DISTRIBUTION LICENSE AGREEMENT
This agreement is made with effect from the 31st day of August 1998 by and
between
PHILIPS CONSUMER ELECTRONICS B.V.
of
Xxxxxxxx 0
0000 XX Xxxxxxxxx
XXX XXXXXXXXXXX
(herein called "Licensor")
AND
Kenwick Inc., doing business under the name
AMERICAN VIDEO LANGUAGE INSTITUTE
of
International Building
0000 X Xxxxxxx Xxxx.
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx
00000 XXX.
(herein called "Licensee")
WHEREAS:
A. Licensor is entitled to exploit in the Territory (as hereinafter defined)
certain content recordings and printed material relative to language
learning, at present owned or controlled by Licensor and to grant certain
distribution rights therein to Licensee for the Territory upon the terms
and conditions hereof.
B. The terms and conditions of any prior licence or distribution agreement
relating to content recordings between Licensor and Licensee shall from
the Commencement Date (as hereinafter defined) be replaced and superseded
by this agreement so that such recordings shall from the Commencement Date
become subject to the license herein granted.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. Definitions
For the purposes of this Agreement the following terms shall have the
meaning ascribed below:
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(a) "Licensed Product" shall mean a compilation consisting of
10 VHS tapes in black cassette boxes
featuring 9 sequential episodes and 1
collection of songs together forming the
screen displayed part of Licensors
language learning programme entitled
"Blip and Blab, the Language Explorers"
(b) "Master Print Materials" shall mean plate and/or films for the
applicable VHS box cover, inner sleeve,
label, inlay cards, original manuscript,
and/or available manuscript translations
and/or workbooks and from which the
printed part of Licensors language
learning programme entitled "Blip and
Blab, the Language Explorers" may be
manufactured.
(c) "Commencement Date" shall mean August 31, 1998
(d) "Term" shall mean the period starting from
Commencement Date and ending August 31,
1999, and thereafter continuing unless
and until terminated by either party on
giving 6 months prior notice to expire
at the end of any calendar month.
(e) "Territory" shall mean The United States of America
and Canada.
(f) "Licensed Product Supplier" shall mean Integrated English
International Inc., 7000S.W.59th Place.
Xxxxx Xxxxx, Xxxxxxx 00000, who is a
manufacturer of Licensed Products.
2. Rights
Subject always to the limitations and restrictions on Licensor's rights
communicated to Licensee from time to time Licensor hereby grants for the
Term and the Territory the right for each Licensed Product and the Master
Print Material made available to Licensee hereunder, subject to the
exceptions and restrictions herein set out, the non-exclusive right to
market, distribute and sell Licensed Products and using marketing
materials derived from Master Print Materials, it being understood that
this license -
(a) does not comprise the right of Licensee to copy Licensed Products,
and that Licensed Products to be distributed by Licensee are all to
be sourced by Licensee from the Licensed Product Supplier, on terms
and conditions to be agreed upon directly between Licensee and the
said supplier, and
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(b) does comprise the right for Licensee to copy from Master Print
Materials for the sole purpose of creating advertising, and
materials associated with the marketing, sale and use of the
Licensed Products.
3. Licensor's Representations and Warranties
Licensor represents and warrants that at the time of granting the licenses
hereunder, and during the Term or such shorter period as is notified by
Licensor to Licensee, Licensor has the selling and distribution rights in
the said materials, subject, however, to the restrictions and obligations
on Licensor of which Licensee may be notified by Licensor from time to
time.
Licensor agrees to indemnify and to keep indemnified the Licensee against
any loss, damage, claim or expense suffered by Licensee as a result of
Licensor's breach of this representation and warranty.
4. Acknowledgement of Rights by Licensee
Licensee acknowledges that all intellectual property rights in Licensed
Products and Master Print Material for which distribution rights are
granted by virtue of this Agreement are vested in Licensor except insofar
as assigned and transferred to Licensee hereunder.
5. Supplies
(a) Licensor agrees to deliver the Master Print Material hereunder by
supplying to Licensee, at Licensor's cost price, plus any actual expenses
incurred for packaging and shipping. Such material and contents shall be
of suitable quality for the use in the commercial manufacture for general
sale and shall be delivered to Licensee following the submission of
written orders thereof to Licensor.
(b) At the time of the delivery to Licensee of the Master Print Material,
Licensor shall supply to Licensee in writing the correct title(s) of the
recorded work(s), the name(s) of the author(s), composer(s) and original
publisher(s) thereof, together with any additional copyright information
known to Licensor, and the name(s) of the Artists(s) as Licensor displays
or intends to display them on the labels and jackets of the Licensed
Products marketed by Licensor.
(c) Licensor also agrees to supply to Licensee samples of its advertising and
publicity material. Upon request Licensee agrees to supply to Licensor
free of charge a sample of prints used by Licensor for the Licensed
Products.
(d) Licensor will advise the Licensed Product Supplier about the rights
granted to Licensee hereunder and shall furnish this supplier with content
material necessary for the Manufacture of Licensed Products. Licensee
shall source Licensed Products from such supplier on terms and conditions
to be agreed upon directly between Licensee
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and the Licensed Product Supplier. Licensor takes no responsibility as to
the performance of the Licensed Product Supplier.
(e) Should Licensee at their expense create adjunct material (such as Guide to
Parents in brochure form with translations into various languages) to be
sold with the material supplied by Licensor, this material can be made
available to Licensor with agreed payment toward defraying some of the
expenses.
6. Remuneration
In consideration of the rights granted hereunder, Licensee shall pay to
Licensor the royalties set forth in Annex I per each Licensed Product
purchased by Licensee with the Licensed Product Supplier.
Royalties are due upon delivery by the Licensed Product Supplier, and
payable to Licensor by the end of the month following the month of such
suppliers delivery, but late changes do not apply until a period of ten
days additonal time passes. At the end of each month, Licensee shall
submit a written statement to Licensor specifying the number Licensed
Products delivered during the precedent month together with a royalty
calculation.
Upon signing of this agreement Licensee shall pay to Licensor an advance
royalty of USD 5,000.00. A second advance royalty of USD 5,000.00 is due
upon 60 days following the signing. The advances shall be set off against
the first royalties payable by Licensee hereunder. Further Licensee
undertakes to a minimum royalty due after 6 months following the signing
of this Agreement equal to 1000 Licensed Products.
In the event of any late payment of any sums due hereunder Licensor shall
be entitled to charge Licensee, and Licensee shall pay promptly interest
at the London Inter Bank Offer Rate plus four percent (4%).
In the event that the Licensee provides opportunities for distribution of
the "Blip and Blap, The Language Explorers" Series outside the Territory a
reasonable and fair remuneration for the Licensee with the negotiations
and agreed based on the success of the presented opportunity.
7. Trademarks
(a) Licensor grants to Licensee for the Term the right to use the trademarks
owned or controlled by Licensor as will be indicated by Licensor from time
to time. Licensee shall use such trademarks only in conjunction with the
sale, marketing and distribution of Licensed Products, and only in
conformity with directions set forth by Licensor.
(b) Licensee acknowledges that this licence grants to Licensee no rights of
ownership of the trademarks used hereunder and it agrees that it shall not
claim any right in this respect whatsoever at any time during or after the
termination of this Agreement.
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months thereafter and at prices not less than those for which the Licensed
Products under this Agreement have been sold by Licensee in the Territory
during the preceding year, provided that Licensee shall have complied with
its obligations under sub-clauses (a) and (b) above.
Immediately after the end of such six (6) month period Licensee shall at
the direction of Licensor:-
(i) furnish Licensor a list setting forth in detail all remaining items
of Licensee's Inventories;
(ii) put at the disposal, sell or transfer all or part of Licensee's
Inventories to Licensor or to any third party designated by Licensor
at Licensee's manufacturing cost price; and/or
(iii) destroy all remaining Licensee's Inventories and render to Licensor
a sworn statement of an officer of Licensee that the same have been
destroyed.
(d) Termination of this Agreement shall not discharge Licensee from its
obligations under this Clause 9 or its obligations to account for and pay
all sums due as provided for under this Agreement.
10. Notice and Address
Notices hereunder may be sent by hand or by telex (where appropriate) or
by pre-paid post addressed to the address of the party to be served as
stated herein or last known to the party serving the notice and shall be
deemed to have arrived:
(a) within seven (7) days of posting in the case of letters; and
(b) in the case of delivery by hand on the date of delivery; and
(c) in the case of telex on the day when the recipients' machine acknowledges
receipt thereof.
A copy of each notice sent to either party shall be sent simultaneously
for the attention of such party's legal adviser.
11. Amendments and Miscellaneous
(a) This Agreement shall supersede and replace any licence agreement
heretofore concluded between the parties and effective as of the
Commencement Date any preceding licence agreement between the parties
hereto pertaining to rights as granted hereunder shall be regarded as
terminated.
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(b) If any provision of this Agreement should be invalid or unenforceable by
operation of law, such invalidity or unenforceability shall not affect the
remainder of the Agreement, and the parties agree to negotiate in good
faith for the purpose of substituting such invalid or unenforceable
provisions expressing the intention of the parties as closely as permitted
by law.
(c) Should, as a result of the advertising, publicity and distribution efforts
by the Licensee in the Territory, inquiries for supplies of Licensed
Products be made directly to Licensor and the origin of such inquiry is
reasonably known by Licensor, these inquiries will be forwarded to
Licensee.
12. Law and Jurisdiction
This Agreement and any variation or amendments hereto shall be governed by
the laws and procedures of The Netherlands under the exclusive
jurisdiction of the Civil Court of Amsterdam. Notwithstanding the
foregoing Licensor shall be entitled to institute any legal action before
any court having jurisdiction in the Territory.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first above written.
By /s/ [ILLEGIBLE]
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For [ILLEGIBLE]
By /s/ [ILLEGIBLE]
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For Philips Consumer Electronics B.V.
[ILLEGIBLE]
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ANNEX I
ROYALTY SCHEDULE: DATE: 1998-08-01
BLIP AND BLAB, THE LANGUAGE EXPLORERS SERIES
Royalty payable per Licensed Product:
o between 1 and 2,499 products U$39.00 per kit
o between 2,500 and 4,999 products U$37.00 per kit
o between 5,000 and 7,499 products U$35.00 per kit
o between 7,500 and 9,999 products U$32.00 per kit
o between 10,000 and 14,999 products U$29.00 per kit
o over 15,000 products U$26.00 per kit
Above mentioned quantities accumulated over a 12 months period commencing at the
month of first production.
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