This Agreement
(“Agreement”) is made and entered into as of 10
th day of August, 2006, by and between Kidville,
NY, LLC, a limited liability company organized under the laws of
the State of New York, with its principal place of business at 163
East 84th Street, New York, New York 10028 (hereinafter
“Kidville”) and Little Maestros, LLC, a limited
liability company organized under the laws of the State of New
York, with its principal place of business at 169 East 69th Street,
New York, New York 10021 (hereinafter,
“LM”).
WHEREAS, Kidville
is engaged in the establishment of integrated venues featuring
developmental classes, creative activities and services, retail and
food, for young children ages new born to five years, as well as
for their parents and caregivers; and
WHEREAS, LM is
engaged in providing music and related classes for infants and
young children (each, an “LM Class”, together, the
“LM Classes”) in the New York City metropolitan area;
and,
WHEREAS, LM
desires to enter into an agreement whereby LM will (i) engage
Kidville to perform certain administrative services with respect to
the LM Classes; (ii) provide certain consulting services to
Kidville with respect to its music programs generally; and
(iii) license to Kidville all the LM Assets (as hereinafter
defined) utilized by LM in connection with the LM Classes on the
terms and conditions provided for herein.
NOW, THEREFORE, in
consideration of the foregoing and the covenants and agreements
hereinafter set forth, the parties hereto agree as
follows:
1.
Administrative Services; Power of Attorney . LM hereby
irrevocably appoints Kidville, for the Term (as defined herein), as
its sole and exclusive administrator and manager to provide all of
the administrative, management and support services and supplies
necessary to efficiently and effectively operate the LM Classes,
and Kidville accepts such appointment. In connection with the
foregoing appointment, LM shall and does for the Term hereof hereby
grant to Kidville an exclusive special power of attorney and shall
and does for the Term hereof hereby appoint Kidville as LM’s
exclusive true and lawful agent and attorney-in-fact, and Kidville
hereby accepts such special power of attorney and appointment,
solely for the following purposes: (i) to bill students in the
LM Classes, in the name and on behalf of LM, for goods and services
rendered by LM; (ii) to administer LM’s accounts
receivable with respect to the LM Classes; (iii) to collect,
receive, take possession of, endorse in the name of LM, and deposit
or transfer into an operating account in the name of Kidville, any
notes, checks, money orders, payments and any other instruments
received or sums collected in payment for goods and services
provided with respect to the LM Classes; and (iv) to direct
any and all third party payors to deposit into the operating
account by electronic funds transfers all payments due as
reimbursement for goods and services provided with respect to the
LM Classes. Kidville shall provide to LM, electronically (or
as
otherwise
agreed) within 15 days of the end of each month during the
Term, a detailed report setting forth the number, type and location
of LM Classes conducted by Kidville during the preceding
month.
(a)
Consideration . For its services under this Section 1,
Kidville shall receive all of the tuition paid by the students of
the LM Classes with respect thereto. Kidville shall be responsible
for paying all expenses relative to the operation of the LM Classes
accruing after January 1, 2007, including, without limitation,
(i) the LM Consulting and License Fee as provided in
Section 2 below, (ii) LM Teacher salaries and benefits as
provided in Section 1(b) below, (iii) all supplies and support
services, liability, workers compensation and all other insurance
relating to Kidville’s operation of the LM Classes,
(iv) transportation of LM Teachers to locations outside of New
York City solely for LM Classes, (v) replacement of mats at
69 th
Street, and (vi) purchase of head
sets, props, puppets (currently $400 to $1,800 each), books,
instruments and other items required for classes, all of which
shall remain the property of LM upon termination or expiration of
this Agreement. Notwithstanding the foregoing, LM shall be entitled
to the revenues from all LM Classes occurring prior to
January 1, 2007 at locations other than 344 East
69 th
Street, New York, New York received
at any time after January 1, 2007.
(b)
LM Teachers . All teachers of LM Classes in the New York
City metropolitan classes shall be the employees of LM (“LM
Teachers”), who shall hire, engage, terminate or otherwise
retain such LM Teachers consistent with prior hiring practices.
Kidville shall be responsible for the day to day supervision of all
teachers. The salaries, wages, fees and benefits (if any) of the LM
Teachers relative to the LM Classes in the New York City
metropolitan area (the “LM Teacher Payroll”) shall be
paid or provided to such LM Teachers directly by Kidville through a
third party payroll support provider. The LM Teacher Payroll chart
attached hereto as Annex A (the “LM Teacher Payroll
Chart”) sets forth wages for LM Teachers based on job
description and tenure. Absent the prior written agreement of
Kidville, wages for LM Teachers hired after the date hereof will be
in accordance with the LM Teacher Payroll Chart and current LM
Teachers will be paid whatever wages they made, on average, per
class for the Fall 2006 semester. The LM Teacher Payroll Chart may
be amended from time-to-time by the mutual consent of the parties.
Kidville covenants and agrees that it shall provide all payroll
reports respecting LM Teachers to LM promptly (and in any event
within two (2) business days) following receipt. The teachers
of LM Classes conducted by Kidville outside the New York City
metropolitan area shall be the employees of Kidville for all
purposes.
(c) LM
covenants and agrees that it shall immediately, and for the term
hereof, discontinue offering LM Classes other than those managed
and operated by Kidville hereunder. Notwithstanding anything in
this Section 1 to the contrary, LM shall be permitted to run
all LM birthday parties, special events (i.e., Halloween Parties)
and concerts and Kidville shall not perform any services or receive
compensation with respect thereto. If by September 30, 2011
this Agreement has not been extended beyond the Term, LM shall have
the right to mail registration forms for Winter 2012 classes to all
existing and
potential
customers of LM Classes and retain all fees collected in connection
therewith.
2.
Consulting Agreement . (a) Kidville, for the Term
hereof, hereby retains LM, and LM accepts and agrees, to serve as
an independent general advisor and consultant to Kidville on all
matters relating to the LM Classes, and shall, at the request of
Kidville, provide the services of Marni Konner
(“Konner”) to write lesson plans and develop classes
commensurate in style, quality and standards as current classes and
lesson plans, and shall be responsible for quality control of LM
Classes in the New York City metropolitan area only (collectively
the “Services”), subject to the terms and conditions of
this Agreement (the “Consulting Agreement”).
(b) LM
agrees to utilize its best commercial efforts in the provision of
the Services described herein; that it shall provide such Services
to Kidville on an exclusive basis; and agrees that it will devote
such time during the term hereof as is reasonably necessary to
provide the Services.
(c) In
full consideration of the Services to be performed under this
Section 2 by LM and on account of the license to use the
Licensed Rights (as described in Section 3 below), Kidville
shall pay to LM, and LM shall accept, an annual fee (the
“Consulting and License Fee”) in such amount and
allocated as set forth on Annex B.
(d) In
addition to any fees that may be payable by Kidville to LM
hereunder and payment or reimbursement of LM Teacher Payroll and
any other reimbursements provided for herein, Kidville shall
reimburse LM promptly upon request from time-to-time for
(i) out-of-pocket expenses reasonably and actually incurred in
connection with LM’s performance hereunder, including
entertainment expenses not to exceed $25,000 per year,
(ii) the actual cost for LM to maintain the health insurance
plan currently in place and covering those employees of LM
currently so covered, including any premium increases thereto;
(iii) an assistant to Konner, currently employed at $800 per
week; (iv) salary of a supervisor of teacher training
(currently billed at $30 per hour) plus trainee time (currently
billed at $25 per hour).
(e) LM
covenants and agrees that it shall devote one hundred percent
(100%) of Konner’s working time to the performance of
LM’s Services hereunder as well as to development, use and
exploitation of the Licensed Rights (as hereinafter defined) and
other proprietary intellectual property, including, without
limitation, the operation of LM birthday parties, special events
(i.e., Halloween Parties), concerts as described herein, and the
development of television properties, DVDs, all other media, books,
clothing, toys and any other matter, and LM shall not permit or
otherwise suffer Konner providing consulting services, advise or
intellectual property (whether or not same involves or otherwise
encompasses the Licensed Rights) to any person or entity other than
Kidville. Notwithstanding the foregoing, nothing herein shall be
deemed to prohibit Konner from engaging or being engaged in other
business ventures provided , that (A) such activities
do not interfere with the performance of Services by LM hereunder;
(B) Konner does not spend
greater than
four (4) hours in any week, in the aggregate, on such
pursuits; and (C) such activities do not otherwise violate any
of the terms and conditions of this Agreement.
3.
License . (a) Subject to LM’s right to operate LM
birthday parties, special events (i.e., Halloween Parties),
concerts as described herein, television, DVD, all other media,
books, clothing, toys and any other matter (as to which all revenue
therefore shall belong to LM) except the LM Classes, LM grants to
Kidville, for the Term hereof, a personal, exclusive, worldwide,
fully-paid up license to use all proprietary and other property
rights and interests owned by LM with respect to the advertising,
marketing, promotion and operation of the LM Classes, including,
the LM’s rights in and to the “LITTLE MAESTROS”
and “MAESTROVILLE” trademarks and service marks, and
such other related trademarks, service marks, logo types,
insignias, trade dress designs and commercial symbols now existing
and hereafter created or exploited by LM (the “LM
Marks”) and LM’s distinctive plan for the operation of
the LM Classes and related products and services, which plan
includes but is not limited to the exploitation of the LM Marks, as
well as policies, standards, procedures, customer records, mailing
lists, class itineraries, lesson plans, copyrighted materials,
signs and related items as existing on the date hereof and as
further developed and supplemented during the term hereof, and the
reputation and goodwill of LM and the LM Marks (together, the
“Licensed Rights”). It is specifically understood and
agreed that Kidville may not change or modify the Licensed Rights
including the nature and scope of the programs offered in LM
Classes or any of the materials used in the LM Classes without
LM’s approval which shall not be unreasonably withheld
delayed or conditioned. Such approval shall be deemed to have been
given if LM does not disapprove in writing within ten
(10) business days of receiving a written request therefor.
For purposes of this Section 3(a) a request by Kidville for
approval from LM shall be effective as of the date same is sent by
either facsimile or e-mail, or received by LM via hand delivery or
any nationally recognized overnight carrier. In furtherance of the
foregoing, it is further acknowledged and agreed that LM has built
significant goodwill in the Licensed Rights and that complete
ownership, dominion and control over the same shall rest entirely
with LM.
(b) Kidville
admits the validity of, and agrees not to challenge LM’s
rights in and to the Licensed Rights. Kidville also agrees that any
and all rights that may be acquired by the use of the Licensed
Rights by Kidville shall inure to the sole benefit of LM. In this
regard, Kidville, when exploiting the Licensed Rights hereunder
shall notify, to the extent reasonably practical under the
circumstances, the public of LM’s ownership of such Licensed
Rights. Kidville shall not use the Licensed Rights except as
contemplated by this Agreement and in connection with its
performance hereunder. Kidville shall, at LM’s expense,
execute any document reasonably requested by LM from time to time
to protect any such right in LM.
(c) Kidville
covenants and agrees that it shall not at any time following this
Agreement, use or seek to register “LITTLE MAESTROS”
standing alone or any “LITTLE MAESTROS” compound
trademark, or to register in any country any name or
mark resembling
or confusingly similar to the LT Marks. If any application for
registration is, or has bee
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