AGR0022798
MASTER LICENSE
and
EXCLUSIVE DISTRIBUTION
AGREEMENT
Between
L&M Media, Inc.
and
INTERNET INFINITY, INC.
The following agreement is intended to explain the relationship of L&M Media,
Inc. AKA Lord & Xxxxxx Productions, Inc. and the Company known as Internet
Infinity, Inc.
2.) L&M Media, Inc. L&M) grants Internet Infinity, Inc., (III) the exclusive
right to manufacturer, duplicate, produce, advertise, promote, sell, rent,
sub-license, exhibit and distribute the (25) twenty-five L&M Health and Medical
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 it 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 L&M 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 L&M media licensed
to III.
5.) The exclusive right granted to III to distribute L&M 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 L&M programs. L&M 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. L&M grants III the exclusive right and license
to sub-license the rights to third parties under this agreement. L&M 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 10.2
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. L&M does not receive any
rights in packing and promotional materials created by III.
9.) Neither party, L&M 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. L&M 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:
The Health and Medical Series of twenty-five completed titles.
12.) The rights granted by L&M to III under this agreement are for a period of
(36) thirty-six months from April 1, 1998 to March 31, 2001.
13.) The rights granted by L&M 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 this agreement.
14.) L&M 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 the three year extension in paragraph 13 above, if III
continues to perform all its obligations under this agreement.
15.) This Agreement shall terminate forthwith, at the election of L&M, in the
event of any (i) default by III of any of its obligations hereunder, (ii)
insolvency of III (however such insolvency may be evidenced, including, without
limitation, by the inability of III to meet its debts as they mature), (iii)
complete
Exhibit 10.2
Page 2 of 6 Pages
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 distribution rights granted by L&M
to III under this agreement is the payment of Advance Royalties for the first
thirty-six months as follows:
a. The acquisition consists of two transactions with the first acquisition of
distribution rights requiring the payment of prepaid royalties of $5,000 per
year per program, with three years minimum paid in advance for five (5) programs
for total of $75,000. ($5,000 per year * three years = 15,000 * 5 programs =
$75,000).
b. In the first transaction, III will pay $75,000 in the form of 125,000 shares
of Internet Infinity common stock to L&M at the rate of $0.60 per share.
c. The value per share was based on the last trading price for non-restricted
common shares at $0.62 with a bid of $0.50 and ask of $0.625 quoted OTCBB on
July 29, 1997.
d. The second transaction for acquisition of distribution rights will require
the payment of prepaid royalties of $5,000 per year per program, with three
years paid in advance for twenty (20) programs for a total of $300,000. ($5,000
per year * 3 years = $15,000 * 20 programs = $300,000). e. In the second
transaction, III has agreed to pay L&M $300,000 with Internet Infinity
Restricted Common Shares at 50% of the III free trading stock price. The price
is to be determined by the closing OTCBB trade price for non-restricted shares
of Internet Infinity on February 27, 1998.
f. The total prepaid royalties for the 25 programs will equal $375,000 for a
three year period amortized at $125,000 per year ending 3/31/99, 3/31/00 and
3/31/01.
g. Neither III nor III can guarantee success in the creation, acquisition or
distribution of any particular program. Therefore, L&M agrees to the following
adjustments for III based on the sales performance of the programs:
e. If the accrued royalties due from III to L&M for the sales of these programs
do not exceed $125,000 for each of the three years ending 3/31/99, 3/31/00 and
3/31/01, a credit will be issued from L&M to III for the balance of $125,000
less royalties earned by L&M for that year. III may use the credit as payment
for any other program royalties licensed by L&M or its affiliates to III. L&M at
its sole discretion may allow the III credit to be used for the
Exhibit 10.2
Page 3 of 6 Pages
purchases of goods and service from L&M or its affiliates including but not
limited to order fulfillment. However, L&M is not obligated to pay the credit in
cash at any time to III except as it elects to make such cash payment at its
sole discretion. L&M may notify III at any time in writing of its decision to
allow III to use the credit for purchases or of it election to pay the credit in
cash. 17.) III will remit to L&M quarterly a royalty of (15) fifteen percent of
the gross funds it receives during the quarter from the sales of L&M programs.
III will remit to L&M quarterly a royalty of (25) twenty-five percent of the
gross funds it receives during the quarter from the rental or sub-licensing of
L&M 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 L&M, nor are the expenses to be shared
by L&M unless approved in writing, in advance, by L&M.
19.) The parties to this agreement authorize III to send all payments,
statements, notices and other documents required or permitted under this
agreement directly to the address listed for L&M on the last page of this
agreement.
20.) Royalties due L&M 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.) L&M shall provide III with a 3/4" NTSC master program and 3- 1/2? HD master
floppy at no cost to III and L&M will allow copies of the masters (sub-masters)
of L&M programs to be made and kept in the possession of III during the contract
period.
23.) L&M 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.
Exhibit 10.2
Page 4 of 6 Pages
26.) III expects to develop a marketing/sales program for all titles during the
term of this agreement.
27.) L&M represents, warrants and agrees:
a. that III shall not be responsible to L&M any other person or entity with any
alleged interest in the programs for moneys except as specifically set forth in
this contract.
b. that L&M 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 L&M 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.
29.) L&M 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 L&M in this contract.
29.) III specifically undertakes and agrees to indemnify and hold L&M harmless
from and against all demands, claims, costs, losses, damages, liabilities,
causes of action, and expenses (including L&M'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
Exhibit 10.2
Page 5 of 6 Pages
this agreement shall be construed as if such invalid provisions were omitted.
33.) Any and all actions by III or L&M, with respect to the determination of any
claims, dispute or disagreement which may arise out of the interpretation,
performance, or breach of this agreement shall be submitted to mediation at the
written request of either III or L&M. 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 American Arbitration
Association, conducted in Los Angeles County.
This agreement is accepted by both parties as indicated below.
L&M Media, Inc.
Lord & Xxxxxx Productions, Inc. Internet Infinity, Inc.
663 The Village 0000 Xxxxxx Xxxx. X-0
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 Xxxxx Xxxx, Xxxxxxxxxx 00000
---------------------- ------------------------
Xxxxxx Xxxxxx Xxxxx Xxxxx
Date Date
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Exhibit 10.2
Page 6 of 6 Pages
