LICENSING REPRESENTATIVE AGREEMENT
BETWEEN
STAR E MEDIA CORPORATION
A Nevada, USA Corporation
AND
ESP INTERNATIONAL
UNITED KINGDOM
This Licensing Representative Agreement (the "Agreement") is entered into by and
between, Star E Media Corporation a Nevada, United States of America Company
located at 00000 Xxxxxxx, Xxxx Xxxxxx, Xxxxxxxxxx 00000 ("Star E Media"), and
ESP International located at 00 Xxxx Xxxxxx Xxxxxxxx Xxxxx Xxxxxxx XX00 0XX
(United Kingdom office) ("Representative"). Star E Media is in the business of
developing and or licensing interactive educational software products, CD ROM
titles, (the "Product") for sale primarily into Multiple Channels. Repre-
sentative owns and operates an independent business for the global distribution
of interactive CD-Rom products. Star E Media desires to engage Representative,
and Representative desires to undertake the engagement to recruit, establish,
and manage a worldwide network of distributors to develop versions of the
Products and to sell, market, and distribute such existing or localized
versions. Duplication of Star E Media products will be considered on a case by
case basis dependent on circumstances of agreement established between Star E
Media, Representative and Duplicator.
ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:
1. TERRITORY AND PRODUCTS. Star E Media engages Representative as an
independent licensing representative of Star E Media to recruit, establish, and
manage distributors in all geographic areas as shown in ATTACHMENT "A" to
develop localized versions of the Product (the "Licensed Products") and to sell,
market, and distribute Licensed Products.
2. EXCLUSIVITY. During the term of this Agreement Star E Media will not
appoint another licensing representative to recruit distributors in the
Territory.
3. RELATIONSHIP BETWEEN THE PARTIES. Representative will, subject to the
provisions of this Agreement, have full discretion as to the manner and timing
of the performance of his duties and obligations under this Agreement, and will
in all respects operate independently of Star E Media as an independent
contractor. Nothing contained in this Agreement will be construed as estab-
lishing an employer/employee, partnership, agency, brokerage, or joint venture
relationship between Representative and Star E Media. Representative will bear,
and promptly pay as and when due, all expenses relating to the performance of
Representative's duties or the conduct of Representative's business ("Expenses")
including salaries and commissions of his employees, rent and travel expenses,
lodging and trade show expenses, advertising or marketing expenses, insurance,
assessments and taxes of every kind. Star E Media will not reimburse or pay for
any of Representative's Expenses. Representative has agreed with Star E Media to
receive a monthly payment of US$3,000, during the first three months of this
agreement increasing to $5,000 USD per month for the next three months,
increasing then to $7,500 USD per month for the next three months and then
rising to $10,000 per month, this payment to be paid by Star E Media during the
term of this agreement only in respect of sales of the School Zone brand of
software licensed by Star E Media for sales in Spanish and Arabic language.
4. REPRESENTATIVE'S OBLIGATIONS. Representative will have the following
obligations:
(a) GENERAL DUTIES. Representative will use his good faith and
commercial best efforts, including the incurring of all customary and reasonable
expense, to promote, recruit, establish and manage distributors in the
Territory, and to fulfill all of Representative's other obligations under this
Agreement, in such a fashion as to maximize Star E Media Territory-wide
royalties and license fees, while maintaining and assuring the quality of the
distribution network and of the Licensed Products, and control of the Trademarks
(as defined below). In particular, but without limitation, Representative will
deal promptly with distributor inquiries, establish and maintain a level of
license and distribution that represents reasonable growth of the license and
distribution of Licensed Products throughout the Territory and refrain from
preferential treatment or attention to Representative's other products or
businesses to detriment of the promotion of Licensed Products. Representative
may offer, promote or distribute other products that do not compete with the
Products of Star E Media, or any Licensed Products derived therefrom.
(b) ESTABLISHING DISTRIBUTORS. Representative will recruit distri-
butors to enter into distribution agreements with Star E Media on such terms and
conditions as Star E Media may direct or approve (the "Distribution Agreement").
Representative will assist as requested by Star E Media in negotiating
Distribution Agreements. Distributors and Distribution Agreements will, however,
be approved or rejected by Star E Media in its sole discretion. Representative
will consult with Star E Media as to any proposed revisions to Star E Media
standard distribution agreement terms and conditions prior to negotiating as to
the same with any potential distributor. Star E Media will determine in its sole
discretion the royalties, license fees, and other terms and conditions of
Distribution Agreements.
(c) MANAGING DISTRIBUTOR RELATIONS. Representative will manage the
relations with the distributors in the Territory. Representative's management
obligations will include: (i) regular communication and visits with the
distributors; (ii) assistance with the collection of royalties and license fees;
(iii) monitoring of the distributor service quality; and (iv) documentation of
any failure to meet quality standards and any breaches of the Distribution
Agreements.
(d) CONDUCT. Representative will at all times conduct his business
consistent with applicable laws and good business practices. Representative
represents and agrees that neither he nor any of his employees, representatives
or agents have offered, given, promised to give, or authorized giving, and
neither he nor any of his employees, representatives or agents will offer, give,
promise to give, or authorize giving, directly or indirectly, any money or
anything else of value to any government official, political party, political
official, or candidate for political office in connection with their activities
under this Agreement.
(e) NOTICE OF COMPLAINTS OF INFRINGEMENTS. Representative will
promptly notify Star E Media of any claims, complaints, litigation, admini-
strative proceeding or governmental inquiry or action, or circumstance
reasonably likely to cause any of the same, concerning the Products or any
Licensed Products, or constituting any infringement of Star E Media Intellectual
Property (as defined below) or any claimed infringement by the Products or
Licensed Products of any third party's intellectual property. Representative
will fully cooperate with Star E Media in the investigation, handling, and
resolution of any dispute. Star E Media will reimburse Representative for the
expenses incurred as a result of such cooperation.
5. STAR E MEDIA'S OBLIGATIONS. Star E Media will have the following
obligations:
(a) COMMISSIONS. During the term of this Agreement, Star E Media
will pay Representative commissions on the following terms:
'Representative' will receive 25% commission on all royalties received during
year one, and for all subsequent periods of this Agreement.
"Net Commissionable Royalties" means 100% of the US dollar amount of total
royalties and licensee fees actually collected and received by Star E Media
under Distribution Agreements procured by Representative in the Territory, net
of any bank fees and other expenses of currency exchange and collection, taxes,
duties, or other government fees and charges withheld at source, or amounts paid
or credited upon any claims by distributors.
(b) REFUNDS AND ADJUSTMENTS. If Star E Media has already paid
Representative a commission with respect to any adjusted or refunded royalties,
Star E Media will reduce Representative's commission payments due in the month
following the adjustment by the amount of any royalty adjustment or refund.
(c) TIMING OF PAYMENT. Star E Media will pay the agreed upon
monthly fee (on or before the 14th day of each month). Star E Media will pay
commissions to Representative on a monthly basis (on or before the 14th day of
each month) based on the Net Commissionable Royalties collected and received by
Star E Media during the preceding month. Less any amounts previously paid to
Representative, as an 'Advance.'
6. INTELLECTUAL PROPERTY.
(a) OWNERSHIP OF INTELLECTUAL PROPERTY. Representative acknowledges
and agrees that all intellectual property rights in the Products, and in any
Licensed Products derived therefrom, including all copyrights, patents and
trademarks, are owned or licensed by Star E Media (the "Intellectual Property").
Representative will not obtain any rights in the Intellectual Property other
than is expressly granted by this Agreement. Representative will not at any time
apply for or obtain, in his own name as owner, the registration of any
Intellectual Property in any country or do any other act that might in any way
impair the rights of Star E Media in and to the Intellectual Property.
Representative agrees to cooperate with Star E Media in any way, including
executing any documents or providing any information, Star E Media deems
necessary to register or otherwise protect the Intellectual Property in any
country.
(b) GRANT OF LICENSE IN TRADEMARKS. Subject to the provisions
hereof, Star E Media extends to Representative, during the term of this
Agreement, a limited, revocable, nonexclusive, nontransferable right and license
to use the trademarks owned or licensed by Star E Media listed on ATTACHMENT "B"
(the "Trademarks"), solely in connection with promoting the Products and
recruiting distributors in the Territory. Star E Media reserves the right to
add to, change or discontinue the use of any Trademark at any time. Any and all
goodwill accruing from Representative's use of the Trademarks will inure to the
sole and exclusive benefit of Star E Media Representative hereby assigns and
transfers to Star E Media all trademarks and trademark rights created by such
uses of the Trademarks, together with the goodwill of the business in connection
with which such Trademarks are used.
(c) MANNER OF USE OF TRADEMARKS. Representatives will not make
any use of any Trademark without Star E Media's express prior written approval.
Prior to initiating any use of any Trademark, Representative will submit the
proposed use to Star E Media for approval. Approval or disapproval of any
proposed use will be within the sole discretion of Star E Media. Star E Media
reserves the right to revoke any previously given approval for any use of any or
all of the Trademarks.
7. TERM, TERMINATION AND DEFAULT.
(a) TERM. The term of this Agreement will be three (3) years
commencing June 1st 2002. After the initial term of this Agreement, this
Agreement will be renewed automatically for successive one-year terms on each
anniversary of the date of signing unless (i) at least 90 days before the end of
any term, either party gives written notice to the other of the party's
intention not to renew the Agreement or (ii) the Agreement is terminated as
provided in subsection 7(b) below. This contract will be subject to ESP
International fulfilling minimum sales and royalty income as set out in
ATTACHMENT "C".
(b) TERMINATION. Star E Media may, at Star E Media's option,
immediately terminate this Agreement without notice to Representative upon the
occurrence of any of the following events:
(i) BREACH. If Representative commits any breach of this
Agreement and the breach continues for 30 days after notice is given to
Representative.
(ii) DEATH, DISABILITY OR INSOLVENCY. If Representative or
any entity owned or controlled by Representative which is involved in promoting
or recruiting distributors for the Product, liquidates, dissolves, becomes
bankrupt or insolvent, or makes an assignment for the benefit of creditors.
(iii) QUESTIONABLE ACTIVITIES. If Representative engages in
unlawful activities or otherwise conducts Representative's business in a manner
that creates a risk of liability on the part of Star E Media or that reflects
adversely on Star E Media's reputation, the Products, or the Trademarks.
(c) COMMISSION PAYMENTS UPON TERMINATION. Upon termination of this
Agreement, Star E Media will pay to Representative any commission due for
Net Commissionable Royalties collected and received during the period of
termination, after which time Representative will have no further or continuing
right to commissions under this Agreement. Representative will have no other
claim to commissions or other compensation hereunder, whether on theory of
procuring cause or otherwise.
8. CONFIDENTIALITY. Representative recognizes that during the course of his
work with Star E Media, Representative and his employees, representatives, or
agents may have occasion to conceive, create, develop, review or receive
information that is considered by Star E Media to be confidential or proprietary
including information relating to the Products, including inventions, patent,
trademark and copyright applications, improvements, know-how, specifications,
drawings, cost date, process flow diagrams, customer and supplier lists, ideas
and/ or any other written material referring to same (the "Confidential
Information"). Both during the term of this Agreement and thereafter,
Representative agrees to maintain in confidence such Confidential Information.
Representative further agrees to use all reasonable precautions to ensure
that all such Confidential Information is properly protected and kept from
unauthorized persons or disclosure. Representative agrees that he will not,
without first obtaining the prior written permission of Star E Media do any of
the following:
(a) Directly or indirectly utilize such Confidential Information
in his own business;
(b) Manufacture and/or sell any product that is based in while or
in part on such Confidential Information; or
(c) Disclose such Confidential Information to any third party.
Representative will have each of his employees, representatives and agents agree
to be bound by the provisions of this section. Upon termination of this
Agreement, Representative will return to Star E Media all items relating to the
Products, the Trademarks and all Confidential Information, regardless of media,
and will retain no copies of or extracts from the same.
9. TRANSFER OR ASSIGNMENT. This Agreement may not be assigned or trans-
ferred, either expressly or by operation of law, by either party, to any other
person or body, without prior written consent from the other party.
10. GOVERNING LAW. This Agreement will be governed by and interpreted
according to the laws of the United States of America, Orange County,
California. All disputes hereunder will be resolved in the applicable authority.
The parties consent to the jurisdiction of such courts, agree to accept service
of process by mail, and waive any jurisdictional or venue defenses otherwise
available.
11. NOTICES. Any notice required to be given pursuant to this Agreement
will be in writing and mailed by certified or registered mail, return receipt
requested or sent by facsimile, electronic transmission, courier or a national
overnight express service to the addresses listed in this Agreement.
12. AGREEMENT BINDING SUCCESSORS. This Agreement will be binding on and will
inure to the benefit of the parties hereto, and their heirs, administrators,
successors, and permitted assigns.
13. WAIVER. No waiver by either party of any default will be deemed as a
waiver of any prior or subsequent default of the same or other provisions of
this Agreement.
14. INTEGRATION; AMENDMENT. This Agreement constitutes the entire under-
standing of the parties, and supersedes all prior agreements between the parties
and is intended as a final expression of their Agreement. It will not be
modified or amended except in writing signed by the parties hereto and
specifically referring to this Agreement. This Agreement will take precedence
over any other documents that may be in conflict therewith.
15. COUNTERPARTS. This Agreement may be executed in one or more counter-
parts, each of which will be an original, and such counterparts will together
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have signed this Licensing Representative
Agreement as of the date set forth below their respective signatures.
ESP INTERNATIONAL
By /s/ Xxxx Xxxxx
-----------------
Xxxx Xxxxx, Chairman & CEO
Date: 06/21/02
--------
STAR E MEDIA CORPORATION
By /s/ E.G. Xxxxxxxxx
---------------------
E.G. Xxxxxxxxx, President
Date: 06/21/02
--------
ACKNOWLEDGEMENT
Representative acknowledges receipt of an executed copy of this Licensing
Representative Agreement.
Date: 06/21/02 /s/ Xxxx Xxxxx
-------- ----------------
ATTACHMENT "A" -- TERRITORY
---------------------------
World-wide distribution I all authorized Star E Media territories excluding all
Arab speaking nations.
ATTACHMENT "B" -- TRADEMARKS
----------------------------
------
ATTACHMENT "C" -- SALES COMMITMENT
----------------------------------
Minimum World-wide Units Sold
Language 2002 2003 2004 2005
-------- ---- ---- ---- ----
Spanish 200,000 545,000 750,000 1,000,000
------- ------- ------- ------- ---------
Arabic 20,000 100,000 200,000 250,000
ATTACHMENT "D" -- TITLES AUTHORIZED
-----------------------------------
ARABIC TITLES
I Spy Junior
I'm Ready for Kindergarten: Huggley's Turtle Rescue
I Spy Spooky Mansion
Usborne's Animated First Thousand Words
Math Shop Deluxe
I'm Ready for Kindergarten: Huggley's Sleep Over
I Spy Classic
Xxxxxxxx Reading
Xxxxxxxx Thinking Adventure
I Spy Junior Puppet Playhouse
Math 2
Reading Readiness K-1
Does it Belong? Preschool
Spelling Puzzles 1
Math 1
Math 3
Beginning Sounds Preschool
Shapes Preschool
Transition Math K-1
Beginning Reading Jog, Frog, Jog K-1
Beginning Reading A different Tune 1-1
Thinking Skills Preschool
Alphabet K
Beginning Reading Beep, Beep! K-2
Beginning Reading The Big Race 1-2
Multiplication & Division 305
Phonics 2-3
Jumpstart 1st Grade
Jumpstart 2nd Grade
Jumpstart 3rd Grade
Jumpstart Pre-Kindergarten
Jumpstart Kindergarten
Jumpstart Toddlers
Jumpstart Preschool
ATTACHMENT "D" -- TITLES AUTHORIZED
-----------------------------------
SPANISH TITLES
I Spy Junior
I'm Ready for Kindergarten: Huggley's Turtle Rescue
I Spy Spooky Mansion
Usborne's Animated First Thousand Words
Math Shop Deluxe
I'm Ready for Kindergarten: Huggley's Sleep Over
I Spy Classic
Xxxxxxxx Reading
Xxxxxxxx Thinking Adventure
I Spy Junior Puppet Playhouse
Math 2
Reading Readiness K-1
Does it Belong? Preschool
Spelling Puzzles 1
Math 1
Math 3
Beginning Sounds Preschool
Shapes Preschool
Transition Math K-1
Beginning Reading Jog, Frog, Jog K-1
Beginning Reading A different Tune 1-1
Thinking Skills Preschool
Alphabet K
Beginning Reading Beep, Beep! K-2
Beginning Reading The Big Race 1-2
Multiplication & Division 305
Phonics 2-3
