DISTRIBUTION AGREEMENT
This agreement ("Agreement") is made as of this 6th day of June, 1997, by
and between Global One Distribution and Merchandising, Inc., a Delaware
corporation ("Global One"), and 2d Interactive, Inc., a Delaware corporation
("2d").
BACKGROUND RECITALS
WHEREAS, Global One, through one of its subsidiaries, OSP Publishing,
Inc., is one of the nations leading publishers and distributors of posters;
WHEREAS, 2d is a media company that has developed an electronic
merchandising kiosk ("PosterCruiser") to be used in connection with the
display and sale of posters that contain advertising images, and other media
programs;
WHEREAS, 2d and Global one believe that it is in their mutual interest to
develop certain exclusive business relationships with respect to 2d's media
programs, subject to the terms and conditions of this Distribution Agreement;
WHEREAS, simultaneous with the execution of this Distribution Agreement,
2d and Global One have entered into a Stock Purchase and Sale Agreement for
the exchange of certain shares of common stock and for the additional sale of
common stock subject to the performance of this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual agreements
and understandings herein set forth:
1. EXCLUSIVE RELATIONSHIPS
(a) EXCLUSIVE PLACEMENT AGENT
2d hereby appoints, and Global One hereby accepts the right and
responsibility of being 2d's exclusive placement agent for (i) the placement
of 2d's existing PosterCruisers, as more fully described on a schedule to
this Agreement, and (ii) the sale of 2d's merchandise based products in
accordance with the terms and conditions of this Distribution Agreement.
Merchandise based products shall include all tangible products currently made
or developed by Global One or its subsidiaries or which may be developed or
produced by Global One or its suppliers as a reasonable extension of its
existing product line, and that can be sold on a wholesales basis to
retailers by Global One. The terms of this exclusive relationship shall not
apply to media
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opportunities available to 2d which are outside of Global One's accounts and
do not incorporate poster products or other merchandise based products.
(b) EXCLUSIVE MEDIA AGENT
Global One hereby appoints, and 2d hereby accepts the right to be Global
One's exclusive placement agent for the sale and placement of any media
programs and advertising in Global One's accounts. Global One's accounts
shall include Targeted and Non-Targeted Accounts, and any other accounts
Global One, or its subsidiaries or affiliates, distributes it's products. 2d
agrees to use its best efforts to sell and place media advertising in Global
One's accounts. The placement of media advertising may include the placement
of advertising on 2d's PosterCruisers, as well as any other media programs,
including, but not limited to, point-of-sale advertising, in-store
promotions, image based advertising, and product displays.
2. PLACEMENT OBLIGATIONS AND GUIDELINES
Global One agrees to use its best efforts to provide for the placement
and retention of 2d's PosterCruisers in certain of Global One's accounts as
selected by 2d and in such other locations as may be selected by 2d and
accepted by Global One, in accordance with this Distribution Agreement.
(a) INITIAL POSTERCRUISER PLACEMENT OBLIGATIONS
Global One agrees to place and maintain during the term of this
Distribution Agreement, 1,000 PosterCruisers in certain targeted Global One
accounts (the "Targeted Accounts") as set forth on Exhibit A, attached hereto
and made a part hereof. The initial 1,000 PosterCruisers shall be placed on
or before July 1, 1998, or such later date as may be extended in accordance
with paragraph 2(e) of this Distribution Agreement. Global One shall arrange
and secure the relocation of PosterCruisers with Targeted Accounts as may be
necessary in order to maintain 1,000 PosterCruisers at all times during the
term of this Agreement. 2d and Global One may at any time, by written
agreement signed by both parties, add Targeted Accounts to the list set forth
on Exhibit A.
(b) ADDITIONAL POSTERCRUISER PLACEMENT OBLIGATIONS
From and after the placement of the initial 1,000 PosterCruisers, Global
One agrees to place and maintain additional PosterCruisers in Targeted
Accounts in
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accordance with the Distribution Schedule attached hereto and made a part
hereof. In the event that 2d intends to place a PosterCruiser in a new
account outside the Global One accounts, 2d shall give Global One an
opportunity to accept such account as a Global One account. Upon acceptance
of such an account, it shall become subject to the terms and conditions of
this Distribution Agreement as a Global One Account.
(c) POSTERCRUISER PLACEMENT GUIDELINES
Global One agrees to adhere to the following Placement Guidelines in
securing, placing and maintaining, PosterCruisers in all Global One
distribution locations:
(i) Global One shall arrange and secure Retail Placement Agreements
with all Targeted Accounts substantially in accordance with the terms and
conditions of the attached Retail Placement Agreement. Global One
acknowledges that the Retail Placement Agreement will require the placement
of PosterCruisers in desirable high traffic locations. Global One also
acknowledges that the Retail Placement Agreements will provide for
exclusivity arrangements with retailers with respect to the sale and display
of electronic advertising images and posters.
(ii) Although Global One cannot guarantee which Targeted or
Non-Targeted accounts will accept and receive 2d's Products or
PosterCruisers, Global One agrees to secure the total number of placement
obligations set forth herein.
(iii) Global One and 2d agree to work together to determine (1) which
Targeted or Non-Targeted Accounts will be approached, (2) the manner in which
each account will be approached, and (3) when the placements of the 2d's
Products or PosterCruisers will occur.
(iv) 2d shall have the final approval with respect to which accounts
receive 2d's Products or PosterCruisers. 2d may reject Targeted Accounts
based on a good faith determination by 2d that the accounts fail to meet any
of the following placement criteria: (1) the location must have a significant
proportion of customers between 18-24 years of age; (2) total foot traffic at
the location must be above industry average for comparable size stores in
competing industries; (3) the location must be predominantly selling either
books, music, movie videos, posters, or sporting goods; (4) the location
and/or national chain must be financially sound; and (5) the specific
location of the PosterCruiser within a store must be acceptable to 2d.
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(d) JOINT PROMOTION OBLIGATIONS
(i) 2d agrees to attend a mutually acceptable number of conventions
and/or tradeshows of Global One for the purpose of promoting the use and
display of 2d's products and PosterCruisers to Global One distribution
accounts. 2d shall not be responsible for paying any costs associated with
such trade shows, other than its reasonable travel and lodging expenses to
and from such conventions and trade shows including technical representation.
A breach of this provision shall not be a material breach of this Agreement.
Provided however, 2d shall be responsible for the cost of providing all of
its advertising material and literature, and the costs of installing,
maintaining, and providing technical assistence for the PosterCruisers at
agreed upon convention or joint promotion locations.
(ii) 2d agrees to provide, subject to its financial resources and
availability, a reasonable amount of advertising literature and material for
Global One's use and distribution for the promotion of 2d's products and
PosterCruisers. All 2d Products will contain the 2d brand name and such
other identification information as 2d may reasonably determine.
(e) POSTERCRUISER FINANCING CONTINGENCY
Global One's obligations to place the PosterCruisers and meet the
distribution schedules set forth herein, shall be subject to 2d's ability and
willingness to finance and provide available PosterCruisers. The
distribution dates and obligations set forth herein shall be extended by any
periods associated with 2d's failure to timely provide PosterCruisers once
Targeted or Non-Targeted Accounts have been selected for distribution and
placement. Global One's obligation to place and maintain PosterCruisers
pursuant to this Agreement is further subject to 2d willingness to continue
to develop and expand its PosterCruiser program in accordance with its
business plans and objectives. In the event that 2d determines that the
expansion of the PosterCruiser program in such Global One locations is not in
the bests interests of 2d, then Global One's obligations to place
PosterCruiser shall thereafter cease.
(f) RELOCATION OF POSTERCRUISERS
2d shall have the right to relocate any non-performing PosterCruisers to
other locations within or outside the Global One accounts upon 60 days
advance notice to Global One. Non-performing shall mean PosterCruisers that
fail to meet the performance guidelines developed by 2d and the applicable
retailer from time to time. In the event 2d causes the relocation of a
PosterCruiser, it shall pay all applicable
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technical relocation fees and costs. During the term of this agreement
Global One shall have the right to cause 2d to relocate the PosterCruisers to
other Global One distribution locations upon 60 days advance notice to 2d.
Global One agrees to assume relocation costs for each PosterCruiser
relocation, provided all technical aspects of the relocation shall be managed
by 2d. In the event that a creditor of 2d causes the removal of a
PosterCruiser, 2d agrees to indemnify and hold Global One harmless from any
and all costs and expenses associated with the removal of such PosterCruiser.
(g) NON-POSTERCRUISER MEDIA PROGRAM
Throughout the term of this Agreement, Global One agrees to provide for
the placement of 2d's advertising posters, signs, and other products,
(collectively "2d's Products") as determined by 2d in certain Targeted and
Non-Targeted Accounts, as set forth on Exhibit B, attached hereto and made a
part hereof. 2d will work with Global One to determine which Targeted and
Non-Targeted accounts will receive 2d's Products and Global One will use its
best efforts to arrange for the placement of 2d's Products in such Targeted
and Non-Targeted accounts. 2d and Global One may at any time, by written
agreement signed by both parties, add Targeted and Non-Targeted Accounts to
the list set forth on Exhibits A and B. In addition, Global One agrees to
the following specific media programs for Targeted and Non-Targeted Accounts:
(i) During the term of this Agreement, Global One shall provide 2d
with the opportunity to place 2d posters in a minimum of 4 wing rack slots at
up to 5,000 Global One Targeted Accounts and a minimum of 6 wing rack slots
at up to 10,000 Non-Targeted Accounts with guaranteed placement in at least 2
wing rack slots at both Targeted and Non-Targeted Accounts.
(ii) Global One agrees to provide 2d with the opportunity to place 2d
advertising images on between 2 and 4 marquee signs at up to 5,000 Targeted
Accounts and 2 marquee signs at up to 10,000 Non-Targeted Accounts.
(iii) Global One agrees to allow 2d to develop and place other media
programs at Targeted or Non-Targeted Account, subject to the approval of such
accounts.
(h) 2d'S PERFORMANCE OBLIGATIONS
Global One's placement obligations shall be subject to 2d's obligation to
timely, deliver, install, and maintain in good operating condition the
PosterCruisers in the selected locations. 2d represents that the
PosterCruisers will be fit for their intended purposes and tasks. 2d further
represents that the design and configuration of its
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PosterCruiser does not violate any copyright, trademark or patent, or other
intellectual property right of any other person, firm, or entity. In the
event that 2d does not diligently fulfill its obligations pursuant to this
paragraph, then Global One's obligation to provide for the placement of such
PosterCruisers shall be suspended until such time as 2d can consistently
fulfill such obligations and provide adequate assurances that it can continue
to fulfill such obligations.
3. POSTER PROGRAM
(a) POSTER PROGRAM MAINTENANCE
In consideration of receiving the poster revenues set forth in
subparagraph (b) below, Global One agrees to manage all aspects of 2d's
poster distribution program including the following primary obligations: (i)
maintain a flexible inventory program that encourages each PosterCruiser to
be fully stocked with 2d's products at all times; (ii) ensure an initial
stocking order of 432 posters for each PosterCruiser location or such other
number as may be required to fill all distribution slots in each
PosterCruiser; (iii) use its best efforts to keep the PosterCruisers fully
stocked with posters from each SKU; (iv) maintain minimum inventory levels of
3 posters per SKU; (v) supply all posters to accounts at its traditional and
standard listed wholesale prices, subject to annual price adjustments; (vi)
provide a contact person who can supply 2d with bi-monthly inventory counts
to assure that the PosterCruisers are fully stocked and maintained; (vii)
recall and replace from its accounts all expired poster images, as hereafter
defined, with new posters as designated by 2d; (viii) display and stock
posters in PosterCruisers for which 2d has a designated advertising contract
or as 2d may otherwise direct; (ix) provide a 100% poster return policy to
all retail accounts; and (x) manage all printing, fulfillment, returns, and
xxxxxxxx aspects of the poster program. An expired poster shall mean a poster
for which an advertising agreement period has expired with 2d. 2d projects
that it will rotate images on a quarterly or more frequent basis.
(b) POSTER REVENUES & ROYALTIES
In consideration of Global One maintaining 2d's poster program, 2d hereby
grants to Global One the right to receive all revenues from the sale of
posters to Global One distribution accounts (Targeted and Non-Targeted).
Provided, Global One agrees to pay 2d a royalty of six and one half percent
(6.5%) of the net sales of all of 2d's Products being distributed and sold to
Global One accounts. Net sales shall be defined as all revenue received from
the sale of 2d's Products by Global One or its affiliates, less customary
trade discounts and product returns. Royalty payments will be made to
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2d on a quarterly basis by the last day of the month following the end of
each quarter for which royalties are due. Global One shall provide detailed
sales reports in connection with each royalty payment which shall include,
but not be limited to, the quantities of each 2d Product sold for each Global
One account. 2d reserves the right to offset total royalties due 2d from the
total Media Fee due Global One in accordance with paragraph 4 below. All
sales of 2d's Products shall be made directly to Global One retail accounts
and not through any intermediary, affiliate or other distributor.
(c) POSTER PRINTING, PUBLISHING SCHEDULE & CUSTOMER SERVICE
2d agrees to give Global One 6 weeks advance notice of which posters need
to be printed prior to the intended distribution date along with the intended
distribution sites. Global One agrees to secure any and all necessary
retailer approval of the distribution of the intended posters prior to
printing. Global One agrees to provide 2d with a printing schedule to
coordinate poster printing. The cost of all printing and production charges
for all posters and related 2d Products shall be paid by Global One. All
customer service calls related to 2d's Products produced by Global One shall
be handled by Global One, unless otherwise directed by 2d. Global One shall
submit to 2d final proofs and production samples of each 2d Product to be
produced by Global One, for 2d's final written approval prior to printing.
2d reserves the right to reject any 2d Products produced by Global One that
do not conform to the final proofs or production samples, or products for
which no approval was obtained.
(d) BOOKS AND RECORDS
Global One shall keep true and complete books and records pertaining to
the manufacture and sale of the 2d Products pursuant to this Distribution
Agreement. 2d shall have the right to inspect and audit Global One's books
and records by mail or at Global One's office during normal business hours to
determine and verify 2d Product sales figures and royalty payments. In the
event that such audit reveals additional payments due 2d, Global One shall
pay upon demand all such amounts due plus interest at a rate of twelve
percent per annum from the date such amounts are determined due and owing.
All such audits shall be at 2d's sole cost and expense, provided however, in
the event that the amount due 2d as a result of such audit is equal to six
percent (6%) or more of the amount initially paid, then Global One shall
reimburse 2d for all reasonable costs of the audit including travel, meals,
lodging, and time expenses at a rate of $100 per hour spent conducting the
audit.
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(e) DISPLAY OF GLOBAL ONE POSTERS
Global One shall have the right to display one or more Global One Posters
(posters bearing images owned or licensed by Global One) in the 2d
PosterCruiser as reasonably determined by Global One and 2d. The goal and
priority of the product mix to be placed in the PosterCruisers, between 2d
Products and Global One Products, will be to fill the PosterCruisers with the
highest generating media revenue posters.
4. MEDIA REVENUE
2d agrees to pay Global One a Media Fee for the placement of 2d's
PosterCruisers, the placement of Non-PosterCruiser media programs, and for
the sale of media advertising in each case through existing Global One
displays. The Media Fee shall vary depending on the type of media program at
each Global One account. The types of media programs for which Media Fees
are payable will include (1) PosterCruiser media programs, (2)
Non-PosterCruiser media programs such as in-store signage, and (3) Global One
display rack media programs. The Media Fee payable to Global One shall be
determined by multiplying the applicable Media Rates for each media program
times the applicable Media Revenues generated by each program.
(a) MEDIA RATE
The Media Rate for the PosterCruiser media program shall be equal to up
to eight percent (8%), depending on the amount given to retailers pursuant to
the Retail Placement Agreement. Global One shall be required to offer up to
four percent (4%) of the media rate to retailers as may be necessary to
provide an incentive for the retailer to place the PosterCruisers. The rate
given to retailers will be deducted from the rate paid to Global One pursuant
to the PosterCruiser media program. The Media Rate for all Non-PosterCruiser
media programs shall be equal to ten percent (10%). The Media Rate for
Global One display wing racks shall be equal to fifty percent (50%).
(b) MEDIA REVENUE
Media Revenue related to each location for each type of media program is
determined by allocating 2d's total media revenue from each advertiser to
each type of media program and then to each location where the media program
is being displayed. 2d will allocate media revenue received from advertisers
to each of its media programs and locations in accordance with its
established practices which will be consistently
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applied. Media Revenue shall include any and all media programs and
advertising placed by 2d in Global One accounts.
(c) MEDIA FEES
Media Fees will be paid to Global One quarterly on the last day of the
month following the end of each calendar quarter during the term of this
Distribution Agreement. Media Fees shall be based on the Media Revenue
recognized during the quarter times the applicable Media Rate. In general,
2d's Media Revenue is recognized during the period in which the advertising
is placed for display. 2d shall submit an accounting statement certified by
2d's Treasurer or other officer attesting to the timing and allocation of the
Media Revenue, applicable Media Rate, and resulting Media Fees payable to
Global One.
(d) RIGHT OF OFFSET
In the event of a breach of any term of this Agreement by one party, the
other party shall have the right to withhold all fees or royalties payable to
the other during any period of breach and to offset the payment of such fees
or royalties with any damages or lost profits caused to the non-breaching
party as a result of such breach.
(e) BOOKS AND RECORDS
2d shall keep true and complete books and records pertaining to the all
media revenue and media fees paid in connection with this Distribution
Agreement. Global One shall have the right to inspect and audit 2d's books
and records by mail or at 2d's office during normal business hours to
determine and verify the media revenue and media fees paid pursuant to this
Distribution Agreement. In the event that such audit reveals additional
payments due Global One, 2d shall pay upon demand all such amounts due plus
interest at a rate of twelve percent per annum from the date such amounts are
determined due and owing. All such audits shall be at Global One's sole cost
and expense, provided however, in the event that the amount due Global One as
a result of such audit is equal to six percent (6%) or more of the amount
initially paid, then 2d shall reimburse Global One for all reasonable costs
of the audit including travel, meals, lodging, and time expenses at a rate of
$100 per hour spent conducting the audit..
5. TERM OF AGREEMENT.
The initial term of this Agreement shall be for a period of Ten (10)
Years from the date of this Agreement. Prior to or upon expiration of this
Agreement, Global One
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and 2d agree to meet to review the performance of the program during the
initial term. Upon mutual agreement of the parties, this agreement may be
extended for one or more successive periods.
6. MAINTENANCE AND OWNERSHIP OF POSTERCRUISERS & INTELLECTUAL PROPERTY RIGHTS
(a) MAINTENANCE
2d will provide installation service and complete technical maintenance
and servicing of the PosterCruisers, including regular polling of
PosterCruisers to insure that software is functioning properly. 2d agrees to
provide Global One distribution sites with relevant program instructions and
PosterCruiser operation instructions. Global One agrees to cause its accounts
to provide access to one dedicated telephone line. 2d agrees to pay regular
installation and monthly telephone charges for such line. Should any
hardware problems occur, 2d will provide on-line or on-site technical service
to ensure proper functioning of each PosterCruiser. 2d will install all
PosterCruisers at no cost to Global One.
(b) OWNERSHIP OF POSTERCRUISERS
Ownership of the PosterCruisers and all digital or electronic images will
remain with 2d at all times. In the event that a Global One distribution
location prematurely terminates or breaches its retail placement agreement,
Global One agrees to pay the costs of relocating the PosterCruiser to another
Global One account.
(c) TRADEMARKS, PATENTS, & INTELLECTUAL PROPERTY RIGHTS
Nothing contained herein shall convey any right, title or interest of any
2d patents, trademarks, copyrights or other intellectual property rights to
Global One. All products, programs, designs, materials, and concepts, that
may be patented, copyrighted, trademarked or otherwise protected, which are
developed by 2d, with or without the participation of Global One, before,
during, or after the term of this Distribution Agreement related to the
distribution and sale of media advertising and/or merchandising of 2d's
Products, including the PosterCruiser, shall be or become the property of 2d.
(d) RIGHTS OF LICENSED PROPERTIES
Global One shall use its best efforts to secure the electronic media
rights to display all of Global One's images which may be placed on 2d's
PosterCruisers or
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Products. Global One agrees to defend and hold 2d harmless from an against
Global One's failure to secure the necessary rights to display images on the
PosterCruiser or 2d's Products.
7. ADDITIONAL COVENANTS
(a) LANDLORD'S WAIVER AND CONSENT
Global One shall obtain the consent and waiver of lien, on a form
acceptable to 2d, of each Landlord or Financial Institution of a retail
account that maintains a prior lien on the property located in or about the
retail premises, prior to the placement of each PosterCruiser. The purpose
of the waiver and consent shall be to prevent a landlord or financial
institution of a retail establishment from maintaining possessory rights to
the PosterCruisers being placed in each retail account. 2d agrees to provide
or execute any and all necessary indemnifications required by retailers with
respect to loss or damage resulting from the installation or removal of the
PosterCruisers.
(b) NON-COMPETITION
During the term of this Agreement and for a period of three years from
the termination hereof for any reason, Global One agrees not to (i) directly
or indirectly engage in any business, whether as a proprietor, parent or
subsidiary, partner, joint venturer, employer, agent, consultant, or
beneficial or record owner of the capital stock of any corporation or
association, which is engaged in the activities in competition with the
business of media advertising or merchandising kiosks conducted by 2d or any
subsidiary of 2d, or (ii) disclose or appropriate to its own use or the use
of any other person or entity any trade secret or confidential information of
or confidential knowledge pertaining in any way to the business of 2d or any
subsidiary of 2d. Provided however, nothing contained herein shall prevent
Global One, or its subsidiaries and affiliates, from carrying on its existing
lines of business. Global One represents and warrants that it is currently
not developing or competing in the media advertising or electronic
merchandising kiosks businesses.
(c) BREACH OF AGREEMENT
The failure of either party to carry out and adhere to the obligations
and covenants set forth herein shall be considered a material breach of this
Agreement, provided however, either party shall have a right to cure any
material breach of this Agreement within 30 days of notice by the
non-breaching party of such breach. In addition, the bankruptcy, whether
voluntary or involuntary, or admitted insolvency of either party shall be
considered a material breach of this Agreement. In the event of a
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breach of this Agreement the non-breaching party shall have the cumulative
rights to terminate this Agreement, pursue the breaching party for all
amounts due and owing pursuant to this Agreement, seek specific performance
by injunction or otherwise, exercise any right of offset set forth herein,
and/or exercise any remedy provided in the Stock Sales Agreement with respect
to a breach of the Distribution Agreement. Such rights shall be cumulative
and may be exercised by the non-breaching party in any manner deemed
sufficient to compensate the non-breaching party for the loss, damage, or
harm proximately caused by the breaching party. The prevailing party in any
action brought to enforce the terms and conditions of this Distribution
Agreement shall be entitled to attorneys fees, costs, and all expenses
related to the enforcement of its remedies provided for herein.
(d) NON-SOLICITATION OF EMPLOYEES/CONTRACTORS
Each party to this Agreement agrees that it will not, without the prior
written consent of the other, directly or indirectly solicit for employment
or offer any position of employment or retain as an independent contractor,
any employee or contractor of the other during the term of this Agreement and
for a period of one year thereafter
(e) MEETING WITH GLOBAL ONE ACCOUNTS
Throughout the term of this Distribution Agreement, 2d shall have the
right to meet and work directly with Global One accounts to better achieve
the objectives of this Distribution Agreement.
8. MISCELLANEOUS TERMS
a) ARBITRATION OF DISPUTES
Any controversy or claim arising out of or relating to this Agreement, or
the breach thereof, shall be settled by arbitration in accordance with the
rules of the American Arbitration Association in the State of Delaware.
Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof.
b) RELATIONSHIP OF PARTIES
Nothing herein contained shall be construed to place the parties hereto
in the relationship of partners or joint ventures, and neither party shall
have the authority to bind the other for any legal obligation.
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c) COMPLETE AGREEMENT
This Agreement supersedes all prior contracts and understandings between
the parties and may not be modified, changed or altered by any premise or
statement by whomsoever made and may only be modified by further written
agreement signed by all parties hereto.
d) SEVERABILITY AND GOVERNING LAW
Each of the provisions of this Agreement shall be enforceable
independently of any other provision of this Agreement and independent of any
other claim or cause of action. In the event of any dispute arising under
this Agreement, it is agreed between the parties that the law of the State of
Delaware will govern the interpretation, validity and effect of this
Agreement without regard to the place of execution or place of performance
thereof.
e) WAIVER OF BREACH
The failure of either party at any time to require the performance of the
other of any of the provisions herein shall in no way effect the respective
rights of either party to enforce the same nor shall the waiver by either
party of any breach of any provisions hereunder be construed to be a waiver
of any succeeding breach or as a waiver or modification of the provisions of
the Agreement itself.
f) AUTHORIZATION
The parties executing this agreement represent and warrant that they have
the necessary authorization and authority to bind the party on behalf of
which they are executing the agreement.
g) NOTICES
Each notice, request, approval, consent, or payment statement made
pursuant to this Agreement shall be in writing and shall be considered
effective and received on the day of deposit with the United States Postal
system, postage pre-paid, to such party at such address(es) as set forth
below (notices may also be made by facsimile provided a copy of the same is
deposited in the United States Postal system on the same day):
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If to 2d: Xx. Xxxxxxx Xxxxx
2d Headquarters
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile 000-000-0000
with copy to: Xxxxxx X. Xxxxxx
Xxxxxx & Associates, Ltd.
000 X. Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile 000-000-0000
If to Global One: Xxxxxx Xxxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxx, XX 00000
Facsimile 000-000-0000
with copy to: Xxxxxx X. Xxxxx
Weissmann, Wolff, Xxxxxxx,
Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000-0000
(h) MUTUAL INDEMNIFICATION
In consideration of the mutual covenants, agreements, and undertakings
set forth therein, each party (the "Indemnifying Party") hereto hereby agrees
to indemnify and hold harmless the other party and its affiliates and the
respective directors, officers, agents, representatives, advisors and
employees and its affiliates and each other person, if any, controlling such
other party or any of its affiliates (each an "Indemnified Person") from and
against all losses, claims, damages, liabilities, actions, taxes and expenses
incurred by any Indemnified Person (including fees and disbursements of
counsel) which are related to or arise, directly or indirectly, out of or in
connection with (i) any material breach of this Distribution Agreement, (ii)
any failure to have the necessary intellectual property rights to produce its
products, or (iii) actions taken or omitted to be taken (including any untrue
statements made or any statements omitted to be made) by the Indemnifying
Party or any of its affiliates. The Indemnifying Party will reimburse any
Indemnified Person for all expenses (including fees and disbursements of
counsel) as they are incurred by such Indemnified Person in connection with
investigating, preparing or defending any such action or claim,
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whether or not in connection with pending or threatened litigation in which
such Indemnified Person is a party. The Indemnifying Party also agrees that
no Indemnified Person shall have any liability to the Indemnifying Party or
its affiliates for or in connection, except for such liability for losses,
claims, damages, liabilities, actions, taxes or expenses incurred by the
Indemnifying Party or its affiliates insofar as a court of competent
jurisdiction has determined in a final and nonappealable order that such
liability has resulted primarily from the gross negligence, recklessness, bad
faith or willful misconduct of the Indemnified Person, and the Indemnifying
Party agrees that it will not, and will procure that its affiliates will not,
make any claim against any Indemnified Person in respect of any such
liability. The Indemnifying Party further agrees that it will not, without
the prior written consent of the Indemnified Person (such consent not to be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder.
The parties hereto, intending this Agreement to be effective as of the
day and year first set forth above, have caused this Agreement to be duly
executed by the authorized representative set forth below.
2D INTERACTIVE, INC. GLOBAL ONE DISTRIBUTION &
MARKETING, INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxx Xxxxxx
--------------------- -------------------------
Xxxxxxx Xxxxx, President Xxxxxx Xxxxxx, CEO
Attest: Attest:
------------------ --------------------
15
SCHEDULE I
Global One agrees to place and maintain PosterCruisers in accordance with the
following schedule:
1,000 PosterCruisers installed by July 1, 1998
2,500 PosterCruisers installed by July 1, 1999
5,000 PosterCruisers installed by July 1, 2000
Maintain a minimum of 2,500 PosterCruisers at all times after April 1, 1999.
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SCHEDULE II
POSTERCRUISERS shall be defined as electronic merchandising kiosks which display
advertising and poster images on a computer touch screen driven by a central
processing unit located in a frame which also serves as a display and rack for
the merchandising of posters and other products.
17
EXHIBIT A
TARGETED ACCOUNTS
Blockbuster Entertainment
Tower Records
Virgin Records
Hastings Books and Music
Musicland
Hollywood Video
TransWorld
Wherehouse Entertainment
HMV Music
Movie Gallery
National Record Mart
Movies Video
Lowes Movie Theaters
AMC Theaters
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EXHIBIT B
Non-Targeted Accounts
K-Mart
Target
JC Penney
Sports Authority
Big 5
19
