Exhibit 10.2
VICTOR EBNER ENTERPRISES S.A.
LICENSE AGREEMENT
Pursuant to the terms, conditions and definitions set out on the subsequent
pages of this Agreement (the "Agreement"), VICTOR EBNER ENTERPRISES, S.A.
(hereinafter "Licensor"), a Swiss Corporation, agrees as of the Effective Date
to perform the Personal Services and license the Intellectual Property in
conjunction with Licensed Products for and to Victor Ebner Enterprises, Inc.
(hereinafter "Licensee"), a New York Corporation. The following capitalized
definitions are used in the Agreement and will have the following meaning(s)
when used:
"Personal Services" : See Schedule A which is
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incorporated herein by reference.
"Marks" : See Schedule B which is
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incorporated herein by reference.
"Licensed Products" : See Schedule C which is
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incorporated herein by reference.
"Territory(ies)" : See Schedule D which is
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incorporated herein by reference.
"Term" : See Schedule E which is
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incorporated herein by reference.
"Royalties" : See Schedule F which is
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incorporated herein by reference.
"Intellectual Property" : See Schedule G which is
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incorporated herein by reference.
"Manufacturers" : See Schedule H which is
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incorporated herein by reference.
"Effective Date" : February 1, 2001
Licensor agrees to perform the Personal Services and license the Intellectual
Property in conjunction with Licensed Products and the Licensee accepts an
exclusive license of the Licensed Intellectual Property in conjunction with the
Licensed Products on the terms and conditions set out on the subsequent pages of
this Agreement.
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Duly authorized for and on behalf of Duly authorized for and on behalf of
VICTOR EBNER ENTERPRISES S.A. VICTOR EBNER ENTERPRISES, INC.
Signature:___________________________ Signature:___________________________
Printed Name:________________________ Printed Name:________________________
Title:_______________________________ Title:_______________________________
Date:________________________________ Date:________________________________
LICENSOR NOTICE ADDRESS: LICENSOR NOTICE ADDRESS:
____________________________________ ___________________________________
____________________________________ ___________________________________
____________________________________ ___________________________________
Either party may change its address to which copies are to be directed for the
purpose of this Agreement by notice of such changes to the other party in
accordance with the provisions set forth and incorporated in this Agreement.
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1. GRANT OF LICENSE: Licensor grants to Licensee for the Term of this
Agreement, subject to the terms and conditions hereinafter contained, the
exclusive license to the Personal Services of Licensor as described in Schedule
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A attached hereto; the Intellectual Property described in Schedule B attached
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hereto, to be used solely in connection with the manufacture, distribution,
promotion, advertisement and sale of the "Licensed Products" specified in
Schedule C attached hereto.
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2. TERRITORY: Licensee shall be entitled to use the license granted
hereunder only in the Licensed Territory described in Schedule D attached
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hereto. Licensee will not make use of or authorize any use of this license or
the Licensed Products outside the Licensed Territory manufacture, distribute or
sell the Licensed Products directly or through others to retailers outside the
Licensed Territory.
3. PERSONAL SERVICES: For the Term of the Agreement described in
Schedule E attached hereto, Licensor agrees to provide to Licensee the Personal
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Services of Licensor as provided for in Schedule A attached hereto.
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4. PAYMENT: PERCENTAGE COMPENSATION: Licensee agrees to pay
Licensor a sum equal to the percentage specified in Schedule F (or Licensor's
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prevailing rate, if greater) of all net sales (as defined below) by Licensee or
any of its affiliated, associated or subsidiary entities of the Licensed
Products covered by this Agreement. (Such percentage of net sales is herein
called "Percentage Compensation.") Percentage Compensation shall be payable
concurrently with the periodic statements required in the following paragraph,
except to the extent offset by Guaranteed Compensation theretofore remitted.
The term "net sales" shall mean gross sales based on the wholesale price to the
retail trade less quantity discounts and actual returns, but no deduction shall
be made for uncollectible accounts, commissions, taxes, discounts other than
quantity discounts, such as cash discounts and discounts attributable to the
issuance of a letter of credit, or any other amount. No costs incurred in the
manufacture, sale, distribution, promotion or advertisement of the Licensed
Products shall be deducted from any Percentage Compensation payable by Licensee.
Said Percentage Compensation shall also be paid by Licensee to Licensor on all
Licensed Products (including, without limitation, any irregulars, seconds, etc.
distributed pursuant to the provisions of Paragraph 4 of this Agreement)
distributed by Licensee or any of its affiliated, associated or subsidiary
entities, even if not billed or billed at less than usual net sales price for
such Licensed Products, and shall be based upon the usual net sales price for
such Licensed Products sold to the trade by Licensee. Any late payments of
Advance Compensation, Guaranteed Compensation or Percentage Compensation shall
require Licensee to pay Licensor, in addition to the amounts due, interest at
one percent (1%) per month or the highest prime lending rate published in the
Wall Street Journal during the period such amounts are delinquent, whichever is
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greater, on the amounts delinquent for the period of the delinquency, without
prejudice to any other rights of Licensor in connection therewith.
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5. PERIODIC STATEMENTS: Within thirty (30) days after the first day of
the Term, and promptly on the 15th day of every calendar month thereafter,
Licensee shall furnish to Licensor complete and accurate statements, certified
to be accurate by an officer of Licensee, showing the sales volume of the
Licensed Products, gross sales price, itemized deductions from gross sales
price, and net sales price of the Licensed Products distributed and/or sold by
Licensee during the preceding calendar month, together with any returns made
during the preceding calendar month. Such statements shall be furnished to
Licensor whether or not any of the Licensed Products have been sold, or any
payment is shown to be due Licensor, during the calendar months in which such
statements are due. Licensee shall furnish to Licensor sufficient background
information so as to make such statements intelligible to Licensor, and on an
annual basis, a complete list of Licensee's customers to whom Licensed Products
have been sold. Licensor agrees that it will not divulge said customer list to
any other licensee, to any other competitor licensing organization, or to any
competitor of Licensee. Receipt or acceptance by Licensor of any of the
statements furnished pursuant to this Agreement or of any sums paid hereunder
shall not preclude Licensor from questioning the correctness thereof at any
time, and in the event that any inconsistencies or mistakes are discovered in
such statements or payments, they shall immediately be rectified and the
appropriate payments made by Licensee. Late payment penalties, if any, shall be
made pursuant to Paragraph 4. Upon demand of Licensor, Licensee shall at its
own expense, but not more than once in any twelve (12) month period, furnish to
Licensor a detailed statement certified by an independent certified public
accounting firm approved by Licensor showing the sales volume of each Licensed
Products, gross sales price, itemized deductions from gross sales price and net
sales price of the Licensed Products covered by this Agreement distributed
and/or sold by Licensee to the date of the Licensor's demand. All amounts
payable pursuant to this Agreement shall be in U.S. dollars only.
6. BOOKS AND RECORDS:
A. RIGHT TO INSPECT: Licensee shall keep, maintain and preserve in its
principal place of business for at least two (2) years following termination or
expiration of this Agreement or any renewal thereof, complete and accurate
records and accounts covering all transactions relating to this Agreement and
pertaining to the various items required to be shown on the statements to be
submitted by Licensee, including, without limitation, invoices, correspondence
and banking, financial and other records in Licensee's possession or under its
control. Such records and accounts shall be available for inspection and audit
(and copying at Licensor's expense) at any time or times during or after the
term or terms of this Agreement during reasonable business hours and upon
reasonable notice by Licensor or its representatives. Licensee agrees not to
cause or permit any interference with Licensor or representatives of Licensor in
the performance of their duties of inspection and audit.
B. NO WAIVER: The exercise by Licensor, in whole or in part or at any
time or times, of the right to audit records and accounts or of any other right
herein granted, the acceptance by Licensor of any statement or statements or the
receipt and deposit by Licensor of any payment tendered by or on behalf of
Licensee shall be without prejudice to any rights or remedies of Licensor and
shall not stop or prevent Licensor from thereafter disputing the accuracy of any
such statement or payment.
C. REMEDIES FOR DISCREPANCIES: If pursuant to its right hereunder to
audit and inspect Licensor causes an audit and inspection to be instituted which
thereafter discloses a deficiency of three percent (3%) or more between the
amount found to be due to Licensor and the amount actually paid or credited to
Licensor, then Licensee shall be responsible for payment of the entire
deficiency, together with interest thereon at the then current prime rate as
published in the Wall Street Journal from the date such amount became due until
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the date of payment, and the costs and expenses of such audit and inspection.
If the audit discloses a deficiency of less than three percent (3%) between the
amount found to be due to Licensor and the amount actually paid or credited to
Licensor, and if the amount actually paid or credited to Licensor plus the
deficiency exceeds the Guaranteed Compensation for the period covered by the
deficiency, then Licensee shall pay Licensor the amount of the deficiency plus
interest as calculated above.
7. INDEMNIFICATIONS AND PROTECTIONS:
A. Licensor hereby agrees to indemnify, defend and hold Licensee and
its owners, shareholders, directors, officers, employees, agents,
representatives, successors and assigns harmless from any claims, suits, damages
or costs (including reasonable attorneys' fees and expenses) arising from (i)
challenges to Licensor's right to license the Intellectual Property in
connection with the manufacture, distribution, promotion, advertisement and sale
of the Licensed Products or (ii) assertions to any claim of right or interest in
or to the Intellectual Property as authorized and used on the Licensed Products,
provided in each case that Licensee shall give prompt written notice,
cooperation and assistance to Licensor relative to any such claim or suit, and
provided further in each case that Licensor shall have the option to undertake
and conduct the defense of any suit so brought and to engage in settlement
thereof at its sole discretion.
B. Licensee shall assist Licensor, to the extent necessary, in the
procurement of any protection or to protect any of Licensor's rights to its
Marks, and Licensor, if it so desires and in its sole discretion, may commence
or prosecute any claims or suits in its own name or in the name of Licensee or
join Licensee as a party thereto. Licensee shall notify Licensor in writing of
any infringements or imitations by others of the Intellectual Property of which
it is aware. Licensor shall have the sole right to determine whether or not any
action shall be taken on account of such infringements or imitations. Licensee
shall not institute any suit or take any action on account of any such
infringements or imitations without first obtaining the written consent of
Licensor to do so. Licensee agrees that it is not entitled to share in any
proceeds received by Licensor (by settlement or otherwise) in connection with
any formal or informal action brought by Licensor hereunder.
C. Licensee hereby agrees to indemnify, defend and hold Licensor,
shareholders, directors, officers, employees, agents, representatives,
successors and assigns harmless from any claims, suits, damages and costs
(including reasonable attorneys' fees and expenses) arising out of (i) any
unauthorized use of or infringement of any trademark, service mark, copyright,
patent, process, method or device by Licensee in connection with the Licensed
Products covered by this Agreement, (ii) alleged defects or deficiencies in said
Licensed Products or the use thereof, or false advertising, fraud,
misrepresentation or other claims related to the Licensed Products not involving
a claim of right to the Intellectual Property, (iii) the unauthorized use of the
Intellectual Property or any breach by Licensee of this Agreement, (iv) libel or
slander against, or invasion of the right of privacy, publicity or property of,
or violation or misappropriation of any other right of any third party, and/or
(v) agreements or alleged agreements made or entered into by Licensee to
effectuate the terms of this Agreement. Licensor shall give Licensee notice in
writing of the making of any claim or the institution of any action hereunder
and Licensor may at its option participate in any action. The indemnifications
hereunder shall survive the expiration or termination of this Agreement.
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8. INSURANCE: Licensee agrees to obtain, at its own cost and expense,
comprehensive general liability insurance including product liability insurance
from an insurance company acceptable to Licensor, providing adequate protection
for Licensor against any claims or suits arising out of any of the circumstances
described in Paragraph 7 above for which insurer is able to provide insurance,
in an amount no less than $5,000, 000 (five million dollars) per incident or
occurrence, or Licensee's standard insurance policy limits, whichever is
greater, and with a reasonable deductible in relation thereto. Such insurance
shall remain in force at all times during the license period and for a period of
five years thereafter. Within thirty (30) days from the date hereof, Licensee
will submit to Licensor a fully paid policy or certificate of insurance naming
Licensor as an additional insured party and requiring that the insurer shall not
terminate or materially modify such policy or certificate of insurance without
written notice to Licensor at least thirty (30) days in advance thereof.
9. COPYRIGHT AND TRADEMARK NOTICES AND REGISTRATIONS: Licensee agrees
that in any instance wherein the Intellectual Property is used, including but
not limited to use in connection with the production, advertisement, promotion
and sale of the Licensed Products, Licensee shall cause a general notice to be
included on the product, on a label(s), on the packaging material(s) or on a
separate slip of paper attached to the products in a form and format as mutually
agreed on by the parties. Licensee shall submit a copy of its specifications
for all of the above notices (including copies of its artwork, layouts or mold
blueprints) to Licensor for its review. Licensor shall have the right to revise
the above notice requirements and to require such other notices as shall be
reasonably necessary to protect the interests of Licensor in the respective
Intellectual Property. Licensee agrees to advise Licensor of the initial date
of the marketing of all Licensed Products, and upon request, to deliver to
Licensor the required number and type of specimen samples of the Licensed
Products, labels or the like upon which the Intellectual Property is used for
use in procuring copyright, trademark and/or service mark registrations in the
name of and at the expense of the person, firm, corporation or other legal
entity owning the Intellectual Property, in compliance with any laws relating to
copyright, trademark and service mark registrations. Except to the extent set
forth in any schedules attached to this Agreement, Licensor shall be solely
responsible for taking such action as it deems appropriate to obtain such
copyright, trademark or service mark registrations for its Intellectual
Property. If it shall be necessary for Licensee to be the applicant to effect
any such registrations, Licensee shall and hereby does assign all of its rights
in each such application and any resulting registration to Licensor or any other
appropriate owner thereof, and further agrees to execute all papers necessary to
effectuate and/or confirm such assignments. Licensee shall perform all acts
necessary and execute all documents necessary to effectuate its registration as
a user of the Intellectual Property where such registration is needed. Licensee
also agrees that, in any case where it employs the service of photographers or
artists in connection with the production, promotion, marketing or distribution
of the Licensed Products, it will require each such photographer or artist to
agree that the photographic or artistic works he or she produces for Licensee
shall be "works made for hire" for the purposes of the copyright laws, and that
to the extent such photographic or artistic works may not qualify as "works made
for hire," the copyright in each such work is assigned to Licensee.
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10. APPROVALS: Licensor shall have absolute approval of the
Licensed Products and of all packaging, advertising and promotional material at
all stages of the development thereof. Licensee agrees to furnish in a timely
manner to Licensor, free of cost, for its written approval as to quality and
style, designs of the Licensed Products and samples of each Licensed Product
before its manufacture, sale, promotion, advertisement or distribution,
whichever first occurs, and samples of all advertising, point of-sale displays,
catalogs, sales sheets and other items that embody, display or picture the
Intellectual Property, and no such Licensed Products other such materials shall
be manufactured, sold, promoted, advertised or distributed by Licensee without
such prior written approval. In particular, no use of any Mark or Marks shall
be made on stationery of Licensee (specifically including, without limitation,
letterhead, envelopes, business cards, shopping bags, invoices, statements,
packing slips, etc.) without Licensor's express written approval in advance of
any such use. In addition, no irregulars, seconds or other Licensed Products
which do not conform in all material respects to the approved samples may be
distributed or sold without the express written advance consent of Licensor.
All such sales, if made, shall bear Percentage Compensation as set forth in
Paragraph 4b. Subject, in each instance, to the prior written approval of
Licensor, Licensee or its agents may use textual and/or pictorial matter
pertaining to the Intellectual Property on such promotional display and
advertising material as may, in its judgment, promote the sale of the Licensed
Products. Ten (10) samples of each Licensed Product shall be supplied free of
cost to Licensor. From time to time subsequent to final approval, a reasonable
number of production samples shall periodically be sent to Licensor free of
cost. Such samples shall also be sent upon any change in design, style or
quality, which shall necessitate subsequent approvals by Licensor. Additional
samples shall be supplied to Licensor upon request at no more than cost.
Licensor shall also have the right to inspect Licensee's plants, warehouses or
storage facilities at any reasonable time without notice.
In the event that any item or matter submitted to Licensor under this
Agreement for approval or consent shall not have been approved or consented to,
disapproved or denied, or commented upon within twenty (20) business days after
receipt thereof by Licensor, and Licensor (both Account Supervisor and Quality
Control) shall have received notice from Licensee that comment is overdue by fax
or other written communication, and Licensor shall not have commented within
five (5) additional Licensor business days of receipt of such notice, any items
or matters so submitted shall be deemed approved and consented to.
In any instance where any material is required to be submitted to Licensor
for Licensor's approval, that approval shall be granted or withheld in
Licensor's sole discretion. No Licensed Products shall be sold without
Licensor's approval as provided in this section.
11. DISTRIBUTION: Licensee shall sell the Licensed Products to
jobbers, wholesalers, distributors or retailers for sale or resale and
distribution to retail stores and merchants for their resale and distribution or
directly to the public. In the event Licensee sells or distributes a Licensed
Products at a special price directly or indirectly to itself, including, without
limitation, any subsidiary of Licensee, or to any other person, firm or
corporation related in any manner to Licensee or its officers, directors or
major stockholders, Licensee shall pay compensation with respect to such sales
or distribution based upon the price generally charged the trade by Licensee.
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12. GOODWILL: Licensee recognizes the great value of the publicity and
good will associated with the Marks and in such connection, acknowledges that
such goodwill belongs exclusively to Licensor.
13. SPECIFIC UNDERTAKINGS OF LICENSEE: During the Term, each additional
license period if any and thereafter, Licensee agrees that:
A. It will not acquire any rights in the Marks specified in Schedule G
attached hereto or Intellectual Property as a result of its use thereof and all
use of the Marks and Intellectual Property shall inure to Licensor's benefit;
B. It will not, directly or indirectly, attack the title of Licensor in
and to the Marks or Intellectual Property, or any copyright, trademark or
service mark pertaining thereto, nor will it attack the validity of the license
granted hereunder, nor will it use the Marks or Intellectual Property in any
manner other than as licensed hereunder;
C. It will not at any time apply for any registration of any copyright,
trademark, service mark or other designation which would affect the ownership of
the Marks, or file any document with any governmental authority or take any
action which would affect the ownership of the Marks or aid or abet anyone in
doing so;
D. It will not harm, misuse or bring into disrepute the Marks or
Intellectual Property;
E. It will manufacture, sell, promote, advertise and distribute the
Licensed Products in a legal and ethical manner and in accordance with the
terms, conditions and intent of this Agreement;
F. It will not create any expenses chargeable to Licensor without the
prior written approval of Licensor;
G. It will protect to the best of its ability the right to manufacture,
sell and distribute the Licensed Products hereunder;
H. It will not use the Licensed Products for combination sales, as
self-liquidation or free giveaways or for any similar method of merchandising
without the prior written consent of Licensor and will exercise due care that
its customers likewise will refrain from making such use of the Licensed
Products;
I. It will not, without the prior written consent of Licensor, enter
into any sublicense or agency agreement for the manufacture, sale, promotion,
advertisement or distribution of the Licensed Products;
J. It will not engage in tying practices, illegal restraints of trade,
or selling practices that exclude any members of the retail trade for any reason
other than poor credit history, known lack of integrity or disregard for the
rights of Licensor. Nothing in the preceding sentence shall be deemed to
require Licensee to violate any other term of this Agreement;
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K. It will not use, or knowingly permit the use of, the Licensed
Products as a premium, except with the prior written consent of Licensor and the
specific negotiation of a higher royalty payment therefor. For purposes of this
Agreement, the term "premium shall be defined as including, but not necessarily
limited to, free or self-liquidating items offered to the public in conjunction
with the sale or promotion of a product or service, including traffic building
or continuity visits by the consumer/customer, or any similar scheme or device,
the prime intent of which is to use the Licensed Products in such a way as to
promote, publicize and/or sell the products, services or business image of the
third party company or "Premium" use shall also specifically include
distribution of the Licensed Products for retail sale through distribution
channels (including, without limitation, catalogs) offering earned discounts or
"bonus" points based upon the extent of usage of the offeror's product or
service;
L. It will comply with such guidelines and/or requirements as Licensor
may announce from time to time. It will comply with all laws, regulations and
standards relating or pertaining to the manufacture, sale, advertising or use of
the Licensed Products and shall maintain the highest quality and standards, and
shall comply with the requirements of any regulatory agencies (including,
without limitation, the United States Consumer Safety Commission) which shall
have jurisdiction over the Licensed Products;
M. It guarantees that Licensor will obtain and shall be permitted to
obtain Licensed Products for retail sale at lowest possible wholesale prices and
shall receive prompt shipments and/or deliveries of the Licensed Products,
without regard to the relatively small volume its orders may represent.
Licensor may obtain the Licensed Products for their use, but not resale, at the
manufacturer's lowest possible price, which shall in no event be greater than
its lowest wholesale price;
N. It will furnish to Licensor, upon request of Licensor (which shall
be made only for reasonable cause and no more often than once per year), a list
of all its distributors, sales representatives and jobbers for the Licensed
Products, as well as a list of all its "trade names," said list to include the
company name, address, telephone number, territorial representation and key
contact name. Licensor agrees that it will not divulge any information provided
to it under this paragraph to any other competitor licensing organization;
O. Concurrently with its execution of this Agreement, it will provide
Licensor with the names, addresses, telephone numbers and names of principal
contacts of each party (hereinafter referred to as "Manufacturer"), both
domestic and foreign, that Licensee desires or intends to have produce one or
more of the Licensed Products in the event Licensee desires not to be the
manufacturer of such Licensed Products. This information shall be set out in
Schedule H of this Agreement and Licensee shall specify the Licensed Products
Manufacturer will produce. In the event Licensee wishes to substitute a
Manufacturer for those listed in Schedule H or wishes to add to the number of
Manufacturers, Licensee shall first provide Licensor with the information set
out in Schedule H regarding the proposed new Manufacturers for Licensor's
written approval of such Manufacturers. Licensee's failure to do so may result
in termination of this Agreement and/or confiscation and seizure of the Licensed
Products. Licensee shall ensure that:
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(a) Manufacturer produces no merchandise bearing the Marks other
than the Licensed Products described in Schedule H of this
Agreement unless authorized by Licensor;
(b) Manufacturer produces the Licensed Products only as and when
directed by Licensee and in accordance with the terms herein
and in compliance with all aws, regulations and governmental
rules applicable to the Licensed Products and/or their
manufacture;
(c) Manufacturer does not supply the Licensed Products to any
person, firm, corporation or business entity other than
Licensee or to such entities as may be authorized by Licensee
and Licensor jointly; and
(d) Manufacturer does not delegate in any manner whatsoever its
obligations with respect to the Licensed Products.
Prior to the delivery of the Licensed Products from Manufacturer to
Licensee, Licensee shall submit to Licensor, free of cost, for its written
approval as to quality and style, at least two samples of the Licensed Products
produced by Manufacturer;
P. It will not manufacture or allow the manufacture, or accumulate
inventory, of the Licensed Products, at a rate greater than its average rate
during the license period as the end of the license period approaches;
Q. It will not sell the Licensed Products to parties whom it knows or
reasonably should know will resell or distribute such Licensed Products outside
the Licensed Territory;
R. It will not disclose any confidential, private, restricted or
otherwise nonpublic information concerning VICTOR EBNER ENTERPRISES, S.A.
which, it acknowledges, it may become privy to during the Term of this Agreement
and for two (2) years thereafter for information which is not a "trade secret";
S. It will not grant to any third person or entity a security interest
in the Licensed Products without Licensor's prior written approval; and
T. With respect to any Licensed Products manufactured outside the
United States, (i) it will take receipt of goods at U.S. ports of entry, (ii)
it will not allow any entity in the United States, including but not limited to
distributors, wholesalers and retailers, to accept shipment of the Licensed
Products from any non-U.S. manufacturer of such Licensed Products, and (iii) it
will distribute such Licensed Products to third parties, including but not
limited to distributors, wholesalers and retailers, from Licensee's principal
place of business only.
U. It shall not make any warranties or representations regarding the
results or anticipated results of the Licensed Products, including without
limitation, those regarding foreign language literacy and comprehension of
foreign language(s).
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14. APPROVAL OF MANUFACTURER, ETC.: Nothing contained herein may be
construed so as to imply endorsement of Manufacturer by Licensor. Licensee
shall seek Licensor's written approval of Manufacturer prior to Licensee's
engagement of Manufacturer. Any approval of Manufacturer granted by Licensor
relates solely to the manufacturing of the Licensed Products and shall not
constitute a grant of any right, title or interest in or to the Marks, nor to
any copyrights, trademarks or service marks or other property rights associated
therewith. Licensor hereby reserves the right to terminate in its discretion
the engagement of Manufacturer at any time. Additionally, Licensor may
confiscate goods or samples imported by Licensee or shipped by Manufacturer that
bear any of the Marks and that have not been approved by Licensor as to quality.
15. ACKNOWLEDEMENT OF RIGHTS: Licensee hereby acknowledges the
proprietary nature of the Intellectual Property of Licensor and acknowledges
that all rights, title and interest to such Intellectual Property belong to
Licensor. Licensee represents that it has not made any unauthorized use of
Intellectual Property of Licensor and agrees that it will make no use of any
such Intellectual Property, other than as provided in this Agreement, without
the prior written consent of Licensor. Any use Licensee has made or will make
of such Intellectual Property has not conferred or will not confer, as the case
may be, any rights or benefits upon it whatsoever, and any rights created by
such use shall inure to the benefit of the Licensor.
16. TERMINATION: Licensor shall have the right to terminate this
Agreement without prejudice to any other rights which it may have, whether under
the provisions of this Agreement, in law or in equity or otherwise, upon the
occurrence of any one or more of the following events (herein called
"defaults"), and Licensee's failure to cure such default(s) completely within
ten (10) business days from Licensee's receipt of notice from Licensor;
A. If Licensee fails to deliver to Licensor or to maintain in full
force and effect the insurance referred to in Paragraph 8 hereof; or
B. If Licensee fails to make any payment due hereunder on the date due,
at which time all monies which are owed during the current term or renewal
referred to in Schedule F of this Agreement shall become due and payable to
Licensor; or
C. If Licensee fails to deliver any of the statements hereinabove
referred to or to give access to the premises and/or license records pursuant to
the provisions hereof to Licensor's authorized representatives for the purposes
permitted hereunder; or
D. If any governmental agency or court of competent jurisdiction finds
that the Licensed Products are defective in any way, manner or form; or
E. If Licensee is unable to pay its debts when due, or makes any
assignment for the benefit of creditors or an arrangement pursuant to any
bankruptcy law, or files or has filed against it any petition under the
bankruptcy or insolvency laws of any jurisdiction, county or place, or shall
have or suffer a receiver or trustee to be appointed for its business or
property, or be adjudicated a bankrupt or an insolvent. In the event the
license granted hereunder is terminated pursuant to this Paragraph neither
Licensee nor its receivers, representatives, trustees, agents, administrators,
successors and/or assigns shall have any right to sell, exploit or otherwise
deal with or in the Licensed Products without the prior written consent of
Licensor; or
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F. If Licensee does not commence in good faith to manufacture,
distribute and sell the Licensed Products throughout the Licensed Territory
within any twelve (12) month period, but such default and Licensor's resultant
right of termination shall apply only to the specific Licensed Products and/or
the specific territory(ies) which or wherein Licensee fails to meet said
requirements; or
G. If Licensee shall discontinue its business as it is now conducted;
or
H. If Licensee shall breach any of the undertakings set forth in
Paragraph 13 hereof; or
I. If Licensee shall breach any of the terms of this Agreement; or
J. If, in the periodic statements furnished pursuant to Paragraph 5
hereof, the amounts owed to Licensor are significantly or consistently
understated; or
K. If Licensee shall undergo a change in majority or controlling
ownership.
In the event any of these defaults occurs and Licensor desires to exercise
its right of termination under the terms of this Paragraph 16, Licensor shall
give notice of termination in writing to Licensee. Any and all payments then or
later due from Licensee hereunder (including Advance Compensation) shall then
become promptly due and payable in full to Licensor and without set off of any
kind; i.e., no portion of any prior payments made to Licensor shall be repayable
to Licensee. Until payment to Licensor of any monies due it, Licensor shall have
a lien on any units of the Licensed Products not then disposed of by Licensee
and on any monies due Licensee from any jobber, wholesaler, distributor,
sublicensee or other third parties with respect to sales of the Licensed
Products. Upon termination or expiration of the term hereof, all rights,
licenses and privileges granted to Licensee hereunder shall automatically revert
to Licensor and Licensee shall execute any and all documents evidencing such
automatic reversion.
17. FINAL STATEMENT UPON TERMINATION OR EXPIRATION: Licensee shall
deliver to Licensor, as soon as practicable, following expiration or termination
of this Agreement, a statement indicating the number and description of the
Licensed Products on hand. Following expiration or termination Licensee may
manufacture no more Licensed Products, but may continue to distribute its
remaining inventory for a period not to exceed sixty (60) days, subject to the
terms of Paragraph 4 hereof and payment of applicable royalties relative
thereto; provided, however, that such royalties shall not be applicable against
Advance Compensation or Guaranteed Compensation. Notwithstanding the foregoing,
Licensee shall not manufacture, sell or distribute any Licensed Products after
the expiration or termination of this Agreement because of (a) the failure of
Licensee to cause the appropriate statutory notice of copyright, trademark,
service mark or user registration to appear wherever the Marks are used; (b) the
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departure of Licensee from the quality and style approved by Licensor under the
terms of Paragraph 10 hereof; (c) the failure of Licensee to obtain the approval
of Licensor under the terms of Paragraph 10 hereof; or (d) the occurrence of an
event of default under the terms of Paragraphs 13and 16 hereof. Licensor shall
have the option to conduct physical inventories before termination and
continuing until the end of the 60-day sell-off period in order to ascertain or
verify such inventories and/or statement. Immediately upon expiration of the
sell-off period, Licensee shall furnish Licensor a detailed statement certified
by an officer of Licensee showing the number and description of Licensed
Products on hand in its inventory and shall dispose of such inventory at
Licensor's direction and at Licensee's expense. In the event Licensee refuses
to permit Licensor to conduct such physical inventory, Licensee shall forfeit
its right hereunder to dispose of such inventory. In addition to such
forfeiture, Licensor shall have recourse to all other remedies available to it.
18. INJUNCTION: Licensee acknowledges that its failure to perform any
of the terms or conditions of this Agreement, or its failure upon the expiration
or termination of this Agreement to cease the manufacture of the Licensed
Products and limit their distribution and sale as provided in Paragraph 11
hereof, shall result in immediate and irreparable injury, harm and damage to
Licensor. Licensee also acknowledges that there may be no adequate remedy at law
for such failures and that in the event thereof, Licensor shall be entitled to
equitable relief in the nature of an injunction and to all other available
relief, at law and/or in equity.
19. RESERVATION OF RIGHTS: Licensor retains all rights not expressly
and exclusively conveyed herein, and Licensor may license firms, individuals,
partnerships or corporations to use the Intellectual Property in connection with
other products, including other products identical to the Licensed Products
contemplated herein outside the territory. Licensor reserves the right to use,
or license others to use and/or manufacture, identical items as premiums.
20. PAYMENTS: All payments shall be made to VICTOR EBNER ENTERPRISES,
S.A. and sent to an address designated by Licensor.
21. WAIVER MODIFICATION: No waiver, modification or cancellation of
any term or condition of this Agreement shall be effective unless executed in
writing by the party charged therewith. No written waiver shall excuse the
performance of any act other than those specifically referred to therein. No
waiver by either party hereto of any breach of this Agreement shall be deemed to
be a waiver of any preceding or succeeding breach of the same or any other
provision hereof. The exercise of any right granted to either party hereunder
shall not operate as a waiver. The normal expiration of the term of this
Agreement shall not relieve either party of its respective obligations accruing
prior thereto, nor impair or prejudice the respective rights of either party
against the other, which rights by their nature survive such expiration.
Licensor makes no warranties or representations to Licensee expect those
specifically expressed herein.
22. NO PARTNERSHIP: This Agreement does not constitute and shall not
be construed as constituting an agency, partnership or joint venture
relationship between Licensee and Licensor. Licensee shall have no right to
obligate or bind Licensor in any manner whatsoever, and nothing herein contained
shall give or is intended to give any rights of any kind to any third persons.
23. NON-ASSIGNABILITY: Licensee acknowledges and recognizes:
(a) That it has been granted the license described in Paragraph 1
because of its particular expertise, knowledge, judgment, skill and ability;
(b) That it has substantial and direct responsibilities to perform
this Agreement in accordance with all of the terms contained herein;
(c) That Licensor is relying on Licensee's unique knowledge,
experience and capabilities to perform this Agreement in a specific manner
consistent with the high standards of integrity and quality associated with
VICTOR EBNER ENTERPRISES, S.A. as (method for learning second languages) and
with VICTOR EBNER ENTERPRISES, S.A.'s licensed merchandise; and
(d) That the granting of the license under this Agreement creates
a relationship of confidence and trust between Licensee and Licensor. This
Agreement is personal to Licensee, and Licensee shall not sublicense or
franchise any of its rights hereunder, and neither this Agreement nor any of the
rights of Licensee hereunder shall be sold, transferred or assigned by Licensee
without Licensor's prior written approval and no rights hereunder shall desolve
by operation of law or otherwise upon any assignee, receiver, liquidator,
trustee or other party. Subject to the foregoing, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, their
successors and assigns.
24. PARAGRAPH HEADINGS: Paragraph headings contained in this
Agreement are for convenience only and shall not be considered for any purpose
in governing, limiting, modifying, construing or affecting the provisions of
this Agreement and shall not otherwise be given any legal effect.
25. SINGULARS AND PLURALS. Where required to conform to common English
usage and to permit a consistent, reasonable construction of this Agreement,
words appearing in the singular shall be deemed to be in the plural, words in
the plural shall be deemed to be in the singular, and subjects and verbs shall
be deemed to agree with each other in the proper sense.
26. CONSTRUCTION: This Agreement shall be construed, controlled and
interpreted according to federal law and the laws of the State of New York
without regard to principles of conflict of laws. All disputes of this Agreement
shall be resolved by the courts of the State of New York and the Licensor and
Licensee consent to the jurisdiction of such courts, agree to accept service of
process by mail, and hereby waive any jurisdictional or venue defenses otherwise
available to them. If any of the terms of this Agreement are held to be unlawful
by a court of competent jurisdiction, such a finding shall in no way affect the
remaining obligations of the Licensor and Licensee hereunder.
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27. SEVERABILITY: The determination that any provision of this
Agreement is invalid or unenforceable shall not invalidate this Agreement, and
the remainder of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.
28. TIME OF THE ESSENCE: Time is of the essence of all parts of this
Agreement.
29. ACCEPTANCE BY LICENSOR: This instrument, when signed by Licensee
or a duly authorized officer of Licensee, shall be deemed an application for a
license and not a binding agreement unless and until signed by a duly authorized
officer of Licensor. The receipt and/or deposit by Licensor of any check or
other consideration given by Licensee and/or the delivery of any material by
Licensor to Licensee shall not be deemed an acceptance by Licensor of this
application. The foregoing shall also apply to any documents relating to
renewals or modifications hereof.
30. INTEGRATION: This Agreement, when fully executed, shall represent
the entire understanding between the parties hereto with respect to the subject
matter hereof and supersedes all previous representations, understandings or
agreements, oral or written, between the parties with respect to the subject
matter hereof.
31. FORCE MAJEURE: Unless otherwise agreed in writing, neither
Licensor or Licensee shall be liable for any damages, costs, expenses or other
consequences incurred by the other or by any other person or entity as a result
of or due to circumstances or events beyond its reasonable control, including,
without limitation, acts of God; change in or in the interpretation of any law
or regulation; strikes, lockouts or other labor problems; fire or explosion;
riot, military action or usurped power; or actions or failures to act on the
part of a governmental authority provided that the non-performing party notifies
the other party of such circumstances within thirty (30) days of learning of
such circumstances. Any deadlines that Licensor or Licensee fails to meet by
reason of any such circumstance or event shall be extended for such period of
time as is reasonable in light of such circumstance or event. Notwithstanding
the foregoing, unless otherwise agreed in writing, this Section shall not be an
excuse for nonpayment. If any circumstance of non-performance extends for more
than sixty (60) days, it shall constitute a breach of the Agreement and the
non-performing Licensor or Licensee may terminate the Agreement pursuant to
Paragraph 16.
32. MISCELLANEOUS: Licensee acknowledges that this Agreement is for
the Term specified in Schedule E only and that neither the existence of this
Agreement nor anything contained herein shall impose on Licensor any obligation
to renew or otherwise extend this Agreement after expiration of the license
period.
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SCHEDULE A
"Personal Services"
Licensor shall provide the following "Personal Services" of Licensor commencing
no more than thirty (30) Licensor business days from the Effective Date of this
Agreement:
SCHEDULE B
"Marks"
"Marks" are defined as the following trademarks and services marks of Licensor,
including all substantially similar variants of the marks which may now or in
the future be pending or registered in the United States Patent and Trademark
Office ("PTO") or any other trademark registry anywhere else in the world:
MARK APPLN/REG. NO.
1. Victor Ebner (word mark);
2. Victor Ebner (stylized);
3. Victor Ebner & Design;
4. Victor (word mark);
5. Victor (stylized);
6. Victor & Design;
7. Ebner (word mark);
8. Ebner & Design;
9. People Speak Victor (word mark);
10. People Speak Victor & Design;
11. Miscellaneous Design (animated character);
12. Magic Lingua (word mark);
13. Magic Lingua (stylized);
14. Magic Lingua & Design;
15. Victor Ebner Method (word mark);
16. Victor Ebner Institute (word mark); and
17. Victor Ebner Institute (stylized).
SCHEDULE C
"Licensed Products"
"Licensed Products" shall refer to the following existing or future goods and
services of Licensor used in teaching foreign languages:
1. Audio and visual multimedia products for use in foreign language
instruction including but not limited to pre-recorded audio and video
cassette tapes, CD-ROMS, DVD's, and compact discs;
2. Text, graphics, artwork literary works including downloadable and
non-downloadable computer software;
3. Musical works, including any accompanying words, dramatic works,
including any accompanying music, pantomimes and choreographic works;
4. Pictorial, graphic, and sculptural works;
5. Videos, films, and other audiovisual works and sound recordings;
6. Instruction manuals, books and course materials;
7. Clothing; and
8. Toys.
SCHEDULE D
"Licensed Territory"
"Licensed Territory" is defined as the United States of America and its
territories and possessions.
SCHEDULE E
"Term"
The Term of the Agreement shall commence as of the Effective Date and remain in
effect for five (5) years therefrom. Except the Agreement shall terminate upon
the delivery by Licensor to Licensee audited financial statements that met the
requirements of generally accepted principles and standards and which effectuate
the terms of Capital Contribution Agreement.
SCHEDULE F
"Royalties"
Licensor shall receive the following "Royalties" from Licensee, such Royalties
to be itemized by the Licensee:
1. "Monthly Royalty" Pursuant to the schedule set forth in Paragraph 4,
---------------
Licensee shall pay Licensor a royalty of the greater of six percent
(6%) of Net Sales of the Licensed Products or $25,000 per year.
SCHEDULE G
"Intellectual Property"
Intellectual Property refers to the Marks and the following copyrights, patent
processes, methods or devices including: all language content including but not
limited to all text, graphics, art work, audio and visual recordings for use in
all Licensed Products including but not limited to all course materials,
instruction manuals, pre-recorded audio and video cassettes, CD-ROMS and DVD's
for use in teaching each of the languages offered now or in the future by
Licensor; visual and audio demonstrations and instruction of how to use all
Licensed Products including but not limited to interactive versions of the
Licensor's language method via the Internet; consultation and instruction
materials supporting the sale, promotion, advertisement and use of all Licensed
Products; and Licensed Product updates and enhancements as developed by
Licensor.
Copyrights refer to all material published and unpublished by Licensor its
affiliates, parent, and subsidiary corporations including but not limited to all
literary works including computer programs, musical works, including any
accompanying words, dramatic works, including any accompanying music, pantomimes
and choreographic works, pictorial, graphic, and sculptural works, motion
pictures and other audiovisual works and sound recordings
SCHEDULE H
"Authorized Manufacturers"
"Authorized Manufacturers" are the following companies, entities or persons:
Company Name: _______________________
Address: _______________________
Contact: _______________________
Telephone Number: _______________________
Telefax Number: _______________________
Email Address: _______________________
Company Name: _______________________
Address: _______________________
Contact: _______________________
Telephone Number: _______________________
Telefax Number: _______________________
Email Address: _______________________
Company Name: _______________________
Address: _______________________
Contact: _______________________
Telephone Number: _______________________
Telefax Number: _______________________
Email Address: _______________________
Company Name: _______________________
Address: _______________________
Contact: _______________________
Telephone Number: _______________________
Telefax Number: _______________________
Email Address: _______________________