AGR01049A
MASTER LICENSE
and
EXCLUSIVE DISTRIBUTION
AGREEMENT
Between
HOLLYWOOD RIVIERA STUDIOS
and
INTERNET INFINITY, INC.
1.) The following agreement is intended to explain the relationship of Hollywood
Riviera Studios and the Company known as Internet Infinity, Inc.
2.) Hollywood Riviera Studios, (HRS) grants Internet Infinity, Inc., (III) the
exclusive right to manufacturer, duplicate, produce, advertise, promote, sell,
rent, sub-license, exhibit and distribute the Personal & Sales Development
Multimedia Success Programs, as hereinafter defined in Paragraph 11, worldwide
without restriction, in all languages, in unlimited quantities, in all channels
of distribution, in all media, under the following conditions:
3.) III is Internet Infinity, Inc. and its heirs, assigns, licensees, or any
other trade name used by III as the party to this agreement.
4.) The exclusive right granted to III to distribute certain HRS programs
include the following formats: floppy disk, digital video, CD-ROM,
videocassette, videodisks, film or any other present or future format now in
existence or later developed which can be used to record the HRS media licensed
to III.
5.) The exclusive right granted to III to distribute HRS programs includes all
forms of media and delivery of content of media presently known and/or in use or
to be devised and used in the future, including interactive television,
satellite and Internet, not withstanding the nature of format used, form of
delivery system or contrivance utilized, venue utilizing such programming or
method of payment.
6.) "Exclusive" means sole control and supervision by III of all sales and
marketing efforts of the licensed HRS programs. HRS will not manufacturer,
duplicate, produce, advertise, sell or distribute the programs or license or
sub-license these rights to any third parties, during the term of this
agreement, anywhere, worldwide. HRS grants III the exclusive right and license
to sub-license the rights to third parties under this agreement. HRS reserves
the right to approve any sub-licensing or assignment of the rights granted by
this Agreement to any third party licensee, such approval not to be unreasonably
withheld.
Exhibit 10.3
Page 1 of 6 Pages
7.) III shall have the sole discretion on all issues relating to creating and
marketing the programs including but not limited to the right to create
packaging material, brochures and other selling aids for the programs, and to
create and use all other marketing and promotional materials III shall deem
necessary.
8.) III will be responsible for providing any artwork for packaging and will
provide such packaging including boxes or folders. HRS does not receive any
rights in packing and promotional materials created by III.
9.) Neither party, HRS nor III shall incur any obligation in the other's name.
The parties shall act solely as independent contractors under this agreement and
nothing contained herein shall create or be construed as creating a partnership,
joint venture, agency or any other relationship between the parties other than
one of independent contractor.
10.) III shall be entitled to sell, market and distribute other products,
including its own creations and programs, as an independent contractor and such
distribution shall not be deemed to be a breach of this agreement. HRS shall be
entitled to sell, market and distribute other products, including its own
creations and programs, as an independent contractor and such distribution shall
not be deemed to be a breach of this agreement.
11.) "program(s)" defined as:
Personal & Sales Development Multimedia Success Programs. Material rights
include existing printed text and electronic video, CD and Internet versions to
be created
12.) The rights granted by HRS to III under this agreement are for a period of
(24) twenty-four months from April 1, 1999 to March 31, 2001.
13.) The rights granted by HRS to III in this agreement shall be extended for an
additional thirty-six months from April 1, 2001 to March 31, 2004 if III has
performed all its obligations under the agreement.
14.) HRS grants III the first right of refusal to extend the distribution rights
covered by this Agreement, in perpetuity, (in agreement with the longest legal
term allowable under existing copyright and contract laws applicable to this
agreement), beyond a three year extension in paragraph 13 above, if III
continues to perform all its obligations under the agreement.
15.) This Agreement shall terminate forthwith, at the election of HRS, in the
event of any (i) default by III of any of its obligations hereunder, (ii)
insolvency of III (however such
Exhibit 10.3
Page 2 of 6 Pages
insolvency may be evidenced, including, without limitation, by the inability of
III to meet its debts as they mature), (iii) complete or partial liquidation or
suspension of the business of III, (iv) filing by or against III of a voluntary
or involuntary petition pursuant to any present or future bankruptcy law, or any
law for the protection of debtors, or (v) dissolution of III under applicable
corporation laws.
16.) Good and valuable consideration for the rights granted by HRS to III under
this agreement the payment of Prepaid Royalties as follows:
III will obtain the rights for the Program from HRS by paying a non refundable
advance royalty fee of $150,000 in restricted III common stock and no cash to
HRS for the development of the Program. III will pay a quarterly cash royalty of
20% on gross sales of the Program over $750,000.
b. III will pay the $150,000 by issuing 517,241 shares of Internet Infinity
Restricted Common Shares to HRS.
c. The total prepaid royalties for the programs will equal $150,000 for a
two-year period amortized at $75,000 per year commencing at the first shipment
of the programs by III.
d. Neither III nor HRS can guarantee success in the creation, acquisition or
distribution of any particular program. Therefore, HRS agrees to the following
adjustments for III based on the sales performance of the programs:
e. If the accrued royalties due from III to HRS for the sales of these programs
do not exceed $150,000 for the two years following commencement of delivery of
the first programs by III, III may request a credit from HRS for that part of
the unearned prepaid royalties paid with stock. The credit shall be equivalent
to 20% of the difference between the actual royalties earned and owed to III and
the $150,000 prepaid with III shares.
Any credit for prepaid royalties issued by HRS to III shall at III?s
sole discretion be applied to: 1) purchases of goods and service from HRS and
its affiliates L&M Media, Inc. or Apple Media Corporation, 2.) other royalties
due to HRS and its affiliates L&M Media from III. HRS is not obligated to pay
off the credit in cash at any time. HRS shall notify III in writing at any time
of its decision to allow III to use the credit for other purchases, royalties or
of it election to pay all or part of the credit in cash.
g. In addition, a Stock Options is granted to HRS for 258,621 @ $0.58 as an
incentive for the creation of the Program. Other stock
Exhibit 10.3
Page 3 of 6 Pages
options may be granted from time to time by the Board to HRS and the members of
their creative team as incentive for continued high quality performance in the
creation of programs for III.
17.) III shall pay HRS quarterly a royalty of (20%) twenty percent of the gross
funds it receives during the quarter from the sales, rental or sub-licensing of
HRS programs to a third party. Such report of sales and royalty payments shall
be due thirty days after the end of the quarter.
18.) It is understood by both parties that expenses of operation, costs of
manufacturing, printing, duplication are responsibility of III and not to be
deducted from any payments otherwise due HRS, nor are the expenses to be shared
by HRS unless approved in writing, in advance, by HRS.
19.) The parties to this agreement authorize III to send all payments,
statements, notices and other documents required or permitted directly to the
address listed for HRS on the last page of this agreement.
20.) Royalties due HRS shall be paid by check in United States currency and
shall accompany the royalty statement.
21.) III Video will be responsible for advertising, accepting and filling
orders, billing, collecting payments, and accounting for sales.
22.) HRS shall provide III with a 3/4" NTSC master program and 3- 1/2? HD master
floppy at no cost to III and HRS will allow copies of the masters (sub-masters)
of HRS programs to be made and kept in the possession of III during the contract
period.
23.) HRS shall, for a period of six months following the final expiration of
this agreement grant III the non-exclusive right to sell and/or rent its
inventory of programs remaining as of the expiration date. The agreed percentage
of royalties in Paragraph 16, will apply during the six month "sell-off" period.
24.) All copies of each Video program shall contain appropriate and legally
sufficient copyright notices, which shall be inserted by III. Each Video program
shall bear the trademark of III Video.
25.) It is L&M?s responsibility to pay talent or creative residuals on programs
as they now exist. Payment to present talent persons is in no way a direct or
indirect responsibility of III.
26.) III expects to develop a marketing/sales program for all titles during the
term of this agreement.
27.) HRS represents, warrants and agrees:
Exhibit 10.3
Page 4 of 6 Pages
a. that III shall not be responsible to HRS any other person or entity with any
alleged interest in the programs for moneys except as specifically set forth in
this contract.
b. that HRS has obtained or will obtain proper and effective licenses or grants
of authority to use the results of the services or performers, and other
persons, connected with the production of the programs.
c. that HRS is the copyright proprietor of the masters and has the exclusive
right to dispose of each and every right granted or purported to be granted to
III in this agreement.
28.) HRS specifically undertakes and agrees to indemnify and hold III harmless
from and against all demands, claims, costs, losses, damages, liabilities,
causes of action, and expenses (including III' reasonable attorney's fees)
resulting directly or indirectly from any claimed breach of any agreement,
representation or warranty made by HRS in this contract.
29.) III specifically undertakes and agrees to indemnify and hold HRS harmless
from and against all demands, claims, costs, losses, damages, liabilities,
causes of action, and expenses (including HRS's reasonable attorney's fees)
resulting directly or indirectly from any claimed breach of any agreement,
representation or warranty made by III in this contract.
30.) This agreement has been entered into in the State of California, and the
validity, interpretation and legal effect of this contract shall be governed by
the laws of the State of California with respect to the determination of any
claims, dispute or disagreement which may arise out of the interpretation,
performance, or breach of this contract.
31.) The agreement shall endure to the benefit of and be binding upon the heirs,
successors and assigns of the parties.
32. This agreement contains the entire understanding of the parties hereto
relating to the subject matter hereof and cannot be amended, modified, changed
or terminated except by a written instrument duly signed by authorized officers
of the parties hereof. A waiver by either party of any term or condition of this
agreement in any instance shall not be deemed or construed as a waiver of such
term or condition for the future or of any subsequent breech thereof. The
invalidity of any particular provision of this agreement, and this agreement
shall be construed as if such invalid provisions were omitted.
33.) Any and all actions by III or HRS, with respect to the determination of any
claims, dispute or disagreement which may arise out of the interpretation,
performance, or breach of this agreement
Exhibit 10.3
Page 5 of 6 Pages
shall be submitted to mediation at the written request of either III or HRS. If
no resolution results between the parties within ninety days of the commencement
of mediation, the matter shall be submitted to binding arbitration under the
rules of the American Arbitration Association, conducted in Los Angeles County.
This agreement is accepted by both parties as indicated below.
Apple Realty, Inc. Internet Infinity, Inc.
DBA: Hollywood Riviera Studios
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Exhibit 10.3
Page 6 of 6 Pages
