EXHIBIT 10.16
LICENSE AGREEMENT
THIS LICENSE AGREEMENT entered into this 29th day of September, 1993 by
and between XXXX XXXX, Ph.D., an individual whose address is 00 Xxxx Xxxxx,
Xxxx Xxxxxx, XX 00000 ("Licensor") and RAMY EL-BATRAWI, whose address is X.X.
Xxx 000000, Xxxxx, XX 00000, and his successors and assigns ("Licensee").
W I T N E S S E T H:
WHEREAS, Licensor has authored numerous books and articles and has
produced a series of video cassette and audio tapes (the "Tapes"), and also
regularly conducts seminars on topics generally having to do with
interpersonal relationships; and
WHEREAS, the only method Licensor is currently utilizing to market and
sell the Tapes is to sell to individuals in attendance at his seminars; and
WHEREAS, Licensor has determined that it is desirable to market the
Tapes on a national basis; and
WHEREAS, Licensee has the knowledge and expertise in the direct response
business to arrange for the marketing, sale and distribution of the Tapes on
a national scale through the use of infomercials, television and radio
commercial and print advertisements; and
WHEREAS, Licensor and Licensee wish to enter into an agreement whereby
Licensor will provide certain information, documentation and assistance
concerning the direct marketing of the Tapes, and whereby Licensee would be
entitled to market, distribute and sell the Tapes for a royalty to be paid to
Licensor.
NOW, THEREFORE, in consideration of the mutual covenants of the parties
hereto, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties mutually agree as
follows:
1. LICENSE. Licensor grants to Licensee a continuing license to sell
the Tapes, with the right to grant sublicenses to Licensee's distributors,
and to use the name "Xxxx Xxxx, Ph.D., Dr. Xxxx Xxxx and Xx. Xxxx," together
with the signature, voice and likeness of Licensor, and all trademarks and
trade names acquired for use with the Tapes, in connection with the
advertising, merchandising, promotion, sale and distribution of the Tapes
until the termination of this Agreement in accordance with the terms hereof.
The license granted hereunder shall be an exclusive license for Licensee to
advertise, market and sell the Tapes at retail or wholesale through any
medium, including but not limited to radio, television, direct mail and
print. Licensor retains the right to sell the Tapes to attendees at his
seminars and to continue to advertise, market or sale the Tapes through the
print mediums he is utilizing on the date of this Agreement. Licensor agrees
that he will not permit any other individual or entity to sell the Tapes
through any medium whatsoever during the term hereof. For purposes of this
Agreement, the term "Tapes"
shall include all existing and any future video and audio products developed,
produced or made available by Licensor, except books authored by Licensor.
2. INFORMATION AND DOCUMENTATION TO BE PROVIDED BY LICENSOR. Licensor
shall provide to Licensee, as soon as is practical after the execution of
this Agreement, information and documentation concerning sales volume of
Tapes and other works by Licensor. In addition, Licensor shall provide to
Licensee copies of any printed promotional material currently available
concerning Xx. Xxxx and his works, whether printed or on video or audio tape.
3. PRODUCTION OF PROMOTIONAL CAMPAIGN. The parties contemplate that
after review of the documentation to be provided by Licensor above, Licensee
will produce certain advertising and promotional material to sell the Tapes
by direct response. The parties contemplate that the marketing campaign
implemented by the Licensee may include, but not be limited to, the
production and use of a 30 minute infomercial, various length television
commercials and other promotional materials. Licensee shall bear all costs
associated with the production of any advertising and shall be solely
responsible for the content and purchase of air time for the advertisements.
Licensee agrees that he will spend not less than $500,000 towards the
marketing of the Tapes. Licensor retains the right to approve any
infomercials or commercials produced by Licensee, but Licensor's approval
will not be unreasonably withheld. Licensor agrees to provide consulting
services and make reasonable personal appearances as requested by Licensee in
connection with the production of any infomercial, commercial or revisions
thereto, at no charge to Licensee. Licensor shall have the right to have a
trailer of not more than one minute in length advertising Licensor's seminars
attached to the end of any 30 minute infomercial produced by Licensee. Any
costs or expenses associated with the production of any trailer shall be at
the sole expense of Licensor.
4. COMPENSATION TO LICENSOR. As compensation for the performance of
Licensor's obligations hereunder, Licensee agrees to pay Licensor a royalty
of the greater of (a) 15% of gross sales of the Tapes after Licensee has
recouped all expenses incurred in connection with the marketing and sale of
the Tapes (expenses shall not exceed $750,000), or (b) 50% of net income from
sales of the Tapes. For purposes of this Agreement, the term "Net Income"
shall be defined as gross income from Tape sales by Licensee, less all
returns and allowances, and less all expenses reasonably related to the
marketing, sale and distribution of the Tapes. Provided, however, payments
of compensation to Licensee shall not be deemed an "expense" in the
calculation of "net income."
5. PAYMENT OF COMPENSATION TO LICENSOR. Payment of the amounts due
pursuant to paragraph 4 above, shall be made to Licensor on the 15th day of
the month following each calendar quarter. Each payment shall be calculated
on sales represented by receipts of the previous calendar quarter. That is,
payments due Licensor hereunder for any video or audio cassettes sold,
whether at retail or wholesale, shall be made on the 15th day of the month
following the calendar quarter during which Licensee receives payment for the
sale. Licensee shall receive a credit against amounts due Licensor
hereunder for any Tapes refunds made to customers during the previous
calendar quarter. Licensee shall provide quarterly reports showing all sales
of Tapes together with supporting documentation including reports from any
"800 service" utilized by Licensee and reports from any credit card agencies.
If payment is not made within fifteen (15) days of due date then Licensor
has option to add the royalty to the Tapes at time of purchase by the
Licensee.
6. NON-CIRCUMVENTION. Licensor hereby represents and warrants that he
has not, and will not during the term of this Agreement, divulge any
information concerning this Agreement to any third person or entity, and
agrees not to participate in any manner whatsoever in the production,
marketing or selling of audio or video cassettes tapes in a manner not
provided for herein. Licensor also agrees not to produce, market, sell or
assist any other party in the production, marketing or sale of any video or
audio cassettes tapes during the term hereof except as permitted herein.
7. OWNERSHIP OF MAILING LIST. Any mailing list compiled by or for
either party hereto as a direct or indirect consequence of this Agreement
shall be the joint property of the parties hereto and both parties shall
share equally in any profits from the sale or lease of such list. This
provision shall survive any termination of this Agreement.
8. ASSIGNMENT. Licensee may assign it rights and duties hereunder.
In the event of an assignment, any reference herein to Licensee shall apply
to the assignee.
9. WAIVER. A waiver by any party hereto or the breach of any
provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach. No waiver shall be valid
unless in writing and signed.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties with respect to the subject matter hereof
and supersedes all prior agreements, or understandings, if any, relating to
the subject matter hereof. This Agreement may not be changed orally, but
only by agreement in writing signed by the party against whom enforcement of
any waiver, change, modification, extension or discharge is sought.
11. INDEPENDENT PROVISIONS. If any term or provision of this Agreement
becomes illegal or unenforceable, the remaining terms and provisions shall
nevertheless be valid, binding and subsisting.
12. ENFORCEMENT; ATTORNEYS' FEES. Should either party to this
Agreement retain an attorney to enforce any of the provisions, terms or
covenants of this Agreement, the prevailing party shall be entitled to
recover reasonable attorneys' fees and all costs incurred in any legal
proceeding. Licensor's sole remedy for breach of this Agreement by Licensee
is termination hereof.
13. GOVERNING LAW; ARBITRATION. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of California. Any
controversy or
claim arising our of, or relating to this Agreement, or the breach thereof,
shall be settled by arbitration in California or Florida as selected by the
party bringing the action, all in accordance with the applicable rules of the
American Arbitration Association, and judgment upon the award rendered may be
entered in any court having jurisdiction thereof.
14. TERM. This Agreement shall continue for in full force and effect
for a period of two (2) years from the date of its execution, unless earlier
terminated upon the mutual agreement of the parties hereto. This Agreement
shall, without the further action of either party, automatically renew for
(a) an additional two (2) year period if Licensee has sold 75,000 or more
tapes during the initial two year period of this Agreement or (b) an
additional four (4) year period if Licensee has sold 200,000 or more tapes
during one initial two year period unless Licensee has defaulted under the
terms of this Agreement which default has not been cured in accordance with
the provisions hereof at the expiration of the original term.
15. BREACH. In the event of a breach of this Agreement by either
party, the non-defaulting party shall give written notice of such breach to
the defaulting party. The breaching party shall have thirty (30) days to
cure such breach. If such breach has not been cured within such thirty (30)
day, the non-defaulting party may, in addition to any other remedies
available, terminate this Agreement.
16. PURCHASE OF TAPES BY LICENSEE. Licensor agrees to provide Licensee
all of the Tapes necessary to fill orders obtained through Licensee's
marketing efforts at Licensor's cost. In the alternative, Licensor agrees to
make arrangements for Licensee to purchase the Tapes at that same cost
directly from Licensor's supplier.
17. ORDERS AND FULFILLMENT. Licensee shall be solely responsible for
processing all orders received as a result of his advertising and for
fulfillment of all orders received.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
/s/ Xxxxxx Xxxx /s/ Xxxx Xxxx 4:20PM
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XXXX XXXX, Ph.D.
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/s/ Xxxxxx Xxxx /s/ Ramy El-Batrawi
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RAMY EL-BATRAWI
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