AGREEMENT
August 9, 2005
YZ Business Consulting ("PROVIDER"), a New Jersey corporation having an office
at: 52 Atrium Way, Manalapan, NJ 07726 in the person of President Y.Zilman
and
Royal Capital Management, Inc. ("Licensee"), a New Jersey corporation having an
office at: 325 Flower Lane, Morganville, New Jersey 07751 in the person of Vice
President E.Klebanov
have entered into this Agreement as follows.
1. The parties hereto have agreed by a mutual consent to accept and effect
hereby the new terms and conditions of Agreement dated July 26, 2002
between YZ Business Consulting and Royal Capital Management, Inc. in its
entirety as attached hereto.
2. Upon the signing of this Agreement the said Agreement of July 26, 2002
between YZ Business Consulting and Royal Capital Management, Inc. shall be
considered null and void.
PROVIDER LICENSEE:
By: /s/ Yevsey Zilman By: /s/ Eduard Klebanov
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Name: Yevsey Zilman Name: Eduard Klebanov
Title: President Title: Vice President
Date: August 9, 2005 Date: August 9, 2005
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This agreement is confidential
AGREEMENT
Cover Sheet
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Parties: Address for notices:
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YZ Business Consulting ("PROVIDER"), YZ Business Consulting
A New Jersey corporation having an office at 52 Atrium Way, Manalapan, NJ 07726
52 Atrium Way, Manalapan, NJ 07726 Telephone/Telefax: (732) 446-1972
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Royal Capital Management, Inc. ("Licensee") Eduard Klebanov
a New Jersey corporation having an office at: 325 Flower Lane, Morganville, New Jersey 07751
325 Flower Lane, Morganville, New Jersey 07751 Telephone: (908) 770-7369
Telefax: (732) 617-8658
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Effective Date: August 9, 2005
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Scheduled Termination Date: pursuant to Section 4 herein
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This agreement (the "Agreement") is by and between the parties identified above
(collectively, the "Parties") and consists of this Cover Sheet, the attached
General Terms and Conditions and any schedules referred to therein. This
Agreement shall become effective when signed by both Parties on the date
indicated above (the "Effective Date"). The schedules shall be construed to be
fully consistent with all of the provisions of the General Terms and Conditions
and, in the case of any conflict, the General Terms and Conditions shall prevail
unless a schedule separately executed by both Parties expressly amends
particular provisions of the General Terms and Conditions, in which case the
amendments of such schedule shall prevail over such particular provisions of the
General Terms and Conditions.
This agreement shall be executed in two counterparts, each of which shall be
deemed an original but both of which shall constitute one and the same
instrument. Each page of this agreement shall be initialed and signed by the
Parties.
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General Terms and Conditions
1. DEFINITIONS
For the purposes of this Agreement, certain terms have been defined below and
elsewhere in this Agreement to encompass meanings that may differ from, or be in
addition to, the normal connotation of the defined word.
1.1 "Royalties" shall have the meaning set forth in Schedule A.
1.2 "Term" shall mean the period beginning on the Effective Date and ending
as indicated in Section 4 herein.
1.3 "Subsidiary" of a Party means a corporation or an affiliate controlled
by the Party. For the purposes of this paragraph, to "control" a
corporation or an affiliate means to own or control, either directly or
indirectly, 51% or more of the shares or other securities entitled to
vote for election of directors of the corporation or the affiliate.
Notwithstanding the foregoing, any corporation or affiliate shall be
deemed to be a Subsidiary only so long as such ownership or control
exists.
1.4 "Technology" means all technical know-how and intellectual property with
a general name ZS SuperTutor(C) developed by the PROVIDER and/or
shareholder(s) of the PROVIDER, which is designed to develop educational
aids in form of a software program on CD's used to study foreign
languages with the help of electronic visual devices, such a personal
computer, analog and/or digital display devices, Internet-based systems,
and others. Certain aspects of the "Technology" were demonstrated by
representatives of the PROVIDER to the Licensee, which acknowledgement
is hereby acknowledged by the Licensee by signing the Agreement. At a
minimum, a portion of the "Technology" is described in United States
provisional application filed by the undersigned representative of the
PROVIDER, a copy of which is attached herewith.
1.5 "Product" means any Educational Aid in form of a software program used
to teach foreign languages, which may be sold or access to which produce
revenue and which was developed on the basis of the Technology.
1.6 "Total revenues" means the sum of funds obtained by the Licensee in a
given time period from sales of the product or products. Total Revenues
include funds obtained by the Licensee directly and the total amount of
funds obtained by any Subsidiaries of the Licensee by selling the
product(s) through sub-licensing arrangements with the Licensee. This
Agreement regulates the sub-licensing activities of the Licensee as
described herein below.
2. LICENSE
2.1 Agreement In General. The Parties wish to enter into this Agreement to
develop, upgrade and market Products referenced to in Article 1.5 above.
In general terms, the PROVIDER shall provide the Licensee with a) the
technical know-how and b) the intellectual property related to the
Technology, and the Licensee shall develop, produce and market
Product(s), pay Royalties to the PROVIDER and provide legal protection
for the technical know-how and the intellectual property of the
PROVIDER, and pay all related costs.
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2.2 ObligatioHns of the Parties.
2.2.1 In accordance with and subject to the terms and provisions described
herein, the Provider, acting as the right holder for the Educational Aid
in form of a software program used to teach the English language, named
ZS SuperTutor(C), grants to the Licensee
a) an exclusive proprietary right to the Educational Aids in form
of a software program used to teach foreign languages developed
on the basis of the Technology, as well as an exclusive right to
develop, improve, upgrade and sell the Educational Aids; and
b) a right to carry out activities in order to utilize the
Educational Aids for the benefit of both Parties, e.g.
establishing any educational systems, opening any teaching
centers, schools, training courses, individual classes and the
like; and
c) a right to obtain from the PROVIDER a license to all types of
registration materials related to the Technology of development
of Educational Aids designed to teach foreign languages, which
shall be executed and obtained by the Licensee in the name of
the PROVIDER in the patent institutions of the United States or
in foreign countries during the Term of this Agreement.
2.2.2. In accordance with and subject to the terms and provisions described
herein, the Licensee agrees to pay the Royalties as set forth in
Schedule A and to undertake other Obligations as described herein below.
2.3 Obligations of the Licensee. Subject to the terms and provisions of this
Agreement, the obligations of the Licensee shall be as follows:
2.3.1 The Licensee shall pay Royalties to the PROVIDER as set forth in
Schedule A.
2.3.2 The Licensee shall ensure the development of an Educational Aid for
teaching the English language as a second language ("ESL Program") and
for this purpose enter into necessary agreements with necessary
contractors.
2.3.3 After a necessary financing has been secured and obtained, the Licensee
shall agree upon with the Provider and organize production and
commercial sales of the ESL Program products as described above.
2.3.4 After a necessary financing has been secured and obtained, the Licensee
shall ensure the sales of the first lot of ESL Program products within a
period of time agreed upon with the Provider. The Licensee shall furnish
to the PROVIDER the evidence of a) the existence of the quantity of the
readily marketable products; and b) the existence of readily available
distribution channels for the products.
2.3.5 The Licensee shall carry out the business development and marketing
research to expand the scope and the geography of sales of the Products.
2.3.6 The Licensee shall provide all necessary technical support for all
marketed products subject to applicable rules and standards.
2.3.7 The Licensee shall bear the cost of preparation and protection of the
intellectual property in the name of the right holders directed to the
Technology of development of Educational Aids used to teach foreign
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languages not to exceed $50,000US or as mutually agreed by both parties.
The Licensee shall keep confidential all information, which may be
available in any non-published applications claiming priority therefrom,
shall not disclose any such information to third parties, and shall not
provide third parties with copies thereof without written consent of the
PROVIDER.
2.3.8 The Licensee shall provide to the PROVIDER, if requested, with all
information related to the utilization and marketing of the Products.
2.3.9 In any year expenditures of Licensee in connection with the activity
covered by this agreement should not exceed $250,000 US from the capital
raised or as mutually agreed by both parties.
2.4 Obligations of the PROVIDER. In addition to grant of rights and subject
to the terms and provisions of this Agreement, the obligation of the
PROVIDER shall be as follows:
2.4.1 The PROVIDER shall provide technical support, supervision, and
professional advice to the Licensee in the development of the
Educational Aids.
2.4.2 The PROVIDER shall provide the Licensee with the necessary
information to enable the Licensee to exercise the rights
granted to the Licensee.
2.4.3 The PROVIDER shall communicate to the Licensee all facts known
to the PROVIDER, which relate to the Educational Aids and
further the development of the business.
2.4.4 The PROVIDER shall assist the Licensee in obtaining registration
materials in the name of the right holders related to the
protection of the intellectual property. The issuance of such
registration materials to the right holders or a failure of such
registration materials to issue shall have no effect on further
obligation of the Parties under this Agreement.
2.5 Have Made Rights and Marketing Rights. Licensee may have Products made
and marketed for it by a third party for the sole purpose of Licensee
exercising the license set forth in Section 2.2.1 provided that: (a)
such third party provides the Products made and marketed by it solely
for Licensee and no other person or entity, (b) these "have made" right
and marketing right are not exercised in a manner such that it is a sham
for the purpose of effectively sublicensing the Licensed Products to
such third party.
2.6 Subsidiaries. Licensee is further granted the right to grant to any of
its Subsidiaries a sublicense within the scope of the license herein
granted to Licensee, provided that (a) Licensee first obtains PROVIDER's
written consent before granting a sublicense to an entity that becomes a
Subsidiary after the Effective Date, and (b) both Licensee and its
sublicensees shall be responsible for the actions or omissions of the
sublicensees and both shall be jointly and severally liable to PROVIDER
if any such actions or omissions breach any provision of this Agreement.
Any such sublicense granted to a Subsidiary shall immediately terminate
in the event that the sublicensee ceases to be a Subsidiary. Any
sublicense permitted under this Section may be made effective
retroactively, but not before the Effective Date nor before the
sublicensee becoming a Subsidiary of Licensee. The revenues which
Subsidiaries derive from Products shall be counted toward the Total
Revenues as described herein. Licensee is further obligated to report
the activities of the Subsidiaries with respect to the Educational Aids
to the PROVIDER.
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3. PAYMENTS
3.1 Payments and Royalties. In consideration of the license and rights
granted in this Agreement, Licensee shall pay to PROVIDER the Royalties
as provided in Schedule A.
3.2 Accrual. Unless otherwise provided in Schedule A, Actual Expenses shall
accrue on any activities related to this agreement and Actual Royalties
shall accrue on the first use, distribution, performance or display of
the Products by Licensee, Licensee's Subsidiaries or its and their
direct or indirect customers that result in revenues received. The
obligation to pay accrued Royalties shall survive termination of this
Agreement. When an entity ceases to be a Subsidiary of Licensee,
Royalties which have accrued with respect to such entity, but which have
not been paid, shall become payable along with Licensee's next scheduled
Royalty payment. Notwithstanding any other provision hereunder, Actual
Royalties shall accrue and be payable only to the extent that
enforcement of Licensee's obligation to pay such Actual Royalty would
not be prohibited by applicable law and in no circumstances these
royalty payments will create loss for the activity covered by this
agreement.
3.3 Quarterly Royalty Payments and Reports. Within thirty (30) days after
the end of each calendar quarter (i.e., within 30 days after March 31st,
June 30th, September 30th and December 31st) during the Term, Licensee
shall pay PROVIDER the Royalties based on the sales revenues received of
the Licensee in the quarter. The first and all consecutive payments
shall be paid at the end of each calendar quarter, in which Actual
Royalties have been accrued, and the last shall be paid at the end of
the quarter during which the Term ends provided this Agreement is ended.
Simultaneously with such payment, Licensee shall provide PROVIDER with a
report certified by a duly authorized officer of Licensee (the "Royalty
Report") which shall identify this Agreement and include the information
set forth in Schedule A as well as any other information PROVIDER may
reasonably require from time to time. Such information shall be shown
separately for Licensee and each Subsidiary which accrued Actual
Royalties during the corresponding calendar quarter. If no Actual
Royalties were accrued during a calendar quarter, the Royalty Report
shall state that fact. The parties shall verify and, if necessary,
adjust the above financial settlement upon completion of each six-month
period of operation in accordance with the Licensee's relevant auditor
reports and based on invoices of the PROVIDER. The Licensee shall pay
the amounts against such invoices of the PROVIDER not later than within
five (5) banking days from the date of receipt of the same by the
Licensee. The principle and method of payments described herein above
shall be applicable to all products specified herein.
3.4 Method of Payment and Reporting. All payments required hereunder shall
be paid to PROVIDER by electronic bank transfer to the following
account: Bank: CHASE MANHATTAN BANK, 2 Penn. Plaza, New York, NY 10001,
Bank Acct Name: Y.Z. BUSINESS CONSULTING INC.; Bank Acct Number:
150-0877633-65; ABA: 021-000-021; SWIFT: CHASUS33. Royalty Reports shall
be sent to the address indicated above. PROVIDER may change the
foregoing payment account and address information upon written notice to
Licensee.
3.5 Overdue Payments. Overdue payments hereunder shall be subject to a late
payment charge calculated at an annual rate of three percent (3%) over
the U.S. prime rate or successive U.S. prime rates (as posted in the
Wall Street Journal) during delinquency. If the amount of such charge
exceeds the maximum permitted by law, such charge shall be reduced to
such maximum.
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3.6 Overpayment. PROVIDER will credit to Licensee any overpayment of
royalties made in error if such error is claimed by the Licensee,
identified and agreed upon by the Parties in writing.
3.7 Taxes. Licensee shall bear all taxes, duties, levies and other similar
charges (and any related interest and penalties), however designated
(hereinafter, "governmental charges"), imposed as a result of the
existence or operation of this Agreement, including any tax which
Licensee is required to withhold or deduct from payments to PROVIDER,
except (a) any tax imposed upon PROVIDER in a jurisdiction outside the
United States if and only to the extent that such tax is allowable as a
credit against the United States income taxes of PROVIDER, and (b) any
net income tax imposed upon PROVIDER by the United States or any
governmental entity within the United States proper (the fifty (50)
states and the District of Columbia). In order for the exception
contained in (a) to apply, Licensee must reduce such tax to the extent
possible giving effect to the applicable Income Tax Convention between
the United States and Licensee's country of incorporation, and furnish
PROVIDER with such evidence as may be required by United States taxing
authorities to establish that such tax has been paid so that PROVIDER
may claim the credit. If Licensee is required to bear any governmental
charges pursuant to this paragraph, then Licensee shall pay any
additional taxes, charges and amounts as are necessary to ensure that
the net amounts received by PROVIDER after all such governmental charges
are made are equal to the amounts which PROVIDER is otherwise entitled
under this Agreement as if such governmental charges did not exist.
3.8 Other Costs. Other than those payments expressly set forth in this
Agreement, each Party will be responsible for the costs it incurs in
carrying out its obligations under this Agreement.
3.9 Record Keeping. During the Term and for a period of six (6) years
thereafter, Licensee shall keep complete, full, clear and accurate books
and records of all information which may be required by PROVIDER in
order to confirm the accuracy of Licensee's Royalty Reports, payments
and other obligations hereunder. PROVIDER shall have the right to have a
professionally registered accountant who shall not be paid on a
contingency basis inspect and copy such books and records of Licensee to
the extent necessary for such purpose, provided that such activity shall
be conducted during Licensee's regular business hours upon at least five
(5) days prior notice and, provided further that, Licensee may not be
audited more than once in any calendar year. Such accountant shall not
reveal any information to PROVIDER or any third party other than what is
required to be reported under this Agreement, unless the accountant is
ordered to disclose additional information by a court of competent
jurisdiction. The cost of the inspection shall be paid by PROVIDER
unless the inspection reveals that Licensee underpaid or underreported
the total amount owed by 5% or more, in which case Licensee shall pay up
to $5,000 of the reasonable costs of the inspection and related
collection and in which case Licensee may thereafter be audited by
PROVIDER once each royalty reporting period.
4. TERM AND TERMINATION
4.1. Term. This Agreement shall be effective with no time limit and shall
terminated either by a mutual consent of the Parties or pursuant to the
terms and provisions of this Section 4.
4.2. Early Termination - Either Party. Either Party may terminate this
Agreement:
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4.2.1 upon thirty (30) days prior written notice, if the other Party
has breached its obligations under this Agreement and such
breach remains uncured during such thirty (30) day period;
4.2.2 in accordance with any terms of this Agreement which expressly
provide for termination; or
4.2.3 immediately if the other Party has failed to fulfill an
obligation required by this Agreement and such failure has or
would materially prejudice the Party regardless of whether such
failure is cured,
4.2.4 immediately upon the other Party, or a third party with respect
to the other Party, filing a petition requesting liquidation,
dissolution, reorganization, suspension, rearrangement or
re-adjustment, in any form, of the other Party's debts under the
laws of the United States, or any other bankruptcy or insolvency
law; the making by the other Party of any assignment for the
benefit of its creditors; or the admission by the other Party in
writing of its inability to pay its debts as they mature.
4.3. Early Termination - PROVIDER. PROVIDER may terminate this
Agreement or pursuant to the terms and provisions above or if
(a) Licensee shall be in default of payment of Royalties or any
other payment due under this Agreement or Royalty Report
obligations hereunder three or more times in any two year
period, regardless of whether or not any such defaults are
ultimately cured or (b) efforts of Licensee to become a public
company before December 31, 2006 have failed or (c) after
becoming a public company Licensee is unsuccessful in raising
required capital within a year of becoming public.
4.4. Effect of Termination. Upon termination of this Agreement:
4.4.1 all payments and reports required under this Agreement,
including all Royalties accrued as of the date of early
termination, shall be immediately due and payable to PROVIDER;
and
4.4.2 all rights and obligations of the Parties, including the license
granted to Licensee, shall terminate except that the rights and
obligations of the Parties under this Agreement which expressly
or by their nature would continue beyond the termination of this
Agreement shall remain in effect and survive termination of this
Agreement; and
4.4.3 notwithstanding such specific termination rights, each Party
reserves all of its other legal rights and equitable remedies.
4.5. End Users. An end user may continue using a Product beyond the
termination of this Agreement if (a) the end user was properly
authorized to use the Product before the date of termination or notice
of termination, whichever is earlier (the "inventory cutoff date"), (b)
the continued use would have been permitted by this Agreement if this
Agreement had not terminated, and (c) the continued use does not breach
the end user's agreement as such agreement existed as of the inventory
cutoff date.
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5. GENERAL TERMS
5.1. Relationship of the Parties. In performing this Agreement, each of the
Parties will operate as, and have the status of, an independent
contractor. Except as may be expressly set forth in this Agreement,
neither Party will have the right or authority to assume or create any
obligations or to make any representations, warranties or commitments on
behalf of the other Party, whether express or implied, or to bind the
other Party in any respect whatsoever. Nothing in this Agreement shall
be construed as forming any partnership, joint venture, agency,
employment, franchise, distributorship, dealership or other similar or
special relationship between the Parties.
5.2. Rules of Construction. As used in this Agreement, (a) the words
"herein," "hereunder" and other words of similar import refer to this
Agreement as a whole, including all exhibits and schedules as the same
may be amended or supplemented from time to time, and not to any
subdivision of this Agreement; (b) the word "including" or any variation
thereof means "including, without limitation" and shall not be construed
to limit any general statement that it follows to the specific or
similar items or matters immediately following it; (c) descriptive
headings and titles used in this Agreement are inserted for convenience
of reference only and do not constitute a part of and shall not be
utilized in interpreting this Agreement; and (d) explicit references to
a particular section hereof shall be deemed to include a reference to
the subsections, if any, associated with the section. This Agreement
shall be fairly interpreted in accordance with its terms and without any
presumption in favor of or against either Party regardless of the
drafter.
5.3. Notice. Unless otherwise provided in this Agreement, all notices,
consents, approvals, waivers and the like made hereunder shall be in
written English to the addresses set forth on the Cover Sheet, shall
reference this Agreement and shall be sent by any of the following
methods: (a) certified mail, postage-prepaid, return-receipt requested,
(b) a delivery service which requires proof of delivery signed by the
recipient or (c) properly-transmitted facsimile followed by written
confirmation in accordance with methods (a), (b) or first-class U.S.
mail. The date of notice shall be deemed to be the date it was received
(in the case of method (c) above, the date of notice shall be deemed to
be the date the facsimile copy is received). A Party may change its
address for notice by written notice in accordance with this paragraph.
5.4. Publicity. No Party shall make any public disclosures and/or disclosures
to any third party, including the public inconsistent with the
provisions of this Agreement. Either Party may require the other Party
to promptly supply a copy of a public disclosure made by the other Party
related to this Agreement.
5.5. Applicable Law and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey without
regard to its conflicts of law rules.
5.6. Force Majeure. Neither Party shall be held responsible for any delay or
failure in performance of any part of this Agreement to the extent such
delay or failure is caused by fire, flood, explosion, war, strike,
embargo, government requirement, civil or military authority,
industry-wide shortage of goods or labor, act of God, or other similar
causes beyond its reasonable control and without the fault or negligence
of the delayed or nonperforming Party or its subcontractors ("force
majeure events"). If any force majeure event occurs, the Party unable to
perform shall give immediate notice to the other Party, stating the
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nature of the event, the anticipated length of the event and any action
being taken to avoid or minimize its effect. The Party affected by the
other's inability to perform may elect to: (a) suspend this Agreement
for the duration of the force majeure event or (b) terminate this
Agreement when the delay or nonperformance continues for a period of at
least thirty (30) days. Under no circumstances shall a force majeure
event excuse the delay of payments due hereunder.
5.7. Assertion of Unenforceability. If any provision of this Agreement is
deemed illegal or unenforceable, the Parties agree that such provision
shall be changed and interpreted so as to best accomplish the objectives
of the original provision to the fullest extent allowed by law and the
remaining provisions of this Agreement shall remain in full force and
effect. Specifically, if any one of the portions of the grant by the
PROVIDER under Subsections 2.2.1 a) and 2.2.1 b) is not effective or not
enforceable for any reason, the remaining provisions of this Agreement
shall remain in full force and effect.
5.8. Assignment. The Parties hereto have entered this Agreement in
contemplation of personal performance by Licensee and intend that the
rights granted to Licensee hereunder not extend to other entities
without PROVIDER's consent. Accordingly, neither this Agreement nor any
of Licensee's rights or obligations hereunder shall be assigned or
transferred (in insolvency proceedings, by mergers, acquisitions or
otherwise) by Licensee without such consent. Any assignment or other
transfer which is inconsistent with the foregoing shall be null and void
ab initio. Subject to the exclusivity provisions, set forth herein, the
PROVIDER may assign all or a portion of its rights and obligations
hereunder.
5.9. Change of Control. In the event that Licensee shall be acquired by or
its management shall otherwise be controlled by an entity that is a
material competitor of PROVIDER, PROVIDER shall have the right to
terminate this Agreement upon ninety (90) days written notice to
Licensee.
5.10. Infringement by Others. Licensee shall notify PROVIDER in the event that
Licensee becomes aware of any unauthorized infringement of any Patents
of the PROVIDER. The PROVIDER shall have the option, but not the
obligation, to seek redress for such infringement at its own expense and
shall be entitled to any recovery therefor. In any action for such
infringement, Licensee shall reasonably cooperate with PROVIDER at
PROVIDER's reasonable expense. Licensee shall have no right, authority
or standing to bring any action against any third party relating to the
third party's infringement of the Licensed Software.
5.11. Export. Licensee acknowledges that the Product(s) and technical
information (including, services and training), if any, provided under
this Agreement are subject to U.S. export laws and regulations and any
use or transfer of such Products and technical information must be
authorized under those regulations. Licensee agrees that it will not
use, distribute, transfer or transmit such software or technical
information (even if incorporated into other products) except in
compliance with U.S. export regulations. For the purposes of this
Paragraph, "export' means transferring or releasing to another country
or to a national of another country (wherever that person is located) by
any means, including physical, electronic, or otherwise. The obligations
of this paragraph shall survive the termination of this Agreement.
5.12. Computation of Time. If a time period provided in this Agreement
requires a certain action be performed within ten (10) or less days,
then intervening Saturdays, Sundays and legal holidays shall not be
included in the computation of time. If a time period requires a certain
action be performed within eleven (11) or more days, then intervening
Saturdays, Sundays and legal holidays shall be included in the
computation of time. In the event that a time period expires on a
Saturday, Sunday or legal holiday, the time period shall be deemed to
expire on the next day that is not a Saturday, Sunday or legal holiday.
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"Legal holidays" means New Year's Day, Birthday of Martin Luther King,
Jr., President's Day, Memorial Day, Independence Day, Labor Day,
Columbus Day, Veterans Day, Thanksgiving Day and the Friday thereafter,
and Christmas Day.
5.13. Third Party Beneficiaries. This Agreement is not intended to be for the
benefit of and shall not be enforceable by any third party. Nothing in
this Agreement, express or implied, is intended to or shall confer on
any third party any rights (including third-party beneficiary rights),
remedies, obligations or liabilities under or by reason of this
Agreement. This Agreement shall not provide third parties with any
remedy, claim, liability, reimbursement, cause of action or other right
in excess of those existing without reference to the terms of this
Agreement. No third party shall have any right, independent of any right
that exists irrespective of this Agreement, to bring any suit at law or
equity for any matter governed by or subject to the provisions of this
Agreement.
5.14 Entire Agreement; No Modification or Waiver. This Agreement constitutes
the entire agreement between the Parties concerning its subject matter
and supersedes all prior written or oral negotiations, correspondence,
understandings and agreements between the Parties respecting such
subject matter; provided, however, that all information disclosed prior
to the Effective Date related to this Agreement shall continue to be
subject to the Agreement and the Parties agree that no information shall
be disclosed under such agreement after the Effective Date. Prior
unexecuted drafts of this Agreement may not be used to interpret the
intentions of the parties to this Agreement and the fact that certain
provisions may have been added, removed or modified during negotiations
shall have no interpretive significance. No provision of this Agreement
shall be deemed modified by any action or omission or failure to object
to any action that may be inconsistent with the terms of this Agreement.
No waiver of a breach committed by a Party in one instance shall
constitute a waiver or license to commit or continue breaches in other
or like instances. This Agreement shall not be modified or rescinded,
except by a writing signed by both Parties. By way of example only, this
Agreement may not be modified by any statement appearing on any check or
similar transfer of money, or by any provision appearing in any
preprinted form of one Party unless expressly accepted by the other
Party in a writing which expressly refers to such preprinted form and
this Agreement.
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SCHEDULE A
PAYMENTS AND REPORTS
1. Actual Royalty. Licensee shall commence regular payments to PROVIDER of
forty per cent (40%) of the Total Revenues from the Licensee's sales of
any product, services or any other activities utilizing the Educational
Aids, following fulfillment by the Provider of conditions as per Item
1.1 below:
1.1 Provider shall repay the Licensee's initial stage operation
costs, the amount of which shall be a one-time cost for the
duration of this Agreement. This amount shall include expenses
for legal protection, advertising and production. The amount of
the one-time cost referred to herein shall not exceed $150,000US
or any other amount mutually agreed by the Parties. Repayment of
the actual expenses referred to herein shall be made from the
revenues received by Licensee from the sales of any product,
services or any other activities utilizing the Educational Aids.
Following the repayment of the actual expenses referred to
herein there shall commence regular payments in the amounts
stipulated above in Item 1 of this Schedule A and pursuant to
the terms and conditions of this Agreement.
2. The regular payments of the Royalty referenced to in Item 1 of this
Schedule A above shall be reduced if necessary to insure that there is
no loss for the Licensee in this type of activity.
3. Royalty Report. The Licensee shall provide the PROVIDER with a quarterly
Royalty Report that shall include, at a minimum:
- Total revenues of the Licensee for the quarter at issue and from the
date of the signing of this agreement
- the number and identity of products, services and other activities
utilizing the Educational Aids disposed of in the quarter at issue (even
if such number is zero),
- the Royalties owed for the quarter at issue; and
- the amount of Licensee's payment accompanying the Royalty Report
and/or transferred to the PROVIDER's bank account.
This Schedule A shall be an integral part of the Agreement.
PROVIDER LICENSEE:
By: /s/ Yevsey Zilman By: /s/ Eduard Klebanov
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Name: Yevsey Zilman Name: Eduard Klebanov
Title: President Title: Vice President
Date: August 9, 2005 Date: August 9, 2005