EXHIBIT 10.11
MERCHANDISE LICENSING AGREEMENT
AGREEMENT made as of April 1, 2003 between NBC Enterprises, Inc. ("NBC"),
whose address is 3400 West Olive Avenue, Sixth Floor, Burbank, California 91505,
and Playinteractive, LLP. ("Licensee") whose address is 12070 N. 134th Way
Scottsdale, Arizona 85259 Attention: Larry Meyers, General Partner.
NBC and Licensee agree as follows:
BASIC PROVISIONS
1. Grant or Rights: NBC grants to Licensee a license to use and exploit
the "Property" and "Trademarks" in connection with the manufacture and
distribution of the "Products" throughout the "Territory" during the "term" as
provided in this agreement ("Agreement").
2. Exclusivity: The rights granted to Licensee herein are granted on
Exclusive basis and are granted in accordance with Paragraph 7(c) of the
Standard Terms and Conditions, attached hereto.
3. Property and Trademarks: The title, names, logos, trademarks, art work,
photographs, of and associated with the Fear Factor Program and the related
marks and design.
4. Products: Video Games, Console, PC handheld games, and Gaming Guide
Books for instructional and strategy usage with games based upon the "Fear
Factor" Television Show.
5. Territory:
(a) Country(ies): United States, its territories and possessions and
English Speaking Canada.
(b) Distribution Channel(s): Products are to be sold through the
following channels only: Web Sales, Direct Sales, Game Retailers, Mass Market
Retailers Including Best Buy, Target, CompUSA, Walmart and others.
"Territory" means the Country(ies) and the Distribution Channel(s).
(c) Approval Required for Export: Licensee shall not export the
Products from the Territory or sell the Products to any entity or customer which
it knows or has reason to believe intends to export the Products from the
Territory without obtaining NBC's prior written approval. NBC/Endemol recognizes
that Licensee may contact foreign entitles/customers regarding the sale of the
product in other Endemol territories. Licensee recognizes that those rights with
such entities must be secured as part of a separate agreement and are not
subject to the terms and conditions of this agreement.
(d) Internet Rights: Licensee may sell Products via the Internet
pursuant to Paragraph 5(b) and will pay the royalties set forth in Paragraph
7(b) below. Licensee shall require its customers and their site operators to
inform potential purchasers that the Products may be delivered only within
Territory and Licensee will refrain from making sales or shipments to customers
outside the Territory. NBC may terminate this agreement in the event Licensee
falls to comply with the terms of this Paragraph 5(d).
(e) Reserved Rights: Notwithstanding anything herein to the
contrary, Licensee acknowledges that NBC may itself use, or authorize others to
use the Property and Trademarks on products sold through one or more of the
following channels: (i) televised home shopping; (ii) online shopping; (iii)
retail stores operated by NBC or its affiliates and (v) NBC's own Internet web
sites and web sites affiliated with the creator of the Property.
6. Term: The Basic Term of this Agreement and the license granted
hereunder shall commence on April 1, 2003 and shall continue until April 1,
2008, subject to the provisions hereof.
"Term" means the Basic Term and any and oil Term Extensions or
Renewals.
7. Advance, Royalties and Guarantee.
(a) Advance:
(i) Licensee shall pay NBC a non-refundable Advance
("Advance") in the amount of One Hundred Thousand Dollars ($100,000.00)
due upon signature of this Agreement.
(ii) Unless specified otherwise herein, Advances shall be paid
on or before the first day of the applicable period of the Term.
(iii) The Advance shall be recoupable by Licensee out of NBC's
share of Royalties payable pursuant to Subparagraph (b).
(b) Royalty: Licensee shall pay NBC a royalty ("Royalty") of Eight
(8%) Percent of Gross Receipts on all Products sold less all third-party game
platform manufacturing costs and royalties. Gross Receipts' shall mean the
actual amount received by Licensee from the sale, lease or license of the
Products
(c) Guarantee:
(i) During the Basic Term, Licensee hereby guarantees that the
Royalty earned for all Products sold shall be no less than One
($150,000.00) Hundred and Fifty Thousand Dollars ("Guarantee"). Royalty
payments shall be credited against the Guarantee; provided, however, that
amounts paid in excess of the Guarantee shall not be credited toward any
renewal term, if NBC grants a renewal term.
(ii) If the Royalties paid to NBC during the Basic Term or any
Term Extension shall be less that the agreed upon Guarantee for such
period, the balance shall be payable In full on the last day at the
applicable period.
(d) Payments, Statements, Approvals and Notices:
(i) All payments and statements shall be made on a Quarterly
basis in accordance with the terms set forth in Paragraph 3(a) and (b) of
the Standard Terms and Conditions. All monies payable to NBC hereunder
shall be paid to and in the name of NBC and all statements shall be sent
to us at: NBC Enterprises, Inc. 3400 West Olive Avenue, 6th Floor,
Burbank, California 91505, Attention: Lawnie Grant. Additionally, a copy
of all statements shall be sent to our licensing agent Joy Tashjian
Marketing Group LLC. ("JT"), 4 Juliana Court, Moraga, California 94558.
Attention: Joy Tashjian. All Payments and statements shall reference the
Contract Number set forth In the Footer, below.
(ii) Submissions for Approval: All submissions for approval as
required by Paragraph 5 of the Standard Terms and Conditions (unless
expressly directed otherwise in this agreement), shall be sent to:
Mainframe Entertainment, 2025 West Broadway Suite 500, Vancouver, BC,
Canada V6J 1Z6, Attention: Helen Chapman. Approval for submissions must be
given within 10 days from the date of the submission.
(iii) Notices: All legal notices or other communications to
either party required by Paragraph 19 of the Standard Terms and Conditions
shall be in writing and shall be sent by mail (return receipt requested)
all charges prepaid, or by telex, cable, fax with proof of delivery, or
personal delivery to the address first stated above for Licensee to the
attention of the President, and in the case of NBC to the parties stated
below:
NBC Enterprises, Inc.
3400 West Olive Avenue
8th Floor
Burbank, California 91505
Attention: Lawnie Grant -Director, Business Affairs
And
Joy Tashjian Marketing Group LLC.
4 Juliana Court
Moraga, California 94556
Attention: Joy Tashjian
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8. Currency: All payments to be made to NBC hereunder shall be payable in
U.S. currency.
9. Marketing Deadline: First Quarter 2005. Licensee shall commence
shipping substantial quantities by this date.
10. Advertising, Marketing, Requirements: Not Applicable
11. Copyright/Trademark Notice: Until such time as NBC otherwise notifies
Licensee, the notice shall be in the following form:
(C)(year) National Broadcasting Company. Inc.
under license from Endemol USA, Inc.
also, if Fear Factor is printed on the products in conjunction with the designs
then the following notice shall apply:
TM &(C)(year) National Broadcasting Company, Inc. NBC, Inc.
under license from Endemol, USA, Inc.
12. Samples: Licensee shall provide NBC with the following quantities of
Product ("Samples"):
Twenty-four (24)
13. Renewal Term: Automatic one (1) year renewal if Licensor earns more
than the Minimum Guarantee, unless a notice of termination is provided ninety
(90) days before the end of current Term by either party.
14. Special Provisions: This license excludes the usage of all celebrity
appearances on "Fear Factor" and the usage of the host Joe Rogan. Pursuant to
Section 16(c) of the Standard Terms and Conditions, NBC hereby consents to ARUSH
Entertainment, with an address of 13951 N. Scottsdale Road, Suite 233,
Scottsdale, AZ 85254 ("ARUSH") being a sublicensee of the rights granted
hereunder to develop, have developed, publish, distribute and sell the Products
hereunder. NBC agrees that in the event of any breach of this Agreement by
Licensee, this sublicense shall survive; provided ARUSH agrees to perform the
obligations of Licensee hereunder. ARUSH shall be a third party beneficiary of
this provision.
15. Standard Terms and Conditions: The Standard Terms and Conditions
annexed hereto constitute part of this Agreement and are hereby incorporated by
reference. To the extent that there is any inconsistency between these Basic
Provisions and the Standard Terms and Conditions, the Basic Provisions shall
govern.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Playinteractive, LLP. Joy Tashjian Marketing Group, LLC.
By: /s/ Lawrence E. Meyers By: /s/ Joy Tashjian
--------------------------------- --------------------------------
Name: Lawrence E. Meyers Name: Joy Tashjian
Title: General Partner Title: President
NBC Enterprises, Inc.
By: /s/ Lawnlia Grant
---------------------------------
Name: Lawnlia Grant
Title: Director, Business Affairs
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