FOURTH AMENDMENT TO KATHY HILTON LICENSE AGREEMENT
FOURTH AMENDMENT
TO
XXXXX XXXXXX LICENSE
AGREEMENT
This Fourth Amendment (this “Amendment”)
to Xxxxx Xxxxxx
License Agreement (the “Agreement”)
dated October 13, 2006, by and between KRH Licensing Company, LLC, a California
limited liability company (“Licensor”)
and OmniReliant Corp., a Florida corporation (“Licensee”)
is made and effective on this ___ day of June, 2008.
WITNESSETH:
WHEREAS, the Agreement was
amended on November 20, 2006, in May 2007, and September 2007, and continues in
effect; and
WHEREAS, Licensor and Licensee
desire to revise the amount of certain royalty payments.
NOW, THEREFORE, in
consideration of the premises and the mutual covenants and conditions contained
herein, the Licensor and Licensee, each intending to be legally bound, hereby
agree as follows:
1. Incorporation; Defined
Terms. The foregoing recitals are true and correct and are
hereby incorporated herein and made a part hereof. All defined
(capitalized) terms used, but not defined, herein shall have the meaning
ascribed to such terms in the Agreement.
2. Guaranteed Minimum
Royalties. Article 8, Sections A and B are hereby amended in
their entirety to read as follows:
“A. Guaranteed Minimum
Royalties. In consideration of both the license granted
herein and the services to be performed by Ms. Xxxxx Xxxxxx hereunder including,
but not limited to, appearances on television shopping networks, in
infomercials, and other personal appearances, Licensee shall pay to Licensor an
annual guaranteed minimum royalty (the “Guaranteed Minimum Royalty” or
“Guaranteed Minimum
Royalties”) as follows:
ANNUAL
PERIOD GUARANTEED MINIMUM ROYALTIES
|
Annual
Period
|
Dates
|
Minimum Royalty
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|
1
|
Effective
Date to 06/30/08
|
$ | 400,000 | * | ||
|
2
|
07/01/08
to 06/30/09
|
$ | 400,000 | * | ||
|
3
|
07/01/09
to 06/30/10
|
$ | 400,000 | * | ||
|
4
|
07/01/10
to 06/30/11
|
$ | 400,000 | * | ||
|
5
|
07/01/11
to 06/30/12
|
$ | 400,000 | * | ||
*
Payable $200,000 on June 30th and
$200,000 on January 1st of
each annual period.
1
In the
event that the Initial Term of this Agreement is extended for an additional
five-year term (July 1, 2012 through June 30, 2017 (the “First Extended Term”), the
Guaranteed Minimum Royalty for each Annual Period of the First Extended Term
shall be Six Hundred Thousand Dollars ($600,000). Subject to
Licensor’s right to terminate in Sub Section (B) below for Licensee’s failure to
reach the specified minimum annual sales, Licensee shall have the right to
extend the Term of this Agreement for continuing subsequent five-year extensions
by paying an increased Guaranteed Minimum Royalty of $250,000 per Annual Period
for each subsequent five-year period. In other words, the Guaranteed
Minimum Royalty for each Annual Period from July 1, 2017 through June 30, 2022
(the “Second Extended
Term”) will be $850,000 and the Guaranteed Minimum Royalty for each
Annual Period from July 1, 2022 through June 30, 2027 (the “Third Extended Term”) will be
$1,100,000 and so forth.
Notwithstanding the foregoing, if
Licensee fails to pay the Guaranteed Minimum Payment for any Annual Period, that
failure to make the Guaranteed Minimum Payment will not be deemed to constitute
a breach of this Agreement, or to generate a claim for monetary relief, but
shall merely give Licenser the right to terminate this Agreement upon sixty (60)
days’ written notice to Licensee. Upon such event, the parties agree
that Licensee shall pay Licensor a termination fee of One Hundred Thousand
Dollars ($100,000) within sixty (60) days of the termination date, at which
point Licensor shall be free to exploit itself or license a third-party to
exploit the Licensed Products bearing the Licensed Marks.
The Guaranteed Minimum Royalty payable
for each Annual Period shall be paid to Licensor semi-annually in advance on the
first day of the month of each half year starting with the payment of the
Guaranteed Minimum Royalty for the 2nd Annual
Period, such that each half of the Guaranteed Minimum Royalty Payments shall be
paid on June 30th and January 1st of each Annual
Period. Notwithstanding the foregoing, the Guaranteed Minimum Royalty
for the first Annual Period shall be paid on June 30, 2008. In the
event that such payment is not timely made, Licensor shall have the right to
cancel this Agreement, making it void ab initio, upon 5-days
written notice to cure.”
B. Right to Terminate for
Failure to Reach Minimum Annual Sales after the First Extension
Term. Notwithstanding Licensee’s willingness to continue
paying the specified Guaranteed Minimum Royalties specified above, Licensor
shall have the right to terminate this Agreement and all rights granted
hereunder in the event that Licensee does not reach the Minimum Annual Sales of
Licensed Products in the Annual Periods specified below:
2
|
Minimum Sales of Licensed
Products
To Obtain Right to Extend Term for
an
Additional Period of Five
Years
|
Dates of Term Extension if
Required
Minimum Sales are
Achieved
|
|
|
$25,000,000
in the Annual Period 7/1/2015 through 6/30/2016
|
7/1/2017
through 6/30/2022
|
|
|
$30,000,000
in the Annual Period 7/1/2020 through 6/30/2021
|
7/1/2022
through 6/30/2027
|
|
|
$35,000,000
in the Annual Period 7/1/2025 through 6/30/2026
|
7/1/2027
through 6/30/2032
|
|
|
$40,000,000
in the Annual Period 7/1/2030 through 6/30/2031
|
7/1/2032
through 6/30/2037
|
3. Sales
Royalties. Article 9, Section A is amended in its entirety to
read as follows:
“A.
Sublicensee
shall pay to Sublicensor a sales royalty (the “Sales Royalty” or “Sales Royalties”) of ten
percent (10%) on each Annual Period's Net Sales on sales made in all venues
other than infomercials. The Sales Royalty payable hereunder shall be
accounted for and paid on a quarterly basis within forty-five (45) days after
the close of the prior quarter's sales. In other words, the actual Sales Royalty
will be paid 45-days in arrears computed on the basis of Net Sales during the
quarter ending 45 days before the period upon which royalties are being paid,
with a credit for any Guaranteed Minimum Royalties and Sales Royalty payments
previously made to Licensor.
4. Governing
Law. This Amendment shall be governed by the laws of the State
of Florida.
5. Effect of
Amendment. The terms and conditions of the Agreement shall
continue in full force and effect, except as otherwise expressly amended by this
Amendment. This amendment shall be without prejudice to any rights
and liabilities arising under the Agreement by reference to acts, omissions and
events occurring prior to such Amendment coming into effect. To the
extent that any provision of the Agreement is inconsistent with the provisions
of this Amendment, the provisions of this Amendment shall be
controlling.
6. Counterparts. This
Amendment may be executed in one or more counterparts, each of which shall be an
original and all of which when taken together shall constitute one and the same
instrument. The parties agree that this Amendment may be executed by
facsimile means, and a facsimile of a party’s signature shall be deemed an
original.
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SIGNATURES
FOLLOW ON NEXT PAGE
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EXECUTED on the day and
year first written above:
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OMNIRELIANT
CORP.
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By:
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Xxxx
Xxxxxxxx, President
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KRH
LICENSING COMPANY, LLC
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By:
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Xxxxxxx
Xxxxxx, President
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ACKNOWLEDGED and
APPROVED:
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Xxxxx
Xxxxxx
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Dated:
June ___, 2008
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CC:GLMAC
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