Exhibit 10.27
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[LOGO - SBS INTERACTIVE,
CO.]
4211 Yonge Street
Suite 235
Toronto, Ontario, M2P
2A9
Tel: 416.223.4045
Fax: 416.223.4046
April 10, 2004
Kontrolled Khaos
1233 Featherstone
Lane
Leesburg, Virginia
20176
Attention: Steven
Gums
Dear Steve:
SBS Interactive, Co. ("SBS")
is the owner of certain patent and trade marks for
the Side by Side Keyer Units
and has been granted exclusive rights by Ultimatte
Corporation ("Ultimatte") to
commercially exploit Ultimatte's patented "blue
screen" imaging process (the
"Ultimate Technology") using the Side by Side Keyer
Units. The Side by Side Keyer
Units captures an image and home environment and
merges it on a monitor with a
pre-recorded foreground video source.
This letter will serve to
confirm the terms upon which SBS provide the following
services:
a) the production of the
Content. The Content is specified as Insert A.1 in
Schedule "A"
annexed hereto;
b) the manufacture of the Copy
of the Product; and
c) the sale of the Side-by-Side
Keyer Units.
In this Letter Agreement,
Kontrolled Khaos shall be referred to as the "Client".
When signed by both of us,
this letter shall be a binding contract between us.
Schedules "A", "B" and "C"
annexed hereto and initialled by each of us form an
integral part of this
contract. All capitalized terms not otherwise defined
herein are as defined in
Schedule "C" annexed hereto.
A. CONTENT
PRODUCTION
1. SBS hereby agrees to provide
the following personnel and facilities (the
"Project
Services"):
a) the Location;
b) the Technical Personnel;
and
c) such other services or
personnel as may be agreed to by the Parties in
writing.
2. The Project Services shall
be rendered to the Client in accordance with:
a) the Content;
b) the terms and conditions
contained in this Letter Agreement;
c) the schedules annexed hereto
and made part hereof;
d) the practice set by the
local film and television industry; and
e) with such other and further
changes (if any) as the parties hereto may
agree upon from time to time.
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2
3. Unless otherwise agreed to
in writing by SBS and except for the Project
Services, the
Client shall:
a) engage, employ and contract
for the services of all personnel, goods
and/or services involved in the production of the
Content;
b) obtain all exhibition and
exploitation rights from such personnel
necessary and sufficient for the full and complete enjoyment by
the
Client of all rights of exploitation in and to the Content, to
the
maximum extent permitted by applicable union or guild
collective
agreements or codes having jurisdiction;
c) obtain and cause to be
maintained during the course of the production
of the Content, all workmen's compensation and similar
employer
insurance, if applicable, as well as perform and abide by all
other
employer functions considered reasonable and prudent in the
management
and production of like undertakings in the jurisdiction in which
the
Content is being produced.
4. In consideration of SBS
providing the Project Services, the Client hereby
agrees to pay to
SBS and SBS hereby agrees to accept, a sum to be agreed
by
the Parties and inserted
into Schedule "A" annexed hereto (the "Project
Fee").
a) the sum to be inserted into
in Schedule "A" annexed hereto, will be
agreed by the Parties after the execution of this Letter
Agreement
(the receipt and sufficiency whereof is hereby by SBS
acknowledged);
and
b) as to the balance thereof,
upon delivery to the Client of a completed
master Copy of the Product.
no part of this
Letter Agreement / Contract, including Project Services,
shall be binding
if the Client and SBS do not agree to SBS's cost of
Project Services
(yet to be added to Schedule A herein) AND/OR the Client
has insufficient
capacity to undertake such a Production at the time.
SBS shall be
responsible for the payment of all expenses for the
Project
Services. Other
than the expenses for the Project Services, the Client
will
reimburse SBS
for all additional expenses reasonably required for
performing the
Project Services and acquiring, making and delivering
the
Content.
5. The parties hereto
acknowledge, understand and agree that:
a) all right, title and
interest in and to the Content (including
copyright) shall be and is the sole and absolute property of
the
Client in and throughout the universe. Without limiting the
generality
of the foregoing, the parties hereby acknowledge all of the
Client's
present and future right, title and interest (including copyright)
in
and to the Content (and in and to any and all rights, titles
and
interests constituting the same or flowing therefrom) are free
and
clear of all liens, mortgages, security interests,
charges,
encumbrances and equities of any kind or nature whatsoever either
by
or through SBS, its successors and assigns.
b) in consideration of, and
conditional upon the payment to SBS of the
Project Fee and the performance of observance by the Client of
its
other obligations set forth herein, SBS hereby grants to the
Client
the exclusive right, license and privilege, for the remainder of
the
copyright in and to the Content and to use the Content as a work
(as
opposed to the component elements thereof) in the form provided by
SBS
and without further modification or editing.
6. The parties hereto
acknowledge, understand and agree that SBS shall be
entitled to
on-screen credits in the main titles of the Product on a
separate card
reading substantially as follows:
"Technical
Production for Kontrolled Khaos by SBS Interactive, Co.
and
Ultimatte
Corporation."
7. SBS may assign its rights
and obligations hereunder to Ultimatte or to an
associate or affiliate of
Ultimatte.
8. The Client may assign its
rights and obligations hereunder to an associate
or affiliate of
the Client.
<PAGE>
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B. MANUFACTURE OF COPIES OF THE
PRODUCT
Subsequent to
the approval in writing by the Client of the Content,
SBS
shall arrange for Copies of
the Product to be made available to the Client at
facilities selected by SBS.
The sale of the Copies of the Product shall be in
accordance with SBS's
standard form conditions of sale then in effect and
otherwise in accordance with
standard industry terms and conditions. The client
may at any time refuse to
allow SBS to manufacture Copies of the Product if the
Client is not entirely
satisfied with SBS's "standard form conditions of sale
then in effect" The costs for
the Copies of the Product, when agreed by the
Parties, will be set out in
Schedule "B" and annexed hereto.
C. SALE OF KEYER
UNITS
Subsequent to
the approval of the Content, the Client and SBS shall
discuss
and determine the terms and
conditions of "Production and Purchase Agreement of
the Side by Side Keyer
Units", and shall enter into such Agreement, under which
SBS agrees to manufacture and
supply the Side by Side Keyer Units to the Client
and the Client agrees to
purchase the Side by Side Keyer Units exclusively from
SBS. The sale of the Side by
Side Keyer Units shall be in accordance with SBS's
standard form conditions of
sale then in effect and otherwise in accordance with
standard industry terms and
conditions. The cost for the Side-by-Side Keyer
Units will be set out in a
Production and Purchase Agreement to be annexed to
this contract. The client
reserves the right to terminate this Agreement, if at
the time of pricing the Keyer
Units, the Client has not seen, and is not fully
satisfied, with a product
demonstration of a fully functional, `production line
Keyer system' and the
necessary component parts.
D. GENERAL TERMS AND
CONDITIONS
1. SBS hereby represents and
warrants that:
a) it is a corporation duly
incorporated and organized under the laws of
the State of Florida and it is in good corporate standing and
will
remain so until the Product is completed. SBS has the corporate
power
to enter into and perform this Letter Agreement. All corporate
action
necessary to authorize the execution, delivery and performance of
this
Letter Agreement has been duly taken and all necessary
authorizations
and approvals have been received. The execution, delivery
and
performance of this Letter Agreement does not violate or conflict
with
the charter documents or by-laws of SBS and does not violate
or
conflict in any way with the terms and provisions of any
judgement,
order, indenture, mortgage, debenture, agreement or undertaking
to
which it is a party or by which it is or its property is
bound.
b) there are no contracts or
other obligations outstanding that are in
any way in conflict or inconsistent with the terms of this
Letter
Agreement, and to the best of SBS's knowledge, there are no
claims,
liens, encumbrances or rights in and to the Product of which
the
Client is not unaware which can or will impair the
distribution,
production and exploitation of the Product and SBS will not in
future
enter into any other agreement which is inconsistent with or
in
conflict with any terms of this Letter Agreement.
c) there is no litigation,
claim or other proceeding of any nature
outstanding against SBS nor, to the knowledge of SBS is any
claim,
litigation or other proceeding threatened against SBS before
any
court, tribunal or other body which, if determined unfavourably
could
adversely effect the performance of SBS and its obligations under
this
Letter Agreement.
2. The Client hereby represents
and warrants that:
a) it is not a corporation duly
incorporated and organized under the laws
of its jurisdiction of incorporation and therefore it is not in
good
corporate standing. The Client is a partnership and has the power
to
enter into and perform this Letter Agreement. All company
action
necessary to authorize the execution, delivery and performance of
this
Letter Agreement has been duly taken and all necessary
authorizations
and approvals have been received. The execution, delivery
and
performance of this Letter Agreement does not violate or conflict
with
the charter documents or by-laws of the Client and does not violate
or
conflict in any way with the terms and provisions of any
judgement,
order, indenture, mortgage, debenture, agreement or undertaking
to
which it is a party or by which it or its property is
bound.
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4
b) the Client shall, in timely
fashion, pay and satisfy all residual,
re-use fees and other fees required to be paid pursuant to
collective
bargaining agreements in connection with the Client exploitation
of
the rights in and to the Product hereby granted to the Client.
Client
acknowledg
