EXHIBIT 10.5
LICENSE AGREEMENT
This License Agreement ("The Agreement") is entered into this _____ day of
November, 1999, by and between Chequemate International, Inc., a Utah
corporation, d/b/a C3D Digital, Inc., ("C3D"), having its principal place of
business at 000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx xxx Xxx, XX 00000,
and Academy Entertainment, Inc., a New Jersey corporation, ("Academy") having
its principal place of business at 00 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx
Xxxxxx 00000.
ARTICLE I
GRANT OF RIGHTS
1.1 Programs. Academy shall furnish to C3D all feature films,
documentaries, cartoons, and short subjects ("Programs") available in
Academy's film library. See Schedule A, Master Tapes Available, bearing the
name, MLR Films International.
1.2 Grant. Academy hereby grants to C3D the perpetual, irrevocable,
non-exclusive, worldwide right to the use of the Programs, for use with their
proprietary 3D technology, or any other 3D technology, including still images
from the Programs, to incorporate some or all of the Programs as part of its
database, to use, copy, display, perform, modify, distribute and otherwise
exploit the Programs in any 3D medium by any means now known or hereafter
devised, to use the Programs for marketing and advertising in connection with
the Programs and to edit the Programs as desired in connection therewith.
1.3 Delivery. Upon C3D's written request, Academy shall deliver to C3D as
soon as is practicable, at C3D's expense, one (1) copy of each of the
Programs requested by C3D to the location designated by C3D in such request
("the Master Copies"). Academy shall be under no obligation to fulfill
requests for Master Copies if new information is discovered of a possible
copyright infringement or potential technical problems. Academy shall replace
any rejected titles with similar themes on a best efforts basis. All Master
Copies shall be sent in Beta SP (metal) NTSC format via UPS, or when
requested, overnight, via Federal Express.
ARTICLE II
PAYMENT
2.1 Payment for Copies. C3D shall pay Academy in advance $100.00 per hour
for each Master Copy ordered pursuant to section 1.3 above. The cost of the
tape is included in the $100.00 per hour, but not the cost of shipping.
2.2 Payment for Rights. C3D shall compensate Academy with restricted common
stock (Rule 144 stock) in C3D, with an aggregate value of $250,000.00 as
follows: C3D shall issue
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$90,000.00 worth of unregistered common stock to Academy upon board approval,
with the number of shares determined by the average trading value over the
five (5) trading days prior to issuance; and another $80,000.00 worth of
unregistered common stock to Academy six months later, with the number of
shares determined by the average trading value over the prior six months; and
the final $80,000.00 worth of unregistered common stock to Academy six months
after that, with the number of shares determined by the average trading value
over those prior six months. Academy shall have standard piggyback and
registration rights.
2.3 Taxes. All taxes, whether Federal, State, Dominion, Provincial, or
Local, and whether Sales or Use or Personal Property, Payroll, Excise, or
other tax, governmental fee, or duty, arising from this Agreement or the
transactions contemplated by this Agreement, shall be the sole responsibility
of Academy.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Academy represents and warrants that (I) it has the right, power, and
authority to enter into this Agreement and fully perform its obligations
hereunder; (II) the making of this Agreement does not violate any agreement
between it and any other person or entity; (III) to the best of Academy's
knowledge, the Programs are in the public domain or are unregistered
according to the U.S. Copyright Office; (IV) there are no outstanding
obligations or commitments of any kind pertaining to or involving the
Programs; (V) neither the Programs nor their copying and distribution as
contemplated herein will infringe upon any common law or statutory copyright
or other state or federal regulations or contravene the rights of any third
party; (VI) the Programs do not violate any rights of privacy; and (VII) all
rights and licenses necessary to grant the rights as set forth herein and to
copy and distribute the Programs as described herein have been obtained.
ARTICLE IV
INDEMNIFICATION
4.1 Indemnity. Academy hereby agrees to indemnify, defend, and hold C3D,
its directors, officers, shareholders, employees, agents, successors and
assigns harmless from any and all claims, causes of action, demands, damages,
losses, costs, obligations, recoveries and deficiencies (including attorney
fees and costs) which arise from or relate in any manner in whole or in part
to any of the representations and warranties of Academy contained in this
Agreement or any failure by Academy to perform or comply with any covenant
contained in this Agreement.
4.2 Procedure. C3D shall notify Academy in writing of any claims for which
it seeks indemnification under section 4.1 above, and shall give Academy the
exclusive authority to defend or settle such claim (it being understood that
C3D may participate with counsel of its own choosing at its own expense),
and, at Academy's expense, give Academy reasonable information
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and assistance to settle and/or defend any such claim. Academy shall not have
the right to settle any claim in a manner which is prejudicial to the
interest of C3D without C3D's prior written consent.
ARTICLE V
GENERAL PROVISIONS
5.1 Governing Law. The rights and obligations of the parties under this
Agreement shall be governed by and construed under the laws of California,
without regard to California's conflict of laws provisions.
5.2 Jurisdiction; Venue. All disputes arising from this Agreement shall be
subject to the exclusive jurisdiction and venue of the state and federal
courts located in Los Angeles County, California, and the parties consent to
the exclusive and personal jurisdiction of these courts.
5.3 Entire Agreement. This Agreement constitutes the complete and exclusive
understanding and agreement of the parties regarding the subject matter
hereof and supersedes any and all prior or contemporaneous understandings,
agreements, communications or advertising or course of conduct with respect
to the subject matter hereof.
5.4 Board of Directors Approval. This Agreement is subject to the approval
of the respective Boards of Directors of the parties hereto, which approval
shall be promptly sought by the officers whose signatures appear below.
Academy Entertainment, Inc. Chequemate International, Inc.
By: By:
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Xxxx Xxxxxx, President J. Xxxxxxx Xxxx, CEO
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