1
EXHIBIT 10.2
LICENSE AGREEMENT
Minnesota Public Radio
and
International Trading and Manufacturing
This License Agreement ("Agreement") is entered into in duplicate
effective as of the 6th day of January, 1999, by and among Minnesota Public
Radio, a Minnesota nonprofit corporation having a place of business at ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ("Licensor"); and International
Trading & Manufacturing Corporation, a Nevada corporation having a place of
business at Suite 100, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Licensee"). Licensor and Licensee are sometimes also referred to in this
Agreement individually as a "party" and, collectively, as the "parties".
RECITALS
A. Licensor is the owner of all rights in and to the marks MINNESOTA
PUBLIC RADIO, MPR and MPR (and Design).
B. Licensee is in the business of producing and distributing sound
recordings, and in particular compact discs featuring classical music which are
intended to be played for infants and children.
C. Licensee wishes to acquire from Licensor an exclusive, non-assignable
license to use the marks MINNESOTA PUBLIC RADIO, MPR and MPR (and Design) in
connection with Licensee's promotion, marketing, sale and distribution of the
compact discs described in Recital B. Licensor is willing to grant such a
license under the terms and conditions as hereinafter set forth.
NOW, THEREFORE, based on the foregoing recitals and in consideration of
the mutual promises herein contained, the parties hereby agree as follows.
ARTICLE 1
DEFINITIONS, GRANT OF LICENSE AND USE LIMITATIONS
1.01 Definitions. For the purposes of this Agreement, the following
definitions shall apply:
2
a) "Licensed Trademarks" (also sometimes referred to herein as the
"Property") shall include and be limited to the marks MINNESOTA PUBLIC
RADIO (U.S. Registration No. 1,677,888), MPR (U.S. Registration No.
1,661,118) and MPR (and Design) (U.S. Registration No. 2,116,005).
b) "Licensed Products" shall mean compact discs respectively entitled
Genius, Baby Genius, Little Genius, Kid Genius and Child Genius
produced and distributed by Licensee. The parties may, upon prior
mutual written consent, revise this definition by adding products to
and/or deleting products from the products listed above.
c) "Licensed Territory" shall mean the United States of America, its
territories and possessions.
d) "License Period" shall mean the period specified in Paragraph 4.01 of
this Agreement.
e) "Effective Date" shall mean the effective date of this Agreement,
which is January 6, 1999.
1.02 Grant of Exclusive License. Licensor hereby grants, and Licensee
hereby accepts, the nontransferable and exclusive right and license to use the
Licensed Trademarks in connection with the promotion, marketing, sale and
distribution by the Licensee of the Licensed Products.
1.03 Limitation on Use. Licensee's use of the Property shall be limited to
uses not inconsistent with the provisions of this Agreement and the license
granted by the provisions of this Agreement, which are reasonably related to
the promotion of the Licensed Products in general. As set forth in this
Agreement, Licensee may not make any use of the Property after the expiration
of the License Period.
1.04 No Transfer. Licensee may not transfer, assign, sublicense, sell,
pledge, or hypothecate, or purport to transfer, assign, sublicense, sell,
pledge, or hypothecate the license granted by the provisions of this Agreement.
1.05 Costs and Expenses. Licensee shall bear and pay all costs and
expenses of promoting sales of the Licensed Products and any use of the
Property in connection therewith.
1.06 Indemnification for Promotional Materials. Licensee shall indemnify
and hold harmless Licensor from and against any liabilities, loss, damages,
expenses (including reasonable attorney's fees and costs), causes of action,
suits, claims or judgments arising out of or based upon the use of any false or
misleading publicity and promotional materials prepared or used by Licensee in
connection with the Licensed Products.
2
3
ARTICLE II
USE OF LICENSED TRADEMARKS AND QUALITY CONTROL
2.01 Ownership. Licensee acknowledges that the Licensed Trademarks are the
sole and exclusive property of the Licensor. Licensee covenants and agrees to
make its best efforts not to do anything which might invalidate or adversely
affect the Licensed Trademarks in any way, or to impair or tarnish the goodwill
connected therewith.
2.02 Quality Control. Licensor shall have the opportunity and right to
approve or disapprove the Licensed Products before they are distributed, and to
establish or designate quality standards and specifications for the Licensed
Products, which quality standards and specifications shall conform to industry
norms and which right to approve will not be unreasonably withheld. Licensee
shall manufacture the Licensed Products in strict conformity with the quality
standards and specifications established or designated by Licensor and shall
make no significant change the Licensed Products without the prior written
approval of Licensor. Licensor shall further have the right to inspect the
quality of the Licensed Products manufactured and sold pursuant to this
Agreement under the Licensed Trademarks to determine whether or not the quality
of the Licensed Products manufactured and sold meet the specifications
established or designated by Licensor. The failure by Licensee to manufacture
and sell products meeting the specifications approved by Licensor shall
constitute a material breach of this Agreement.
2.03 Inurement of Rights. All use of the Licensed Trademarks by Licensee
under the terms and conditions of this Agreement shall inure to the benefit of
Licensor. Licensee shall use its best efforts to preserve and expand the
goodwill in the Licensed Trademarks in the Licensed Territory.
2.04 Trademark Registration. Based on Licensee's use of the Licensed
Trademarks and pursuant to the provisions of Paragraph 2.03 of this Agreement,
Licensor shall have the right to obtain federal registrations of the Licensed
Trademarks based on Licensee's use. Licensee agrees to cooperate with Licensor
to that end by providing any and all information necessary to prepare and file
applications for federal registration as well as specimens of use to support
any such application.
ARTICLE III
CONSIDERATION
3.01 Consideration.
(a) For the first five hundred thousand (500,000) Licensed Products (that
is, the first 500,000 compact discs subject to this Agreement) sold by
3
4
Licensee, the consideration to be paid by Licensee to Licensor
for the license granted under this Agreement shall be seventeen
thousand five hundred (17,500) "restricted" (as that term is
defined in the provisions of Rule 144 promulgated pursuant to the
provisions of the Securities Act of 1933, as amended), shares of
Licensee's $.001 par value common stock, which Licensee shall
cause to be issued as soon as possible after the Effective Date
of this Agreement as set forth in the preamble above. The
provisions of Rule 144 are, by this reference, made a part of
this Agreement as though specified completely verbatim in this
Agreement.
(b) In the event sales of the Licensed Products exceed five hundred
thousand (500,000) units (ie, compact discs subject to this
Agreement), Licensee shall report such circumstance and shall pay
additional consideration to Licensor for each additional unit
sold of $0.056 to maintain this Agreement throughout the
agreement term. Payment shall be made quarterly, along with a
report of sales and manufacture, within sixty (60) days of the
end of each calendar quarter, in arrears. This continuation of
this Agreement shall be conditioned on Licensee's delivery of
such payment.
ARTICLE IV
TERM AND TERMINATION
4.01 License Period. Subject to the provisions contained elsewhere
herein, the license granted under of this Agreement shall remain full force and
effect for a period of ten (10) years from the Effective Date ("License
Period").
4.02 Termination. Licensor shall have the right to terminate this
Agreement under any of the events of default enumerated below by giving
Licensee written notice to that effect. If the event of default so specified is
not cured within thirty (30) days of receipt of such written notice, this
Agreement shall automatically terminate at the completion of such thirty (30)
day period. Any of the following events shall be an event of default:
(a) Licensee ceases using the Licensed Trademarks for a period of six
(6) months;
(b) Licensee commits a material breach of this Agreement, including
but not limited to a breach of the obligations specified at
Paragraphs 2.01 and 2.02 of this Agreement.
(c) The Licensee is adjudicated a bankrupt, makes an assignment for
the benefit of creditors, or liquidates its business.
4
5
4.03 Automatic Termination. Licensee and Minnesota Communications Group
have concurrently entered into a related trademark license agreement involving
different trademarks. In the event of termination of this related trademark
license agreement by Minnesota Communications Group, this Agreement shall
automatically terminate effective the same termination date.
4.04 Expiration or Termination of License. Upon expiration of the license
period or termination of this Agreement by Licensor, Licensee shall immediately
cease all use of the Licensed Trademarks. Thereafter, the license granted
pursuant to the provisions of this Agreement shall terminate and revert to the
Licensor.
(a) In the event of expiration of the License Period, Licensee shall have
the right to complete distribution of any and all Licensed Products
produced as of the expiration date.
(b) In the event of termination of the License Agreement by Licensor,
Licensee shall not have any further distribution right of Licensed
Products that remain in inventory. Licensee acknowledges that further
distribution of Licensed Products bearing the Licensed Trademarks
after termination, or any other use of the Licensed Trademarks
thereafter, shall constitute an intentional infringement of Licensor's
trademark rights.
ARTICLE V
PROPERTY RIGHTS AND INDEMNIFICATION
5.01 Title Assurances. Licensor assures Licensee that, to the best of
Licensor's current actual knowledge, Licensor has good title to the Licensed
Trademarks and the right to license the Property's use to Licensee, free of any
proprietary rights of any other party or any other encumbrance whatever.
5.02 Indemnification of Licensor. Licensor shall indemnify, defend and
hold Licensee, free and harmless from any and all losses, damages, injuries,
and liabilities, including attorney fees and costs, arising from any third
party claims that Licensee's use of the Property in connection with the
Licensed Products as provided in this Agreement infringes on the proprietary
rights of any other party.
5
6
ARTICLE VI
GENERAL PROVISIONS
6.01 Recitals. The recitals set forth above are incorporated herein by
this reference and made a part of this Agreement.
6.02 Advice of Counsel. Each party has been advised of and understands
the terms and conditions of this Agreement. This Agreement has been freely and
voluntarily entered into and executed by the parties, each of the parties being
duly represented by counsel or having the benefit of advice of counsel.
6.03 Entire Agreement. This Agreement and the exhibit to this Agreement
are the final written expression and the complete and exclusive statement of
all the agreements, conditions, promises, representations, warranties and
covenants between the parties with respect to the subject matter of this
Agreement, and this Agreement supersedes all prior or contemporaneous
agreements, negotiations, representations, warranties, covenants,
understandings and discussions by and between and among the parties, their
respective representatives, and any other person, with respect to the subject
matter specified in this Agreement. No provision of any exhibit to this
Agreement shall supersede or annul the terms and provisions of this Agreement,
unless the matter specified in such exhibit shall explicitly so provide to the
contrary, and, in the event of ambiguity in meaning or understanding between
the provisions of this Agreement proper and the appended exhibits, the
provisions of this Agreement proper shall prevail and control in all instances.
6.04 Further Assurances. The parties shall from time to time sign and
deliver any further instruments and take any further actions as may be
necessary to effectuate the intent and purposes of this Agreement.
6.05 Assignment.
(a) Licensee shall not have the right, without the consent of Licensor,
to assign, transfer, sell, pledge, hypothecate, delegate, or otherwise
transfer, whether voluntarily, involuntarily or by operation of law,
this Agreement or any of its rights or obligations created by the
provisions of this Agreement, in whole or in part, nor shall its
rights be subject to encumbrance or the claim of creditors. Any such
purported assignment, transfer, or delegation shall be null and void.
(b) Licensor shall have the right to assign this Agreement without the
consent of Licensee as the result of any acquisition or merger of
assets, or in the event the Licensed Trademarks are transferred to a
third party.
6
7
6.06 Captions and Interpretations. Captions of the articles and sections
of this Agreement are for convenience and reference only, and the works
specified therein shall in no way be held to explain, modify, amplify or aid in
the interpretation, construction, or meaning of the provisions of this
Agreement. The language in all parts to this Agreement, in all cases, shall be
construed in accordance with the fair meaning of that language as if prepared
by all parties and not strictly for or against any party. Each party and counsel
for such party have reviewed this Agreement. The rule of construction, which
requires a court to resolve any ambiguities against the drafting party, shall
not apply in interpreting the provisions of this Agreement.
6.07 Choice of Law and Consent of Jurisdiction. This Agreement shall be
deemed to have been entered into in the State of Minnesota. All questions
concerning the validity, interpretation, or performance of any of the terms,
conditions and provisions of this Agreement or of any of the rights or
obligations of the parties shall be governed by, and resolved in accordance
with, the laws of the State of Minnesota, without regard to conflicts of law
principles.
6.08 Waiver and Modification. No modification, supplement or amendment of
this Agreement or of any covenant, condition, or limitation specified in this
Agreement shall be valid unless the same is made in writing and duly executed by
both parties. No waiver or any covenant, condition, or limitation specified in
this Agreement shall be valid unless the same is made in writing and duly
executed by the party making the waiver. No waiver of any provision of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, not shall any waiver constitute a continuing waiver.
6.09 Number and Gender. Whenever the singular number is used in this
Agreement, and when required by the context, the same shall include the plural,
and vice versa; the masculine gender shall include the feminine and the neuter
genders, and vice versa.
6.10 Successor and Assigns. This Agreement and each of its provisions
shall obligate the heirs, executors, administrators, successors, and assigns of
each of the parties. Subject to Paragraph 6.05, nothing specified in this
article, however, shall be a consent to the assignment or delegation by any
party of such party's respective rights and obligations created by the
provisions of this Agreement.
6.11 Third Party Beneficiaries. Except as expressly specified by the
provisions of this Agreement, this Agreement shall not be construed to confer
upon or give to any person, other than the parties hereto, any right, remedy or
claim pursuant to, or by reason of, this Agreement or of any term or condition
of this Agreement.
6.12 Severability. In the event any part of this Agreement, for any
reason, is determined by a court of competent jurisdiction to be invalid, such
determination shall not affect the validity of any remaining portion of this
Agreement, which remaining portion shall remain in full force and effect as if
this Agreement had been executed with the invalid portion thereof eliminated.
It is hereby declared the intention of the parties that they would have
executed the
7
8
remaining portion of this Agreement without including any such part, parts, or
portion which, for any reason, may be hereafter determined to be invalid.
6.13 Governmental Rules and Regulations. The transaction and relationship
contemplated by the provisions of this Agreement are and shall remain subject to
any and all present and future orders, rules and regulations of any duly
constituted authority having jurisdiction of that transaction and relationship.
6.14 Execution in Counterparts. This Agreement may be prepared in multiple
copies and forwarded to each of the parties for execution. All of the signatures
of the parties may be affixed to one copy or to separate copies of this
Agreement and when all such copies are received and signed by all the parties,
those copies shall constitute one agreement which is not otherwise separable or
divisible.
6.15 Survival of Covenants, Representations and Warranties. All covenants,
representations, and warranties made by each party to this Agreement shall be
deemed made for the purpose of inducing the other party to enter into and
execute this Agreement. The representations, warranties, and covenants specified
in this Agreement shall survive any investigation by either party whether before
or after the execution of this Agreement.
6.16 Right to Audit. Licensor shall have the right, upon reasonable notice,
to audit the records of manufacture and sale of the Licensed Products. If
discrepancies between audited numbers and reported numbers (pursuant to Section
3.01) are found, the party whom the discrepancy benefited shall promptly repay
the other party. If errors of more than five percent (5%) are discovered by such
audit, Licensee shall pay the cost of the audit. Errors of more than ten percent
(10%) will be considered a material breach of this Agreement.
REMAINDER OF THIS PAGE IS BLANK
SIGNATURE PAGE FOLLOWS
8
9
IN WITNESS WHEREOF, this License Agreement is executed and is effective as
of the date first set forth in the Preamble.
Licensor:
MINNESOTA PUBLIC RADIO,
a Minnesota Nonprofit Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Its: EVP
------------------------------------
Date: 99-03-08
-----------------------------------
Licensee:
INTERNATIONAL TRADING & MANUFACTURING CORPORATION,
a Nevada Corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Its: COO
------------------------------------
Date: 99-03-10
-----------------------------------
9