NAVARRE CORPORATION
NATIONAL DISTRIBUTION AND WAREHOUSING
AGREEMENT
This Agreement is entered into by the parties hereof as of the 1st day of
October, 1997.
NAVARRE CORPORATION ("NAVARRE") is an experienced wholesale distributor of
musical, literary, and artistic recordings on various recording media.
The company listed below ("LABEL") has released, and will release during the
term of this Agreement, certain Recordings for sale and distribution in the
United States through NAVARRE.
MSH MUSIC GROUP
---------------
LABEL Name
0000 Xxxxx Xxxx Xxxxxxxxx. Xxxxx 000
------------------------------------
Street Address
Xxxxx Xxxxxx. XX 00000
----------------------
City/State/Zip Code
DEFINITIONS:
------------
"Actual Price" shall mean the Base Price adjusted for Growth Incentive Rebates
and the discounts and rebates described in Section 2.1 hereto.
"Base Price" shall mean the price of the Recordings to NAVARRE, as set forth on
Schedule A hereto.
"Contract Year" shall mean each October 1 through September 30 during the term
of this Agreement.
"Recordings" means and includes all of LABEL's musical sound recordings on
various recording media (including but not limited to compact disks, cassettes
and DVD). A partial listing of the LABEL's catalog of Recordings is shown in
Schedule B to this Agreement.
1
1. APPOINTMENT AND SCOPE.
----------------------
1.1 This Agreement will be effective as of October 1, 1997. The initial term
will be for approximately three years ending September 30. 2000. Therefore, this
Agreement will automatically renew for successive one year periods unless
terminated as provided in Section 11.
1.2 Except as described in Schedule 1.2 hereof, LABEL appoints NAVARRE as its
exclusive distributor in the United States for sales and the distribution of all
of LABEL's content or recordings, through all wholesale and retail sales
channels. LABEL represents that all of its current labels are listed on Schedule
A hereto. If LABEL markets its Recordings under more than one label, the current
labels as shown in Schedule A, and all additional labels created during the term
of this Agreement, are included under this appointment. This appointment
includes, without limitation, sales to retail outlets, one stops, rack jobbers,
military, wholesale clubs, and sales to subdistributors as provided by this
Agreement.
2. PRICING: PAYMENT.
-----------------
2.1 In consideration of the rights granted hereunder and the obligations and
covenants of the parties set forth herein, NAVARRE shall pay LABEL a variable
cost for each recording calculated in accordance with Schedule 2.1 hereto.
NAVARRE agrees that these prices will be no less favorable than the prices that
NAVARRE offers to any other labels.
2.2 The current suggested retail prices charged by LABEL for Recordings are
shown in Schedule 2.1. LABEL may change the suggested retail price on a
prospective basis by issuing new pricing sheets to NAVARRE to reflect price
changes and new releases.
2.3 NAVARRE will provide LABEL on a weekly basis with total shipments, by SKU,
and also carrying inventory figures through the last business day of the week
(normally Friday). This information will be transmitted in electronic form, by
title and customer, on the following business day (normally Monday). If
electronic link is not possible, hard copies of reports will be mailed each
Monday.
2.4 During the period September 1 through December 25 of each year, NAVARRE
shall be entitled to retain 20% of the Base Price of all copies of Christmas
Recordings sold by NAVARRE during such period as a reserve for returns. This
reserve will be reconciled and paid by NAVARRE to LABEL by April 30 of the
following year.
2.5 Invoices will be issued weekly by LABEL to NAVARRE from the net total on the
Weekly Invoice reports which correspond to each week ending Saturday. Payment
terms to LABEL are two percent (2%), sixty (60). Payments will be sent to the
LABEL at the end of each week, corresponding to the invoice which comes due on
its sixtieth day during that week.
2
2.6 Within 30 days after the end of each Contract Year, any Growth Incentive
Rebate fee payable to LABEL or Charge shall be calculated in accordance with
Schedule 2.1 hereof. If additional money is owed to LABEL, NAVARRE shall pay it
within 60 days. If actual amount paid to LABEL for the calendar year is in
excess of the amount due LABEL hereunder, NAVARRE may, at its option, either (i)
require LABEL to remit the overage to NAVARRE within 60 days or (ii) deduct the
overpayment from the next distribution payment(s) that would otherwise be
payable to LABEL.
2.7 LABEL also agrees to participate in the following discount programs and
prices for such recordings shall be correspondingly reduced from the Base Price
described on Schedule 2.1:
(a) A minimum of two (2) of NAVARRE's three (3) scheduled sell in
programs (February/Winter, May/Spring, Fall Buy In). This participation will be
in the form of a discount passed on to NAVARRE for all of the LABEL's product
sold during the program period. LABEL's participation in such programs shall be
at a rate of up to six (6%) percent off of the Base Price at NAVARRE's
discretion. Any such discount in excess of six (6%) percent off of the Base
Price will have to be agreed to in advance by LABEL unless otherwise agreed in
writing by LABEL.
(b) Standard discounts for NAVARRE's sales to rack jobbers, which is
currently in the amount of five (5%) percent off of the Base Price.
(c) Standard discounts for NAVARRE's sales to military bases and
installations, which is currently in the amount of ten (10%) percent off of the
Base Price.
2.8 In the event that LABEL reduces the price of any product or offers the
product at a lower price, including raising the discount offered, to any other
party, LABEL shall promptly credit NAVARRE for the difference between the
invoice price charged to NAVARRE and the reduced price for each unit of product
held in inventory by NAVARRE on the date the reduced price is first offered.
LABEL will also credit NAVARRE for the difference between the invoice price
charged to NAVARRE and the reduced price for each unit of product held in
inventory by NAVARRE's or its customers on the date the reduced price is first
offered by LABEL if NAVARRE's customers request a credit resulting from LABEL's
price reduction. Should any of NAVARRE's customers request a price adjustment as
outlined in this section, NAVARRE shall provide for an independent third party
audit of that customer's inventory upon LABEL's reasonable request and at
LABEL's expense. NAVARRE will use commercially reasonable efforts to provide
inventory reporting of its customer's inventory. Any such price reduction shall
be taken into account in the calculation of amounts payable hereunder.
2.9 No payment or fees shall be payable to LABEL on copies of the Recordings
furnished free of charge by LABEL or NAVARRE to third parties for non-resale
purposes such as review, advertising, sample, publicity, promotion or like
purposes, or copies destroyed by fire or water, or on copies sold at or below
the cost of manufacture.
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2.10 LABEL shall be responsible for payment directly to the copyright
proprietors of any and all mechanical copyright royalties on any and all
compositions incorporated into the Recordings at the applicable statutory rates.
2.11 NAVARRE shall provide LABEL with an accounting of all amounts payable to
LABEL hereunder within thirty (30) days of the end of each Contract Year. All
such accountings rendered by NAVARRE will become final and binding on LABEL and
LABEL will neither have nor make any claim against NAVARRE with respect to such
statement unless prior to 90 days after the rendering of such statement LABEL
advises NAVARRE in writing of any objection to such statement, setting forth the
specific basis for objection, in which case such statement shall be binding in
all respects except those stated in such written objection.
2.12 LABEL shall have the right, at LABEL's expense, to engage an independent
certified public accountant, not then conducting or participating in an audit of
NAVARRE's books, to audit relevant portions of NAVARRE's books and records
pertaining to monies payable to LABEL hereunder that have not been rendered
incontestable, but not more than once in any twelve (12) month period, during
normal business hours and upon reasonable notice, and provided that such audit
will not be conducted on a contingent fee arrangement.
3. NAVARRE OBLIGATIONS.
--------------------
3.1 NAVARRE shall use its best efforts and time to promote and sell the
Recordings in the ordinary course of its business.
3.2 NAVARRE shall maintain suitable offices, warehousing facilities and adequate
staffing for the performance of its duties under this Agreement. NAVARRE shall
conduct its business in its own name and shall pay all of its own costs and
expenses.
3.3 NAVARRE shall respect the musical, dramatic, artistic and literary rights of
LABEL and the property rights of the LABEL, the artists, producers and others in
the Recordings, the trade names, trademarks, logos and other information
supplied with or that is a part of the Recordings or promotional materials for
the Recordings.
3.4 NAVARRE shall promptly pay LABEL according to the payment provisions of this
Agreement.
3.5 NAVARRE shall make available to LABEL manufacturing of all forms of CD's,
DVD and cassettes upon the pricing and terms established from time to time by
separate agreement between the parties.
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4. LABEL'S OBLIGATIONS.
--------------------
4.1 LABEL shall provide NAVARRE with a minimum of 30 releases during the term of
this contract.
4.2 LABEL shall accept orders from NAVARRE for the consignment of recordings,
and shall promptly deliver against those orders. Recordings will be supplied in
industry acceptable packaging with the appropriate UPC sticker or labeling.
4.3 LABEL shall provide NAVARRE with reasonable quantities of no-charge
promotional and advertising materials for the recordings, but in no event shall
LABEL be required to provide promotional goods, at no charge, in excess of
limitations on LABEL as provided in recording Agreements with Artists signed to
LABEL.
4.4 LABEL shall consign an inventory of recordings to NAVARRE sufficient to
allow both parties to comply with the terms of this Agreement.
4.5 If at any time, for any reason, LABEL has a debit balance with NAVARRE,
LABEL will pay NAVARRE the debit balance within sixty (60 days). If all or any
portion of the balance remains unpaid after 60 days, NAVARRE shall be entitled,
at its option, to (i) withhold future payments due LABEL until such debit
balance is paid, and/or (ii) liquidate any inventory of LABEL in the possession
or control of NAVARRE and/or (iii) apply any proceeds received from such
liquidation towards LABEL's debit balance and/or (iv) manufacture and sell
additional Recordings at prices determined by NAVARRE, in its discretion, in
quantities sufficient to fully repay all amounts owed by LABEL to NAVARRE and/or
(v) immediately terminate this Agreement without further notice.
4.6 All new pressings covered under the terms of this contract shall include the
statement "Distributed by Navarre Corporation, Xxxxxxxxxxx, XX 00000."
5. CONSIGNMENT OF INVENTORY.
-------------------------
5.1 LABEL will deliver on consignment to NAVARRE's warehousing facilities an
inventory of recordings requested by NAVARRE in amounts determined by NAVARRE.
LABEL and NAVARRE shall consult regarding the timing and size of manufacturing
orders for purposes of coordinating availability of adequate inventory in
accordance with the terms and conditions of this Agreement, but NAVARRE shall at
all times have the sole authority to determine the amount of inventory stored at
its premises, and any excess inventory shall be returned to LABEL or destroyed
pursuant to Section 7.2 hereof.
5
5.2 NAVARRE assumes the risk of loss or damage to consigned recordings from the
time of delivery to NAVARRE, until sold or returned to LABEL. If NAVARRE
provides manufacturing services to LABEL pursuant to Section 2.7 of this
Agreement, NAVARRE shall assume the risk of loss of consigned goods from the
time that LABEL becomes liable to pay the cost of manufacturing such goods.
5.3 NAVARRE will pay all expenses incurred after delivery for the protection,
sale, warehousing and shipment of recordings.
5.4 LABEL will be responsible for payment of shipping costs for delivery of the
recordings to NAVARRE, and the LABEL shall pay for shipping costs for any
authorized returns to LABEL (returns will be shipped freight collect).
5.5 NAVARRE will keep books and records showing the transactions made pursuant
to this Agreement. NAVARRE's books and records supporting receipts of
recordings, shipments of recordings, and all charges applicable to LABEL will be
open to inspection upon reasonable advance notice by LABEL during NAVARRE's
normal business hours.
5.6 NAVARRE will provide LABEL with a physical inventory, supervised by
NAVARRE's CPA firm (currently Ernst & Young), every six months (January and July
unless otherwise agreed). LABEL shall also have the right to make its own
physical inspection of inventory, upon reasonable advance notice, during
NAVARRE's normal business hours.
5.7 The consigned recordings will be safely stored at NAVARRE's warehousing
facilities, and will not be removed except upon their sale or return. NAVARRE
will keep the inventory adequately insured at its expense against loss or
damage, and will have LABEL named as an additional insured.
5.8 Subject to Section 4.5 hereof, title to the consigned recordings shall be
and remain in LABEL until sold.
5.9 Shipment discrepancies between the invoice/xxxx-of-lading provided by LABEL
and any damage in transit will be promptly reported.
6. SALES BY NAVARRE.
-----------------
6.1 NAVARRE is authorized to sell the consigned inventory to its accounts in the
United States.
6.2 NAVARRE shall be free to establish, with respect to its agents and
distributors, the terms of sale, and cost prices at NAVARRE's discretion.
6
6.3 LABEL will reorder recordings for delivery to NAVARRE, as reasonably
required to maintain adequate inventory, based on the shipping report issued
each week and the order requests issued to LABEL by NAVARRE.
7. RETURNS.
--------
7.1 All defective recordings, either identified upon receipt from LABEL, or
determined to be defective when returned from NAVARRE's customers or
subdistributors, will be reported to LABEL and placed at its disposition. LABEL
shall advise NAVARRE regarding the disposition of defective recordings within 14
days after receipt of notice of defects from NAVARRE. Otherwise, the defective
product will be destroyed, at NAVARRE's option. LABEL shall bear all expenses
regarding the destruction or other disposition of defective recordings.
7.2 Due to the nature of the consignment, NAVARRE may return for full credit up
to 100% of all conforming sound Recordings received from LABEL. Such returns
shall be limited to once per month, and shall be made with advance notice to
LABEL as to estimated arrival date. Upon advance notice of returns, LABEL shall
provide Return Authorization within seven (7) days of notice. NAVARRE shall bear
expense and risk of loss of return shipment. LABEL shall issue payment to
NAVARRE for such returned products if no balance is then outstanding. If at any
time LABEL refuses to accept returns from NAVARRE, NAVARRE may, at its option,
destroy the product or arrange for transportation and storage at another
location. All costs relating to destruction, transportation and storage of such
product shall be paid by LABEL.
7.3 LABEL shall issue an immediate credit for purchase price plus all return
freight charges for defective product, and products returned as defective by
NAVARRE customers. Upon LABEL recall of products due to defects, NAVARRE shall
provide reasonable assistance, at LABEL's expense, in such recall.
7.4 NAVARRE's right to return products shall survive the term and termination of
this Agreement. Should NAVARRE have a balance due upon reconciliation of the
account for product returns, freight chargebacks, advertising credits, or other
upon end of term or termination, LABEL shall issue payment therefor within
thirty (30) days of such term or termination. NAVARRE shall use best efforts to
return all unsold product within one hundred eighty (180) days of termination of
the Agreement.
7.5 NAVARRE will provide LABEL with a weekly customer returns report identifying
quantities and titles. All non-defective returns will be processed by NAVARRE,
and placed in inventory for resale or returned to LABEL.
7
8. ADVERTISING AND MARKETING.
--------------------------
8.1 LABEL agrees to conduct marketing and promotional efforts supporting the
sale of recordings at its expense. This may include, but is not limited to,
advertising in trade and consumer publications, in-store or media promotions,
and promotions for radio airplay.
8.2 LABEL shall provide suitable advertising allowances that can be claimed by
NAVARRE or its customers.
8.3 LABEL shall provide to NAVARRE camera ready artwork, free of charge, to be
used in advertisements, and other suitable promotional materials for NAVARRE and
its customers. NAVARRE agrees to use its best efforts to safeguard these
materials and return them to LABEL at their request.
8.4 NAVARRE or its customers may produce their own advertisements or promotional
materials for LABEL's recordings, so long as such advertisements and promotional
material, or the use thereof, have been approved in advance, in writing, by
LABEL. Such approval will not be unreasonably withheld, with decisions being
made within five workings days of receipt of written request by NAVARRE.
9. INTELLECTUAL PROPERTY.
----------------------
9.1 LABEL grants to NAVARRE the right to use, in connection with sales of
Recordings the trademarks and trade names listed in Schedule 9.1. NAVARRE shall
have no right to remove or cover such marks on the products and the marks and
names shall remain the exclusive property of LABEL.
9.2 LABEL warrants that the recordings, the sale of recordings and the intended
use of recordings does not infringe the patent, copyright, trademark or trade
name of any third party. LABEL will indemnify and defend NAVARRE against all
damages and costs incurred by NAVARRE due to claims of infringement of any
patents, copyrights, trademarks, trade secrets, or other proprietary rights in
the manufacture or marketing of product. Upon claim of infringement, NAVARRE
may, at its option, immediately cease manufacture, sale and distribution of the
recordings. Also, LABEL may, at its expense and option, either procure the right
to continue using any part of product, replace same with non-infringing product,
or modify product to make it non-infringing; should LABEL be unable or unwilling
to replace, modify, or procure right to continued use of product within thirty
(30) days of claim notification, NAVARRE may, at its option, return product for
a full cash refund of all amounts paid by NAVARRE to LABEL for such Recordings.
8
9.3 NAVARRE agrees to respect and abide by the terms and conditions of the
licensed or transferred use of applicable patents, copyrights, trademarks and
trade names for purposes of this Agreement. NAVARRE will indemnify and hold
LABEL harmless against claims by third parties respecting breaches of this
Agreement by NAVARRE.
10. REPRESENTATIONS AND WARRANTIES.
-------------------------------
10.1 As an inducement for NAVARRE to enter into this Agreement, LABEL hereby
warrants and represents to NAVARRE as follows:
(a) CORPORATE EXISTENCE. POWER AND AUTHORITY. LABEL is a corporation
duly organized and validly existing in the State of ______________, and is fully
qualified to do business and in good standing in the State of _____________, and
in every other jurisdiction wherein the nature of its businesses or the
character of its properties makes such qualification necessary, and has all
requisite power and authority to carry on its businesses as now conducted and as
presently proposed to be conducted. LABEL has full power and authority to
execute and deliver this Agreement, the Note, the Security Agreement and all
other documents contemplated herein and therein (collectively, the "Borrower
Documents") and to incur and perform its obligations hereunder and thereunder.
The Borrower Documents each constitute the legal, valid and binding obligations
of LABEL enforceable in accordance with their respective terms.
(b) LICENSES: ROYALTIES AND INFRINGEMENT. LABEL possesses adequate
licenses, permits, franchises, patents, copyrights, trademarks and trade names,
or rights thereto, to conduct its respective business substantially as now
conducted and as presently proposed to be conducted. There does not exist and
there is no reason to anticipate that there may exist, any liability to LABEL
with respect to any claim of infringement regarding any patent, copyright,
trademark, trade name or other intellectual property right relating to the
releases. LABEL is current on all license and royalty payments owned, including,
without limitation, artist royalties and mechanicals.
(c) DEFAULT. LABEL is not in default of a material provision under any
material agreement, instrument, decree or order to which it is a party or by
which it or its respective property is bound or affected.
(d) CONSENTS. No consent, approval, order or authorization of any
governmental authority or any third party is required in connection with the
execution and delivery of LABEL Documents, or any of the agreements or
instruments herein mentioned or the carrying out or performance of any of the
transactions required or contemplated hereby or thereby or, if required, such
consent, approval, order or authorization has been obtained by LABEL prior to
the date hereof.
9
(e) OWNERSHIP. The shareholders, officers and directors of LABEL are
listed on Schedule 10.1(e) hereto. Except as described on Schedule 10.1(e), none
of the persons listed owns, controls, is employed by or affiliated with any
recording company or label other than LABEL.
11. TERMINATION.
------------
11.1 The initial term of this Agreement shall be three (3) years. Thereafter,
the Agreement shall automatically renew for additional one (1) year periods.
11.2 LABEL may terminate this Agreement, without cause, if it has been in effect
for a period of at least one year. LABEL must give NAVARRE at least ninety (90)
days advance written notice of termination. Upon such notice, NAVARRE shall not
be required to make further payments to LABEL for a period of one hundred eighty
(180) days after the date the termination is effective.
Upon termination by LABEL without cause, it shall pay to NAVARRE for the loss of
the rights granted under this Agreement, as liquidated damages and not as a
penalty, a dollar amount derived from the gross margins that would have been
realized by NAVARRE during the remaining term of this Agreement. For this
calculation, the "gross margin percentages" realized by NAVARRE from the
shipment and sale of recordings over the six month period preceding the giving
of notice will be used to determine the average gross margin dollars realized
per month. This dollar amount will then be multiplied by the months remaining in
the term of the Agreement. NAVARRE's invoice for this amount shall include
documentation to support its calculation. Payment shall be made within 30 days.
LABEL shall have the right to audit NAVARRE's books and recordings to confirm
the accuracy of NAVARRE's calculation of a basis for this payment, provided that
LABEL shall place the amount of such payment in an escrow account pending
verification of the amount of the audit. As used herein, "gross margin
percentage" is defined as the sell price NAVARRE charges its customers minus the
Base Price NAVARRE pays LABEL (as defined in Schedule 2.1) divided by the sell
price NAVARRE charges its customers.
11.3 After one year, NAVARRE may terminate this Agreement, without cause, by
giving LABEL 90 days notice of its intent to terminate. Both parties agree to as
smooth a transition as possible.
10
11.4 This Agreement may be terminated for cause upon the material breach by
LABEL or NAVARRE of any obligation created hereunder. Except as otherwise
provided in this Agreement, such termination shall be effected by the giving of
30 days written notice of the intent to terminate. The notice must give details
of the claimed breach, and the party given the notice shall have the 30 day
period to cure before the termination will be effective. If the breach by
NAVARRE or LABEL is payment to the other party, the party given the notice shall
have a 10-day period to cure before termination will be effective.
11.5 In the event either NAVARRE or LABEL files or becomes subject to a petition
in bankruptcy, or other assignment for the benefit of creditors, such event may
constitute a material breach and may be cause for termination of this Agreement
under the standard termination clause contained herein. In such event, all
consigned goods held by NAVARRE shall be delivered to LABEL, or held for LABEL's
benefit at a location designated by LABEL.
11.6 At the end of term or termination of this Agreement for any reason, NAVARRE
may return products in lieu of payment on account for one hundred eighty (180)
days. At the end of the one hundred eighty (180) days, NAVARRE may keep products
and pay LABEL therefor. Prices and payment schedule for such products shall be
as mutually agreed at that time. If LABEL and NAVARRE are unable to agree upon
such prices and payment schedule within ten (10) days following the expiration
of said one hundred eighty (180) day period, NAVARRE will return all products
for credit or if there is a balance owed to NAVARRE, LABEL shall pay NAVARRE
within thirty (30) days.
12. RELATIONSHIP 0F THE PARTIES.
----------------------------
12.1 Neither party to this Agreement is the employee, agent or legal
representative of the other for any purpose whatsoever.
13. GENERAL PROVISIONS.
-------------------
13.1 This Agreement shall be governed by the laws of the state of Minnesota. Any
dispute arising out of this Agreement shall be brought and prosecuted in a court
within Hennepin County Minnesota. For this purpose, LABEL, appoints the
Secretary of State of Minnesota as its agent for services of process in the
event that NAVARRE is unable to serve process on LABEL at its last known
business address.
13.2 This Agreement may be assigned by either party subject to the written
consent of both parties and said consent will not be unreasonably withheld. Said
assignment shall not unreasonably impair the rights of the non-assigning party
and shall not be on terms less favorable than the terms set forth in this
Agreement
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13.3 This Agreement supersedes all prior oral or written proposals and
communications between the parties related to this Agreement, and shall not be
modified, rescinded, waived or otherwise changed except with the written consent
of the parties. This contract sets forth the entire Agreement between the
parties with respect to the subject matter hereof.
13.4 Each party confirms that no inducements, promises or representations, not
written herein, caused it to enter into this Agreement.
The parties, by the actions of their authorized representatives, have executed
this Agreement, including the attached Schedules, as of the date first mentioned
above.
LABEL: NAVARRE:
/s/ Xxxxxxx Xxxxxxxxxxx /s/ Xxx X. Xxxxxxx
-------------------------- ----------------------------
Signature Signature
Xxxxxxx Xxxxxxxxxxx Xxx X. Xxxxxxx
-------------------------- ----------------------------
Typed/Printed Name Typed/Printed Name
President COO
-------------------------- ----------------------------
Title Title
12
LIST OF SCHEDULES
TO DISTRIBUTION AGREEMENT OF
October 1, 1997
BETWEEN
MSH MUSIC GROUP
AND
NAVARRE CORPORATION
A Current Labels
B LABEL's Catalog of Recordings
1.2 Scope of Exclusive Distribution
2.1 Actual Price
9.1 Trademark and Trade Names
10.1(e) Shareholders, Officers and Directors of LABEL
13
SCHEDULE 2.1
TO DISTRIBUTION AGREEMENT
DATED OCTOBER 1, 1997
BETWEEN
MSH
AND
NAVARRE CORPORATION
Current Pricing:
Suggested Base Price Suggested Base Price
Retail $ to NAVARRE(1) Retail $ to NAVARRE(1)
-------- ------------- -------- -------------
3.49 1.46 16.98 8.84
4.98 2.08 17.98 9.15
5.98 2.39 18.98 9.72
6.98 3.12 19.98 10.19
7.98 3.74 23.98 11.96
8.98 4.26 25.98 12.69
9.98 4.89 27.98 13.94
10.98 5.30 29.98 14.98
11.98 6.34 30.98 15.44
12.98 6.81 31.98 15.96
13.98 7.38 32.98 16.43
14.98 7.80 33.98 16.95
15.98 8.37 39.98 19.97
(1) This pricing is based on an estimated Base Price before any discounts
described in Section 2.6 and exclusive of Growth Incentive Rebates or Charges.
Any discounts shall apply immediately but, with respect to Growth Incentive
Rebates or Charges, the Actual Price to NAVARRE shall be calculated on an annual
basis.
NAVARRE's Annual Net Payments Growth
to LABEL for Recordings Incentive Rebate
----------------------- ----------------
0-$2,000,000 0
$2,000,000 - $4,000,000 2%
$4,000,000 - $8,000,000 4%
$8,000,000 - $12,000,000 5%
$12,000,000 - $15,000,000 6%
$15,000,000 and over 7%
14
SCHEDULE A
CURRENT LABELS
--------------
Current MSH Music Group Labels:
MSH RECORDS
MSH/OUTWEST RECORDS
(a children's label to be designated)
SCHEDULE B
LABEL'S CATALOG OF RECORDINGS
-----------------------------
Current MSH Music Group Recordings:
Xxx-Xxxxx Soundtrack Xxxx Xxxxxxxxx and guests
Nothin' On But The Radio X.X. Xxxxxxxx
Cowboy Attitude Xxxxx Xxxxxxx
Freedom Xxxxxx Xxxxxx (Licensed)
106 Ike and Xxxx Xxxxxx Masters
SCHEDULE 1.2
SCOPE OF EXCLUSIVE DISTRIBUTION
-------------------------------
Expressly excluded from this Distribution Agreement are distribution of
video product oilier than music videos, record clubs, and electronic
distribution of recorded product. All other distribution is as set forth in
Paragraph 1.2 of this Distribution Agreement.
SCHEDULE 9.1
TRADEMARK AND TRADE NAMES
-------------------------
Label is currently using the following trademarks and trade names:
MSH MUSIC GROUP
MSH ENTERTAINMENT CORP.
MSH RECORDS
MSH/OUTWEST RECORDS
SCHEDULE 10.1(e)
SHAREHOLDERS. OFFICERS AND DIRECTORS OF LABEL
---------------------------------------------
MSH Music Group is presently a division of MSH ENTERTAINMENT CORP., a
publicly traded Utah Corporation (NASDAQ). Shortly, MSH Music Group will be
incorporated separately as a wholly owned subsidiary of MSH ENTERTAINMENT CORP.
MSH ENTERTAINMENT CORP.
-----------------------
Chairman: Xxxxxx Xxxxx
President: Xxxxxxxx Xxxxxxxxx
Executive Vice President: Xxxxxx Xxxxxxx
Executive Vice President: Xxxxxxx Xxxxxxxxxxx
MSH MUSIC GROUP (Pending)
-------------------------
Director: Xxxxxx Xxxxx
Director Xxxxxxxx Xxxxxxxxx
Director: Xxxxxxx Xxxxxxxxxxx
Chairman: Xxxxxx Xxxxx
