EXHIBIT 10.19
INTERNATIONAL DISTRIBUTION RIGHTS AGREEMENT
THIS AGREEMENT is entered into this 1st day of July, 1998 is to replace and
supersede all former agreements, if any, both verbal and/or written;
BETWEEN: Advanced Knowledge, Inc. AND: Learning Resources Pty Ltd
00000 Xxxxxxx Xxxx. XX Xxx 000, Xxxxxx Xxxxx 0000
Xxxxxx ,XX00000 Cape Town
(Hereinafter called "Distributor") Republic of South Africa
(Hereinafter called "Producer")
WHEREAS, the Producer is engaged in the business of the production of training
videotapes and other audiovisual materials, entitled "What It Really Takes to be
a World Class Company" "Products"; and WHEREAS, the Distributor is engaged in
the business of distribution of training videotapes and other audio-visual
materials; and WHEREAS, the Producer desires to provide the Distributor, the
exclusive distribution rights of the Product in The United States "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 July 1, 1998 and expiring on June 30, 2001. 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 as long as they are not lower than Producer's published prices. Should
Distributor desire to set a price lower than the Producer's published prices,
they may do so only with prior written approval from Producer.
4. ROYALTY RATE: Distributor agrees to pay to Producer a royalty of thirty five
(35%) percent of the gross revenues, less any government required withholding
taxes, received from Preview, Sales, Lease, Rental or any other exhibition of
the Product. Gross revenues exclude all taxes and shipping and handling charges,
if any.
5. ROYALTY STATEMENTS: Distributor agrees to provide Producer with royalty
statements quarterly, within 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.
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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, Distributors failure to provide Producer with these royalty
statements and remittances will constitute grounds for termination of this
agreement with sixty (60) days 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 the Products are only to be licensed for use
solely within their clients 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
arrangements without the prior written approval of Producer.
10. EXCERPTS: Distributor may not enter into any arrangements for excerpts
(stock footage) from the Product.
11. ALTERATION OF PRODUCT: Distributor will not alter the Product or knowingly
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 costs shall be deducted from the
royalties due to 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) days 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 within sixty (60) days of the signing of this
agreement and updated annually thereafter.
15. PRODUCER CREDITS: Distributor agrees to mention Producer on all promotional
materials and/or catalogs listing the Product.
16. SUPPLy at Cost: Producer agrees to supply to Distributor at cost, materials
available and required for fulfillment of the agreement by Distributor. This
included masters, at lab cost, and promotional materials and accompanying
literature at cost of creation and printing.
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17. TRANSLATION: Distributor shall bear all costs relative to the translation
and adaptation of the Product into the language(s) required. 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 remains
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 requests. Producer agrees not to allow its usage by any other
Distributor 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 Distributors records, with at least thirty days
notice, relating to this agreement at any time during this agreement at normal
business hours, and may make extracts therefrom at Producer's expense.
19. ASSIGNMENT: No assignment may be made by the Distributor without the prior
written consent of the Producer.
20. AMENDMENTS: This agreement can not be amended, modified or changed in any
way whatsoever, except by written instrument duly executed by authorized
representatives of the parties hereto,
21. INDEMNIFICATION: Distributor agrees to indemnify, reimburse, defend and hold
Producer harmless from any claim, demand or judgment made, asserted or obtained
against it, including all costs, disbursements 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 confidence and shall not share information on Producers'
Products, strategies or sales performances with anyone outside Distributors'
organization.
23. WARRANTS AND REPRESENTATIONS; Producer warrants and represents that it owns
all rights granted to Distributor under this Agreement, and that in the event of
any suit or claim against Distributor based ypon 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
direct losses sustained by Distributor, including reasonable attorney fees.
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 amendments shall be automatically terminated
if any correspondence from Producer remains unanswered for more than 30 calendar
days.
25. DYNAMIC TRAINING Media: Distributor and Producer acknowledge and agree that
Dynamic Training Media is appointed as coordinator for communications between
the parties and that Dynamic Training Media shall receive COPIES of all reports,
payment notices and communications sent by either Producer or Distributor.
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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 printing 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 REPUBLIC OF SOUTH AFRICA
and is binding on all successors 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 the Agreement or the breach
thereof shall be settled by binding arbitration held in CAPE TOWN, SOUTH AFRICA
in accordance with the rules of the SOUTH AFRICAN Arbitration Association, and
judgment upon the award rendered by the Arbitrators) 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.
PRODUCER:
BY: /S/ Xxxxx Xxxxxxxx 13 July 1998
------------------------------ ------------
Xxxxx Xxxxxxxx DATE
Managing Director
Learning Resources Pty Ltd
DISTRIBUTOR:
BY: /S/ Xxxxx Xxxxx 7/6/98
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Xxxxx Xxxxx DATE
Chief Executive Officer
Advanced Knowledge, Inc.
File: AKWORLD
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