Exhibit 10.5
MTV NETWORKS
A VIACOM COMPANY
November 15, 2002
Terry Marco
Director of Marketing
The Singing Machine Company
6601 Lyons Road, Bldg. A-7
Coconut Creek, FL 33073
Dear Ms. Marco:
Reference is made to the Merchandise License Agreement dated November 1, 2000,
as amended January 1, 2002, by and between MTV Networks, a division of Viacom
International Inc. ("MTVN") and The Singing Machine Company, Inc. ("Licensee")
with respect to the licensing of the MTV: Music Television name, trademark and
logo in connection with certain song compilations for use in connection with a
"Karaoke" machine (the "Agreement"). Capitalized terms used without definition
herein shall have the respective definitions set forth in the Agreement.
Notwithstanding anything to the contrary contained in the Agreement, MTVN and
Licensee hereby agree that the "Basic Provisions" section of the Agreement
shall be amended as follows, including the Additional Terms and Conditions
section as indicated in Paragraph 3 below:
1. "Licensed Territory", add the following:
Australia
2. "Guaranteed Minimum Royalty", add the following:
In consideration for the additional rights granted hereunder to Licensee,
Licensee shall pay to MTVN, an additional Guaranteed Minimum royalty of
Five Thousand United States Dollars (US$5,000)(the "Australia Guaranteed
Minimum Royalty") payable upon Licensee's execution of this Amendment.
Licensee shall report sales of Licensed Products in Australia separately
from those royalties earned in the United States, its territories and
possessions, utilizing the attached Royalty Report form. In addition, it is
understood and agreed that Licensee shall not have the right to cross
collateralize royalties earned in respect of sale of the Licensed Products
between territories (e.g. royalties earned in the United States, its
territories and possessions may not be applied against royalties earned in
Australia, and vice versa). The Australia Guaranteed Minimum Royalty is a
one-time payment and the Licensee shall not have any obligation to make
additional payments for the right to sell the Licensed Productu8s currently
granted under the Agreement in Australia, other than royalties due MTVN in
respect of sale of the Licensed Products in Australia.
3. Article 4, Quality Samples, Approvals, and Manufactures, subparagraph (d),
add the following:
With respect to Australia only, concurrently with the initial shipment of
Licensed Product, Licensee shall send 4 product samples of Music Product
(as defined in the Agreement) and 2 product samples of MTV Karaoke Machines
(as defined in the Agreement) directly to Miriam Wermelt, Manager,
International Consumer Products, 1515 Broadway, New York, NY 10036, 47th
floor and 2 of each Licensed Product each subsequent year of the License
Term.
Nothing contained herein shall be deemed a waiver of any of MTVN's rights and
remedies, with respect to the performance of the Agreement at law or equity, all
of which are expressly reserved, nor shall anything contained herein relieve
Licensee of its obligations set forth in the Agreement.
Except as otherwise herein amended, the Agreement is hereby ratified and
confirmed in all respects.
Please indicate your acceptance of the foregoing by signing in the space
provided below.
Very truly yours,
ACCEPTED AND AGREED TO:
MTV NETWORKS, a division of
The Singing Machine Company, Inc. Viacom International Inc.
By: /s/ John Klecha By: /s/ Kathleen Hricik
--------------------------- -----------------------------
Name: John Klecha Name: Kathleen Hnak
Title: President & COO Title: EVP International Program
Enterprises
Date: 11/26/02 Date:
Exhibit A
MTV NETWORKS ROYALTY REPORT
Licensee: _____________________
Property: _____________________
Reporting Period: _____________
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Product Design # Retail Unit Quantity of Total Royalty Royalty Deductions
Description Account Price Units Sold Sales Rate Due
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Totals:
------------ --------- -------- ------------
Total Royalty Due:_______________
Less Deductions: ________________
Less Advance Paid
(or balance forward):____________
Balance Forward:_________________ or Amount Due:______________
I hereby certify that the above information is true and accurate:
Signature:_______________________________
Print Name:______________________________
Title:___________________________________