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VIDEO
DISTRIBUTION AGREEMENT
BUSINESS TERMS SCHEDULES
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1.
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AGREEMENT DATED AS OF :
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September
25, 2007
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2.
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PARTIES :
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uKarma:
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uKarma
Corporation (a California corporation)
520
Broadway, Suite 350
Santa
Monica, CA 90401
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Northern
Response:
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Northern
Response International Limited
18
Skagway Avenue
Toronto,
Ontario, M1M 3V1, Canada
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3.
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TRADEMARKS :
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uKarma,
Xflowsion, Triple Training, Calm Down Dog, Amazing Abs, Body
Blast, Dreams Realized, Look Great Outside, Feel Great Inside,
Mind Blowing Fitness for Every Body, The most fun you’ll
ever have working out, ultimate cross training for mind, body,
and spirit.
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4.
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THE PROGRAMS :
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PROGRAMS:
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Xflowsion
(Yoga/fitness video series), including the following
“workouts:” Live in Hollywood; Amazing Abs; Body
Blast; Calm Down Dog; Dreams Realized (audio CD); and Anytime
Anywhere (Audio CD). Programs may also include certain printed
content including the following: Real Meals Guidebook; and
Moves and Grooves Fitness Guide.
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INFOMERCIALS:
30-minute (and shorter) audio-visual programming produced by
uKarma to advertise, market, promote and sell the Programs by
direct response television advertising.
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5.
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TYPE OF LICENSE :
i) exclusive right and license for Northern Response to broadcast
the Infomercial and non-exclusive right to use the uKarma Marks and
to market, distribute and sub-license the Licensed Works; ii)
Exclusive right and license for Northern Response to market,
distribute, sub-license the Programs, in any Home Video Formats
through all channels of distribution except as otherwise provided
for herein; provided that uKarma can accept and fulfill orders
worldwide through its owned and/or operated websites (collectively,
“uKarma’s Websites”) including but not limited
to www.xflowsion.com
and
www.uKarma.com
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For purposes of this Agreement, “Home Video Formats”
means all physical home video formats whether now known or
hereinafter devised, including but not limited to VHS, Digital VHS,
HDTV-VHS, DVD, Blu-Ray, HD-DVD, DVD-ROM, CD-ROM, UMD and all other
forms of physical home video programming, but excluding all forms
of distribution via the Internet (including, without limitation,
streaming, electronic sell-through and all other forms of digital
distribution).
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INITIALS:
uKarma
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Northern
Response_______
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6.
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THE USE OF THE UKARMA MARKS :
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Non-exclusive
right and license to use the uKarma Marks in the Distribution
and Sale of the Programs in the Territory, including but not
limited to the use of the uKarama Marks in the
Infomercial.
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7.
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THE TERRITORY :
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The
world, excluding the United States, its territories,
commonwealths and possessions.
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8.
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DEADLINE DATES :
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THE
TERM:
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THE
COMMENCEMENT DATE: October 15, 2007
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THE
EXPIRATION DATE: February 14, 2008
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RENEWAL TERMS :
The Term of this Agreement shall automatically renew for additional
four (4) month periods unless uKarma provides Northern Response
thirty days prior written notice of its desire to terminate the
Agreement.
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9.
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FEES :
Northern Response shall pay 50% (of the total amount due uKarma in
each instance) in advance and 50% prior to pickup in US Dollars to
uKarma, via wire transfer, the Wholesale Price for each Unit
ordered as follows: for distribution in Canada, $16.50 and for
distribution in the Territory but outside of Canada, $14.50. All
Distribution Costs (or an estimate thereof) shall also be paid in
advance with each Program Unit order.
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DISTRIBUTION
COSTS: All Distribution Costs shall be borne by Northern
Response, or its Affiliates, sub-distributors or
sub-licensees. “
Distribution Costs ”
shall mean all costs incurred in connection with delivery of the
Programs (and any Units thereof); all costs incurred in connection
with duplication of the Programs for Northern Response (including
without limitation, addition of the alternative language audio
tracks into the non-English language versions of the Programs); all
costs of prints, costs of packing, transportation and insurance
from the country of origin to the country of distribution; custom
duties, alteration fees, sales, use, excise and franchise taxes,
import taxes; all costs of subtitling or dubbing; promotional and
publicity expenses including paid advertising; and expenses in
recovering debts from defaulting distributors. “
Units ”
mean units of the Programs manufactured in any Home Video Format.
“
Affiliates ”
mean any other company that directly, or indirectly through one or
more intermediaries, controls, is controlled by, or is under common
control with the applicable Party hereunder.
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BANK INFORMATION FOR WIRE PAYMENT :
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Account Name:
Account No.:
Bank Address:
ACH/ Wire Routing Number:
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INITIALS:
uKarma
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Northern
Response_______
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uKarma Corporation |
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520
Broadway, Suite 350
Santa
Monica, CA 90401
Attn:
Bill Glaser
Ph:
310-998-8909
Fax:
310-861-0542
With
a copy to (which copy shall not constitute
notice):
Mary
Innis
Loeb
& Loeb LLP
321
North Clark Street, Suite 2300
Chicago,
IL 60610
Ph:
312-464-3133
Fax:
312-803-2120
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| To Northern Response: |
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Northern Response International
Limited |
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18
Skagway Avenue
Toronto,
Ontario, M1M 3V1, Canada
Attn:
David Baldassi
Ph:
416-261-6699 (ext. 307)
Fax:
416-261-4159
e-mail:
david@nresponse.com
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LAW AND JURSIDCTION :
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GOVERNING LAW: |
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The laws of the State of California,
USA. |
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EXCLUSIVE JURISDICTION: |
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Arbitration before a retired judge
on the Entertainment Panel of JAMS in Santa Monica,
California. |
INITIALS:
uKarma
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Northern
Response_______
UKARMA
CORPORATION
(uKarma)
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NORTHERN RESPONSE INTERNATIONAL
LIMITED
(Northern Response)
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INITIALS: uKarma
_______
Northern
Response_______
VIDEO DISTRIBUTION AGREEMENT
STANDARD TERMS AND CONDITIONS
This
Video Distribution Agreement, by and between the parties
described in Schedule 2 of the Business Terms attached hereto
(“uKarma” and “Northern Response”),
the Standard Terms and Conditions, the Appendices and Exhibits
and the Business Terms (collectively, the
“Agreement”), is made as of the date set forth in
Schedule 1 of the Business Terms (the “Effective
Date”).
WHEREAS,
uKarma has certain rights in and to the trademarks set forth
in Schedule 3 (collectively, the “uKarma
Marks”);
WHEREAS,
uKarma and/or its Affiliates, also has certain rights,
including copyright, to the Programs and certain other
audio-visual programming and photographic and digitized images
provided to Northern Response pursuant to this Agreement
(collectively with the Infomercials and uKarma Marks, the
“Licensed Works”);
WHEREAS,
Northern Response recognizes that the uKarma Marks and the
Licensed Works have been used:
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in
the Programs produced, owned and distributed by
uKarma;
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in
advertising, publicity and home video productions and allied fields
by uKarma; and
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in
promotional and advertising materials in diverse businesses by
uKarma.
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WHEREAS,
Northern Response recognizes and acknowledges that the uKarma
Marks are well-known and recognized by members of the general
public and the trade, and are associated in the public mind
exclusively with uKarma, and are designations in which uKarma
has acquired considerable and valuable goodwill.
NOW,
THEREFORE, in consideration of the mutual premises herein
contained, and intending to be bound by this Agreement, the
parties agree as follows:
| a. |
Grant .
Upon and subject to the terms and conditions hereinafter set forth,
uKarma hereby grants to Northern Response, and Northern Response
hereby accepts, the right, license and privilege specified
in
Schedule 5 (with
the right to sublicense as permitted hereunder) in the geographic
areas specified in
Schedule 7 (the
“
Territory ”).
Such right, license and privilege is hereinafter called the
“
License .”
The Programs shall be selected from time to time by mutual
agreement of uKarma and Northern Response, but uKarma shall have
the sole discretion to approve or disapprove each requested
selection. Northern Response shall bear uKarma’s cost of
duplication and delivery of all Programs to Northern Response or
its Affiliates, sub-distributors or sub-licensees. In addition,
Northern Response shall produce and provide to uKarma (or its
designee) dubbed and/or subtitled language tracks of all Programs
not in the English language to be distributed hereunder. uKarma (or
its designee) shall be responsible for manufacturing and
duplicating all such alternative language Programs.
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INITIALS: uKarma
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Northern
Response_______
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In
connection with the License, uKarma hereby also grants to Northern
Response the following rights:
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| i. |
To
publicize, advertise and exploit the rights granted to Northern
Response hereunder and to cause or permit others to do so, subject
to the provisions of this Agreement. In that regard, uKarma hereby
grants to Northern Response solely for the purpose of advertising,
publicizing and promoting the rights herein granted to Northern
Response in the Programs, subject to any restrictions or conditions
by which uKarma is bound, the right: to publish or cause to be
published synopses, summaries and resumes of the Programs in all
advertising media; to use the Infomercials to advertise and promote
the sale of the Programs, provided that Northern Response or its
Affiliates, sub-distributors or sub-licensees shall be responsible
for any language dubbing, alterations to conform to local law and
payment of all fees for the Infomercials to run on local
television; to use the name, approved likeness and approved
biography of any performer rendering services in connection with
such Programs and/or Infomercials; to use the title of such
Programs and/or Infomercials, music recorded in such Programs and
artwork and design used in connection with such Programs and/or
Infomercials; provided, however, no use shall constitute a direct
or implied endorsement of any product or service.
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To
distribute the Programs including dubbed and subtitled versions of
the Programs and Infomercials at Northern Response’s or its
Affiliates’, sub-distributors’ or sub-licensees’
sole cost and expense. uKarma shall provide Northern Response with
DVDs of the Programs for preparation of the dubbed and subtitled
versions of the Programs. Northern Response shall provide the
dubbed and/or subtitled language tracks to uKarma. uKarma shall
approve or disapprove each dubbed or subtitled version within a
reasonable period of time following uKarma’s receipt thereof,
and thereafter arrange for the manufacture and duplication of the
required Home Video Formats and deliver same to Northern Response.
uKarma shall provide masters of the Infomercials to Northern
Response for preparation of dubbed and subtitled versions and any
other alterations required for distribution in the Territory.
Northern Response shall provide the dubbed and/or subtitled
versions of the Infomercials to uKarma for approval within a
reasonable period of time following uKarma’s receipt
thereof.
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INITIALS: uKarma
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Northern
Response_______
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The
right to associate appropriately the uKarma Marks with the Programs
and/or Infomercials, but only for the following limited purposes:
(A) to increase sales of the Programs pursuant to this Agreement;
(B) to identify uKarma as exclusive owner of the Programs; (C) to
enhance consumer awareness of the uKarma Marks and uKarma’s
publications, videos, images, other content, and talent; and (D) to
increase uKarma’s goodwill and the value of the uKarma
Marks.
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Northern
Response may sublicense the rights granted under this Agreement
only to third party distributors known to Northern Response as
necessary to exploit the rights granted under this
Agreement;
provided that
(i) each sublicensee must agree in writing to be bound by the terms
of a separate Agreement to be mutually agreed to by both parties
hereto and the material terms of this Agreement must be
incorporated into each agreement between Northern Response and its
sublicensees) concerning the Licensed Works and name uKarma an
express third party beneficiary thereof; and (ii) a breach by such
sublicensee of such agreement shall constitute a breach by Northern
Response of this Agreement. Northern Response shall be responsible
for all sublicenses granted pursuant to this Agreement and shall
indemnify uKarma, consistent with
Section 8 hereof,
for all Losses caused by its sublicensees.
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uKarma
will at all times have unrestricted free access to all alternate
language tracks and dubbed versions of the Programs and
Infomercials, advertising and promotional materials, artwork and
other materials created by Northern Response pursuant to this
Agreement. Northern Response will promptly give uKarma notice of
each person who prepares any dubbed or subtitled tracks for the
Programs and Infomercials and of each laboratory or facility where
the tracks are located. Promptly after completion of any dubbed or
subtitled version of the Programs and Infomercials, Northern
Response will provide uKarma with immediate unrestricted free
access to all dubbed and subtitled tracks. uKarma will immediately
become the owner of the copyright in all dubbed and subtitled
tracks, subject to a non-exclusive free license in favor of
Northern Response to use such tracks during the Term solely for
exploitation of the rights licensed hereunder. If such ownership is
not allowed under a law in the Territory, then Northern Response
will grant uKarma a non-exclusive free license to use such dubbed
or subtitled tracks worldwide in perpetuity without
restriction.
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Subject
to
Section 1.c. hereof,
in any permitted sublicense or other assignment of the rights
granted herein, Northern Response shall absorb all fees and costs
of its sublicensees and/or assignee, such that there shall be no
reduction in the sums otherwise payable to uKarma hereunder by
reason of any sublicense or other assignment. Northern Response
shall not enter into any arrangement for the distribution or
exploitation of the Programs outside of the Territory.
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INITIALS: uKarma
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Northern
Response_______
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All
rights not specifically granted to Northern Response under this
Agreement are hereby reserved by uKarma for its use or disposition,
and uKarma may exploit any such rights during the Term in the
Territory. Northern Response shall exploit the rights herein
granted by uKarma diligently, conscientiously and to the best of
its ability to maximize revenues, such commitment being of the
essence of this Agreement and a material inducement to uKarma to
enter into this Agreement.
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Notwithstanding
Section 1.a .
above and the exclusive license specifically granted in this
Agreement, Northern Response agrees that uKarma may itself exploit
some or all of the rights granted herein in the Territory but only
to the extent that English language Home Video Formats are
purchased directly by consumers in the Territory through
uKarma’s Websites.
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Northern
Response hereby acknowledges the great value of the goodwill
associated with the uKarma Marks and the worldwide recognition of
same and that the proprietary rights therein, and goodwill attached
thereto, are solely and exclusively owned by uKarma and that the
uKarma Marks and other words, devices, designs and symbols have a
secondary meaning that is firmly associated in the minds of the
general public exclusively with uKarma and/or its Affiliates and
related companies and their respective videos, published material,
products and other activities; and any additional goodwill attached
to the uKarma Marks, created through the use of such Marks by
Northern Response shall inure to the benefit of uKarma alone.
During and after the Term, Northern Response shall not itself and
shall not assist any person or entity to: (i) challenge the scope,
validity, or enforceability of, or title to, any of the Licensed
Works; (ii) do, omit to do or permit anything that is likely to
diminish the rights of uKarma in the Licensed Works or endanger the
value or validity of the Licensed Works or bring them into
disrepute; (iii) register or seek to register any Licensed Works,
whether as a trademark, legal entity name, Internet domain name,
copyright or otherwise, or impair, threaten, block or cancel any
application or registration therefor owned by uKarma or its
designees; (iv) edit, alter or otherwise use the uKarma Marks in
any forms not specifically approved in writing by uKarma, including
without limitation combining one or more uKarma Marks with other
words or devices so as to create a unitary mark, combined mark,
joint mark or co-branding scheme; (v) do anything or fail to do
anything that is likely to diminish the rights of uKarma in the
uKarma Marks or to impair any registration of the uKarma Marks or
to endanger the value or validity of any of the uKarma Marks or to
bring any of the uKarma Marks to disrepute or to jeopardize any
regulatory or other relevant consents, permits or approvals
relating to any of the Programs; or (vi) use any of the uKarma
Marks (or any designation incorporating the uKarma Marks, or any
designations similar thereto or derived therefrom) in any form not
approved in advance and in writing by uKarma. Northern Response
shall execute and deliver registered user trademark statements to
uKarma as uKarma requests from time to time. Northern Response
shall execute all papers and perform such other acts as uKarma
reasonably requests to transfer to uKarma any ownership interest in
and to any Licensed Works that Northern Response acquires
notwithstanding the provisions of this Agreement.
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INITIALS: uKarma
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Northern
Response_______
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Alteration
of Programs and/or Infomercials.
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Northern
Response shall distribute the Programs and use the Infomercials in
their entirety as delivered, and Northern Response agrees not to
itself, nor will it authorize or permit any third party to, cut,
edit, change, alter, modify or add to prints of the Programs and
Infomercials. Northern Response or any of its permitted
sublicensees shall however edit prints of the Programs and
Infomercials solely to meet governmental requirements (including,
without limitation, advertising and other consumer protection laws
and regulations); but under no circumstances shall Northern
Response delete, edit, alter or reposition the main or end titles
or any part thereof or the copyright notice or the credits. In
addition, Northern Response can edit infomercials for pricing and
offer changes. voice-over in terms of language and script, local
800 numbers, and other related edits for the purpose of finding the
ideal marketing language for particular markets within the
Territory. In the event that any edits shall be required to be made
as herein provided, Northern Response shall give uKarma reasonable
prior notice thereof and all such alterations shall require the
prior approval of uKarma. It is expressly understood and agreed
that uKarma shall have no responsibility whatsoever for, and shall
not be liable in any way to Northern Response (or any of its
permitted sublicensees) because of, any act of any regulatory board
or other governmental authority in the Territory save and except
for a breach of uKarma’s representations and warranties in
section 7.a. Any breach of the terms of this paragraph (save and
except for a breach caused by uKarma’s breach of its
representations and warranties) shall constitute a material default
entitling uKarma at its election and in addition to any other
rights or remedies available to uKarma and without releasing or
discharging Northern Response from any liability hereunder, to
terminate this Agreement in whole or in part.
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| ii. |
Compliance with all laws .
Northern Response or its sublicensees shall include all labels and
notices required by applicable local laws and regulations on the
Programs and/or Infomercials. Northern Response shall at all times
comply with all laws, rules, regulations and ordinances applicable
to its performance of and actions taken in connection with this
Agreement. Northern Response will not violate any applicable
material federal, state or local law or regulation of any country
in which the distribution of the Programs and use of the
Infomercials takes place. It is solely Northern Response’s
(or any of its permitted sublicensees’) responsibility to
determine the law and applicable standards and whether Northern
Response’s distribution or the Programs and use of the
Infomercials in any country within the Territory will violate the
applicable laws and standards.
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INITIALS: uKarma
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Northern
Response_______
| j. |
Publicity
and Promotional Materials; Videos and Packaging for
Videos.
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| i. |
uKarma
shall have the right to approve all advertising and promotional
materials in any media whatsoever in connection with the
exploitation of any rights granted hereunder and the distribution
of the Programs, as well as (without limiting the foregoing) the
packaging used in connection with videos of the Programs prepared
by or under the authority of Northern Response (collectively the
“Promotional Materials”), including, without
limitation, the concept and design therefor and all copy,
photographs, stills and illustrations. Upon written request,
Northern Response shall furnish all such Promotional Materials to
uKarma for inspection and approval at various stages of preparation
when reasonably possible, but in no event shall any such
Promotional Materials be utilized or released by Northern Response
unless and until uKarma shall have approved same. uKarma agrees to
approve or disapprove each submission of Promotional Materials
within a reasonable period of time following uKarma’s receipt
thereof; provided, however, any submission not specifically
approved by uKarma shall be deemed disapproved. Without limitation
of the foregoing, to the extent uKarma delivers to Northern
Response advertising and promotional materials, Northern Response
shall not be required to submit same to uKarma for approval in
accordance with the foregoing, provided Northern Response makes no
changes thereto (other than changing the copy from English to the
native language of the applicable country in the
Territory).
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| ii. |
Northern
Response shall have the right, subject to the provisions hereof,
including, without limitation, uKarma’s approval rights set
forth in subparagraph 1.j.i. above, to use film or video clips of
no more than sixty (60) seconds in duration from the Programs and
uKarma’s name solely to advertise and promote the
distribution of the Programs by Northern Response, provided no such
use may constitute a direct or implied endorsement of any product
or service. Without limitation of the foregoing, to the extent
uKarma delivers to Northern Response one or more promotional
videos, Northern Response shall not be required to submit same to
uKarma for approval in accordance with subparagraph 1.j.i. above
provided Northern Response makes no changes thereto.
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INITIALS: uKarma
_______
Northern
Response_______
| i. |
uKarma
will make (Northern Response acknowledges receipt of certain
Materials prior to this Agreement) the Materials set forth
on
Exhibit A available
to Northern Response on or before fifteen (15) days following
Commencement Date and receipt by uKarma of Northern
Response’s written request for the Delivery Materials. uKarma
will deliver the Delivery Materials to Northern Response or to a
carrier designated by written notice by Northern Response, which
shall be deemed to be delivery hereunder and uKarma shall not be
liable for any default or action taken or default made in delivery
by any other party. The cost of delivering all Delivery Materials
shall be paid by Northern Response. All Delivery Materials shall
remain the property of uKarma, subject only to the right of
Northern Response to make use thereof in accordance with the terms
hereof.
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| ii. |
Northern
Response shall, within ten (10) days of receipt of the Delivery
Materials, provide notice to uKarma in writing if the Delivery
Materials, or any part thereof, are defective, damaged or
incomplete. Any failure by Northern Response to deliver such
written notification as aforesaid shall be deemed to be acceptance
by Northern Response of such Delivery Materials. In the event the
Delivery Materials, or any part thereof, are defective or
incomplete, uKarma shall replace such defective, damaged or
incomplete materials within twenty (20) days of uKarma’s
receipt of the aforementioned written notification, such twenty
(20) day replacement time not to include the time it takes for
shipping.
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| iii. |
Northern
Response hereby agrees, at uKarma’s expense, to return to
uKarma at the address set out in the
Schedule 2 ,
or such other place as uKarma may designate by notice in writing as
provided herein, all Delivery Materials and all other material
associated with the Programs delivered to and/or created by
Northern Response within ten (10) days after the earlier of the
expiration or termination of the Term, in the same condition
(reasonable wear and tear excepted) as such Delivery Materials and
other materials were delivered to Northern Response.
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| iv. |
Northern
Response shall take all necessary precautions to safeguard and to
prevent any unauthorized duplication of the Delivery Materials and
any and all copies, prints and versions thereof.
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INITIALS: uKarma
_______
Northern
Response_______
As
concerns geographic areas within the Territory that are not
part of the European Union [as constituted on of the Effective
Date of this Agreement] (“
EU ”),
Section 2.a. applies
and
Sections 2.b. and 2.c. do
not apply. As concerns geographic areas within the Territory that
are part of the EU,
Section 2.a. does
not apply and
Sections 2.b. and 2.c. do
apply. The remainder of
Section 2 applies
in all instances.
| a. |
The
License granted hereby extends only to the geographic areas within
the Territory. Northern Response expressly acknowledges and agrees
that it is not licensed to make or authorize any use, direct or
indirect, of the Licensed Works in any other geographic area, and
that it is not licensed to, and will not, knowingly sell any
Programs to persons or entities who are likely to make or authorize
any such use or resell them in another area.
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| b. |
Northern
Response will enter into a binding data protection safe harbor
agreement with uKarma for at least the duration of the
Term.
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| c. |
Except
as required by Article 81 of the EEC Treaty:
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| i. |
The
License granted hereby extends only to the Territory. Northern
Response expressly acknowledges and agrees that it is not licensed
to make or authorize any use, direct or indirect, of the Licensed
Works in any other geographic area.
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| ii. |
Notwithstanding
the foregoing, as concerns geographic areas of the Territory within
the EU, Northern Response may, if it receives orders from an
importer within another Member State of the EU, export the Programs
to one or more other geographic areas within the EU outside the
Territory, provided that Northern Response gives at least thirty
(30) calendar days prior written notice of the geographic areas
concerned. Northern Response may not export the Programs outside
both the Territory and the EU unless the Programs are destined for
ultimate delivery within the Territory or the EU.
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| iii. |
In
any geographic area of th
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