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Exhibit 10.23
AGREEMENT
This agreement is made on the 17th day of October, 1997 between XXXXX &
XXXXXX INC. (hereinafter "BTE") and WEST COAST ENTERTAINMENT CORPORATION
(hereinafter "WCE").
WHEREAS, BTE desires to sell and WCE desires to purchase certain video
products and related products, the parties agree as follows:
1. Superseding Previous Agreement
The parties had previously entered an agreement on this subject matter
dated October 28, 1996. This Agreement supersedes the agreement dated October
28, 1996 in its entirety.
2. Products and Pricing
a. WCE and BTE will mutually negotiate rental products pricing.
b. Catalog sell-thru products will be priced at 38% off the retail price.
c. New release, hit sell-thru titles will be priced and bid on a title by
title basis.
d. Accessories will be priced at BTE's dealer cost.
3. Payment Terms
WCE will pay BTE all invoices submitted hereunder within 60 days from
invoice date. Any different dating related to a special program such as catalog
orders for new store openings must be agreed to by both parties in writing
prior to shipment of product.
WCE shall pay interest at the rate of 15% per annum on any past due balance
which remains unpaid after 7 days written notification of such delinquency to
WCE.
4. Returns
a. WCE will be eligible to return up to 50% of all catalog sell-thru
purchased from BTE. Product must be eligible for return (ie. not on
moratorium, final sale). Returns must be requested quarterly, and unused
accruals do not roll forward from quarter to quarter.
b. To return product, WCE must call BTE's customer service department
within ninety (90) days of receipt of the product to be returned to
obtain a Return Authorization number (RA). The product must be returned
by WCE within thirty (30) days of receipt of the RA number.
c. WCE shall be allowed to return defective product not to exceed 1% of
any single video title. BTE's only obligation with respect to defective
product will be to issue a replacement to WCE.
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d. Returns will be processed by BTE and credit memos delivered to WCE
within sixty (60) days after BTE's receipt of the product returned in
accordance with Paragraph 4, A and B above, and must provide that the
credit issued therein may be taken immediately. No deductions from
payments are allowed prior to the issuance of a credit memo for returned
product.
e. WCE agrees that credits issued for the RA numbers listed on the
Attachment A will not be available for reduction of payments until the
4th quarter program is due to BTE (after all authorized returns have
been received and processed by BTE), estimated to be no later than
February 1, 1998.
f. All products returned by WCE to BTE must be with the original
manufacturer's shrink wrap intact (defective returns excepted) and free
of all stickers and other any other markings applied to the product by
WCE. Any product returned not in compliance with the preceding sentence
will be subject to a removal fee of $.15 per unit.
g. A full copy of BTE's return policy is attached hereto and incorporated
by reference herein. Should any inconsistencies exist between the terms
of BTE's return policy attached hereto and this agreement, the terms
contained within this agreement shall prevail.
5. Advertising
a. WCE & BTE will mutually negotiate advertising accruals, on a title per
title basis on net sales of rental product purchased from BTE prior to
the pre-order date published in BTE's Marquee. Fund performance periods
will be communicated for each title.
b. WCE will earn a 4% accrual, exclusive of MDF, on net sales of sell-thru
catalog from studios that offer catalog coop. Funds must be used no
later than ninety (90) days from allocation or according to studio
guidelines.
c. WCE agrees that credits issued for the 4th Quarter mailing as referenced
on Attachment B will not be available for reduction of payment until the
final 4th quarter program is due to BTE (after all authorized returns
have been received and processed by BTE), estimated to be no later than
February 1, 1998.
d. A copy of BTE's coop policy must be adhered to, a copy of which is
attached as Attachment B and incorporated by reference herein. (All
studio and BTE policies must be adhered to by WCE. Should any
inconsistencies exist between the terms of BTE's coop policy attached
hereto and this agreement, the terms contained within this agreement
shall prevail.
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e. Reimbursement will be made in the form of credit memos issued no later
than sixty (60) days from BTE's receipt and corresponding chargeback
of WCE's proper proof of performance as defined by BTE's coop policy.
f. No deductions from payment will be allowed for any coop advertising
claims prior to the issuance of a credit memo by BTE.
6. Ordering, Shipping and Handling
a. WCE shall contact the designated BTE telemarketing branch to place all
orders for product. However, WCE agrees that all replenishment of 4th
Quarter sell-thru product shall be placed via BTE's TalkMedia automated
order system.
b. BTE will pay all UPS Ground freight costs for all shipments from BTE
shipping warehouses directly to WCE store locations within the
continental US (as directed by WCE).
c. BTE will consolidate shipments using its build order system in order to
save freight and reduce paperwork. Consolidation rules will be jointly
established by WCE and BTE.
d. Under any and all circumstances, risk of loss shall be upon BTE until
the goods are delivered to WCE.
e. BTE will make commercially reasonable efforts to cause all shipment and
deliveries to be timely, subject to each studio's timely delivery of
product to BTE. WCE agrees that product will not be displayed and/or
sold of prior to the official street date as specified by each studio.
WCE agrees that it is responsible for any penalties imposed by any
studio associated with WCE displaying and/or sales of product prior to
street date.
7. Credit Line
BTE will periodically review WCE's financial information and other such
information as it deems appropriate to establish a credit line for WCE. BTE
reserves the right to change such credit line with prior written notice to
WCE.
8. Notices
All notices given by either party shall be in writing and shall be sent by
a nationally recognized overnight courier, by hand delivery, receipt
acknowledged, or by registered or certified mail, return receipt requested, to
the parties at the following addresses:
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If to BTE: Xxxxx & Xxxxxx, Inc.
c/x Xxxxx & Xxxxxx Entertainment
0000 X. Xxxxxx Xxxxxx
Xxxxxx Xxxxx, XX 00000
Attn: Vice President, Finance
If to WCE: West Coast Entertainment Corporation
One Summit Square, Suite 000
Xxx. 000 & Xxxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
All notices given by courier or by hand delivery will be deemed delivered
when actually delivered and all notices given by registered or certified mail
will be deemed delivered five (5) days after deposit with the US Postal Service.
Any change of address notice given by party will not be deemed given until
actually receive by the recipient party.
9. Term & Termination
a. The term of this Agreement shall be one year from the date of its
execution. This Agreement shall automatically renew for succeeding
additional one-year, terms provided however that this agreement may be
canceled by either party upon not less than sixty (60) days written
notice to the other party. The Agreement will be subject to any
revisions of terms which have been agreed upon by the parties not less
than thirty (30) days prior to any scheduled termination (and the
parties acknowledge that neither will have an obligation to agree to
terms).
b. Either party may cancel the agreement without cause given thirty (30)
days prior written notice.
c. In the event of a breach or default by either party, the other party
shall have the right to terminate this agreement immediately. The party
making such termination for cause shall send written notice of the
termination to the breaching or defaulting party.
d. Each party shall indemnify and hold the other harmless from and against
any and all direct and actual damages, losses, claims, costs and
expenses (including reasonable attorney's fees and interest at the rate
of 15% per annum on any amount in default) arising of or in connection
with any breach by the other of any of its obligations under this
Agreement (this indemnity shall survive the expiration or termination of
this Agreement). Neither party will be liable to the other for indirect
or consequential damages.
e. Termination of this agreement by either party, or upon the expiration of
this agreement will not effect: (1) the obligations of either party
already accrued prior to the effective date of expiration or termination
of the agreement (including obligations with respect to returned
product). (2) the rights of either
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party with respect to any breach of this Agreement, (3) WCE's rights to
market, promote, sell or return product, which were in WCE's inventory
at the time of expiration or termination, (4) those obligations of the
parties that, by their terms, survive termination or expiration of this
Agreement.
f. In the event of expiration or termination, WCE agrees to promptly
reconcile accounts payable with BTE. BTE and WCE agree to promptly
reconcile rebates, coop credits, returns and other credits and make
final payment in good funds within 60 days of the termination of this
agreement.
10. Compliance and Default
a. BTE shall be WCE's primary (1st source) supplier of sell-through catalog
product for all of its stores, including stores which are opened or
acquired during the term of this Agreement. Accordingly, all of WCE's
order for sell-through catalog product shall be made to BTE prior to
being requested from any other supplier. If BTE is unable to fill an
order for a particular title, in a reasonable period of time, WCE shall
order said title from another supplier. This provision may be limited by
the credit line established by BTE.
b. An event of default by either party is defined to mean:
(1) WCE failing to use BTE as its primary supplier of sell-through
catalog product as defined in the preceding paragraph, or
(2) Failure to make, observe or perform any condition or obligation as
required in this agreement, or
(3) The filing of a voluntary petition in bankruptcy by either party,
or
(4) The filing of an involuntary petition filed against either party,
the appointment of a receiver or trustee by either party, the
extension of an assignment for the benefit of credits of either
party.
c. In the event of a default by WCE, BTE shall have the right to eliminate
all discounts, free freight and coop privileges (excluding funds
previously accrued), such elimination to be effective as of the date of
default. WCE shall, within ten (10) business days of notification from
BTE reimburse BTE for any discounts, free freight or coop privileges
which are forfeited under this provision.
d. The option to terminate this Agreement shall be in addition to, and not
in lieu of any other remedy available to the terminating party under
this Agreement or at law equity, all such remedies being cumulative.
11. Miscellaneous
This agreement contains the entire understanding of the parties, and there
are no representations, warranties, convenants, or undertakings other than those
expressly set forth herein. All prior negotiations, commitments,
representations and undertakings of the parties on this subject matter are
merged in this Agreement.
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All provisions of this Agreement shall be binding upon the respective
successors, assigns, administrators and representatives of the parties.
Neither party may assign its rights under this Agreement without the prior
written consent of the other party.
This Agreement shall be deemed to have been jointly drafted, such that no
alleged ambiguity in the language of this Agreement shall be construed against
either of the parties.
Amendments or modifications to this Agreement must be in writing and signed
by both parties.
Neither party will be liable for any failure to perform, or delay in the
performance of any of its obligations hereunder (not will same constitute and
Event of Default) if and to the extent the failure or delay is caused, directly
or indirectly, by events beyond its control, such as acts of God, acts of the
public enemy; acts of any governmental body in its sovereign or contractual
capacity, fires, floods, epidemics, quarantine restrictions, strikes or other
labor disputes (except strikes or labor disputes that are not industry wide, but
are brought against WCE or BTE solely), freight embargoes and or unusually
severe weather. Lack of funds by either party will not excuse its timely
performance or its obligations hereunder. In the event of an occurrence
described in the first sentence, the non-performing party affected will be
excused from further performance or observance of the obligator(s) so affected
for as long as such circumstances prevail and if the party continues to use its
best efforts to recommence performance or observance whenever and to whatever
extent possible without delay.
This Agreement shall be construed in accordance with the laws and the State
of Illinois without giving effect to the choice of law rules thereof.
The Waiver or failure of either party to exercise in any respect any right
provided for herein will not be deemed a waiver of any further right hereunder.
The provisions of this Agreement shall be binding upon, and shall inure to
the benefit of the parties hereto and each of their respective successors and
assigns.
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Both parties warrant that the representatives who have signed below for
each of them, respectively, has the authority to bind the party for whom he or
she signs.
Entered the date written above.
XXXXX & XXXXXX, INC.
By Xxxxx & Xxxxxx Entertainment
By: /s/ Xxxxxx X. Xxxxxx [seal]
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Title: CFO
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Printed Name: Xxxxxx X. Xxxxxx
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WEST COAST ENTERTAINMENT CORPORATION
By: /s/ Xxxxxxx Xxxxx [seal]
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Title: CFO
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Printed Name: XXXXXXX XXXXX
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