Exhibit 10.6
AGREEMENT
THIS AGREEMENT ("Agreement"), effective as of January 8, 2010 (the "Effective
Date"), is made and entered into by and between:
(a) XXXXXXXXXXXXXXXXXXX.XXX, INC., a California corporation ("Distributor");
and
(b) XXXXXX X. XXXX, an individual; EQUITY CAPITAL GROUP, INC., a Nevada
corporation; and GRUPO MANDARIN, S.A., a Panamanian corporation (Xxxxxx X.
Xxxx, Equity Capital Group, Inc. and Grupo Mandarin, S.A. are the collective
holders of all intellectual property rights and assets known as "MMAX
Fights," "Campeon MMAXIMO," "MMAX Xtreme" and "Mixed Martial Arts Xtreme,"
and are referred to hereinafter collectively as "Producer").
Distributor and Producer may be referred to hereinafter collectively as the
"Parties" and individually as a "Party." For good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Parties hereby agree as follows:
1. Certain Definitions.
1.1 "Episode" means any one of the 39 episodes of the television production
identified in Schedule A as well as any episode of a yet-to-be-completed
television reality series based thereon.
1.2 "Exploit" or "Exploitation" means to exploit one or more Episodes by
means of Television Broadcast (as defined below).
1.3 "Force Majeure" means any cause or event the occurrence of which is
beyond the reasonable control of a Party, including, without limitation:
fire, flood, earthquake, or other natural disaster; strike, labor dispute or
unrest; failure or malfunction of any equipment, facility, system or network
provided or maintained by a third party; failure to perform or delay by any
third-party laboratory, vendor, supplier, exhibitor, licensee, sub-
distributor or agent; delay or lack of public transportation; embargo, riot,
war, insurrection or civil unrest; any Act of God including severe inclement
weather; any act of legally constituted authority; and inability to obtain
sufficient material, labor, transportation, power or other essential goods or
services required for the conduct of a Party's business.
1.4 "Episode Sublicense" means any contract, agreement or arrangement
between Distributor and a third party whereby Distributor sublicenses such
third party to Exploit any or all Episodes in the Territory.
1.5 "Television Broadcast" means exhibition, broadcast, rebroadcast,
transmission and retransmission of an Episode copy via all forms of
television and other similar electronic media or devices now known or
hereafter developed (excluding the Internet), including, without limitation:
closed-captioned and secondary audio programming (SAP), free (or over-the-
air), pay, cable, basic cable, master antenna system, community antenna
system, low and full power, multi-point distribution system, wireless, fiber
optics, microwave, Telstar type, direct broadcast system (DBS), digital,
satellite, relay, interactive, direct-to-home (DTH), and high-definition
(HDTV) television. As used herein, Television Broadcast does not include the
following: (a) pay-per-view, video-on-demand, or closed circuit; or (b) any
form of Internet streaming or downloading.
1.6 "Term" shall have the meaning set forth in Section 10 of this Agreement.
1.7 "Territory" means the United States of America, including its
territories and possessions.
2. Grant of Rights. Subject to the terms hereof, Producer hereby
irrevocably grants to Distributor the following rights during the Term
(collectively, the "Granted Rights"):
(a) the exclusive right to Exploit, and to sublicense others (pursuant
to Episode Sublicenses) to Exploit, the Episodes in the Spanish language
throughout the Territory, including the right to prepare Spanish-language
translated, dubbed and subtitled versions of the Episodes and their titles;
(b) the right to edit and reformat the Episodes as necessary to make it
suitable for Exploitation in the Territory;
(c) the right to make copies of the Episodes and materials derived from
the Episodes (collectively "Episode Materials"), as required to Exploit the
Episodes in the Territory; and
(d) the right to advertise and promote the Episodes throughout the
Territory in any and all media now known or hereafter developed, including
the right to (i) create, release, exhibit, transmit and distribute
commercials, ads, trailers, clips, still photos, artwork, excerpts, synopses,
posters, flyers, and other advertising and promotional materials and items
(collectively "Advertising Materials"), (ii) use the title of the Episodes,
and (iii) use the names, likenesses (whether photographic or otherwise),
voices and biographies of all fighters, emcees, referees, trainers,
performers, models, artists, talents, and any and all other parties who have
rendered service or material on the Episodes, in each case as Distributor
deems necessary or appropriate to carry out the advertising and promotion of
the Episodes (but not as an endorsement for any product or service other than
the Episodes).
2.1 Right of First Refusal. Producer further agrees that Distributor shall
have the right of first refusal to obtain an exclusive Spanish-language
Exploitation license from Producer on substantially the same terms as those
contained in this Agreement, with respect to all other mixed martial arts
(MMA) content and programs that may be developed by or for Producer during
the Term.
3. Participation at Trade Shows. [Intentionally omitted]
4. Delivery. Producer shall, at its sole expense, deliver to Distributor
at the address designated by Distributor all of the items set forth in
Schedule B to this Agreement (collectively "Delivery Items"), on or prior to
the delivery date set forth in Schedule B ("Delivery Date"). Producer shall
ensure that all Delivery Items conform with the standards generally required
by distributors and their licensees for the Territory, as well as with any
specific requirements set forth in Schedule B.
5. Reimbursement of Costs for Distributor Created Materials.
[Intentionally omitted]
6. Ownership. Producer remains the sole author and/or copyright owner of
the Episodes and reserves all rights in and to the Episodes not expressly
granted to Distributor hereunder. Legal ownership of and title to all
Delivery Items shall remain with Producer, subject to Distributor's right to
use Delivery Items for Exploitation of the Episodes in accordance with this
Agreement.
7. Payment and Financial Terms. As set forth in Schedule C to this
Agreement.
8. No Warranty by Distributor. Producer expressly acknowledges and agrees
that Distributor's sole obligation hereunder is to use commercially
reasonable efforts to Exploit the Episodes in the Territory, and that
Distributor makes no representation or warranty whatsoever, express or
implied, that: (a) any attempt by Distributor to Exploit the Episodes will be
successful; (b) any Episode Sublicense will be offered or concluded, or the
terms of any Episode Sublicense will be favorable to Producer; and/or (c) any
fees, royalties, revenues or proceeds (including, without limitation,
broadcast revenues and syndication revenues) will be generated from any
Exploitation of the Episodes.
9. Producer Representations and Warranties; Producer Indemnity.
9.1 Producer hereby represents, warrants and covenants that:
(a) Producer is the sole legal and beneficial owner of all of the
Granted Rights throughout the Territory and has full right, power and
authority to enter into this Agreement and to grant to Distributor all of the
Granted Rights; and Xxxxxx X. Xxxx has been duly authorized by Equity Capital
Group, Inc. and Grupo Mandarin, S.A. to enter into and execute this Agreement
in their respective names and on their respective behalf;
(b) Producer has obtained all rights, including all third-party grants,
licenses, assignments, consents, permissions, releases and waivers, required
for Distributor to Exploit the Episodes in accordance with this Agreement,
including, without limitation: literary rights (i.e., rights to any story,
screenplay, script, book, or other literary material upon which the Episodes
may be based); music rights (i.e., rights to synchronization, mechanical
reproduction, public performance, etc. with respect to any musical
compositions and recordings thereof used in the Episodes); individuals'
rights (i.e., rights to record, exhibit and use in the Episodes the names,
likenesses, voices, biographies, fighting and/or other performances or
appearances of all fighters, emcees, referees, trainers, performers, models,
artists, talents, and any and all other individuals who have rendered service
or material on the Episodes); artwork rights (i.e., rights to use and display
third-party artwork in the Episodes); trademark rights (i.e., rights to use
and display third-party trademarks and logos in the Episodes); product
placement rights (i.e., rights to use and display third-party goods and
services in the Episodes); and location rights (i.e., rights to film and
photograph buildings and locations for the Episodes), and all such rights
will remain in full force and effect throughout the Term;
(c) as of the Effective Date of this Agreement and throughout the Term,
Producer is not, and will not be, a party to or otherwise bound by any
contract, agreement or arrangement with any third party, the terms of which
would prohibit or restrict Producer from entering into this Agreement or
would directly overlap or conflict with the Granted Rights;
(d) any Exploitation of the Episodes in accordance with this Agreement
will not subject Distributor and/or its licensees to any third-party claim
for infringement of copyright, violation of moral right, infringement or
misappropriation of trademark or trade dress, false advertising, defamation,
libel, slander, false light, invasion of privacy, violation or
misappropriation of right of publicity, or for infringement, violation or
misappropriation of any other property, personal or proprietary right
recognized in the Territory;
(e) the Episodes are not subject to any lien, charge, security
interest, or other encumbrance that would hinder Distributor's right to
Exploit the Episodes in accordance with this Agreement or would require
Distributor to pay any money or consideration to any third party;
(f) Producer has paid and will pay all compensations, fees, advances,
guaranties, royalties, residuals, shares of revenues or profits, bonuses,
salaries, commissions, monies and considerations owed to third parties in
connection with the Episodes, including, without limitation, those owed to
fighters, emcees, referees, trainers, performers, models, talents, artists,
authors, composers, writers, publishers, performing right societies, royalty
collection agencies, guilds, unions, sponsors, advertisers, investors, and
any other persons and entities involved or connected with the Episodes;
(g) except as otherwise stated in Schedule A, the Episodes are
completely finished, edited and titled and fully synchronized with language,
dialogue, sound and music, recorded with sound equipment pursuant to valid
licenses, and in all material respects ready for release in the Territory
(other than any editing and reformatting that may reasonably be required to
make the Episodes suitable for Exploitation in the Territory, including,
without limitation, as necessary to comply with the applicable television
rating and censorship requirements in the Territory);
(h) the Episodes contain all required screen credits for persons and
entities involved or connected with the Episodes; and
(i) Producer has secured (or will secure), and will maintain in full
force and effect throughout the Term, all governmental and/or industry
regulatory approvals, licenses and permits as may be required for organizing,
promoting and publicly exhibiting in the Territory mixed martial arts (MMA)
fights and combat events as depicted in the Episodes (including, without
limitation, all those that may be required by local athletic commissions and
other governing bodies that sanction MMA fights and combat events), and all
MMA fights and combat events depicted in the Episodes are in full compliance
with all governmental and/or industry rules and regulations that are
applicable to such fights and combat events.
9.2 Producer (a) shall defend Distributor, its affiliates, licensees and
subdistributors, and their respective shareholders, directors, officers,
employees, agents and representatives (collectively, the "Distributor Related
Parties"), against any and all claims, demands, actions, suits and
proceedings brought by third parties based upon or by reason of (i)
Distributor's and/or its licensees' Exploitation of the Episodes in
accordance with this Agreement or (ii) Producer's breach of any of its
representations, warranties and covenants contained in this Agreement
(collectively "Third Party Claims"), and (b) shall indemnify and hold
harmless Distributor and Distributor Related Parties from any and all
judgments, liabilities, damages, penalties, costs and expenses (including,
without limitation, attorneys' fees and legal costs) that may be awarded
against Distributor or any of Distributor Related Parties as a result of any
such Third Party Claims.
10. Term and Termination.
10.1 The term of this Agreement shall commence on the Effective Date and,
unless sooner terminated by a mutual agreement of the Parties or sooner
terminated pursuant to Section 10.2 below, shall continue for a period of
eighteen (18) months; PROVIDED that if, at the end of such 18-month period,
Distributor has secured or is in the process of securing a Television
Broadcast deal for the Episodes from at least two (2) top-40 Spanish-language
television stations in the Territory, then the term of this Agreement shall
automatically be extended for an additional period of five (5) years, after
which Distributor shall have the right and option to further extend the term
for two successive five (5) year periods (the "Term").
10.2 A Party may terminate this Agreement with immediate effect upon written
notice to the other Party, if the other Party is in material breach of this
Agreement and fails to cure such breach within thirty (30) days after its
receipt of initial notice regarding such breach.
11. Post-Termination Provisions.
11.1 Except as expressly provided in Sections 11.2 and 11.3 below, upon
expiration or termination of this Agreement, all of the Granted Rights shall
automatically terminate and revert back to Producer, and Distributor shall
cease all further Exploitation of the Episodes and shall, at Producer's
election, either (a) return all Delivery Items and Distributor Created
Materials then in its possession to Producer at Producer's expense, or (b) at
Producer's request destroy such items and materials and confirm such
destruction in writing to Producer.
11.2 The Parties expressly agree that no expiration or termination of this
Agreement shall affect any Episode Sublicenses that (a) are entered into by
Distributor during the Term, if they are still in effect at the time of
expiration or termination of this Agreement; or (b) are already substantially
negotiated by Distributor during the Term, even though they are not executed
until after the expiration or termination of this Agreement (collectively,
"Outstanding Episode Sublicenses"); that all Outstanding Episode Sublicenses
shall remain in full force and effect in accordance with their respective
terms; that all sublicensees under Outstanding Episode Sublicenses may
continue to Exploit the Episodes in accordance with the terms of their
respective agreements; and that all applicable provisions of this Agreement,
including, without limitation, all of the provisions of Schedule C, shall
continue to apply with respect to all Outstanding Episode Sublicenses.
11.3 Upon expiration or termination of this Agreement, Distributor may retain
and continue to use Delivery Items and Distributor Created Materials then in
its possession, but only as necessary to fulfill its obligations under any
Outstanding Episode Sublicenses. Upon fulfillment of its obligations under
all Outstanding Episode Sublicenses, Distributor shall comply with Section
11.1 above with respect to any remaining Delivery Items and Distributor
Created Materials.
12. Miscellaneous.
12.1 To the extent a Party discloses its confidential information to the
other Party in connection with this Agreement, the receiving Party shall (a)
use such information solely for purposes for which it was disclosed, (b) keep
the information confidential and safeguard it with at least the same degree
of care that the receiving Party uses to protect its own most confidential
information (but in no event less than reasonable care), and (c) not disclose
the information to any third party without the prior written consent of the
disclosing Party.
12.2 This Agreement shall be governed by and construed in accordance with the
laws of the State of California, U.S.A., without regard to its conflicts of
law provisions. The Parties hereby consent to the personal and subject
matter jurisdiction of the courts in the State of California and to the venue
of the Federal and State courts located in the County of Los Angeles,
California.
12.3 This Agreement (including all Schedules attached hereto) constitutes the
entire agreement and understanding of the Parties with respect to the subject
matter hereof and supersedes all prior agreements, understandings,
negotiations, communications, promises and discussions of the Parties,
whether oral or written, with respect to such subject matter. No amendment
to this Agreement will be effective unless it is in writing and executed by
both Parties.
12.4 The provisions of this Agreement will be binding upon and inure to the
benefit of the Parties, and their heirs, successors and permitted assigns.
12.5 If any provision of this Agreement is held by any court of competent
jurisdiction to be invalid, illegal, or unenforceable, such provision will be
deemed modified in such manner as to render such provision valid, legal, and
enforceable to the fullest extent permitted by law in such jurisdiction. The
remaining provisions of this Agreement will not be affected thereby, and will
continue in full force and effect.
12.6 No failure or delay by a Party to exercise any remedy in the event of a
breach of this Agreement by the other Party will in any way operate as a
waiver of such remedy, nor will any single or partial enforcement of any
remedy for breach preclude the further enforcement of such remedy or the
enforcement of any other remedy. No waiver of any right hereunder or of any
breach hereof will be effective unless set forth in writing and executed by
the Party against whom such waiver is sought to be enforced. The waiver by a
Party of any right or remedy hereunder or of any breach hereof by the other
Party will not be deemed a waiver by such Party of any other right or other
remedy hereunder or of any other breach by the other Party, whether of a
similar or dissimilar nature thereto.
12.7 This Agreement may be translated into another language for the
convenience of either Party, provided that the English-language version shall
control at all times.
12.8 The Parties agree that Producer may, upon written notice to Distributor,
assign this Agreement in its entirety (with all terms and conditions hereof
unchanged), together with all right, title and interest (including all
copyrights and other intellectual property rights) in and to the Episodes, to
NEVADA PROCESSING SOLUTIONS, INC., a Nevada corporation ("NEPR") as part of a
"going public" transaction, and that upon such assignment (which is at the
option of Producer), NEPR shall be deemed "Producer" hereunder for all
purposes and all of the provisions of this Agreement shall be binding upon
and inure to the benefit of NEPR and Distributor, PROVIDED that the
provisions of Section 2.1 and Section 9 of this Agreement shall continue to
be binding upon Xxxxxx X. Xxxx, Equity Capital Group, Inc. and Grupo
Mandarin, S.A. collectively as the original "Producer" hereunder.
[signature block on next page]
"Distributor": "Producer":
XXXXXXXXXXXXXXXXXXX.XXX, INC. XXXXXX X. XXXX
____________________________________ ________________________________
Name:
Title:
EQUITY CAPITAL GROUP, INC.
________________________________
Xxxxxx X. Xxxx, Esq., signing as
authorized representative and
attorney-in-fact for Equity Capital
Group, Inc.
GRUPO MANDARIN, S.A.
________________________________
Xxxxxx X. Xxxx, Esq., signing as
authorized representative and
attorney-in-fact for Grupo
Mandarin, S.A.
Schedule A - Episodes
Schedule B - Delivery Schedule
1. Delivery Date:
2. Delivery Items:
Schedule C - Payment and Financial Terms
1. Compensation.
[Section 1.1 through Section 1.3 have been REDACTED]
1.4 Currency. All amounts due to a Party hereunder shall be paid in U.S.
---------
Dollars in immediately available funds through wire transfer to the bank
account designated in writing by such Party.
1.5 Taxes. Notwithstanding anything to the contrary contained herein, each
------
Party shall be solely responsible for all taxes assessed based upon its
income derived from this Agreement.
2. Distributor Records; Audit by Producer.
2.1 During the Term and, thereafter, until the second anniversary of the
Distributor Accounting End Date, Distributor shall maintain complete and
independent books and records of all Distributor Domestic Spanish-Language
Exploitation Revenues (collectively "Distributor Records").
2.2 Producer and its designee may inspect and audit, at Producer's own
expense, Distributor Records at the location where they are kept, solely for
the purpose of verifying whether Distributor's accounting and calculation of
Distributor Domestic Spanish-Language Exploitation Revenues hereunder is
accurate, PROVIDED that: (a) an audit pertaining to a given Distributor
Reporting Period must be conducted no later than 120 days after Producer's
receipt of Distributor's statement for that Distributor Reporting Period, and
the final audit must be conducted no later than 90 days after Producer's
receipt of Distributor's closing statement; (b) Distributor's accounting and
calculation of Distributor Domestic Spanish-Language Exploitation Revenues
for a given Distributor Reporting Period may not be audited more than once
for any reason; (c) Producer shall give advance written notice to Distributor
at least 7 days prior to each audit; (d) each audit shall take place at
reasonable times during Distributor's normal business hours; (e) each audit
shall be conducted in a non-disruptive manner to minimize interruption of
Distributor's normal business operations; and (f) Producer and its designee
have agreed to maintain confidentiality of all Distributor Records and all
information and data contained therein by executing a non-disclosure and
confidentiality agreement in a form satisfactory to Distributor.
3. Producer Records; Audit by Distributor.
3.1 During the Term and, thereafter, until the second anniversary of the
Producer Accounting End Date, Producer shall maintain complete and
independent books and records of all Producer Exploitation Revenues
(collectively "Producer Records").
3.2 Distributor and its designee may inspect and audit, at Distributor's own
expense, Producer Records at the location where they are kept, solely for the
purpose of verifying whether Producer's accounting and calculation of
Producer Exploitation Revenues hereunder is accurate, PROVIDED that: (a) an
audit pertaining to a given Producer Reporting Period must be conducted no
later than 120 days after Distributor's receipt of Producer's statement for
that Producer Reporting Period, and the final audit must be conducted no
later than 90 days after Distributor's receipt of Producer's closing
statement; (b) Producer's accounting and calculation of Producer Exploitation
Revenues for a given Producer Reporting Period may not be audited more than
once for any reason; (c) Distributor shall give advance written notice to
Producer at least 7 days prior to each audit; (d) each audit shall take place
at reasonable times during Producer's normal business hours; (e) each audit
shall be conducted in a non-disruptive manner to minimize interruption of
Producer's normal business operations; and (f) Distributor and its designee
have agreed to maintain confidentiality of all Producer Records and all
information and data contained therein by executing a non-disclosure and
confidentiality agreement in a form satisfactory to Producer.
