Merchandise License Agreement
"Licensor" Mainframe Entertainment
2025 West Broadway, Suite 500
Vancouver, BC
Canada, V6J 1Z6
Attention: Helen Chapman
Phone: (604) 714-2600 Fax: (604) 714-2641
"Agent for Licensor" American Champion Marketing Group, Inc.
1694 The Alameda, Suite #100
San Jose, CA 95126
Contact: Joy Tashjian
Phone: (408) 288-8199 Fax: (408) 288-8098
"Licensee": Romar International
112 West 34th Street, Suit 903
New York, NY 10120
Contact: David Steinberg, Joanne Romeo
Phone: (212) 736-9555 Fax: (212) 967-4819
"Effective Date" of the Agreement is upon signing.
"Properties" are the following Characters or other trademarks: ReBoot
and all related characters seen in the ReBoot television program.
"Products" that Licensee is authorized to produce is accessories in
the following categories: backpacks, belt bags, coin purses, duffle
bags, hand bags, lunch boxes, messenger bags, plush backpacks, roll
bags, slings, totes and wallets. Caps/hats in the following
categories: basic, crusher, screen printed, solid and sunglasses.
Cold weather apparel in the following categories: hats, headbands,
gloves, mittens and scarves. Luggage in the following categories:
rollers and suitcases. Additional accessories in the following
categories: belts, toe socks, umbrellas
"Trademarks" being licensed to Licensee are ReBoot and all related
characters.
"Territory" where Licensee can sell products is The United States it's
possessions and territories and Canada.
"Distribution" is department stores, mid-tier retailers, mass
merchants and specialty sores.
" Advance Royalty" is $2,500 (Two Thousand Five Dollars) due upon
signing
"Earned Royalty" is 7% of net sales (including sales made FOB shipping
point outside territory). After the $10,000 (Ten Thousand Dollar)
guarantee is met the royalty rate will be 8% (including sales made FOB
shipping point outside territory).
"Guaranteed Royalty" is $10,000 (Ten Thousand Dollars).
"Scope" is exclusive with the exception of caps/hats which shall be
non-exclusive
"Initial Sale Date" is January 1, 2001.
"Term" of this agreement is from the Effective Date until December 31,
2003.
All products and Advertising materials will bear this notice in
complete form:
ReBoot r & c (year) Mainframe Entertainment, Inc. All Rights Reserved
LICENSING AGREEMENT
This Licensing Agreement (this "Agreement") is made and entered
into as of this 19th day of May, 2000 by and between Maineframe
Entertainment Inc. a Canadian Corporation with offices at 2025 West
Broadway, Suite 500, Vancouver, British Columbia, Canada V6J-1Z6
(Licensor) and American Champion Media Inc., a corporation duly
organized and existing under the laws of the State of Delaware,
located at 1694 The Alameda, Suite 100, San Jose, California 95126
("Agent for Licensor") and Romar International a corporation duly
organized and existing under the laws of the state of New Jersey
located at 112 West 34th Street, Suite 903, New York, NY 10120.
The Licensor is the owner of and/or has the exclusive right to
license the ReBoot character and all related characters included in
the television program entitled " ReBoot" (collectively the
"Characters") and all the names, symbols, likeness, designs and other
indicia comprised in or associated with the Characters, and all
copyrights, including all derivative works, and trademarks which exist
in the Characters and the names and likeness of the characters
("Properties"); in the Territory.
The Licensor desires to grant and the Licensee desires to obtain
a license to manufacture and sell certain Products using or based upon
the Properties;
In consideration of the mutual covenants contained herein the
parties agree as follows.
1. License To Use Properties.
(a) Grant of License. Licensor grants to Licensee a non-
transferable, license to use the Properties in connection with the
development, manufacture, marketing, distribution and sale of the
Products in the Territory and to manufacture the Products using all
present and future Characters and Properties, and the exclusive right
during the Term to distribute and sell such Products through the
Distribution Channels throughout the Territory. Except for the
specific rights, which are granted to Licensee under this Agreement,
all rights in and to the Properties are retained by Licensor. Except
to the extent set forth in paragraph 10(a) below, Licensee shall not
have the right to sublicense any of the rights granted to it under
this Agreement.
(b) Use of Licensed Properties. The Licensee will: (i) use the
Properties only on Products and Advertising Materials, as defined
below; (ii) package and sell Products only in packaging approved by
Licensor, said approval not to be unreasonably refused; (iii) refrain
from use of the Properties except under the terms of this Agreement;
(iv) notify Licensor in writing of any conflicting uses, applications
for registration or registrations of the properties or marks similar
thereto of which it has knowledge; (v) execute any documentation as
may be reasonably requested by Licensor relating to the Properties;
(vi) indicate on the Products and/or their labeling or packaging that
the Products are manufactured by Licensee, or a manufacturer as
described in paragraph 10(a), and that such manufacture is pursuant to
license from Licensor; and (vii) comply with all of Licensor's
reasonable instructions relating to the use and display of the
properties.
(c) Restriction on Use of Properties. The Properties, either
in whole or in part, will not be shown endorsing the Licensee or
products (including the Products) or services of Licensee or others,
without the prior written approval of Licensor. None of the
Properties shall be combined in any Products or Advertising materials
with any other characters or persons.
(d) Method of Sale. Licensee agrees that the products will be
sold at a competitive price that does not exceed the price customarily
charged the trade by Licensee. License agrees to offer a warranty to
purchasers of the Products substantially similar to that offered for
products competitive with Products, and in no event shorter or less
comprehensive than the warranty offered by Licensee for other similar
items produced by it.
2. Product Quality.
(a) Quality Standards. Licensee therefore agrees that prior to
the release of any Product, it will submit (3) samples of the Product
to Licensor for approval, as provided in Section 3. Once Licensor's
approval has been obtained, Licensee agrees that it will not deviate
in a material manner from the approved samples. Failure by Licensee
to materially conform its Products to the approved samples will be
considered a breach of this Agreement and upon notice of such,
Licensee agrees that it will immediately stop the manufacture,
distribution and sale of the nonconforming Products.
(b) Provision of Samples. Licensee will furnish free of charge
to Licensor twenty-four (24) samples of each Product. Upon written
request, Licensor may annually request an additional twelve (12)
samples of each Product.
(c) Inspections. Upon reasonable notice from Licensor but no
more often than once a year, Licensee shall permit representatives of
Licensor to enter Licensee's premises and plant(s) during normal
business hours for the purpose of inspecting Licensee's plant(s),
equipment, records, operation and supplies which relate to the
manufacture, distribution and sale of the Products.
(d) Product Warranty. Licensee represents and warrants that the
Products will be of good quality in design, material and workmanship
and will be suitable for their intended purpose; that no injuries,
deleterious, or toxic substances will be used in or on the Products;
that the Products will not cause harm when used in a foreseeable
manner; and that Licensee will, at its own expense, comply with all
laws and regulations, including those relating to the operation of
Licensee's plants, the manufacture, sale and distribution of the
Products, including the labeling thereof and including safety
standards and testing of the Products, as may be required by
applicable law.
3. Approval Procedures.
(a) Approval of Products. Prior to producing Product for sale,
Licensee will submit to Agent for its review and written approval,
three (3) identical production samples of the Product, and the address
of the production facilities where the Product will be produced.
(b) Approval of Advertising Materials. With respect to all
advertising and promotional materials and all packaging wrapping, and
labeling materials for the Products (including, but not limited to,
catalogs, sales shoots, package inserts, hang tags, and displays)
which make any use of or reference to the Properties ("Advertising
Materials"), Licensee will submit three (3) prior to the final printed
samples of the Advertising Materials where feasible (as for example,
in the case of labels, hang tags, printed brochures, catalogs, and the
like) to Licensor for its review and written approval.
(c) Approval Standards. Licensor shall have the right, acting
reasonably, to approve or disapprove any Products or Advertising
Materials.
(d) Time for Approval. Licensor agrees to inform Licensee of its
approval or refusal of each Product, Advertising Material or other
item within fifteen (15) business days of receipt of same. Any
refusal must be accompanied by clear and specific written explanations
as to the corrective measures that Licensor reasonably requires for
Licensor to subsequently approve the relevant item. In the event that
Licensor does not inform Licensee of its refusal or does not provide
such written explanations within such fifteen (15) business day
period, Licensor shall be deemed to have not approved that particular
item. However, after such fifteen (15) business day period, Licensee
will implement corrective measures requested by Licensor provided that
Licensee is able to effect such corrective measures without delaying
development of any of the items
(e) Artwork for Properties. If Licensee requests Licensor to
furnish it with any artwork or copies of material relating to the
Properties, Licensee agrees to reimburse Licensor for its costs of
supplying such materials to Licensee, to the extent Licensor is able
to furnish such materials.
(f) Translations. All translations of written material used on
or in connection with the Products or Advertising Materials shall be
accurate.
4. Sale of Products.
(a) Exploitation of Rights. Licensee agrees that during this
Agreement, it will diligently and continuously distribute, ship and
sell all of the Products in the Territory and that it will use its
best efforts to manufacture the Products in sufficient quantities to
meet the reasonably anticipated demand in the Territory.Licensee
agrees to use commercially reasonable efforts to promote and sell the
Products..
(b) Sale to Licensor. Licensee agrees to sell to Licensor, on
request Product at Licensee's cost for such Product. No royalties
will be due on sales to Licensor and the Licensor shall not be
entitled to resell any such Products.
5. Protection of the Properties.
(a) Registrations. Licensor shall have the right, in its sole
discretion, to file trademark, design, patent or other applications in
the Territory, relating to the use or proposed use by Licensee of any
of the Properties and/or to record this Agreement. Such filings will
be made in the name of the Licensor or in the name of any third party
selected by Licensor, provided any dealings with the Properties by
Licensor or third parties does not in any way diminish the rights
herein granted to the Licensee.
(b) Trademark Use For Licensor's Benefit. All uses of the
names, symbols, designs and other works comprised in Properties
("Trademarks") by Licensee shall inure to the benefit of the Licensor,
which shall own all trademarks and trademark rights and all copyrights
created by such uses. To the extent Licensee acquires any rights to
any of the Copyrights and Trademarks, Licensee hereby assigns and
transfers to Licensor and agrees to execute any documentation relating
to such assignment.
(c) Other Uses of Trademarks. Licensee shall not use any of
the Trademarks in combination with any other trademark, word, symbol,
letter, or design, or as part of its company name or in connection
with any product other than the Products. Further, Licensee agrees
not to adopt any trademark, trade name, design, logo or symbol which,
in Licensor's opinion, is similar to or likely to be confused with any
of the Trademarks. Licensee shall be entitled to use its trademarks
and shall be entitled to permit its authorized subcontractors' to use
their trademarks on the Products and on their various related
packaging, promotional and advertising materials, subject to
reasonable approval of the Licensor.
(d) Copyright Protection. Licensee recognizes the importance
to Licensor of preserving copyright protection and registrations
therefor on the Properties and all works relating to the Properties,
including new works and derivative works ("Copyrights"), and the
importance of securing copyright protection for the products and
Advertising Materials which constitute "new works" or derivative
works" for copyright law purposes, and for all reproductions of the
Properties which appear on the Products or in the Advertising
Materials. Therefore, Licensee's license to manufacture, distribute
and sell products and to display Advertising Materials is expressly
conditioned upon Licensee's agreeing to place a copyright notice(s) in
the name(s) specified by Licensor on all Products and Advertising
Materials. Licensee agrees that it will not affix to the Products or
the Advertising Materials any other copyright notice in its name or
the name of any other person, firm, or corporation, except as may be
reasonable approved by Licensor. Licensee acknowledges that proper
copyright notices must be permanently affixed to all products and
Advertising Materials and to any portions of products or Advertising
Materials intended to be used separately by the ultimate purchaser or
user. Such notices will be sufficient in size, legibility, form,
location, and permanency to comply with both the United States
copyright laws and also the copyright notice requirements of the
Universal Copyright Convention.
(e) Assignment by Licensee The Licensee hereby sells,
assigns, and transfers to Licensor its entire worldwide right, title,
and interest in and to all "new works", derivative and/or "joint
works" heretofore or hereafter created using all or any portion of the
Properties including, but not limited to the Copyrights and renewal
copyrights thereon. If parties who are not employees of Licensee
living in the United States make or have made any contribution to the
creation of a work, so that such parties might be deemed to be
"authors" as that term us used in present or future United States
copyright statutes, Licensee agrees to obtain from such parties a full
assignment of rights so that the foregoing assignment by Licensee
shall vest in Licensor full rights in the work, free of any claims,
interests, or rights of other parties. Licensee will not permit any
of its employees to obtain or reserve any rights as "authors" of such
works and agrees to furnish Licensor with full information concerning
the creation of new works and/or derivative works and with copies of
assignments of rights obtained from other parties, and to execute,
without charge, any documents requested by Licensor for such purposes.
(f) Notices. The Licensee agrees to affix or to cause its
authorized manufacturing sources to affix to both the Products and
Advertising Materials notices in the format shown on Page 1 or as
otherwise reasonably requested by Licensor in relation to Licensor's
trademark, copyright, patent or other protection. The Licensee agrees
that it will not distribute or sell, not authorize others to
distribute or sell, any Products or Advertising Materials which do not
carry copyright and other notices meeting the requirements of this
section.
(g) Acknowledgement of Validity. Subject to the rights granted
to the Licensee pursuant to this Agreement, Licensee shall not,
directly or indirectly, in any way dispute or impugn the validity of
the Trademarks, Copyrights or Properties, or Licensor's sole ownership
and right to use and control the use of the Trademarks, Copyrights and
Properties during the term of this Agreement and thereafter. Licensee
will not do or knowingly permit to be done and action or thing which
will in any way impair Licensor's rights in and to the Trademarks,
Copyrights and Properties.
6. Infringements.
(a) Infringement by Third Parties. When Licensee learns that a
party is making unauthorized use of the rights granted to the Licensee
hereunder, Licensee agrees promptly to give Licensor written notice
containing full information of which it is aware with respect to the
actions of such party. Licensor shall immediately take all actions
which are necessary to defend and assert the rights granted to the
Licensee hereunder. If Licensor fails to take the required actions,
Licensee shall be entitled but not obligated to take such actions and
all costs and expenses involved in same shall be borne by Licensor and
may be set off against payments owed to Licensor. Licensee agrees to
cooperate with Licensor, at Licensor's expense, in connection with any
action taken by Licensor to terminate infringements.
(b) Claims. If a claim is made or suit is brought against
Licensor or Licensee by a party asserting rights in the Properties,
or names or designs similar thereto, or if either party hereto learns
that another party has or claims rights which would or might conflict
with the proposed or actual use of some or all of the Properties by
Licensee, Licensee agrees either to make responsible modifications in
its use of the Properties as requested by Licensor, or to discontinue
the us eof the allegedly infringing part of the Properties in the
country of the Territory in question on the particular Products which
are involved, if Licensor, in its sole discretion, considers such
action necessary or desirable to resolve or settle the claim or suit
to eliminate or reduce the threat of a claim or suit by such party.
In no event shall Licensee have the right to acknowledge the validity
of such a claim, to obtain or seek a license from such party, or to
take any other action which might impair the ability of Licensor to
contest the claim. Licensor shall have the right to participate fully
at its own expense in the defense of any claim or suit instituted
against Licensee with respect to the use of the Properties by
Licensee.
7. Indemnifications.
(a) Licensee's Indemnification. Licensee agrees to indemnify
and hold Licensor harmless, from any and all claims, liabilities,
judgements, penalties, losses, costs, damages, and expenses resulting
therefrom excluding lost profits, made, claimed or obtained by third
parties and arising out of (ii) the warranted exercise by Licensor of
its termination rights in Section 10. (b) against third parties
appointed by Licensee to manufacture or distribute the Products; and
(iii) Licensee's material failure to comply with the material terms
hereof. Claims based upon the use of the Properties by Licensee in
manner which had been previously approved by Licensor or which is in
material compliance with the terms of this Agreement are expressly
excluded from Licensee's indemnity of Licensor.
(b) Licensor's Indemnification. Licensor agrees to indemnify
and hold Licensee harmless from any and all claims, liabilities,
judgements, penalties, losses, costs, damages, and expenses resulting
therefrom excluding lost profits, incurred by Licensee or made by
third parties asserting rights in the Properties as used on Products,
when use of the Properties by Licensee has been in strict accordance
with the terms of this Agreement.
(c) Claims Procedures. With respect to the forgoing
indemnifications; (i) each party agrees promptly to notify and keep
the other fully advised with respect to such claims and the progress
suits in which the other party is not participating; (ii) each party
shall have the right to assume, at its sole expense, in any suit
instituted against it and to approve any attorney's selected by the
other party to defend it, which approval shall not be unreasonably
withheld or delayed; and (iv) a party assuming the defense of a claim
or suit against the other party shall not settle such a claim or suit
without the prior or written approval of the other party, which shall
not be unreasonably withheld.
8. Insurance.
(a) Insurance Required. The Licensee agrees during the term
hereof and for as long as Products are sold by Licensee to end users
or to intermediaries for sale to end users, to obtain and maintain at
its own cost from an insurance company acceptable to Licensor,
standard Product Liability Insurance, Contractual Liability and
Advertising Insurance, the form of which must be acceptable to
Licensor, naming Licensor, its subsidiaries and affiliates, and their
directors, officers, agents, employees, assignees, and successors as
additional named insureds.
(b) Products Liability Insurance. Licensee's product and
contractual liability insurance policy shall provide coverage for any
and all losses, expenses, claims, demands, causes of action and
settlements, including attorney's fees, allegedly arising out of any
contractual liability or any defects in the Products or any material
used in connection therewith, their failure to perform, or any use
thereof. The amount of coverage shall be a minimum of $1,000,000
combined single limit with no deductible amount, for each single
occurrence for bodily injury and/or for property damage or contractual
liability.
(c) Certificate of Insurance. Within thirty (30) days after
the execution of this Agreement, Licensee will provide a certificate
to Licensor issued by Licensee's carrier confirming that such policy
has been issued and is in full force and effect and provides coverage
as required by this Section 8., and also confirming that before any
cancellation, modification, or reduction in coverage of such policy,
the insurance company will give Licensor thirty (30) days prior
written notice thereof. The policy (s) will include a provision that
it will be deemed primary insurance and any insurance obtained by
Licensor will be excess insurance. In no event will Licensee
manufacture, offer for sale, sell, advertise, promote, ship and/or
distribute Products prior to the receipt by Licensor of such evidence
of insurance.
9. Royalties.
(a) Guaranteed and Advance Royalties. Licensee agrees to pay
Licensor a Guaranteed Royalty (as described in Section 1 of Schedule A
attached hereto), and on execution of this Agreement to pay Licensor
the nonrefundable Advances (as described in Section 2 of Schedule A
attached hereto) which shall be recouped against royalties. No portion
of the Advance or Guaranteed Royalty will be refundable to Licensee on
termination or expiration of this Agreement.
(b) Earned Royalty. Licensee agrees to pay Licensor the Earned
Royalty of eight percent (7%) on Net Revenues of the Products. until
Guarantee is met, thereafter eight (8%) percecent. "Net Revenues" as
used herein shall mean the total revenue actually received by Licensee
from sales of the Product itself. Royalties will nor be paid on any
taxes.
Licensee's total invoice price less actual returns, up to a
maximum of ten (10%) of the Net Revenues being reported. Whenever
Products are transferred in whole or in part in transactions in which
some or all of the consideration is non-monetary, or where the
transferee is affiliated with: Licensee, the transferee shall be
deemed to be made at the fair market price for the distribution
channel during the quarter in which the shipments to such persons are
made.
(c) Reports. Licensee shall pay the advances in the amounts and
on the dates and upon the terms and conditions specified in Section 2
of Schedule A. Licensee shall account to Licensor with regard to
royalties due within thirty (30) days following the conclusion of each
calendar quarter in which the Product is distributed. Each such
accounting ("Statement(s)") shall contain the appropriate calculations
relating to the computation of payments payable to Licensor under this
Agreement and such payments shall be remitted and paid to Licensor
with the particular Statement indicating such amount due. All
Statements hereunder shall be deemed rendered when deposited, postage
prepaid, in the United States mail, addressed to Licensor Attention
Joy Tashjian at American Champion Entertainment, Inc.. Each Statement
and all items contained therein shall be deemed correct and shall be
conclusive and binding upon Licensor upon the expiration of one year
(1) year from the date rendered, unless, within such one (1) year
period, Licensor delivers written notice to Licensee objecting to one
or more items of such Statement and such notice specifies in
reasonable detail the items to which Licensor objects and the nature
of and reason for Licensor 's objection thereto. In such event
Licensor may exercise its audit rights under this Section, provided
said audit commences within three (3) months from the date Licensee
receives written notice objecting to the Statement. Licensee shall
keep books of account relating to licensing and distribution of the
Products on the same basis and in the same manner and for the same
periods as such records are customarily kept by Licensee. Licensor
may, upon reasonable notice and at its own expense, audit the
applicable records at Licensee's office, in order to verify any
Statements rendered hereunder. Any such audit shall be conducted only
by a certified public accountant whom is not held on retainer by
Licensor nor working on a contingency fee and shall take place only
during reasonable business. All of the information contained in
Licensee's books and records shall be kept confidential except to the
extent necessary to permit enforcement of Licensor 's rights
hereunder, and Licensor agrees that such information inspected and/or
copied on behalf of Licensor hereunder shall be used only for the
purposes of determining the accuracy of the Statements, and shall be
revealed only to such employees, agents and/or representatives of
Licensor as necessary to verify the accuracy of the Statements except
to the extent necessary to permit enforcement of Licensor 's rights
hereunder. Licensee shall be furnished with a copy of Licensor 's
auditor report within thirty (30) days after the completion of such
report. In no event shall an audit with respect to any Statement
rendered hereunder commence after one year after the date of the
relevant Statement nor shall audits be made hereunder more frequently
than one (1) time annually nor shall the records supporting any such
Statements be audited more than once. In addition, Licensee shall be
responsible for all reasonable documented costs incurred by Licensor
to conduct such an examination should an underpayment of ten (10%)
percent or greater be discovered. All royalties will be due and
payable in US dollars, unless otherwise specified by Licensor.
(d) Taxes. If any taxes imposed by governments other than the
U.S based on funds remitted to Licensor are required to be paid by
Licensee on behalf of Licensor and Licensee in fact pays such taxes,
Licensee may deduct these from the royalties due, provided that
Licensee furnishes Licensor with documentation sufficient to enable
Licensor to receive a credit for such taxes from the U.S government
and that Licensor is able to claim the benefit of such credit.
Licensee agrees to reimburse Licensor for any taxes withheld from
royalties for which Licensor does nor receive such a credit.
(e) Retention of Records. Licensee shall keep full and accurate
books of account relating to licensing and distribution of the
Products on the same basis and in the same manner and for the same
periods as such records are customarily kept by Licensee. Licensor
may, upon reasonable notice and at its own expense, audit the
applicable records at Licensee's office, in order to verify any
Statements rendered hereunder. Any such audit shall be conducted only
by a certified public accountant whom is not held on retainer by
Licensor nor working on a contingency fee and shall take place only
during reasonable business. All of the information contained in
Licensee's books and records shall be kept confidential except to the
extent necessary to permit enforcement of Licensor 's rights
hereunder, and Licensor agrees that such information inspected and/or
copied on behalf of Licensor hereunder shall be used only for the
purposes of determining the accuracy of the Statements, and shall be
revealed only to such employees, agents and/or representatives of
Licensor as necessary to verify the accuracy of the Statements except
to the extent necessary to permit enforcement of Licensor 's rights
hereunder. Licensee shall be furnished with a copy of Licensor 's
auditor report within thirty (30) days after the completion of such
report. In no event shall an audit with respect to any Statement
rendered hereunder commence after one year after the date of the
relevant Statement nor shall audits be made hereunder more frequently
than one (1) time annually nor shall the records supporting any such
Statements be audited more than once.
(f) Audits. If any audit of Licensee's books and records
reveals that License has failed properly to account and pay royalties
owing to Licensor hereunder, and the amount of any royalties which
Licensee has failed properly to account for and pay for any quarterly
accounting period exceeds, by ten percent (10%) or more, the royalties
actually accounted for and paid to Licensor for such period, Licensee
shall, in addition to paying Licensor such past due royalties,
reimburse Licensor for its reasonable documented costs incurred in
conducting the audit, together with interest on the overdue royalty
amount at an annual rate of two percent (2%) over the prevailing prime
interest rate fixed and published by The First National Bank of
Chicago, Illinois in effect as of the date on which such overdue
royalty amount should have been paid to Licensor.
10. Agreements with Manufactures and Distributors.
(a) Manufacturers and Distributors. Licensee shall have the
right to arrange with others to manufacture the Products or components
thereof for the exclusive sale, use, and distribution by Licensee, or
to serve as a distributor, localizer, translator promoter or sales
representative for the Products. Licensee agrees to enter into
written agreements with all manufactures and distributors and agrees
to incorporate into such written agreements all of the provisions
contained herein which relate to the production, distribution and sale
of the Products or are otherwise relevant to the third party's
performance as distributor or manufacturer, including an express
agreement by the parties that Licensor is a third party beneficiary of
the agreement. Licensee further agrees, upon request, to furnish
Licensor within thirty (30) days of execution, copies of all
agreements with such manufactures and distributors.
(b) Enforcement of Agreements. Licensee agrees strictly to
enforce its manufactures and distributors all of the provisions in
such agreements which protect Licensor's rights, to advise Licensor of
any material violations thereof which may have a detrimental effect on
the Licensor's rights to the Properties and of corrective actions
taken by the Licensee and the results thereof, and, at the request of
Licensor, to terminate such agreements if any manufacturer or
distributor is in material violation of any provisions identical or
similar to the obligations undertaken by Licensee herein.
11. Term and Termination.
(a) Term. Except as otherwise provided herein, the term of
this Agreement shall be the Term set forth in Section 3 of Schedule A
of this Agreement (the "Term"). Failure to comply with the terms set
forth in schedule A will result in Licensor's immediate termination of
this Agreement.
(b) Termination on Forty Five Days Notice. If Licensee
breaches any of the terms of this Agreement other than those specified
in (a) above, and fails to cure the breach within forty-five (45) days
after receiving written notice thereof or fails to undertake, within
such forty-five (45) day period, the necessary steps so that the
breach may be cured within a reasonable time, this Agreement will
terminate at the end of the relevant forty-five (45) day notice
period.
(c) Bankruptcy or Insolvency. Licensor may terminate this
Agreement if: (i) Licensee becomes insolvent, or a petition in
bankruptcy or for reorganization is filed by or against it, or any
insolvency proceedings are instituted by or against it, which petition
or proceedings are not contested in good faith by Licensee or (ii)
Licensee makes an assignment for the benefit of its creditors, is
placed in the hands of a receiver, or liquidates its business. If
Licensor terminates this Agreement under any of the foregoing
provisions, the Licensee, its receivers, trustees, or other
representatives shall have no right to sell, exploit, or in any way
deal with the Products, Properties or the Advertising Materials,
except with the express written consent of Licensor.
(d) Effect of Termination. Termination of this Agreement shall
be without prejudice to any rights or claims which Licensor or
Licensee, as the case may be, may otherwise have against the other.
Upon termination of this Agreement, notwithstanding anything to the
contrary herein, all royalties on sales thereto made shall become
immediately due and payable to Licensor, including the Guaranteed
Royalty set forth in Schedule A
(e) Discontinuance of Use of Trademarks. Subject to the
provisions of subsection 11. (g), upon the expiration or termination
of this Agreement, Licensee agrees immediately to discontinue
manufacturing selling, advertising. distributing, and using the
Products and Advertising Materials; to turn over to Licensor or to
destroy any molds, dies, patterns, or similar items in its possession
or under its control from which the Products and Advertising Materials
were made, as requested by Licensor, unless it is possible to
completely obliterate all references to Licensor and the Properties,
and to terminate all agreements with manufactures, distributors, and
others which relate to the manufacture, sale, distribution, and use of
the Products.
(f) Disposition of Inventory Upon Expiration. Notwithstanding
the provisions of subsection 11.(e), if this Agreement expires in
accordance with its terms and is not terminated for a breach by
Licensee, Licensee shall have the right to sell Products on hand or in
the process of manufacture as of such expiration or termination for a
period of one ninety (90) days immediately following expiration,
subject to payment of royalties to Licensee on any such sales and
compliance with all the terms of this Agreement. The sell-off right
granted to Licensee is expressly conditioned on Licensee's providing
Licensor with an accurate total of all inventory of Products on hand
and on Licensor's having the right to conduct a physical inventory in
order to verify such inventory. In the event Licensee fails to
provide such inventory to Licensor, and/or refuses to permit Licensor
to conduct a physical inventory, the terms of subsection 11. 9f) will
control. Upon expiration of the sell-off period, all remaining
Products shall upon Licensor's option be sold to Licensor at
Licensee's direct cost of manufacture, excluding overhead, or Licensee
shall destroy the Products and furnish Licensor with a sworn
certificate of destruction.
12. General Provisions.
(a) No Liability. Neither party will be liable to the other
for any loss or injury incurred or damages sustained by the other
party due to a failure on the part of a party to perform under this
Agreement, except Licensee's failure to make payments to Licensor as
provided herein, if such failure to perform is a result of war, not
labor strike or lock-out, shortages, fire, flood, wind, storm, Act of
God, governmental control or regulation or other similar condition
beyond the party's control.
(b) Representations and Warranties. Licensor warrants and
represents that: (i) Licensor has full right and power to enter into
this Agreement and to grant the rights set forth herein; (ii) the
Characters and Properties and all associated materials will be
original or under license by Licensor; (iii) the Characters and
Properties and all associated materials will not contain any libelous
or otherwise unlawful material or violate any personal, proprietary or
contractual right of any person or entity; (iv) all third party tools
used to create the Characters and Properties and all associated
materials do not infringe on the intellectual property rights of any
third parties. Licensee warrants and represents that: (i) Licensee
has full right and power to enter into this Agreement; (ii) the
packaging and marketing materials will be original or under license by
Licensee; (iii) the packaging and marketing materials will not contain
any libelous or otherwise unlawful material or violate any personal,
proprietary or contractual right of any person or entity; and (v) all
third party tools used to create the packaging and marketing materials
do not infringe on the intellectual property rights of any third
parties.
(c) Relationship of the Parties. Nothing contained in this
Agreement and no action taken by either party to this Agreement will
be deemed to constitute any party or any of such party's employees,
agents, or representatives to be an employee, agent or representative
of any other party or will be deemed to create any partnership, joint
venture, association or syndication among or between any of the
parties, or will be deemed to confer on any party any express or
implied right, power or authority to enter into any agreement or
commitment, express or implied, or to incur any obligation or
liability on behalf of any other.
(d) Final Agreement. This Agreement sets forth the entire and
final agreement and understanding of the parties with respect to the
matter hereof. Any and all prior agreements or understandings,
whether written or oral, with respect to the subject matter of this
Agreement are terminated. This Agreement may not be modified or
amended except by an instrument in writing specifically referring to
this Agreement and executed by the parties hereto.
(e) No Waiver. No waiver, forbearance or failure by any party
of its rig ht to enforce any provision of this Agreement will
constitute a waiver or estoppel of such party's right to enforce any
other provision of this Agreement or such party's right to enforce
such provision in the future.
(f) Remedies. The right of or to be indemnified and held
harmless under Section 7. will not be exclusive, but will be in
addition to any and all other rights and remedies to which Licensor
may be entitled under this Agreement or otherwise.
(g) Notice. Any notice or other communication will be and
effective only if given in writing, evidenced by a delivery receipt,
and personally delivered or sent by facsimile, overnight courier, or
mail, postage prepaid to the addresses shown on page 1. Any notice or
other communication if given personally will be effective upon the
date shown or the delivery if given receipt. Notices directed to
Licensor will be given to both Agent and Licensor.
(h) Assignment. This Agreement will be binding upon and inure
to the benefit of the successors and assigns of the parties hereto
Licensee and Licensor may not assign or otherwise transfer by
operation of law or otherwise, this Agreement to any entity without
the express written consent of the other party, which consent shall
not be unreasonably withheld and any attempt to do so will be null and
void. Notwithstanding the foregoing, either party may assign this
Agreement pursuant to the sale of a significant portion of its assets
or undertaking.
(i) Governing Law. This Agreement will be constructed and
enforced in accordance with the laws of the State
of California, USA. The parties agree that the exclusive jurisdiction
and venue of any action between the parties arising out of this
relationship, including disputes that may arise following termination
of this Agreement, shall be the Superior Court of California for the
County of Santa Clara or the United States District court for the
Northern District of California and each of the parties hereby submits
itself to the exclusive jurisdiction and venue of such courts for the
purpose of such an action.
(j) Submission to Jurisdiction. The Licensee hereby consents
to the jurisdiction of the courts specified above and waives any
objection based on improper venue or forum non conveniences to the
court of any proceeding in such court and waives personal service of
any and all process upon it, and consents that all such service of
process be made by mail directed to it at the address set forth on
page one of the Agreement and that service so made shall be deemed to
be completed upon the earlier of actual receipt or three (3) days
after the same shall have been sent to Licensee by Licensee's agent as
set forth below.
(k) Captions. The captions in this Agreement are for
convenience only and will not be considered a part of or be deemed to
affect the construction or interpretation of, any provision of this
Agreement.
(l) Attorney Fees. If Licensor initiates action to collect
monies due to Section 9., or to obtain Licensee's compliance with
provisions of Section 5., Licensee will pay all of Licensor's costs,
including attorney's fees, incurred in relation to such action.
13) RESERVATION OF RIGHTS
(a) The Licensor hereby reserves for itself, without
restriction, all rights not specifically granted to the Licensee
herein, including but not limited to all rights with respect to the
Articles for any and all channels of trade and/or modes of
distribution and/or delivery other than those specifically licensed
hereunder, including but not limited to premiums, giveaways, direct
mail, mail order, electronic shopping, Internet shopping, home
television shopping, vending machines, in-theater, promotional
arrangements or fan clubs. All rights not specifically granted to
Licensee herein are reserved to Licensor without restriction. Without
limiting the foregoing, Licensor reserves unto itself and/or its
assignees and/or designees the right to manufacture, distribute, offer
for sale, sell, advertise, promote, display and otherwise exploit
articles similar and/or identical to the Articles for use in
connection with premium sales or giveaways, promotional giveaways, in-
theater sales and sales outlet immediately adjacent to motion picture
theaters, sales at or adjacent to them parks, amusement parks,
entertainment centers or other amusement attractions,
mail/telephone/Internet order sales, sales through catalogue houses,
vending machine sales, home television sales (eg. home shopping
clubs), radio sales, electronic shopping sales, sales by or through
fan clubs and conventions, sales through home video retail outlets,
and/or sales in or in connection with facilities owned, operated
and/or controlled by Licensor and its affiliated and/or subsidiary
companies.
(b) Licensee agrees to furnish to Licensor, at its best
wholesale distributor price, any number of Articles ordered by
Licensor for sale in or in connection with any of the foregoing
reserved rights.
The parties have agreed to the terms of this license contained above.
Mainframe Entertainment, Inc. Company
By: /s/ Joy Tashjian By: /s/ David Steinberg
President & CEO President
American Champion Marketing Group Romar International
Agent for Mainframe Entertainment, Inc.
Date: August 22, 2000 Date: August 22, 2000