker. DISC agrees to sell to Broker, and
Broker agrees to purchase from DISC under the terms and conditions
contained herein, all DISC Products, including replication of CDs,
DVDs, business card or shaped CDs, mastering services, packaging
and support services hereinafter called "Products") During the term
of this agreement and extensions hereto, DISC agrees to offer to
Broker under the terms and conditions set forth herein those
Product improvements, new features, and options generally offered
for sale to DISC's customers. DISC reserves the right to alter,
modify or add to Products without notice and to delete Products
upon sixty (60) days prior written notice to Broker.
2. Exclusive Agreement. Broker agrees that this Agreement shall
be exclusive with respect it's ability to offer services or
products that compete with DISC's Products. Broker further
acknowledges that the purpose of this Agreement is to provide a way
for Broker to increase it's profit margins by buying at the
discounted prices offered by DISC, thereby allowing Broker to xxxx
up the prices and sell the Products, competitively, at a profit.
DISC, on the other hand, desires to establish a network of
wholesale brokers with the ability to sell the Products and to
enhance DISC's ability to keep it's manufacturing plant operating
at peak load and efficiency. DISC shall, therefore, be free to
enter into similar or identical agreements with other brokers as it
may determine in its sole discretion.
3. Duties of Broker. Broker agrees:
A. To engage in advertising, public relations and
educational campaigns sufficient to establish an image and
reputation as a provider of high quality CD mastering and
replication services, and to inform its prospects and customers of
the Products, enhance the image of the Products and create a demand
for the Products.
B. To provide, and to be solely responsible for the
supervision and compensation of, such qualified and competent
personnel as may be reasonably required to sell the Products in the
manner contemplated hereunder.
C. To purchase during each twelve (12) month period during
the Term hereof (each such period a "Quota Year") the Quota of
Products set forth on the attached Exhibit "A.".
D. To purchase the Products at prices indicated on the
attached Exhibit "B", consistent with Broker's classification level
indicated on Exhibit "A.
E. To provide DISC with information summarizing any
significant market changes, activities and trends; market
potential; competitive analysis; Product requirements and other
similar information, as required, to assist DISC in meeting Product
demand and manufacturing a competitive Product for Broker.
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F. To provide DISC, at least quarterly, with an updated six
(6)-month forecast of Broker's anticipated Product Sales and
shipment requirements.
G. To make Broker's technical and sales personnel available
for DISC Product training courses at times and places to be
mutually agreed upon by the parties in conformance with Section 6.C
below.
H. To preserve and protect DISC's proprietary and
confidential information which is supplied hereunder or in the
future in conformance with Section 12 below.
I. To promote and sell the Products in a manner consistent
with DISC's Content Policy which is:
DISC will not duplicate or replicate any CD/DVD that is rated
X or R by the film industry's accepted rating systems. Any
audiotape or CD that requires a "Parental Advisory," or
contains vulgar or profane language, excessive violence, or
sexually explicit lyrics, will not be duplicated/replicated
in a DISC, or associated, facility.
4. Broker Compensation. No compensation shall be paid to Broker
by DISC for Broker's performance of its duties set forth herein.
Broker's sole compensation will be the xxxx-up charged by Broker to
its customers for the Products sold by Broker. Broker is
responsible for adding a reasonable xxxx-up on pricing to it's
customers, consistent with normal business practices.
5. Quarterly Progress Review. At the end of each quarter of each
Quota Year, DISC will review Broker's progress toward, or
achievement of, its Quota of Products for the then current Quota
Year and will also review the accuracy of Broker's sales and
shipping forecasts during the previous quarter and preceding
quarters of the same calendar year .The purpose of the review is to
compare actual results with the Quota of Products agreed to in
Exhibit " A " and to assist Broker to achieve it's Quota and sales
expectations. Upon review, DISC reserves the right to adjust the
pricing structure and/or the Broker classification level, shown in
Exhibits "B" and "A," respectively to reflect Broker's performance.
No adjustments will be made without first meeting with Broker to
discuss the review by DISC and any proposed adjustments.
6. DISC's Obligations. DISC agrees:
A. To supply Broker, at DISC's expense, such aids, training
and technical assistance as DISC and Broker mutually deem necessary
during the initial period of building up Broker's capability to
aggressively market the Products.
B. To supply Broker with sales aids, samples and literature
in reasonable quantities. The first fifty (50) copies of each
brochure will be free. Subsequent requirements will be charged to
Broker at DISC's cost.
C. To train Broker's personnel at DISC's facilities. The
cost of travel, lodging, compensation and other expenses associated
with Broker's personnel will be borne by Broker. The costs
associated with DISC personnel shall be borne by DISC.
D. To provide reasonable amounts of consultation by mail,
telephone, facsimile or email and in person at DISC's facilities.
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7. Prices And Payment Terms.
A. Product pricing to Broker shall be F.O.B. DISC's
manufacturing plant in Orem, Utah. All freight, insurance and taxes
applicable to or levied on the sale of the Products to Broker shall
be paid for and borne by Broker. Such prices, as of the Effective
Date, are those shown in Exhibits "A" and "B." Such prices may be
changed from time to time as set forth in Section 5.
B.Payments due for all Products sold under this Agreement shall
be made to DISC 50% with the order and 50% within three (3) days of
delivery of written notice by DISC to Broker, that the ordered
Products are ready for delivery. Under no circumstances shall DISC
be obligated to ship any Products to Broker or Broker's customers
prior to receiving payment in full from Broker. Without limiting
the generality of the foregoing, under no circumstances shall
Broker's duty to pay DISC be contingent upon Broker's prior receipt
of payment from Broker's customer(s), nor shall DISC's retention of
Products pending payment by Broker terminate, waive, excuse or
delay Broker's obligation to make payment therefore as set forth
above. Credit terms may be extended as determined by DISC from time
to time in its sole discretion. Any amounts not paid when due shall
accrue interest at the lesser of (i) 1.5 % per month or (ii) the
highest rate permitted by law, until paid in full.
8. Delivery And Passage Of Title. Delivery of the Products
purchased by Broker hereunder shall be made and accepted F.O.B. at
DISC's manufacturing plant located in Orem, Utah. Title to the
Products purchased hereunder shall be deemed to pass to Broker, and
all risk of loss or damage to such Products shall be borne by
Broker from the time such Products are delivered F.O.B. Broker will
arrange for freight carrier and insurance to cover the Products
while in transit from F.O.B. point to destination.
9. Orders; Acceptance of Orders. All orders submitted by Broker
to DISC will be in accordance with factory shipment lead times to
be supplied to all brokers from time to time by DISC; each Product
order shall be subject to written acceptance by DISC, which
acceptance may be withheld in DISC's sole discretion, for any
reason.
10. Order Cancellation. Orders cannot be cancelled once they have
been accepted by DISC and are in process.
11. Assignment of Rights. The rights and interests of both DISC
and the Broker under this Agreement are not assignable without the
prior written consent of the other party .Any assignment or
transfer made without such written consent shall be null and void.
12. Reciprical Non-Disclosure And Non-Circumventing. DISC and
Broker recognize and agree that the content of this agreement, the
pricing provided hereunder, and much of the information transmitted
from DISC to Broker and from Broker to DISC are of a confidential
and proprietary nature and are the valuable property of DISC or
Broker. DISC and Broker agree not to disclose or allow to be
disclosed to any third party, person, or company any information
(including detailed Product or customer information) designated by
DISC or Broker as proprietary, either during the term of this
Agreement or subsequent thereto, unless prior written consent to do
so is received from DISC or Broker, as applicable. DISC ~d Broker
shall cause such of their employees, agents, and sub-contractors,
as may have access to proprietary information to restrict the
disclosure and use of such information to those within the company
who have reason to know or use the information and who have agreed
to maintain the
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confidentiality of the information. At the termination of this
Agreement DISC and Broker shall return all proprietary information
and any copies thereof to the proprietor, DISC or Broker, of such
information, or upon receipt of written consent from the
proprietor of the information, destroy the information and certify
to the proprietor such destruction and shall thereafter not make
use of any such information either for its own business or others,
except with the prior written consent of the proprietor.
Notwithstanding the foregoing, neither party shall have any
obligation under this Section 12 for information of the other
party which the receiving party can substantiate with documentary
evidence has been or is: (i) developed by the receiving party
independently and without the benefit, use of, or reference to
information disclosed hereunder by the disclosing party; (ii)
lawfully obtained by the receiving party from a third party
without restriction and without breach of this Agreement; or (iii)
publicly available without breach of this Agreement.
During the term of this agreement, DISC agrees not to
knowingly circumvent Broker, in any way, with regard to Broker's
customers and will not knowingly do business with Broker's
customers other than through Broker.
13. Trademarks And Service Marks. DISC hereby grants to Broker,
only during the Term of this Agreement, a limited, non-exclusive,
revocable license, to use DISC trademarks and service marks only
for the purposes contemplated by this Agreement. Before release to
the public, Broker shall submit all materials of any kind
containing the DISC's marks to DISC for inspection, and DISC shall
have the right to approve or disapprove such material prior to its
distribution. Except as set forth in this Section 13, nothing in
this Agreement shall grant or shall be deemed to grant to Broker
any right, title or interest in or to the DICS's marks. All use of
DISC's trademarks by Broker shall inure to the benefit of DISC. At
no time during or after the Term shall Broker challenge or assist
others to challenge DISC's marks or the registration thereof or
attempt to register any marks or trade names that are, in DISC's
judgment, confusingly similar to those of DISC. Broker shall
provide DISC with prompt notice of any apparent infringement of
the DISC's marks or any petition to cancel any registration of the
same, or any attempted use of or any application to register any
xxxx confusingly similar to, or a colorable imitation of, any of
DISC's marks of which it becomes aware. The foregoing license to
use does not and shall not be construed as granting the Broker any
right, title or interest in the marks other than as set forth
herein. Broker agrees not to use DISC trademarks, service marks or
trade names upon termination of this Agreement.
14. Taxes And Assessments. Broker shall hold DISC harmless from
all taxes, assessments or other governmental impositions of any
nature whatsoever which may be levied upon or with respect to the
Products after their delivery to Broker.
15. Copyrights. Broker warrants and represents to DISC that in
relation to all media and related materials to be provided to DISC
for reproduction, Broker will have obtained the full and
unregulated right to reproduce all of the contents contained in the
materials to be provided. Each order will require a document signed
by Broker's customer confirming Broker's right to reproduce or to
have reproduced, all of the content contained in the media to be
manufactured by Broker or it's assignee, DISC. Broker's client must
also declare, warrant and guarantee that:
A. All payments and royalties due to persons with rights in
the data to be copied have been paid by the client.
B. All of the required authorizations to reproduce the data
to be copied have been obtained in respect of copyrights,
trademarks, and any other intellectual property rights.
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C. That the requested reproduction of the data to be copied
will not violate the rights of any other entity or person.
In addition, Broker shall hold DISC harmless in the event of
any breach or default by it or any of it's customers or their
representatives of the warranties herein set forth or set forth in
any other document signed by Broker as well as from any suits,
disputes, actions, or other legal proceeding initiated by any other
parties in connection with the reproduction of the contents of the
media and related materials and shall pay any awards granted
against DISC and compensate DISC for all legal fees and
disbursements incurred in connection therewith, including any costs
and attorneys' fees incurred in connection with an appeal.
Further, Broker agrees to defend DISC at Broker's cost and
expense in any suit or proceeding in connection with any allegation
that the Product purchased hereunder infringes a copyright,
provided that Broker is immediately notified by DISC of any such
action or proceeding. DISC shall have sole direction and control of
any negotiations or of any suit that may be brought against DISC,
and Broker shall assist DISC in any reasonable way required by DISC
in iTS defense. Broker will be required by this Agreement to fill
out and submit a DISC Content Information Form with each order
placed hereunder.
16. Warranty.THE FOLLOWING WARRANTIES ARE IN LIEU OF ALL OTHER W
ARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE AND OF ANY OTHER SIMILAR OBLIGATION ON THE
PART OF DISC. IN THE EVENT THE PRODUCT IS MISUSED, MISTREATED,
DAMAGED, MODIFIED OR ALTERED IN ANY WAY, BY SOMEONE OTHER THAN DISC
OR AFTER SHIPMENT BY DISC, THESE WARRANTIES SHALL BE NULL AND VOID.
A. DISC warrants to Broker, that all Product has been tested
and will ship with the test report attached. Playability of a CD is
largely dependent on the player device over which DISC has no
control. DISC does not warrant that the Product will play on all
player devices. DISC warrants that the printing of a silk-screened
label on the CD will be in compliance with the mutually agreed upon
and fully documented specifications supplied by the customer.
All Products are shipped in compliance with certification
standards for Yellow Book, mode l or mode 2, Green Book, White Book
or Orange Book depending on the product provided.
B. This warranty shall not extend to any Product that has
been subject to misuse, neglect or accident after delivery F.O.B.
DISC, Orem, Utah.
17. Term of Agreement.
A. This Agreement shall continue in full farce and effect
from the Effective Date for a period of two years or until
terminated by written notice as herein provided.
B. Either party may terminate this agreement, for any
reason, upon thirty (30) days written notice, any time after the
first two years following the Effective Date.
C. DISC shall have the option to tem1inate this Agreement
upon thirty (30) days written notice if Broker fails to meet it's
Quota obligation for any year.
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D. This Agreement may be terminated by either party if the
other becomes insolvent, files any voluntary petition in bankruptcy
or liquidation, has filed against it any voluntary petition in
bankruptcy or liquidation and such petition is not dismissed or
stayed within ninety (90) days after such filing, makes an
assignment for the benefit of creditors or is adjudicated as
bankrupt.
E. Should this Agreement be terminated for any cause other
than breach of a material provision by Broker, including, without
limitation, Broker's failure to pay any amounts due hereunder when
due, Broker shall have the right to continue to purchase under the
term of this Agreement from DISC only those Products being supplied
under contract or contracts requiring Broker to provide the
Product(s) on a continuing basis for a specified period of rime,
thus enabling Broker to fulfill it's continuing obligation to it's
customer until the expiration or cancellation of said contract or
contracts.
18. Force Majeure. If by reason of strikes, inability to obtain
materials, file or other severe action of the elements, accidents,
governmental or legal restrictions or appropriation, or other
causes, whether like or unlike the foregoing, beyond the control of
a party hereto, such party is unable to perform in whole or in part
its obligations as set forth in this Agreement, then such party
shall be relieved of those obligations to the extent it is so
unable to perform and such inability to perform, so caused, shall
not make such party liable to the other party.
19. Relationship of The Parties. Nothing is this Agreement nor
anything to be done pursuant to its terms and conditions is
intended to, nor shall, create a partnership, joint venture or
principal-agent relationship between the parties. This Agreement
establishes a supplier-Broker relationship only. Broker shall not
represent itself as other than an authorized Broker of DISC and
shall save and hold harmless DISC from damages, losses, indemnities
and liabilities including costs of litigations, arising from, or
representation not authorized by, this Agreement.
20. Severability. The parties agree it is not the intention of
either party to violate any public policy, statutory or common law;
that if any sentence, paragraph, clause or combination of the same
is in violation of the applicable law of any jurisdiction, it shall
be void in the jurisdiction where it is unlawful, but enforceable
in all other jurisdictions. If any part of this Agreement should be
held to be void or unenforceable by any competent judicial
authority, such part will be treated as severable, leaving valid
and enforceable the remainder of the Agreement, notwithstanding the
part or parts found void or unenforceable. The parties agree with
respect to any part of this Agreement, which is held to be
unenforceable or void, that they will attempt to renegotiate such
part in a manner consistent with the intent of the parties. The
headings to Sections of this Agreement are to facilitate reference
only, do not form a part of this Agreement, and shall not in any
way affect the interpretation hereof.
21. Governing Laws.
A. This Agreement will be governed and construed, to the
extent applicable, in accordance with Utah law without regard to
its conflict of law principles, and otherwise, in accordance United
States law. The parties hereto consent to exclusive jurisdiction
and venue in the courts of Utah County, State of Utah or the United
States Federal District Court located in Salt Lake City, Utah. The
Parties further agree not to disturb such choice of forum, and if
not resident in such state, waive the personal service of any and
all process upon them, and consent that such service of process may
be made by certified or registered mail, return receipt requested,
addressed to the parties as set forth herein.
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A. In the event any disputes or differences should arise among
the parties hereto, out of or in relation to or in connection with
the provision of this Agreement, or any action taken hereunder, the
parties hereto shall in good faith explore possibilities for the
amicable settlement thereof.
B. All of the terms and conditions hereof shall be binding
upon and insure to he benefit of the parties, their permitted
successors, assigns, and legal representatives. This Agreement may
not be assigned by Broker without the prior written consent of
DISC.
22. Contract In Entirety. This Agreement constitutes the entire
and only agreement between the parties hereto in respect to the
subject matters hereof and supercedes and cancels any prior
agreements. No amendment or change hereof or addition hereto shall
be effective or binding upon any of the parties hereto unless
reduced in writing and executed by the respective duly authorized
representatives of all of the-parties hereto.
23. Notices. All notices and other communications under this
Agreement, including telegraphic, facsimile and e-mail
communications, shall be in writing and shall be deemed to have
been duly given on the date of delivery, date delivered personally
to the party to whom notice is to be given, telegraphed, faxed or e-
mailed, respectively, or on the third (3rd) day after mailing, if
mailed to the party to whom notice is to be given, by registered
mail, return receipt requested, and properly addressed as follows:
(1) If to DISC:
Digital Impression & Xxxxxxx
Company 0000 X. 0000 Xxxx
Xxxx, XX. 00000
Attn: Xxxxx Xxxxxxx -General
Manager
or to such a person or address DISC from time to time
furnishes the Broker;
and to:
Xxxxx X. Xxxxxxx, ESQ.
Xxxxxxxx, Xxxxxx &
Xxxxxxx, XX 80 North
100 East
X.X. Xxx 0000
Xxxxx, Xxxx 00000-0000
(2) If to Broker;
Company Name: xxxXxxxx.xxx, Inc.
Attn: Xxxx Xxxxxxxxx
Address: 0000 X. Xxxxxx Xxx Xx. #00
Xxxx: Xxx Xxxxx
Xxxxx: NV
Zip: 89102
or to such other person or address Broker may from time to
time furnish to DISC.
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24. Limitation Of Liability. DISC's sole liability for damages to
Broker for any cause whatsoever, and regardless of the form of
action, whether in contract or tort, shall be limited to the lesser
of $100,0 00 or the total of all amounts paid by Broker to DISC
hereunder during the six (6) months preceding the date on which the
first event giving rise to the damages occurred.
In no event shall DISC be liable for any lost profit or other
consequential damages, even if DISC has been advised of the
possibility of such damages, or for any claim against Broker by any
other person.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers.
"DISC" "BROKER"
Digital Impression &'Xxxxxxx
Company, a Utah limited XxxXxxxx.xxx, Inc.
liability company
By /s/ Xxxx Dauus By /s/ Xxxxxxx Xxxxxxxxx
Title Sales Manager Title President / CEO
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EXHIBIT "A"
The Quota of Products to be purchased during the Quota Year as
described in Section 3.C of this Agreement is defined as follows:
Broker's Class will be designated below by an "X" marking the level
mutually agreed upon by Broker and DISC.
Class A Brokers commit to an annual volume of at least
57000,000 CDs and/ or DVDs with the average order being at
---- least 25,000 per order. Minimum order is 5,000 CDs.
Class B Brokers commit to an annual volume of at least
2,5007000 CDs and/ or DVDs with the average order being
---- 25,000 per order. Minimum order is 5,000 CDs.
Class C Brokers commit to an annual volume of at least
X 1,000,000 CDs and/or DVDs with the average order being
---- 25,000 per order. Minimum order is 5,000 CDs.
Class D Brokers commit to an annual volume of at least
100,000 CDs and/or DVDs with the average order being 10,000
---- per order. Minimum order is 5,000 CDs.
Exhibit "B," attached hereto and by reference made a part hereof,
indicates the CD and DVD Replication Prices for Broker's
classification identified in Exhibit "A," above.
Broker may negotiate with DISC for a higher Broker Classification
level if actual orders justify such an adjustment.
Prices are FOB Orem7 Utah. Prices do not include film charges,
color proofs or Fed Ex charges for proof approvals, which shall be
billed separately at DISC's regular rates. Prices do not include
mastering costs on orders of less than $57000.
Turnaround times are estimated at time of order. Once all
documents, masters, etc., are received and approved by DISC, DISC
will commit to a specific ship date to Broker. Notwithstanding the
foregoing, Broker shall not have any authority to commit DISC to a
shipping date with respect to any customer of Broker.
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