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EXHIBIT 10.9
LICENSE AGREEMENT
This LICENSE AGREEMENT ("Agreement") is made and entered into as of this 30th
day of November 2000, between LOHAN MEDIA, LLC, a California Limited Liability
Company ("LM"), located at 00000 Xxx Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx,
XX 00000, and INFOTOPIA, INC., a Nevada corporation ("Infotopia"), located at
000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000.
RECITALS
WHEREAS, Infotopia is in the business, among other things, of advertising,
promoting, marketing, selling and distributing products in various media,
including television, print, and retail; and
WHEREAS, Infotopia desires to license from LM rights to advertise, promote,
market, sell, distribute and otherwise exploit that certain bun and thigh
fitness product currently known as "Body by Jake, Bun & Thigh Rocker" and all
improvements and modifications thereof (the "Product") and the upsell product
known as the "Body by Jake Body Shape Up System" ("Shape Up"), together with
related upsells including a membership club offering and a vitamin program and
any other form of revenue associated with the Product (Shape Up, together with
all other upsells associated with the Product, are hereinafter collectively
referred to as the "Upsells") and Infotopia desires to engage Infomercial
Management Corporation ("Management Co.") to manage the advertisement,
promotion, marketing, sale, distribution and exploitation of the Product and
Upsells on behalf of Infotopia, all in accordance with the terms and conditions
set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties agree as follows:
1. Rights Granted. (a) In consideration of the compensation set forth below,
but subject to the conditions set forth in Clause 1(d), below, LM hereby grants
and licenses to Infotopia the exclusive rights during the Term (as defined
below) to jointly, with LM, advertise, promote, market, sell, distribute and
exploit the Product and related Upsells by any manner, in the agreed territory
of North America, excluding Canada ("Territory") and in any and all media
("Rights"), including, without limitation, airing the Infomercial (as defined
below), commercial and promotional spots on broadcast, cable, satellite and all
other forms of television transmission now existing or hereafter developed,
television shopping programs such as QVC and HSN, radio, internet, all print
media, direct mail solicitation, inbound and outbound telemarketing, PI media,
catalog sales, continuity program, retail sales and all other channels or means
of distribution now existing or hereafter developed. Infotopia acknowledges that
the rights to distribute the Product in international markets are specifically
excluded; provided that LM shall pay to Infotopia a monthly reverse royalty of
seventy-five cents ($0.75) for every Product unit sold in the international
markets after February 20, 2001. The term "Infomercial" shall mean that current
twenty-eight minute thirty second (28:30) television commercial designed to sell
the Product by means of direct response by the customer, and any parts thereof.
(b) In connection with the Rights granted by LM to Infotopia hereunder,
and subject to the conditions and limitations stated in the preceding clause
1(a), LM hereby grants to Infotopia the exclusive license in the Territory to
use, jointly with LM, all copyrights, patents, trademarks and all other
intellectual property relating to the Product and Shape Up owned,
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licensed and/or controlled by LM. LM represents and warrants that copies of any
patent applications, patent licenses, patents, copyrights, copyright
registrations, trademarks and trademark registrations which it may own, license
and/or control with respect to the Product and Shape Up shall be provided to
Infotopia upon request. In addition, and subject to the conditions and
limitations contained in clause 1(a) hereof, LM hereby grants to Infotopia the
exclusive license to use, jointly with LM (i) any and all artwork and
promotional materials, if any, that LM may own, license and/or control with
respect to the Product and Shape Up, and (ii) the names, likenesses,
endorsements and testimonials of all endorsers and other persons with respect to
the Product and Shape Up, but only to the extent of LM's rights relating
thereto. All copyrights, patents, trademarks and all other intellectual property
relating to the Product and Shape Up owned, licensed and/or controlled by LM
shall remain the sole property of LM, and neither Infotopia nor any third party
shall acquire any right, title or interest in such copyrights, patents,
trademarks or other intellectual property by virtue of this Agreement or
otherwise. Any unauthorized use of such copyrights, patents, trademarks or other
intellectual property by Infotopia shall be deemed an infringement of the rights
of LM therein. Infotopia shall not in any way or at any time dispute or attack
the validity or contest the rights of LM in or to any of such copyrights,
patents, trademarks or other intellectual property.
(c) All of the Rights set forth in this clause 1 may be exercised and
exploited by Infotopia only in accordance with the prior approval of LM and such
Rights may not be exercised and exploited by Infotopia in any manner without the
direct participation of LM. Additionally, Infotopia may not alter the
Infomercial in any way, or add to, delete or change the Upsells offered thereby,
without the prior and express written approval of LM; provided that LM shall
cause Infotopia's name and logo to be edited into all versions of the
Infomercial to be aired by Infotopia after the satisfaction of the conditions
precedent set forth in clauses 5(a) and 3(b) hereof.
(d) All rights granted herein in this Clause (1) are subject to Infotopia's
satisfaction of the conditions set forth in this Agreement, and subject
specifically to the conditions set forth in Clauses 3, 4 and 5. During the Term
hereof, LM will be allowed to purchase up to $300,000.00 per week in television
media to broadcast the INFOMERCIAL, and Infotopia will be allowed to purchase
up to $450,000 per week to broadcast the Infomercial. In the event that the
weekly media ratio for sales of Product and Upsells equals or exceeds 3.6/1,
then for as long as such minimum 3.6 ratio is maintained, Infotopia may increase
its weekly media without limit. In the event that the parties mutually agree, at
some future date, that additional weekly media purchases above the foregoing
maximums are warranted regardless of the weekly media ratios, then Infotopia may
purchase additional weekly media in an amount to be agreed on at a future date,
and from time to time, as warranted. During the Term hereof, Infotopia shall
share equally with LM in the Net Revenues generated by PI media, which PI media
and the sales therefrom shall be contracted for and monitored exclusively by LM.
Net Revenues is defined as the selling price, less cost of PI media, cost of
shipping and handling, cost of Product and Upsells per Clause 3(b), a 10%
reserve for returns and bad debt, and the cost of telemarketing and fulfillment.
Until February 20, 2001, LM shall have the exclusive right, and Infotopia shall
have no right, to market the Product and Upsells via print media and retail
distribution channels, as well as via home shopping channels, including HSN and
QVC. After February 20, 2001, Infotopia shall receive a 45% share of the Home
Shopping Net Revenue generated by home shopping channels in accordance with
Clause 7(b) hereof, which home shopping channel sales shall be contracted for
and monitored exclusively by LM. Home Shopping Net Revenue is defined as the
selling price, less cost of goods sold, less royalty payment to Producers and
Jake. Finally, after February 20, 2001, Infotopia shall have the exclusive
right, during the Term hereof, and LM shall have no right, to market Retail
Sales of the Product and Upsells and LM shall receive a 45% share of the
Adjusted Gross Retail Revenue generated by such Retail Sales in accordance with
Clause 4(c) hereof.
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2. Engagement of Management Co.; Services of Management Co. (a) Subject to
the satisfaction of the conditions precedent set forth in clauses 5(a) and 3(b)
hereof, Infotopia shall engage Management Co. and its designees to render
Management Co.'s services as Infotopia's exclusive management company during the
Term of this Agreement to manage and oversee all operations relating to the
advertising, promotion, ordering, sale, marketing, distribution and exploitation
of the Product and related Upsells, all on the terms and conditions set forth
herein. Infotopia and LM understand that Management Co. shall have the right to
render services to other persons, firms or corporations either in the capacity
in which Management Co. shall be engaged by Infotopia, or otherwise, as well as
to engage in any and all other business activities and to devote such time as it
may seem advisable, in its sole discretion, to such businesses.
(b) During the Term of this Agreement, Infotopia shall cause Management
Co., subject to Infotopia's performance of its obligations hereunder, to manage
and oversee all operations relating to the advertising, promotion, ordering,
sale, marketing, distribution and exploitation of the Product and related
Upsells, all subject to LM's approval, including:
(i) Coordination of advertising and promotion for the Product and
Upsells;
(ii) Coordination of telemarketing services;
(iii) Coordination of television media buying;
(iv) Coordination of fulfillment;
(v) Implementation of continuity program;
(vi) Coordination of the ordering of the Product and Upsells;
(vii) Implementation of non-television distribution channels for the
Product and Upsells;
(viii) Coordination of customer service regarding the Product and Upsells;
(ix) Oversee all transactional, financial, business and contractual
matters relating to the marketing of the Product, including the
negotiation of contracts (in consultation with Infotopia) for all
of the above services; and
(x) Providing general management and administrative services with
respect to the day-to-day operations of the marketing and
distribution of the Product.
(c) Infotopia agrees that the fulfillment center shall be Promotions
Distributor Services Corp. ("PDS") and the telemarketing service shall be West
Telemarketing and any changes in fulfillment center, telemarketing service and
any other material vendor shall require the prior written mutual approval of LM
and Infotopia.
(d) On the Wednesday of each week during the Term hereof, Infotopia shall
cause LM to be provided with copies of all telemarketing, fulfillment and media
reports showing all activity for the prior week, as well as any other reports
which LM may request from time to time. Additionally, upon execution hereof,
Infotopia will immediately authorize and instruct West Telemarketing, PDS and
any media agency used by Infotopia to allow LM to direct, unrestricted and
uninterrupted access from West Telemarketing, PDS and any media agency used by
Infotopia to any and all online computer data and reports collected and
generated by West Telemarketing and PDS relating to sales of the Product and
Upsells, as well as placement and procurement of media purchases by Infotopia.
(e) On the Wednesday of each week, Infotopia agrees to cause Xxxxxx
Xxxxxxxx Business Management, Inc. to transmit via wire transfer to LM's bank
account all royalties due LM based on the prior week's Gross Sales Revenues,
including those royalties due Body by Jake Enterprises, LLC, and the producers
of the Infomercial as provided for in clause 4(b), on a priority, first monies
basis, without regard to whether or not the Adjusted Gross Revenues and
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related Costs for the prior week have been calculated, and without regard to
whether any of the prior week's Adjusted Gross Revenues have been remitted to
Infotopia. Notwithstanding any other liability that Infotopia may have to LM
under this Agreement, Infotopia specifically warrants to LM that any and all
weekly royalty monies due LM shall be transmitted to LM in accordance with this
clause.
(f) Infotopia agrees to open and maintain a separate bank account for
the exclusive use of Management Co. for the purposes hereunder ("Bank Account")
(i) in which all Gross Sales Revenues, as defined in clause 3(c) hereof, and
the Wholesale Selling Price shall be deposited, (ii) in which all Costs (as
defined in clause 3(a) hereof) shall be deposited, (iii) from which all Costs
shall be paid, (iv) from which all royalties and bonuses hereunder due to LM,
third parties and Management Co. shall be distributed and paid and (v) from
which all Adjusted Gross Revenues due to Infotopia and Management Co. shall be
distributed. The sole signatories on the Bank Account shall be representatives
of Xxxxxx Xxxxxxxx Business Management, Inc.
(g) Throughout the Term hereof, LM and Infotopia will coordinate and
mutually agree and approve the PI Media to be placed by LM, and the respective
television media to be placed by both parties on a weekly basis in order to
rotate on an equitable basis favorable media placements. LM and Infotopia shall
each cause their respective media purchasers to provide weekly media reports to
the other party reflecting such party's media placement, Product sales and
individual and cumulative media ratios for the preceding week.
3. Obligations of Infotopia. (a) Infotopia shall be solely responsible to
fund and deposit into the Bank Account all fees, costs and expenses
(collectively, "Costs") in connection with the management by Management Co. of
the advertising, promotion, ordering, sale, marketing, distribution and
exploitation of the Product and related Upsells, including, without limitation,
production and post-production costs; media costs; Product and Upsells costs;
ordering costs; freight and transportation costs; telemarketing costs;
fulfillment costs; credit card and bank costs; packaging costs; marketing costs;
customer service costs; training costs; professional service fees;
celebrity/talent/experts fees and royalties and testimonial costs; internet
costs; third party license fees; third party marketing commissions; insurance
costs; management and personnel; a two percent (2%) royalty of the "Gross Sales
Revenues" as defined in clause 3(c) hereof payable to Management Co. for its
management obligations to be performed with respect to the Product; travel
costs; returns, refunds, chargebacks and bad debts; and all other documented
out-of-pocket expenses incurred in connection with the transactions
contemplated hereunder and approved by Infotopia and Management Co. Neither
Management Co. nor LM shall have any responsibility whatsoever to pay for any
of such fees, costs and expenses.
(b) Upon placement of all purchase orders with LM, Infotopia will place
with LM a deposit of equal to 30% of the cost of each Product and Shape Up unit
ordered, and Infotopia will pay the balance due twenty-four hours prior to
scheduled delivery of the units to PDS. Concurrently with the consummation of
the transaction set forth in clause 5(a) hereof, (i) Infotopia shall place
purchase orders with LM exclusively for Eight Thousand (8,000) units of the
Product and Four thousand four hundred (4,400) units of the Shape Up (the
"Initial Order"), and Infotopia shall pay $56.00 per unit for the Product and
$8.00 per unit for the Shape Up, to be delivered to Infotopia's fulfillment
center. Upon execution of this Agreement, Infotopia will place a deposit of
equal to 30% of the cost of each Product and Shape Up unit ordered ($144,960).
LM will deliver to PDS a minimum of 3,333 units of Product and 1,833 units of
Shape Up each week starting on November 27, 2000. Thereafter, Infotopia agrees
to purchase exclusively from LM and take delivery of a minimum of 15,000 units
of Product and 8,250 units of Shape Up per month, starting January 2001, until
such time as the Gross Sales Revenues to Costs Per Order ratio (the "Sales to
Media Ratio") falls below an average of 2.7/1 per week for three (3)
consecutive weeks at which time there will be no additional minimum
requirements,
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and in which event LM, in addition to any other rights and remedies provided for
herein, and in exchange for payment to Infotopia of a weekly reverse royalty of
two percent (2%) of Gross Sales Revenues, shall be permitted to supplement
Infotopia's media order with additional media in excess of the limit set forth
in Clause 1(d) hereof, in order to broadcast the Infomercial for LM's own
account and to take any and all other actions necessary to fulfill orders for
Products and Upsells relating to LM's own media order for LM's own account,
including, without limitation, purchasing Product and Upsell units. Such monthly
minimum requirements shall be deemed waived by the parties hereto only to the
extent Infotopia is unable to achieve a Sales to Media Ratio of 2.7/1 per week
for three (3) consecutive weeks from the purchase of Three Hundred Thousand
Dollars ($300,000) in weekly television media. Purchases of the Product and
Shape Up by Infotopia shall be cumulative so that, for example, if Infotopia has
purchased Product units during any month of the Term that exceeds the monthly
minimum amount hereunder, such excess amount may be carried forward and applied
to satisfy the minimum purchase condition for any subsequent month(s). When
Infotopia has paid for 100,000 units of Product, the price per unit of Product
shall be reduced by $0.50 per unit of Product to $55.50, on all future
purchases; when Infotopia has paid for 200,000 units of Product, the price per
unit of Product shall be reduced by an additional $1.00 per unit of Product to
$54.50 on all future purchases. Infotopia shall authorize Management Co. to
place on its behalf a television media order to broadcast the Infomercial in the
amount of Two Hundred and Fifty Thousand Dollars ($250,000) for the first week's
media, and Infotopia or its media funding agency shall pay at such time for such
media order. Infotopia agrees that under no circumstances will it purchase
Product or Upsells from any entity other than LM.
(c) Infotopia shall also authorize Management Co. to place on its behalf a
minimum of Two Hundred Fifty Thousand Dollars ($250,000) in weekly television
media through February 20, 2001, and Three Hundred Thousand Dollars ($300,000)
in weekly television media thereafter, to broadcast the INFOMERCIAL for so long
as the Sales to Media Ratio of Gross Sales Revenues to Costs Per Order is 2.7/1
or greater, on a weekly basis. "Gross Sales Revenues" shall mean all gross
revenues (including membership club revenues and fees) actually received by
Infotopia or its agent, Xxxxxx Xxxxxxxx, with respect to sales and exploitation
on the Product and Upsells in the Territory, by any means and media other than
retail, reduced by (i) sales, excise, use or any other non-income taxes (if any
of such taxes are included in gross revenues), and actual returns, actual
refunds and actual chargebacks. "Costs Per Order" shall mean the media costs
incurred in order to sell the Product and related Upsells through the airing of
the Infomercial. Infotopia agrees to provide sufficient funding on an on-going
basis required to maintain such media minimums for so long as such Sales to
Media Ratio is maintained at 2.7/1 or greater, including, without limitation,
funding for media, Product units and Upsell units. In the event that (i)
Infotopia fails to fund a minimum of Two Hundred Fifty Thousand Dollars
($250,000) in weekly television media to broadcast the Infomercial for any week
when the Sales to Media Ratio for the previous week was 2.7/1 or greater or (ii)
after February 20, 2001, Infotopia fails to fund an amount equal to Three
Hundred Thousand Dollars ($300,000) in television media to broadcast the
Infomercial for any week when the Sales to Media Ratio for the previous week was
greater than 2.7/1, or (iii) Infotopia fails to purchase 15,000 units of Product
per month as required in clause 3(b) above, LM, in addition to any other rights
and remedies provided for herein, be permitted to supplement Infotopia's media
order with additional media in excess of the limit set forth in Clause 1(d)
hereof, in order to increase the broadcast of the Infomercial for LM's own
account and to take any and all other actions necessary to increase orders for
Products and Upsells relating to LM's own media order for LM's own account,
including, without limitation, purchasing Product and Upsell units.
(d) At all times during the Term of this Agreement, Infotopia shall
maintain a minimum amount of working capital in the Bank Account utilized by
Management Co. equal to not less than one (1) week of estimated Costs determined
by Management Co. and Infotopia to
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be required for the advertising, promotion, ordering, purchase, sale,
marketing, distribution and exploitation of the Product and related Upsells
("Minimum Working Capital"). Infotopia shall send as required by wire transfer
in immediately available funds an amount of working capital into the Bank
Account equal to the amount reflected on a weekly cash flow projection prepared
by Management Co. and approved by Infotopia.
(e) Within three (3) business days after the execution of this Agreement,
Infotopia shall send by wire transfer in immediately available funds an amount
equal to Twenty Five Thousands Dollars ($25,000) to Xxxxxx Xxxxxxxx Business
Management, Inc.'s bank account for the benefit of LM. If conditions precedent
set forth in clause 5(a) and the Initial Order and first week media purchase in
clause 3(b) hereof are not satisfied for any reason, Xxxxxx Xxxxxxxx Business
Management, Inc. shall release such funds to LM. If the conditions precedent
set forth in clauses 5(a) and 3(b) hereof are satisfied, Xxxxxx Xxxxxxxx
Business Management, Inc. shall release such funds to the Bank Account.
(f) At all times during the Term, each of LM and Infotopia agrees to
maintain in effect a policy of product liability insurance in connection with
the marketing and sale of the Product and Upsells, and said insurance shall
have coverage of at least one million dollars ($1,000,000.00) per occurrence
and two million dollars ($2,000,000.00) in the aggregate. Each of LM and
Infotopia agrees to cause the other party and Management Co. to be named as
additional insureds on all such policies for at least a period of two (2) years
after the expiration or termination of the Term.
4. Compensation to LM for License. In consideration for the license by LM of
the Rights set forth herein, Infotopia shall compensate LM as follows, subject
to the satisfaction of the conditions precedent set forth in clauses 5(a) and
3(b) hereof:
(a) During the Term hereof, Infotopia shall pay LM a weekly royalty of
five percent (5%) of one hundred percent (100%) of Gross Sales Revenues of the
Product and Upsells from sales and exploitation of the Product and Upsells by
any means and media other than Retail Sales. The royalty payable to LM shall be
paid to LM in accordance with clause 2(e) hereof. LM agrees that out of said 5%
royalty it shall pay Xxxx Xxxxxxxxx a 2% additional royalty in accordance with
Paragraph 5(a)(i) of Exhibit "A" hereto.
(b) During the Term hereof, Infotopia shall pay LM additional weekly
royalties, in accordance with clause 2(e), for payment in full by LM
to Body By Jake Enterprises, LLC, and the producers of the
INFOMERCIAL of all compensation relating to the Product and Upsells
payable to such parties per the agreements between LM and Body By Jake
Enterprises, LLC and LM and the producers of the Infomercial, copies
of which are attached hereto as exhibits "A" and "B" respectively, and
in the following amounts: (i) three percent (3%) of one hundred
percent (100%) of Gross Sales Revenues of the Product and Upsells from
Direct Response Sales (defined as sales directly to the consumer via
direct response advertising) and exploitation of the Product and
Upsells; (ii) six percent (6%) of one hundred percent (100%) of Gross
Sales Revenues of the Product and Upsells from Home Shopping Channels
(defined as sales to home shopping channels) and Retail Sales; (iii)
four percent (4%) of one hundred percent (100%) of Gross Sales
Revenues of the Product and Upsells from Internet (defined as sales
via the web and through a web site) and other sales.
Subject to mutual agreement with Xxxx Xxxxxxxxx, Steinfeld will appear
personally on home shopping channels to promote the Product. In the event of
such personal appearance by Steinfeld, Infotopia shall reimburse or pay
directly for first class round trip travel expenses, chauffeured automobile and
first class hotel accommodations and other travel costs incurred in
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fulfilling such obligations. It is agreed that all internet sales will be
processed exclusively through the existing XxxxXxXxxx.xxx web site. Throughout
the Term of this Agreement, internet sales shall be allocated proportionately
and paid weekly by LM to Infotopia based on the weekly media spent by each
party. Said payments shall be made by the Wednesday of each week based on the
sales of the prior week. (c) LM shall receive a monthly royalty of forty-five
percent (45%) of one hundred percent (100%) of the "Adjusted Gross Retail
Revenue" of the Product and Upsells from Retail Sales of the Product and
Upsells. Infotopia agrees to cause Xxxxxx Xxxxxxxx Business Management, Inc. to
transmit via wire transfer to LM's bank account all royalties due LM based on
the prior month's Adjusted Gross Retail Revenue. Monthly statements and payments
shall be sent to LM within fifteen (15) days after the end of the preceding
month. "Retail Sales" shall mean all channels of distribution for the sale of
the Product and Upsells to the ultimate consumer exclusive of DRTV, internet
sales, international and Canadian sales, PI sales and home shopping channel
sales. For purposes of this clause 4(c), "Adjusted Gross Retail Revenues" shall
mean one hundred percent (100%) of the Wholesale Selling Price actually received
by Infotopia, less all Costs associated with the Retail Sales incurred by
Infotopia, and a ten percent (10%) holdback of the Wholesale Selling Price as a
reserve against returns, refunds, chargebacks, bad debts and similar deductions
relating to Products and Upsells sold hereunder. "Wholesale Selling Price" shall
mean the gross amount invoiced by Infotopia or its designee on behalf of
Infotopia to retailers and/or distributors for resale to consumers and actually
received by Infotopia or its designees on behalf of Infotopia in respect of
Retail Sales of the Product and Upsells.
(d) Notwithstanding anything to the contrary contained herein, "Gross Sales
Revenues" and "Adjusted Gross Retail Revenue" shall not include any gross
revenues received by LM with respect to sales and exploitation of the Product
and Upsells by any means and media after the effectiveness of this Agreement
(i.e., the satisfaction of the conditions precedent set forth in clauses 5(a)
and 3(b) hereof) to the extent such gross revenues are realized from sales made,
or purchase orders for units of the Product and Upsells placed, prior to the
effectiveness of this Agreement.
5. Compensation for Services. In consideration of the services to be rendered by
LM and Management Co. as set forth herein, Infotopia shall compensate LM and
Management Co. during the Term as follows:
(a) Upon execution hereof, Infotopia shall issue directly into escrow for
the benefit of LM's designees 10,000,000 shares of Infotopia's unrestricted,
free trading common stock equal in value to $1,000,000 in consideration of
manufacturing and ongoing sales campaign consultation. Such shares shall be
placed in escrow with Xxxx Xxxxx, Attorney at Law, at 0 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, as attorney for Infotopia. Within five (5) business days
from and including the date of the execution hereof, Infotopia's financial
consultants shall purchase from LM's designees all of such shares of Infotopia's
unrestricted, free trading common stock for the price of One Million Dollars
($1,000,000). Such financial consultants shall place One Million Dollars
($1,000,000) into escrow in the client trust account of Xxxx Xxxxx, Attorney at
Law, at 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as attorney for Infotopia.
In accordance with the instructions set forth in an escrow agreement
satisfactory to LM, Xxxx Xxxxx, Attorney at Law shall consummate such stock
purchase transaction by delivering such shares of Infotopia's unrestricted, free
trading common stock to Infotopia's financial consultants and the One Million
Dollars ($1,000,000) to LM's designees by wire transfer in immediately available
funds, subject to the concurrent satisfaction by Infotopia of the conditions set
forth in clause 3(b) hereof regarding the Initial Order and the first week media
purchase. Notwithstanding any of the foregoing, Infotopia shall not issue
directly into escrow for the benefit of LM's designees such shares of
unrestricted, free trading common stock until LM's legal counsel has received
and approved in writing, written securities and tax legal opinions furnished by
Infotopia's legal
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counsel confirming that (i) such stock purchase transaction, if consummated,
will comply with all applicable securities laws and (ii) the issuance of such
shares of unrestricted, free trading common stock into escrow for the benefit of
LM's designees, if such stock purchase transaction is not consummated, shall not
have any adverse tax consequences to or result in a taxable event for any of LM
or its designees. If such stock purchase transaction is not consummated for any
reason within five (5) business days from and including the date of the
execution hereof, this Agreement shall be void ab initio and of no force or
effect and all of such shares shall be returned to the treasury of Infotopia. In
the event the sale of the stock does not equal $1,000,000, Infotopia is
obligated to make up any shortfall in an additional cash payment.
(b) Infotopia shall pay LM an additional cash payment of $1,000,000 on
February 20, 2001.
(c) Upon execution hereof, Infotopia shall issue to LM's designees, in
accordance with all applicable securities laws, 7,000,000 shares of Infotopia's
unrestricted, free trading common stock. LM agrees to cause the LM designees to
not sell said shares until 60 days after their receipt thereof.
(d) After February 20, 2001, Infotopia shall pay LM additional cash
bonuses equal to Two Hundred Fifty Thousand Dollars ($250,000), for every Five
Million Dollars ($5,000,000) of Gross Sales Revenue of the Product and Upsells
(including membership club revenues) and including Retail Sales, achieved by
Infotopia, payable within fifteen (15) business days following the achievement
of each Five Million Dollars ($5,000,000) of Gross Sales Revenue of the Product
and Upsells (including membership club revenues) and including Retail Sales.
(e) From the date of execution hereof, Infotopia shall pay Management Co.
a weekly royalty of two percent (2%) of one hundred percent (100%) of Gross
Sales Revenues of the Product and Upsells from sales and exploitation of the
Product and Upsells by any means and media other than Retail Sales for its
management duties stated herein. The royalty payable to Management Co. shall be
paid to Management Co. each week as a first priority after LM has been paid its
royalties.
(f) Management Co. shall receive a monthly royalty of ten percent (10%) of
one hundred percent (100%) of the Adjusted Gross Retail Revenue of the Product
and Upsells from Retail Sales of the Product and Upsells. Infotopia agrees to
cause Xxxxxx Xxxxxxxx Business Management, Inc. to transmit via wire transfer to
Management Co.'s bank account all royalties due Management Co. based on the
prior month's Adjusted Gross Retail Revenue. Monthly statements and payments
shall be sent to Management Co. within fifteen (15) days after the end of the
preceding month.
(g) Management Co. shall receive a monthly royalty of three percent (3%)
of one hundred percent (100%) of the Adjusted Gross Revenues (as defined below)
of the Product and Upsells from sales and exploitation of the Product and
Upsells. Infotopia agrees to cause Xxxxxx Xxxxxxxx Business Management, Inc. to
transmit via wire transfer to Management Co.'s bank account all royalties due
Management Co. based on the prior month's Adjusted Gross Revenues.
6. Adjusted Gross Revenues (a) The business management firm of Xxxxxx Xxxxxxxx
Business Management, Inc. shall distribute to Infotopia or cause to be paid to
Infotopia by the applicable fulfillment house all "Adjusted Gross Revenues less
Management Co.'s share thereof in accordance with Clause 5(g) hereof. For
purposes of this Agreement, "Adjusted Gross Revenues" shall mean one hundred
percent (100%) of the Gross Sales Revenues and the Wholesale Selling Price
actually received by Infotopia or its designees on behalf of Infotopia,
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plus any funds released from the holdback described below, less all Costs, a ten
percent (10%) holdback of Gross Sales Revenues and the Wholesale Selling Price
as a reserve against returns, refunds, chargebacks, bad debts and similar
deductions relating to Products and Upsells sold hereunder, all royalties
payable to LM, third parties and Management Co. hereunder and a reserve for
Minimum Working Capital.
(b) LM makes no representations or warranties that the advertising,
promoting, manufacturing, marketing, distributing, selling and/or exploiting of
the Product and Upsells will be profitable and result in Adjusted Gross
Revenues. Infotopia acknowledges that any sales projections of the Product and
Upsells provided to Infotopia by LM are estimates only, are not representations
that sales in the projected quantity will be sold and provide no guarantees
concerning the performance of the Product and Upsells. LM does certify that it
has tested a minimum of $600,000.00 in media and achieved an average media
ration of 3.5/1 and will provide documentation of such results upon execution.
7. Accounting. (a) Adjusted Gross Revenues hereunder shall be calculated
on a monthly basis in conjunction with the business management firm of Xxxxxx
Xxxxxxxx Business Management, Inc., and said firm shall furnish Infotopia
monthly with an itemized statement setting forth the Gross Sales Revenues and
the Wholesale Selling Price during the preceding month together with the
computations of the Adjusted Gross Revenues with respect thereto. Monthly
statements shall be sent to Infotopia and LM within fifteen (15) days after the
end of the preceding month. A monthly disbursement shall be made to Infotopia
for the Adjusted Gross Revenues, if any, for the preceding month. LM shall at
reasonable times have the right to inspect the books and records as maintained
by Xxxxxx Xxxxxxxx Business Management, Inc. Infotopia will not change the
service entity of Management Co., Xxxxxx Xxxxxxxx Business Management, Inc. nor
engage a new service entity or business management entity without the prior
written consent of LM.
(b) Throughout the Term hereof, LM and Infotopia shall share equally in
all Net Revenues generated from all PI media contracted for by LM. LM shall make
a monthly disbursement to Infotopia for its share of the Net Revenues, if any,
for the preceding month from such PI Media. LM shall cause its third party PI
Media companies to provide monthly statements to Infotopia reflecting such
party's PI Media Product sales.
(c) Subject to Infotopia's performance with Clauses 3, 4 and 5, LM shall
pay to Infotopia a monthly reverse royalty of seventy-five cents
($0.75) for every Product unit sold in the international markets after
February 20, 2001, from which time LM shall cause its accounting
representative, Xxxxx Xxxxxx and Company, to provide monthly
statements to Infotopia certifying to the number of Product units sold
in the international markets, if any, for the preceding month. Monthly
statements and distributions shall be sent to Infotopia within thirty
(30) days after the end of the preceding month.
8. Term of Agreement; Conditions Precedent; Kill Fee.
(a) The term of this Agreement (the "Term") shall at all times be subject to
LM's rights to distribute the Product as provided for in clause 1(a) hereof. The
Term shall commence and this Agreement shall be effective upon the satisfaction
of the conditions precedent set forth in clause 5(a) and the Initial Order and
first week media purchase in clause 3(b) hereof and shall continue until January
31, 2004 unless sooner terminated in accordance with the provisions set forth
herein or if the Gross Sales Revenues from the sales of the Product and Upsells
fail to exceed Fifty Thousand Dollars ($50,000) per week for three (3)
consecutive weeks. Upon the expiration of the Term, this Agreement may be
extended on terms to be mutually agreed upon by the parties
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hereto, with such extension agreement(s) to be executed not less than thirty
(30) days prior to the end of the Term or any extended term.
(b) If the conditions precedent set forth in clauses 5(a) and 3(b) hereof
are not satisfied for any reason, then this Agreement shall be void ab initio
and of no force and effect and LM shall have no obligations whatsoever
hereunder.
(c) In the event the conditions precedent set forth in clauses 5(a) and
3(b) hereof are not satisfied for any reason, Infotopia shall pay to LM a
"kill" fee equal to Twenty Five Thousand Dollars ($25,000) in accordance with
the terms of clause 3(e) hereof. This subparagraph 8(c) shall survive
notwithstanding the fact that this Agreement shall be void ab initio and of no
force and effect if such conditions precedent are not satisfied.
9. Customer List. The name, address, telephone number, credit card
information and all other customer data collected by LM and Infotopia relating
to the Product and Upsell units sold after the effectiveness of this Agreement
during the Term ("Customer List"), shall be jointly owned by LM and Infotopia.
Neither LM nor Infotopia shall sell, lease, rent or otherwise transfer all or
any portion of the Customer List to any third party without the written
approval of the other party, which approval shall not be unreasonably withheld
or delayed.
10. Infringement. LM agrees to take all steps and do all filings and
registrations to maintain all copyrights, patent licenses, trademarks and all
other intellectual property relating to the Product in force, all at
Infotopia's expense. LM shall promptly notify Infotopia of any information
obtained regarding infringements or imitations by third parties of the Product
or the intellectual property relating thereto. In connection therewith, LM
agrees to fully cooperate with Infotopia to stop such infringement or
imitations. Any recovery of damages shall be shared on an equal basis by
Infotopia and LM after deduction of all costs and expenses paid by Infotopia
relating to such infringement or imitations. Infotopia acknowledges that
Infotopia shall not, without the consent and/or participation of LM, defend or
prosecute any action relating to the Product or the intellectual property
relating thereto, and that LM, at its sole discretion, may elect to defend or
prosecute, or to participate in the defense or prosecution of, any action
relating thereto, at Infotopia's expense. In the event that LM undertakes the
defense or prosecution of any litigation relating to the Product or
intellectual property relating thereto, Infotopia agrees to fully cooperate
with LM in any such proceeding, to join with LM as a party to any action
brought by LM if required or requested by LM, and to execute any and all
documents and do all acts which may be necessary or of aid, at the
determination of LM's legal counsel, to carry out such litigation. The
provisions of this clause shall survive any expiration or termination of this
Agreement.
11. Non-Compete. Except as provided in clause 1(a) hereof, during the Term of
this Agreement, LM shall not, directly or indirectly, either alone or in
participation with any other person or entity, engage in or be involved with
marketing or distributing any other product substantially similar in design,
composition, content or function to the Product, unless LM first offers
Infotopia the right to participate in the marketing and distribution thereof in
accordance with the terms and conditions set forth in clause 12 hereof. At any
time during the Term of this Agreement and for one (1) year following the date
of expiration or termination of this Agreement, Infotopia shall not, directly or
indirectly, either alone or in participation with any other person or entity,
engage in or be involved with the advertisement, promotion, manufacturing,
marketing, sale, distribution or exploitation of any other product substantially
similar in design, composition, content or function to the Product.
12. Right of First Refusal. During the Term of this Agreement, LM shall grant
Infotopia a right of first refusal regarding the advertisement, promotion,
manufacturing, marketing, sale,
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distribution and exploitation of (i) any other product substantially similar in
design, composition, content or function to the Product that LM intends to
develop and market. Infotopia shall have seven (7) business days to determine
whether Infotopia is interested in exploiting such product offered by LM and in
negotiating to acquire rights therein and thereto. If Infotopia serves notice
that Infotopia is not interested in any such product or fails to notify LM of
its interest or lack of interest with respect to such product within such seven
(7) business day period, LM shall then have the right to dispose of rights in
and to such product or exploit such product in any manner it shall choose
thereafter without any further obligation to Infotopia with respect thereto. If
Infotopia serves written notice that it is interested in such product, LM will
negotiate in good faith with Infotopia with respect to the rights in and to such
product. If such negotiations shall not result in a binding written agreement
between LM and Infotopia within a period of fifteen (15) business days from the
commencement of such negotiations, LM shall then have the right to dispose of
rights in and to such product or exploit such product in any manner it shall
choose thereafter without any further obligation to Infotopia with respect
thereto.
13. Representations and Warranties. Each party represents and warrants to the
other as follows:
(a) It has all requisite right, power and authority to enter into this
Agreement and to grant the rights set forth herein.
(b) The execution and delivery of this Agreement by it and the performance
of its obligations hereunder, do not and will not conflict with or result in a
breach of or a default under its organizational instruments or any other
agreement, instrument, order, law or regulation applicable to it or by which it
may be bound.
(c) This Agreement has been duly and validly executed and delivered by it
and constitutes its valid and legally binding obligation, enforceable in
accordance with its terms.
(d) It has not granted and will not grant any rights that would conflict
with or derogate from the rights granted to hereunder.
(e) It has not previously entered into any agreement and shall not enter
into any agreement that would conflict with or derogate from the rights granted
or the services to be rendered hereunder.
14. Termination by Infotopia. (a) Infotopia shall be permitted to terminate
this Agreement immediately by written notice to LM upon the occurrence of any of
the following: (i) if LM files a voluntary petition under the United States
Bankruptcy Code; (ii) if LM is the subject of an involuntary petition under the
United States Bankruptcy Code which is not dismissed within sixty (60) days
after the filing thereof; (iii) if LM makes an assignment for the benefit of
creditors, applies for or consents to the appointment of any receiver or trustee
of all or any material part of its property; or (iv) if LM institutes a
dissolution or liquidation proceeding with respect to its business.
(b) Infotopia shall be permitted to terminate this Agreement upon the
breach by LM of any material representation, warranty, covenant or agreement
contained in this Agreement (unless such breach is the result of a force majeure
event). Prior to any termination pursuant to this subparagraph (b), Infotopia
shall give LM written notice of, and thirty (30) days to cure, such breach, if
such breach is curable, and if such breach is cured to Infotopia's satisfaction
within such thirty (30) day period, Infotopia shall not be permitted to
terminate this Agreement. If such breach is not curable (giving written notice
of a non-curable breach being the only requirement prior to termination) or such
breach is not cured to Infotopia's satisfaction within
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such thirty (30) day period, this Agreement shall terminate without the need for
further action by Infotopia. Such right of termination shall be in addition to
such other rights and remedies as Infotopia may have under applicable law.
15. Termination by LM. (a) LM shall be permitted to terminate this Agreement
immediately by written notice to Infotopia upon the occurrence of any of the
following: (i) if Infotopia files a voluntary petition under the United States
Bankruptcy Code; (ii) if Infotopia is the subject of an involuntary petition
under the United States Bankruptcy Code which is not dismissed within sixty (60)
days after the filing thereof; (iii) if Infotopia makes an assignment for the
benefit of creditors, applies for or consents to the appointment of any receiver
or trustee of all or any material part of its property; (iv) if Infotopia
institutes a dissolution or liquidation proceeding with respect to its business;
or (v) if Infotopia ceases to be a publicly traded company.
(b) LM shall further be permitted to terminate this Agreement upon the
occurrence of any of the following: (i) the breach by Infotopia of Infotopia's
agreements contained in any of clauses 1(c), 3, 4, 5 or 25 of this Agreement,
(ii) the unauthorized use by Infotopia of the Rights, (iii) the unauthorized use
by Infotopia of any copyrights, patents, trademarks or other intellectual
property relating to the Product owned, licensed and/or controlled by LM, (iv)
Infotopia's failure to purchase and fund media for any two (2) weeks, (v)
Infotopia's failure to purchase and fund Product and Upsells as agreed to in
this Agreement, or (vi) the non-payment by Infotopia of any amount due to LM
hereinabove. Prior to any termination pursuant to this subparagraph (b), LM
shall give Infotopia written notice of, and seven (7) business days to cure,
such breach, if such breach is curable, and if such breach is cured to LM's
satisfaction within such seven (7) business day period, LM shall not be
permitted to terminate this Agreement. If such breach is not curable (giving
written notice of a non-curable breach being the only requirement prior to
termination) or such breach is not cured to LM's satisfaction within such seven
(7) business day period, this Agreement shall terminate without the need for
further action by LM. Such right of termination shall be in addition to such
other rights and remedies as LM may have under applicable law.
(c) LM shall be permitted to terminate this Agreement upon the occurrence
of any of the following: (i) the breach by Infotopia of any material
representation, warranty, covenant or agreement contained in this Agreement
other than as set forth in clause 15(b) above (unless such breach is the result
of a force majeure event). Prior to any termination pursuant to this
subparagraph (c), LM shall give Infotopia written notice of, and thirty (30)
days to cure, such breach, if such breach is curable, and if such breach is
cured to LM's satisfaction within such thirty (30) day period, LM shall not be
permitted to terminate this Agreement. If such breach is not curable (giving
written notice of a non-curable breach being the only requirement prior to
termination) or such breach is not cured to LM's satisfaction within such thirty
(30) day period, this Agreement shall terminate without the need for further
action by LM. Such right of termination shall be in addition to such other
rights and remedies as LM may have under applicable law.
16. Effect of Termination; Sales After Termination. Upon termination or
expiration of this Agreement for any reason whatsoever, the following shall
occur: (a) all Rights shall revert to LM and Infotopia shall have no further
rights whatsoever with respect to the Product, Upsells and the intellectual
property relating thereto; (b) Infotopia shall, at its own expense, return any
of LM's intellectual property, artwork or materials of any kind in its
possession or control; (c) for a period of three (3) months following the
expiration or termination of this Agreement, all pending orders for Product or
Upsells shall be filled to the extent inventory funded by Infotopia exists
relating to such orders, in which case LM shall account to Infotopia for
Adjusted Gross Revenues as provided for herein. Following the expiration or
termination of this Agreement, LM shall have the right, but not the obligation,
to repurchase any Product and Shape Up units Infotopia
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may have in its warehouse at the same cost as LM sold such Product and Shape Up
units to Infotopia.
17. Indemnifications.
(a) Infotopia agrees to indemnify, hold harmless and defend LM and
Management Co., its officers, directors, shareholders, employees, affiliates,
representatives, designees (with respect to receipt of stock, stock options or
warrants by Infotopia hereunder), agents, attorneys, licensees, distributors,
successors and assigns from and against any and all losses, costs, damages,
claims, suits, actions, judgments, demands, obligations, debts, liabilities,
agreements and expenses whatsoever, (including, without limitation, attorneys'
fees, court costs and reasonable investigation expenses) arising out of or in
connection with (i) any breach by Infotopia of any covenant, representation,
warranty or agreement contained herein, (ii) any unauthorized use by Infotopia
of the Rights, (iii) any unauthorized use by Infotopia of any copyrights,
patents, trademarks or other intellectual property relating to the Product
owned, licensed and/or controlled by LM, or (iv) any issuance of stock, stock
options or warrants by Infotopia hereunder.
(b) LM agrees to indemnify, defend and hold harmless Infotopia, its
officers, directors, shareholders, employees, affiliates, representatives,
agents, attorneys, licensees, distributors, successors and assigns from and
against any and all losses, costs, damages, claims, suits, actions, judgments,
demands, obligations, debts, liabilities, agreements and expenses whatsoever,
(including, without limitation, attorneys' fees, court costs and reasonable
investigation expenses) arising out of or in connection with (i) any breach by
LM of any covenant, representation, warranty or agreement contained herein, or
(ii) to the extent Infotopia has paid royalties to LM in accordance with clause
4(b) hereof, any subsequent failure by LM to pay such royalties to Body By Jake
Enterprises, LLC, and the producers of the Infomercial.
(c) The provisions of this clause shall survive any expiration or
termination of this Agreement.
18. Injunctive Relief It is mutually understood and agreed that the Rights
granted to Infotopia herein are special, unique, unusual, extraordinary and of
an intellectual character, giving them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in an action at law,
and that in the event of the unauthorized use by Infotopia of the Rights or
the unauthorized use by Infotopia of any copyrights, patents, trademarks or
other intellectual property relating to the Product owned, licensed and/or
controlled by LM, LM will be caused irreparable harm for which the remedy at
law is inadequate. Accordingly, LM shall be entitled to preliminary and
permanent injunctive relief (mandatory or otherwise) in addition to damages, to
enforce the provisions of this Agreement, and any other equitable relief, which
XX xxxxx appropriate.
19. Confidentiality.
(a) Infotopia agrees to hold all proprietary information and materials
received from LM or its affiliates or learned during the Term, whether orally
or in written form or otherwise, relating to LM's or its affiliates' products
or the business being conducted by LM or its affiliates (the "Proprietary
Information") in strictest confidence and not to use in any manner or to
disclose the Proprietary Information to any third party except as required by
law, pursuant to court order or legal process. Infotopia acknowledges that any
non-permissible disclosure or use of such Proprietary Information could
materially prejudice LM or its affiliates in the conduct of its business and
result in substantial losses and damages.
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(b) LM agrees to hold all proprietary information and materials received
from Infotopia or its affiliates or learned during the Term, whether orally or
in written form or otherwise, relating to Infotopia's or its affiliates'
products or the business being conducted by Infotopia or its affiliates (the
"Confidential Information") in strictest confidence and not to use in any
manner or to disclose the Confidential Information to any third party except as
required by law, pursuant to court order or legal process. LM acknowledges that
any non-permissible disclosure or use of such Confidential Information could
materially prejudice Infotopia or its affiliates in the conduct of its business
and result in substantial losses and damages.
20. Force Majeure. No party shall be in breach of this Agreement or be liable
for damages if such party fails to perform hereunder or such party's
performance is delayed as a result of war, fire, flood, labor trouble, act of
governmental authority, riot, strike, accident, breakage of equipment,
unavailability of materials, delay in production, delay of transportation
service, acts of God, or any other similar or different contingencies beyond
the reasonable control of the parties hereto. Notwithstanding anything to the
contrary contained herein, the foregoing provision shall not apply to the
obligations of Infotopia to fund the Costs set forth herein or to make any
payment due to LM hereunder.
21. Governing Law; Jurisdiction. The provisions of this Agreement shall be
governed by and construed and interpreted in accordance with the laws of the
State of California, without reference to choice or conflicts of law
principles. Except as otherwise provided herein, any and all suits or actions,
whether federal or state, for any breach of this Agreement, or otherwise
arising out of this Agreement, shall be filed and prosecuted in any court of
competent jurisdiction in the City of Los Angeles, State of California. The
parties hereto hereby consent and submit to the jurisdiction of the courts in
the City of Los Angeles, State of California and hereby agree that service of
process on any party may be effected by certified mail, return receipt
requested, postage prepaid. Each of the parties waives any objection that it
may have based on improper venue or forum non-conveniens to the conduct of any
such suit or action in any such court.
22. Amendments; Waivers; Rights Cumulative. This Agreement cannot be modified,
altered or otherwise amended except by an agreement in writing signed by all of
the parties hereto. No provision of this Agreement may be waived unless in
writing signed by all of the parties hereto, and waiver of any one provision of
this Agreement shall not be deemed to be a waiver of any other provision. No
failure or delay on the part of any party in exercising any right, power or
remedy hereunder shall operate as a waiver thereof. No right, power or remedy
granted to the parties under this Agreement on default or breach is intended to
be in full or complete satisfaction of any damages arising out of such default
or breach, and any single or partial exercise of any such right, power or
remedy shall not preclude any other, or further exercise thereof, or the
exercise of any other right, power or remedy. Each and every right, power or
remedy under this Agreement, or under any other document or instrument
delivered hereunder, or allowed by law or equity, shall be cumulative and may
be exercised from time to time.
23. Assignments. Neither party shall have the right to assign any of its
rights or obligations to any third party without the prior written consent of
the other party; provided that each of the parties shall have the right to
assign any of its rights or obligations to any parent, affiliate or subsidiary
company or to any other entity owning or acquiring all or substantially all of
such party's stock or assets, or any division or part of such party that is
charged with responsibility for this Agreement, without the prior written
consent of the other party, so long as such assignee assumes all of the
assignor's obligations hereunder in writing. Notwithstanding any other
provision of this Agreement, any attempted assignment by either party without
the prior written consent of the other party except as permitted herein shall
be void and of no force or effect. This Agreement shall be binding upon and
inure to the benefit of the parties to this Agreement and their respective
successors and permitted assigns.
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24. Counterparts; Facsimile. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument. This Agreement may be
executed by facsimile, and signatures on a facsimile copy hereof shall be
deemed authorized original signatures.
25. Confidentiality of Terms. Each of the parties agrees to keep the terms and
conditions contained in this Agreement confidential, and agrees not to disclose
said terms and conditions to any third parties other than its representatives,
attorneys and accountants except as otherwise required by law; provided that
either party shall have the right to disclose the terms contained in this
Agreement through a business plan, offering memorandum, prospectus or similar
document for purposes of raising capital for such party provided the other
party has consented thereto in writing. Each of the parties agrees that such
party shall not make any public announcement, issue any press release or other
publicity or confirm any statements by third parties concerning the
transactions contemplated hereby, without the prior written consent of the
other party (such consent may be given by e-mail or fax), except as otherwise
required by law or as set forth in the next sentence. LM agrees to give a reply
to Infotopia's request for approval of a press release within three (3)
business days from receipt, and if LM fails to do so, such press release shall
be deemed acceptable to LM. The parties further and specifically agree that
Infotopia shall not issue an initial press release until (i) LM has approved
such release in writing, and (ii) LM has received the initial $1,000,000
payment in accordance with Clause 5(a) and (iii) LM has received the initial
payment on deposit for Product and Shape Up units per Clause 3(b).
26. Additional Documents; Cooperation. Each of the parties agrees to execute
any and all additional documents or instruments, to obtain all required
licenses, permits and approvals necessary to implement the transactions
contemplated herein, to cooperate with the other party and to do any and all
things necessary or desirable to effectuate the purposes of this Agreement.
27. Independent Contractors. It is expressly agreed and intended that each
party hereto shall remain a separate legal entity from the other and each shall
be an independent contractor responsible only for its own actions. Nothing
contained in this Agreement shall be construed as establishing an
employer/employee, partnership or joint venture relationship between the
parties hereto. Each of the parties shall be responsible for payment of all of
its own taxes on compensation received by it under this Agreement.
28. Notices. All notices, requests, demands and other communications
(collectively, "Notices") given or made pursuant to this Agreement shall be in
writing and shall be deemed received (i) on the same day if delivered in
person, by same-day courier or by facsimile transmission; provided that if sent
by facsimile transmission, a copy is also sent by certified mail, return
receipt requested, postage prepaid, (ii) on the next day if delivered by
overnight mail or courier, or (iii) three (3) business days after the date of
deposit in the mails if being sent by certified mail, return receipt requested,
postage prepaid, to the parties at their addresses as set forth at the
beginning of this Agreement. Any of the parties to this Agreement may from time
to time change such party's address for receiving notice by giving written
notice thereof in the manner set forth above.
29. No Adverse Construction. The rule that an agreement is to be construed
against the party drafting the agreement is hereby waived by the parties
hereto, and shall have no applicability in construing this Agreement or the
terms of this Agreement.
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30. Legal Counsel. Each of the parties acknowledges that it had the right and
opportunity to seek independent legal counsel of its own choosing in connection
with the execution of this Agreement, and each of the parties represents that
it has either done so or that it has voluntarily declined to do so, free from
coercion, duress or fraud.
31. LIMITATION OF LIABILITY. IN NO EVENT SHALL LM HAVE ANY LIABILITY TO
INFOTOPIA, INFOTOPIA'S CUSTOMERS OR ANY THIRD PARTY, FOR ANY CAUSE OF ACTION
RELATING TO THIS AGREEMENT FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR
SPECULATIVE DAMAGES, INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS
OR USE, BUSINESS INTERRUPTION, OR LOSS OF GOODWILL, IRRESPECTIVE OF WHETHER LM
HAS ADVANCE NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.
32. Severability. Any provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
33. Headings. Any Paragraph headings contained in this Agreement are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
34. Entire Agreement. This Agreement constitutes the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes any prior understandings or agreements between the parties hereto.
35. Attorneys' Fees. If any action, suit or other proceeding is instituted to
remedy, prevent or obtain relief from a default in the performance by any party
of such party's obligations under this Agreement, the prevailing party shall
recover all of such party's reasonable attorneys' fees and costs incurred in
each and every such action, suit or other proceeding, including any and all
appeals or petitions therefrom.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first set forth above.
INFOTOPIA, INC. LOHAN MEDIA, LLC
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxx Xxxxx
---------------------------- -------------------------
Xxxxxx Xxxxx, CEO/Chairman of the Board Xxxxx Xxxxx, Managing Member
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