EXHIBIT 10.39

LICENSE AGREEMENT

This License Agreement (“Agreement”) is entered into effective as of September 28, 2016 (the “Effective Date”), by and between Munzee Inc. (“Licensor”), a Delaware corporation with its principal offices located at 111 E. Virginia Street, McKinney, Texas 75069, and Freeze Tag, Inc., a Delaware corporation (“Licensee”) with its principal offices located at 18062 Irvine Blvd. Suite 103, Tustin, CA 92780.

RECITALS

A. Licensor is the creator and copyright owner of the “Munzee Software” and “Munzee Services” which are described as certain mobile device software applications (the "Munzee Software"), websites, feeds and applications for third-party Web sites and services, and any other data used or collected, mobile, web services, or applications owned, controlled, or offered by Licensor (collectively, the "Munzee Services") that enable a location-based scavenger hunt game through the use of QR codes (physical or virtual) or by other means.

B. Licensee desires to license non-exclusive rights to develop and publish game programs (“Games”) which contain Munzee Software and/or Munzee Services created and owned by Licensor, and to sublicense and distribute the Games through its own distribution channels and partner distribution channels.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Definitions .

1.1 “ Confidential Information ” means all nonpublic information, whether in oral, written or other tangible form that the party disclosing the information (the “Disclosing Party”) designates as being confidential or which, under the circumstances surrounding disclosure, the receiving party (the “Recipient”) knows or has reason to know should be treated as confidential, including without limitation, the terms and conditions of this Agreement, the sales techniques of Licensee, End User information, memoranda, corporate documents, price lists, pricing structures, and software structure and code which is provided by a party. In the event Confidential Information is transmitted orally the Disclosing Party shall provide written confirmation of such disclosure’s confidentiality to the other party within thirty (30) business days after disclosing such information. Notwithstanding the foregoing, Confidential Information does not include information that: (i) is or becomes generally available to the public, other than (a) as a result of a disclosure by Recipient or its employees or any other person who directly or indirectly receives such information from Recipient or its employees, or (b) in violation of a confidentiality obligation to Disclosing Party known to Recipient; (ii) as a result of the information becoming available to Recipient on a non-confidential basis from a source which is entitled to disclose it to Recipient; or (iii) as a result of the efforts or developments by employees or agents of the Recipient independently of and without reference to any information communicated to Recipient by the Disclosing Party.

1.1.1 Both parties are subject to the terms and conditions set forth in a Mutual Non Disclosure Agreement signed by both parties August 5, 2016.

 

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1.2 “ End User ” means a third party licensed directly or indirectly to use the Games for the End User’s customary personal use purposes and not for redistribution.

1.3 “ Fiscal quarter ” means a three-month period aligned with the calendar months, with the First Fiscal Quarter being January 1 to March 31, the Second Fiscal Quarter being April 1 to June 30, the Third Fiscal Quarter being July 1 to September 30, and the Fourth Fiscal Quarter being October 1 to December 31.

1.4 “Game(s) ” means mobile (smartphone and tablets) videogames (software) for the iOS (Apple) and Android (Google) platforms developed by Licensee subject to the terms of this License Agreement.

1.5 “ Intellectual Property Rights ” means copyrights, trademark rights, patent rights, trade secret rights, moral rights, rights of publicity, authors’ rights, contract and licensing rights, goodwill and all other intellectual property rights as may exist now and/or hereafter come into existence and all applications, registrations, renewals and extensions thereof, regardless of whether such rights arise under the law of the United States or any other state, country or jurisdiction.

1.6 “ Licensed Work ” means the Munzee Software and Munzee Services made the subject of this Agreement by Exhibit A.

1.7 “ Licensee Software ” means any software generated by Licensee for the development of the Game including all source code, tools, routines, libraries, etc. and any software (whether owned by a third party or by Licensee) added to the Games by Licensee for the purpose of protecting the Games (Digital Rights Management) or for processing billing payments.

1.8 “ Sell,” “sale” and “sold ” means the sale or download of a license to use the Game(s) even if the end user did not pay for the initial download.

1.9 “ Net Revenue ” means the total amount of all monies actually received by Licensee from sale of the Games to End Users, less any applicable returns or refunds, as well as all monies actually received by Licensee from in-app purchases, ad revenue, or any other source of revenue actually received by Licensee for the exploitation of the Game(s) based on the Licensed Work.

2. Licenses .

2.1 Licensed Work . Licensor hereby grants to Licensee a worldwide, non-exclusive royalty-free license in and to the Licensed Work in all versions (trial version, full version, or other port for the iOS and Android platforms), through Licensee’s own distribution channels and distributors during the Term of this Agreement.

 

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3. Licensee’s Obligations .

3.1 Licensee shall comply with all applicable laws and regulations with respect to its performance under this Agreement. Licensee shall be solely responsible for the protection of the privacy of all End User information collected by it in connection with this Agreement, and with the compliance with all applicable privacy policies.

4. Royalties . Royalties and payment terms are defined in Exhibit B .

5. Territory . The Territory shall be worldwide.

6. Taxes . Licensee agrees to pay, and indemnify and hold Licensor harmless from, any withholding or similar tax or duty which Licensee may incur in respect of this Agreement, including without limitation any sales tax, VAT, and any other applicable transaction taxes, if any, that Licensee may be responsible for as a result of Licensee's distribution of the Games.

7. Audits . Licensee shall maintain reasonable records with respect to payments due to Licensor hereunder for a period of two (2) years following termination of the Agreement. Licensor may, no more than once each calendar year during the term of this Agreement and for two (2) years following the termination of this Agreement, upon two (2) weeks’ notice, during regular business hours, itself or through its representatives (the “Auditor”) conduct an audit of such records for the sole purpose of verifying the payments made to Licensor hereunder; provided, however, that Licensor shall be solely responsible for all costs and expenses of conducting any such audit. The Auditor shall be required to sign Licensee’s standard confidentiality agreement. Licensor acknowledges that Licensee’s records and reports and the results of any audit contain the confidential trade information of Licensee, and Licensor warrants and represents that Licensor shall not use or communicate to others any facts or information obtained as a result of an audit permitted under this Agreement except to prosecute a claim for payment. Licensee shall reimburse Licensor the cost of any such audit or inspection if it establishes an underpayment to Licensor in excess of five percent (5%) of the amounts due to Licensors for the period subject to audit or inspection. Any underpayment shall be paid by Licensee within thirty (30) days of discovery, plus accrued interest of one percent (1%) per month.

8. Permission to Use Licensor’s Name . Licensor shall permit Licensee to use Licensor’s name in advertising and promotional copy intended to promote the sale of the Game(s) which incorporate the Munzee Software and Munzee Services.

9. Competition Notification : Licensor agrees to provide immediate notification to Licensee if essentially similar rights of the Munzee Software and Munzee Services are granted to a third party for use in any type of videogame or similar competitive software product after the effective date and during the full term of this Agreement.

 

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10. Marketing Support/Press Releases .

10.1 Marketing Support . Licensee agrees that it will use commercially reasonable efforts to promote the Games through its own website, and its distribution channels and distributors. Licensor agrees that it will provide Licensee with any distribution lists, namely email addresses, or other materials or means by which Licensee’s end product can be promoted to its customers. Subject to 10.2 below, the parties shall mutually agree on the content and timing of any press release regarding this Agreement and the parties’ relationship.

10.2 Press Releases . Neither Licensee nor Licensor shall make any public announcement, except as they may mutually agree, as to the existence and details of the matters set forth in this Agreement (other than to employees, consultants, shareholders or as required by such parties’ disclosure obligations under the securities laws or regulations of the United States or any state thereof).

11. Proprietary Rights .

11.1 Ownership . Licensee acknowledges that Licensor owns and/or controls the rights in and to the Licensed Work and copyrights worldwide in both the US and EU, and that Licensee has no rights therein, other than as expressly provided for herein. All right, title and interest in and to the Licensor’s Copyrights shall at all times remain with Licensor or its respective owners. All rights pertaining to the licensed works not expressly granted herein are hereby reserved to Licensor.

11.2 Ownership . Licensor acknowledges that Licensee is the owner of all Licensee materials including but not limited to game design documents, documentation, source code, graphics, text, sounds, videos, characters, logos, or other creative elements (excluding the Licensed Works) and Licensee Software used in connection with the development of and/or incorporated in the Games. Subject to Licensor’s rights as set forth herein, Licensee shall own copyrights and trademarks in and to the Games and all Licensee Software.

11.3 End User Licensing . The End Users’ use of the Games will be governed by and subject to an End User license agreement (EULA) which will be provided by Licensee or Licensee’s distribution partners and distributed to End Users with each copy of the Games

11.4 Copyright and Trademark Notices . Licensee shall cause to be listed in all Games or portions of the Game that incorporate the Licensor’s works of art into the Game, the following copyright notice (most likely included in the credits section): Copyright 20xx Munzee Inc. Licensee shall cause to be listed in all Games or portions of the Game that incorporate the Licensor’s registered trademarks proper trademark notice by use of Ò , ™, or as appropriate.

 

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12. Representations and Warranties .

12.1 Power and Authority . Each party warrants and represents that:

12.1.1 such party possesses full power and authority to enter into this Agreement and to fulfill its obligations hereunder; and

12.1.2 the performance of the terms of this Agreement and of such party’s obligations hereunder shall not breach any separate agreement by which such party is bound.

12.2 Licensee Warranties . Licensee warrants that the Licensee Software created in the development of the Games or that will be bundled with or attached to the Games as used by Licensee and the End Users as contemplated herein does not and will not infringe the Intellectual Property Rights of any third party.

12.3 Licensor Intellectual Property Rights . Licensor confirms that it owns the right, title and interest in and to the Licensed Work, and they: (i) do not, to the best of Licensor’s knowledge, infringe the Intellectual Property Rights of any third party; and (ii) are free and clear of any claims, liens, security interests, encumbrances, or judgments that may jeopardize Licensor’s rights in and to the License Work.

12.4 Disclaimer . THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES OR CONDITIONS, AND EXCEPT FOR THE EXPRESS WARRANTIES OR CONDITIONS STATED IN THIS AGREEMENT, LICENSOR AND LICENSEE MAKE NO ADDITIONAL WARRANTIES OR CONDITIONS, EXPRESS OR IMPLIED. IN PARTICULAR, ANY AND ALL WARRANTIES AND CONDITIONS OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE EXPRESSLY EXCLUDED.

13. Confidentiality . Each party acknowledges that in the course of the performance of this Agreement, it may obtain the Confidential Information of the other party. The Recipient (as defined in Section 1.1) shall, at all times, both during the Term of this Agreement and thereafter keep in confidence and trust all of the Disclosing Party’s (as defined in Section 1.1) Confidential Information received by it. The Recipient shall not use the Confidential Information of the Disclosing Party other than as expressly permitted under the Terms of this Agreement. The Recipient shall take reasonable steps to prevent unauthorized disclosure or use of the Disclosing Party’s Confidential Information and to prevent it from falling into the public domain or into the possession of unauthorized persons, but in no event will the Recipient use less care than it would in connection with its own Confidential Information of like kind. The Recipient shall not disclose Confidential Information of the Disclosing Party to any person or entity other than its officers, employees, attorneys and consultants who need access to such Confidential Information in order to effect the intent of this Agreement and who have entered into confidentiality agreements which protect the Confidential Information of the Disclosing Party sufficient to enable the Recipient to comply with this Section 6. Nothing in this Agreement shall prevent the Recipient from disclosing Confidential Information to the extent the Recipient is legally compelled to do so by any governmental investigative or judicial agency pursuant to proceedings over which such agency has jurisdiction; provided, however, that prior to any such disclosure, the Recipient shall (i) assert the confidential nature of the Confidential Information to the agency; (ii) immediately notify the Disclosing Party in writing of the agency’s order or request to disclose; and (iii) cooperate fully with the Disclosing Party in protecting against any such disclosure and/or obtaining a protective order narrowing the scope of the compelled disclosure and protecting its confidentiality.

 

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Notwithstanding the foregoing, a party shall have no obligation to treat as confidential, information and material which (i) was in its possession or known by such party at the time of disclosure without an obligation to maintain its confidentiality prior to its receipt; (ii) is or becomes known to the public without violation of this Confidentiality Agreement; (iii) is disclosed lawfully to such party by a third party who, to the best of such party’s knowledge, has the right to disclose it without an obligation of confidentiality; (iv) is independently developed by such party; (v) is approved in writing by the other party for disclosure; or (vi) is required to be disclosed by law or court order, provided that prior written notice of such required disclosure and an opportunity to oppose or limit disclosure is given to the other party.

14. WAIVER OF CONSEQUENTIAL DAMAGES . EXCEPT FOR BREACHES OF SECTION 13 (“CONFIDENTIALITY”) OR OBLIGATIONS ARISING UNDER SECTION 16 (“INDEMNIFICATION”) AND 11 (“PROPRIETARY RIGHTS”), NEITHER PARTY SHALL HAVE ANY LIABILITY FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL OR PUNITIVE DAMAGES OR LIABILITIES OF ANY KIND OR FOR LOSS OF REVENUE, LOSS OF BUSINESS OR OTHER FINANCIAL LOSS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, REGARDLESS OF THE FORM OF THE ACTION, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT PRODUCT LIABILITY OR OTHERWISE, EVEN IF ANY REPRESENTATIVE OF A PARTY HERETO HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE PARTIES AGREE THAT THESE LIMITATIONS SHALL APPLY EVEN IF ANY LIMITED REMEDY SPECIFIED HEREIN IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE.

15. Term and Termination .

15.1 Term . This Agreement is effective as of the Effective Date and will continue for an initial term of three (3) years, and shall automatically renew for successive one (1) year terms unless earlier terminated as set forth below, or with written notice by either party at least sixty (60) days prior to the expiration of the then current term.

15.2 Termination Occurrences . Upon the occurrence of any of the following events, either party may terminate this Agreement effective immediately upon written notice to the other, except as otherwise specified herein.

15.2.1 The other party: (i) shall be or become insolvent, or is not generally paying its debts as such debts become due; (ii) makes any general assignment for the benefit of creditors; or (iii) becomes involved in a receivership, reorganization or any other similar proceeding for the relief of debtors.

15.2.2 The other party shall fail to perform properly any of the material terms and conditions herein contained or breaches any material term herein contained and such failure to perform or such breach has not been satisfactorily remedied within fifteen (15) business days after written notice by the non-breaching party in accordance with paragraph 17.1 of this Agreement.

15.2.3 The parties mutually agree to terminate this Agreement at any time.

 

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15.3 Obligations upon Termination .

15.3.1 Confidential Information . Upon the expiration or earlier termination of the Agreement, the Receiving Party shall, within fifteen (15) business days of any termination or expiration of this Agreement, return to the Disclosing Party or destroy all full or partial copies, in whatever media, of any and all Confidential Information in the Receiving Party’s possession which had been furnished to the Receiving Party by the Disclosing Party pursuant to this Agreement, and the Receiving Party shall warrant in writing to the Disclosing Party within thirty (30) days after termination or expiration that all such Confidential Information has been returned to the Disclosing Party or destroyed.

15.3.2 Survival . The parties agree that their respective rights, obligations and duties under the provisions of this Agreement which by their nature require performance following termination or expiration of this Agreement shall survive such termination or expiration.

16. Indemnification

16.1 Indemnification by Licensor . Licensor shall, at its own expense, indemnify, hold harmless and, at Licensee’s option and request, defend Licensee and its officers, directors, employees or others acting on its behalf from any third party claims, suits, losses, liabilities, damages, court judgments or awards and the associated costs and expenses (including reasonable attorneys’ fees), incurred because of (a) a breach of any material provision of this Agreement by Licensor; (b) a breach of any material representation or warranty made by Licensor with respect to the Licensed Work as set forth in this Agreement; or (c) the gross negligence or intentional misconduct on the part of the Licensor or representatives of Licensor. Should the use of the Licensed Work by Licensee or its customers be enjoined, or in the event Licensor wishes to minimize its potential liability hereunder, Licensor may, at Licensee’s option, either: (i) modify the infringing use of the Licensed Work so that it no longer infringes but remains functionally equivalent; (ii) obtain for Licensee or its customers, at Licensor’s expense, the right to continue use of the Licensed Work. If none of the foregoing remedies is available on commercially reasonable terms, Licensor may cancel the applicable license and refund the royalties paid for such license pursuant to this Agreement on a pro-rata basis based on a three year useful life.

16.2 Indemnification by Licensee . Licensee shall, at its expense, indemnify, hold harmless and, at Licensor’s option and request, defend Licensor and its officers, directors, agents, employees or others acting on its behalf from any third party claims, suits, losses, liabilities, damages, court judgments or awards and the associated costs and expenses (including attorneys’ fees) arising (a) out of or resulting from any breach of any material provision of this Agreement by Licensee; (b) out of or resulting from the breach of any material representations or warranties made by Licensee with respect to the Games, or (c) as a result of the negligence or intentional misconduct on the part of Licensee or representatives of Licensee.

 

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17. Miscellaneous .

17.1 Notices .All notices and communications hereunder are required to be sent to the email address or physical address below by: (i) email with confirmation of acceptance, (ii) personal or courier delivery with written proof of acceptance or (iii)  by commercial delivery service utilizing same or next day delivery. All notices so given shall be deemed received upon the the date shown on written proof of receipt.

17.2 Amendment; Waiver . This Agreement may be amended or supplemented only by a writing that is signed by duly authorized representatives of both parties. No term or provision hereof will be considered waived by either party, and no breach excused by either party, unless such waiver or consent is in writing signed on behalf of the party against whom the waiver is asserted. No consent by either party to, or waiver of, a breach by either party, whether express or implied, will constitute a consent to, waiver of, or excuse of any other, different, or subsequent breach by either party.

17.3 Severability . If any provision of this Agreement (or any other agreement incorporated herein) is held by a court of competent jurisdiction to be invalid or unenforceable for any reason, the remainder of the provision shall be amended to achieve as closely as possible the economic effect of the original term and all other provisions shall continue in full force and effect.

 

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17.4 Governing Law . This Agreement shall be governed by and construed under the laws of the United States and the State of California. All disputes relating to this Agreement shall be subject to the exclusive jurisdiction of state and federal courts located in Orange County, California, and the parties hereby submit to the jurisdiction of such courts, agree to accept service of process by certified mail, and hereby waive any jurisdictional or venue defenses otherwise available to it. The parties agree that the United Nations Convention on Contracts for the International Sale of Goods is specifically excluded from application to this Agreement.

17.5 Force Majeure . Neither party will be liable for any failure or delay in performance under this Agreement (other than payment) due to fire, explosion, earthquake, storm, flood or other weather, unavailability of necessary utilities or raw materials, war, insurrection, riot, act of God or the public enemy, law, act, order, proclamation, decree, regulation, ordinance, or instructions of Government or other public authorities, or judgment or decree of a court of competent jurisdiction (not arising out of breach by such party of this Agreement) or any other event beyond the reasonable control of the party whose performance is to be excused.

17.6 Relationship of the Parties . The parties to this Agreement are independent contractors. There is no relationship of agency, partnership, joint venture, employment, or franchise between the parties. Neither party has the authority to bind the other or to incur any obligation on its behalf.

17.7 Allocation of Risk . The sections on limitation of liability, warranties and disclaimer of warranties allocate the risks in the Agreement between the parties. This allocation is an essential element of the basis of the bargain between the parties.

17.8 Construction of Agreement . This Agreement has been negotiated by the respective parties hereto and their attorneys and the language hereof shall not be construed for or against any party. The titles and headings herein are for reference purposes only and shall not in any manner limit the construction of this Agreement, which shall be considered as a whole.

17.9 Attorneys’ Fees . In the event that any suit or other action is instituted to enforce or interpret this Agreement, the prevailing party shall be entitled to recover its attorneys’ fees, including those incurred on appeal.

17.10 Counterparts . This Agreement may be executed in two counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. If this Agreement is executed in counterparts, no signatory hereto shall be bound until both the parties named below have duly executed or caused to be duly executed a counterpart of this Agreement.

17.11 Entire Agreement . This Agreement, including all Exhibits to this Agreement, constitutes the entire agreement between the parties relating to this subject matter and supersedes all prior or simultaneous representations, discussions, negotiations, and agreements, whether written or oral.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates set forth below effective as of the Effective Date.

Licensee: Freeze Tag, Inc.			Licensor: Munzee
By:			By:
Name:			Name:
Title:			Title:
Date:			Date:

 

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Exhibit A – Licensed Works Owned by Licensor

Below is a listing of the Licensed Work created and owned by the Licensor and licensed under this Agreement to the Licensee:

Licensed Works :

1. Geographic coordinates and associated data :

INFORMATION ON SHARED DATABASE HERE

2. Services :

As the Games gain popularity, and players begin adding their own “new” locations to the Games, these new locations will be monitored, approved, and stored in the Licensor database.

Licensor personnel will be responsible for this process of adding new locations to the Licensor database.

Licensor will assist Licensee in an advisor/contractor role for each Game, with the actual number of hours spent kept to a minimum and mutually agreed upon by Licensor and Licensee.

 

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Exhibit B – Royalties and Service Fees

Royalty :

Licensee shall pay Licensor REV SHARE % HERE of Licensee’s Net Revenue as defined in the Agreement.

Fee for Services:

In addition to the Royalty Payments due to Licensor, Licensee also agrees to compensate Licensor at such time as Licensor incurs costs related to the monitoring, approval and storing of new location data provided by players of the Games in the Licensor database. At such time as these services are required, Licensee and Licensor agree to negotiate in good faith a fair monthly fee to Licensor for these services.

Payment Terms and Reports :

Licensee shall make payments of royalties to Licensor on a quarterly basis with such payments to be made within thirty (30) days after the end of each fiscal quarter. Such payments shall be accompanied by a written statement summarizing the generation of such payments with the following information:

a. Territories (e.g. Europe, North America, etc.)

b. Amount due Licensor by Game title and totals (“Royalty Report”).

Where applicable, the Royalty Report shall also contain the number of units sold at each price point by game title.

Payments shall be made via wire transfer and Royalty Reports shall be sent to Licensor in accordance with the Notice provisions of the Agreement at paragraph 17.1. As instructed by Licensor, payment information is as follows:

Licensor:_____________________________________________________________

Licensor bank name: ____________________________________________________

Licensor bank routing/SWIFT number: ______________________________________

Licensor bank account number:____________________________________________

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EXHIBIT 10.40

"GARFIELD" LICENSING AGREEMENT

To:	Freeze Tag, Inc.
	18062 Irvine Blvd., Suite 103 Tustin, Ca 92780

Contact Person: Craig Holland

Telephone: PHONE HERE

Fax: FAX HERE

1. (a) For purposes of this Agreement, the following terms shall have the following meanings:

Licensed Property: The graphic images of the characters (the “Characters”) as they have regularly appeared in the GARFIELD Ò comic strip created by Jim Davis, namely “Garfield,” “Odie,” “Jon,” “Arlene,” “Nermal,” and “Pooky,” together with such other graphic images of the Characters that Paws approves and provides for your use.

Game: Mobile (smartphone and tablets) and videogames (software) for the iOS and Android platforms.

Licensed Articles:

In-app purchase packs for your Kitty Pawp Game consisting of the use of the GARFIELD Character as a "celebrity" kitty, and use of Garfield trivia (provided by Paws).

Licensed Territory: Worldwide.

2. This license will commence on November 1, 2016 and will continue until October 31, 2019 , provided you honor the terms of this Agreement. So long as you are in compliance with the terms of this Agreement and upon your written request, Paws agrees to commence negotiations with you for a possible renewal of this Agreement 90 days before the expiration date of this Agreement.

3. You agree to pay Paws royalties equal to REV SHARE % HERE of your total Net Revenue derived from purchases of the Licensed Articles. “Net Revenue” means gross purchase price less platform fees.

4. (a) Paws, Incorporated, 5440 East County Road 450 North, Albany, Indiana 47320 USA ("Paws") represents and warrants that it has all necessary rights to grant to you, and does hereby grant to you, under the terms and conditions of this Agreement, a non-exclusive license to use the Licensed Property solely on or in connection with the development, distribution and advertisement of the Licensed Articles, to be marketed and distributed solely within the Licensed Territory, and using only the Licensed Languages.

(b) This license includes the right to affix the Licensed Property on digital platform landing pages or online storefronts, and advertising and promotional materials used in connection with the Licensed Articles ("Collateral Materials").

(c) [Intentionally deleted.]

(d) Relevant trademarks owned by Paws and registered in the Licensed Territory (“Paws’ Trademarks”) (if any) and associated with the Licensed Property may be used by you on a royalty-free basis, on or in connection with the Licensed Articles and Collateral Materials, but only in circumstances where Paws' Trademarks are used in connection with the Licensed Property.

(e) All translations from the English language to the Licensed Language(s) must be accurate.

 

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5. (a) A Licensed Article is considered "sold" or “distributed” when you first claim a right to payment.

(b) Paws is under no obligation to execute this Agreement. To be considered for execution, this Agreement must be returned to Paws within thirty (30) days along with payment of the above stated advance (if any). Paws will not deposit the advance payment until after it has signed this Agreement.

(c) If you are prohibited or restricted from making payment of any monies to Paws when due and payable hereunder, by reason of any law or currency regulations, or by virtue of any action by a governmental authority, including the United States, you agree to promptly advise Paws in writing. Paws may then (i) terminate this Agreement; or (ii) direct you to deposit to the credit of Paws in a bank designated by Paws in the Licensed Territory, or to promptly pay to anyone Paws may designate.

(d) You agree that it shall be your sole responsibility, at your own expense, to obtain the approval of any authorities; to take whatever steps may be required to effect the remission of royalty payments in the manner designated by Paws from time to time; to minimize or eliminate the incidence of foreign taxes, fees or assessments that may be imposed; to protect your investments in the Licensed Territory; to take whatever steps may be required to enable you to commence or continue doing business in the Licensed Territory; and to comply in any and all respects with all applicable laws and regulations to enable you to exercise the license granted by this Agreement.

(e) Notwithstanding the foregoing, if a foreign government imposes a withholding tax against Paws with respect to the royalties payable to Paws on the distribution or other exploitation of Licensed Articles in a particular country of the Licensed Territory, if you pay such tax on behalf of Paws, and if such tax is an income tax with respect to which Paws may obtain a foreign tax credit under the U.S. Internal Revenue Code, then you may deduct the amount of such withholding tax from royalties owing to Paws on the condition that you furnish to Paws: (i) an original receipt from the foreign government with respect to the withholding tax paid together with an official translation to English; (ii) a report describing the royalties with respect to which the withholding tax was paid, the amount of the tax paid, and the date on which it was paid; and (iii) such other information as Paws may reasonably request.

6. (a) You agree to initially market the Licensed Articles for distribution in the Licensed Territory within one hundred fifty (150) days of the date of signing this Agreement. Throughout the term of this Agreement you agree to use reasonable and good faith efforts to advertise, promote and distribute the Licensed Articles in the Licensed Territory.

(b) You have also agreed to distribute the Licensed Articles at a competitive price. “Bundling” or other use of the Licensed Articles designed to encourage or facilitate the distribution of your other products or services shall be subject to the advance written consent of Paws, which consent shall not be unreasonably withheld or delayed.

(c) [Intentionally deleted.]

(d) [Intentionally deleted.]

7. You also agree to exert your reasonable and good faith efforts to perform in accordance with written Marketing Plans for the Licensed Articles that you provide to Paws or Paws' Agent. If you have not already done so, you agree to provide Paws' Agent with your initial Marketing Plan within 30 days of your signing of this Agreement. Additional Marketing Plans will be done by you on each yearly anniversary of the commencement date of this Agreement. Your Marketing Plans will describe for each Licensed Article your marketing timetable, distributions projections, channels and methods of distribution, anticipated advertising support, and such other information as Paws or Paws' Agent may reasonably request.

 

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8. You agree that you will not grant sublicenses under this Agreement and that you will not transfer or assign all or any portion of this Agreement, and that you will not delegate your duties to anyone else. If you do not at all times develop the Licensed Articles, you agree that you will at all times provide Paws with a complete and accurate list of each and every developer, including name, address, contact person, phone number, and articles developed.

9. Before you may use the Licensed Property (or Paws’ Trademarks) in any fashion, you agree to submit to Paws for approval such digital or other materials as Paws may reasonably request. You agree to get Paws' prior written approval for each Licensed Article, as well as Paws' prior written approval of any Collateral Materials for each Licensed Article. All non-English language text and explanatory material must be accompanied by an accurate and complete English language translation.

Upon approval of the prototypes and/or Collateral Materials, you agree that all Licensed Articles sold or distributed shall conform to the approved prototype(s) in all material respects, and that the Collateral Materials will not be modified in any material fashion without the advance consent of Paws.

Paws will respond to your requests for approval as soon as it reasonably can, and in case of disapproval, Paws will explain to you why. Paws will exercise its approval rights in good faith. Paws will have no duty to respond to requests for approval during any period of time that money owed by you to Paws is due and unpaid, or during any period of time that you are otherwise not in compliance with your duties and obligations under this Agreement.

You agree that Paws may require the artwork of the Licensed Property to be updated on any Licensed Articles or Collateral Materials three years after Paws' first approval of the item.

10. (a) Unless Paws gives you permission in writing, all character art and editorial for the Licensed Articles and Collateral Materials must be provided by Paws, and only current art may be used. So long as you are in full compliance with all of your obligations under this Agreement, Paws will allow you access to the Paws Licensing Support Site ("PLSS"). In order to obtain access to the PLSS system, you agree to provide Paws with an email address for the receipt of the information needed to enable you to log-in to PLSS. You will be responsible for all uses or misuses of the PLSS site by all persons who use your account to access PLSS. Artwork from PLSS will be made available to you on the same terms as it is generally made available to other Paws' Licensees. If you are unable to use art by downloading from PLSS, Paws will provide you with existing art at its standard rates for reproduction, handling and mailing. All custom art work must be done by Paws (unless you are authorized in writing by Paws), and you will be charged a competitive price.

(b) Paws offers a wide range of creative services ("Creative Services") such as custom art work, design layout, graphic design, writing/editorial, website design/enhancement, and other services. Should you elect to utilize any of the Creative Services, you agree to pay all properly issued invoices in accordance with their terms. Also, before utilizing the results of Creative Services, IT WILL BE YOUR SOLE RESPONSIBILITY TO ENSURE THAT THERE ARE NO ERRORS OR OMISSIONS. If you discover any errors or omissions that were the fault of Paws, Paws will correct the work in the format or medium as originally submitted to you by Paws and without additional expense to you. Beyond this, however, YOU ACKNOWLEDGE AND AGREE THAT PAWS WILL HAVE NO LIABILITY OR RESPONSIBILITY WHATSOEVER TO YOU, OR TO ANY THIRD PARTY, FOR ANY SUCH ERRORS OR OMISSIONS, INCLUDING ANY DIRECT, INDIRECT, OR CONSEQUENTIAL LOSS, DAMAGE OR EXPENSE.

 

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(c) If Paws authorizes you to provide creative elements for a Licensed Article or Collateral Materials ("New Works"), such as graphical elements (e.g., portrayals of the Characters, backgrounds, et cetera) or written elements (e.g., gags, slogans, stories, content for speech/thought balloons, et cetera), you hereby assign and transfer to Paws, and you agree to assign and transfer to Paws, without charge, your entire, worldwide right, title and interest in and to the New Works (and elements thereof) including, but not limited to, all copyrights, and you waive and agree to waive all associated moral rights. “New Works” does not include (i) your proprietary software or proprietary software of others that is licensed by you, and (ii) characters created by you and which bear no resemblance to the Characters. If parties who are not your employees living in the United States make or have made any contribution to the creation of the New Works so that such parties might be deemed to be "authors" of the same as that term is used in present or future United States copyright statutes, you agree to obtain from such parties a full assignment of rights so that the foregoing assignment by you shall vest in Paws full rights in the New Works (and all elements thereof) free of any claims, interest, or rights of other parties. At the request of Paws, you agree to furnish Paws with all relevant information concerning the creation of the New Works and copies of assignments of rights obtained from other parties. You agree to execute and cause to be executed such documents as Paws may reasonably request in order to carry out the intent and purpose of this paragraph.

(d) All art which Paws provides to you, in whatever media and for whatever purpose, shall be promptly returned to Paws upon the request of Paws, except for art reasonably required for authorized current production of Licensed Articles. You acknowledge that all such art is proprietary to Paws, may only be used for your authorized activities under this Agreement, and you agree that such art shall not be delivered to or made available for use by any third party.

(e) You agree that you will not, during or after the term of this Agreement, directly or indirectly assert any interest in or property rights in the Licensed Property or the Characters. You further agree that you will not, during or after the term of this Agreement, directly or indirectly contest the validity of the copyrights in the Licensed Property, or Paws' ownership of the copyrights in the Licensed Property. During the term of this Agreement, you agree to conduct all of your activities in compliance with all applicable laws, rules and regulations, and you also agree to not engage in or sanction any activity within your control which, in the reasonable judgment of Paws, reflects adversely upon Paws, Paws' Trademarks, or the Licensed Property.

11. (a) Paws will obtain in its own name and at its own expense trademark, copyright or other proprietary protection for the Licensed Property or the Licensed Articles and/or Collateral Materials as Paws deems appropriate. You agree that you will not seek or obtain any trademark, copyright or other protection or take any other action which might affect Paws' ownership of any of the rights in the Licensed Property (or Paws’ Trademarks). You understand and agree that your use of the Licensed Property (and Paws’ Trademarks) and all goodwill arising therefrom shall inure to Paws' exclusive benefit and that you will not acquire any rights by virtue of any use you may make of the Licensed Property (or Paws’ Trademarks), other than as specifically set out in this Agreement.

(b) You agree that the Licensed Articles and all Collateral Materials shall bear such copyright and other proprietary rights notices as Paws may direct, and incorporate a Paws’ Trademark if requested by Paws. References to website(s) owned or controlled by Paws shall also be included (if practicable) as reasonably directed by Paws.

(c) If Paws thinks it appropriate, you also agree to execute and cause to be executed by your employees and/or contractors such documents as Paws may request to carry out the intent of this paragraph.

(d) With respect to countries which require applications to register a license as a registered user of the Licensed Property, or which have a requirement of a similar nature, you agree to execute, deliver and record at your expense such documents as Paws may reasonably request.

12. (a) You agree that the quality and style of the Licensed Articles as well as the quality and style of all Collateral Materials shall be at least as high as the best quality of similar digital products and promotional and advertising material sold or distributed by you in the Licensed Territory. You also warrant that the Licensed Articles and Collateral Materials: (1) will not infringe upon or violate any rights of any third party; (2) will be of high standard in style, appearance and quality; (3) will be safe for use by consumers and others; (4) will be in compliance with all applicable governmental laws, rules or regulations (including, but not limited to, COPPA); and (5) will not be sold or distributed by you or your customers in any manner or in any place not specifically authorized by this Agreement.

 

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(b) For avoidance of doubt, you understand that Paws does not conduct any trademark search or other inquiry concerning the use of words or images (other than the Licensed Property) on or in connection with the Licensed Articles. Therefore, you agree that Paws will have no liability to you or to others, and you will be solely responsible for, any claim or demand alleging that the use of such words or images (other than the Licensed Property) constitutes an infringement of trademark or other rights purportedly held by a third party, or constitutes unfair competition. You further understand that Paws has no expertise, and relies solely upon you, to competently design, develop and sell Licensed Articles which are safe for use, and suitable for their intended purposes. As such, you agree that you will be solely responsible for any claim or demand alleging that any Licensed Article is unsafe, defective, or otherwise unsuitable, even though Paws has approved the use of the Licensed Property thereon, and even though Paws may have offered suggestions relating to the design, development, or distribution of the Licensed Articles.

13. For avoidance of doubt, the license granted by this Agreement does not include the right to sell, distribute, or offer to sell or distribute, the Licensed Articles (a) in connection with or in relation to the release of a movie featuring the Licensed Property in any format, and whether a theatrical release, or release in any format principally designed for home entertainment, or in any other manner; or (b) in connection with or in relation to a themed attraction, such as a themed restaurant, theme park, themed attraction at a park, et cetera.

14. Within forty-five (45) days after the end of each calendar quarter, you agree to provide Paws with analytics for each Licensed Article sold or distributed in the calendar quarter, together with payment in U.S. Dollars (or a different local currency designated by Paws) of all royalties due on revenues received or credited in such calendar quarter. You agree to provide supporting documentation for the royalties due and owing on account of each Licensed Article, including information for each Licensed Article as to the quantity and gross selling price of each Licensed Article sold or distributed by you during each such period, earned royalties due, the nature and amount of any allowable deductions and/or credits as to each given Licensed Article, and such other information as Paws may reasonably request. Each statement shall be due regardless of whether or not royalties are payable with respect to such period. The reporting and payment period shall be changed from quarterly to monthly upon default by you under this Agreement, unless Paws otherwise agrees in writing.

Should Paws elect to do so during the term of this Agreement or within 2 years after the expiration or termination of this Agreement, you agree to allow Paws (or its designee), upon not less than fifteen (15 business days prior notice, access to your books and records (which you agree to maintain and preserve while this Agreement is in effect and for 2 years after expiration or termination of this Agreement) and/or facilities during normal business hours and you agree to cooperate with Paws in conducting an audit of your activities relating to this Agreement. Acceptance by Paws of any statement furnished or royalty paid will not preclude Paws from questioning the correctness thereof. You agree to maintain your internal business records so that Licensed Articles sold by you are conspicuously and readily identifiable as Licensed Articles, and distinguishable from similar items sold by you which do not incorporate elements of the Licensed Property.

You also agree that time is of the essence with respect to all royalty payments to be made under this Agreement, and any other payments owed by you to Paws (such as for Creative Services), and that any sums of money that are owed to Paws by you under this Agreement and not paid when due shall bear interest at the rate of one and one-half percent (1-1/2%) per month. If any audit performed by Paws, or on Paws' behalf, identifies a shortfall of 5% or more in royalties due for any calendar quarter, you agree to reimburse Paws for its reasonable charges and expenses associated with conducting the audit, including but not limited to out of pocket expenses and professional fees paid. If any audit performed by Paws, or on Paws' behalf, identifies an overpayment by you in royalties for any calendar quarter, Paws agrees to reimburse you after first deducting its reasonable charges and expenses associated with conducting the audit, including but not limited to out of pocket expenses and professional fees paid.

All royalty payments and all royalty statements shall be submitted to Paws' Agent, or as may otherwise be directed by Paws in writing.

 

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15. You agree to promptly advise Paws as soon as you become aware of any unauthorized use of the Licensed Property and to reasonably cooperate (without direct expense to you) with Paws in stopping or attempting to stop any such infringing activity. Paws shall have the exclusive right to initiate and pursue any and all legal actions involving the unauthorized use of the Licensed Property.

16. Paws represents to you that it has the exclusive right to grant this license for the Licensed Property to you, and if anyone claims that your use of the Licensed Property in accordance with the terms of this Agreement infringes any ownership right or claim of another person, you agree to notify Paws immediately. Paws will then take over the handling of the claim and protect you against monetary losses (but excluding lost profits) that you sustain as a result of such a claim. You agree to reasonably cooperate with Paws in handling and resolving the claim (without direct expense to you), and to do nothing to interfere with the ability of Paws to defend and resolve the same.

17. You agree to defend, indemnify and save Paws harmless from and against any and all claims, demands, causes of action, judgments, damages, losses, costs and expenses (including reasonable attorneys' fees) arising from any claim or demand made against Paws by any third party and arising from or in connection with the conduct of your business, or your activities under this Agreement (except for claims covered by the preceding paragraph). Your obligation under this paragraph will include any claims or demands arising out of the activities of and/or made by your employees, agents, representatives, distributors, retailers, or manufacturers.

18. [Intentionally deleted.]

19. (a) Paws may, at its option, terminate this Agreement on written notice to you if: (i) you sell or offer to sell any item incorporating elements of the Licensed Property and not included within the description of Licensed Article(s); (ii) you sell or offer to sell any Licensed Article incorporating elements of the Licensed Property which has not been approved in advance by Paws as required by the terms of this Agreement; or (iii) you terminate or suspend your business, you go into either voluntary or involuntary liquidation, or you are subject to insolvency proceedings according to or under the law by which you are governed. Upon termination of this Agreement, all guarantees, nonrefundable advance payments, and accrued royalties shall become immediately due and payable, all licensed rights shall revert to Paws, and Paws shall be entitled to pursue any and all other available remedies.

(b) You shall also be considered in breach of this Agreement if you should fail to: (i) perform any of your other obligations under this Agreement; (ii) perform any of your obligations under any other Agreement that you have with Paws; or (iii) pay when due any invoice issued to you by Paws, and any such failure continues for fifteen (15) days after Paws has notified you in writing of the failure.

(c) If you are in breach of this Agreement, then Paws may, at its option, and upon written notice to you: (i) terminate this Agreement, whereupon all guarantees, and accrued royalties, shall be immediately due and payable; (ii) declare all guarantees immediately due and payable; (iii) suspend the performance of any of its duties, including the right to suspend responding to requests for approvals; and/or (iv) pursue any and all remedies available at law or in equity. Upon expiration or termination of this Agreement, all rights granted in this Agreement shall revert to Paws, and you agree to immediately stop doing everything relating to the Licensed Articles and the Licensed Property (or Paws’ Trademarks), and your registrations (if any) as a registered user of Paws' Trademarks shall be cancelled. Paws will also be entitled to recover all of its costs and expenses (including reasonable attorney fees) which it incurs in the event of a breach of this Agreement by you. Written notice under 19(a), (b) or (c) may be given by mail, courier, facsimile transmittal, or email.

(d) Before Paws shall be considered in breach of this Agreement, or as having failed to perform any duty or obligation to you, you must first notify Paws in writing of any such failure, describing the alleged failure with specificity, whereupon Paws shall have a period of fifteen (15) business days to cure or remedy any such failure. If any such failure is not remedied within said fifteen (15) business days, then you are entitled to submit such failure to arbitration as provided in this Agreement; provided, that any such submission must be made within one (1) year of the date of the alleged failure by Paws or your right to seek redress shall be deemed forever barred.

 

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20. Upon the earlier of (i) expiration of this Agreement; (ii) termination of this Agreement; or (iii) regular distributions are no longer being made for a particular Article(s), you agree to deliver to Paws all digital files from which the Licensed Articles and any Collateral Materials were made, together with all original art work, all of which shall be deemed as solely owned by Paws; provided, that the preceding sentence shall not apply to items created by you and which do not incorporate element(s) of the Licensed Property (or Paws’ Trademarks) and which are readily distinguishable from the Licensed Property (or Paws’ Trademarks). In addition, upon expiration or earlier termination, you agree to terminate all agreements with manufacturers, distributors, and others which relate to the manufacture, distribution, distribution and use of the Licensed Property (or Paws’ Trademarks) and/or the Licensed Articles.

21. [Intentionally deleted.]

22. (a) All rights in the Licensed Property not specifically granted to you by the terms of this Agreement are reserved and retained by Paws for its sole use and benefit. (b) You agree that this Agreement does not create a partnership or joint venture between you and Paws, and that you will have no power to obligate or bind Paws in any manner whatsoever. (c) While this Agreement is in effect, you grant permission to Paws to use your name to notify others that you are an authorized GARFIELD Licensee, and to promote the Licensed Articles. (d) Unless you otherwise notify Paws, in writing, Paws will have the right to communicate with you and your employees by way of email communications, including unsolicited email communications relating to Paws or the Licensed Property (such as marketing and informational material).

23. You agree that no waiver by Paws of your failure to perform any of your obligations under this Agreement and/or any material breach of any provision of this Agreement shall be deemed a waiver of a subsequent failure and/or breach. You acknowledge that you have had this Agreement reviewed by your attorney (or have had the opportunity to do so), and that you have had the opportunity to request changes or revisions; accordingly, you agree that any rule of contract interpretation or construction to the effect that ambiguities or uncertainties will be construed against the drafting party shall not be applied to the interpretation or construction of this Agreement.

24. If and to the extent that the laws of any governmental authority limit the enforceability of any territorial restrictions contained in this Agreement, you agree that such provisions shall be deemed modified so as to be compatible with applicable law. In any event, you agree that you will not actively solicit distributions of any Licensed Articles outside the Licensed Territory without Paws' prior written consent. If you receive a request for export to a country outside the Licensed Territory, you agree to inform Paws prior to exportation.

25. Any statement by Paws or any of its employees or representatives as to future events, predictions or the like shall not constitute a warranty or representation or a legally binding commitment unless such statement is specifically included within the written terms of this Agreement. This Agreement constitutes the entire agreement between you and Paws and supersedes all prior discussions and agreements with respect to the subject matter hereof. You agree that this Agreement will be controlled by the laws of the State of Indiana, regardless of the place or places of its physical execution and performance. This Agreement is prepared in the English language and the English version will prevail over any foreign translation. This Agreement may only be modified in writing, signed by both parties. If any term or provision is declared invalid, all other provisions shall remain in full force and effect. Each party agrees to notify the other of any change in mailing address or change in operational personnel.

 

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26. The following paragraphs of this Agreement shall survive the expiration or termination of this Agreement: 1, 3, 5, 6(c), 10-14, 16-21, 23, 25, and 26.

Paws, Incorporated
By:	Beverly Purtlebaugh
	Vice President, Paws, Incorporated
Date: ________________________
Freeze Tag, Inc.
By:
Printed Name and Title: _______________________________
Contract Number: FTAG_USA01

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