MANUFACTURING & DISTRIBUTION AGREEMENT
THIS MANUFACTURING & DISTRIBUTION AGREEMENT ("Agreement") is made
effective July 1, 1997, by and between LYONS PARTNERSHIP, L.P. ("Lyons"), and
KIDEO PRODUCTIONS, INC. ("Kideo").
WHEREAS, Kideo manufactures and distributes certain videos which are
"personalized" by incorporating therein a child's image, spoken name and the
like, and Kideo desires to obtain a license to manufacture and distribute such
personalized videos which also incorporate the Barney(R) character and related
characters, as more particularly described in Exhibit A, attached hereto and
incorporated herein by reference (the "Videos"); and
WHEREAS, Lyons desires to grant such license to Kideo on the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual
promises and covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. TERM. The term of this Agreement shall commence on the date first
set forth above and, unless earlier terminated pursuant to its provisions, shall
continue through the date five (5) years thereafter (the "Term").
2. TERRITORY. The rights granted to Lyons hereunder shall be only
for the United States, and its territories, possessions and military bases
worldwide, and Canada (collectively, the "Territory").
3. LICENSE. On the terms and conditions set forth in this Agreement,
Lyons hereby grants to Kideo and Kideo hereby accepts the exclusive license to
manufacture (in the NTSC format only) and distribute the Videos set forth on
Exhibit A for ultimate sale to the public, through all channels of distribution,
only in the Territory. Within sixty (60) days following the one-year anniversary
of Kideo's first release of the Videos, the parties shall negotiate in good
faith regarding the potential grant of a license by Lyons to Kideo for
additional tides for videos to be manufactured and distributed hereunder. On
reaching agreement on each additional title, if any, an exhibit substantially in
the form of Exhibit A shall be signed by the parties and attached hereto, and
shall thereupon be deemed to be fully incorporated herein by reference, and all
references herein to "Videos" shall thereafter be deemed to include that
additional title.
Manufacturing and Distribution Agreement
Between Lyons Partnership, L.P. and Kideo Productions, Inc.
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4. MANUFACTURING.
(a) Delivery of Final Master. Lyons shall deliver to Kideo, on
such date as mutually agreed by the parties, the final master of each basic
title to be used for the manufacture of the Videos (each, a "Final Master").
Kideo shall bear all costs related to Lyons' production of each Final Master.
Lyons shall provide to Kideo, for Kideo's approval, a production budget for each
Final Master, which approval shall not be unreasonably delayed or withheld.
(b) Manufacture of Videos. Kideo shall manufacture and/or
arrange for manufacture of the Videos by those vendors regularly used by Kideo,
at Kideo's sole cost. In the event any such vendor is not a wholly-owned
subsidiary of Kideo, Kideo shall, before authorizing such manufacture and before
placing any orders with the proposed manufacturer, obtain Lyons' approval. Kideo
shall then have the proposed manufacturer sign, in duplicate original, an
agreement in the form of Exhibit B attached hereto ("Manufacturer's Agreement").
Kideo shall deliver the original copies of the Manufacturer's Agreement signed
by Kideo and the proposed manufacturer to Lyons, and Kideo shall obtain Lyons'
signature on the Manufacturer's Agreement before the manufacture of the Videos
by the proposed manufacturer. Kideo shall arrange for all invoices for the
manufacturing of the Videos to be sent directly to Kideo.
5. MARKETING.
(a) Marketing Plan. Kideo shall provide to Lyons. for Lyons'
reasonable approval, a plan for the marketing and distribution of the Videos
(the "Marketing Plan"). Kideo shall not proceed with implementation of the
Marketing Plan without the prior approval of Lyons, which shall not be
unreasonably withheld. Lyons shall make good faith efforts to promptly respond
to Kideo's submitted Marketing Plan (or any portion thereof); provided that,
failure of Lyons to inform Kideo whether Lyons approves the Marketing Plan
within thirty (30) days following receipt thereof shall constitute Lyons'
disapproval.
(b) Implementation of Marketing Plan. On approval of the
Marketing Plan and subject to the provisions of Paragraphs 10, 11 and 12 hereof,
Kideo shall arrange for the design and production of packaging and marketing and
promotional materials by those vendors regularly used in connection with Kideo's
products, and the placement of any agreed on advertising of the Videos.
(c) Lyons' Marketing Services. Lyons shall make good faith
efforts to make its marketing resources available to Kideo for assistance in
Kideo's marketing of the Videos, including, but not limited to, inserting
printed material regarding the Videos in the packaging for a minimum of four (4)
new Lyons releases over a two-year period. Lyons shall also consider, in good
faith, whether a Barney-appropriate
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"trailer" to educate consumers regarding the availability and features of the
Videos might be developed and included on select Barney home video titles.
(d) Premiums, promotions and giveaways. No Videos may be used
as premiums, as part of promotions, or as giveaways without the prior written
approval of Lyons. A detailed description of any such planned promotional or
premium use of Videos, including, but not limited to, information about the
quantity of merchandise involved and the purpose of the program, must be
provided to Lyons. Failure to obtain prior written approval shall result in the
obligation of Kideo to pay full royalties on all Videos given away, or used as
premiums or in promotions.
(e) Marketing Costs. Kideo shall bear all marketing,
promotional and advertising costs related to the Videos and shall arrange for
all invoices therefor to be sent directly to Kideo.
6. DISTRIBUTION
(a) Kideo Services. Kideo shall use its reasonable efforts to
diligently and continuously manufacture, promote, market, sell and distribute
(collectively, "Distribute") the Videos in commercially reasonable quantities
throughout the Territory, beginning not later than the distribution date agreed
upon by the parties and set forth on the pertinent exhibit hereto. Kideo shall
Distribute the Videos in accordance with its customary policies and practices
applicable to similar products, substantially in accordance with the Marketing
Plan and subject to those approvals of Lyons as required herein.
(b) Fulfillment. Kideo shall maintain a number of staff and a
quantity and quality of equipment sufficient to allow prompt fulfillment of
reasonably anticipated orders.
(c) Distribution Costs. Kideo shall bear all distribution
costs related to the Videos and shall arrange for all invoices therefor to be
sent directly to Kideo.
7. ROYALTIES.
(a) Calculation of Royalties. Kideo shall pay to Lyons as
royalties (the "Royalties"):
(i) On each Video sold at Kideo's usual full direct
price ("Direct Price"), a sum equal to the following
percentage of the Direct Price ("Direct Royalty"):
On the first 15,000 units of a given Video title- 7.5%;
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On units 15,001 through 50,000 of a given Video title
- 10%;
On units 50,001 through 100,000 of a given Video title -
12.5%; and
On all units in excess of 100,000 of a given Video title
- 15%.
(ii) On each Video sold to a retailer, cataloger, or
similar party at less than the Direct Price ("Retailer
Price"), an amount equal to the Direct Royalty which would
otherwise be payable, multiplied by the percentage obtained by
dividing the Retailer Price by the Direct Price.
In no event shall the Royalties paid be less than the Minimum Royalty, as
defined below. No costs incurred in the manufacture, sale, distribution,
advertisement, or exploitation of the Videos shall be deducted from any
Royalties payable to Lyons by Kideo. No deductions shall be made for
uncollectible accounts. Except as expressly provided in this Agreement, no costs
whatsoever shall be deducted for purposes of calculating the Royalties.
(b) Minimum Royalty Defined. "Minimum Royalty" shall mean the
sum of $1.25 for each Video sold, regardless of whether sold at Direct Price or
Retailer Price.
(c) Accrual. Royalties shall accrue upon the sale of the
Videos regardless of the time of collection by Kideo. For purposes of this
Agreement, the Videos shall be considered "sold" on the date when such Videos
are billed, invoiced, shipped or paid for, whichever event occurs first.
8. REPORTING AND PAYMENT
(a) Payments. Kideo shall pay to Lyons on a quarterly basis,
within 45 days following the end of each calendar quarter, the Royalties due to
Lyons for such period. Neither the expiration nor the termination of this
Agreement shall relieve Kideo from its obligation to pay the Royalties due to
Lyons as provided in this Paragraph.
(b) Statement. At the time of payment of Royalties, Kideo
shall also furnish Lyons a statement of the number of each of the Videos sold
during the immediately preceding period, the number sold at Direct Price, the
number sold at Retailer Price and such other information as Lyons may reasonably
require. Such statements shall be certified as true and correct by a duly
authorized officer of Kideo. Any inconsistencies or mistakes in such statements
or payments later discovered shall
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immediately be rectified and the appropriate payments made to Kideo or Lyons, as
the case may be.
(c) Address for Payment. The statements and payments required
pursuant to this Paragraph 8 shall be delivered to:
Lyons Partnership, L.P.
ATTN:__________
2435 N. Central Expressway, Suite 1600
Richardson, Texas 75080
9. OWNERSHIP OF PROPRIETARY MATERIALS AND TECHNOLOGY.
(a) Lyons' Ownership. As between Lyons and Kideo, Lyons'
ownership rights shall be as follows:
(i) The Barney, BJ(R) and Baby Bop(TM) dinosaur
characters and related characters that have been or may, in
the future, be developed by Lyons and all related materials
and rights, including, without limitation, all copyrights,
trademarks and other proprietary rights therein are owned
exclusively by Lyons (collectively, the "Proprietary
Materials").
(ii) The Final Master, as delivered by Lyons to Kideo,
shall be owned exclusively by Lyons.
(iii) As incorporated into the Videos, the Proprietary
Materials shall be owned exclusively by Lyons.
(b) Kideo's Ownership. As between Lyons and Kideo, and subject
to Lyons' ownership as set forth in subparagraph (a) above, Kideo shall own all
proprietary rights in and to the technology used in "personalizing" the Videos
with various children's images and spoken names.
(c) Image and Reputation. Neither party shall dispute the
other's ownership rights, as between them, as set forth above. Neither party
shall do or cause to be done anything that might adversely affect the image or
reputation of the other party or such other party's products, characters, or
proprietary materials. Kideo shall manufacture, sell, promote and distribute the
Videos in an ethical manner and in accordance with the terms and intent of this
Agreement.
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10. APPROVALS AND QUALITY.
(a) General. All Videos or other materials utilizing any of
the Proprietary Materials shall be manufactured, sold, distributed, and promoted
subject to Section 5 hereof.
(b) Product Submissions and Approvals. Prior to the release of
each title of the Videos to the market, Kideo shall deliver to Lyons one (1)
copy of each such Video, together with the packaging and promotional materials
for the Video, for the review and approval of Lyons, which approval shall not be
unreasonably delayed or withheld. In addition, Kideo shall deliver to Lyons five
(5) copies of each title of the Videos, together with their packaging, at no
cost to Lyons.
(c) Advertising Submissions and Approvals. Kideo may, subject
to Lyons' prior approval, use textual and pictorial matter pertaining to and
including the Proprietary Materials on such promotional, display and advertising
material as may, in Kideo's reasonable judgment, promote the sale of the Videos.
(d) Damaged, Defective, Non-Approved or Non-Complying Items.
Kideo shall not knowingly, nor shall it knowingly permit any third party to,
sell, market, distribute or use, for any purpose whatsoever, any Videos or
promotional and packaging material relating to the Videos which are damaged,
defective, seconds or otherwise substandard, or fail to meet Lyons' trademark
and copyright usage and notice requirements.
11. ARTWORK, COPYRIGHT AND TRADEMARK NOTICES AND PROTECTION.
(a) Ownership of Artwork. Lyons shall own all copyrights,
trademarks and other proprietary rights in the Proprietary Materials and any and
all artwork and designs authorized for use hereunder by Kideo in connection with
Distribution of the Videos which incorporates or otherwise includes any of the
Proprietary Materials (the "Artwork"). Kideo agrees and acknowledges that any
Artwork shall be a "work-made-for-hire" within the meaning of the United States
Copyright Act and shall be owned in its entirety exclusively by Lyons. Lyons
reserves for itself or its designees all rights to use any and all Artwork,
without limitation. To the extent any Artwork created by Kideo or any other
person or entity is not deemed to be a work-made-for-hire, Kideo hereby assigns
to Lyons all copyrights, trademarks and other proprietary rights in such
Artwork. Kideo agrees to execute or cause to be executed by any of its employees
who participate in the creating of any such Artwork any additional documents
proposed by Lyons to effectuate and confirm Lyons' sole and exclusive ownership
of all copyrights, trademarks and other proprietary rights in and to such
Artwork. Kideo warrants and represents that all contributions to the creation of
Artwork shall be undertaken as works-made-for-hire for or on behalf of Lyons. If
any third party makes or
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has made any contribution to the creation of the Artwork, Kideo shall, prior to
any use of such Artwork, obtain from such party a full assignment of rights such
that the foregoing assignment by Kideo shall vest full rights in Lyons.
(b) Notices. Kideo shall cause appropriate copyright and
trademark notices or other indicia of Lyons' ownership to be imprinted on each
of the Videos and all advertising, promotional, packaging and wrapping material
which includes any of the Proprietary Materials. Matters relating to Lyons'
trademarks, copyrights, and other notice elements, UPC symbols, cover layout and
packaging elements shall be determined by Lyons, in its sole discretion.
(c) Protection. Kideo shall assist Lyons in the procurement,
protection, and maintenance of Lyons' rights in and to the Proprietary
Materials, including, but not limited to, cooperating in the preparation and
filing and renewal of registered user applications, as necessary, in the
Territory. Lyons may, in its sole discretion, commence or prosecute and effect
the disposition of any claims or suits relative to the imitation, infringement
or unauthorized use of the Proprietary Materials either in its own name or in
the name of Kideo, or join Kideo as a party in the prosecution of such claims or
suits. Kideo agrees to cooperate fully with Lyons in connection with any such
claims or suits and undertakes to furnish full assistance to Kideo in the
conduct of all proceedings in regard thereto, provided that, Lyons shall be
solely responsible for all costs incurred in such regard. Kideo shall promptly
notify Lyons in writing of any infringements or imitations or unauthorized uses
by others of the Proprietary Materials of which Kideo becomes aware. Kideo shall
not, without the prior written consent of Lyons, institute any suit or take any
action on account of such infringements, imitations or unauthorized uses.
(d) Registration. In addition to those samples required to be
delivered to Lyons pursuant to Paragraph 10(b), Kideo agrees to deliver to
Lyons, as soon as available and free of cost, that number of the Videos,
together with their packaging, wrapping material, sales information and similar
material, as required for trademark or copyright registration purposes. Any
copyrights or trademarks with respect to the Videos shall be procured by and for
the benefit of Lyons and at Lyons' expense. Kideo further agrees to promptly
provide Lyons with the date of the first use in commerce of the Videos and any
other information required to effect such registrations.
12. COMPLIANCE WITH GOVERNMENT AND INDUSTRY STANDARDS. Kideo
represents and warrants that it will at all times comply with all federal, state
and local laws, regulations, rules and guidelines, and all voluntary industry
standards relating or pertaining to the design, manufacture, sale, advertising,
distribution or use of the Videos. Kideo shall comply with any regulatory
agencies which shall have jurisdiction over the Videos and shall procure and
maintain in force any and all permissions, certifications and other
authorizations from governmental and other official authorities that may be
required in relation thereto.
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Between Lyons Partnership, L.P. and Kideo Productions, Inc.
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13. BOOKS AND RECORDS.
(a) Maintenance, Inspection and Audit. Kideo shall keep,
maintain and preserve, at Kideo's principal place of business, during the Term
and for at least three (3) years thereafter, complete and accurate records and
accounts covering all transactions relating to this Agreement. All such records
and accounts shall be maintained in accordance with generally accepted
accounting principles consistently applied. Such records and accounts shall be
available for inspection and audit, including the taking of extracts or copies
as Lyons deems necessary, at any time or times during reasonable business hours
and on reasonable notice by Lyons or its nominees, but not more than once during
each calendar year of the Term. Kideo agrees not to cause or permit any
interference with any such inspection and audit.
(b) Effect of Exercise of Audit Rights. The exercise by Lyons,
in whole or in part, at any time of the right to inspect and audit records and
accounts or any other right granted herein, shall be without prejudice to any
rights or remedies of Lyons and shall not preclude or prevent Lyons from
thereafter disputing the accuracy of any statement or payment
14. WARRANTIES AND REPRESENTATIONS. Kideo and Lyons each represents
and warrants to the other as follows:
(a) It has full power and authority to execute and deliver
this Agreement and to perform the transactions contemplated hereby;
(b) The making of this Agreement does not, and during the Term
will not, violate or conflict with any other agreements, rights or obligations
binding on or affecting it;
(c) This Agreement has been duly and properly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation enforceable in accordance with its terms; and
(d) There is not pending or, to its knowledge, threatened
against it any action, suit or proceeding at law or in equity or before any
court, tribunal, governmental body, agency, official or arbitrator that purports
to draw into question, or is likely to affect, the legality, validity or
enforceability of this Agreement or its ability to perform its obligations under
this Agreement.
15. LYONS' ADDITIONAL REPRESENTATIONS. Lyons represents and warrants
to Kideo that the Final Master, as delivered to Kideo, will not infringe on any
patent, trademark, copyright or other proprietary right(s) of any third
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party, and that the Final Master does not contain any material which is
defamatory or obscene.
16. KIDEO'S ADDITIONAL REPRESENTATIONS. Kideo represents and
warrants to Lyons that the "personalized" format of the Videos does not and will
not infringe on any patent, trademark, copyright or other proprietary right(s)
of any third party, and that neither the respective personalized elements of
each of the Videos nor any adaptations of or changes made to the Final Master by
Kideo will contain any material which is defamatory or obscene.
17. TERMINATION. The following rights are without prejudice to any
other rights which Lyons may have either pursuant to this Agreement, in law,
equity or otherwise.
(a) Lyons' Immediate Right of Termination. Lyons shall have
the right to immediately terminate this Agreement on written notice:
(i) If Kideo manufactures, sells, markets or distributes
any Videos containing or otherwise used in connection with the
Proprietary Materials or promotional or packaging material
relating thereto without Lyons' prior approval as provided for
by this Agreement or continues to manufacture, sell, market or
distribute any such Videos or promotional or packaging
material relating thereto after receipt of notice from Lyons
disapproving such items;
(ii) If Kideo fails to either (A) allow Lyons to inspect
Kideo's or its authorized manufacturers' facilities or (B)
obtain prior authorization by Lyons of any third party
manufacturers in accordance with Paragraph 4 of this
Agreement;
(iii) If Kideo breaches any provision of this Agreement
relating to the unauthorized assertion of rights in the
Proprietary Materials, including, without limitation, the
distribution or sale of the Videos or the use of any
promotional or packaging material which does not contain
appropriate trademark and/or copyright notices;
(iv) If Kideo fails to obtain or maintain product
liability insurance as required by this Agreement;
(v) If Kideo breaches any provision of this Agreement
prohibiting Kideo from directly or indirectly arranging for
the manufacture by third parties, assigning, transferring,
sublicensing,
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delegating or otherwise encumbering this Agreement or any of
its rights or obligations;
(vi) If Kideo fails to make timely payment of Royalties
or submissions of royalty statements when due two or more
times during any twelve-month period; or
(vii) If Kideo or any of its officers, directors,
employees, agents or affiliates takes any action in connection
with the manufacture, sale, distribution or advertising of the
Videos or the promotional and packaging materials which
damages or reflects adversely upon Lyons and/or the
Proprietary Materials.
(b) Right to Terminate on Notice. Without prejudice to any
other rights or remedies available to either party, either party may terminate
this Agreement in the event of a material breach hereof by the other, effective
on thirty (30) days' prior written notice; provided that, during such thirty
(30) day notice period, the party in breach fails to cure the breach to the
reasonable satisfaction of the non-breaching party.
18. EFFECT OF TERMINATION.
(a) Fulfillment of Pre-termination Orders. Neither Kideo or
Kideo's successors or permitted assigns shall have any right whatsoever after
the effective date of termination to manufacture, sell, ship, market, distribute
or otherwise use the Videos. However, Kideo shall complete the manufacture and
delivery of only such work-in-progress as is necessary to fill bonafide binding
orders accepted by Kideo prior to the termination of this Agreement.
(b) Return of Final Master. Within ten (10) business days
following the expiration or termination of this Agreement, Kideo shall (i) turn
over the Final Master to Lyons, and (ii) give evidence satisfactory to Lyons of
the destruction of all packaging materials. Lyons, at its election, shall have
the right to have its representatives observe such destruction.
(c) Reversion of Rights. From and after the expiration or
termination of this Agreement, all rights granted to Kideo under this Agreement
shall forthwith revert to Lyons, and Kideo shall refrain from any use of the
Proprietary Materials.
19. INDEMNITY.
(a) Each party assumes liability for, and shall indemnify,
defend, protect, save and hold the other harmless from and against, any and all
claims,
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actions, suits, costs, liabilities, judgments, obligations, losses, penalties,
damages and expenses (including reasonable legal fees and expenses) of
whatsoever kind or nature arising out of any breach or alleged breach by such
party of any of its warranties, representations, covenants or obligations made
pursuant to this Agreement.
(b) To seek or receive indemnification hereunder:
(i) The party seeking indemnification must have promptly
notified the other of any claim or litigation of which it is
aware to which the indemnification relates; and
(ii) The party seeking indemnification must have
afforded the other the opportunity to approve any compromise,
settlement, litigation, or other resolution or disposition of
such claim or litigation; provided that, if such other party
fails reasonably to approve any such compromise, settlement,
litigation or other resolution or disposition of such claim or
litigation, such other party shall be obligated to defend any
such claim or litigation for the benefit of the party seeking
indemnification; and
(iii) The party seeking indemnification must cooperate
fully with the other in connection with defending such claim.
20. INSURANCE. Kideo shall, at its own expense, obtain and maintain,
during the Term and any applicable Sell-off Period, and for three (3) years
thereafter, standard comprehensive general liability coverage for bodily injury,
property damage and personal injury, from a qualified insurance carrier
reasonably acceptable to Lyons. Said coverage shall include broad form
contractual and product liability insurance, and shall be no less than Three
Million United States Dollars ($3,000,000.00) per claim, and shall name Lyons as
an additional insured. Kideo shall, promptly upon the execution of this
Agreement, furnish Lyons a certificate of insurance stating thereon the limits
of liability, the period of coverage, the parties insured (including Lyons and
Kideo), and the insurer's agreement not to terminate or materially modify such
insurance without notifying Lyons, in writing, at least thirty (30) days before
such termination or modification. Coverage shall be on an occurrence basis. The
existence of the product liability insurance shall not mitigate, alter or waive
the indemnity provisions of Paragraph 19.
21. NOTICES. All notices, requests, demands and communications
required or permitted under this Agreement shall be in writing and shall be
deemed delivered at the time of delivery if personally delivered or transmitted
via facsimile with receipt confirmed, the next business day following deposit
with a reputable courier service for overnight delivery, or five business days
following deposit in the United States mail, addressed as follows:
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Between Lyons Partnership, L.P. and Kideo Productions, Inc.
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If to Lyons: With a copy to:
Lyons Partnership, L.P. Lyrick Studios
ATTN: Executive Vice President ATTN: Vice President,
Suite 1600 Legal and Business Affairs
2435 N. Central Expressway Suite 1600
Richardson, Texas 75080 2435 N. Central Expressway
Facsimile: (972) 390-6001 Richardson, Texas 75080
Facsimile: (972)390-6001
If to Kideo:
Kideo Productions, Inc.
ATTN: Richard Bulman
611 Broadway
New York, New York 10012
Facsimile: (212) 505-2142
Either party may from time to time change its address by written notice to the
other specifying a new address.
22. INDEPENDENT CONTRACTOR. Kideo is an independent contractor and
not an agent, partner, joint venturer, franchisee, affiliate or employee of
Lyons. No fiduciary or franchise relationship exists between the parties.
Neither party shall be liable for any debts, accounts, obligations or other
liabilities of the other, its agents or employees. Neither party shall have the
authority to obligate or bind the other party in any manner. Lyons has no
proprietary interest in Kideo and has no interest in the business of Kideo,
except to the extent set forth in this Agreement.
23. BINDING EFFECT. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
permitted assigns.
24. CONFIDENTIALITY. Each party may, during the Term of this
Agreement, have access to certain procedures, technical data, proprietary
information and trade secrets of the other party and its affiliates
(collectively, the "Confidential Information"). Neither party shall use,
disclose or otherwise permit any person or entity access to any of the
Confidential Information; provided that, it may disclose such portions of the
Confidential Information to its agents or employees who have a reasonable need
to know such information in connection with its performance hereunder. Each
party understands that it is not allowed to sell, license or otherwise exploit
any products or services which embody, in whole or in part, any Confidential
Information.
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25. GOVERNING LAW; JURISDICTION. THIS AGREEMENT AND THE LEGAL
RELATIONSHIP BETWEEN THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS. THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE TRIED AND LITIGATED IN THE DISTRICT COURTS OF THE
STATE OF TEXAS, LOCATED IN THE COUNTY OF DALLAS, STATE OF TEXAS OR, IF
JURISDICTIONALLY SUFFICIENT, THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS, AND EACH PARTY HERETO HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS THE PERSON OF SUCH PARTY TO THE JURISDICTION OF SUCH COURTS IN ANY SUCH
SUIT, ACTION OR PROCEEDING.
26. SEVERABILITY; HEADINGS. Each term and provision of this
Agreement constitutes a separate and distinct undertaking, covenant, term and
provision hereof. In the event that any term or provision of this Agreement
shall be determined to be unenforceable, invalid or illegal in any respect, such
unenforceability, invalidity or illegality shall not affect any other term or
provision of this Agreement, but this Agreement shall be construed as if such
unenforceable, invalid or illegal term or provision had never been contained
herein. If any term or provision of this Agreement shall for any reason be held
to be excessively broad as to time, duration, activity or subject, it shall be
construed, by limiting and reducing it, so as to be enforceable to the extent
permitted under applicable law as it shall then exist. Headings of paragraphs
herein are for convenience only and are without substantive significance.
27. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding among the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements, commitments, arrangements,
negotiations, understandings, undertakings, representations or warranties,
whether oral or written, with respect to the subject matter of this Agreement
other than those expressly set forth or referred to herein.
28. FORCE MAJEURE. Neither Lyons nor Kideo shall be liable for
failure to perform resulting, directly or indirectly, from or contributed to by
reason of fire, flood, epidemic, earthquake, explosion, accident, or other act
of God ("Force Majeure"), or by virtue of war, blockade, embargo, act of a
public enemy, civil disturbance, labor dispute (or threatened dispute), strike
lockout, inability to secure sufficient labor, essential commodities, necessary
equipment or adequate transportation facilities, applicable law, or any other
disruptive events beyond such party's reasonable control; provided that, if a
party's failure to perform continues for more than ninety (90) days, the other
party shall have the right, upon written notice, to terminate this Agreement.
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Between Lyons Partnership, L.P. and Kideo Productions, Inc.
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29. RIGHTS CUMULATIVE. Except as expressly provided in this
Agreement, and to the extent permitted by law, any remedies described in this
Agreement are cumulative and not alternative to any other available remedies.
30. AMENDMENT; WAIVER. Neither this Agreement, nor any of the terms
or provisions hereof, may be amended, modified, supplemented or waived, except
by a written instrument signed by the parties hereto (or, in the case of a
waiver, by the party granting such waiver). No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver. No failure of either party hereto to insist upon strict
compliance by the other party with any obligation, covenant, agreement or
condition contained in this Agreement shall operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Whenever this Agreement
requires or permits consent by or on behalf of any party hereto, such consent
shall be given in a manner consistent with the requirements for a waiver of
compliance as set forth in this Paragraph 30.
IN WITNESS WHEREOF, Kideo and Lyons have caused this Agreement to be
executed by their authorized representatives effective as of the date first set
forth above.
KIDEO PRODUCTION, INC. LYONS PARTNERSHIP, L.P.
/s/ Richard Bulman By: /s/ Timothy A. Clott
- -------------------------- ------------------------------
Richard Bulman Timothy A. Clott
Chief Executive Officer Executive Vice President
Manufacturing and Distribution Agreement
Between Lyons Partnership, L.P. and Kideo Productions, Inc.
Page 14 of 14
EXHIBIT B
MANUFACTURER'S AGREEMENT
THIS MANUFACTURER'S AGREEMENT is made pursuant to the Manufacturing &
Distribution Agreement ("Agreement") between LYONS PARTNERSHIP, L.P. ("Lyons")
and the undersigned KIDEO PRODUCTIONS, INC. ("Kideo"), a copy of which is
attached hereto and made a part hereof.
________________________________ (full name) at ________________ (principal
address) ("Manufacturer") desires to manufacture and sell to Kideo the following
Videos bearing certain of Lyons' Proprietary Materials: _______________________
(the "Videos"). Such Videos shall be manufactured only at (full address):
___________________________________. In consideration of Lyons' approval of the
manufacture by Manufacturer of the Videos utilizing the Proprietary Materials
listed in Paragraph 9 of the Agreement at the locations listed above, the
parties agree as set forth below.
1. Manufacturer acknowledges the validity of and Lyons' sole title to the
Proprietary Materials. Manufacturer agrees that its right to manufacture the
Videos utilizing the Proprietary Materials is in all respects subject to the
terms and conditions in the Agreement, including, but not limited to, the
termination provisions and restrictions on the use of the Proprietary Materials.
Manufacturer agrees that the provisions of the Agreement shall take precedence
over and supersede any agreements between Kideo and Manufacturer.
2. Manufacturer and Kideo acknowledge that Manufacturer's manufacture of
any Videos is subject to Lyons' prior written approval, and may not proceed
prior to Lyons' execution of this Agreement.
3. Manufacturer will (a) not manufacture the Videos to the order of anyone
other than Kideo; (b) invoice only Kideo; (c) not ship to anyone other than
Kideo; and (d) not manufacture after the expiration, or (if applicable) the
earlier termination of the Agreement. Manufacturer agrees that its manufacture
of Videos shall give Manufacturer no right to use the Proprietary Materials in
any manner whatsoever or to sell Videos utilizing the Proprietary Materials
except as specifically provided in this Agreement and/or beyond the expiration
or (if applicable) the earlier termination of the Agreement.
4. Manufacturer will not subcontract manufacture of any of the Videos or
any component thereof utilizing the Proprietary Materials.
5. Manufacturer will not manufacture any merchandise or other materials
whatsoever utilizing the Proprietary Materials, other than the Videos.
Exhibit B to Manufacturing and Distribution Agreement
Between Lyons Partnership, L.P. and Kideo Productions, Inc.
Page 1 of 3
EXHIBIT A
PROGRAMS
Personalized videos manufactured from the Final Master of the base title -- "My
Birthday With Barney"
Agreed Distribution Date: ______________________
Exhibit A to Manufacturing and Distribution Agreement
Between Lyons Partnership, L.P. and Kideo Productions, Inc.
Page 1 of 1
6. Without in any way limiting the terms and provisions of the Agreement,
Manufacturer shall:
(a) use only materials certified by the United States and/or
applicable state or other municipal agencies as acceptable for importing into
and distribution and use within and throughout the United States;
(b) use only materials and processes which meet or exceed any and
all applicable safety, quality, performance and flammability requirements of the
United States, each state of the United States and industry standards and
guidelines; and
(c) perform all inspections and testing necessary to ensure that all
Videos manufactured and sold pursuant to this Agreement meet or exceed all of
the foregoing requirements, standards and guidelines.
7. Manufacturer will permit Kideo and/or Lyons' authorized representatives
at any time to inspect Manufacturers activities, premises, accounting books and
invoices relevant to Manufacturers manufacture and supply of the Videos.
8. Manufacturer will keep confidential its manufacture of the Videos,
including, without limitation, Manufacturer will not publish or cause the
publication of pictures or other representations of any of the Videos and/or the
Proprietary Materials in any publication or promotional material, nor advertise
that Manufacturer is permitted to manufacture the Videos.
9. Upon notification of the expiration or termination of the Agreement,
Manufacturer will immediately cease manufacturing the Videos and immediately
destroy any and all copies, molds, plates, engravings and/or other devices used
to manufacture the Videos or any component thereof and/or reproduce the
Proprietary Materials, as well as any Videos or any component thereof remaining
in Manufacturer's possession, and deliver to Lyons a written certificate of
destruction signed by an officer or principal of Manufacturer.
10. Nothing herein will be construed so as to make Manufacturer a party to
or third party beneficiary of the Agreement and Manufacturer will look solely to
Kideo for payment and/or other compensation in respect of the manufacture of the
Videos. It is specifically acknowledged that this Agreement is not and shall not
constitute a license from Lyons to Manufacturer, and Manufacturer shall derive
no rights hereunder to manufacture any products whatsoever utilizing the
Proprietary Materials or any of Lyons' proprietary rights except as expressly
provided pursuant to this Agreement. Manufacturer will have no claim against and
hereby releases Lyons in respect of any such payment and/or any Videos and/or
the Agreement Furthermore, if Kideo's rights to use the Proprietary Materials
expire or terminate, Manufacturer agrees to make no claim against Lyons for any
reason whatsoever.
Exhibit B to Manufacturing and Distribution Agreement
Between Lyons Partnership, L.P. and Kideo Productions, Inc.
Page 2 of 3
11. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF. THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE TRIED AND LITIGATED ONLY IN THE DISTRICT COURT OF
THE STATE OF TEXAS LOCATED IN THE COUNTY OF DALLAS, STATE OF TEXAS, OR IF
JURISDICTIONALLY SUFFICIENT, THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS, AND EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS THE
PERSON OF SUCH PARTY TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH
SUIT, ACTION OR PROCEEDING. MANUFACTURER IRREVOCABLY APPOINTS__________________
(THE "PROCESS AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT _______________, AS
ITS AGENT UPON WHOM PROCESS AGAINST IT MAY BE SERVED.
-----------------------------------
LYONS PARTNERSHIP, L.P. MANUFACTURER
By Rhenclid, Inc., Its General Partner
By: By:
-------------------------------- --------------------------------
Timothy A. Clott Printed Name:
Executive Vice President ----------------------
Title:
-----------------------------
Date: Date:
------------------------------ ------------------------------
KIDEO PRODUCTIONS, INC.
By:
--------------------------------
Printed Name:
----------------------
Date:
------------------------------
Exhibit B to Manufacturing and Distribution Agreement
Between Lyons Partnership, L.P. and Kideo Productions, Inc.
Page 3 of 3