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EXHIBIT 10.12
LICENSE AGREEMENT
August 4, 1998
LICENSOR: VidKid Distribution, Inc.
0000 X. 00xx Xx.
Xxxxxxxxx, XX 00000
LICENSEE: Fast Forward Marketing, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx xxx Xxx, XX 00000
Licensor hereby grants to Licensee a license for the rights specified herein
under the terms and conditions provided for below. In consideration of the
mutual promises contained herein, the parties agree as follows:
PROGRAMS: Box Set of 5 Videos, each video will include 4 episodes, as listed on
Exhibit A, attached hereto and made a part hereof.
RIGHTS LICENSED AND TERRITORY: Exclusive Video Rights in the U.S. As used
herein, "Video Rights" shall mean the distribution of video cassettes through
all mass merchants and related "rack jobbers", all retail chains and outlets,
all direct marketing and catalog sales, premium sales, as well as any wholesale
or retain accounts within the licensed territories not covered by the above
descriptions. Licensor will retain the rights to all electronic media (i.e.
JQVC, HSN, etc.), all direct print (i.e. NSI, Publishers Clearing House, etc.),
all TV and direct response advertising.
TERM: 3 years, commencing August 1, 1998 and terminating July 31, 2001 for all
programs. If Fast Forward Marketing accounts have not purchased Licensor product
within 18 months, Licensor has the right to sell those accounts direct.
ROYALTIES: (a) Licensee shall pay Licensor $8.00 per Box Set sold, except for
the accounts listed on Schedule "A". (b) Licensee shall pay to Licensor $6.00
per Box Set sold to the accounts listed on Schedule "A". (c) No payment shall be
made on copies returned and on free promotional copies.
RESERVE: As a reserve against potential returns of Programs from the ultimate
purchaser, FFM shall have the right to withhold from any payment owed to
Licensor an amount reasonably related to anticipated returns up to twenty-five
percent (25%) of payment due in any accounting period. FFM shall use its
reasonable efforts to liquidate the reserve fund on a rolling, accrual basis no
more than one hundred and twenty (120) days after reserve was taken.
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MASTER: One broadcast quality Master videotape in D2 format per Program and a
protection master, without defects. The acceptability of each Master is subject
to Licensee's reasonable approval as to technical suitability for home video
distribution. If Licensee deems a Master unsuitable, Licensor agrees to promptly
provide a satisfactory substitute until Licensee so reasonable approved. Any
master not objected to within thirty (30) days shall be deemed approved. Title
to the Masters shall be and remain vested in Licensor, subject to the right of
Licensee to use the same for such reproduction and other purposes as are
permitted by this Agreement. The Masters shall be returned to Licensor at the
end of the term.
DELIVERY: The Master and Materials for the Box Sets, shall be delivered to
Licensee at Licensor's sole expense within five (5) business days.
PACKAGING: Licensor will supply artwork, sample sleeves and promotional
materials created for these programs during the three (3) year program. The
following credit may be included by Licensee on the packaging and any other sale
materials: "Distributed Exclusively by Fast Forward Marketing, Inc., Marina Del
Rey, California.
Licensee agrees to place notice on all printed and advertising materials that
Howdy Xxxxx is a registered trademark of NBC. VidKid Distributing, Inc.; Realm
Productions & Entertainment Company owns all copyrights to the videos.
PROMOTION: Licensee may use and authorize others to use the title(s); excerpts
from each Program not to exceed 3 minutes in duration, the same, likeness, and
all other pertinent information about the purpose(s) for publicizing and
promoting each Program. Licensor shall approve all advertising and promotional
materials; such approval not be unreasonably withheld and made within (1)
business days. Failure to disapprove within said ten (10) business days shall be
deemed an approval.
ACCOUNTING REPORT: (a) Licensee shall maintain complete books and records
relating to its distribution of the Programs. A correct statement of Net
Royalties due will be rendered to Licensor on a quarterly basis, with payments
due thirty (30) days after each reporting period. Royalties shall be defined as
gross Box Sets sold less returned Box Sets per each accounting period.
DUPLICATING: Licensee shall have the right to duplicate a reasonable number of
copies of the Programs from the Masters to fulfill normal customer demands.
Licensor shall have the right to access the duplicator(s) to verify production
quality and numbers. Licensor can purchase box sets from the duplicator, for
resale to Licensor's exclusive accounts. Licensor will pay a 10% premium over
Fast Forward's cost.
SELL-OFF PERIOD: Licensee shall have the right to sell-off any remaining videos
for a period of six (6) months after the expiration of the Term (the "Sell-Off
Period"). If all videos are not sold in the (6) months sell-off period, Licensor
shall have the option to purchase Licensee's videos in excess of what is
required to fulfill the balance of Licensee's
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customer's needs at Licensee's actual cost plus 10% shipping and handling
charges. Licensee may withhold a reserve of up to 10% of sums due Licensor
during the Sell-Off Period to be used against returns only, and such reserve
shall be liquidated and paid to Licensor within sixty (60) days from the end of
the Sell-Off Period.
OWNERSHIP: Licensor has all rights, title and interest including the copyrights
in and to the Programs and Licensor's pre-existing home video packaging belong
exclusively to Licensor, subject to the license herein granted.
LICENSOR'S WARRANTIES AND REPRESENTATIONS: Licensor warrants and
represents that:
(a) it has the right to enter into and perform this Agreement and
to grant the rights herein granted,
(b) it has secured and paid for, or prior to delivery of the
Programs shall secure and pay for all rights, releases,
clearances and licenses with respect to all elements contained
in the programs.
(c) no claim or litigation is pending or threatened with respect
to the Programs or any element contained therein; and
(d) neither the Programs nor the exercise by Licensee of the
rights granted it hereunder will infringe upon or violate the
privacy of or constitute a libel or slander against or violate
any copyright, trademark, literary, artistic, dramatic,
musical, or any other right, of any third party.
LICENSEE'S WARRANTS AND REPRESENTATIONS: Licensee represents and warrants
that it has the right to enter into and perform this Agreement and that:
(a) it will comply with all governmental laws, rules and
regulations relating to the manufacture and distribution of
copies of the programs.
INDEMNITIES: Each party hereby agrees to indemnify, defend, and hold harmless
the other, its officers, directors, agents and employee, from and against any
and all claims, damages, liabilities, costs and expenses, including attorney's
fees, arising out of or relating to the breach or alleged breach of any
warranty, representation or agreement made by it herein.
TERMINATION: If either party breaches this Agreement, and in particular in the
case of Licensee if Licensee fails to render statements and payments when due,
in addition to any other rights of whatever nature which the non-breaching party
may have at law or equity, such party may terminate this Agreement upon notice
by registered mail. In that even, Licensee will render to Licensor an accounting
accompanied by payment of any sums then due.
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FORCE MAJEURE: If Licensor fails to deliver the Programs in accordance with its
obligations hereunder because of "force majeure" (i.e., act of God, fire, labor
dispute, riot or civil commotion, order or act of government, failure of
technical facilities, war or other cause of similar nature beyond Licensor's
control) then Licensor shall not be deemed to be in breach or violation of the
Agreement and this Agreement shall be extended for a period of time equal to the
continuance of the event of force majeure.
ARBITRATION: In the event of a dispute arising from this agreement, within sixty
(60) days from the date notice is given by one party to the other as to the
existence of such a dispute, the parties agree to submit any such dispute to
binding arbitration in accordance with the rules of any mutually agreed upon
arbitrator (the "Rules"). Such arbitration shall be binding and final. The
prevailing party shall be entitled to immediate payment of all costs incurred by
such party in such dispute, including but not limited to, court costs and
reasonable attorneys' fees. In agreeing to arbitration, the parties acknowledge
that in the event of a dispute arising from this agreement, each party is giving
up the right to have the dispute decided in a court of law before a judge or
jury and instead is accepting the use of arbitration for resolution.
MISCELLANEOUS:
(a) Nothing herein shall be deemed to create any partnership or
joint venture between the parties.
(b) Neither party may assign this Agreement without the prior
written approval of the other party. Any assignment made
without such approval shall be invalid.
(c) This Agreement shall be governed by the laws of the State of
Florida applicable to contracts made and wholly to be
performed therein.
(d) The prevailing party in any dispute between the parties shall
be entitled to recover its reasonable attorneys' fees and
reasonable costs incurred in resolving the dispute in addition
to any other relief obtained.
(e) This Agreement embraces the entire understanding between the
parties, supersedes any prior oral and/or written agreements
relating to the subject matter hereof and may not be altered
or modified except in a writing signed by the parties. A
waiver by either party of any breach or default by the other
party may not be construed as a waiver of any other breach or
default by such other party.
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Accepted and Agreed to:
VIDKID DISTRIBUTION, INC. (Licensor)
By: Date:
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FAST FORWARD MARKETING, INC. (Licensee)
By: Date:
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Schedule "A"
HOWDY XXXXX - ACCOUNTS THAT WILL ONLY
BUY IT AT 55% OFF SRP:
Catalog Partners
Critics Choice Video
Funny Side Up Catalog
Global Video
Genesis Direct/Command Performance
Xxxxxxx Xxxxxx
Library Video Company
Pulse Direct
PBS (Public Broadcasting System)
Readers Digest
Rivertown Trading
Rhino Direct
Unapix Catalog
Value Fair
Wellspring Media
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Materials:
The digital files need to be delivered on either CD-ROM or Zip disks and must
contain all necessary digital files for packaging elements (fonts, images, etc.)
We also need to know who to contact to get more sleeves printed when needs.
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