EXHIBIT 10.13
[This Agreement now between XXXXXXX XXXXXXXXXX XX. ENTERPRISES, INC. and
Princeton Publishing, Inc., as assignee of DOJO PUBLISHING, INC.]
LICENSING AND PURCHASE OPTION AGREEMENT
Agreement, made this 6 day of July, 1990, by and between DOJO
PUBLISHING, INC. ("Licensee"), a New York corporation with offices at 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and XXXXXXX XXXXXXXXXX XX.
ENTERPRISES, INC. ("Licensor"), residing at 000 Xxxxxx Xxxx, Xxxxxxxxx,
X.X. 00000.
WITNESSETH:
WHEREAS, Licensor is the publisher of a certain magazine of general
circulation to the public entitled "Karate International" (the "Magazine"),
and
WHEREAS, Licensee is desirous of obtaining a license from Licensor for
the use of the name, trademark and style of the Magazine; and
WHEREAS, Licensee is desirous of retaining Licensor for the purpose of
producing future issues of the Magazine.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
heretofore set forth herein, the parties hereto hereby agree as follows:
1. GRANT OF LICENSE AND WARRANTEE - Licensor grants to Licensee the
right to secure registration in Licensor's name at Licensee's sole cost of
a trademark "Karate International" (the "Trademark") for periodicals with
the United States Patent and Trademark Office and in foreign countries
outside the United States. Licensee shall at Licensee's discretion and cost
secure and maintain said registrations. Licensor shall execute a power of
attorney and/or any and all other necessary documents to appoint Licensee
as Licensor's attorney-in-fact for the purpose of, at Licensee's sole
discretion, obtaining and maintaining said registrations. Licensor grants
to Licensee an exclusive license (the "License") to employ the Trademark
and/or the logo, style, and good will associated therewith and/or the
editorial style, content and good will associated with the Magazine
(collectively the "Licensed Rights") in (a) all editions of the Magazine
(and/or special editions, yearbooks and/or one-shots bearing the Trademark)
to be published in the United States and distributed by Licensee in the
United
States and other parts of the world, and (b) and (b) upon any and all other
products, goods and/or services manufactured, sold and/or provided by
Licensee, upon the terms and conditions hereinafter set forth. The said
License shall commence with issue number 9 of the Magazine, bearing a cover
date of October 1990 and a scheduled on-sale date of September 11, 1990.
Licensee accepts such License, and agrees to use the Trademark on all
copies of the Magazine published pursuant to this Agreement, commencing
with Volume 2, number 3 of the Magazine. Any and all debts or obligations
incurred in connection with any issues of the Magazine prior to Volume 2,
number 3 thereof shall, at all times, remain the exclusive obligations of
Licensor and Licensee shall incur no obligations with respect thereto.
Licensor agrees that while this Agreement remains in effect, Licensor will
not use, or grant to anyone other than Licensee the right to use, any of
the Licensed Rights anywhere in the world. Licensee agrees to execute all
license and registered user agreements that may be necessary and proper in
order to obtain and maintain trademark registrations for the Trademark.
Notwithstanding anything herein stated to the contrary, Licensor retains
the right to utilize the Trademark in connection with seminars,
demonstrations and tournaments.
2. LICENSING FEE - Licensee shall pay to Licensor, in full
consideration of the License granted pursuant to this Agreement, the
aggregate sum of $25,000.00 (the "Licensing Fee). The Licensing Fee shall
be paid as follows: (i) the sum of $5,000.00 upon the execution of this
Agreement; (ii) the sum of $5,000.00 upon the publication of the first
issue of the Magazine to be published pursuant to this Agreement; and (iii)
the balance of $15,000.00 in three equal monthly installments of $5,000.00
each, commencing thirty days after the publication of the first issue of
the Magazine to be published pursuant to this Agreement and continuing each
thirty days thereafter until the entire Licensing Fee is paid. In the
event of a default by Licensee in the payment of any portion of the
Licensing Fee, which default remains uncured for a period of fourteen days
after written notice thereof, the entire Licensing Fee shall accelerate and
become immediately due and payable to Licensor.
3. OPTION TO PURCHASE - Licensor hereby grants to Licensee an
irrevocable option to purchase the Licensed Rights outright for a purchase
price of $100.00. The said option to purchase may be exercised by Licensee
at any time after the Licensing Fee (as defined in paragraph 2 of this
Agreement) has been paid in full. The said option to purchase shall become
effective as of the date of this Agreement and shall remain in effect
through and including June 30, 2040.
4. FURTHER CONSIDERATION FOR OPTION TO PURCHASE - As further
consideration for the irrevocable option described in paragraph 1 of this
Agreement, upon the execution of this Agreement, Licensee shall deliver to
Licensor share certificates evidencing ownership of thirty percent (30%) of
the issued and outstanding common stock of Licensee ("Licensor's Stock
Interest") and shall note such issuance on Licensee's stock transfer
ledger. Nothing contained in this paragraph, or otherwise in this
Agreement, shall be construed as preventing the issuance, sale, transfer or
other disposition of any other shares of stock of Licensee, whether
presently existing, hereafter issued or authorized, or otherwise, provided
that such issuance shall not dilute Licensor's percentage ownership of
thirty percent (30%) of the stock of Licensee. Licensor, as thirty percent
(30%) owner of the common stock of Licensee, shall be paid yearly by
Licensee thirty percent (30%) of any and all profits of Licensee. Licensee
shall have the right to examine, during normal business hours and upon
reasonable notice, the records maintained by Licensee as received from the
National Distributor of the Magazine reflecting sales of the Magazine.
Licensor (and/or Licensor's representatives) shall have access, upon
reasonable notice and during working hours) to such books and records of
Licensee as are actually needed to determine Licensee's profits, if any.
5. EMPLOYMENT OF LICENSOR
5.1 EMPLOYMENT - Licensee hereby employs Licensor, and Licensor accepts
such employment, as the publisher of the Magazine for a period of two years
from the date of this Agreement (the "Term"). During the Term, Licensor
shall be listed on the masthead of the Magazine as the Publisher thereof.
Licensor's employment as publisher shall be as an independent contractor
and shall be terminable for cause at any time and at will after the
expiration of the Term. Nothing contained in this Agreement shall be
deemed a waiver of the Licensee's right to terminate the Licensor's
Employment at any time for cause or for any reason or for no reason after
the expiration of the Term. Nothing contained in this Agreement shall be
deemed to create an employment for any fixed term other than the Term, it
being understood that Licensor's retention as an independent contractor is
severable from the remaining provisions of this Agreement and is terminable
at the will of Licensor after the expiration of the Term. Upon such
termination, Licensee shall be under no obligation to Licensor except to
pay him such compensation as he may be entitled to receive up to the time
of such termination. The rights and powers granted to Licensor are those
of an independent contractor only and this Agreement shall not, and is not
intended to, create any other relationship nor make, constitute or appoint
Licensor an agent or joint venturer of Licensee.
5.2 COMPENSATION - Licensor shall receive the sum of $36,000.00 per
annum, payable in equal installments every two weeks while Licensor's
employment with Licensee continues, as full compensation for his employment
by Licensee as publisher of the Magazine.
5.3 DUTIES OF LICENSOR - Licensor shall deliver to Licensee, in
sufficient time to meet Licensee's production schedules (which shall be
delivered to Licensor in advance in writing in sufficient time to comply
therewith), editorial text and photographs sufficient to produce no more
that ten (10) eighty (80) page, four-color issues of the Magazine. In the
event that more than ten (10) issues of the magazine are published pursuant
to this Agreement in any calendar year, Licensee's compensation set forth
in paragraph "5.2" of this Agreement shall be modified accordingly.
Additionally, Licensor shall use his best efforts (and Licensee shall fully
cooperate) to retain the advertisers that presently advertise in the
Magazine, a Schedule of which is annexed hereto, made a part of this
Agreement, and labeled Schedule "A". Licensor warrants and represents that
the information contained on Schedule "A" is accurate as of the date of
this Agreement. Additionally, Licensor shall, at his discretion, assist
Licensee in attempting to obtain additional future advertising from any and
all sources available. All advertising revenues shall, at all times, be
billed by, collected by, and remain the exclusive property of Licensee.
5.4 DUTIES OF LICENSEE - Licensee shall pay all costs for the materials
necessary to publish all issues of the Magazine, which costs shall not
exceed $4,500.00 per issue of the Magazine. Licensor shall submit to
Licensee all proposed expenses intended to be incurred in excess of
$3,000.00 to obtain the materials necessary for the publication of the
Magazine for approval prior to incurring any such bills. Licensee shall be
responsible for the payment of only those bills in excess of $3,000.00
which Licensee has approved prior to the time that the same are incurred.
5.5 SUBSCRIPTIONS - Annexed to this Agreement, made a part hereof, and
labeled Schedule "B" is a list of existing subscriptions for the Magazine.
Licensor warrants and represents that all information contained on Schedule
"B" is accurate as of the date of this Agreement. Licensee shall be
responsible for fulfilling all Subscriptions listed on Schedule B through
the expiration dates indicated thereon.
6. INDEMNITIES - Licensor agrees to, and does, indemnify, defend and
hold Licensee harmless against any claims or suits of third parties
arising out of the use by Licensee of the Licensed Rights with the
Magazine. Each party shall give the other prompt notice of any such claim
or suit. Licensor shall have the option to settle, or to undertake and
conduct the defense of, any suit so brought; except that Licensor shall
not, without Licensee's consent (which consent shall not be unreasonably
withheld), enter into any settlement agreement which prohibits the use of
any of the Licensed Rights on the understanding that if Licensee fails to
consent to such Settlement, Licensee shall undertake and conduct the
defense at Licensee's
expense. Each party shall cooperate with the other in the defense of any
suit at the sole cost and expense of the party not defending such suit
shall have the right, at its sole cost and expense, to join in the defense
of any such suit.
7. RESTRICTION ON USE OF CONFIDENTIAL INFORMATION - As part of the
consideration required of him under this Agreement, Licensor agrees that he
will not at any time during the Term of his Employment with Licensee
(except in connection with Licensor's production of an illustrated comic
magazine entitled "Karate Kreatures") divulge to any person, firm or
corporation, or use for his own benefit or for the benefit of any other
person, firm or corporation, (a) any of the materials obtained by Licensor
for the publication of the Magazines or (b) any Confidential Information
(as hereinbelow defined) received by him during the course of his
employment with regard to the personal, financial or other affairs of
Licensee and all such information shall be kept confidential and shall not
in any manner be revealed to anyone. For the purposes of this Agreement,
the term "Confidential Information" shall mean (1) the identity of
potential advertisers of Licensee and/or the Magazine; (2) the address,
requirements, or person to contact with respect to any advertisers or
potential advertisers of Licensee and/or the Magazine; (3) the methods,
processes or manner of doing business of Licensee; (4) the identity of any
and all sources of supply or potential sources of supply to Licensee; (5)
the terms of any distribution agreement to which Licensee is a party or a
beneficiary; and (6) any sales, distribution and/or demographic information
concerning the Magazine and/or the purchasers and/or potential purchasers
of the Magazine. For the purposes of this Agreement, the term Confidential
Information shall apply to any information of the type described in this
paragraph, whether the same was information in the possession of Licensee
prior to the employment of Licensor or otherwise, and whether the same came
into the possession of Licensee as a result of Licensor's efforts, it being
the intention of the parties to irrevocably deem any information which
Licensor brings to Licensee, or learns of while employed with Licensee, to
be the sole and exclusive property of Licensee for all time. Upon the
termination of Licensor's employment with Licensee, irrespective of the
time, manner or cause of such termination, Licensor shall surrender to
Licensee all lists, books and records of or in connection with Licensee's
advertisers, sources of supply and/or business, and all other property
belonging to Licensee.
8. COVENANT NOT TO COMPETE - As part of the consideration given by
Licensor for the making of this Agreement, Licensor agrees that he will
not:
A. At any time during, or for a period of two years after the
termination of this Agreement, endeavor to entice away from Licensee any of
the readers or potential readers and/or any advertisers or potential
advertisers of the Magazine, or any person, firm or corporation in the
habit of dealing with Licensee, or interfere with or entice away any other
employee of Licensee; or
B. For a period of two (2) years from the termination of Licensor's
employment with Licensee, irrespective of the time, manner or cause of such
termination, Licensor shall not, on his own behalf or on behalf of any
other person, firm or corporation, either as principal, agent, employee,
employer, stockholder, copartner or in any other individual or
representative capacity whatsoever, solicit, serve or cater to or engage,
assist, be interested in or connected with or engaged in the publication of
any magazine distributed in the United States or Canada dealing with the
martial arts in general or karate in particular, other than the Karate
Kreatures comic magazine referred to in paragraph 7. Employee specifically
agrees that the geographical and time scope of the restriction on competi-
tion set forth in this paragraph are reasonable, and that if either is
deemed unreasonable by any Court, that particular provision shall not be
severed and eliminated, but shall be deemed reformed to be within the scope
that is held reasonable by the Court.
9. INJUNCTIVE RELIEF APPROPRIATE - Licensor agrees that a violation of
paragraph "8" of this Agreement will cause such damage to Licensee as will
be irreparable and for that reason further agrees that Licensee shall be
entitled, as a matter of right, and in addition to any monetary damages
which Licensee is able to prove, to an ex parte injunction out of any Court
of competent jurisdiction, restraining any further violation of the said
covenants by Licensor and/or his agents or employees --- such right to an
injunction, however, to be cumulative and in addition to whatever other
remedies Licensee may have in the premises.
10. LITIGATION OF DISPUTES - Any disagreement, claim or dispute of any
kind whatsoever concerning this Agreement, or the performance hereof, shall
be resolved by an action commenced in the Supreme Court of the State of New
York in and for the County of New York. For the purposes of this
Agreement, the parties hereto irrevocably consent to the jurisdiction and
venue of the said Court and agree that service of process may be made by
certified mail, return receipt requested, at the address set forth in the
preamble of this Agreement, or such other address as any party may, in
writing, notify the other.
11. EXECUTION OF DOCUMENTS - The parties to this Agreement shall
execute and deliver such documents and instruments of any kind as are
necessary to carry this Agreement into effect.
12. NOTICES TO BE GIVEN - All notices and/or demands required or
permitted to be given pursuant to this Agreement shall be in writing and
shall be personally delivered to, or mailed by certified mail, return
receipt requested, to the party to receive such notice, at the address
appearing in the preamble to this Agreement, or at such other address as
any party may, by written notification, advise the other party.
Notification shall be completed upon the personal delivery of the notice or
the execution of the return receipt in the case of notice by mail.
13. CONTRACT BINDING - This Agreement shall be binding upon and inure
to the benefit of the parties hereto, and their heirs, executors,
administrators and successors. This Agreement may not be assigned by
either party hereto without the written consent of the other party.
14. WAIVER OF BREACH - The waiver by any party to this Agreement of a
breach of any provision of this Agreement by the other party shall not act
as a waiver of any subsequent breach of such provision, or other provision,
of this Agreement by such breaching party or any other party hereto.
15. INDEPENDENT REPRESENTATION - It is acknowledged by the parties
hereto that Xxxxxxx X. Xxxxxx, Esq. is counsel to Licensee for the purposes
of this Agreement and has acted exclusively on behalf of Licensee in
connection herewith. It is further acknowledged that Licensor has retained
and consulted with independent counsel of his choice for the purposes of
this Agreement, which counsel has acted exclusively on behalf of Licensor
in connection herewith. The parties acknowledge that the attorney
representing the other party to this Agreement has not counseled, advised
or otherwise acted, in any manner, on behalf of the party who is not such
attorney's client. Additionally, the parties agree that this Agreement has
resulted from substantial negotiation and modification of
prior drafts hereof. As such, any ambiguity appearing in this Agreement
shall not be held against either party hereto and neither party shall be
charged with any adverse inference as a result of any ambiguity appearing
in this Agreement.
16. MAINTENANCE OF QUALITY - The quality of the Magazine produced by
Licensee shall be the same or better than the quality of the Magazine as
currently produced by Licensor.
17. ENTIRE AGREEMENT - This instrument constitutes the entire
agreement between the parties hereto and supersedes and replaces any prior
negotiations, discussions and writings. No representations, warranties,
statements of fact, or agreements of any kind, unless specifically stated
in this Agreement, shall survive the execution of this Agreement. The
parties acknowledge that they have conducted such investigation as they
determined necessary to adequately assess the viability of this Agreement
and the transaction contemplated hereby, have had the opportunity to
examine all relevant books and records and are satisfied therewith. The
parties further acknowledge that no representations, other than those
contained in this Agreement, have been made by either party and
specifically waive any claim of nondisclosure or improper disclosure which
may subsequently be raised. This Agreement may not be changed other than
by a written instrument, executed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have set their hand on the date
and year first above-written.
DOJO PUBLISHING, INC.
By: /s/ Xxxxx X. XxXxxxxxx, Pres.
XXXXXXX XXXXXXXXXX ENTERPRISES, INC.
By: /s/ Xxxxxxx XxXxxxxxxx, Xx., Pres.
