Fill and Sign the Hco Cape May Llc Offering Statement 1 a 1 a Form

1 2.20 Form: Clearinghouse Oriented Content License Agreement This Agreement (the "Agreement") is entered into as of this____day of___________, 20____(the "Effective Date") by and between Photographer, Inc. ("Licensor") and CLEARINGHOUSE CORPORATION (hereinafter "Licensee"). WHEREAS: A. Licensor owns a collection of photographs and transparencies; B. Licensee is creating an archive of digital images and other digital information from which it licenses digital images and other digital information to third parties for their commercial and personal uses. Licensee is also in the business of creating products using digital images and other digital information from its archive; and C. Subject to the terms, conditions and limitations set forth herein, Licensee would like to license from Licensor images from the Collection for use in Licensee's archive, licensing activities and products, and Licensor would like to license to Licensee images from the Collection for use in Licensee's archive, licensing activities and products. NOW THEREFORE: In consideration of the mutual promises and covenants contained herein, the parties agree as follows: 1. Definitions The following terms as used herein shall have the following meanings whenever the first letter or letters of the term are capitalized: 1.1. Element "Element" means a chemical or analog record of information (e.g., a slide, transparency, print, negative, audiotape, film, printed material or 2 videotape), or a digital file of such record of information stored in any medium. 1.2. Licensed Element "Licensed Element" means an Element which Licensor has licensed to Licensee under this Agreement which Element is owned by Licensor or whose owner is represented by Licensor and which has been provided to and selected by Licensee pursuant to this Agreement. 1.3. Digitize "Digitize" and variations thereof means converting an Element into digital format such that it can be read, utilized and displayed by a device, machine, or any other technology currently in existence or hereafter developed capable of utilizing digital information. 1.4. On-Line Technology "On-Line Technology" means any method now known or hereafter devised, except distribution by Physical Media, by which end users may access Licensed Elements (e.g., copper wire, fiber wire, satellite, microwave, cellular, etc.). 1.5. Personal Use "Personal Use" means the use of Licensed Elements by an individual or entity that is directly or indirectly authorized by Licensee or a Producer or their respective distributors to acquire a copy of, or have access to Licensed Elements including the right to display the Licensed Elements at various resolutions alone or in combination with other material, to modify the Licensed Elements, to create printed versions of the Licensed Elements and modified versions thereof, and to use the Licensed Elements and modified versions thereof for reference, research and any other purpose, provided all such uses are limited to the private non-commercial use of the user. A public display shall be considered a Personal Use provided the user or any other entity does not charge a fee or charge for viewing the Licensed Elements. 3 1.6. Producer "Producer" means an individual or entity that is authorized by Licensee to incorporate the Licensed Elements in products or services licensed, sold and/or otherwise distributed under Producer's trademark or trade name for the Personal Use of the Producer's (or Producer's distributor's) end users. 1.7. Element License "Element License" means the license granted by Licensee or its distributor with respect to an individual Licensed Element or group of Licensed Elements for commercial use and Personal Use by Licensee's licensees in any medium, which license does not include any right to use Licensee software (other than the Licensed Element), search and retrieval and/or cataloging tools. 1.8. Licensee Product License "Licensee Product License" means the license of Licensee Products granted by Licensee or its distributor to their respective end users for Personal Use. 1.9. Licensee Product "Licensee Product" means products or services created by Licensee which incorporate Licensed Elements (and may include other Elements), and which are licensed, sold and/or otherwise distributed by Licensee or its distributors pursuant to a Licensee Product License. 1.10. Identifying Information "Identifying Information" means information that identifies an Element by identifying the medium (e.g., dimensions, materials, techniques, etc.), the circumstances of creation (e.g., time, social 4 context, etc.), the subject matter (e.g., locations, objects, animals, persons, activities, etc.), and the creator(s) (e.g., name, nationality, birthdate, date of death, etc.) and other information as may be specified by Licensee. Any license of a Licensed Element shall be deemed to include the related Identifying Information, whether prepared and archived with the Element or separately, and no additional sums shall be paid by Licensee for the use of the Identifying Information. 2. License Licensor hereby grants Licensee and its representatives, agents and assigns a non-exclusive, worldwide license as follows: 2.1. Grant Subject to the Term as defined below, the rights granted herein include the right to Digitize, use, reproduce, modify, translate into any language, and create derivative works based upon the Licensed Elements; to combine Licensed Elements with Identifying Information and other materials; to catalog, index, market, advertise, display, distribute, transmit, license, sell, rent or lease copies of the Licensed Elements in any medium whatsoever, whether now known or hereafter devised, including without limitation in advertising and promotional products. 2.2. Modifications As part of the Digitization process, Licensee may remove incidental dust, dirt and other particles from the original Elements, and Licensee may use cloning and other image processing techniques to cover incidental dust, dirt and other particles and imperfections that appear in the resulting Digitized Elements. Licensee also may correct the color and color contrast in the resulting Digitized Elements. However, at all times during the Digitization process, it is Licensee's intent to create Digitized Elements that are substantially true to their respective original Elements. Licensee may crop a Digitized Element under the following circumstances and in the following manner: (i)\x11to eliminate rebate areas, (ii)\x11to create a square or rectangular Digitized Element (not including rebate areas) if the original Element 5 is not square or rectangular in shape (not including rebate areas), (iii)\x11to remove background objects and materials (such as a wall, an easel or other hanging/holding devices) that are separate from depicted objects in the original Elements, and (iv)\x11to remove picture frames. Licensee is developing and may use copy protection schemes, which may result in encoding or encrypting upon the resulting Digitized Element, in connection with its reproduction, distribution and licensing of the Licensed Elements. 2.3. Limitations The foregoing rights may be exercised by Licensee and Licensee's licensees through Element Licenses or Licensee Product Licenses; provided, however, that Licensee shall not grant any Element License without Licensor's prior approval, which shall not be unreasonably withheld. Licensee shall submit requests for approval to Licensor in writing. Licensor will notify Licensee in writing of its approval or disapproval within five business days after receipt of Licensee's written request. If Licensor does not provide such written approval or disapproval within five business days, Licensor will be deemed to have approved the request, and Licensee may proceed to grant the subject Element License. Notwithstanding the foregoing, neither Licensee nor its licensees or assigns shall have any obligation to incorporate the Licensed elements into any product or service whatsoever. 3. Term (1) Length. Subject to the provisions of Paragraph 9 below, the Agreement is for an initial term of _____ years from the Effective Date (the "Term") and shall be automatically renewed for subsequent terms of _____ years each, unless Licensee or Licensor notifies the other in writing of its intent not to renew at least ninety (90) days before the expiration of the Term or any subsequent renewal. (2) Effect of Termination. Upon termination of this Agreement, Licensee shall no longer be entitled to acquire additional Elements, or to use individual Licensed Elements (other than as part of a pre- 6 existing product), as provided for in this Agreement. For Licensed Element already acquired by Licensee and incorporated into products and services of Licensee, its licensees and/or assigns prior to termination, Licensee and its licensees and/or assigns shall retain the right to continue using such Licensed Element in the respective product or service after the Term. Such license shall be subject to all restrictions and obligations as provided for herein. Further, upon termination of this Agreement, the license of digital files from Licensee to Licensor (granted pursuant to paragraph 3(e) below) shall terminate, and Licensor agrees to return all such digital files to Licensee or to destroy such files. 3.1. Identifying Information Licensor shall provide Licensee with Identifying Information related to each Element upon delivery of the Element. Licensee has the right, in its sole discretion, to include some or all of the Identifying Information with each Licensed Element, to combine Identifying Information provided by Licensor with editorial materials from Licensee as well as other sources, and to edit, delete or otherwise change the Identifying Information. 4. Royalties In consideration of the licenses granted herein, Licensee agrees to pay Licensor the amounts as set forth below. Licensee has no other obligation with respect to consideration owing Licensor pursuant to this Agreement, including without limitation, any expenses, costs, services or liability of Licensor. Unless stated otherwise, payments shall be made in U.S. currency to Licensor to this license agreement. 4.1. Advances In accordance with Paragraph 4.3 below, Licensee agrees to pay Licensor a one-time non-refundable advance against Royalties of _____ dollars ($_____) per Licensed Element ("Advance"). This Advance shall be credited against royalties due Licensor under this Agreement. 7 4.2. Royalty Amounts Subject to the Advance, Licensee shall pay Licensor the following royalties (the "Royalties"): (1) Element License. Licensee will pay Licensor a sum equal to _____ percent (__%) of the cash revenues received by Licensee directly from the license of the respective Licensed Elements. (2) On-Line Technology. From the license of Licensee Products distributed by Licensee or by third-party distributors by On-Line Technology, Licensee will pay Licensor its pro rata share of a sum equal to three and one-half percent (3Ω%) of the cash revenues received by Licensee from the distribution (directly or indirectly) to end users of the respective Licensee Product, less any applicable taxes and any service, maintenance, hardware, software, server, telecommunications or other fees or charges payable to third parties that are Licensee's responsibility in connection with the respective On- Line Technology. Licensor's pro rata royalty share shall equal the ratio of the number of Licensed Elements to the total number of Elements in the Licensee Product. 4.3. Payment Schedule (1) Advances. Payments of Advances shall be made forty-five (45) days after the Effective Date. (2) Royalties. Payments of Royalties will be made forty-five (45) days after close of any calendar quarter for the prior quarter following any calendar month in which Licensee received cash revenues from Element Licenses or Licensee Product Licenses relevant to this Agreement. Licensee shall submit to Licensor a written report of the details regarding the applicable revenues, if any, accrued in the relevant quarter, along with the appropriate payments of Royalties, if any; however, Licensee shall have no obligation to make payments to Licensor for Royalties so long as the Advances have not been fully recouped. 8 4.4. Audit Licensee shall initiate an audit of its records with respect to royalties due pursuant to this Agreement on a yearly basis by an independent certified public accountant of Licensee's choice, and Licensor may review copies of said audit only with respect to Licensor's records upon written request. If Licensor believes in good faith that a payment is incorrect after having reviewed said audit, Licensor may notify Licensee in writing that it is requesting an audit at Licensor's expense, but not more frequently than once per year. Such audit shall occur within sixty (60) days of such request at a location to be approved by Licensee. The auditor shall be subject to Licensee's prior written approval, not to be unreasonably withheld, and such auditor shall sign Licensee's then current non-disclosure form in connection with such audit. Licensee shall be required to produce records relating solely to the product in question. If after good faith review is determined by Licensee and the auditor that there is a deficit in Licensor's favor, it is agreed Licensor shall be entitled to the actual dollar amount of such deficit, and Licensor shall not be entitled to sums, interest or any other form of financial or equitable relief beyond such actual deficit. 4.5. License Back Licensee will provide and license back to Licensor, at no cost, two digital files of each Licensed Element for use by Licensor in connection with non-commercial educational, research, reference and archival activities. Licensor agrees that it will not transmit any digital file provided by Licensee over the Internet or other On-Line Technology at a resolution greater than 256 x 256 pixels. The license for the digital files shall terminate upon the termination of this Agreement. 5. Transportation of Elements 5.1. Information About Collection Licensor has identified on Exhibit B attached hereto and incorporated by this reference the works it will make available for digital image 9 licensing under this Agreement, and the number for which color transparencies are already available. 5.2. Works Already in Digital Form For Licensed Elements for which Licensor has digital images of acceptable quality available to Licensee without violating Licensor's agreements with any other parties, Licensor will supply such digital images to Licensee at no additional cost for use in accordance with this Agreement. 5.3. Works with Transparencies Available For Licensed Elements for which Licensor has transparencies of acceptable quality in Licensee's sole judgment, Licensor will supply such transparencies to Licensee at no additional cost. Licensee shall use Licensor's transparencies to create Licensed Elements and shall return the transparencies within ninety (90) days of receipt by Licensee. 5.4. Creation of Transparencies or Digital Images For Licensed Elements for which Licensor does not have digital images or transparencies available for use by Licensee, Licensee may, but shall not be obligated to, arrange for creation of transparencies or digital images in cooperation with Licensor at Licensee's expense. For works designated by Licensee after completion of the initial processing schedule, transparencies or digital images will be created under processing schedules created from time to time based on availability and condition of the work of art or other object, studio space, and other Licensor priorities. 6. Selection of Elements From the Elements and from new Elements Licensor acquires during the Term, Licensee may, but is under no obligation to, select, replicate and/or Digitize any or all such Elements to become Licensed Elements, as provided in this Agreement. 10 7. Transportation of Elements. At Licensee's sole discretion and expense, Licensor shall transport Elements to Licensee's designated offices in compliance with Licensee's shipping guidelines, and, upon delivery of Elements, Licensor shall provide Licensee with an inventory of the delivered Elements. At a minimum, such inventory shall state the number of Elements delivered and ideally shall include the format and subject matter of the Elements. Licensee may replicate and/or Digitize such Licensed Elements and shall make good faith efforts to return the original Elements to Licensor, by air courier freight prepaid, within ninety (90) days of Licensee's receipt of each batch of such Elements unless otherwise agreed to by both parties. Licensee will submit with its return shipment of the Elements to Licensor a list of each Element selected from that shipment. Licensee will pay a holding fee of one U.S. dollar ($1) per Elements per day for each day in excess of ninety (90) days, unless Licensor has approved a longer holding time. Licensee's obligation to pay Licensor a holding fee shall be limited to a maximum of one hundred U.S. dollars ($100) per week, regardless of the number of Elements held. 8. Insurance and Liquidated Damages Licensee shall insure the Elements under its insurance policy (subject to the limits and exclusions of said policy) for a sum of up to $1,500 (U.S.) per original Element and up to $100 (U.S.) per duplicate with a limit per occurrence of $100,000 (U.S.) (which shall supercede the foregoing per-Element limits in the event that liability on a per- Element basis exceeds $100,000) during those periods when the Elements are being held by Licensee and when in transit from Licensee by a carrier designated by Licensee. Licensee assumes no responsibility for loss or damage to the Elements until they are received by Licensee, and Licensee has verified the count and general condition of the Elements. The parties to this Agreement agree that estimation of loss or damage to Elements may be difficult or impossible to determine. Therefore, the parties agree that payment by Licensee's insurer of any insurance claim for loss of or damage to any Elements in an amount not to exceed the sums set forth above shall be 11 considered to be liquidated damages, and shall be a full and final settlement of any claim against Licensee for loss of or damage to any Elements. 9. Credits and Copyright Notices Licensee will credit Licensor within each Licensee Product which incorporated Licensed Elements, and Licensee shall advise its licensees of an obligation to provide such credit in their products which incorporate Licensed Elements. In the event Licensee fails to credit Licensor, Licensee shall exercise good faith efforts to cure prospectively any such failure upon written notice from Licensor specifying such failure. Licensee will include a copyright in Licensee Products that include Licensed Elements, and Licensee shall advise its licensees of any obligation to include a copyright notice in products that include Licensed Elements. In the event Licensee fails to include a copyright notice in Licensee Products, Licensee shall use good faith efforts to cure prospectively any such failure upon written notice from Licensor specifying such failure. 10. Promotion of the Licensed Elements Licensee and any licensees or assigns of Licensee's rights hereunder shall have the right, including in advertising and publicity in any media in connection therewith, to use the Licensed Elements, the name, image, likeness, biography and trademarks of Licensor and/or the respective creator to identify and describe the Licensed Elements and to promote, advertise and market products and/or services containing the Licensed Elements. 11. Licensee Property Licensor may not use the trademarks or service marks of Licensee in any advertising, publicity or promotion without Licensee's prior written consent. 12 12. Representations and Warranties Licensor hereby represents and warrants to Licensee as follows: (1) That Licensor is the holder of sufficient rights, including copyrights, in any Elements produced under this Agreement and has the full right and power to enter into and perform the obligations hereunder according to the terms of this Agreement. No other party's permission is required for Licensor to convey the license and rights granted under this Agreement, and no third party's moral, personal or property rights shall be infringed by the licenses granted to Licensee under this Agreement. (2) That the Identifying Information provided by Licensor is accurate and does not infringe the rights of any third party. Licensee hereby represents and warrants to Licensor that it has the full right and power to enter into and perform its obligations hereunder according to the terms of this Agreement. 13. Indemnification 13.1 Right to Indemnification The parties each agree to defend, indemnify, save and hold the other and its successors, officers, directors, and employees harmless from any and all claims, demands, losses, or damages (including reasonable attorneys' fees and expenses) arising out of or in connection with any claim by a third party which results in a bona fide settlement, claim or adjustment and/or if proved true would constitute a breach of the representations and warranties set forth in Paragraph 12. 13.2. Indemnification Process If any claim is made by a third party in respect to which indemnity may be sought from the other party pursuant to the provisions of this Section, the indemnified shall promptly notify the indemnifying party in writing, specifying the nature of the third-party actions and the total monetary amount or other relief sought therein. The indemnified party shall cooperate with the indemnifying party at the indemnifying party's 13 expense in such action. The indemnifying party may, upon written notice to the indemnified party, undertake to conduct all the proceedings and negotiations in connection therewith, assuming full responsibility for the defense, and if it so undertakes, it shall also undertake all other required steps or proceedings to settle or defend any such action, including the employment of counsel which shall be reasonably satisfactory to the indemnified party, and the payment of all expenses. The indemnified party shall have the right to employ separate counsel and participate in the defense. The indemnifying party shall obtain the indemnified party's prior written consent to any settlement of an infringement claim, which consent shall not be unreasonably withheld. 13.3. Actions to Be Taken in the Event of an Infringement Claim If Licensor's representations regarding the copyright status of any Licensed Elements are proved to be incorrect and Licensee's use of such Licensed Element is enjoined, Licensor shall immediately either (i)\x11procure for Licensee the rights to use any such Licensed Element(s) consistent with the representations made in this Agreement; or (ii)\x11replace such Licensed Element(s) with an equivalent Element that is non-infringing and satisfactory to Licensee. If either of the foregoing remedies are unavailable, Licensor shall promptly refund to Licensee all amounts paid by Licensee to Licensor hereunder for such Licensed Elements. Regardless of whether such remedies are available, Licensor shall also reimburse Licensee for the cost of removing such Licensed Element(s) from Licensee's products and services, as well as for any indemnity or damages paid or owing to Producers and other licensees. 13.4. Limitation of Liability EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER PARTY NOR ANY SUBSIDIARY, AFFILIATE, AGENT OR EMPLOYEE OF EITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ANY OTHER THIRD PARTY CLAIMING THROUGH IT FOR INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING WITHOUT 14 LIMITATION CLAIMS ARISING OUT OF THE DISTRIBUTION OR USE OF THE LICENSED ELEMENTS, WHETHER FRAMED AS A BREACH OF WARRANTY, IN TORT, CONTRACT, FAILURE OF ESSENTIAL PURPOSE, OR OTHERWISE. 14. Copyright; Licensee's Right to Take Action These licenses also shall include the right of Licensee (i)\x11to secure copyright protection in Licensee's own name for Licensee products and services containing Licensed Elements and for those Digitized Licensed Elements created by Licensee, and (ii)\x11to exploit such copyrights. Notwithstanding the foregoing, Licensor shall remain the author of the Elements pursuant to the copyright laws of the U.S. or analogous laws of other jurisdictions. Licensee acknowledges and agrees that its use of the Licensed Elements is at all times subject to this license agreement. Licensee shall have the right to take legal action against any unauthorized users of Licensee products or services containing Licensed Elements. Licensor agrees to provide Licensee with reasonable assistance at Licensee's request and expense, including the authorization of any lawsuit for infringement of any copyrights owned by Licensor or its principals. 15. Termination/Expiration 15.1. Termination This Agreement may be terminated if either party materially fails to perform or comply with its Agreement or any material provision hereof, in which event termination shall be effective thirty (30) days after notice of termination by the non-defaulting party to the defaulting party if the default(s) has not been cured within such thirty (30) day period. 15.2. Rights and Obligations Upon Termination or Expiration Upon termination of this Agreement all obligations of both parties shall discontinue except that the parties agree that neither termination of this Agreement, nor breach by either party will affect the right of Licensee and its licensees to exercise the rights granted in Licensed 15 Elements and incorporated into existing products before such termination nor the obligations of the parties with respect to such Licensed Elements. These provisions will remain in full force and effect. Notwithstanding the foregoing, if Licensee is in uncured breach then Licensee's continued right to use the Licensed Element(s) in question shall be deemed terminated. 16. Updating Licensed Elements If Digital technology change during the Term of this Agreement such that the Licensed Elements are no longer satisfactory for state-of-the- art storage or presentation, Licensor will cooperate with Licensee to allow Licensee to create updated Licensed Elements in accordance with the procedures set forth in this Agreement. Licensee will be responsible for all reasonable out-of-pocket expenses associated with supplying and/or creating such updated Licensed Elements. 17. Governing Law/Attorneys' Fees. This Agreement shall be construed and controlled by the laws of the State of New York, exclusive of its conflict of law rules. In any action arising out of this Agreement the prevailing party shall be entitled to an award of reasonable attorneys' fees plus its reasonable expenses, including without limitation statutory costs. Licensor hereby consents to personal jurisdiction by the state and federal courts sitting in the state of New York with respect to any dispute arising out of this Agreement. Venue of any action arising out of this Agreement shall be in a state or federal court located in New York County, New York. 18. Independent Contractors This Agreement is intended solely as a license agreement, and no partnership, joint venture, agency, or other form of agreement or relationship is intended. 19. Entire Agreement/Modification The parties hereto acknowledge that they have read this Agreement and understand it, and they agree to be bound by all its terms and 16 conditions. They further agree that this Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and merges all prior and contemporaneous communications. This Agreement shall not be modified except by a written agreement signed by a duly authorized representatives of Licensee and Licensor. 20. Biding Effect This Agreement will inure to the benefit of and be binding upon the parties, their successors, administrators, heirs, affiliates and assigns. This Agreement must be signed by duly authorized representatives of Licensee and Licensor, and becomes effective on the last date signed. 21. Notice and Requests Any notice or request that is required or permitted under this Agreement shall be sufficient if given in writing and transmitted either by (a)\x11facsimile machine to the persons and numbers listed below, (b)\x11air courier or other messenger, or (c)\x11a type of mail, postage prepaid, requiring a signed receipt to confirm delivery. The notice or request shall be addressed to the addressees as follows: If to Licensee: ___________________________________________________________________________ If to Licensor: ___________________________________________________________________________ In Witness Whereof, the parties hereto have caused this Agreement to be executed on the dates set forth below. LICENSEE: LICENSOR: CLEARINGHOUSE CORP. PHOTOGRAPHER, INC. 17 By:_______________________ By:______________________ Name:_____________________ Name:____________________ Its:________________________ Its:_______________________ Date:______________________ Date:_____________________