Exhibit 2.2
Assignment of Rights and License Agreement
This Agreement is made as of January 20, 2004, between Earthworks Entertainment,
Inc., with offices at 000 Xxxxxx Xxxxxx, Xxxx Xxxx Xxxxx, XX 00000, and its
designees and assignees (hereinafter "Company", "Assignee" and/or "Licensee");
and Xxxxx Xxxxx, with offices at 0000 Xxxx Xxxx Xxxxx, Xxxx #000, Xxxxxx Xxxxx,
XX 00000 (hereinafter "Assignor" and/or "Licensor").
The parties hereto, intending to be legally bound, agree as follows:
W I T N E S S E T H:
WHEREAS, Licensor is the sole owner of the trademarks, service marks, and
registrations set forth herein ("Trademarks"); and
WHEREAS, Licensor is the sole owner of the copyrights and registrations set
forth herein ("Copyrights"); and
WHEREAS, Licensor is the sole owner of the merchandising and licensing rights to
certain intellectual properties set forth herein ("Merchandising and Licensing
Rights"); and
WHEREAS, Licensor holds certain rights to the profits and income streams
generated by certain intellectual properties set forth herein ("Profit Rights
and Income Stream Rights"); and
WHEREAS, Licensor has the power and authority to grant to Licensee the right,
privilege, and license to use the Trademarks, Copyrights, Merchandising and
Licensing Rights, Profit and Income Stream Rights on or in association with the
goods and services covered by the registrations for the intellectual properties
("the Licensed Products and Services"); and
WHEREAS, Licensee desires to obtain from Licensor a license to use the
Trademarks on or in association with the Licensed Products and Services; and
WHEREAS, Licensee desires to obtain from Licensor a license to use the
Copyrights on or in association with the Licensed Products and Services; and
WHEREAS, both Licensee and Licensor are in agreement with respect to the terms
and conditions on which Licensee shall use the Trademarks, Copyrights,
Intellectual Properties, Merchandising and Licensing Rights, Profit Rights,
Income Stream Rights, Licensed Products and Services.
NOW, THEREFORE, in consideration of the promises and agreements set forth
herein, the parties, each intending to be legally bound hereby, do promise and
agree as follows:
1. LICENSE
Licensor hereby grants to Licensee, for the Term of this Agreement as recited
herein, the right and license to use the Trademarks and Copyrights on, or in
association with, the Licensed Products and Services in the Licensed Territory
(hereinafter the "License"). It is understood and agreed that this License shall
pertain only to the Trademarks and Copyrights for the Z~Force property Licensed
Products and Services and does not extend to any other xxxx, product or service.
Licensor also grants to Licensee his interest in the rights described below for
other
Licensed Products and Services The Licensed Products and Services are currently
known as:
A. Z~Force
B. Nine Dog Christmas
C. Nine Dog Night of Fright
Licensor guarantees that his interest in the Licensed Products and Services are
as follows:
Rights Acquired Property Name Interest
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1. Profit Participation Ownership Z~Force 45%
2. Global Management and Control of TV &
Home Video/DVD Sales, Merchandise,
Licensing & Distribution Z~Force 100%
3. USA TV Distribution Rights Nine Dog Christmas 100%
4. USA TV Distribution Rights Nine Dog Night of Fright 100%
5. Gross Revenue - Merchandise Licensing Nine Dog Christmas 5%
6. Gross Revenue - Merchandise Licensing Nine Dog Night of Fright 5%
7. Gross Revenue - Home Video/DVD Sales Nine Dog Christmas 2%
8. Gross Revenue - Home Video/DVD Sales Nine Dog Night of Fright 3%
9. Profit Participation Ownership Nine Dog Christmas 3%
10. Profit Participation Ownership Nine Dog Night of Fright 12%
Licensor has provided Licensee with all appropriate documentation proving
Licensor's ownership and/or control of the rights as described herein, together
with any signatures or clearances that have been reasonably requested by
Licensee to prove such ownership and/or control.
2. TERM AND TERRITORY OF THE AGREEMENT
A. TERM
This Agreement and the provisions hereof, except as otherwise provided, shall be
in full force and effect commencing on the date of execution by both parties and
shall extend for a period of Ten (10) Years (the "Term"). Licensee shall,
thereafter, have the option of renewing the Agreement for an additional ten year
Term, provided that the parties mutually agree to renew the Agreement at the
expiration of the Term. In the event that Xxxxx Xxxxx'x Employment Agreement
with the Company shall be terminated prior to the expiration of its term, or at
any time thereafter, Xxxxx Xxxxx shall continue to be the manager and ultimate
controller of all rights and administration for the Z-Force and Nine Dog
properties, including all areas of production, distribution, sales and
marketing, licensing and any and all other forms exploitation.
B. TERRITORY
The Territory of this Agreement ("Territory") shall be the World.
3. COMPENSATION
In consideration for the License granted hereunder for the Term hereunder, and
for any option to renew such Licenses, Licensee agrees:
A. Licensee shall deliver to Licensor the shares and/or warrants as described in
Company's Form 10- KSB as filed for the Fiscal Year ended September 30, 2003,
payable in accordance with the terms of Company's Form 10-KSB as filed for the
Fiscal Year ended September 30, 2003.
B. Licensee shall acquire, and Licensor hereby assigns, the global Management
Administration of the rights for: TV and Home Video/DVD, Merchandise Licensing
and Distribution of the property currently known as "Z~Force" in exchange for
One Million (1,000,000) restricted shares of Company's common stock, or a
warrant/share combination, as mentioned below. Licensor shall personally, at his
sole discretion, determine and control the administration and execution of all
aspects of the aforesaid rights Management and Administration.
C. Licensee shall acquire, and Licensor hereby assigns, Licensor's forty-five
(45%) percent profit participation in the property currently known as "Z~Force",
in exchange for Eight Million (8,000,000) restricted shares of Company's common
stock, or a warrant/share combination, as mentioned below.
D. Licensee shall acquire, and Licensor hereby assigns, Licensor's United States
broadcast, cable, satellite, pay-per-view and all other so-called "television
broadcast rights" currently in existence or either commenced or invented in the
future, for the properties currently known as "Nine Dog Christmas" and "Nine Dog
Night of Fright". Licensor shall personally, at his sole discretion, determine
the administration and execution of all aspects of the "television broadcast
rights".
E. Licensee shall acquire, and Licensor hereby assigns, Licensor's gross revenue
participation in the so-called "merchandise licensing", "home video sales" and
Licensor's profit participation position in the property currently known as
"Nine Dog Christmas". Licensor shall personally, at his sole discretion,
determine the administration, execution and control of all aspects of these
categories of commercial exploitation.
F. Licensee shall acquire, and Licensor hereby assigns, Licensor's gross revenue
participation in the so-called "merchandise licensing" and "home video sales",
and Licensor's profit participation position in the property currently known as
"Nine Dog Night of Fright". The rights acquired with respect to Paragraphs 3(d),
3(e) and 3(f) herein shall, in total, be in exchange for One Million (1,000,000)
restricted shares of Company's common stock, or a warrant/share combination, as
mentioned below. Licensor shall personally, at his sole discretion, determine
the administration, execution and control of all aspects of these categories of
commercial exploitation.
G. Licensee agrees to provide Licensor with other good and valuable
consideration, the receipt of which is hereby acknowledged by Licensor.
H. The parties further agree that Licensor shall have the option to elect
receipt of the consideration mentioned herein in a combination of shares and
warrants that approximate the same value of the ten
million (10,000,000) shares provided in this Agreement, restricted shares of
Company's common stock (or the warrant/share combination, as mentioned below),
such value being calculated at the trading price of Company's shares as of
December 1, 2003.
I. Any Company shares delivered to Licensor in accordance with the terms of this
Agreement shall be so-called "restricted shares", with a minimum holding period
of One (1) Year. Such restricted shares shall be held in trust by Earthworks
Entertainment, Inc.'s corporate attorney, Xxxxxxx Xxxxxx, Esq., at Xx. Xxxxxx'x
office, until such time as all of the terms and conditions of this Agreement and
the provisions of Company's Form 10-KSB as filed for the Fiscal Year ended
September 30, 2003 have been completed to Xx. Xxxxxx'x and the Board of
Directors of the Corporation's satisfaction and approval, such approval not to
be unreasonably withheld.
4. NOTICES, QUALITY CONTROL, AND SAMPLES
A. The License granted hereunder is conditioned upon Licensee's full and
complete compliance with the marking provisions of the trademark, patent and
copyright laws of the United States.
B. The Licensed Products and Services, as well as all promotional, packaging,
and advertising material relative thereto, shall include all appropriate legal
notices as required by Licensor.
C. The Licensed Products and Services shall be of "first class" quality.
D. If the quality of the Licensed Products and Services falls below such
quality, Licensee shall use its best efforts to restore such quality
prospectively, upon notice by Licensor.
5. INTELLECTUAL PROPERTY RIGHTS
A. Licensee acknowledges Licensor's exclusive rights in the Trademarks and
Copyrights and, further, acknowledges that the Trademarks and Copyrights are
unique and original to Licensor and that Licensor is either the owner thereof or
the exclusive holder thereof. Licensee shall not, at any time during or after
the effective Term of the Agreement, dispute or contest, directly or indirectly,
Licensor's exclusive right and title to the Trademarks, the Copyrights, or the
validity thereof. Licensor, represents and warrants that, with respect to the
validity of any patent, trademark, service xxxx, or copyright that may issue or
be granted therefrom, these patents, trademarks, service marks, or copyrights do
not infringe upon the rights of any other person, party, corporation, limited
liability company, partnership, or other legal entity. Licensor shall indemnify
and hold Licensee harmless, and Licensor and Licensee shall jointly defend, at
Licensor and Licensee's shared cost, any claim which purports to challenge the
validity of these rights or Licensee's rights thereto.
B. Licensee acknowledges that the Trademarks have acquired secondary meaning.
C. Licensee agrees that its use of the Trademarks inures to the benefit of
Licensor and that the Licensee shall not acquire any rights in the Trademarks as
a result of this license.
6. NOTIFICATION OF ALLEGED BREACH
Neither party may bring any action, suit, arbitration, or claim for termination
of this Agreement unless the party alleging the breach of contract first
notifies the other party, in writing, of the details of the alleged breach; and
provides the other party with at least sixty (60) days to cure the alleged
breach, and the other party fails to cure such alleged breach.
7. POST TERMINATION RIGHTS
A. Not less than thirty 30 days prior to the expiration of this Agreement or
immediately upon termination thereof, Licensee shall provide Licensor with a
complete schedule of all inventory of Licensed Products and Services then on
hand (the Inventory).
B. Upon expiration or termination of this Agreement, except for legal notice
marking requirements, Licensee shall be entitled, for twelve (12) months
(Sell-Off Period) and on a nonexclusive basis, to continue to sell such
Inventory. Such sales shall be made subject to all the provisions of this
Agreement including Licensor's management control of any such sell-off and the
payment of a Royalty, to be negotiated between the parties in good faith, and
which shall be due within sixty (60) days after the close of the Sell-Off
Period. At the conclusion of the Sell-Off Period, Licensor may require that
Licensee either destroy any product still on hand or, alternatively at
Licensor's election, purchase it from Licensee at a price equal to Sixty (60%)
Percent of Licensee's net selling price.
C. If Company files for Chapter 7 "Liquidation" Bankruptcy protection, or if
Company terminates Xxxxx Xxxxx from his Employment Agreement, or if any court of
law issues any material judgment against Licensee due to any wrongful acts of
Licensee, which acts occurred prior to the date of this agreement, Company's
joint ownership in Copyrights and Trademarks for the Licensed Properties shall
revert solely to Xxxxx Xxxxx.
8. INDEMNITY
Licensee agrees to defend and indemnify Licensor, and its officers, directors,
agents, and employees, against all costs, expenses, and losses (including
reasonable attorney fees and costs) incurred through claims of third parties
against Licensor based on the manufacture or sale of the Licensed Products and
Services under the Trademarks and Copyrights including, but not limited to,
actions founded on product liability, infringement of copyright, invasion of
right of privacy, or invasion of right of publicity. As the parties shall be
joint co-owners of the copyrights and trademarks of some of the Licensed
Products and Services, the parties agree to jointly conduct the defense of any
such claim brought during the Term or any Extended Term.
9. INSURANCE
Licensee shall, throughout the Term of the Agreement, obtain and maintain at its
own cost and expense from a qualified insurance company licensed to do business
in Delaware, standard Product Liability Insurance naming Licensee, Licensor, and
their respective officers, directors, employees, agents, and shareholders, as an
additional insureds. Such policy shall provide protection against all claims,
demands, and causes of action arising out of any defects or failure to perform,
alleged or otherwise, of the Licensed Products and Services or any material used
in connection therewith or any use thereof, with minimum coverage as determined
by the Board of Directors of Company in consultation with counsel, in the
Board's sole discretion and business judgment.
10. NOTICES
A. Any notice required to be given pursuant to this Agreement shall be in
writing and mailed by certified or registered mail, return receipt requested, or
delivered by a national overnight express service.
B. Either party may change the address to which notice or payment is to be sent
by written notice to the other party pursuant to the provisions of this
paragraph.
C. A copy of any notice provided to Company, Assignee and/or Licensee hereunder
shall also be provided to Company's counsel Xxxxxxx Xxxxxx, Esq., at 000 Xxxxxx
Xxxxxx, Xxxx Xxxx Xxxxx, XX 00000, telephone contact: 000-000-0000.
11. JURISDICTION AND DISPUTES
A. This Agreement shall be governed in accordance with the laws of the State of
Delaware.
B. All disputes under this Agreement shall be resolved by the courts of the
States of Florida or California, including the U.S. District Court for the
district of Florida or California closest to Company's then-current
headquarters, and the parties all consent to the jurisdiction of such courts,
agree to accept service of process by mail, and hereby waive any jurisdictional
or venue defenses otherwise available to it. Any dispute shall be held within
ten (10) miles of Company's then-current headquarters.
12. AGREEMENT BINDING ON SUCCESSORS
The provisions of the Agreement shall be binding on and shall inure to the
benefit of the parties hereto, and their heirs, administrators, successors, and
assigns, subject to the provisions of the Company's Form 10-KSB as filed for the
Fiscal Year ended September 30, 2003.
13. WAIVER
No waiver by either party of any default shall be deemed as a waiver of prior or
subsequent default of the same or other provisions of this Agreement.
14. SEVERABILITY
If any term, clause, or provision hereof is held invalid or unenforceable by a
court of competent jurisdiction, such invalidity shall not affect the validity
or operation of any other term, clause, or provision and such invalid term,
clause, or provision shall be deemed to be severed from the Agreement.
15. ASSIGNABILITY
The license granted hereunder is shall not be assigned by Licensor or by
Licensee, unless both parties jointly approve such assignment.
16. INTEGRATION
With the exception of the provisions of Company's Form 10-KSB as filed for the
Fiscal Year ended September 30, 2003, this Agreement constitutes the entire
understanding of the parties, and revokes and supersedes all prior agreements
between the parties. It shall not be modified or amended except in writing
signed by the parties hereto and specifically referring to this Agreement.
17. XXXXXXXX-XXXXX COMPLIANCE
Xxxxx Xxxxx hereby acknowledges his awareness of the provisions of the so-called
"Xxxxxxxx-Xxxxx Act" regarding ethical provisions for officers and directors of
public companies, and affirms his intention to comply with all of his duties and
obligations in accordance therewith.
18. RIGHT TO COUNSEL
Xxxxx Xxxxx hereby acknowledges his awareness of his right to competent legal
counsel prior to execution of this Agreement. Xx. Xxxxx acknowledges that he has
been advised of his right to seek counsel experienced in the particular fields
at issue in this Agreement, i.e. including but not limited to Entertainment Law,
Intellectual Property Law and Securities Law, and that he has either sought such
counsel or voluntarily waives his right to seek such counsel.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have each caused to be affixed hereto its or his/her hand and seal the day
indicated.
Earthworks Entertainment, Inc.
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxxx Name: Xxxx Xxxxxxx
Title: Vice-President Title: Director
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Date: 1/20/2004 Date: 1/20/2004
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Xxxxx Xxxxx:
/s/ Xxxxx Xxxxx
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Date: 1/20/2004
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