MEMORANDUM OF LICENSE AGREEMENT
MADE AND ENTERED INTO ON THIS 1ST DAY OF MAY, 2000
BY AND BETWEEN: GATOR MARKETING CONCEPTS INC., a body politic and corporate,
duly incorporated according to the laws of Barbados,
hereinafter referred to as the
"LICENSOR"
AND: TELEHUBLINK CORPORATION, a body politic and corporate, duly
incorporated according to the laws of Delaware, hereinafter
referred to as the
"LICENSEE"
PREAMBLE
WHEREAS the Licensor has developed a proprietary system to assemble content
and/or manufacture, distribute, market and sell consumer benefit packages (the
"System");
WHEREAS the Licensor is the owner of the Trade Mark "Triple Gold";
WHEREAS the Licensor wishes to grant the right to use its System and Trade Marks
to the Licensee based on the terms and conditions more fully described
hereinbelow.
NOW, THEREFORE, THE PARTIES HERETO WITNESSETH THEIR COVENANT AS FOLLOWS:
1. PREAMBLE
The Preamble to the present Agreement shall form part of the Agreement itself
as if it were enumerated at length herein.
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2. DEFINITIONS
The following terms shall have meanings as set forth below.
(a) "LICENSED PRODUCTS" shall be defined as those products that are sold
with the System and/or associated by the Licensee with the Trade
Marks, which products are set out in Schedule "A" as modified from
time to time by Licensee with Licensor's prior approval, by affixing
labels containing the Trade Marks, or part thereof, to the Licensed
Products;
(b) "SYSTEM" shall mean the proprietary system used to collate, assemble
content, manufacture, distribute, market and sell the Licensed
Products, as may be amended from time to time by the Licensor;
(d) "TERM" shall mean a period of twenty (20) months, starting May 1st,
2000 and ending January 1st, 2002;
(c) "TERRITORY" shall mean the geographical area as set forth in Schedule
"B" as may be amended from time to time with the written consent of
the parties and any other trade marks the parties may apply during the
term hereof;
(d) "TRADE MARKS" shall mean the Trade Marks as set forth in Schedule "C"
as may be amended from time to time with the written consent of the
parties and any other trade marks the parties may apply during the
term hereof;
3. RIGHTS GRANTED
Licensor hereby grants to Licensee, upon the terms and conditions set forth
herein, an exclusive, personal, non-transferable, non-assignable License,
without the right to grant sublicenses, to use the System and the Trade Marks
associated to it solely in conjunction with the sale of the Licensed Products
in the Territory and provided that the license may be transferred or used by
any Licensee's affiliated companies. In the event that the license is to be
transferred or used by any such affiliated companies, Licensee shall first
advise Licensor in writing of the intended user and a description of the
Licensed Products so affected.
4. OWNERSHIP OF ARTWORK AND DESIGN
Licensee acknowledges and agrees that Licensor is owner of all artwork and
designs involving the Trade Marks supplied by the Licensor pursuant to this
Agreement. Licensee further agrees that, during the term of this Agreement,
and after its termination, it shall not use said artwork and/or designs in
connection with the distribution and sale of the Licensed Products or any
other product except as
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provided in this Agreement. Nothing herein contained shall impair the
Licensee's use and ownership of its own trade marks, art work, and designs
during and after the termination of this Agreement, and whether or not the
same had been used or associated with the Licensed Products or the Trade Mark
during the course of this Agreement.
5. GOODWILL AND PROMOTIONAL VALUE
(a) Licensee recognizes the value of the good will associated with the
System and the Trade Marks and acknowledges that the System and Trade
Marks, and all rights therein and the good will pertaining thereto,
belong exclusively to Licensor,
(b) Licensee agrees that its use of the Trade Marks shall inure to the
benefit of the Licensor and that the Licensee shall not, at any time,
acquire any rights in the Trade Marks by virtue of any use it may make
of the Trade Marks;
6. QUALITY STANDARDS
The Licensee agrees to act honestly and in good faith with respect to the
commercial exploitation of the System and the Trade Marks in conjunction with
the Licensed Products and to use reasonable commercial business efforts to
develop the market for the Licensed Products using the System and the Trade
Marks. In that connection, the Licensee agrees to protect the goodwill in the
System and the Trade Marks insofar as associated with the Licensed Products
to the same extent that the Licensee would protect its own system and trade
marks of similar quality, and with a view to not consuming the goodwill in
the System and the Trade Marks so that to the extent possible, there will be
commercial value therein after the expiration of this License. Subject to the
foregoing obligations, including without limitation the obligations to act
honestly and in good faith, it is acknowledge and agreed that the Licensee is
empowered in its sole discretion to exercise its commercial business judgment
as to the best method to position and market the Licensed Products.
7. CO-OPERATION AND INPUT
Without in any way derogating from the discretion of the Licensee set out in
section 6 hereof, the Licensee agrees to give the Licensor an opportunity to
have input into the nature, quality, and pricing of Licensed Products to be
distributed by the Licensee and into the Licensee's marketing plans in
respect thereof. The Licensee will consider in good faith any suggestions
that the Licensor may have in respect of the foregoing matters, but the
Licensee shall be entitled in its sole discretion to decide whether it will
or will not implement any such suggestions.
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8. ROYALTIES
In consideration of the License granted herein, the Licensee shall pay to the
Licensor the following royalties which royalty payment shall be made in the
manner provided hereinbelow on the total net sales, "net sales" being defined
as total paid sales less returns, of the Licensed Products for the relevant
period:
(a) In the first EIGHT months of the Term, royalties in a minimum guaranteed
amount of TEN THOUSAND US DOLLARS (US$10,000.00) per week, which amount
shall be paid weekly, beginning May 1st, 2000;
(b) In the ninth to the fourteenth month of the Term, royalties of TEN US
DOLLARS (US$10.00) per Licensed Product sold, excluding in-bound sales,
which amount shall be paid weekly, beginning January 1st, 2001; and
(c) In the fifteenth month to the end of the Term, royalties of FIVE US
DOLLARS (US$5.00) per Licensed Product sold, excluding in-bound sales,
which amount shall be paid weekly, beginning July 1st, 2001.
The Licensee shall submit to the Licensor within five (5) days of the end of
each week of the term of this Agreement, or any renewal thereof, a detailed
statement of all sales and returns during the week in question.
During the last three (3) months of the present Agreement, it is understood
and agreed that Licensee shall hold back an amount equal to ten (10) percent
of the amount payable during the said three (3) months under the present
Agreement's as reserve for returns, which amount shall held In Trust by
Licensee for the benefit of Licensor. Upon receipt of payments for the
Licensed Products sold during the last three (3) months of the present
Agreement, Licensee shall remit to Licensor the said reserve less returns.
It is understood that the parties shall negotiate in good faith an amount of
royalties payable to Licensor for Licensed Products sold through in-bound
sales, which amount shall be payable, in addition to any other amount payable
under the present agreement, on the total in-bound net sales starting from
the first day of the ninth month of the Term.
Notwithstanding the preceding and section 6 of the present agreement,
Licensee represents and warrants to Licensor that it shall maintain and
expand the commercialization of the Licensed Products through out-bound sales
made either by its own employees or by independent sub-contractors.
Consequently, Licensee undertakes to retain the services of brokers in order
to identify, approach and recruit sub-contractors whose services shall
retained for purpose of selling the Licensed
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Products on out-bound sales basis, with Licensee's approval, which approval
shall not be with-held unreasonably.
9. DURATION OF THE AGREEMENT
This Agreement shall remain in force for a period of eighteen (18) months
unless sooner terminated by either party under the terms and conditions as
stated herein.
10. BOOKS, RECORDS
Licensee agrees that it shall keep complete and accurate written books of
accounts and records, maintained in accordance with generally accepted
accounting principles consistently applied, at its principal place of
business, covering all merchandise distributed and sold under the System and
Trade Marks. Licensor at its expense, shall be entitled to appoint a duly
qualified accounting firm (the "Licensor's Auditors") to attend at the
offices of the Licensee during normal business hours at a time not
inconvenient to the operation of the Licensee's business (acting reasonably)
and upon reasonable notice during the term of this Agreement, its renewal,
or within one hundred and twenty (120) days after the Licensee gives its
final royalty statement upon the termination of this Agreement, for the
purpose of auditing the Licensee's books of accounts and records and all
other documents and materials in the possession or under the control of
Licensee including computer records, backups, tapes, floppies, etc. and
other electronic information storage and retrieval systems reasonably
necessary to determine the royalties payable under this Agreement. The
Licensor's Auditors shall keep in confidence the information and detailed
working papers generated from such audit as they would do if they were the
Licensee's auditors; provided that nothing herein contained shall prohibit
such auditors from otherwise disclosing such information with the Licensee's
consent, or disclosing such information in any action between the Licensor
and Licensee as evidence in support of the Licensor's Auditor's conclusions
as to royalties payable. The Licensor's Auditors shall give the Licensee all
reasonable access to their working papers and to their conclusions before
publishing same. As the result of that process, the Licensor's Auditors
shall be entitled to publish to the Licensor, in accordance with generally
accepted accounting principles and at a financial statement summary level,
the Licensor's Auditors' conclusions as to the relevant Sales and relevant
royalties payable thereon. If as a result of the audit, the Licensee agrees
(or a court of competent jurisdiction determines) there is evidence to the
effect that the Licensee had understated the royalties payable to the
Licensor by an amount at least equal to the Licensor's Auditors' cost of
conducting the audit, then the Licensee shall also reimburse the Licensor
for the costs of the Licensor's Auditors incurred in the process.
11. OWNERSHIP OF THE TRADE MARKS
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(a) It is understood and agreement that Licensor is the sole and exclusive
owner of all right, title and interest in and to the System and Trade
Marks and that Licensee shall use such System and Trade Marks as a
licensee of Licensor,
(b) Licensee agrees that nothing in this Agreement shall give to Licensee
any right, title, or interest in the System and/or Trade Marks, other
than the license to use the System and Trade Marks; that such System and
Trade Marks are the sole property of Licensor, that all such uses by
Licensee of such System and Trade Marks shall enure only to the benefit
of Licensor, and it being understood that all rights, title or interest
relating thereto are expressly reserved by Licensor except for the
rights being licensed hereunder;
(c) Licensee agrees and acknowledges that if it has obtained or obtains in
the future, in any country, any right, title, or interest in any marks
which are confusingly similar to the Trade Marks, (including the filing
of any application for the Trade Marks or Service Mark registration or
the obtaining of any issued registration), that Licensee has acted or
will act as an agent and for the benefit of Licensor. Licensor further
agrees to execute any and all instruments deemed by Licensor, its
attorneys or representatives, to be necessary to transfer such right,
title, or interest to Licensor to protect Licensor's right, title and
interest in such marks;
12. THIRD PARTY INFRINGEMENT
Licensee agrees to notify Licensor in writing of any infringements or
limitations by third parties of the System and/or Trade Marks, which may
come to Licensee attention. In the event that a third party should infringe
upon the System and/or any of the Trade Marks rights or any other rights
under the Agreement in the Territory, the Licensor shall, at it sole
discretion, take whatever action it will deem necessary to protect the
System and/or Trade Marks and concerning any action to be taken:
(a) Licensor shall proceed against the infringer alone, and shall bear all
expenses alone, and Licensor shall be exclusively entitled to any
damages recovered;
(b) The same provisions that apply in Sub-paragraph (a) above, shall apply
mutatis mutandis it if is agreed that Licensee shall proceed against the
infringer alone;
(c) The parties shall assist each other in any infringement action, free of
charge;
(d) The Licensee shall not take any action on account of any infringement
without first obtaining the written consent of the Licensor.
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In addition, and in consideration of the covenants contained herein, the
Licensor represents and warrants that the Licensor has the full power and
authority to grant the license hereunder to the Licensee, and the Licensor
hereby agrees to indemnify and save harmless the Licensee from any and all
claims, liabilities, actions, costs or expenses that the Licenseee may
hereafter suffer or incur as the result of a claim from any other person to
the effect that the Licensee's use of the System and Trade Marks in
association with the Licensed Products in accordance with this Agreement
infringes the rights of any other person.
13. ASSIGNABILITY
The license granted hereunder is and shall remain personal to Licensee and
shall not be granted, assigned or otherwise conveyed by any act of Licensee
or by operation of law, save and except to affiliated companies as
contemplated in Section 3. Any attempt on the part of Licensee to arrange to
sublicense or assign to any third parties its rights under this Agreement
without the prior written approval of the Licensor shall consititue a
material breach of this Agreement; however, such approval shall not be
withheld without reasonable cause.
14. NO AGENCY, JOINT VENTURE PARTNERSHIP
The Parties agree that no agency, joint venture, or partnership is created
by this Agreement, and that neither Party shall incur any obligation in the
name of the other without the other's prior written consent.
15. INDEMNIFICATION
Except for claims of Trade Marks infringement or similar claims, Licensee
will indemnify, defend or hold Licensor harmless from any and all
liabilities, claims, obligations, suites, judgments and expenses whatsoever,
including court costs and attorney's fees, which Licensor may incur or which
may be asserted against Licensor and which arise or occur with respect to
the operation of Licensee's business as it relates to the design,
distribution, promotion, advertisement, and sale of the Licensed Products
under the System and Trade Marks; and it is further provided that Licensor
shall have the right to undertake and conduct the defense of any cause of
action so brought and handle any such claim or demand. Such indemnity shall
extend to liabilities and claims incurred after the termination of this
Agreement but which are based on acts or events whose proximate cause arose
during this Agreement.
16. TERMINATION
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The following termination rights are in addition to the termination rights
provided elsewhere in this Agreement:
(a) Immediate Right of Termination
Licensor shall have the right to immediately terminate this Agreement if
Licensee does any one of the following and Licensee fails to cure the same
within ten (10) days following written notice thereof from Licensor or if
same is not reasonably curable with the said delay, if the Licensee fails to
initiate the cure of same within ten (10) days of written notice thereof
from the Licensor and thereafter falls to diligently and continuously pursue
the remedy;
(i) If the Licensee is in material breach of any of its covenants under
this Agreement; or
(ii) Licensee becomes subject to any voluntary or involuntary order of
any governmental agency involving the recall of any of the Licensed
Products because of safety, health or other hazards, or risks to
the public; or
(iii) In the event that Licensee shall file a voluntary petition in
bankruptcy or be adjudicated a bankrupt or insolvent, or in the
event of the appointment of a receiver by a Court of competent
jurisdiction or the making of an assignment for the benefit of
creditors, or shall seek protection from its creditors pursuant to
the provisions of the Companies' Creditors Arrangement Act, or if a
writ of execution is issued against Licensee or if Licensee's
assets are seized by any person, Licensor may, at its option,
terminate this Agreement upon no less than five (5) days' notice;
provided, however, that such termination shall not impair or
prejudice any right or remedy that the Licensor might otherwise
have under this Agreement.
(b) Right to Terminate on Notice
(i) It is understood that the grant of the License herein by Licensor
is premised upon the present character and composition of
Licensee's management and Licensee's general good standing and
reputation in the business community, and is therefore personal to
Licensee. In the event of the sale or transfer of a substantial
portion of the assets of Licensee's business or of a breach of the
terms set out in section 11 above or of a merger or consolidation
of Licensee's business with any other entity, or in the event of
substantial change in the control of Licensee, unless Licensor will
have given its prior consent, which
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consent shall not be unreasonable withheld, to such changes in
writing, Licensor may, at its option, terminate this Agreement on
twenty-one (21) days written notice to Licensee;
Upon such termination, neither party hereto shall have any further rights or
obligations under this Agreement, save and except in respect of obligations
which have accrued to the date of termination, and save and except in
respect of the obligations set out in paragraph 17 hereof.
17. EFFECT OF TERMINATION
(a) Upon expiration or termination of this Agreement, subject to
subparagraph (c) of this section all rights and licenses granted to
Licensee hereunder shall immediately expire and Licensee shall
immediately cease and desist from using the System and Trade Marks and
shall, within thirty (30) days after expiration or termination of this
Agreement as the case may be, furnish Licensor with a full and detailed
written statement of the Licensed Products in its inventory on the date
of expiration or termination (the "Inventory") and of contractual
commitments then in effect for the manufacture and sale of the Licensed
Products (the "Commitments"). Licensor shall have the option of
conducting a physical inventory at the time of expiration or
termination and/or at a later date in order to ascertain or verify such
statement. In the event that the Licensee refuses to permit Licensor to
conduct such physical inventory, Licensee shall forfeit its rights
hereunder to dispose of such inventory. In addition to such forfeiture,
Licensor shall have recourse to all other remedies available to it;
(b) After the expiration or termination of this Agreement, all rights
granted to Licensee shall forthwith revert to Licensor who shall be
free to license others to use the System and Trade Marks in connection
with the manufacture, offering for sale, sell, advertising, promotion,
shipment and/or distribution of the Licensed Products and Licensee
shall refrain from further use of the System and Trade Marks or any
further reference to them, either directly or indirectly, in connection
with the manufacture, offering for sale, sale, advertising, promotion,
shipment and/or distribution of Licensee's products. To this end,
Licensee will be deemed to have automatically assigned to Licensor upon
such expiration or termination, the System and Trade Marks, equities,
good will, titles, and other rights in or to the Licensed Products and
all adaptations, compilations, modifications, translations and versions
thereof, and all other Trade Marks used in connection therewith which
have been or may be obtained by Licensee or which may vest in Licensee
and which have not already been assigned to Licensor. Licensee shall
upon the expiration or termination of this Agreement and at the expense
of the Licensor execute any
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instruments reasonably requested by Licensor or its legal counsel to
accomplish or confirm the foregoing. Any such assignment shall be
without further consideration than the mutual covenants and
considerations of this Agreement. Licensee shall further turn over to
Licensor all materials that reproduce the System and Trade Marks or
shall give Licensor satisfactory evidence of their destruction.
Licensee shall be responsible to Licensor for any damages caused by the
unauthorized use by Licensee or by others of such materials that are
not turned over to Licensor;
(c) Licensor shall have the fulfill commitments in effect at the date of
termination and Licensor shall have the first right to purchase any
Licensed Products in Licensee's possession that are unsold on the date
of such expiration or termination. Should Licensor decide not to
purchase said Licensed Products at this stage, Licensee may sell the
same, in a manner consistent with past practices for a period of twelve
(12) months after the expiration or termination hereof, subject to the
payment of the relevant royalties under the present Agreement;
(d) Upon the termination and/or expiration of the License Agreement,
Licensee shall cause any business registration associated with the
Licensed Products to be changed or dissolved within a delay of sixty
(60) days and shall provide Licensor with a certified copy of evidence
of same within the same delay. All signs indicating the Trade Marks or
business registration must be removed and all stationary, invoices,
etc. must be destroyed within the same delay. Licensee undertakes not
to convey the impression of any continued association in any way with
the Licensor and the Licensed Products;
(e) Licensor may thereafter, in its sole discretion enter into such
agreements as it deems desirable, with any other party, for the
promotion and sale of the Licensed Products in the Territory.
18. MODIFICATION; WAIVER
(a) No modification of any of the terms or provisions of this Agreement
shall be valid unless contained in a writing signed by the parties;
(b) No waiver by either party of a breach or a default hereunder shall be
deemed a waiver by such party of a subsequent breach or default of a
like or similar nature;
(c) Resort by Licensor to any remedies referred to in its Agreement or
arising by reason of a breach of this Agreement by Licensee shall not
be construed as a waiver by Licensor of its right to resort to any and
all other legal and
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equitable remedies available to Licensor.
19. FORCE MAJEURE/ACT OF GOD
Neither Licensor nor Licensee shall be liable to each other or be deemed in
breech or default of any obligations contained in this Agreement, for any
delay or failure to perform due to causes beyond its reasonable control,
including but not limited to delay due to causes beyond its reasonable
control, including but not limited to delay due to the elements, acts of
government, acts of God, fires, floods, epidemics, embargoes, riots,
strikes, any of the foregoing events being referred to as a "Force Majeure"
condition. In such event, dates for performance shall be extended for the
period of delay resulting from the Force Majeure condition. The party
affected by a Force Majeure condition shall, as soon as practicable, notify
the other party of the nature and extend of such condition.
20. NOTICE
All notices, approvals, consents, requests, demands or other communications
to be given to either party in writing may be effected by personal delivery
or by prepaid registered mail, return receipt requested or by telefax. Such
communication shall be addressed to Licensee and Licensor at their
respective addresses as set forth in the preamble above (or to such other
address as may have been transmitted in writing by the party concerned to
the other party) and shall be effective upon actual delivery to that
address.
21. GOVERNING LAW
This Agreement is to be interpreted and construed in accordance with the
laws of Barbados.
22. ENTIRE AGREEMENT
This Agreement contains the entire understanding of the parties and there
are no representations, warranties, promises, or undertakings other than
those contained herein. This Agreement supersedes and cancels all previous
agreements between the parties hereto.
23. CONFIDENTIAL INFORMATION
Licensor and Licensee agree (and shall instruct their partners, officers,
directors, designers, and other persons to whom disclosure is made) to keep
all designs, manufacturing instructions, and other information relating to
the System and Licensed Products that are not otherwise available to the
public, whether furnished by one to the other or in way either party, as
strictly confidential,
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and the same shall be used by either party solely under this Agreement and
for the purposes of marketing of the Licensed Products. This obligation
shall survive the termination of this Agreement.
24. BINDING EFFECT
This Agreement shall be binding on the parties, and they each warrant that
the undersigned are authorized to execute this Agreement on behalf of their
respective parties.
25. SURVIVAL OF THE RIGHTS
Notwithstanding anything to the contrary contained herein, such obligations
which remain executory after expiration of the term of this Agreement shall
remain in full force and effect until discharged by performance and such
rights as pertain thereto shall remain in force until their expiration.
26. SEVERABILITY
In the event that any term or provision of this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity or unenforceability shall not affect any other term or provision
and this Agreement shall be interpreted and construed as if such term or
provision, to the extent the same shall have been held to be invalid,
illegal or unenforceable, had never been contained herein.
27. CAPTIONS
The captions used in connection with the paragraphs and subparagraphs of
this Agreement are inserted only for purposes of reference. Such captions
shall not be deemed to govern, limit, modify or in any other manner affect
the scope, meaning or intent of the provisions of this Agreement or any part
thereof nor shall such captions otherwise be given any legal effect.
28. LANGUAGE CLAUSE
At the request of all of the Parties hereto this Agreement has been drafted
in English. Les Presentes ont ete redige en langue anglaise a la demande
exprese des parties.
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IN WITNESS WHEREOF, THE PARTIES HERETO AGREE THAT THIS AGREEMENT SHALL TAKE
EFFECT AS OF THE DATE AND YEAR FIRST WRITTEN ABOVE.
GATOR MARKETING CONCEPTS INC.
Per: ________________________
TELEHUBLINK CORPORATION
Per: _______________________
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SCHEDULE "A"
LICENSED PRODUCTS
TRIPLE-GOLD PACKAGE
Please see copy of the Clam Shell and content attached to the present
Agreement.
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SCHEDULE "B"
TERRITORY
North America
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SCHEDULE "C"
TRADE MARKS
TRIPLE GOLD
