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VIDEO DISTRIBUTION AGREEMENT

Distribution Agreement

VIDEO DISTRIBUTION AGREEMENT You are currently viewing:
This Distribution Agreement involves

Northern Response International Limited | uKarma Corporation

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Title: VIDEO DISTRIBUTION AGREEMENT
Date: 10/4/2007
Law Firm: Loeb & Loeb LLP    

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VIDEO DISTRIBUTION AGREEMENT
 
BUSINESS TERMS SCHEDULES
 
1. 
 
AGREEMENT DATED AS OF: 
 
September 25, 2007
         
2.
 
PARTIES:
   
         
 
uKarma:
 
uKarma Corporation (a California corporation)
520 Broadway, Suite 350
Santa Monica, CA 90401
         
 
 
Northern Response:
 
Northern Response International Limited
18 Skagway Avenue
Toronto, Ontario, M1M 3V1, Canada
         
3.
 
TRADEMARKS:
 
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.
         
4.
 
THE PROGRAMS:
   
         
   
PROGRAMS:
 
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.
 
INFOMERCIALS: 30-minute (and shorter) audio-visual programming produced by uKarma to advertise, market, promote and sell the Programs by direct response television advertising.
 
5.
 
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. 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).
 
i
INITIALS: uKarma _______
Northern Response_______

 
 
6.
 
THE USE OF THE UKARMA MARKS:
 
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.
 
 
 
 
 
7.
 
THE TERRITORY:
 
The world, excluding the United States, its territories, commonwealths and possessions.
 
 
 
 
 
8.
 
DEADLINE DATES:
 
 
 
 
 
THE TERM:
THE COMMENCEMENT DATE: October 15, 2007
 
 
 
THE EXPIRATION DATE: February 14, 2008
 
 
 
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.
 
 
 
9.
 
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.
 
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.
 
10.
BANK INFORMATION FOR WIRE PAYMENT:
 
 
 
Account Name:
 
Account No.:
 
Bank Address:
 
ACH/ Wire Routing Number:
 
 
ii
 INITIALS: uKarma _______
Northern Response_______

 
 
11.
ADDRESS FOR NOTICE:
 
To uKarma:   uKarma Corporation
   
 
   
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
     
     
To Northern Response:   Northern Response International Limited
   
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
 
12.  
LAW AND JURSIDCTION:
   
         
    GOVERNING LAW:   The laws of the State of California, USA.
         
    EXCLUSIVE JURISDICTION:   Arbitration before a retired judge on the Entertainment Panel of JAMS in Santa Monica, California.
 
 
iii
 INITIALS: uKarma _______
Northern Response_______

 
 
UKARMA CORPORATION
(uKarma)
 
 
By:      
       
Its:      
       
Date:      
       
 
NORTHERN RESPONSE INTERNATIONAL LIMITED
(Northern Response)
 
       
By:      
       
Its:      
       
Date:      
 
 
iv
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:
 
a.  
in the Programs produced, owned and distributed by uKarma;
 
b.  
in advertising, publicity and home video productions and allied fields by uKarma; and
 
c.  
in promotional and advertising materials in diverse businesses by uKarma.
 
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:
 
1.  
GRANT OF LICENSE.
 
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.
 
1
INITIALS: uKarma _______
Northern Response_______

 
 
b.  
In connection with the License, uKarma hereby also grants to Northern Response the following rights:
 
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.
 
ii.  
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.
 
2
INITIALS: uKarma _______
Northern Response_______

 
 
iii.  
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.
 
c.  
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.
 
d.  
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.
 
e.  
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.
 
3
INITIALS: uKarma _______
Northern Response_______

 
 
f.  
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.
 
g.  
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.
 
h.  
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.
 
4
INITIALS: uKarma _______
Northern Response_______

 
 
i.  
Alteration of Programs and/or Infomercials.
 
i.  
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.
 
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.
 
5
INITIALS: uKarma _______
Northern Response_______

 
 
j.  
Publicity and Promotional Materials; Videos and Packaging for Videos.
 
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).
 
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.
 
 
6
INITIALS: uKarma _______
Northern Response_______

 
 
k.  
Delivery.
 
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.
 
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.
 
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.
 
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.
 
7
INITIALS: uKarma _______
Northern Response_______

 
 
2.  
TERRITORY.
 
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
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