Merchandise License Agreement
"Agent for Licensor" American Champion Marketing Group, Inc.
1694 The Alameda, Suite #100
San Jose, CA 95126
Contact: Joy Tashjian
Phone: 288-8199 Fax: 288-8098
"Licensor" Mainframe Entertainment, Inc.
2025 West Broadway, Suite 500
Canada, V6J 1Z6
Contact: Helen Chapman
Phone: 714-2600 Fax: 714-2641
"Licensee": Cutting Edge Industries
150 Martinvale Lane
San Jose, CA 95119
Contact: Michael Applebaum
Phone: (408) 574-7900 Fax: (408) 226-4199
"Effective Date" of the Agreement is upon signing.
"Properties" are the following Characters or other trademarks: ReBoot
and all related characters seen in the ReBoot television program.
"Products" that Licensee is authorized to produce is stickers and
tattoos in all sizes and types, including static cling and decals.
"Trademarks" being licensed to Licensee are ReBoot and all related
"Territory" where Licensee can sell products is The United States it's
possessions and territories and Canada.
"Distribution" is vending machines.
" Advance Royalty" is $2,500 (Two Thousand Five Dollars) due upon
"Earned Royalty" is 8% of net sales (including sales made FOB shipping
point outside territory).
"Guaranteed Royalty" is $6,000 (Six Thousand Dollars).
"Scope" is exclusive.
"Initial Sale Date" is January 1, 2001, or sooner.
"Term" of this agreement is from the Effective Date until December 31,
All products and Advertising materials will bear this notice in
complete form: ReBoot r
This Licensing Agreement (this "Agreement") is made and entered
into as of this 19th day of May, 2000 by and between Maineframe
Entertainment Inc. a Canadian Corporation with offices at 2025 West
Broadway, Suite 500, Vancouver, British Columbia, Canada V6J-1Z6
(Licensor) and American Champion Media Inc., a corporation duly
organized and existing under the laws of the State of Deleware, located
at 1694 The Alameda, Suite 100, San Jose, California 95126 ("Agent for
Licensor") and Cutting Edge Industries, Inc. a corporation duly
organized and existing under the laws of the state of Delaware located
at 150 Martinvale Lane, San Jose, CA 95119.
The Licensor is the owner of and/or has the exclusive right to
license the ReBoot character and all related characters included in the
television program entitled " ReBoot" (collectively the "Characters")
and all the names, symbols, likeness, designs and other indicia
comprised in or associated with the Characters, and all copyrights,
including all derivative works, and trademarks which exist in the
Characters and the names and likeness of the characters ("Properties");
in the Territory
The Licensor desires to grant and the Licensee desires to obtain
a license to manufacture and sell certain Products using or based upon
In consideration of the mutual covenants contained herein the
parties agree as follows.
1. License To Use Properties.
(a) Grant of License. Licensor grants to Licensee a non-
transferable, license to use the Properties in connection with the
development, manufacture, marketing, distribution and sale of the
Products in the Territory and to manufacture the Products using all
present and future Characters and Properties, and the exclusive right
during the Term to distribute and sell such Products through the
Distribution Channels throughout the Territory. Except for the specific
rights, which are granted to Licensee under this Agreement, all rights
in and to the Properties are retained by Licensor. Except to the
extent set forth in paragraph 10(a) below, Licensee shall not have the
right to sublicense any of the rights granted to it under this
(b) Use of Licensed Properties. The Licensee will: (i) use the
Properties only on Products and Advertising Materials, as defined
below; (ii) package and sell Products only in packaging approved by
Licensor, said approval not to be unreasonably refused; (iii) refrain
from use of the Properties except under the terms of this Agreement;
(iv) notify Licensor in writing of any conflicting uses, applications
for registration or registrations of the properties or marks similar
thereto of which it has knowledge; (v) execute any documentation as may
be reasonably requested by Licensor relating to the Properties; (vi)
indicate on the Products and/or their labeling or packaging that the
Products are manufactured by Licensee, or a manufacturer as described
in paragraph 10(a), and that such manufacture is pursuant to license
from Licensor; and (vii) comply with all of Licensor's reasonable
instructions relating to the use and display of the properties.
(c) Restriction on Use of Properties. The Properties, either in
whole or in part, will not be shown endorsing the Licensee or products
(including the Products) or services of Licensee or others, without the
prior written approval of Licensor
(d) Method of Sale. Licensee agrees that the products will be
sold at a competitive price that does not exceed the price customarily
charged the trade by Licensee. License agrees to offer a warranty to
purchasers of the Products substantially similar to that offered for
products competitive with Products, and in no event shorter or less
comprehensive than the warranty offered by Licensee for other similar
items produced by it.
2. Product Quality.
(a) Quality Standards. Licensee therefore agrees that prior to
the release of any Product, it will submit (3) samples of the Product
to Licensor for approval, as provided in Section 3. Once Licensor's
approval has been obtained, Licensee agrees that it will not deviate in
a material manner from the approved samples. Failure by Licensee to
materially conform its Products to the approved samples will be
considered a breach of this Agreement and upon notice of such, Licensee
agrees that it will immediately stop the manufacture, distribution and
sale of the nonconforming Products.