LICENSE AGREEMENT
This LICENSE AGREEMENT ("Agreement") is made and entered into as
of this 26th day of June, 2000, between TORSO TIGER, INC., a
California corporation ("TT"), located at 0000 Xxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxx Xxxxxx, Xxxxxxxxxx 00000, on the one hand, and
INFOTOPIA, INC., a Nevada corporation ("Infotopia"), on the other
hand, located at 00 Xxxxxxx Xxxxx, Xxxxx 0, Xxxxxxx,
Xxxxxxxxxxxxx 00000.
RECITALS
WHEREAS, Infotopia is in the business, among other things, of
advertising, promoting, marketing, selling and distributing
products in various media, including television, print, and
retail; and
WHEREAS, Infotopia desires to license from TT rights to
advertise, promote, market, sell, distribute and otherwise
exploit that certain abdominal fitness product currently known as
"Torso Tiger" and all improvements and modifications thereof (the
"Product") and Infotopia desires to engage TT to manage the
advertisement, promotion, marketing, sale, distribution and
exploitation of the Product on behalf of Infotopia, as well as
any additional products mutually agreed-upon by the parties, all
in accordance with the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, and for other good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, the parties agree as follows:
1. Rights Granted. (a) In consideration of the compensation set
forth below, TT hereby grants and licenses to Infotopia, subject
to the satisfaction of the conditions precedent set forth in
Paragraphs 5(a) and 3(b) hereof and the provisions contained in
this Agreement, the exclusive worldwide rights during the Term
(as defined below) to advertise, promote, market, sell,
distribute and exploit the Product and related Upsells by any
manner and in any and all media and markets now known or
hereafter devised ("Rights"), including, without limitation,
airing the Infomercial (as defined below), commercial and
promotional spots on broadcast, cable, satellite and all other
forms of television transmission now existing or hereafter
developed, television shopping programs such as QVC and HSN,
radio, internet, all print media, direct mail solicitation,
inbound and outbound telemarketing, catalog sales, continuity
program, retail sales and all other channels or means of
distribution now existing or hereafter developed. The term
"Infomercial" shall mean that current twenty-eight minute thirty
second (28:30) television commercial designed to sell the Product
by means of direct response by the customer, and any parts
thereof. The term "Upsell" shall mean any and all products or
services, which may include the Product, that are offered for
sale as part of or in connection with the airing of the
Infomercial.
(b) In connection with the Rights granted by TT to Infotopia
hereunder, TT hereby grants to Infotopia the exclusive license to
use all copyrights, patents, trademarks and all other
intellectual property relating to the Product owned, licensed
and/or controlled by TT. TT represents and warrants that copies
of any patent applications, patent licenses, patents, copyrights,
copyright registrations, trademarks and trademark registrations
which it may own, license and/or control with respect to the
Product shall be provided to Infotopia upon request. In addition,
TT hereby grants to Infotopia the exclusive license (i) to use
any and all artwork and promotional materials, if any, that TT
may own, license and/or control with respect to the Product, and
(ii) to use the names, likenesses, endorsements and testimonials
of all endorsers and other persons respect to the Product, but
only to the extent of TT's rights relating thereto. All
copyrights, patents, trademarks and all other intellectual
property relating to the Product owned, licensed and/or
controlled by TT shall remain the sole property of TT, and
neither Infotopia nor any third party shall acquire any right,
title or interest in such copyrights, patents, trademarks or
other intellectual property by virtue of this Agreement or
otherwise. Any unauthorized use of such copyrights, patents,
trademarks or other intellectual property by Infotopia shall be
deemed an infringement of the rights of TT therein. Infotopia
shall not in any way or at any time dispute or attack the
validity or contest the rights of TT in or to any of such
copyrights, patents, trademarks or other intellectual property.
(c) All of the Rights set forth in this Paragraph 1 may be
exercised and exploited by Infotopia only in accordance with the
prior approval of TT and such Rights may not be exercised and
exploited by Infotopia in any manner without the direct
participation of TT.
2. Engagement of TT; Services of TT. (a) Subject to the
satisfaction of the conditions precedent set forth in Paragraphs
5(a) and 3(b) hereof, Infotopia hereby engages TT and its
designees to render TT's services as Infotopia's exclusive
management company during the Term of this Agreement to manage
and oversee all operations relating to the advertising,
promotion, manufacturing, sale, marketing, distribution and
exploitation of the Product and related Upsells, and TT hereby
accepts such engagement, all on the terms and conditions set
forth herein. Infotopia understands that TT shall have the right
to render services to other persons, firms or corporations either
in the capacity in which TT is engaged hereunder, or otherwise,
as well as to engage in any and all other business activities and
to devote such time as it may seem advisable, in its sole
discretion, to such businesses.
(b) During the Term of this Agreement, TT, subject to
Infotopia's performance of its obligations hereunder, shall
manage and oversee all operations relating to the advertising,
promotion, manufacturing, sale, marketing, distribution and
exploitation of the Product and related Upsells, including:
(i) coordination of advertising and promotion for the
Product and Upsells;
(ii) coordination of telemarketing services;
(iii) coordination of television media buying;
(iv) coordination of fulfillment;
(v) implementation of continuity program;
(vi) coordination of the manufacturing of the Product and
Upsells;
(vii) implementation of non-television distribution channels
for the Product and Upsells;
(viii) coordination of customer service regarding the
Product and Upsells;
(ix) oversee all transactional, financial, business and
contractual matters relating to the marketing of the
Product, including the negotiation of contracts (in
consultation with Infotopia) for all of the above
services ; and
(x) providing general management, administrative and
bookkeeping services with respect to the day-to-day
operations of the marketing and distribution of the
Product, including generating monthly statements and
computing and disbursing "Adjusted Gross Revenues" (as
defined below) to Infotopia and royalties hereunder to
TT.
(c) Infotopia agrees to open and maintain a separate bank
account for the exclusive use of TT for the purposes hereunder
("Bank Account") (a) in which all Gross Sales Revenues and the
Wholesale Selling Price shall be deposited, (b) in which all
Costs (as defined in Paragraph 3(a) hereof) shall be deposited,
(c) from which all Costs shall be paid, (d) from which all
royalties and bonuses hereunder due to TT shall be distributed
and paid and (e) from which all Adjusted Gross Revenues due to
Infotopia shall be distributed. TT and Infotopia may from time to
time agree that some of the Costs shall be paid by Infotopia
directly to the manufacturer of the Product or other vendors. The
sole signatories on the Bank Account shall be representatives of
Xxxxxx Xxxxxxxx Business Management, Inc.
3. Obligations of Infotopia. (a) Infotopia shall be solely
responsible to fund and deposit into the Bank Account all fees,
costs and expenses (collectively, "Costs") in connection with the
management by TT of the advertising, promotion, manufacturing,
sale, marketing, distribution and exploitation of the Product and
related Upsells, including, without limitation, production and
post-production costs; media costs; Product and Upsells costs;
manufacturing costs; freight and transportation costs;
telemarketing costs; fulfillment costs; credit card and bank
costs; packaging costs; marketing costs; customer service costs;
training costs; professional service fees;
celebrity/talent/experts fees and royalties and testimonial
costs; internet costs; third party license fees; third party
marketing commissions; insurance costs; management, personnel and
overhead costs (management, personnel and overhead costs on a
monthly basis up to twenty-six thousand dollars ($26,000) shall
be deemed pre-approved by Infotopia hereunder); travel costs;
returns, refunds, chargebacks and bad debts; and all other
documented out-of-pocket expenses incurred in connection with the
transactions contemplated hereunder and approved by Infotopia and
TT. TT shall have no responsibility whatsoever to pay for any of
such fees, costs and expenses.
(b) Concurrently with the consummation of the transaction set
forth in Paragraph 5(a) hereof, (i) Infotopia shall place a
purchase order for twenty thousand (20,000) units of the Product,
seven thousand two hundred (7,200) Fast Cat upsell units and
three thousand (3,000) bottles of Ultimate Slimming Formula
upsell units, and Infotopia shall pay at such time for all of
such units at TT's current manufacturing cost, including freight,
transportation and insurance charges and (ii) Infotopia shall
authorize TT to place on its behalf a television media order to
broadcast the Infomercial in the amount of Three Hundred Thousand
Dollars ($300,000), and Infotopia shall pay at such time for such
media order.
(c) Infotopia shall also authorize TT to place on its behalf a
minimum of Two Hundred Fifty Thousand Dollars ($250,000) in
weekly television media to broadcast the Infomercial for so long
as the ratio of Gross Television Sales Revenues to Costs Per
Order is 2.3/1 or greater, on a weekly basis. "Gross Television
Sales Revenues" shall mean all gross revenues actually received
by TT or its designees on behalf of Infotopia in respect of
worldwide sales and exploitation of the Product and Upsells by
any means and media other than retail in direct response to the
airing of the Infomercial, excluding (i) sales, excise, use or
any other taxes, and (ii) actual returns, actual refunds and
actual chargebacks. "Costs Per Order" shall mean the media costs
incurred in order to sell the Product and related Upsells through
the airing of the Infomercial. Infotopia agrees to provide
sufficient funding on an on-going basis required to maintain such
media minimums for so long as such ratio is maintained at 2.3/1
or greater, including, without limitation, funding for media,
Product units and Upsell units. In the event that (i) Infotopia
fails to fund a minimum of Two Hundred Fifty Thousand Dollars
($250,000) in television media to broadcast the Infomercial for
any week when the ratio of Gross Television Sales Revenues to
Costs Per Order for the previous week was 2.3/1 or greater or
(ii) Infotopia fails to fund an amount equal to One Hundred Fifty
Thousand Dollars ($150,000) in television media to broadcast the
Infomercial for any week when the ratio of Gross Television Sales
Revenues to Costs Per Order for the previous week was less than
2.3/1, TT shall be permitted to supplement Infotopia's media
order with TT's own media order to broadcast the Infomercial for
TT's own account and to take any and all other actions necessary
to fulfill orders for Products and Upsells relating to TT's own
media order for TT's own account, including, without limitation,
purchasing Product and Upsell units; provided that, with respect
to such supplemental media purchased by TT in the case of clause
(ii) above, TT shall pay to Infotopia a reverse royalty in the
amount of five percent (5%) of Adjusted Gross Revenues (as
defined below) derived from such supplemental media, excluding
from such definition Wholesale Selling Price, royalties payable
to TT hereunder and the reserve for working capital.
(d) At all times during the Term of this Agreement, Infotopia
shall maintain a minimum amount of working capital in the Bank
Account maintained by TT equal to not less than one (1) week of
estimated Costs determined by TT and Infotopia to be required for
the advertising, promotion, manufacturing, sale, marketing,
distribution and exploitation of the Product and related Upsells
("Minimum Working Capital"). Infotopia shall send weekly by wire
transfer in immediately available funds an amount of working
capital into the Bank Account equal to the amount reflected on a
weekly cash flow projection prepared by TT and approved by
Infotopia.
(e) Every month during the first twelve (12) months of the Term
of this Agreement Infotopia shall order a minimum of seven
thousand two hundred (7,200) units of the Product and pay at such
time for all of such units at TT's current manufacturing cost,
including freight, transportation and insurance charges.
(f) Within three (3) business days after the execution of this
Agreement, Infotopia shall send by wire transfer in immediately
available funds an amount equal to Twenty-five Thousand Dollars
($25,000) to Xxxxxx Xxxxxxxx Business Management, Inc.'s bank
account for the benefit of TT. If the conditions precedent set
forth in Paragraphs 5(a) and 3(b) hereof are not satisfied for
any reason, Xxxxxx Xxxxxxxx Business Management, Inc. shall
release such funds to TT. If the conditions precedent set forth
in Paragraphs 5(a) and 3(b) hereof are satisfied, Xxxxxx Xxxxxxxx
Business Management, Inc. shall release such funds to the Bank
Account.
4. Compensation to TT for License. In consideration of the
license by TT of the Rights set forth herein, Infotopia shall
compensate TT as follows, subject to the satisfaction of the
conditions precedent set forth in Paragraphs 5(a) and 3(b)
hereof:
(a) Infotopia shall issue to TT or its designees, in accordance
with all applicable securities laws, shares of its restricted
common stock, validly issued, fully paid and non-assessable,
equal to Five Hundred Thousand Dollars ($500,000) at the price of
fifteen cents ($0.15) per share. Such shares shall be Rule 144
restricted shares. In the event such shares are not valued at
Five Hundred Thousand Dollars ($500,000) at the time such shares
become free trading, Infotopia shall, at TT's election, either
pay to TT or its designees the difference in cash between the
value of such shares at such time and Five Hundred Thousand
Dollars ($500,000) or issue to TT or its designees additional
shares of Infotopia common stock or warrants or stock options to
purchase shares of Infotopia common stock, in either case
necessary to achieve an aggregate value of Five Hundred Thousand
Dollars ($500,000). If at any time Infotopia ceases to be a
publicly traded company and TT or its designees have not sold
such shares prior to such time, Infotopia shall pay TT or its
designees an amount equal to Five Hundred Thousand Dollars
($500,000).
(b) Infotopia shall be obligated to register some of its
securities for sale for its own account or for the account of
other persons within six (6) months of the date hereof. Infotopia
shall at such time give written notice ("Infotopia's Notice"), at
its expense, to TT of its intention to do so at least thirty (30)
days prior to the filing of a registration statement with respect
to such registration with the Securities and Exchange Commission.
Unless Infotopia receives notice from TT to the contrary within
ten (10) business days after Infotopia's Notice is received by
TT, Infotopia shall cause all of TT's shares to be registered
under the Securities Act in connection with Infotopia's
registration so as to permit the sale by TT of TT's shares. All
expenses incurred in effecting any registration pursuant to this
subparagraph, including, without limitation, all registration and
filing fees, printing expenses, expenses of compliance with blue
sky laws and fees and disbursements of counsel for Infotopia,
shall be borne by Infotopia. The foregoing registration rights
shall apply to TT's designees if the Infotopia shares were issued
to said designees.
(c) Infotopia represents, warrants and covenants that it will
comply with Rule 144 in all respects, including, without
limitation, Rule 144(c) (1) and (2). If Infotopia fails to
register such restricted shares as set forth in Paragraph 4(b)
above, Infotopia shall issue to TT or its designees, in
accordance with all applicable securities laws, at TT's election,
shares of its common stock, validly issued, fully paid and non-
assessable, or warrants or stock options to purchase shares of
Infotopia common stock at an exercise price of fifteen cents
($0.15) per share, equal in market value to One Hundred Thousand
Dollars ($100,000). The parties hereto agree that such issuance
is not intended to be in full or complete satisfaction of any dam
ages arising out of such default or breach by Infotopia and that
such issuance shall not preclude any action or remedy available
to TT with respect to such default or breach by Infotopia.
Moreover, in such event, TT or its designees shall be entitled to
exercise a "put" right to Infotopia upon written notice to
Infotopia, pursuant to which Infotopia shall be obligated to
purchase such restricted shares from TT or its designees at a
purchase price equal to the value of such shares at the time of
such written notice, but in no event less than Five Hundred
Thousand Dollars ($500,000) regardless of the value of such
shares at such time.
5. Compensation to TT for Services. In consideration of the
services to be rendered by TT as set forth herein, Infotopia
shall compensate TT during the Term as follows:
(a) TT shall receive a weekly royalty of five percent (5%) of
one hundred percent (100%) of Gross Sales Revenues of the Product
and Upsells from worldwide sales and exploitation of the Product
and Upsells by any means and media other than retail. "Gross
Sales Revenues" shall mean all gross revenues actually received
by TT or its designees on behalf of Infotopia in respect of sales
and exploitation of the Product and Upsells by any means and
media other than retail, excluding (i) sales, excise, use or any
other taxes, and (ii) actual returns, actual refunds and actual
chargebacks.
(b) TT shall receive a weekly royalty of seventeen percent (17%)
of one hundred percent (100%) of the "Wholesale Selling Price" of
the Product and Upsells from worldwide retail sales and
exploitation of the Product and Upsells, including, without
limitation, internet sales through xxxxxxxxxx.xxx and third party
internet sales. "Wholesale Selling Price" shall mean the gross
amount invoiced by TT or its designee on behalf of Infotopia to
retailers and/or distributors for resale to consumers and
actually received by TT or its designees on behalf of Infotopia
in respect of worldwide retail sales and exploitation of the
Product and Upsells, excluding (i) sales, excise, use or any
other taxes, and (ii) actual returns, actual refunds and actual
chargebacks.
(c) TT shall receive an additional contingent cash bonus equal
to Two Hundred Fifty Thousand Dollars ($250,000), payable within
fifteen (15) business days following the achievement by TT on
behalf of Infotopia of Gross Sales Revenues and the Wholesale
Selling Price from worldwide sales and exploitation of the
Product and Upsells by any means and media of Ten Million Dollars
($10,000,000) or One Million Dollars ($1,000,000) in Adjusted
Gross Revenues (as defined below) before taxes and excluding the
reserve against returns and the reserve for working capital set
forth in Paragraph 6 hereof.
(d) TT shall receive an additional contingent cash bonus equal
to One Hundred Thousand Dollars ($100,000), payable within
fifteen (15) business days following any month in the calendar
year 2000 during which a minimum of Eight Hundred Thousand
Dollars ($800,000) in media is aired resulting in a ratio of
Gross Television Sales Revenues to Costs Per Order of 2.5/1 or
greater for such month, up to a maximum bonus of Three Hundred
Thousand Dollars ($300,000).
(e) Notwithstanding anything to the contrary contained herein,
"Gross Sales Revenues" and "Wholesale Selling Price" shall not
include any gross revenues received by TT in respect of sales and
exploitation of the Product and Upsells by any means and media
after the effectiveness of this Agreement (i.e., the satisfaction
of the conditions precedent set forth in Paragraph 5(a) and 3(b)
hereof) to the extent such gross revenues are realized from sales
made, or purchase orders for units of the Product and Upsells
placed, prior to the effectiveness of this Agreement.
6. Adjusted Gross Revenues (a) TT shall distribute to Infotopia
or cause to be paid to Infotopia by the applicable fulfillment
house all "Adjusted Gross Revenues." For purposes of this
Agreement, "Adjusted Gross Revenues" shall mean one hundred
percent (100%) of the Gross Sales Revenues and the Wholesale
Selling Price actually received by TT or its designees on behalf
of Infotopia, plus any funds released from the holdback described
below, less all Costs, a ten percent (10%) holdback of Gross
Sales Revenues and the Wholesale Selling Price as a reserve
against returns, refunds, chargebacks, bad debts and similar
deductions relating to Products and Upsells sold hereunder, all
royalties payable to TT hereunder and a reserve for Minimum
Working Capital.
(b) TT makes no representations or warranties that the
advertising, promoting, manufacturing, marketing, distributing,
selling and/or exploiting of the Product and Upsells will be
profitable and result in Adjusted Gross Revenues. Infotopia
acknowledges that any sales projections of the Product and
Upsells provided to Infotopia by or on behalf of TT are estimates
only, are not representations that sales in the projected
quantity will be sold and provide no guarantees concerning the
performance of the Product and Upsells.
7. Accounting. Adjusted Gross Revenues hereunder shall be
calculated on a weekly basis in conjunction with the business
management firm of Xxxxxx Xxxxxxxx Business Management, Inc., and
said firm shall furnish Infotopia monthly with an itemized
statement setting forth the Gross Sales Revenues and the
Wholesale Selling Price during the preceding month together with
the computations of the Adjusted Gross Revenues with respect
thereto. Monthly statements shall be sent to Infotopia within
fifteen (15) days after the end of the preceding month. A weekly
disbursement shall be made to Infotopia for the Adjusted Gross
Revenues, if any, for the preceding week. Infotopia, upon
reasonable prior notice to TT for administrative convenience,
shall have the right to inspect, at TT's offices during normal
business hours, the books and records of TT, at Infotopia's
expense, insofar as such books and records relate directly to the
computation of Adjusted Gross Revenues hereunder.
8. Term of Agreement; Conditions Precedent; Kill Fee. (a)
The term of this Agreement (the "Term") shall commence and this
Agreement shall be effective upon the satisfaction of the
conditions precedent set forth in Paragraphs 5(a) and 3(b) hereof
and shall continue until June 10, 2002 unless sooner terminated
in accordance with the provisions set forth herein. Upon the
expiration of the Term, this Agreement may be extended for one or
more additional periods on terms to be mutually agreed upon by
the parties hereto, with such extension(s) to occur not less than
thirty (30) days prior to the end of the Term or any extended
term.
(b) If the conditions precedent set forth in Paragraphs 5(a) and
3(b) hereof are not satisfied for any reason, then this Agreement
shall be void ab initio and of no force and effect and TT shall
have no obligations whatsoever hereunder.
(c) In the event the conditions precedent set forth in
Paragraphs 5(a) and 3(b) hereof are not satisfied for any reason,
Infotopia shall pay to TT a "kill" fee equal to Twenty-five
Thousand Dollars ($25,000) in accordance with the terms of
Paragraph 3(f) hereof. This subparagraph 8(c) shall survive
notwithstanding the fact that this Agreement shall be void ab
initio and of no force and effect if such conditions precedent
are not satisfied.
9. Customer List. The name, address, telephone number, credit
card information and all other customer data collected by TT and
Infotopia relating to the Product and Upsell units sold after the
effectiveness of this Agreement during the Term ("Customer
List"), shall be jointly owned by TT and Infotopia. Neither TT
nor Infotopia shall sell, lease, rent or otherwise transfer all
or any portion of the Customer List to any third party without
the written approval of the other party, which approval shall not
be unreasonably withheld or delayed.
10. Infringement. TT agrees to take all steps and do all filings
and registrations to maintain all copyrights, patent licenses,
trademarks and all other intellectual property relating to the
Product in force, all at Infotopia's expense. TT shall promptly
notify Infotopia of any information obtained regarding
infringements or imitations by third parties of the Product or
the intellectual property relating thereto. In connection
therewith, TT agrees to fully cooperate with Infotopia to stop
such infringement or imitations. Any recovery of damages shall
shared on an equal basis by Infotopia and TT after deduction of
all costs and expenses paid by Infotopia relating to such
infringement or imitations. Infotopia acknowledges that Infotopia
shall not, without the consent and/or participation of TT, defend
or prosecute any action relating to the Product or the
intellectual property relating thereto, and that TT, at its sole
discretion, may elect to defend or prosecute, or to participate
in the defense or prosecution of, any action relating thereto, at
Infotopia's expense. In the event that TT undertakes the defense
or prosecution of any litigation relating to the Product or
intellectual property relating thereto, Infotopia agrees to fully
cooperate with TT in any such proceeding, to join with TT as a
party to any action brought by TT if required or requested by TT,
and to execute any and all documents and do all acts which may be
necessary or of aid, at the determination of TT's legal counsel,
to carry out such litigation. The provisions of this Paragraph
shall survive any expiration or termination of this Agreement.
11. Non-Compete. During the Term of this Agreement, TT shall
not, directly or indirectly, either alone or in participation
with any other person or entity, engage in or be involved with
marketing or distributing any other product substantially similar
in design, composition, content or function to the Product,
unless TT first offers Infotopia the right to participate in the
marketing and distribution thereof in accordance with the terms
and conditions set forth in Paragraph 12 hereof. At any time
during the Term of this Agreement and for one (1) year following
the date of expiration or termination of this Agreement,
Infotopia shall not, directly or indirectly, either alone or in
participation with any other person or entity, engage in or be
involved with the advertisement, promotion, manufacturing,
marketing, sale, distribution or exploitation of any other
product substantially similar in design, composition, content or
function to the Product.
12. Right of First Refusal. During the Term of this Agreement,
TT shall grant Infotopia a right of first refusal regarding the
advertisement, promotion, manufacturing, marketing, sale,
distribution and exploitation of (i) any other product
substantially similar in design, composition, content or function
to the Product that TT intends to develop and market and (ii) any
other product owned and/or controlled by TT which has been
sufficiently developed for potential marketing, distribution
and/or exploitation upon satisfaction of the condition that Gross
Sales Revenues and the Wholesale Selling Price total ten million
dollars ($10,000,000) as of the first anniversary of the date
hereof. Infotopia shall have seven (7) business days to determine
whether Infotopia is interested in exploiting any product offered
by TT and in negotiating to acquire rights therein and thereto.
If Infotopia serves notice that Infotopia is not interested in
any such product or fails to notify TT of its interest or lack of
interest with respect to such product, TT shall then have the
right to dispose of rights in and to such product or exploit such
product in any manner it shall choose thereafter without any
further obligation to Infotopia with respect thereto. If
Infotopia serves written notice that it is interested in such
product, TT will negotiate in good faith with Infotopia with
respect to the rights in and to such product,. If such
negotiations shall not result in a binding written agreement
between TT and Infotopia within a period of fifteen (15) business
days from the commencement of such negotiations, TT shall then
have the right to dispose of rights in and to such product or
exploit such product in any manner it shall choose thereafter
without any further obligation to Infotopia with respect thereto.
13. Representations and Warranties. Each party represents and
warrants to the other as follows:
(a) It has all requisite right, power and authority to enter
into this Agreement and to grant the rights set forth herein.
(b) The execution and delivery of this Agreement by it and the
performance of its obligations hereunder, do not and will not
conflict with or result in a breach of or a default under its
organizational instruments or any other agreement, instrument,
order, law or regulation applicable to it or by which it may be
bound.
(c) This Agreement has been duly and validly executed and
delivered by it and constitutes its valid and legally binding
obligation, enforceable in accordance with its terms.
(d) It has not granted and will not grant any rights that would
conflict with or derogate from the rights granted to hereunder.
(e) It has not previously entered into any agreement and shall
not enter into any agreement that would conflict with or derogate
from the rights granted or the services to be rendered hereunder.
14. Termination by Infotopia. (a) Infotopia shall be permitted
to terminate this Agreement immediately by written notice to TT
upon the occurrence of any of the following: (i) if TT files a
voluntary petition under the United States Bankruptcy Code; (ii)
if TT is the subject of an involuntary petition under the United
States Bankruptcy Code which is not dismissed within sixty (60)
days after the filing thereof; (iii) if TT makes an assignment
for the benefit of creditors, applies for or consents to the
appointment of any receiver or trustee of all or any material
part of its property; or (iv) if TT institutes a dissolution or
liquidation proceeding with respect to its business.
(b) Infotopia shall be permitted to terminate this Agreement
upon the breach by TT of any material representation, warranty,
covenant or agreement contained in this Agreement (unless such
breach is the result of a force majeure event). Prior to any
termination pursuant to this subparagraph (b), Infotopia shall
give TT written notice of, and thirty (30) days to cure, such
breach, if such breach is curable, and if such breach is cured to
Infotopia's satisfaction within such thirty (30) day period,
Infotopia shall not be permitted to terminate this Agreement. If
such breach is not curable (giving written notice of a non-
curable breach being the only requirement prior to termination)
or such breach is not cured to Infotopia's satisfaction within
such thirty (30) day period, this Agreement shall terminate
without the need for further action by Infotopia. Such right of
termination shall be in addition to such other rights and
remedies as Infotopia may have under applicable law.
15. Termination by TT. (a) TT shall be permitted to terminate
this Agreement immediately by written notice to Infotopia upon
the occurrence of any of the following: (i) if Infotopia files a
voluntary petition under the United States Bankruptcy Code; (ii)
if Infotopia is the subject of an involuntary petition under the
United States Bankruptcy Code which is not dismissed within sixty
(60) days after the filing thereof; (iii) if Infotopia makes an
assignment for the benefit of creditors, applies for or consents
to the appointment of any receiver or trustee of all or any
material part of its property; (iv) if Infotopia institutes a
dissolution or liquidation proceeding with respect to its
business; or (v) if Infotopia ceases to be a publicly traded
company.
(b) TT shall be permitted to terminate this Agreement upon the
occurrence of any of the following: (i) the breach by Infotopia
of Infotopia's agreements contained in any of Paragraphs 1(c),
3(a), 3(c) or 3(d) of this Agreement, (ii) the unauthorized use
by Infotopia of the Rights, (iii) the unauthorized use by
Infotopia of any copyrights, patents, trademarks or other
intellectual property relating to the Product owned, licensed
and/or controlled by TT or (iv) the non-payment by Infotopia of
any amount due to TT hereunder. Prior to any termination pursuant
to this subparagraph (b), TT shall give Infotopia written notice
of, and seven (7) business days to cure, such breach, if such
breach is curable , and if such breach is cured to TT's
satisfaction within such seven (7) business day period, TT shall
not be permitted to terminate this Agreement. If such breach is
not curable (giving written notice of a non-curable breach being
the only requirement prior to termination) or such breach is not
cured to TT's satisfaction within such seven (7) business day
period, this Agreement shall terminate without the need for
further action by TT. Such right of termination shall be in
addition to such other rights and remedies as TT may have under
applicable law.
(c) TT shall be permitted to terminate this Agreement upon the
occurrence of any of the following: (i) the breach by Infotopia
of any material representation, warranty, covenant or agreement
contained in this Agreement other than as set forth in Paragraph
15(b) above (unless such breach is the result of a force majeure
event) or (ii) if for any two (2) consecutive month periods
Infotopia purchases an amount of Product units less than the
minimum order specified in Paragraph 3(e) hereof. Prior to any
termination pursuant to this subparagraph (c), TT shall give
Infotopia written notice of, and thirty (30) days to cure, such
breach, if such breach is curable, and if such breach is cured to
TT's satisfaction within such thirty (30) day period, TT shall
not be permitted to terminate this Agreement. If such breach is
not curable (giving written notice of a non-curable breach being
the only requirement prior to termination) or such breach is not
cured to TT's satisfaction within such thirty (30) day period,
this Agreement shall terminate without the need for further
action by TT. Such right of termination shall be in addition to
such other rights and remedies as TT may have under applicable
law.
16. Effect of Termination; Sales After Termination. Upon
termination or expiration of this Agreement for any reason
whatsoever, the following shall occur: (a) all Rights shall
revert to TT and Infotopia shall have no further rights
whatsoever with respect to the Product, Upsells and the
intellectual property relating thereto; (b) Infotopia shall, at
its own expense, return any of TT's intellectual property,
artwork or materials of any kind in its possession or control;
(c) for a period of three (3) months following the expiration or
termination of this Agreement, all pending orders for Product or
Upsells shall be filled to the extent inventory funded by
Infotopia exists relating to such orders, in which case TT shall
account to Infotopia for Adjusted Gross Revenues as provided for
herein.
17. Indemnifications.
(a) Infotopia agrees to indemnify, hold harmless and defend TT,
its officers, directors, shareholders, employees, affiliates,
representatives, designees (with respect to receipt of stock,
stock options or warrants by Infotopia hereunder), agents,
attorneys, licensees, distributors, successors and assigns from
and against any and all losses, costs, damages, claims, suits,
actions, judgments, demands, obligations, debts, liabilities,
agreements and expenses whatsoever, (including, without
limitation, attorneys' fees, court costs and reasonable
investigation expenses) arising out of or in connection with (i)
any breach by Infotopia of any covenant, representation, warranty
or agreement contained herein, (ii) any unauthorized use by
Infotopia of the Rights, (iii) any unauthorized use by Infotopia
of any copyrights, patents, trademarks or other intellectual
property relating to the Product owned, licensed and/or
controlled by TT, or (iv) any issuance of stock, stock options or
warrants by Infotopia hereunder.
(b) TT agrees to indemnify, defend and hold harmless Infotopia,
its officers, directors, shareholders, employees, affiliates,
representatives, agents, attorneys, licensees, distributors,
successors and assigns from and against any and all losses,
costs, damages, claims, suits, actions, judgments, demands,
obligations, debts, liabilities, agreements and expenses
whatsoever, (including, without limitation, attorneys' fees,
court costs and reasonable investigation expenses) arising out of
or in connection with any breach by TT of any covenant,
representation, warranty or agreement contained herein.
(c) The provisions of this Paragraph shall survive any expiration
or termination of this Agreement.
18. Injunctive Relief It is mutually understood and agreed that
the Rights granted to Infotopia herein are special, unique,
unusual, extraordinary and of an intellectual character, giving
them a peculiar value, the loss of which cannot be reasonably or
adequately compensated in damages in an action at law, and that
in the event of the unauthorized use by Infotopia of the Rights
or the unauthorized use by Infotopia of any copyrights, patents,
trademarks or other intellectual property relating to the Product
owned, licensed and/or controlled by TT, TT will be caused
irreparable harm for which the remedy at law is inadequate.
Accordingly, TT shall be entitled to preliminary and permanent
injunctive relief (mandatory or otherwise) in addition to
damages, to enforce the provisions of this Agreement, and any
other equitable relief which TT deems appropriate.
19. Confidentiality.
(a) Infotopia agrees to hold all proprietary information and
materials received from TT or its affiliates or learned during
the Term, whether orally or in written form or otherwise, relat
ing to TT's or its affiliates' products or the business being
conducted by TT or its affiliates (the "Proprietary Information")
in strictest confidence and not to use in any manner or to
disclose the Proprietary Information to any third party except as
required by law, pursuant to court order or legal process.
Infotopia acknowledges that any non-permissible disclosure or use
of such Proprietary Information could materially prejudice TT or
its affiliates in the conduct of its business and result in
substantial losses and damages.
(b) TT agrees to hold all proprietary information and materials
received from Infotopia or its affiliates or learned during the
Term, whether orally or in written form or otherwise, relating to
Infotopia's or its affiliates' products or the business being
conducted by Infotopia or its affiliates (the "Confidential
Information") in strictest confidence and not to use in any
manner or to disclose the Confidential Information to any third
party except as required by law, pursuant to court order or legal
process. TT acknowledges that any non-permissible disclosure or
use of such Confidential Information could materially prejudice
Infotopia or its affiliates in the conduct of its business and
result in substantial losses and damages.
20. Force Majeure. No party shall be in breach of this Agreement
or be liable for damages if such party fails to perform hereunder
or such party's performance is delayed as a result of war, fire,
flood, labor trouble, act of governmental authority, riot,
strike, accident, breakage of equipment, unavailability of
materials, delay in production, delay of transportation service,
acts of God, or any other similar or different contingencies
beyond the reasonable control of the parties hereto.
Notwithstanding anything to the contrary contained herein, the
foregoing provision shall not apply to the obligations of
Infotopia to fund the Costs set forth herein or to make any
payment due to TT hereunder.
21. Governing Law; Jurisdiction. The provisions of this
Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of California, without
reference to choice or conflicts of law principles. Except as
otherwise provided herein, any and all suits or actions, whether
federal or state, for any breach of this Agreement, or otherwise
arising out of this Agreement, shall be filed and prosecuted in
any court of competent jurisdiction in the City of Los Angeles,
State of California. The parties hereto hereby consent and submit
to the jurisdiction of the courts in the City of Los Angeles,
State of California and hereby agree that service of process on
any party may be effected by certified mail, return receipt
requested, postage prepaid. Each of the parties waives any
objection which it may have based on improper venue or forum non
conveniens to the conduct of any such suit or action in any such
court.
22. Amendments; Waivers; Rights Cumulative. This Agreement
cannot be modified, altered or otherwise amended except by an
agreement in writing signed by all of the parties hereto. No
provision of this Agreement may be waived unless in writing
signed by all of the parties hereto, and waiver of any one
provision of this Agreement shall not be deemed to be a waiver of
any other provision. No failure or delay on the part of any party
in exercising any right, power or remedy hereunder shall operate
as a waiver thereof. No right, power or remedy granted to the
parties under this Agreement on default or breach is intended to
be in full or complete satisfaction of any damages arising out of
such default or breach, and any single or partial exercise of any
such right, power or remedy shall not preclude any other, or
further exercise thereof, or the exercise of any other right,
power or remedy. Each and every right, power or remedy under this
Agreement, or under any other document or instrument delivered
hereunder, or allowed by law or equity, shall be cumulative and
may be exercised from time to time.
23. Assignments. Neither party shall have the right to assign
any of its rights or obligations to any third party without the
prior written consent of the other party; provided that each of
the parties shall have the right to assign any of its rights or
obligations to any parent, affiliate or subsidiary company or to
any other entity owning or acquiring all or substantially all of
such party's stock or assets, or any division or part of such
party that is charged with responsibility for this Agreement,
without the prior written consent of the other party, so long as
such assignee assumes all of the assignor's obligations hereunder
in writing. Notwithstanding any other provision of this
Agreement, any attempted assignment by either party without the
prior written consent of the other party except as permitted
herein shall be void and of no force or effect. This Agreement
shall be binding upon and inure to the benefit of the parties to
this Agreement and their respective successors and permitted
assigns.
24. Counterparts; Facsimile. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be
an original, but all of which together shall constitute one and
the same instrument. This Agreement may be executed by facsimile,
and signatures on a facsimile copy hereof shall be deemed
authorized original signatures.
25. Confidentiality of Terms. Each of the parties agrees to keep
the terms and conditions contained in this Agreement
confidential, and agrees not to disclose said terms and condi
tions to any third parties other than its representatives,
attorneys and accountants except as otherwise required by law;
provided that either party shall have the right to disclose the
terms contained in this Agreement through a business plan,
offering memorandum, prospectus or similar document for purposes
of raising capital for such party. Each of the parties agrees
that, unless approved by the other parties in advance, such party
shall not make any public announcement, issue any press release
or other publicity or confirm any statements by third parties
concerning the transactions contemplated hereby, except as
otherwise required by law.
26. Additional Documents; Cooperation. Each of the parties
agrees to execute any and all additional documents or in
struments, to obtain all required licenses, permits and approvals
necessary to implement the transactions contemplated herein, to
cooperate with the other party and to do any and all things neces
sary or desirable to effectuate the purposes of this Agreement.
27. Independent Contractors. It is expressly agreed and intended
that each party hereto shall remain a separate legal entity from
the other and each shall be an independent contractor responsible
only for its own actions. Nothing contained in this Agreement
shall be construed as establishing an employer/employee,
partnership or joint venture relationship between the parties
hereto. Each of the parties shall be responsible for payment of
all of its own taxes on compensation received by it under this
Agreement.
28. Notices. All notices, requests, demands and other
communications (collectively, "Notices") given or made pursuant
to this Agreement shall be in writing and shall be deemed
received (i) on the same day if delivered in person, by same-day
courier or by facsimile transmission; provided that if sent by
facsimile transmission, a copy is also sent by certified mail,
return receipt requested, postage prepaid, (ii) on the next day
if delivered by overnight mail or courier, or (iii) three (3)
business days after the date of deposit in the mails if being
sent by certified mail, return receipt requested, postage
prepaid, to the parties at their addresses as set forth at the
beginning of this Agreement. Any of the parties to this Agreement
may from time to time change such party's address for receiving
notice by giving written notice thereof in the manner set forth
above.
29. No Adverse Construction. The rule that an agreement is to be
construed against the party drafting the agreement is hereby
waived by the parties hereto, and shall have no applicability in
construing this Agreement or the terms of this Agreement.
30. Legal Counsel. Each of the parties acknowledges that it had
the right and opportunity to seek independent legal counsel of
its own choosing in connection with the execution of this
Agreement, and each of the parties represents that it has either
done so or that it has voluntarily declined to do so, free from
coercion, duress or fraud.
31. LIMITATION OF LIABILITY. IN NO EVENT SHALL TT HAVE ANY
LIABILITY TO
INFOTOPIA, INFOTOPIA'S CUSTOMERS OR ANY THIRD PARTY, FOR ANY
CAUSE OF ACTION RELATING TO THIS AGREEMENT FOR ANY INCIDENTAL,
CONSEQUENTIAL, SPECIAL OR SPECULATIVE DAMAGES, INCLUDING, WITHOUT
LIMITATION, DAMAGES FOR LOSS OF PROFITS OR USE, BUSINESS
INTERRUPTION, OR LOSS OF GOODWILL, IRRESPECTIVE OF WHETHER TT HAS
ADVANCE NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.
32. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
such prohibition, unenforceability or non-authorization without
invalidating the remaining provisions hereof or affecting the
validity, enforceability or legality of such provision in any
other jurisdiction.
33. Headings. Any Paragraph headings contained in this Agreement
are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
34. Entire Agreement. This Agreement constitutes the entire
understanding between the parties hereto with respect to the
subject matter hereof and supersedes any prior understandings or
agreements between the parties hereto, including, without
limitation, that certain non-binding Letter of Intent dated as of
June 6, 2000 but excluding that certain Production Agreement
dated as of May 16, 2000 between the parties and that certain
Confidentiality Agreement dated as of April 21, 2000 between the
parties. There are no representations, agreements, arrangements
or understandings, oral or written, between the parties relating
to the subject matter of this Agreement which are not fully
expressed herein.
35. Attorneys' Fees. If any action, suit or other proceeding is
instituted to remedy, prevent or obtain relief from a default in
the performance by any party of such party's obligations under
this Agreement, the prevailing party shall recover all of such
party's reasonable attorneys' fees and costs incurred in each and
every such action, suit or other proceeding, including any and
all appeals or petitions therefrom.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first set forth above.
INFOTOPIA, INC. TORSO TIGER, INC.
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxx Xxxxxx
Xxxxxx Xxxxx, CEO/Chairman of the Board Xxxx Xxxxxx, President
ADDENDUM TO LICENSE AGREEMENT
BETWEEN TORSO TIGER AND INFOTOPIA
INFOTOPIA, INC., (the "Company") hereby agrees to retain
Xxxx Xxxxxx and Xxxxx Xxxxxxxx to administer and act as
consultants to the Company regarding the management and operation
of the Torso Tiger product as long as the License Agreement dated
June 26, 2000 by and between Infotopia and Torso Tiger remains in
full force and effect.
The aforementioned consultants shall report directly to
Xxxxxx Xxxxxxx, President of Infotopia, Inc.
Compensation to be determined and fixed by a vote of the
Board of Directors of Infotopia, Inc.
DATED this 6th day of July, 2000.
/s/ Xxxx Xxxxxx /s/ Xxxxx Xxxxxxxx
Xxxx Xxxxxx Xxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxx /s/ Xxxxxx X. Xxxxx
Xxxxxx Xxxxxxx, President/Director Xxxxxx X. Xxxxx, CEO/Director
/s/ Xxxxxxx Xxxxx /s/ Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, Director Xxxxx Xxxxxxxxx
