LICENSE AGREEMENT
[The Creature From Black Lake]
THIS LICENSE AGREEMENT ("Agreement") is made as of the 31st day of
July, 2002, by and between UAV CORPORATION, a South Carolina corporation with an
address at 0000 Xxxxxxxx Xxxxx, Xxxx Xxxx, Xxxxx Xxxxxxxx 00000, phone number
(000) 000-0000, fax number (000) 000-0000 ("UAV"), and Xxx XxXxxxxxxx
Productions, Inc. c/o its agent, Mac Filmworks, Inc., a Delaware corporation
with an address at 0000 Xxxxxxxxx Xx., #X0, Xxxxxxxxxx, Xxxxxxxxx 00000, phone
number (000) 000-0000, fax number (000) 000-0000 ("Licensor").
WHEREAS, Licensor owns a certain rights in the motion pictures set
forth on Exhibit A attached hereto and incorporated herein (the "Property") and
is seeking opportunities for third party exploitation of the Property; and
WHEREAS, UAV, a leading independent manufacturer and distributor of
entertainment products with significant expertise in marketing products similar
to the Property, desires to obtain a license from Licensor for duplication and
distribution rights in and to the Property; and
WHEREAS, Licensor is wiling to grant such rights to UAV pursuant to the
terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants,
representations and agreements set forth herein, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
Licensor and UAV hereby agree as follows:
1. RIGHTS GRANTED:
a) Licensor hereby grants to UAV the right during the Term to
manufacture, distribute, promote, advertise, sell and
otherwise exploit Video Devices (is hereinafter defined)
containing the Property in the Territory (as that term is
defined on Exhibit B attached hereto and incorporated herein)
through retail outlets, direct marketing, and any and all
distribution channels intended to reach individuals who may
engage in private use of the Property, and institutions,
schools libraries and any other organization not primarily
engage in commercial exploitation of entertainment properties.
b) As used herein, the term "Video Devices" shall mean copies of
the Property in linear or non-linear form on all types of
video cassettes, video discs, other digital storage media
capable of storing and reproducing audio-visual works or on
any other medium, whether now known or hereafter devised.
2. TERM:
a) The Term of this Agreement shall be a stated on Exhibit B
hereto provided however that in no case shall the Term begin
prior to UAV granting its full approval of the Master(s)
pursuant to Paragraph 5 hereof.
b) Provided that UAV is not then in breath of this Agreement,
UAV shall have a right of first
negotiation and a continuing right of first refusal to
renew as a licensee of the Property. If
Licensor and UAV do not reasonably agree upon terms of
such renewal within thirty (30) days
following any party's receipt of the other's written
renewal offer, Licensor shall give its
final acceptable terms to UAV in writing. Licensor may
then negotiate with bona fide third
parties, but before entering into any third party
agreement shall give UAV ten (10) business
days' prior written notice of the negotiated third party
terms during which time UAV may choose
to accept or reject such terms as the basis for an agreement
between UAV and Licensor.
3. FINANCIAL TERMS:
a) After recoupment of the Advance, UAV agrees to pay Licensor a
royalty computed in accordance with the Royalty Rate (defined
on Exhibit B) for each Video Device paid for and not returned.
b) UAV shall pay o royalties for any part of the Property or
underlying material tin is in the public domain, is under
third party dispute or which is not the subject of a valid
copyright. UAV may distribute reasonable quantities of Video
Devices at no charge for promotional purposes and shall pay no
royalties to Licensor for any such Video Devices.
c) UAV, in its sound business judgment, may deduct no more than
thirty (30%) percent of actual sales hereunder as a reserve
for returns, credits, exchanges, etc. of Video Device. UAV
shall account for such deduction quarterly and shall reconcile
any such deduction no later than one year (1) thereafter.
4. ACCOUNTING: Within sixty (60) days after the first calendar quarter during
which UAV first sells Video Devices and after each calendar quarter thereafter
during the Term, UAV will submit to Licensor a written statement accounting for
all royalties, recouprnents and reserves accompanied by payment of any amounts
due Licensor. Statements shall be deemed conclusively final and binding upon
Licensor one (1) year after receipt unless Licensor submit written objections
thereto within one (1) year after receipt. UAV shall maintain records related to
the Property and shall make them available for audit by a qualified independent
certified pubic accountant at Licensor's sole expense upon twenty-one (21) days'
advance written notice, but not more than once annually. Licensor's auditor
shall treat all information confidentially, disclose to Licensor only
information relating to the Property and only examine records created no more
than one (1) year prior to the audit. Further, upon written request to UAV and
no more than once each calendar quarter, Licensor may obtain confirmation of the
number of video boxes for the Property printed at UAV's designated printer.
5. DELIVERY: Licensor, at its sole cost, shall deliver to UAV one (1) fully
synchronized broadcast quality NTSC videotape master for each composite part of
the Property together with all available supporting or marketing materials (i.e.
artwork, posters, slides, reviews, etc.) and chain of title documentation
reasonably satisfactory to UAV (the "Master(s)") as a precondition for UAV's
execution of this Agreement. UAV shall have five (5) business days to inspect
the Master(s). At its own expense, Licensor shall repair or replace any
Master(s) reasonably deemed defective by UAV within fourteen (14) days following
UAV's request. UAV WILL FURNISH LICENSOR A COPY OF THE D.V.D. MASTER.
6. MAKETING: Licensor grants UAV the right to promote and advertise the Property
in any manner UAV shall determine. UAV may use and permit others to use the
Property, Licensor's name, trademarks, tradenames and logos and the names,
photographs, likenesses, biographies, and recorded voices and images of all
persons appearing in the Property in connection with the promotion or
advertising of Video Devices. UAV may add trademarks, tradenames and logos to
the Property, Video Devices and packages, labels and promotional and advertising
material for the Property.
7. ARTWORK AND CREDITS: UAV may prepare artwork and package designs for Video
Devices, all of which shall be owned solely by UAV, and may recoup its
reasonable costs of doing so against royalties payable hereunder APPROVED BY
LICENSOR. UAV SHALL USE EXISTING ART AND "A XXX XXXXXXXXXX PRODUCTION" WILL
APPEAR ABOVE THE TITLE AND ON CREDITS ON BOTTOM OF ARTWORK. Licensor shall
provide UAV with a complete statement setting forth the names and types of
credits to be accorded to all persons and organizations to which Licensor is
obligated to accord credit on the Property or in any promotion, publicity or
exploitation thereof. The Master(s) delivered to UAV shall contain all such
required credits. Licensor shall not thereafter agree to accord credit to any
person or organization without UAV's prior written consent. UAV shall be
entitled to rely entirely upon the credits and notices furnished by Licensor and
shall not be required to remedy any of Licensor's omissions or mistakes in such
credits or notices unless UAV is reasonably able to do so and is reimbursed by
Licensor for related costs.
8. WARRANTIES AND REPRESENTATIONS:
a) Licensor hereby warrants, represents and agrees that it
possesses the full right, power and
authority to enter into and perform this Agreement and that
Licensor is the owner of all rights
granted herein. Licensor agrees to promptly provide
UAV with evidence of valid trademark
and/or copyright protection and any underlying rights
agreements establishing chain of title in
Licensor's favor with regard to any of the parts of the
Property upon request from UAV.
Licensor also warrants, represents and agrees that the
Property does not violate or infringe
upon any copyright, trademark, right of privacy, and/or
statutory or common law right(s) of any
third party and does not contain any matter which is
libelous, harmful to the user or to any
third party, or otherwise in contravention of the law.
Licensor further warrants that it will
not, so long as this Agreement remains in effect, grant
or attempt to grant to any person or
entity other than UAV any rights the exercise of which
would be inconsistent with the rights
granted to UAV hereunder, and that Licensor shall use its
best efforts to end any unauthorized
duplication, manufacture, distribution or sale of the
Property of which it becomes aware.
b) Licensor hereby warrants, represents and agrees that UAV shall
not be liable for any payments of any nature whatsoever to any
third parties in connection with the Property and that
Licensor shall bear the full responsibility for any claim by
or liability to any such third parties, specifically
including, but not limited to, all guilds, unions, performers,
artists, writers, producers, directors, and other parties with
any interest in the music, visual presentations or other
matters in, of or relating to the Property.
9. INDEMNIFICATION: Licensor shall indemnify, defend and hold harmless UAV and
its agents (including but not limited to affiliates, distributors, customers
licensees, successors and any employee, officer, director, shareholder or agent
of any of them) from and against any and all liability, expenses (including
reasonable attorneys' costs and fees) judgments, fines and amounts paid. in
settlement (with the prior approval of Licensor, not to be unreasonably
withheld) actually incurred or paid by UAV in connection with any action, suit
or proceeding to which UAV is made a party alleging facts contrary to, or
arising from, the breach of the representations and warranties set forth in this
Agreement, and any and all losses incurred by UAV by virtue of Licensor's breach
of any representation, warranty or agreement hereuuder. Nothing herein shall be
deemed to require UAV to contest any such threatened or pending claim, action,
suit or proceeding. UAV shall indemnify and hold harmless Licensor and its
agents in any action, suit or proceeding in connection with UAV's distribution
of the Property in any manner contrary to the terms of this Agreement. The
parties shall notify each other of any event, claim, action or proceeding with
respect to the Property of which either becomes aware that might interfere with
Licensor's ownership of the Property or UAV's exploitation of the license
granted herein, and the parties shall cooperate in resolving the same.
10. DEFAULT. TERMINATION. EXPIRATION: The non-defaulting party may elect to
immediately terminate this Agreement by giving written notice of such election
to the defaulting party if any one of' the following events of default occurs:
a) any representation or warranty m by either party is or becomes
false a misleading in any material respect;
b) any part of the Property Thus into the public domain due to
any action or inaction of Licensor;
c) Licensor fails to timely deliver any part of the Property,
Master(s) or marketing material(s) reasonably requested by
UAV; or either party defaults in any material respect in the
performance of any other obligation, which default remains
uncured after a. period of forty-five (45) days after receipt
of written notice from the non-defaulting party.
Notwithstanding any termination or expiration of this Agreement, UAV
will have the continuing non-exclusive right to market and distribute Video
Devices manufactured prior to the effective date of termination or expiration.
In addition, in the event that the Property is listed in any catalog as of the
effective date of termination or expiration, UAV may continue to accept and
fulfill orders for the Property from any such catalog until the last such
catalog is out of print NOT TO EXCEED 30 DAYS ON MONTHLY PRINTING AND 90 DAYS
FROM ANY OTHER DATE OF PRINTING. Royalties for such Property shall accrue in
accordance with the terms and conditions set forth above, except that no
royalties shall accrue beyond the effective date of termination if Licensor is
the defaulting party or if remaining Video Devices are sold as overstocked
merchandise (defined as sales that take place at less than half of UAV's last
published catalog price).
11. ASSIGNMENT, WAIVERS: This Agreement shall be binding upon and inure of the
successors, assigns and legal representatives if parties hereto. No waiver of
any breach of this Agreement shall be construed to be a continuing waiver or
consent to any subsequent breach.
12. NOTICES: All notices hereunder shall be given in writing and delivered by
hand, registered mail, air courier or facsimile (with a confirmation of
transmittal) to the addresses first set forth above or such other address or
addresses as may be designated by either party and shall be deemed effective
upon actual receipt or upon refusal of receipt.
a) All notices to UAV shall be addressed to Xxxxx X. Xxxxxx, Xx.
with a separate copy to UAV's Business Affairs Department,
Attn.: Xxx X. Must, Esq.
b) All notices and reports to Licensor shall be addressed in care
of the party whose name appears in the signature block below.
13. ENTIRE AGREEMENT: This Agreement, together with all Exhibits or attachments
hereto, supersedes any prior agreements or understandings, oral or written,
between the parties hereto and represents their entire understanding and
agreement with respect to the subject matter hereof and cast be amended,
supplemented or changed, and any provision hereof can be waived, only by written
instrument making specific reference to this Agreement signed by both parties.
Any such written, signed instrument will be binding upon the parties despite any
lack of consideration.
14. SEVERABILITY, HEADINGS: If any term or provision of this Agreement or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such terms or provision to persons or circumstances other than those as to which
it is held invalid and unenforceable, shall be valid and enforceable to the
fullest extent permitted by law. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
15. LAW, VENUE: This Agreement will be governed by the laws of the State of
South Carolina, and apply to agreements executed and performed entirely therein.
The parties irrevocably consent to submit to the exclusive jurisdiction
competent courts located in the State of South Carolina in any action which may
arise out of this Agreement and all matters related thereto and Licensor agrees
to initiate any such action or proceeding only in such courts.
16. RELATIONSHIP OF PARTIES: Licensor and UAV are independent contractors, and
nothing herein shall create any partnership, joint venture or agency
relationship between them. Neither party shall have any authority, or power to
bind the other. Each party shall be fully responsible for all persons it employs
in connection s this Agreement.
17. INTERPRETATION: Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context includes is appropriate This Agreement shall not be construed against
the party preparing it or any of it on that ground, but shall be construed as if
all parties jointly prepared it and shall not be applied more strictly against
one party than the other.
18. COUNTERPARTS: This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
UAV: LICENSOR:
UAV CORPORATION MACFILMWORKS INC.
By: //S// XXXXX XXXXXX, XX By: //s// XXX XXXXXXXXXX, SR.
Name: XXXXX XXXXXX, XX Name: XXX XXXXXXXXXX, SR
Title: CEO Title: President
EXHIBIT A
TO AGREEMENT DATED AS OF JULY 31, 2002
BY AND BETWEEN
UAV CORPORATION AND MAC FILMWORKS INC.
Property
1. Title: "The Creature From Black Lake" A XXX XXXXXXXXXX
PRODUCTION
Producer: Xxx XxXxxxxxxx
Director: Xxx Xxxxx, Xx.
SCRIPT: XXX XXXXXXXXXX, JR.
Copyright Date: March 10, 1976
Owner: Xxx XxXxxxxxxx-- LP46574
Starring: Xxxx Xxxx and Xxx Xxxxxx
Running Time: 97 minutes
THIS INFORMATION SHOULD BE INCLUDED ON ALL PRINTED ADVERTISING AND ARTWORK,
THIS INCLUDES, BUT NOT LIMITED TO VIDEO BOXES, D.V.D. PACKAGING, AND SALES
PROMOTIONS.
EXHIBIT B
TO AGREEMENT DATED AS OF JULY ___, 2002
BY AND BETWEEN
UAV CORPORATION AND MACFILMWORKS INC.
Definitions
Property: shall consist of the following title(s), as each is more
fully described on Exhibit A of this
Agreement:
"Creature from Black Lake"
Term: The Term of this Agreement shall be as follows:
a) For "Creature from Black Lake": The Term of this Agreement
shall begin upon UAV's release of "Creature from Black Lake",
and shall expire two (2) years thereafter. Release of
"Creature from Black Lake" shall be deemed to take place no
later than ninety (90) days following UAV's receipt and
approval of all Masters.
b) For all other parts of the Property: UAV may release all
other parts of the Property no sooner than, and the Term of
this Agreement for such parts shall begin on, Date and shall
expire two (2) years thereafter.
Territory: United States and Canada
Advance: An advance of $20,000.00 will be made payable to Xxx
XxXxxxxxxx Productions. This advance will
be disbursed in the following manner:
o $5,000.00 to be deposited upon execution of the Deal Memo
o $5,000.00 to be sent upon execution of the License Agreement
and acceptable Master and Art Materials o $4,000.00 to be paid
30 days after execution of License Agreement o $3,000.00 to be
paid 60 days after execution of License Agreement o $3,000.00
to be paid 90 days after execution of License Agreement
Royalty Rate: UAV agrees to pay Licensor a royalty at a rate of 20% of
net wholesale per Video Device sold,
paid for and not returned.
