Document:

Exhibit 10.27

 

Savvior Technology Solutions Sales Agreement

 

This sales agreement is executed on October 11, 2004, by and
between Savvior Technology Solutions, a Pennsylvania Corporation with its
principal place of business at 800 Vinial Street, Suite B208 Pittsburgh,
Pa. 15212 (“Seller”) and Public Media Works, a Delaware Corporation with its
principal place of business at 14759 Oxnard Street, Van Nuys, CA  91411-3122 (“Buyer”).

 

Sales Agreement. The
Buyer agrees to buy, and the Seller agrees to sell, a non-transferable licensed
version of the Content Management, Knowledge Management, &
eCommunications Management Systems to the Buyer: See attached Estimate
Proposal and 8 Sharp Project Outline.

 

Price. The Buyer
agrees to pay the Seller the following service and/or licensing fees, according
to the attached Fees Schedule for the initial deployment, installation,
maintenance and one enterprise licensed version of the Content
Management, Knowledge Management, & eCommunications Management Systems.

 

Delivery. The Seller
will deliver the Content Management, Knowledge Management, &
eCommunications Management Systems, as well as the outlined feature
enhancements, to the Buyer via the web hosting solution provided by the Seller
over the course of the time period between November 1, 2004 and January 31,
2005 according to the attached “Deliverable Schedule”. The Goods will be deemed
received by the Buyer when delivered and all bugs or system errors will be
corrected by Savvior at no additional cost and repaired during normal business
hours M-F, 9am-5pm EST.

 

Risk of Loss. The
risk of loss from any casualty to the Content Management, Knowledge
Management, & eCommunications Management Systems, regardless
of the cause, will be the responsibility of the Seller until the Content
Management, Knowledge Management, & eCommunications Management Systems
has been received by the Buyer.  Savvior
is not liable for 3rd parties vendor activities.

 

Warranties. The
Seller Warrants that the Content Management, Knowledge Management, &
eCommunications Management Systems is now free, and that at the time
of delivery will be free from any security interest or other lein or
encumbrance and that it has full title to the Content Management,
Knowledge Management, & eCommunications Management Systems and
full authority to internally sell additional seat licenses to the Content
Management, Knowledge Management, & eCommunications Management Systems.
Furthermore, the Seller warrants that at the time of signing this Agreement,
the Seller neither knows, nor has reason to know, of the existence of any
outstanding title or claim of title hostile to the rights of the Seller in the Content
Management, Knowledge Management, & eCommunications Management Systems.

 

 

ARBITRATION - Should
a dispute between the parties arise concerning the construction, meaning or
effect of this Agreement or any agreement or covenant entered into pursuant to
this Agreement or the termination of this Agreement or the termination of any
such agreements or covenants (other than a matter dealt with in this Agreement
or any agreement or covenant entered into pursuant thereto whereby such
agreement or covenant specifically states that a certain determination shall be
final and binding), or the rights or obligations of the parties hereto or their
heirs, executors, administrators, successors or assigns, then, said dispute
shall be resolved by an independent mediator (the “Mediator”), chosen by
agreement of the parties, or if the parties cannot agree, chosen by the
American Arbitration Association, with any costs or fees to be shared equally
by “SAVVIOR” and “the Client”.  Any
decision by the Mediator shall be final and binding upon the parties.

 

Acceptance of Goods.
The Buyer will have the right to inspect the goods on arrival, and within 60
business days after delivery, the Buyer must give notice to the seller of any
claim for damages on account of condition, quality, or grade of the goods, and
the Buyer must specify the basis of the claim of the Buyer in detail. The
failure of the Buyer to comply with these conditions will constitute
irrevocable acceptance of the goods by the Buyer.

 

CLIENT SUPPORT -
Provide technical support for the Products to Client by way of email response
and telephone, as SAVVIOR in its sole discretion deems necessary. SAVVIOR
reserves the right to refuse service to Client who abuses the support system.
Such abuse may include, but not be limited to:

(a)           Excessive
requests for assistance where answers are provided within the documentation
supplied to the Client;

(b)           Requests
for technical support not directly related to the Products;

(c)           Verbal
or written abuse of SAVVIOR Resellers or agents.

 

Indemnification

a. SUBJECT TO THE
PROVISIONS CONTAINED IN SECTION     BELOW. SAVVIOR SHALL
INDEMNIFY, DEFEND AND HOLD HARMLESS PublicMediaWorks WITH RESPECT TO ALL CLAIMS
OR ACTIONS. OR SETTLEMENTS RELATED TO ANY SUCH CLAIMS OR ACTIONS, AGAINST
PublicMediaWorks, Inc.  FOR LIBEL,
SLANDER, PIRACY, PLAGIARISM, INVASION OF PRIVACY OR INFRINGEMENT OF COPYRIGHT
RESULTING FROM MATERIAL PREPARED BY SAVVIOR IN CONNECTION WITH THE CONTENT
MANAGEMENT, KNOWLEDGE MANAGEMENT, & eCOMMUNICATIONS MANAGEMENT SYSTEMS
BUT ONLY TO THE EXTENT THAT PublicMediaWorks DID NOT CONSENT TO THE USE OF SUCH
MATERIAL OR PARTICIPATE IN THE CREATION OF SUCH MATERIAL.

 

b. PublicMediaWorks SHALL
INDEMNIFY, DEFEND AND HOLD HARMLESS SAVVIOR WITH RESPECT TO ANY CLAIMS OR
ACTIONS, OR SETTLEMENTS

 

 

RELATING TO ANY SUCH
CLAIMS OR ACTIONS’ INSTITUTED BY THIRD PARTIES WHICH RESULT FROM OR IN
CONNECTION WITH: (i) ANY MATERIAL FURNISHED BY PublicMediaWorks TO SAVVIOR
TO BE USED IN CONNECTION WITH SAVVIOR’S PERFORMANCE OF ITS OBLlGATIONS
HEREUNDER (ii) WHERE MATERIAL CREATED BY SAVVIOR HAS BEEN CHANGED BY
PublicMediaWorks AND IS SUBSEQUENTLY USED, (iii) USE BY PublicMediaWorks
OF ANY ADVERTISING OR PROMOTIONAL MATERIAL FOLLOWING THE TERMINATION OR
EXPIRATION OF THIS LETTER AGREEMENT, OR (iv) PERFORMANCE BY SAVVIOR
TECHNOLOGY SOLUTIONS OF ITS OBLIGATIONS HEREUNDER. ANY INFORMATION OR DATA
OBTAINED BY SAVVIOR FROM PublicMediaWorks TO SUBSTANTIATE CLAIMS MADE IN
ADVERTISEMENTS OR PROMOTIONS SHALL BE DEEMED TO BE “MATERIALS FURNISHED BY
PublicMediaWorks FOR PURPOSES OF THIS SECTION.

 

c. PublicMediaWorks AGREES
TO INDEMNIFY DEFEND AND HOLD HARMLESS SAVVIOR WITH RESPECT TO ANY DEATH OR
PERSONAL INJURY, PROPERTY DAMAGE CLAIMS OR ACTIONS OR OTHER CLAIMS ARISING FROM
OR IN CONNECTION WITH: (i) ANY USE OF PublicMediaWorks’s PRODUCTS OR
SERVICES, (ii) ANY GIFTS, PRODUCT SAMPLES OR REWARDS DISTRIBUTED, OR (iii) THE
PRESENCE OF, OR ACTS OR OMISSIONS OF, PublicMediaWorks’s REPRESENTATIVES,
AGENTS, OR EMPLOYEES WITH RESPECT TO WORK PERFORMED BY SAVVIOR. IF
PublicMediaWorks SECURES PRODUCT LIABILITY INSURANCE WITH RESPECT TO THE USE OF
ANY PRODUCTS ASSIGNED TO SAVVIOR, PublicMediaWorks WILL CAUSE SAVVIOR TO BE
NAMED AS A CO-INSURED AND SHALL MAINTAIN SUCH POLICY AT PublicMediaWorks’s SOLE
COST AND EXPENSE.

 

Notices. All
notices, demands or consents required or permitted under this Agreement will be
in writing and will be delivered, sent by facsimile or mailed certified return
receipt requested to the respective parties at the addresses set forth above or
at such other address as such party will specify to the other party in writing.
Any notice required or permitted to be given by the provisions of this Agreement
will be conclusively deemed to have been received on the day it is delivered to
that party by U.S. Mail with acknowledgment of receipt or by any commercial
courier providing equivalent acknowledgement of receipt.

 

The “Copyrighted Material” means all materials produced, authorized,
originating from or otherwise created for the benefit of SAVVIOR, the Reseller
and their sales representatives with respect to the Products, including,
without limitation, all audio-visual materials, computer software, electronic
files, graphic designs, web files of any nature, programming libraries other
computer code, so produced, authorized, originated or created, all of which are
deemed to be the exclusive property of SAVVIOR;

 

 

“Products” means the digital media developments, enhancements, software
and systems developed, resold under license, and provided under consulting,
development or personnel agreements to our clients by our subcontracted or
employed personnel. These Products may include, but are not limited to: Content
Management, Project Management, Knowledge Management, eCommunications, Document
management, web development, e-commerce programming, documentation, research,
consultation, merchant reporting services, database development, e-mail access
and promotions, credit card and other transaction processing systems, shopping
carts, catalog sales systems and their installation and maintenance.

 

“Services” means the digital media developments, enhancements, software
and systems developed, resold under license, and provided under consulting,
development or personnel agreements to our clients by our subcontracted or
employed personnel. These services may include, but are not limited to: web
development, web page design, graphic design, audio design, e-commerce
programming, webmastering, copywriting, videography, media preparation,
documentation, research, consultation, merchant reporting services, data
analysis, database development, website hosting, file transfer, publicity and
PR services, interactive media, email access and promotions, credit card and
other transaction processing systems, shopping carts, catalog sales systems and
their installation and maintenance.

 

Governing Law. This
agreement, and all rights and obligations of the parties will be governed by the
Uniform Commercial Code as enacted by the State of Pennsylvania. Any disputes
hereunder will be heard in the appropriate federal and state courts located in
the County of Allegheny in the State of Pennsylvania.

 

Relationship
of Parties.
Nothing contained in this Agreement shall be deemed or construed by the
parties, or by any third party, to create the relationship of partnership,
joint venture or agent and principal between the parties hereto, it being
understood and agreed that the relationship between the parties hereto shall be
the relationship of independent parties contracting for services. Neither
Sponsor nor Chancellor has, and neither shall hold itself out as having, any
authority to enter into any contract or create any obligation or liability on
behalf of, in the name of, or binding upon the other.

 

Force Majure. If performance by a party of any
service or obligation under this Agreement is prevented or delayed by reason of
floods, lightning, severe weather, earthquakes, war or revolution which prevention
or delay could not have been avoided by reasonable precautions, then the such
party shall be excused from the performance to the extent of such prevention or
delay provided that the party shall make reasonable efforts to resume
performance.

 

Waiver. The failure of either party at
any time to require performance by the other party of any provision of this
Agreement shall not affect in any way the full right to require the performance
at any subsequent time. The waiver by either party of a breach of any provision
of this Agreement shall not be taken or held to be a waiver of the provision

 

 

itself. Any course of
performance shall not be deemed to amend or limit any provision of this
Agreement.

 

Severability The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision. Any invalid or
unenforceable provision shall be deemed severed from this Agreement to the
extent of its invalidity or unenforceability, and this Agreement shall be
construed and enforced as if the Agreement did not contain that particular
provision to the extent of its invalidity or unenforceability.

 

Entire Agreement.
The parties acknowledge that this Agreement expresses their entire
understanding and agreement, and that there have been no warranties,
representations, covenants or understandings made by either party to the other
except as expressly set forth in this section. The parties further acknowledge
that this Agreement supersedes, terminates and otherwise renders null and void
any and all prior or contemporaneous agreements or contracts, whether written
or oral, entered into between the Buyer and the Seller with respect to the
matters expressly set forth in this Agreement.

 

We have carefully reviewed this contract and agree and accept its terms
and conditions. We are executing this Agreement as of the day and year first
written above.

 

 

	
  BUYER:

  	
  SELLER:

  
	
   

  	
   

  
	
  /s/ Thomas A. Szabo

  	
   

  	
  /s/ Keith P. Giuliani

  	
   

  
	
  Thomas A. Szabo

  	
   

  	
  Keith P. Giuliani

  
	
  CEO

  	
   

  	
  CEO, Savvior Technology Solutions

  
					

 

 

FEES
Schedule

 

 

Phase I

To
be implemented in phased deliverables between 

November 1, 2004 and January 31, 2005

 

See
attached Deliverable Schedule

 

 

Consulting

•      Review
Site Design/Layout

•      CMS,
KMS, eCommunications, & other custom programming functionality

•      Best
Solutions

 

Project Management

 

Web Design / Creative Design

•      Basic
Site Design

•      10-12
Templates created by 8 Sharp

•      All
site copy will be inserted into CMS by 8 Sharp

•      Templates
converted into Dreamweaver files by Savvior

•      Savvior
inserts Dreamweaver files into CMS

 

Flash Design

•      Flash
Design for Site Elements created by 8 Sharp

•      Other
Potential Flash Components

•      Some
Flash elements managed using CMS

 

Content Management System [Savvior]

•      Web
Site Management Application

•      Installation

•      Implementation

•      Training
(5 users at launch)(via WebX)(1 hour for all 5 users)

•      Custom
Programming:

•      Share
with friend feature

•      Print
this page feature

•      Calendar
Functionality

•      Custom
voting design with survey/form feature

 

eCommunications Module [Savvior]

•      Broadcast
E-Mail Application

•      Installation

•      Implementation

•      Training
(5 users at launch)(via WebX)(1 hour for all five users)

 

 

Knowledge Management System [Savvior]

•      Dynamic
FAQ

•      Installation

•      Implementation

•      Training
(5 users at launch)(via WebX)(1 hour for all five users)

 

Merchant Account and Setup &
Commerce [Savvior]

•      Costs
dependent on the merchant and functionality desired of the site

•      Savvior
to deploy cart and tie to Merchant Account

•      3rd
party shopping cart fees apply (estimate fees at max will not exceed $500 for
the cart itself)

 

Dedicated Hosting [Savvior]

•      Dedicated
hosting is recommended because of the possibility of secure transactions and
high volume of users

•      SSL
Enable (need 3rd party certificated)

•      Unlimited
e-mail accounts

•      Co-Located
Facility

•      Use
Public Media Works newly purchased servers for hosting & deploy in
Savvior co-location facility

•      Savvior
will host on Savvior servers during the development phase, however monthly fees
apply once co-located servers are activated

•      Servers
managed 24/7/365

•      Backed
up to remote hard drive

•      Installation
of Flash Communications Server MS (license costs responsibility of
PublicMediaWorks)

•      Additional
Bandwidth Fees: WAITING!!!

•      Optional
future stats packages: WAITING!!!

 

Additions Elements added in Phase 1:

•      Points-based
system tracked by individual visitor

•      Advertiser
tracking system with granular reporting capabilities

•      Message
Boards & Chat Rooms

•      Update
a few Flash files using CMS

•      Java
window for latest news & info

•      Sweepstakes
w. auto email notifications

•      Store
Coupon Codes (electronic redemption via shopping cart)

•      Internet
Marketing Campaign...client choose to have Savvior set up Metatags, but do not
want paid placement in search engines or participate in the Internet Marketing
Campaign

 

 

	
  Fee Description

  	
   

  	
  Amount

  	
   

  	
  Time Period Payable

  	
   

  
	
  Dedicated Hosting and Co-location Fees

  	
   

  	
  $1,000
  monthly*

  If bandwidth
  exceeds X then additional direct to client charges may range from $X to $X.

  $27,000 over
  2 years.

  	
   

  	
  10/15/04 —
  10/14/06

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  License of Content Management System,
  Knowledge Management System, and eCommunications System

  	
   

  	
  $4,500
  monthly

  Total
  $108,000 over the 2-year contract.

  	
   

  	
  1/1/05 —
  12/31/06

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ongoing Customization Retainer: 12
  monthly/288 total hours of customization programming.

  	
   

  	
  $1,000
  monthly ($83 hourly)

  Unused
  monthly hours can be saved for larger projects/additions.

  $23,000 over
  2 years.

  	
   

  	
  2/1/05 —
  12/31/06

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Service Fees for Initial Custom Programming
  and Set-Up

  	
   

  	
  $22,500 one
  time

  	
   

  	
  Quarterly
  installments of $5,625 due on 1/1/05, 4/1/05, 7/1/05, 10/1/05

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  All costs over 27 months 10/15/04 –
  12/31/06

  	
   

  	
  

  $180,500

  	
   

  	
  

  Average monthly payment: $6,5000

   

  Does not
  include quarterly installments.

  	
   

  

 

Deliverables
Schedule

 

	
  November 1, 2004

  	
   

  	
  •      Build
  the web site structure within the CMS using 8 Sharp designs.

  •      Push
  “The Public Website”* live including new visitor registration.

  •      Create
  ability to collect user profiles.

  •      Track
  visitors actions based on standard web tracking statistics.

  •      Have
  the ability to manually, mass email visitors who signed up on the web site.

  •      Import
  emails from previous registrations on older versions of the web site.

  •      Stream
  Flash created by 8 Sharp.

  

 

 

	
  November 15, 2004

  	
   

  	
  •      Push the
  first Virtual Studio Production Stage*— Carpool Guy — live with content as
  provided and/or entered by 8 Sharp.

  •      Survey
  (custom voting application) visitors w/ user profiles.

  •      Set
  up eCommerce for up to 25 products

  •      (Initially,
  manually process credit card orders).

  •      Have
  site structure for “Studio Buildings” complete and ready for content
  population.

  
	
   

  	
   

  	
   

  
	
  December 1, 2004

  	
   

  	
  Have My Office Elements working.

  Have fully functioning eCommunications systems running.

  
	
   

  	
   

  	
   

  
	
  December 15,2004

  	
   

  	
  Have the Knowledgebase system up and running.

  
	
   

  	
   

  	
   

  
	
  January 15,2005

  	
   

  	
  Have the back-end of the Content Management System fully programmed
  and usable by non-technical people.

  Have the Points system fully automated.

  Have the PMW Store fully completed and editable by a non-technical
  person with auto credit card processing.

  
	
   

  	
   

  	
   

  
	
  January 31, 2005

  	
   

  	
  Coupon redemption codes completed.

  Sweepstakes completed.

  

 

As defined in the Functional Specifications, Version 1.0 developed by 8
Sharp on Sept. 19, 2004

 

EFFECT OF TERMINATION -
In the event of termination, all rights of the Savvior Applications remain
property of Savvior, however the Client is permitted under this Agreement to
one licensed version of each purchased application from SAVVIOR, with exception
only where noted herein. The Client will immediately notify Savvior in writing
regarding the termination and agree to not resell the Copyrighted
Materials/Applications of SAVVIOR.  All
Copyrighted Materials will be returned to SAVVIOR if project ceases to exist
within 72 hours of termination.

 

If for any reason Public Media Works decides to leave Savvior
Technology Solutions, the total contract balance is due immediately upon
termination.Exhibit 10.28

 

DISTRIBUTION AGREEMENT

 

AGREEMENT
made as of April 1, 2005 by and among Public Media Works, Inc. and
Carpool Guy Partners LLC (collectively, “Licensor”), on the one part, and LA
Ideas Inc. (“LA Ideas”), on the other.

 

WHEREAS,
Licensor has the sole and unrestricted right, power and authority to grant the
rights herein granted and agreed to be granted in and to the “Picture” as
hereunder described and defined, and

 

WHEREAS,
LA Ideas desires to acquire from Licensor the rights herein granted and agreed
to be granted in and to the Picture.

 

NOW,
THEREFORE, in consideration of the representations and warranties hereinafter
set forth and of the mutual covenants of the parties hereto, it is agreed as
follows:

 

1.             PICTURE.  The subject of this Agreement is the motion picture
currently entitled “Carpool Guy” produced by Licensor and directed by Corbin
Bernsen (“Picture”).

 

2.             TERRITORY.  The “Territory” for which the rights granted
to LA Ideas in this Agreement shall consist of the Universe.

 

3.             TERM.
 The rights granted to LA Ideas in this
Agreement are granted in perpetuity commencing on the date hereof (“Term”).

 

4.             GRANT
OF RIGHTS.  The sole and exclusive “Videogram
Rights” to the Picture during the Term in the Territory and the sole and
exclusive right to exploit the Picture by means of “Video On Demand”, “Pay Per
View”, and “Internet Transmission” during the Term in the Territory.

 

4.1           “Videogram
Rights” shall mean the right to manufacture, advertise, promote and distribute
on a sale or rental basis, DVDs, video compact discs, laser discs, videotapes
or any other analog or digital recording devices containing visual images now
known or hereafter discovered for use by consumers.

 

4.2           “Video On Demand”
shall mean the transmission of a selected video program from a video library
via a system where reception of said video program at any viewing time selected
by the viewer is available only upon payment of a charge therefor, which charge
is in addition to any charge for reception of the television service and/or
programming channel.

 

4.3           “Pay Per View”
shall mean the transmission of a
selected video program via a television system where reception of said video
program at a viewing time selected by the viewer from a limited number of
viewing times is available only upon payment of a charge therefor, which charge
is in addition to any charge for reception of the television service and/or
programming channel.

 

1

 

4.4           “Internet Transmission” shall mean the
transmission of a selected video program to a consumer via the Internet (through
digital downloading or otherwise), where such transmission is available only
upon payment of a charge therefor, which charge is in addition to any charge
for Internet services

 

4.5           Without in
any way limiting the generality of the grant of rights set forth in this Section of
the Agreement, LA Ideas is granted and shall be vested with the following
rights for the purpose of distribution of the Picture as set forth hereunder:

 

4.5.1        Use
of Title.  To use the title of the Picture
and to change the title of the Picture if necessary or desirable in order to
make the Picture suitable for exhibition in any and all parts of the Territory.

 

4.5.2        Addition
of LA Ideas Name, Trademark and Logo. 
To use the name, trademark and logo of LA Ideas or any of its
subsidiaries, affiliates or its parent in the credits of the Picture and in all
advertising and publicity relating thereto, in such a manner, position, form
and substance as LA Ideas may reasonably elect to identify LA Ideas as the
distributor of the Picture.

 

4.5.3        Changes.  To make such changes, additions, alterations,
cuts, interpolations and elimination as LA Ideas may deem necessary or
desirable in order to adapt and make the Picture suitable for exhibition in any
and all parts of the Territory, provided, however, that no material change
shall be made in any of the credits or the copyright notice appearing in
positive prints or videotapes of the Picture as delivered by Licensor to LA
Ideas.

 

4.5.4        Publicity
and Advertising.  To publicize,
advertise and exploit the Picture throughout the Territory during the Term and
to cause or permit others so to do including, without limitation, the right in
connection with, and solely for the purpose of advertising, publicizing and
exploiting, the Picture to (i) publish and to license and authorize others
to publish in such forms as LA Ideas may deem advisable, synopses, summaries,
resumes and stories of any excerpts from the Picture and from any literary or
dramatic material included in the Picture or upon which the Picture is based,
and in newspapers, magazines, trade periodicals and in all other medial of
advertising and publicity whatsoever; (ii) broadcast by radio and
television, and to license and authorize others to so broadcast in the
Territory, parts of the Picture, and any literary or dramatic material included
in the Picture or upon which the Picture is based, and to use in conjunction
therewith any other literary, dramatic or musical material; and (iii) use,
license and authorize others to use the name, physical likeness of any actor,
writer, director or executive producer rendering services in connection with
the Picture, provided, however, LA Ideas shall abide by

 

2

 

any
reasonable restrictions on the use of the name, physical likeness and voice of
any actor, writer, director or executive producer rendering services in
connection with the Picture set forth in any agreement between Licensor and
such person of which Licensor notifies LA Ideas in writing in advance.

 

4.5.5        Promotional
Announcements.  To cause promotional
announcements of the Picture to be made (should LA Ideas desire to do so) and
prints thereof to be manufactured, exhibited and distributed by every means,
method and device now or hereafter known.

 

4.5.6        Copies.  To manufacture and/or procure an unlimited
number of copies of the Picture.

 

4.5.7        Claims.  To assert, prosecute, handle and settle in
any and all parts of the Territory all claims or actions or causes of action
against any and all persons for the unauthorized or illegal use, copying
reproduction, release, distribution, exhibition or performance of the Picture
or any part of versions thereof, or of the literary, dramatic or musical
material upon which the Picture is based or which are used therein, or any part
or version thereof, in any media which is part of the rights granted hereunder or
for the enforcement or protection of all or any rights herein granted or
purported to be granted to LA Ideas, together with full and complete authority
and power of attorney in the name of Licensor or otherwise to do all or any of
the foregoing, and to execute, acknowledge, verify and deliver any all
consents, documents, releases or other papers or documents of any kind
pertaining thereto or any thereof in the name of or on behalf of Licensor,
which Licensor fails or refuses, after request and reasonable notice, to
execute, acknowledge, verify and/or deliver. 
LA Ideas may settle any claim pursuant to this Section which
involves the collection of money only or the payment of money only out of Gross
Proceeds collected or to be recouped out of Gross Proceeds hereunder without
the prior consent of Licensor.  If
Licensor, or any parent or affiliated company, is to pay any money or incur any
obligation in connection with such settlement, or if such settlement imposes
any limitation on Licensor’s rights or interests in the Picture, LA Ideas shall
not agree to such settlement without the prior written consent of Licensor.

 

4.5.8        Sub-License.
LA Ideas may grant further sub-license(s) in respect of the rights granted to
it hereunder to any third parties.

 

5.             DELIVERY.

 

5.1           Physical
Elements.  Licensor shall deliver the
Picture to LA Ideas, free and clear from any liens, encumbrances, or any claims
whatsoever.  In connection therewith, Licensor
shall deliver to LA Ideas the physical elements as set forth in

 

3

 

the “Delivery
Requirements” attached hereto as Exhibit A.  Such elements shall be delivered to Kyle
Borg, or such other person as may be designated by LA Ideas from time to time.

 

5.2           Documents.  Licensor also agrees to concurrently deliver
to LA Ideas the following:

 

5.2.1        Chain
of Title Documents.  Any and all
documents necessary to prove or effectuate the chain of title.

 

5.2.2        Certificate
of Insurance.  A certificate of
errors and omissions insurance, naming as an additional insured “LA Ideas Inc.”,
its affiliated and subsidiary entities, and the successors, licensees, assigns,
officers and directors of each of the foregoing at no cost to LA Ideas.  Such policy shall be endorsed to provide LA
Ideas with not less than 30 days notice of cancellation or material change in
such policy.  Licensor agrees that it will
keep such insurance in effect throughout the term hereof and such policy shall
be issued by an insurance company acceptable to LA Ideas with not less than
limits of $1,000,000 per claim and $3,000,000 in the aggregate and a deductible
of not more than $10,000 per claim.  If,
after the initial three year term of such errors and omissions insurance
policy, the prevailing industry standard deductible is higher than $10,000,
then the deductible on any renewal policy for the remainder of the term shall
be such prevailing industry standard rate.

 

5.2.3        Scripts.  A copy of the final shooting script; a
legible typewritten copy in the English language of a detailed continuity
script containing final dialogue (word for word), narration, song vocals, as
well as a cut by cut description of the action, conforming exactly to the
photographic action and soundtrack; one copy of the editor’s code book, if any;
and one copy of the lined script.

 

5.2.4        Music
Cue Sheets.  A copy of a music cue
sheet showing the particulars of all music, the title of each composition,
names of composers, publishers, and copyright owner(s) and/or synchronization
and performance rights owner(s); the usages (whether instrumental,
instrumental-visual, vocal, vocal-visual or otherwise), the place and number of
such uses, running time for each cue, the performing rights society involved,
and any other information customarily set forth in music cue sheets.

 

5.2.5        Publicity
Materials.  Publicity materials,
including at least reproduction quality color and black and white photographs
of the principal actors and key scenes from the Picture.

 

4

 

5.2.6        Promotional
Materials.  Where available, a black
and white production stat (being a high contrast black and white print) of the
logo of the title of the Picture; where available, a color 5” by 4”
transparency of the title logo.

 

5.2.7        Dubbing
Restrictions.  A statement of any
restrictions as to the dubbing of the voice of any player, if any.

 

5.2.8        Cutting
Restrictions.  A statement of any
restrictions as to the cutting or editing of the Picture, if any.

 

5.2.9        Titles.  A typewritten list of the main titles and end
titles.

 

5.2.10      Biographies.  A biography of each of the principal members
of the cast.

 

5.2.11      Synopsis.  A brief synopsis in English (one typewritten page in
length) of the content.

 

5.2.12      Credits.  The statement(s) of credits to accord credit
on the screen, in advertising and on recordings, and excerpts as to any
restrictions as to use of name and likeness.

 

5.2.13      Cast.  One (1) copy of a list indicating the
name of the character portrayed by each player and a complete description of
the character.

 

5.3           Inspection.   All of the elements required in paragraphs
5.1 and 5.2 above are sometimes collectively referred to herein as the “Delivery
Materials”.  To the extent that delivery
is incomplete or fails to meet the requirements specified herein, LA Ideas
shall so notify Licensor, and Licensor shall immediately thereafter correct all
such deficiencies. If Licensor fails to meet such requirements then without
waiving any of LA Ideas’ other rights and remedies, LA Ideas shall have the
right, but not the obligation, to cure the defect.  The cost of any element of delivery supplied
by LA Ideas which is omitted by Licensor, or does not meet the creative and
technical specifications herein, may be recouped by LA Ideas from any
disbursements to or for the account of Licensor hereunder.

 

6.             PARTICIPATION.

 

6.1           Subject to
the full and faithful performance of this Agreement by Licensor and provided
Licensor is not in material default of this Agreement, in consideration of the
rights, license and privileges herein granted, LA Ideas agrees to pay Licensor
its share of “Gross Proceeds” (defined below) as set forth in this Section.

 

6.2           Gross
Proceeds shall be applied in the following manner and in the order set forth:

 

6.2.1        LA
Ideas shall deduct and retain a “Distribution Fee” as follows:

 

5

 

6.2.1.1     For
the United States:  Twenty Percent (20%) of
Gross Proceeds; and

 

6.2.1.2     For
the rest of the Territory:  Thirty Percent
(30%) of Gross Proceeds;

 

6.2.2        LA
Ideas shall recoup its Distribution Costs and Expenses as defined in Section 7.4;
and

 

6.2.3        100%
of the remaining Gross Proceeds after Licensor deducts its Distribution Fee and
recoups its Distribution Costs and Expenses (“Remaining Gross Proceeds”) shall
be paid to Licensor; provided, however, that:

 

6.2.3.1     50% of the Remaining Gross Proceeds derived
solely from sales of Videograms and/or Internet Transmissions made on or from
the website carpoolguy.com or any other website affiliated with the Picture
shall be retained by LA Ideas (as the assignee of Shoolery Designs, Inc.) as
set forth in that certain agreement between Shoolery Designs, Inc. and
Public Media Works, dated as of February 1, 2005 (“Shoolery Agreement”);
and

 

6.2.3.2     A royalty of Fifty Cents ($.50) shall be retained
by LA Ideas (as the assignee of Shoolery Designs, Inc.) as set forth in
the Shoolery Agreement for each DVD and/or other home video unit of the Picture
sold or distributed and not returned during the Term
in the Territory except sales derived from the website carpoolguy.com or any other
website affiliated with the Picture.

 

6.3           Gross
Proceeds shall be defined, calculated, accounted for and paid as set forth in
Sections 7 and 8 below.

 

7.             GROSS
PROCEEDS, DISTRIBUTION COSTS AND EXPENSES.

 

7.1           Gross
Proceeds.  “Gross Proceeds” shall
mean all monies actually collected by LA Ideas from the distribution of the
Picture by means of Videograms, Video on Demand, Pay Per View and Internet Transmission
(herein sometimes collectively called “distribution”).

 

7.2           Exclusions
from Gross Proceeds.

 

The
following shall not be included in Gross Proceeds:

 

7.2.1        Refunds.  Any monies paid to LA Ideas and thereafter
refunded (and if any such monies have been included in computing any sums paid
to

 

6

 

Licensor,
such payment shall be deemed an overpayment); it is understood money shall be
refunded only in exercise of good faith business judgment.

 

7.2.2        Advances
and Security Deposits.  Any monies
received by LA Ideas in the nature of advances or security deposits until such
monies are earned or become non-refundable.

 

7.2.3        Discounts
and Allowances.  All discounts or
allowances paid or granted to third parties in the ordinary course of business
in connection with the distribution of the Picture as permitted hereunder.

 

7.2.4        Taxes.  All sums paid or accrued on account of sales,
use, value of the Picture, receipts, income remittance, and any other taxes,
however denominated, to any governmental authority directly or indirectly
related to the Picture (but not including any corporate income or franchise tax
on LA Ideas’ or any affiliates’ income), including any cost (fairly apportioned
by LA Ideas to the Picture hereunder) of contesting the same and all sums paid
or accrued on account of all duties, customs and imposts, costs of acquiring
permits and other similar authority to secure the entry and exercise of the
rights hereunder.

 

7.2.5        Claims.  Amounts paid, or reasonably reserved, for the
payment of any claims, actions or causes of action arising out of LA Ideas’
distribution of the Picture.

 

7.3           Distribution
Costs and Expenses.  LA Ideas shall
advance all Distribution Costs and Expenses and shall recoup the same in
accordance with Section 6.2.2.  “Distribution
Costs and Expenses” shall mean the following:

 

7.3.1        Manufacture/Duplication
of Discs, Etc.  All costs incurred in
connection with the manufacture, duplication, delivery, insurance and storage
of discs, tapes and/or other Videograms of the Picture;

 

7.3.2        Promotional
Announcements.  If LA Ideas
determines that it is necessary or desirable to deliver to any of its licensees
in connection with its distribution of the Picture, promotional announcements,
in whatever length or lengths, LA Ideas shall cause such promotional
announcements to be prepared.  The cost
thereof shall be considered “Promotional Costs” (as defined below).

 

7.3.3        Advertising,
Sales, Marketing and Publicity.  Advertising,
sales, marketing and publicity costs (“Promotional Costs”), including without
limitation, all costs incurred by LA Ideas in connection with Section 4.5.5
above, the cost of advertising in newspapers, trade papers, magazines, over
radio or television, sales promotion books and the cost of press kits and
synopses, the cost of entertaining and travel, relating to the

 

7

 

advertising,
sales, marketing and publicity of the Picture, and the cost of any and all
advertising and promotional activities; provided, however, for any advertising
or promotional materials relating to more than one of LA Ideas property, the
costs thereof shall be fairly allocated and the allocated amount charged hereto.  Promotional Costs must be approved by Licensor prior to
expenditure.  Such approval shall be
deemed granted unless reasonable objection is received in writing within 3
business days after receipt of LA Ideas’ notice of its desire to expend such
costs.

 

7.3.4        Miscellaneous.  All other costs incurred by LA Ideas in
connection with the distribution of the Picture.

 

7.3.5        Costs
of Collection.  Costs, including, but
not limited to, reasonable attorneys’, outside accountants, and collection
agency’s fees and costs incurred in any claim or proceeding brought by or
against LA Ideas in collection of any Gross Proceeds in connection with the
Picture or the Agreement.  The foregoing
shall include the cost of securing royalty payments from the Copyright Royalty
Tribunal, AGICOA, and similar and successor organizations, such cost to be a
portion of LA Ideas’ overall cost for securing such payments for all programs
distributed by LA Ideas, if any, prorated based upon the amount that the
recovery for the Picture bears to the amount recovered for all payments so
secured.

 

7.4           Residuals.  It is expressly understood and agreed that
the costs for rerun, reuse or residual payments arising out of the distribution
of the Picture hereunder shall be paid and borne solely by Licensor, including,
without limitation, pension, health and welfare paid to or in connection with
actors, writers, directors and musicians who provided services or granted
rights in connection with the production of the Picture pursuant to certain
collective bargaining agreements entered into by Licensor, rerun or reuse
payments required by any and all collective bargaining agreements to which
Licensor is a party or by which it may be bound, any and all additional
payments (whether expressed in fixed amounts or in percentages, including, but
not limited to, television rerun, re-use payments and/or any other payments
required to be made to or on behalf of persons or firms used in or furnishing
rights in the Picture by reason of any collective bargaining agreement and/or
individual employment agreements) required to be made with respect to any
persons or firms who render services upon or furnish material or rights for the
Picture, except as set forth in Paragraphs 7.2.3.1 and 7.2.3.2 above, together
with all taxes, fees, contributions and similar expenses attributable to such
payments.

 

7.5           Music.  All Music synchronization license fees and
master use license fees payable in connection with the exercise of distribution
rights granted hereunder shall be paid and borne solely by Licensor.

 

7.6           Gross
Proceeds; No Guarantee.  LA Ideas
makes no warranty or representation about whether or not any Gross Proceeds
shall be realized or the extent thereof,

 

8

 

and LA
Ideas shall have no liability to Licensor if any Gross Proceeds which are
realized fail to reach any particular level.

 

8.             ACCOUNTING.

 

8.1           Accounting
Periods.  Gross Proceeds hereunder
shall be computed by LA Ideas based upon the aggregate of Gross Proceeds
derived from distribution of the Picture during accounting periods (herein “accounting
periods”) as specified below.  The first
accounting period hereunder shall commence on the date the Picture is first
distributed under this Agreement.  LA
Ideas shall render accountings on a quarterly basis.  LA Ideas shall render an accounting statement
to Licensor within thirty (30) days after the end of each accounting period
during which any Gross Proceeds are received by LA Ideas hereunder or
Distribution Expenses are incurred hereunder. 
LA Ideas shall have the right, in its sole discretion, to change the
date in which to render an accounting, but in no event shall any accounting
period be longer than the time period agreed to above.  Each accounting statement shall be set forth
in reasonable detail the Gross Proceeds received by LA Ideas during the
accounting period covered by such statement and the share thereof, if any, payable
to Licensor.  Concurrently with the
furnishing of any such statement, LA Ideas shall pay Licensor and any other
parties as set forth herein its share of Gross Proceeds, if any, payable to
Licensor pursuant to said accounting statement. 
If, during any accounting period or periods, LA Ideas incurs a net loss,
such loss or losses shall be carried forward into one or more accounting
periods in which Gross Proceeds are realized and applied as a reduction of said
Gross Proceeds.  LA Ideas may, during the
pendency of any claim brought against LA Ideas by any third party with respect
to any breach of any warranty or agreement made by Licensor under the
Agreement, withhold any sums payable to Licensor hereunder in an amount which,
in LA Ideas’ reasonable business judgment, is sufficient to satisfy Licensor’s
liability to LA Ideas in connection therewith. 
LA Ideas may also, in each accounting statement, provide for reserves
which, in LA Ideas’ reasonable business judgment, are sufficient to cover any
potential returns and the potential liability of LA Ideas from claims brought
against LA Ideas by any third party with respect to the Picture.  LA Ideas shall liquidate reserves for returns
within twelve (12) months.

 

8.2           Books
and Records.  During any periods in
which Licensor is entitled to accountings hereunder, and for at least two (2) years
thereafter, LA Ideas shall maintain books and records relative to Gross
Proceeds derived from distribution of the Picture by LA Ideas during that
Period.  LA Ideas shall retain any books
and records with respect to any item objected to until such objection is
resolved.

 

8.3           Examination
of Books and Records.  If Licensor so
requests in writing, and affording LA Ideas at least ten (10) business
days’ notice, LA Ideas will permit Licensor’s designated certified accountant
to make an examination, at Licensor’s expense, of such of its books and records
as may be necessary to verify the accuracy of any statement submitted to
Licensor by LA Ideas hereunder, which

 

9

 

examination
with respect to each statement must take place during reasonable business
hours, at LA Ideas’ office, only once during the one (1) year period
subsequent to the delivery of such earnings statement.  Said examination may relate only to the sums
contained on the last four (4) earnings statements, provided that
examination shall not cover statements previously examined.  No examination shall continue longer than
thirty (30) days after commencement thereof. 
LA Ideas need not furnish Licensor with copies of any records inspected,
but Licensor may copy said records or make extracts therefrom at its sole
expense.

 

8.4           Incontestability.  Each statement rendered hereunder shall be
binding upon Licensor and not subject to objection for any reason unless such
objection is made in writing stating the basis thereof and delivered to LA
Ideas within one (1) year from delivery of such statement or, if an
examination is commenced prior thereto, within ninety (90) days from the
completion of such examination.  Unless
notice is given to LA Ideas as provided in this Section 8.4, each
statement and other account rendered by LA Ideas shall be final, conclusive and
binding upon Licensor and shall constitute an account stated.  The inclusion of any item from a prior
statement on subsequent statements shall not render such prior-appearing item
contestable or recommence the running of the applicable one (1) year
period with respect thereto.

 

9.             WARRANTIES
AND REPRESENTATIONS; INDEMNIFICATION.

 

9.1           Warranties
and Representations.  In order to
induce LA Ideas to enter into this Agreement, Licensor warrants and represents
to LA Ideas as follows:

 

9.1.1        Licensor
has the right, power and authority to enter into this Agreement and grant to LA
Ideas all of the rights and licenses herein granted and agreed to be granted to
LA Ideas; that the execution and delivery of this Agreement does not and will
not violate the Certificate of Incorporation of or By Laws of Licensor or any
court or administrative ruling, contract, instrument or any other agreement, to
which Licensor is a party or by which it may be bound.

 

9.1.2        Licensor
is the sole and absolute owner of and has the absolute right to grant to or
vest in LA Ideas all of the rights, licenses and privileges granted to or
vested in or to be granted to or vested in LA Ideas under this Agreement.

 

9.1.3        All
of the following have been or will be fully paid or discharged:

 

9.1.3.1     All
claims and rights of owners of copyrights of literary, dramatic, musical rights
and other property or rights in or to all stories, plays, scripts, scenarios,
themes, incidents, plots, characters, dialogue,

 

10

 

music,
words, and other material of any nature whatsoever appearing, used, or recorded in the Picture;

 

9.1.3.1     All
claims and rights with respect to the use, distribution, performance,
exhibition and exploitation of the Picture, and any music contained therein,
throughout the Territory;

 

9.1.3.2     All
costs of producing and completing the Picture have been fully paid or
discharged, and there are not, and there will not be outstanding at any time
during the term hereof, liens, claims, charges, encumbrances, restrictions,
agreements, commitments, arrangements whatsoever with any person, firm or
corporation, or any obligation (past, present or future), or any defaults
under, or breaches, of any contract, license or agreement which can, or will, in
any way interfere with, impair, abrogate or adversely or otherwise affect any
of the rights granted to LA Ideas pursuant to the terms of this Agreement, and
that there are not and will not be any payments of any kind required to be made
by LA Ideas in respect, or as a result, of any use of the Picture pursuant to
the rights and license herein granted to LA Ideas, except as set forth in Paragraphs
6.2.1.1 and 6.2.2.2.

 

9.1.4        Neither
the Picture nor any part thereof, nor any materials contained therein or
synchronized therewith, nor the title thereof, nor the exercise of any right,
license or privilege herein granted, violates or will violate, or infringes or will
infringe, any trademark, trade name, contract, agreement, copyright (whether
common law or statutory) patent, literary, artistic, dramatic, personal,
private, civil or property right or right of privacy or “moral rights of
authors” or any other right whatsoever of, or slanders or libels, any person,
firm, corporation, or association whatsoever.

 

9.1.5        Licensor
owns or controls, without any limitations or restrictions whatsoever, all
rights granted hereunder in and to the Picture and all the soundtracks thereof;
and has obtained all necessary licenses required for the production,
synchronization, exhibition, performance, distribution, marketing and
exploitation of the Picture hereunder (including the dramatic and non-dramatic
music performance rights to the music contained therein) throughout the
Territory and during the Term, for any and all purposes licensed hereunder and
by every means, method and device now or hereafter known or required for the
full, complete and unlimited exercise and enjoyment by LA Ideas of each and all
of the rights herein granted to it.

 

9.1.6        The
performing rights to all musical compositions contained in the Picture are
controlled by the Society of European State Authors and Composers, Inc. (“SESAC”),
Associated Music Publishers, Inc. (“AMPI”), American

 

11

 

Society
of Composers, Authors and Publishers (“ASCAP”), Broadcast Music Inc. (“BMI”) or
their affiliates or are in the public domain or are controlled by Licensor to
the extent required for the purpose of this Agreement.

 

9.1.7        With
respect to the payment of rerun or residual payments, there are no restrictions
which would or could prevent LA Ideas from distributing the Picture by any
media or means for which rights are granted to LA Ideas hereunder and there are
not and will not be any payments (out of any part of any revenues from the
distribution or exploitation of the Picture or otherwise) which must be made by
LA Ideas to any actors, musicians, directors, writers or to other persons who
participated in the Picture, or to any union, guild or other labor organization
for any right to exhibit the Picture or as compensation in connection with such
exhibition or for any other use of the Picture or any of the rights therein and
thereto granted hereunder.

 

9.1.8        The
Picture has been duly and properly registered for copyright in the United
States or can and prior to delivery to LA Ideas will be so registered, and the
copyright will be valid in the United Stats and in all countries party to the
Universal Copyright Convention or the Berne Convention.  The copyrights in the Picture and the
literary, dramatic and musical material upon which the Picture is based or
which are contained in the Picture will be valid and subsisting during the term
throughout the Territory, and no part of the Picture is in the public domain.

 

9.1.9        LA
Ideas will quietly and peacefully enjoy and possess each and all of the rights,
licenses and privileges granted or purported to be granted to it throughout the
term and the Territory without hindrance on the part of any third party.  There is not now outstanding any litigation
or threatened litigation, or any claims or demands or threats of claims, with
respect to the Picture, the literary, dramatic or musical material upon which
the Picture is based, or which is used therein, or the physical properties
thereof.

 

9.1.10      Licensor
has not sold, assigned, transferred or conveyed, and will not sell, assign,
transfer or convey, to any party, any right, title or interest in and to the
Picture or any part thereof or in and to the dramatic or literary material upon
which it is based, adverse to or derogatory of the rights granted to LA Ideas,
and Licensor has not an will not authorize any other party to exercise any
right to take any action which might tend to derogate from or compete with the
rights herein granted or purported to be granted to LA Ideas.

 

9.2           Licensor’s
Indemnity.  Licensor does hereby and
shall at all times defend, indemnify and save harmless LA Ideas, its subsidiary,
parent and affiliated

 

12

 

companies,
its officers, directors and employees, and its licensees and assignees, of and
from any and all claims, demands, and causes of action, or any thereof arising
out of or relating to or connected with or resulting from any actual or alleged
breach by Licensor or any of its representations, warranties, covenants or
undertakings under the Agreement.  Upon
not more than ten (10) day notice from LA Ideas of any such claims,
demands or action being advanced or commenced, Licensor agrees to adjust,
settle, or defend the same (at Licensor’s election) at the sole cost of
Licensor; if Licensor shall fail promptly to do so, LA Ideas shall have the
right and is hereby authorized and empowered by Licensor to appear by its
attorneys in any such action, to adjust, settle, compromise, litigate, contest,
satisfy judgments and take any other action necessary or desirable for the
disposition of such claim, demand or action; in any such case Licensor within
fifteen (15) days after demand therefor by LA Ideas shall fully reimburse LA
Ideas for all such payments and expenses, including attorneys’ fees; if
Licensor shall fail so to reimburse LA Ideas then, without waiving its right
otherwise to enforce such reimbursement, LA Ideas shall have the right to
deduct the said amount of such payments and expenses, or any part thereof, from
any sum payable or accruing, to or for the account of Licensor under this or
any other agreement.

 

9.3           Credits.
 Licensor warrants and represents that
the main and end titles of the Picture delivered to LA Ideas hereunder contain
or shall contain all necessary and proper credits for the actors, directors,
writers and all other persons appearing in or connected with the production of
the Picture who are entitled to receive the same.  Licensor shall deliver to LA Ideas as part of
the delivery requirements of the Picture hereunder a complete statement setting
forth the names of all persons to whom Licensor is contractually obligated to
accord any credit in any advertising, publicity or exploitation of the Picture
and to include in such statements excerpts from any such agreements defining
and describing the form and nature of such required credits.  LA Ideas shall be entitled to rely entirely
upon Licensor’s aforesaid warranty and statements to be delivered as aforesaid
and if by reason of any improper information or lack of information contained
in Licensor’s said statements, LA Ideas shall accord to any person improper or
insufficient credit or no credit and such person by reason thereof shall made
any claim against LA Ideas, then at the election of LA Ideas, evidenced by
written notice to Licensor, Licensor agrees at its own cost and expense, to
defend, indemnify and hold LA Ideas harmless against any such claim, action or
proceeding, including any judgment that may be sustained against LA Ideas by
reason thereof.  If LA Ideas elects, or
if Licensor, following receipt from LA Ideas of such written notice, shall fail
to promptly undertake the defense of any such claim, then LA Ideas may
undertake such defense, at the expense of Licensor, which shall be deemed to
include court costs and reasonable outside attorneys’ fees, and may, in good
faith, settle or adjust the same of such terms as LA Ideas may deem fair and
proper.  Licensor will upon demand
reimburse LA Ideas for any such costs.  LA
Ideas shall have the right to deduct the amount of its expenses incurred as a
result of the defense of such claim, including the amount of any judgments
required to be paid by LA Ideas from any sums payable or

 

13

 

accruing
under this Agreement to or for the account of Licensor.  LA Ideas shall inform its licensees of the
provisions of this Section.   No casual
or inadvertent failure by LA Ideas or failure by its licensees to comply with
the provisions of this Section shall constitute a breach of this
Agreement; provided, however, that if LA Ideas casually or inadvertently fails
to comply with this Section, then upon written notice to LA Ideas specifying
such failure in reasonable detail, LA Ideas shall use reasonable efforts to
prospectively cure such failure as to prints and advertisements not yet printed
or committed to as of the date of LA Ideas’ receipt of such notice. LA Ideas or
its relevant subsidiary or affiliate shall have the right to add a logo card
credit as the distributor of the Picture in the Territory, in a form specified
by LA Ideas in last position on screen.

 

10.           LA
IDEAS INDEMNIFICATION.

 

LA
Ideas does hereby and shall at all times defend, indemnify and save harmless
Licensor, its subsidiary, parent and affiliated companies, its officers,
directors and employees, from any and all claims, actions or causes of action
brought or made by third parties unaffiliated with Licensor arising out of any
distribution by LA Ideas of the Picture contrary to the terms of this Agreement
or a breach by LA Ideas of its covenants and agreements hereunder (other than a
claim to which Licensor’s indemnity applies).

 

11.           DEFAULT.

 

The
rights herein granted by Licensor are of a unique character and of such value
that the loss of these rights could not be adequately compensated in damages in
an action at law, and a breach by Licensor of any material provision hereunder
will cause irreparable injury.  Licensor
therefore expressly agrees that LA Ideas shall be entitled to seek equitable
relief by way of temporary restraining order, preliminary or permanent
injunction or otherwise to prevent the breach of this Agreement and to secure
its enforcement.  However, the sole right
of Licensor as to any breach or alleged breach by LA Ideas shall be the
recovery of money damages, and the rights herein granted by Licensor shall not
terminate by reach of such breach.  Each
of LA Ideas’ several rights, remedies and options hereunder shall be cumulative
and no one of them is exclusive of the others or of any right, remedy or
priority allowed by law or in equity, and the pursuit of one remedy shall not
be deemed a waiver of any other remedy.  Without
limiting the generality of the foregoing, the rights granted herein shall not
terminate, abate or otherwise be adversely affected if Licensor shall be
adjudicated a bankrupt, or a receiver, trustee or liquidator shall be appointed
to administer its affairs or assets, or if Licensor shall file a petition in
bankruptcy or a petition for an arrangement with creditors under Chapter XI of
the bankruptcy laws of the United States, or similar laws of other
jurisdictions, or make a general assignment of its assets for the benefit of
creditors.

 

12.           MISCELLANEOUS.

 

12.1         No Liens.  All Gross Proceeds derived from distribution
of the Picture shall be received by LA Ideas as its sole and absolute property
and, as between LA Ideas

 

14

 

and
Licensor, LA Ideas’ only obligation under this Agreement shall be to pay to
Licensor sums equal to Licensor’s share of Gross Proceeds, if any, becoming
payable hereunder.  There is a
creditor-debtor relationship between LA Ideas and Licensor with respect to
payment of amounts due Licensor hereunder and nothing contained herein shall be
construed to create an agency, trust or fiduciary obligation with respect to
such amounts or to prevent LA Ideas from commingling any such amounts with any
other funds or give Licensor a lien on the Picture and Licensor waives any
right to claim to the contrary.  LA Ideas’
obligation to pay Licensor hereunder shall not bear interest nor entitle
Licensor to gains which may accrue to such funds prior to payment to Licensor.

 

12.2         No
Fiduciary Obligation.  No fiduciary
or separation of funds obligations of any sort are created by this Agreement.

 

12.3         LA Ideas’
Authority.  Except for Licensor’s
approval right with respect to Promotional Costs, as between Licensor and LA
Ideas, LA Ideas shall have complete authority to exploit its distribution
rights hereunder throughout the Territory in accordance with such methods,
policies and terms as it may in good faith determine.  LA Ideas agrees to use good faith efforts to
exploit its distribution rights hereunder, provided, however, that Licensor
understands that LA Ideas has not made any representations or warranties,
express or implied, as to the amount of proceeds to be derived from the exploitation
of the Picture nor that there will be any sum payable to Licensor hereunder nor
that LA Ideas will successfully exploit the Picture.  Further, LA Ideas may refrain from exploiting
any or all of its rights in the Picture in any particular territory if LA Ideas,
in its good faith opinion, believes it is desirable to do so; provided, however
that if LA Ideas elects to completely abandon its distribution of the Picture
by written notice to Licensor, then this Agreement shall terminate and all
rights granted herein shall revert to Licensor.”

 

12.4         Force
Majeure.  Anything herein contained
to the contrary notwithstanding, neither party shall be liable to the other in
damages by virtue of any failure to perform hereunder caused by any cause
beyond its control customarily considered an event of force majeure, including,
but not limited to, fire, earthquake, flood, epidemic, accident, explosion,
casualty, strike, lockout, labor controversy, riot, civil disturbance, act of a
public enemy, embargo, war, act of God, any governmental ordinance or law, the
issuance of any executive or judicial order, any failure or delay of any
transportation agency, any failure or delay with respect to the electrical or
sound equipment or apparatus, or by any laboratory, any failure without fault,
to obtain material, transportation, power, or any other essential thing
required in the conduct of its business or any similar causes.

 

12.5         No
Partnership.  Nothing herein
contained shall constitute a partnership between or joint venture by the
parties hereto, or constitute either party the agent of the other.  Neither party shall hold itself out contrary
to the terms of this paragraph, and neither party shall be or become liable by
any representation, act or omission

 

15

 

of the
other contrary to the provisions hereof. 
This Agreement is not for the benefit of any third party and shall not
be deemed to give any right or remedy to any such party whether referred to
herein or not.  LA Ideas shall not be
considered a trustee, pledge holder, fiduciary or agent of Licensor by reason
of anything done or any money collected by it.

 

12.6         No
Implied or Continuing Waiver.  No
failure on the part of LA Ideas or Licensor to exercise and no delay in exercising,
and no course of dealing with respect to any right, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under this Agreement preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege.

 

12.7         Notices.  All notices and other communications to be
given by either party hereunder shall be in writing and shall be delivered by
hand, sent by facsimile, air express, or certified mail return receipt
requested.  Every notice shall be deemed
received if hand-delivered, on the date of delivery; if by facsimile, on the
date of confirmation of such transmittal’s completion;  if by air express, on the date of delivery;
and if sent otherwise, on the third (3rd) day after its mailing,
exclusive of Saturdays, Sundays and holidays. 
All notices and communication hereunder shall be addressed as follows,
unless the parties agree in writing otherwise:

 

	
   

  	
  To LA Ideas:

  	
  LA Ideas Inc.

  	
   

  
	
   

  	
   

  	
  6222 Wilshire
  Boulevard

  	
   

  
	
   

  	
   

  	
  Suite 400

  	
   

  
	
   

  	
   

  	
  Los Angeles,
  California 90048-5100

  	
   

  
	
   

  	
   

  	
  Attention: Kyle
  Borg

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  With a copy
  concurrently to:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Weissmann,
  Wolff, Bergman, Coleman

  	
   

  
	
   

  	
   

  	
  Grodin &
  Evall, LLP

  	
   

  
	
   

  	
   

  	
  9665 Wilshire
  Boulevard, Suite 900

  	
   

  
	
   

  	
   

  	
  Beverly Hills,
  California 90212

  	
   

  
	
   

  	
   

  	
  Attention:
  Andrew J. Schmerzler

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  To Licensor:

  	
  Public Media
  Works

  	
   

  
	
   

  	
   

  	
  Carpool Guy
  Partners LLC

  	
   

  
	
   

  	
   

  	
  4759 Oxnard
  Street

  	
   

  
	
   

  	
   

  	
  Van Nuys,
  California 91411

  	
   

  

 

12.8         Headings.  The headings of this Agreement or any
paragraphs hereof are inserted for the purpose of convenient reference and it
is recognized that they may not accurately or adequately describe the contents
of the paragraphs which they head.  Such
headings shall not be deemed to limit, cover or in any way affect the scope,

 

16

 

meaning
or intent of this Agreement, or any part thereof, nor shall they otherwise be
given any legal effect.

 

12.9         Entire
Agreement.  This Agreement supersedes
and cancels all prior negotiations and understandings in the premises between
the parties, and contains all of the terms, conditions and promises of the
parties hereto in the premises.  No
modification hereof shall be valid or binding unless in writing and executed by
both parties hereto.  No officer,
employee or representative of LA Ideas has any authority to make any
representation or promise not contained in this Agreement, and Licensor has not
executed this Agreement in reliance on any such representation or promise.

 

12.10       Governing
Law.  This Agreement shall be
construed and interpreted pursuant to the applicable federal laws of the United
States and the substantive laws of the State of California and the venue for
any dispute shall be the courts located in Los Angeles County, California.

 

12.11       Violation
of Law.  Nothing contained herein
shall be construed as to require the commission of any act contrary to law, and
wherever there is any conflict between any provision of this Agreement and any
material statute, law or ordinance contrary to which the parties have no legal
right to contract, the latter shall prevail, but in such event the provisions
of this Agreement affected shall be curtailed and limited only to the extent
necessary to bring it within legal requirements.

 

17

 

12.12       Person.  As used herein, the term “persons” shall,
unless the context clearly provides to the contrary, include any association,
organization, partnership, business trust or corporation as well as natural
persons.

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their duly
authorized officers as of the day and year above written.

 

	
   

  	
  PUBLIC MEDIA
  WORKS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Corbin
  Bernsen

  	
   

  
	
   

  	
  Print Name:

  	
  Corbin Bernsen

  	
   

  
	
   

  	
  Print Title:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CARPOOL GUY
  PARTNERS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas A.
  Szabo

  	
   

  
	
   

  	
  Print Name:

  	
  Thomas A. Szabo

  	
   

  
	
   

  	
  Print Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LA IDEAS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kyle Borg

  	
   

  
	
   

  	
  Print Name:

  	
  Kyle Borg

  	
   

  
	
   

  	
  Print Title:

  	
  COO

  	
   

  
					

 

18

 

EXHIBIT ”A”

 

DELIVERY REQUIREMENTS

 

The following items shall
be delivered to LA Ideas:

 

19

 

EXHIBIT ”B”

 

DELIVERY SCHEDULE

 

20

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