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Exhibit 10.24
NORTH CAROLINA
CONSIGNMENT AGREEMENT
MECKLENBURG COUNTY
THIS AGREEMENT is made this 17th day of October, 1997, by and between XXXXX
& XXXXXX, INC. (hereinafter "Consignor") and WEST COAST ENTERTAINMENT
CORPORATION (hereinafter "Consignee");
The parties mutually agree as follows:
1. The Consignor agrees to deliver to Consignee on consignment and the
Consignee agrees to accept and receive on consignment certain merchandise
(hereinafter "Merchandise"), a list of which is attached hereto as Exhibit
A and incorporated herein by reference.
2. Title to the Merchandise shall remain in the Consignor until sold by the
Consignee as herein provided.
3. Consignee shall be responsible for the safekeeping of said Merchandise and
to answer to the Consignor for any loss or damage to the same while in
Consignee's actual or constructive possession (until the Merchandise is
sold by the Consignee as herein provided). The Consignee shall provide
insurance on the said Merchandise in an amount of at least $3.5 million,
although the coverage amount shall be allowed to be decreased in proportion
as payments from sales are made as provided herein and shall be increased
as necessary to insure the full value of any replenishment shipments.
Consignee shall instruct the insurer to list the Consignor as the
beneficiary, and Consignor shall be an intended creditor third party
beneficiary to the contract of insurance between the insurer and the
Consignee with full rights to enforce the contract for Consignor's own
benefit. Consignee shall provide verification of such insurance to the
Consignor prior to the Consignor's shipment of the Merchandise.
4. Consignee shall be allowed to sell the Merchandise at such prices and make
payment to Consignor as follows. Because the Consignee does not have a
point of sale system which would enable it to identify at any given time
exactly which items have been sold, the parties agree to the following
payment and commission schedule. Consignee shall be allowed to retain all
proceeds from the sale of Merchandise over and above the sum listed for
each item in Exhibit A as a commission for making such sale. The payment
schedule is based upon estimated sales for all payments except the final
payment. At the time of the final payment, the parties shall make
adjustments in the final payment amount to reflect the actual sales made,
actual shipments made to Consignee, and actual product returned by
Consignee to Consignor. The original shipment, estimated at $3.5 million,
shall be shipped the week ending October 24, 1997. Thereafter,
replenishment shipments.
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may be made during the term of this agreement, and such shipments shall be
governed by this agreement.
Payment Returns
Week Ending Schedule Schedule
----------- -------- --------
24 Oct 97
31 Oct 97
07 Nov 97
14 Nov 97
21 Nov 97
28 Nov 97
05 Dec 97 $450,000
12 Dec 97
19 Dec 97 $900,000
26 Dec 97
02 Jan 98
09 Jan 98
16 Jan 98 $450,000
23 Jan 98 Return all unsold products
per terms of this agreement
30 Jan 98
06 Feb 98 Final payment equal to amount of
product shipped to Consignee under
this agreement less previous
payments made and less product
returned in accordance with this
agreement
If at any point in time prior to a scheduled payment date above, the
replenishment shipments exceed the next scheduled payment, such payment shall
equal such replenishment total. For example, if replenishment shipments of
$500,000 are received before December 5, 1997, the amount due on December 5,
1997 shall be $500,000. Conversely, if replenishments received before December
5, 1997 are $400,000, then the amount due on December 5, 1997 shall be $450,000.
Consignee shall pay interest at the rate of 15% per annum on any balance
required to be paid by Consignee under this agreement, if and when such payments
by Consignee are past their due date. Interest at that rate shall continue to
accrue on the outstanding balance until paid in full.
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Payments shall be made by overnight delivery to the following address:
Xxxxx & Xxxxxx Entertainment
0000 Xxxxx Xxxx
Xxx Xxxxxx, XX 00000
Attn: Citibank
Lockbox 8035
To return unsold Merchandise, Consignee shall contact a Xxxxx & Xxxxxx Customer
Service Representative for a Return Authorization Number prior to the week of
January 23, 1998. Consignee shall follow the return policy described in Exhibit
B which is attached hereto.
5. Upon the request of the Consignor, Consignee shall generate and provide to
Consignor an itemized and accurate record of the location of the
Merchandise. Consignee shall provide this record within 7 days of the
request from Consignor.
6. All of the Merchandise which remains unsold and the record required in
paragraph 5 shall at all times be subject to inspection by the Consignor or
its representative.
7. In the event of a breach or default by the Consignee, the Consignor shall
be permitted to enter the Consignee's premises (or locations under the
control of the Consignee) at any time to remove any unsold Merchandise and
any monies owned to it under this agreement. In that event, Consignor shall
be entitled to take and remove the amount of monies owned to it under this
Agreement from funds at the Consignee's premises or from any other
locations or accounts where the Consignee has control of funds or legal
title to funds, regardless whether such funds are the identifiable proceeds
of the sale of this Merchandise or not. In the event of a breach or default
by Consignee, Consignee waives any and all defenses to Consignor's removal
of Merchandise and/or to Consignor's collection of monies owed under this
agreement.
8. The parties agree to execute promptly such UCC forms and any other
documents as the other party requests to confirm the existence or terms of
this Agreement. The Consignor shall be entitled to require the Consignee to
sign UCC forms or other forms for public filing prior to Consignee taking
delivery of the Merchandise. Consignee shall pay all filing fees for UCC
forms and attachments (i.e., copies of this agreement attached to the UCC
form). If Consignor advances said filing fees, Consignee shall reimburse
Consignor within 15 days of receiving an invoice for the same.
9. Consignee warrants that this agreement is not in violation of any loan
documents or other financing agreements to which it is a party as of this
execution of this agreement. Both parties warrant that the agents who have
executed this agreement on behalf of each of them have the authority to
bind the respective corporations. Consignee warrants that it has made all
of its banks and financial institutions.
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(whether for deposit accounts or for financing) aware of this agreement.
Consignee shall hold Consignor harmless for any breach of these warranties
by Consignee.
10. Copies of records, and verification of insurance shall be delivered to the
Consignor to the following address: Xxxxx & Xxxxxx, Attention: Vice
President of Finance, 0000 X. Xxxxxx Xxx., Xxxxxx Xxxxx, XX 00000.
11. In the event the Consignor finds it necessary to take legal action to
enforce the rights under this agreement, Consignee shall be responsible for
all of Consignor's costs in such action, including a reasonable attorney's
fee.
12. This instrument contains the complete agreement of the parties on this
subject. In the event any part of this agreement is determined by a court to
be invalid, the remaining provisions shall remain in full force and effect.
Entered the date written above.
XXXXX & XXXXXX, INC.
By Xxxxx & Xxxxxx Entertainment
By: /s/ Xxxxxx X. Xxxxxx [SEAL]
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Authorized Agent
Printed Name: Xxxxxx X. Xxxxxx
Title: CFO
WEST COAST ENTERTAINMENT CORPORATION
By: /s/ Xxxxxxx Xxxxx [SEAL]
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Authorized Agent
Printed Name: Xxxxxxx Xxxxx
Title: CFO
