Exhibit 10.51
Licensing Agent Agreement
This Licensing Agent Agreement (the "Agreement") is entered into
on January 10, 2000 by and between American Champion Marketing Group,
Inc., a Delaware corporation with offices at 0000 Xxx Xxxxxxx, Xxxxx
000, Xxx Xxxx, XX 00000 ("ACMG") and Mainframe Entertainment, Inc., a
Canadian corporation with offices at 0000 Xxxx Xxxxxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X-0X0 ("Mainframe").
This Agreement is being entered into with respect to the
following facts:
A. Mainframe is the sole owner and has the exclusive right to
license the trademark, brand name, logo, characters, actors likeness,
voice and related properties known as: Re-Boot, Dot's Bots, and Scary
Godmother, subject to the provisions below, (collectively called the
"Properties") based upon the television of the same Properties to be
broadcast and/ or currently being broadcast on television ("Programs").
B. Mainframe desires to appoint ACMG as its exclusive agent
for purposes of licensing and merchandising the Properties for use on
or in connection with all categories of merchandise products (e.g.,
clothing, toys, sporting goods, etc.), services (collectively the
"Products"), and ACMG desires to accept such appointment in accordance
with the terms and conditions set forth in this Agreement. Grant of
rights herein,Products as defined herein, and ACMG's appointment
herein, specifically excludes the following:
(i) The right to produce and distribute animated or live
action television episodes, series, video-grams or films of any length
in any and all media whether known or hereafter devised;
(ii) Agent will receive a reduced commission of (deleted
pursuant to request for confidential treatment) based on Gross Receipts
on the Xxxxx Toy License Agreement for Re-Boot Property excluding any
royalties or advances collecting or owing that relate to reporting
periods prior to the commencement of the Term hereunder. Agent would
receive a (deleted pursuant to request for confidential treatment)
commission based on Gross Receipts upon execution of any other Master
Toy Agreement or Toy Agreement with any party other then Xxxxx.
Agent may exploit any secondary toy rights that are not included in the
master toy agreement;
(iii) All forms of computer assisted or optically driven or
interactive media (including XX-XXX, XXX, XX-0, 0X0, XXX or similar
mediums);
(iv) Theme parks, amusement parks, IMAX, or other large-
formed theatrical venues location based entertainment centers, game
centers, motion simulation rides, theatre sales outlets, live
theatrical productions;
(v) All rights that form part of any third party
distribution or broadcast agreements or negotiations entered into by
Mainframe with respect to the programs where such rights are required
by such third party distribution or broadcasters as a condition of
licensing or distributing the Program(s).
(vi) All rights relating to any existing likeness or
retained rights
(vii) All music publishing rights
(viii) All rights related to the sale of stock footage
(ix) Sales in or in connection with facilities owned,
operated, or controlled by Mainframe and its affiliated and/or
subsidiary companies
(x) All revenues associated with the creation of
customized artwork or animation
(xi) Mainframe shall retain the non-exclusive right to
exploit e-commerce
(xii) The provisions of paragraph 2(B) below
1. Subject to the provisions set forth below in this
paragraph 1, Mainframe hereby appoints ACMG to represent Mainframe as
its exclusive agent for purposes of licensing and merchandising the
Properties to third parties for use on and in connection with the
Products throughout the world excluding Japan Singapore, malaysia,
Taiwan, Indonesia, Vietnam, Hong Kong and South Korea (the "Territory")
2 (a). ACMG shall submit each proposed licensing
arrangement to Mainframe for its approval in the form of a term sheet
providing reasonable detail as to the proposed transaction. Mainframe
shall forward to ACMG any proposed changes to terms promptly following
receipt. Based on the terms approved by Mainframe, ACMG shall prepare
or have prepared a merchandise license agreement ("License Agreement")
incorporating the agreed terms and such other terms and conditions as
are customary and reasonable. No license Agreement shall be entered
into without Mainframe's prior written consent. Mainframe shall have
approval over the Products and over the material terms of the License
Agreements, which approval shall be exercised in Mainframe's sole
discretion. ACMG hereby waives any claim it may have that Mainframe
did not exercise its approval rights in good faith with respect to any
proposed License Agreement. Mainframe shall respond to ACMG within
fourteen (14) days with respect to its approval or disapproval of any
proposed License Agreements. Failure by Mainframe to so respond shall
be deemed as disapproval of any such License Agreement. All License
Agreements shall be entered into in the name of Mainframe, with ACMG as
the exclusive agent, and shall be executed by Mainframe and ACMG.
2(b). ACMG acknowledges that with the respect to the
Property "Scary Godmother all rights to so called "collectable" or
"hobby" items which are intended to sell fewer than 15,000 units of any
particular item have been retained by Xxxx Xxxxxxxx and/or Xxxxx
Entertainment, Inc. In addition, Xxxxxxxx has retained all comic book,
hard cover, trade paperback, activity and coloring books, comic strips
and graphic novel publishing rights, as well as the right to produce
calendars, stationary, and greeting cards: and Xxxxxxxx shall have
meaningful consultation in connection with the creation of style
guides.
3. This Agreement shall be effective as of the date
first abouve mentioned and shall continue for the term of three (3)
years (the "term"). Commencing sixty (60) days prior to the expiration
of the such initial term, ACMG and Mainframe shall negotiate in good
faith with respect to extending the term for some additional period of
time. The initial term and any extension thereof is referred to herein
as the "Term."
4. ACMG shall do the following with respect to the Properties:
(a) Seek out, negotiate and present for approval
and execution by Mainframe, business opportunities relative to the
merchandising and licensing of the Properties.
(b) Monitor and oversee the licensing, promotion
and marketing programs with all existing or hereinafter acquired third
party licensee ("Licensees").
(c) Whenever necessary, conduct personal visits to
Licensees' manufacturing facilities, to ensure conformance with the
quality control trademark and copyright provisions of the License
Agreements.
(d) Engage in other such activities as the parties
may mutually agree and use its best efforts to maximize revenue
generated from the exploitation of the rights granted hereunder and to
enhance the value and the reputation of the Properties
(e) If appropriate, attend the Consumer Electronics
Show, the Toy fair, the annual Licensing Show, MAGIC, American Book
Association, House-wares, SHOPA, MIPCOM, MIP and other trade shows to
exhibit and display the Properties.
(f) Keep accurate books of account and records
concerning this Agreement and all License Agreements.
(g) Fulfill all its obligations under all License
Agreements including but not limited to the collection of royalties,
reports and statements of licensees.
5. Mainframe shall be responsible for all costs
associated with style guides development and any other collateral
materials that Mainframe may deem necessary. Mainframe may, at such
sole discretion, contribute to the cost of certain key marketing and
promotional events such as launches, representation at trade shows, and
special presentations. ACMG shall prepare and submit to Mainframe for
Mainframe's approval, an annual marketing plan setting out ACMG's
proposed activities and costs associated therewith for the marketing
and promotion of the Rights.
6. Mainframe shall have the responsibility at its own
cost and expense for obtaining and maintaining appropriate trademark
and copyright protection throughout the Territory with respect to the
Products. ACMG shall promptly advise Mainframe in writing of any
suspected or known infringement of the Properties which comes to ACMG's
attention.
7. Any compensation for services not already
contemplated by this Agreement shall be separately negotiated between
Mainframe and ACMG.
8. ALL monies, including advances and guarantees,
received by ACMG, Mainframe or any of their respective agents or
affiliated companies, from the licensing, merchandising or other
disposition of the Products utilizing the Properties or from any other
rights granted hereunder, but after deduction of any contractual share
of such monies payable by Mainframe to any broadcasters of the program
("Gross Receipts") shall be applied as follows:
(a) ACMG shall be entitled to (fifty percent) to 50%
commission on all Gross Receipts received exclusive
of any subagents commissions and all of ACMG's
expenses: and
(b) The balance of Gross Receipts shall be retained by or
remitted to mainframe in accordance with the
provisions below.
(c) Upon the expiration or earlier termination of this
Agreement, the agency appointed hereunder shall
terminate immediately provided that ACMG shall
(provided the Agreement has not been terminated for
ACMG's fraud, misrepresentation or other tortuous or
illegal conduct) continue to be entitled to receive
the foregoing fee and expenses with respect to any
License Agreements entered into during the Term for
the greater of (i) the actual Term of each such
License Agreement; or (ii) two (2) years from the
date of commencement of each such License Agreement;
provided ACMG continues to service such License
Agreements as provided in paragraph 4 abouve.
9(a) ACMG shall be obligated to collect all monies due
from the third party licensees in a timely manner.
Upon receipt of monies, all such monies shall be
deposited into a segregated interest-bearing bank
account to be held in trust for Mainframe provided
that ACMG may deduct its fees from such monies at
such a time as it accounts and pays Mainframe all
monies due to Mainframe. ACMG shall provide written
accounts to Mainframe on not less than a quarterly
basis within fifteen (15) days following each
calendar quarter, with the appropriate payment
accompanying each such account.
(b) Mainframe shall have the right upon, seventy-two (72)
hours notice, during reasonable business hours, to
audit, to inspect and take extracts form the books
and records of ACMG relating to this Agreement or any
License Agreement. In the event there is any
discrepancy in favour of Mainframe between the amount
actually paid to Mainframe and the amount due to it,
ACMG shall immediately remit such payment. All costs
of the audit shall be borne to Mainframe, unless the
amount of the discrepancy is five (5%) percent or
more of the amount reported, in which case the cost
of the audit shall be borne to ACMG.
10. Each of the parties (the "indemnifying Party") will
all times defend, indemnify and hold the other (including its
directors, officers, shareholders, partners, agents, employees
and permitted assigns) harmless from and against any and all
claims, damages, loss of profits, liabilities, costs and expenses
(including reasonable attorney's fees) arising out of the
indemnifying Party's breech of any of the covenants,
representations or warranties contained in this Agreement,
including the unauthorized grant or use by ACMG of the
Properties.
11.(a) Mainframe shall have the right to
immediately terminate this Agreement if:
(i) ACMG shall fail to deliver any remittance,
report or statement as and when due hereunder,
but in no event later than ten (10) days
following the date when originally due.
(ii) a petition in bankruptcy or for reorganization
is filed by or against ACMG under any
bankruptcy act now or hereafter in force, or
if ACMG makes and assignment for the benefit of
its creditors, or if a receiver, trustee,
receiver-manager, liquidator or other custodian
is appointed for all or a substantial part of
ACMG's assets, and the order of appointment is
not contest or has been contested but is not
vacated within thirty (30)days; or if ACMG
assigns or encumbers this Agreement in whole or
part contrary to the terms hereof; or if all or
a substantial part of ACMG's assets is
sequested or levied against or attached and the
order of sequestration, levy or attachment is
not contest or has been contested but is not
vacated within thirty (30) days.
(iii) mainframe is merged with an arm's length
company or a majority of Mainframe's shares are
required by an arm's length company and it is a
requirement of any such arrangement that the
rights granted to ACMG hereunder revert to
mainframe or such new company.
(b) Either party hereto shall be deemed in default
hereunder and a non-defaulting party may:
(i) terminate this Agreement on ten (10) days
written notice to the other, unless the default
has been remedied; or
(ii) terminate this Agreement immediately in the
event the default cannot be remedied,
If the defaulting party breeches any material
representation, covenant or warranty made hereunder or
breeches or defaults in the performance of any other
material provision herein on its part to be performed.
12. ACMG hereby assigns and grants to Mainframe, its
successors and assigns, a first priority lien and a continuing
security interest, and a mortgage, pledge and assignment in and
to all of the rights granted to ACMG hereunder and all rights
derived by ACMG pursuant to its exercise of such rights to secure
(a) all sums which Mainframe is entitled to receive or otherwise
be paid hereunder; (b) all rights to which Mainframe is entitled
hereunder; and (c) the performance and observance by ACMG of all
of its obligations now or hereafter existing hereunder to be
performed and observed.
13. This Agreement may not be observed by ACMG without
the prior written consent of Mainframe. Mainframe shall have the
right to assign this Agreement provided it remains liable for its
obligations hereunder to the extent not performed by its
assignee(s) unless agreed to in writing by ACMG which permission
shall not be unreasonably withheld.
14. This Agreement shall be governed by and constructed
in accordance with the laws of the Province of British Columbia
and the laws of Canada applicable therein; and the parties
irrevocably attorn to the exclusive jurisdiction of the courts of
said province with respect to all matters pertaining to this
Agreement.
15. "Key Representative". It is hereby acknowledged that
Mainframe Entertainment is a prior relationship of Xxx Xxxxxxxx
and at such a time as Xx. Xxxxxxxx may no longer be with ACMG,
Mainframe Entertainment shall have the right to terminate it's
Agreement with ACMG. Mainframe Entertainment would remain
obligated to compensate ACMG for all ongoing commissions in
accordance with Paragraph 3 of this document.
The parties have agreed to the terms of this license contained above.
American Champion Marketing Group, Inc. Mainframe Entertainment, Inc.
By: /s/ Xxx Xxxxxxxx By: /s/ Xxxxx Xxxxxx
Xxx Xxxxxxxx Xxxxx Gannon_____
(President/CEO) Chief Financial Officer
3/16/00 3/18/00
