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EXHIBIT 10.29 - WARNER BROS. LICENSE AGREEMENT
RETAIL LICENSE
WARNER BROS. CONSUMER PRODUCTS
#12953-BLT/WBLT
THIS AGREEMENT REPLACES THAT CERTAIN LICENSE AGREEMENT DATED MARCH 12, 1998,
(#8824-BLT) AND ANY AMENDMENTS THERETO BETWEEN LICENSOR AND LICENSEE
LICENSE AGREEMENT made April 25, 2001, by and between Warner Bros., a Division
of Time Warner Entertainment Company, L.P., c/o Warner Bros. Consumer Products
("WBCP"), a Division of Time Warner Entertainment Company, L.P., whose address
is 0000 Xxxxxx Xxxx., Xxxxxxx, XX 00000 (hereinafter referred to as "LICENSOR")
and Gerber Childrenswear, Inc., whose address is 0000 Xxxxxx Xxxx, Xxxxx X,
Xxxxxxxxxx, XX 00000, Attention: Xxxxx X. Xxxxxxxxx (hereinafter referred to as
"LICENSEE").
WITNESSETH:
The parties hereto mutually agree as follows:
1. DEFINITIONS: As used in this Agreement, the following terms shall have
the following respective meanings:
(A) "APPROVED CLOSEOUTS AND IRREGULARS OUTLETS": Licensee may
submit to Licensor a listing of proposed closeout and
irregular stores which Licensor will review and, if approved
in writing, will be considered approved outlets for any
future sale of Closeouts and/or Irregulars (as defined
below). Licensee will use its best efforts to prohibit the
advertising of Closeouts and/or Irregulars by the retailer or
outlet purchasing such products.
(I) CLOSEOUTS: shall mean first quality Licensed
Products discounted by twenty percent (20%) or more off the
list price for such Licensed Products for purpose of
discounting sales of the Licensed Products. Sales of
Closeouts shall not exceed ten percent (10%) of all sales of
Licensed Products in any calendar quarter.
(II) IRREGULARS: shall mean Licensed Products which
contain approved image and complete legal notices, but which
contain slight defects in the manufacture or printing of the
product. Irregulars shall not include any product which is
dangerous or hazardous, contains unapproved images or lacks a
complete legal notice. Sales of Irregulars shall not exceed
seven (7%) of all sales of Licensed Products in any calendar
quarter.
(B) "CHANNELS OF DISTRIBUTION": Licensee shall sell and
distribute the Licensed Products through the following
channels of distribution only (as such channels are defined
in Exhibit 1 attached hereto and incorporated herein by
reference).
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(I) EXCLUSIVE CHANNELS: The sale of Licensed Products
shall be on an EXCLUSIVE basis in the following channels of
distribution, but only to the extent exclusivity is granted
in Schedule A attached hereto and incorporated herein by
reference:
CHANNELS EXHIBIT 1 NUMBER
Chain Drug Stores
(limited to Bibs only, this channel
is exclusive for Bibs sold individually
only and is non-exclusive for Bibs
sold in sets) 14
National Discount/Mass Retailers 51
Regional Discount/Mass Retailers 65
Supermarket/Grocery Stores
(limited to Bibs only, this channel is
exclusive for Bibs sold individually
only and is non-exclusive for Bibs
sold in sets) 73
(II) NON-EXCLUSIVE CHANNELS: Notwithstanding anything to
the contrary in Schedule A attached hereto, the sale of
Licensed Products shall be on a NON-EXCLUSIVE basis in the
following channels of distribution:
CHANNELS EXHIBIT 1 NUMBER
Baby Specialty Stores 7
Chain Toy Stores 16
Direct Mail Catalogs
on a case-by-case basis only with
Licensor's prior written approval 23
Florists
(limited to Gift Sets only) 32
Home Specialty Stores
(limited to Gift Sets, Bibs and Infant
Coordinated Bedding only) 43
Mid-Tier Department Stores 48
Military Exchange Services 49
Non-Chain Drug Stores
(limited to Bibs only) 54
Non-Chain Toy Stores 56
Non-Mall Clothing Specialty Stores 57
Off-Price/Closeout Stores 59
Television Home Shopping
(limited to QVC) 75
Warehouse Clubs
(limited to Licensed Products 26, 31, 32, and 37) 83
WBSS International 85
ALL OTHER CHANNELS OF DISTRIBUTION DEFINED IN EXHIBIT 1,
WHICH ARE NOT SPECIFIED ABOVE IN THIS PARAGRAPH
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1(B), ARE SPECIFICALLY EXCLUDED FROM THIS AGREEMENT, PROVIDED
THAT IF, DURING THE TERM, LICENSOR SHALL BE WILLING TO
LICENSE ANY PARTIES FOR THE SALE OR DISTRIBUTION OF ANY
PRODUCTS IDENTICAL TO THOSE LICENSED HEREIN THROUGH THE
INTERNET CHANNEL OF DISTRIBUTION (EXHIBIT 1 REFERENCE NUMBER
46), LICENSOR SHALL SO NOTIFY LICENSEE, AND LICENSEE SHALL
HAVE THE OPTION, EXERCISABLE WITHIN SIXTY (60) DAYS OF SUCH
NOTIFICATION, TO RECEIVE AN EXCLUSIVE LICENSE FOR SUCH SALE
AND DISTRIBUTION WITH RESPECT TO THE LICENSED PRODUCTS, BUT
ONLY TO THE EXTENT EXCLUSIVITY HAS BEEN GRANTED IN SCHEDULE
A.
In-kind charitable donations are permitted pursuant to the
letter dated November 21, 2000, from Xxxx Xxxxxxx at Gerber
Childrenswear, Inc. to Xxxxx Xxxxx at Xxxxxx Bros. Consumer
Products.
(C) "GUARANTEED CONSIDERATION": The sum of $4,300,000 payable as
follows:
$860,000 payable simultaneously with the execution of this
Agreement (except to the extent offset by Royalties paid by
Licensee pursuant to this Agreement);
$860,000 payable on or before September 30, 2001 (except to
the extent offset by Royalties paid by Licensee pursuant to
this Agreement);
$860,000 payable on or before June 30, 2002 (except to the
extent offset by Royalties paid by Licensee pursuant to this
Agreement);
$860,000 payable on or before December 31, 2002 (except to the
extent offset by Royalties paid by Licensee pursuant to this
Agreement); and
$860,000 payable on or before June 30, 2003 (except to the
extent offset by Royalties paid by Licensee pursuant to this
Agreement).
(D) "LICENSED PRODUCT(S)": As set forth in Schedule A attached
hereto.
(E) "LICENSED PROPERTY":
(I) CATEGORY I: The fictional cartoon characters BABY
BUGS BUNNY, BABY LOLA BUNNY, BABY DAFFY DUCK, BABY XXXXXXXXX,
BABY TWEETY, BABY TASMANIAN DEVIL, BABY WILE E. COYOTE, BABY
ROAD RUNNER and BABY XXXXXX THE MARTIAN which constitute
"BABY LOONEY TUNES", including the names of said characters
and all trademarks, copyrights, environmental settings and
artwork associated therewith. The Licensed Property licensed
hereunder shall be identified with the "BABY LOONEY TUNES
Mass Market logo provided by Licensor. Unless otherwise set
forth below, specifically excluded herefrom are any other
properties, trademarks or copyrights of Licensor, including
but not limited to the "BABY LOONEY TUNES CLASSIC COLLECTION"
logo, BABY LOONEY TUNES CROSS-LICENSES (IE. NFL, NHL, ETC.)
and the cartoon characters referred to collectively as the
"LOONEY TUNES" characters, and Licensee acknowledges and
agrees that it shall enjoy no rights whatsoever hereunder
with respect to such properties, trademarks, and copyrights,
it being understood that such properties, trademarks, and
copyrights are and will continue to be the subject of
separate licensing agreements with licensees of Licensor's
choice.
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Without limiting the generality of the foregoing, Licensee is
obtaining no rights hereunder, unless otherwise specifically
set forth below, in or to the adult versions of BUGS BUNNY,
LOLA BUNNY, DAFFY DUCK, XXXXXXXXX, TWEETY, TASMANIAN DEVIL,
WILE E. COYOTE, ROAD RUNNER and XXXXXX THE MARTIAN
(II) CATEGORY II: The fictional cartoon characters BUGS
BUNNY, LOLA BUNNY, DAFFY DUCK, XXXXXXXXX, TWEETY, TASMANIAN
DEVIL, WILE E. COYOTE, ROAD RUNNER, and XXXXXX THE MARTIAN
which constitute "LOONEY TUNES", including the names of said
characters and all trademarks, copyrights, environmental
settings and artwork associated therewith. Licensee
specifically understands and agrees that no rights are
granted herein with respect to the Warner Bros. "BABY LOONEY
TUNES" or "BABY LOONEY TUNES CLASSIC COLLECTION" properties,
it being understood that all rights in and to said property
are reserved exclusively to Licensor for use and/or licensing
as it deems appropriate to third parties of its choice.
Licensee further understands and agrees that the rights
granted herein are limited only to the cartoon characters set
forth above and that any and all rights in, to or associated
with any theatrical motion picture or direct to video
containing the "LOONEY TUNES" cartoon characters, whether
live action, animation or both, as well as with any sequels
thereto, are specifically excluded herefrom, it being
understood that all rights in and to said property are
reserved exclusively to Licensor for use and/or licensing as
it deems appropriate to third parties of its choice. Any and
all rights in any music or sound elements associates with the
"LOONEY TUNES" Characters are specifically excluded herefrom.
(F) "MARKETING DATE": January 1, 2001.
(G) "ROYALTY RATE": As set forth in Schedule A attached hereto.
(H) "STYLE GUIDE": Any materials provided by Licensor to Licensee
which sets forth the style, format, characterization and any
artwork depicting the Licensed Property which has been
approved by Licensor in writing.
(I) "TERM": January 1, 2001 through December 31, 2003.
(J) "TERRITORY": United States (fifty states), Puerto Rico and
United States Virgin Islands.
2. GRANT OF LICENSE:
(A) Subject to the restrictions, limitations, reservations and
conditions and Licensor's approval rights set forth in this
Agreement, Licensor hereby grants to Licensee and Licensee
hereby accepts for the Term of this Agreement, a license to
utilize the Category I and Category II Licensed Property and
to create Artwork, subject to Licensor's approval, solely on
or in connection with the manufacture, distribution and sale
of the Licensed Products as specified above for the ultimate
retail sale to the public throughout the Territory on a
non-exclusive basis, except as set forth in Schedule A.
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(B) Without limiting any other approval rights of Licensor as
contained herein, no television commercials may be utilized
under this Agreement without the specific prior written
approval of Licensor.
(C) Subject to the Grant of License set forth in Paragraph 2(a)
above, it is specifically understood and agreed between the
parties hereto that those characters set forth in Paragraph
1(e)(i) Category I and 1(e)(ii) Category II above shall only
be utilized in connection with the respectively designated
Licensed Products set forth in Schedule A.
3. RESERVATION OF RIGHTS; PREMIUMS:
(A) Licensor reserves all rights not expressly conveyed to
Licensee hereunder, and Licensor may grant licenses to others
to use the Licensed Property, artwork and textual matter in
connection with other uses, services and products without
limitation.
(B) Notwithstanding anything to the contrary stated herein,
Licensor, for itself and its affiliates, specifically reserves
the right, without limitation throughout the world, to use, or
license any third party(s) of its or their choice to use the
Licensed Property for the marketing, promotion, manufacture,
distribution and sale of products similar or identical to
those licensed herein in Paragraph 1(d) above for sale through
any catalogue(s) or online website produced or distributed by
or on behalf of Licensor or its Affiliated Companies (defined
below), or for sale or distribution in any theaters, arenas or
restaurants or for sale or distribution in connection with any
home video product, including DVD or other formats, or for
sale or distribution in any retail stores operated by or on
behalf of Licensor, its Affiliated Companies or franchisees,
or for sale or distribution in any theme/amusement parks
operated by or on behalf of Licensor or its licensees, Six
Flags, Movie World, or their affiliated companies. Licensor
shall use reasonable commercial efforts to cause its
Affiliated Companies to offer Licensee the opportunity to
submit a competitive bid for any goods that are similar or
identical to those licensed herein and to be procured through
third party suppliers. In addition, Licensor reserves the
right to allow Six Flags and Movie World to manufacture (or
have manufactured by a third party) products similar or
identical to those licensed herein for distribution or sale in
theme and/or amusement parks owned or operated by Six Flags
and/or Movie World. Affiliated Companies herein shall mean any
company owned either directly or indirectly by AOL Time
Warner, Inc. In addition, Licensor reserves the right to use,
or license others to use, and/or manufacture products similar
or identical to those licensed herein for use as premiums,
excluding premiums which would be distributed through
Licensee's Exclusive Channels of Distribution.
(C) Licensee specifically understands and agrees that no rights
are granted herein with respect to the Warner Bros. "shield"
logo or trademark, or any other trademark(s), logo(s) or
copyrights owned by Licensor other than those specifically set
forth above in the Licensed Property, it being understood that
all rights in and to said properties are reserved exclusively
to Licensor for use and/or licensing as it deems appropriate
to third party(s) of its choice.
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(D) Licensee agrees that it will not use, or knowingly permit the
use of, and will exercise due care that its customers likewise
will refrain from the use of, the Licensed Products as a
premium, except with the prior written consent of Licensor.
Subject to Licensor's prior written approval as aforesaid,
Licensee shall pay to Licensor a sum equal to TWELVE PERCENT
(12%) of all premium sales. Any such royalties on premium
sales shall not offset the Guaranteed Consideration hereunder.
For purposes of this paragraph, the term "premium" shall be
defined as including, but not necessarily limited to,
combination sales, free or self-liquidating items offered to
the public in conjunction with the sale or promotion of a
product or service, programs designed to build traffic or
continuity visits by the consumer/customer, or any similar
scheme or device, the prime intent of which is to use the
Licensed Products in such a way as to promote, publicize and
or sell the products, services or business image of the user
of such item. Premium shall not include (i) "value-added"
packaging of Licensed Products as extra items with other
Licensed Products hereunder or (ii) placement of discount
coupons or similar types of rebate or discount offers on other
Licensee's products ("Cross-couponing"). All instances of
Cross-couponing and all Artwork in relation thereto shall be
subject to Licensor's prior written approval.
4. CONSIDERATION:
(A) The Guaranteed Consideration paid by Licensee as set forth
above shall be applied against such royalties as are, or have
become, due to Licensor. No part of such Guaranteed
Consideration shall be repayable to Licensee. Royalties earned
in excess of the Guaranteed Consideration applicable to the
Term hereof shall not offset any Guaranteed Consideration
required in respect of the succeeding renewal term (if any);
likewise, royalties earned in excess of the Guaranteed
Consideration applicable to the renewal term (if any) shall
not offset any Guaranteed Consideration applicable to any
prior term.
(B) Royalty Payments: Licensee shall pay to Licensor a sum equal
to the Royalty Rate as set forth above of all net sales by
Licensee of the Licensed Products covered by this Agreement.
The term "net sales" herein shall mean the gross invoice price
billed customers, less actual quantity, placement and volume
based discounts and actual returns, but no deductions shall be
made for uncollectible accounts and deductions for actual
returns may not exceed 5% of total sales. No costs incurred in
the manufacture, sale, distribution, advertisement, or
exploitation of the Licensed Products shall he deducted from
any royalties payable by Licensee.
(C) For sales of Closeouts and Irregulars at or below 2,500 units,
Licensee may directly sell such Closeouts and/or Irregulars to
Approved Closeouts and Irregulars Outlets. For sales of
Closeouts and/or Irregulars in excess of 2,500 units, prior to
offering such Closeouts and/or Irregulars, Licensee shall give
notice to Licensor or its intent to offer Closeouts and/or
Irregulars, the Licensed Products to be sold as Closeouts or
Irregulars, the quantity available, the nature of the
irregularity, a representative sample of the Closeouts and/or
Irregulars and the price they are to be offered at. Licensee
shall further notify
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Licensor of the retailer or other outlets which will be
offered the Closeouts and/or Irregulars. If, within five (5)
business days of such further notice, Licensor objects to any
particular retailer or outlet and provides a good faith basis
for such objection, Licensee shall not offer such Closeouts
and/or Irregulars to such retailer or outlet.
(D) Royalties shall be payable quarterly with the periodic
statements required in Paragraph 5 hereof, except to the
extent offset by Guaranteed Consideration theretofore
remitted. Further, it is expressly understood that royalties
paid by Licensee in connection with sales of Licensed
Product(s) to WBSS International shall be offset against the
Guaranteed Consideration, provided such sales are reported
separately as required herein. Royalties paid by Licensee in
excess of Guaranteed Consideration payments theretofor due and
paid shall be applied against Guaranteed Consideration
payments due thereafter.
5. PERIODIC STATEMENTS:
(A) Within thirty (30) days after the end of the first fiscal
month after the date of execution of the License Agreement and
promptly on the 15th day after the end of each calendar month
thereafter, Licensee shall furnish to Licensor complete and
accurate statements certified to be accurate by Licensee, or
if a corporation, by an officer of Licensee, showing with
respect to all Licensed Products distributed and sold by
Licensee during the preceding fiscal month the (i) number by
SKU number; (ii) wholesale list price; (iii) quantity,
placement and volume discounts; and (iv) net sales price
together with any returns made during the preceding fiscal
month. Further upon Licensor's request, Licensee shall provide
to Licensor the Description (as such term is defined below) of
the Licensed Products utilizing the Looney Tunes Licensed
Property. Such statements shall be in such formats as Licensor
shall require (which formats may be amended upon reasonable
notice by Licensor from time to time) and shall be furnished
to Licensor whether or not any of the Licensed Products have
been sold during fiscal months to which such statements refer.
Receipt or acceptance by Licensor of any of the statements
furnished pursuant to this Agreement or of any sums paid
hereunder shall not preclude Licensor from questioning the
correctness thereof at any time, and in the event that any
inconsistencies or mistakes are discovered in such statements
or payments, they shall immediately be rectified and the
appropriate payments made by Licensee. Upon demand of
Licensor, Licensee shall at its own expense, but not more than
once in any twelve (12) period, furnish to Licensor a detailed
statement by an officer of Licensee showing the (i) number by
SKU number; (ii) wholesale list price; (iii) Description (as
such term is defined below) of the Licensed Products utilizing
the Looney Tunes Licensed Property; (iv) quantity, placement
and volume discounts; and (v) net sales price of the Licensed
Products covered by this Agreement distributed and/or sold by
Licensee up to and including the date upon which Licensor has
made such demand. For purposes of this Subparagraph, the term
"Description" shall mean a detailed description of the
Licensed Products including the nature of each of the Licensed
Products, any and all names and likenesses, whether live
actors or animated characters, from the Licensed Property
utilized on the Licensed Products and/or any related
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packaging and/or wrapping material; and any other components
of the Licensed Property utilized on the Licensed Products
and/or any related packaging and/or wrapping material. It is
understood and agreed that pursuant to Licensor's written
request, Licensee shall provide the names and likenesses
utilized on each Licensed Product. In the event Licensor is
responsible for the payment of any additional third party
participations based on Licensee not reporting by character
name and likeness as provided above, Licensee shall be
responsible for reimbursing Licensor for the full amount of
all such third party claims, including without limitation,
the participation itself, interest, audit and attorneys'
fees. Licensee understands and agrees that it is a material
term and condition of this Agreement that Licensee include
the Description on all statements on which it has been
requested commencing with statements rendered after December
31, 2001. In the event Licensee fails to do so, Licensor
shall have the right to terminate this Agreement, in
accordance with the provisions of Paragraph 14 herein.
Further, it is expressly understood that sales of Licensed
Products to WBSS International shall be reported separately
from the sales of all other Licensed Products.
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(B) For the statements and payments required hereunder (Licensee
shall reference the contract number(s) on all statements and
payments) if the United States Postal Service is used deliver
to the following:
WARNER BROS. CONSUMER PRODUCTS
00000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
For the statements and payments required hereunder (Licensee
shall reference the contract number(s) on all statements and
payments) if sent by Federal Express or any other Courier
Service deliver to the following:
BANK ONE
Attention WBCP lockbox #21477
525 West Monroe
0xx Xxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Telephone Number 000-000-0000
(C) Any payments which are made to Licensor hereunder after the
due date required therefor, shall bear interest at the then
current prime rate, as published in The Wall Street Journal
(New York edition), plus four (4%) percent (or the maximum
rate permissible by law, if less) from the date such payments
are due to the date of payment. Licensor's right hereunder to
interest on late payments shall not preclude Licensor from
exercising any of its other rights or remedies pursuant to
this Agreement or otherwise with regard to Licensee's failure
to make timely remittances.
(D) If any required payment of Royalty or Guaranteed
Consideration shall be delinquent ten (10) days or more
beyond the due date, Licensee shall provide, at Licensor's
request, a standby letter of credit valid for one (1) year,
issued in favor of Licensor from a financial institution as
approved by Licensor in an amount up to the Guaranteed
Consideration due within the twelve (12) month period.
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6. BOOKS AND RECORDS:
(A) Licensee shall keep, maintain and preserve (in Licensee's
principal place of business) for at least two (2) years
following termination or expiration of the Term of this
Agreement or any renewal(s) hereof (if applicable), complete
and accurate records of accounts including, without
limitation, purchase orders, inventory records, invoices,
correspondence, banking and financial and other records
pertaining to the various items required to be submitted by
Licensee as well as to ensure Licensee's compliance with
local laws as required pursuant to Paragraph 13(k) hereof.
However, in no event will the foregoing be interpreted to
require Licensee to keep any records for longer than its
normal retention period, which is four (4) years from the end
of the calendar year to which such records pertain. Such
records and accounts shall be available for inspection and
audit at any time or times during or after the Term of this
Agreement or any renewal(s) hereof (if applicable) during
reasonable business hours and upon reasonable notice by
Licensor or its nominees. Licensee agrees not to cause or
permit any interference with Licensor or nominees of Licensor
in the performance of their duties. During such inspections
and audits, Licensor shall have the right to take extracts
and/or make copies of Licensee's records relating to such
periodic statements or the Licensed Products as it reasonably
deems necessary.
(B) The exercise by Licensor in whole or in part, at any time of
the right to audit records and accounts or of any other right
herein granted, or the acceptance by Licensor of any
statement or statements or the receipt and/or deposit by
Licensor, of any payment tendered by or on behalf of Licensee
shall be without prejudice to any rights or remedies of
Licensor and such acceptance, receipt and/or deposit shall
not preclude or prevent Licensor from thereafter disputing
the accuracy of any such statement or payment, except that
any objection to the accuracy of any statement or payment
shall be made within two (2) years following termination or
expiration of the Term of this Agreement or any renewal(s)
hereof (if applicable).
(C) If pursuant to its right hereunder Licensor causes an audit
and inspection to be instituted which thereafter discloses a
deficiency between the amount found to be due to Licensor and
the amount actually received or credited to Licensor, then
Licensee shall, upon Licensor's demand, promptly pay the
deficiency, together with interest thereon at the then
current prime rate from the date such amount became due until
the date of payment, and, if the deficiency is more than 3%
of all royalties paid by Licensee during the period covered
by the audit, then Licensee shall pay the reasonable costs
and expenses of such audit and inspection. If an audit
discloses an overpayment to Licensor by Licensee, then
Licensor shall remit the amount of such overpayment to
Licensee within sixty (60) days of conclusive agreement that
such overpayment occurred.
(D) Licensee understands and agrees that Licensor shall have
access to Licensee's sell-through information, with respect
to the Licensed Products, pertaining to various retail
customers (e.g. Wal*Mart, JC Penney) (the "Sell Through
System"). Licensor agrees to keep confidential all
information obtained by Licensor through the Sell Through
Systems except: (i) to the
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extent necessary to comply with a law or the valid order of a
court of competent jurisdiction, in which event the party
making such disclosure shall so notify the other and shall
seek confidential treatment of such information; (ii) as part
of normal reporting or review procedure to the respective
parties' boards of directors, parent company, auditors and
attorneys who agree to be bound by the provisions of this
subparagraph; (iii) in order to enforce its rights or perform
its obligations under this Agreement; or (iv) when discussing
the sale of Licensed Products with the applicable retail
customer in an effort to improve business results.
7. INDEMNIFICATIONS:
(A) During the Term, and continuing after the expiration or
termination of this Agreement, Licensor shall indemnify
Licensee and shall hold it harmless from any loss, liability,
damage, cost or expense, arising out of any claims or suits
which may be brought or made against Licensee by reason of
the breach by Licensor of the warranties or representations
as set forth in Paragraph 12 hereof, provided that Licensee
shall give prompt written notice, and full cooperation and
assistance to Licensor relative to any such claim or suit and
provided, further, that Licensor shall have the option to
undertake and conduct the defense of any suit so brought.
Licensee shall not, however, be entitled to recover for lost
profits. Licensee shall cooperate fully in all respects with
Licensor in the conduct and defense of said suit and/or
proceedings related thereto.
(B) During the Term, and continuing after the expiration or
termination of this Agreement, Licensee shall indemnify
Licensor, Time Warner Entertainment Company, L.P. ("TWE") and
each of its affiliates and shall hold them harmless from any
loss, liability, damage, cost or expense arising out of any
claims or suits which may be brought or made against Licensor,
TWE or any of its affiliates, by reason of: (i) any breach of
Licensee's covenants and undertakings hereunder; (ii) any
unauthorized use by Licensee of the Licensed Property; (iii)
any use of any trademark or copyright (except trademarks or
copyrights in the Licensed Property used in accordance with
the terms of this Agreement), design, patent, process, method
or device; (iv) Licensee's non-compliance with any applicable
federal, state or local laws or with any other applicable
regulations; and (v) any alleged defects and/or inherent
dangers (whether obvious or hidden) in the Licensed Products
or the use thereof.
(C) With regard to Paragraph 7(b) above, Licensee agrees to
obtain, at its own expense, Commercial General Liability
Insurance, including product liability and contractual
liability coverage providing adequate protection for Licensor
and Licensee against any such claims or suits in amounts no
less than three million dollars ($3,000,000) per occurrence,
combined single limits. Simultaneously with the execution of
this Agreement, Licensee undertakes to submit to Licensor a
fully paid policy or certificate of insurance naming
Licensor, TWE and each of its affiliates as additional
insured parties and, requiring that the insurer shall not
terminate or materially modify such policy or certificate of
insurance without written notice to Licensor at least twenty
(20) days in advance thereof. Such insurance shall at all
times be primary and not
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contributory with any insurance carried by Licensor, TWE or
any of their affiliates. Further the delivery of the policy
or certificate, as provided in this Paragraph 7(c) are
material obligations of Licensee.
8. ARTWORK; COPYRIGHT AND TRADEMARK NOTICES:
(A) The Licensed Property shall be displayed or used only in such
form and in such manner as has been specifically approved in
writing by Licensor in advance and Licensee undertakes to
assure usage of the trademark(s) and character(s) solely as
approved hereunder. Licensee further agrees and acknowledges
that any and all Artwork (defined below) created, utilized,
approved and/or authorized for use hereunder by Licensor in
connection with the Licensed Products or which otherwise
features or includes the Licensed Property shall be owned in
its entirety exclusively by Licensor. "Artwork" refers to
incorporating Category I and Category II Licensed Property
and shall include, without limitation, all pictorial,
graphic, visual, audio, audio-visual, digital, literary,
animated, artistic, dramatic, sculptural, musical or any other
type of creations and applications, whether finished or not,
including, but not limited to, animation, drawings, designs,
sketches, images, tooling and tooling aids, illustrations,
film, video, electronic, digitized or computerized
information, software, object code, source code, on-line
elements, music, text, dialogue, stories, visuals, effects,
scripts, voiceovers, logos, one-sheets, promotional pieces,
packaging, display materials, printed materials, photographs,
interstitials, notes, shot logs, character profiles and
translations, produced by Licensee or for Licensee, pursuant
to this Agreement. Licensor reserves for itself or its
designees all rights to use any and all Artwork created,
utilized and/or approved hereunder without limitation.
(B) Licensee acknowledges that, as between Licensor and Licensee,
the Licensed Property and Artwork and all other depictions,
expressions and derivations thereof, and all copyrights,
trademarks and other proprietary rights therein are owned
exclusively by Licensor and Licensee shall have no interest
in or claim thereto, except for the limited right to use the
same pursuant to this Agreement and subject to its terms and
conditions.
Licensee agrees and acknowledges that any Artwork created by
Licensee or for Licensee hereunder is a "work made for hire"
for Licensor under the U.S. Copyright Act, and any and all
similar provisions of law under other jurisdictions, and that
Licensor is the author of such works for all purposes, and
that Licensor is the exclusive owner of all the rights
comprised in the undivided copyright and all renewals,
extensions and reversions therein, in and to such works in
perpetuity and throughout the universe. Licensee hereby
waives and releases in favor of Licensor all rights (if any)
of "droit moral," rental rights and similar rights in and to
the Artwork (the "Intangible Rights") and agrees that
Licensor shall have the right to revise, condense, abridge,
expand, adapt, change, modify, add to, subtract from,
re-title, re-draw, recolor, or otherwise modify the Artwork,
without the consent of Licensee. Licensee hereby irrevocably
grants, transfers and assigns to Licensor all right, title
and interest, including copyrights, trademark rights, patent
rights and other proprietary rights, it
13
may have in and to the Artwork, in perpetuity and throughout
the universe, and to all proprietary depictions, expressions
or derivations of the Licensed Property created by or for
Licensee. Licensee acknowledges that Licensor shall have the
right to terminate this Agreement in the event Licensee
asserts any rights (other than those specifically granted
pursuant to this Agreement) in or to the Licensed Property or
Artwork.
Licensee hereby warrants that any and all work created by
Licensee under this Agreement apart from the materials
provided to Licensee by Licensor is and shall be wholly
original with or fully cleared by Licensee and shall not copy
or otherwise infringe the rights of any third parties, and
Licensee hereby indemnifies Licensor and will hold Licensor
harmless from any such claim of infringement or otherwise
involving Licensee's performance hereunder. At the request of
Licensor, Licensee shall execute such form(s) of assignment
of copyright or other papers as Licensor may reasonably
request in order to confirm and vest in Licensor the rights
in the properties as provided for herein. In addition,
Licensee hereby appoints Licensor as Licensee's
Attorney-in-Fact to take such actions and to make, sign,
execute, acknowledge and deliver all such documents as may
from time to time be necessary to confirm in Licensor, its
successors and assigns, all rights granted herein. If any
third party makes or has made any contribution to the
creation of Artwork authorized for use hereunder, Licensee
agrees to obtain from such party a full confirmation and
assignment of rights so that the foregoing rights shall vest
fully in Licensor, in the form of the Contributor's Agreement
attached hereto as Exhibit 2 and by this reference made a
part hereof, prior to commencing work, and subject to the
prior written approval of Licensor ensuring that all rights
in the Artwork and Licensed Property arise in and are
assigned to Licensor. Promptly upon entering into each such
Contributor's Agreement, Licensee shall give Licensor a copy
of such Contributor's Agreement. Licensee assumes all
responsibility for such parties and agrees that Licensee
shall bear any and all risks arising out of or relating to
the performance of services by them and to the fulfillment of
their obligations under the Contributor's Agreement.
Upon expiration or termination of this Agreement for any
reason, or upon demand by Licensor at any time, Licensee
shall promptly deliver to Licensor all Artwork or Licensed
Property, whether finished or not, including drawings,
drafts, sketches, illustrations, screens, data, digital files
and information, copies or other items, information or things
created in the course of preparing the Licensed Property and
all materials provided to Licensee by Licensor hereunder, or,
at Licensor's option and instruction, shall destroy some or
all of the foregoing and shall confirm to Licensor in writing
that Licensee has done so. Licensee shall not use such
Artwork or Licensed Property, items, information or things,
or materials, for any purpose other than as permitted under
this Agreement.
(C) Licensee shall, within thirty (30) days of receiving an
invoice for a charge that Licensee has previously approved in
writing, pay Licensor for artwork executed for Licensee by
Licensor (or by third parties under contract to Licensor) for
use in the development of the
14
Licensed Products and any related packaging, display and
promotional materials at Licensor's prevailing commercial art
rates. The foregoing shall include any artwork that, in
Licensor's opinion and subject to Licensee's written
approval, is necessary to modify artwork initially prepared
by Licensee and submitted for approval. Estimates of artwork
charges are available upon request.
(D) Licensee shall cause to be imprinted, irremovably and legibly
on each Licensed Products manufactured, distributed or sold
under this Agreement, and all advertising, promotional,
packaging and wrapping material wherein the Licensed Property
appears, the following copyright and/or trademark notice(s)
(or such other notice as may be approved by Licensor):
CATEGORY I:
BABY LOONEY TUNES, CHARACTERS, NAMES, AND ALL RELATED INDICIA
ARE TRADEMARKS OF WARNER BROS.(C) 20___.
CATEGORY II:
LOONEY TUNES, CHARACTERS, NAMES, AND ALL RELATED INDICIA ARE
TRADEMARKS OF WARNER BROS.(C) 20___.
(The year date shall be as instructed by Licensor)
(E) In no event shall Licensee use, in respect to the Licensed
Products and/or in relation to any advertising, promotional,
packaging or wrapping material, any copyright or trademark
notices which shall conflict with, be confusing with, or
negate, any notices required hereunder by Licensor in respect
to the Licensed Property.
(F) Licensee agrees to deliver to Licensor free of cost six (6)
of each of the Licensed Products together with their
packaging and wrapping material for trademark registration
purposes in compliance with applicable laws, simultaneously
upon distribution to the public. Any copyrights or trademarks
with respect to the Licensed Products shall be procured by
and for the benefit of Licensor and at Licensor's expense.
Licensee further agrees to provide Licensor with the date of
the first use of the Licensed Products in interstate and
intrastate commerce.
(G) Licensee shall assist Licensor, at Licensor's expense, in the
procurement, protection, and maintenance of Licensor's rights
to the Licensed Property. Licensor may, in its sole
discretion, commence or prosecute and effect the disposition
of any claims or suits relative to the imitation, infringement
and/or unauthorized use of the Licensed Property either in its
own name, or in the name of Licensee, or join Licensee as a
party in the prosecution of such claims or suits. Licensee
agrees to cooperate fully with Licensor in connection with any
such claims or suits and undertakes to furnish full assistance
to Licensor in the conduct of all proceedings in regard
thereto. Licensee shall promptly notify Licensor in writing of
any infringements or imitations or unauthorized uses by others
of the Licensed Property, on or in relation to products
identical to, similar to, or related to the Licensed Products.
Licensor shall in its sole discretion have the right to settle
or effect compromises in respect
15
(H) Licensee acknowledges receipt of Licensor's Style Guide and
undertakes to utilize the depictions of the characters
contained within the Licensed Property (and, if authorized by
Licensor, any emblems and/or devices associated therewith) in
the form as set forth therein on all Licensed Products as
well as advertising, promotional, packaging or wrapping
materials. In the event that Licensee desires to utilize
character renditions which vary from those as set forth in
the Style Guide, Licensee shall make a request to Licensor in
that connection, and if the request is approved, Licensor
shall prepare appropriate artwork and deliver same to
Licensee. Licensee shall utilize and shall pay a reasonable
fee to Licensor in respect thereof not later than one month
after delivery thereof by Licensor to Licensee, and such fee
shall be additional to and not offset by any Guaranteed
Consideration referred to in Paragraph 1(c) hereinabove.
(I) If Licensee is unable or unwilling to use character artwork
from the Licensor's Style Guide and if Licensor is unable or
unwilling to provide Licensee with artwork as described in
subparagraph (h) above and if Licensor expressly consents in
writing, which consent shall not be unreasonably withheld,
but may be subject to such conditions as Licensor may elect
in its sole discretion, then and only then may the Licensee
create or procure the creation of character artwork. In any
event, Licensee shall assign or procure the assignment in
writing of all rights, copyright and otherwise, in and
pertaining, or otherwise relating to the Licensed Property,
including any and all newly created characters, ideas,
stories, scenes and scenarios which may be marketed in
connection with the Licensed Property and the Licensed
Products, and it is intended that this provision shall take
effect as an assignment of prospective copyrights in works
yet to be created by or for Licensee referring to, displaying
or otherwise relating to the Licensed Property. The Licensee
further undertakes to take all and any steps necessary for
the recordal or registration of the assignment(s) referred to
hereinabove.
16
thereof. Licensee shall not institute any suit or take any
action on account of such infringements, imitations or
unauthorized uses.
9. APPROVALS AND QUALITY CONTROLS:
(A) Licensee agrees to comply and maintain compliance with the
reasonable quality standards and specifications of Licensor
as they are required of other licenses in respect to all
usage of the Licensed Property on or in relation to the
Licensed Products throughout the Term of this Agreement and
any renewals or extensions thereof (if applicable). Licensee
agrees to furnish to Licensor free of cost for its written
approval as to aesthetic quality and style, samples of each
of the Licensed Products, together with their packaging,
hangtags, and wrapping material, as follows in the successive
stages indicated: (i) rough sketches/layout concepts; (ii)
finished artwork or final proofs; (iii) pre-production samples
or strike-offs; and (iv) finished products, including
packaged samples. Finished Products will be deemed approved
if they conform in all material respects to the approved
pre-production sample or strike-off. Licensor will not
withhold approval of a product based on its construction or
materials unless
17
the construction or materials impairs the aesthetic
appearance of the product or is otherwise not in conformity
with the general quality of Licensee's products.
(B) No Licensed Products and no material utilizing the Licensed
Property shall be manufactured, sold, distributed or promoted
by Licensee without prior written approval. Licensee may,
subject to Licensor's prior written approval, use textual
and/or pictorial matter pertaining to the Licensed Property on
such promotional, display and advertising material as may, in
its reasonable judgment, promote the sale of the Licensed
Products. All advertising and promotional material relating to
the Licensed Products must be submitted to the Licensor for
its written approval at the following stages appropriate to
the medium used: (i) rough concepts; (ii) layout, storyboard,
script; and (iii) finished materials.
(C) Approval or disapproval shall lie in Licensor's sole
discretion. Licensee shall submit all materials for approval
to Xxxxx Xxxxx or such other person Licensor shall use its
best efforts to approve, disapprove or otherwise comment upon
any items submitted to it for approval as may be required
hereunder within ten (10) business days after receipt by it of
such item(s). In the event that Licensor fails to approve,
disapprove or otherwise comment upon the item(s) so submitted
within said ten (10) business days, then Licensee shall have
the right to notify Licensor of such failure by facsimile
(evidenced by written confirmation of facsimile transmittal)
and Licensor shall thereafter be required to approve,
disapprove or otherwise comment upon the item(s) so submitted
within three (3) business days after receipt by it of said
facsimile and failure to do so shall be deemed approval of any
item(s) so submitted. Any Licensed Products not so approved
shall be deemed unlicensed and shall not be manufactured or
sold. If any unapproved Licensed Products are being sold,
Licensor may, together with other remedies available to it
including, but not limited to, immediate termination of this
Agreement, require such Licensed Products to be immediately
withdrawn from the market and to be destroyed, such
destruction to be attested to in a certificate signed by an
officer of Licensee.
(D) Any modification of a Licensed Product which relates to the
Artwork applied to the Licensed Product or results in a
material deviation in the standards of quality of a Licensed
Product must be submitted in advance for Licensor's written
approval as if it were a new Licensed Product. Approval of a
Licensed Product which uses particular artwork does not imply
approval of such artwork for use with a different Licensed
Product.
(E) Licensed Products must conform in all material respects to the
final production samples approved by Licensor. If in
Licensor's reasonable judgement, the quality of a Licensed
Product originally approved has deteriorated in later
production runs, or if a Licensed Product has otherwise been
altered, Licensor may, in addition to other remedies available
to it, require that such Licensed Product be immediately
withdrawn from the market.
(F) Licensee shall permit Licensor to inspect Licensee's
manufacturing operations, testing and payroll records
(including those operations and records of any supplier
18
or manufacturer approved pursuant to Paragraph 10(b) below)
with respect to the Licensed Products.
(G) If any changes or modifications are required to be made to any
material submitted to Licensor for its written approval in
order to ensure compliance with Licensor's specifications or
standards of quality, Licensee agrees promptly to make such
changes or modifications.
(H) Subsequent to final approval, no fewer than twelve (12)
production samples of Licensed Products will be sent to
Licensor to ensure quality control simultaneously upon
distribution to the public. In addition, Licensee shall
provide Licensor with six (6) catalogs or available style
listings which display all of Licensee's products, not just
the Licensed Products. Further, Licensor shall have the right
to purchase any and all Licensed Products in any commercially
reasonable quantity at the maximum discount price Licensee
charges its best customer.
(I) To avoid confusion of the public, Licensee agrees not to
associate other characters or properties with the Licensed
Property on the Licensed Products or in any packaging,
promotional or display materials unless Licensee receives
Licensor's prior written approval. Furthermore, Licensee
agrees not to use the Licensed Property (or any component
thereof) on any business sign, business cards, stationery or
forms, nor as part of the name of Licensee's business or any
division thereof. The following licensed properties are hereby
deemed approved for use on the Licensed Products for purposes
of this paragraph: the Cotton seal; 3-M-Scotchguard; Curity
and Gerber.
(J) Licensee shall use its best efforts to notify its customers of
the requirement that Licensor has the right to approve all
promotional, display and advertising material pursuant to this
Agreement. Notwithstanding the foregoing, Licensee shall not
be responsible for any customers failure to obtain any
required approval.
(K) It is understood and agreed that any animation used in
electronic media, including but not limited to animation for
television commercials and character voices for radio
commercials, shall be produced by Warner Bros. Animation
pursuant to a separate agreement between Licensee and Warner
Bros. Animation, subject to Warner Bros. Animation's customary
rates. Any payment made to Warner Bros. Animation for such
animation and/or services shall be in addition to and shall
not offset the Guaranteed Consideration set forth in Paragraph
1(c).
(L) Licensor's approval of Licensed Products (including without
limitation, the Licensed Products themselves as well as
promotional, display, and advertising materials) shall in no
way constitute or be construed as an approval by Licensor of
Licensee's use of any trademark, copyright and/or other
proprietary materials, not owned by Licensor.
10. DISTRIBUTION; SUB-LICENSE MANUFACTURE:
(A) Within the Channels of Distribution set forth in Paragraph
1(b) hereof, Licensee shall sell the Licensed Products to
wholesalers, distributors or retailers for sale or resale and
distribution directly to the public.
19
If Licensee sells or distributes the Licensed Products at a
special price, directly or indirectly, to itself, including
without limitation, any subsidiary of Licensee or to any other
person, firm, or corporation affiliated with Licensee
(including any affiliated distributors) or its officers,
directors or major stockholders, for ultimate sale to
unrelated third parties, Licensee shall pay royalties upon the
actual sale of the Licensed Product to an unrelated third
party.
(B) Licensee shall not be entitled to sub-license any of its
rights under this Agreement. In the event Licensee is not the
manufacturer of the Licensed Products, Licensee shall, subject
to the prior written approval of Licensor, which approval
shall not be unreasonably withheld, be entitled to utilize a
third party manufacturer in connection with the manufacture
and production of the Licensed Products, provided that such
manufacturer shall execute a letter in the form of Exhibit 3
attached hereto and by this reference made a part hereof. In
such event, Licensee shall remain primarily obligated under
all of the provisions of this Agreement and any default of
this Agreement by such manufacturer shall be deemed a default
by Licensee hereunder. In no event shall any such third party
manufacturer agreement include the right of a manufacturer to
grant any rights to subcontractors.
11. GOODWILL: Licensee recognizes the great value of the publicity and
goodwill associated with the Licensed Property and acknowledges: (i)
such goodwill is exclusively that of Licensor; and (ii) that the
Licensed Property has acquired a secondary meaning as Licensor's
trademarks and/or identifications in the mind of the purchasing public.
Licensee further recognizes and acknowledges that a breach by Licensee
of any of its covenants, agreements or undertakings hereunder will
cause Licensor irreparable damage, which cannot be readily remedied in
damages in an action at law, and may, in addition thereto, constitute
an infringement of Licensor's copyrights, trademarks and/other
proprietary rights in, and to the Licensed Property, thereby entitling
Licensor to equitable remedies, and costs.
12. LICENSOR'S WARRANTIES AND REPRESENTATIONS: Licensor represents and
warrants to Licensee that:
(A) It has, and will have throughout the Term of this Agreement,
the right to license the Licensed Property to Licensee in
accordance with the terms and provisions of this Agreement;
and
(B) The making of this Agreement by Licensor does not violate any
agreements, rights or obligations of any person, firm or
corporation.
13. LICENSEE'S WARRANTIES AND REPRESENTATIONS: Licensee represents and
warrants to Licensor that, during the Term and thereafter:
(A) It will not attack the title of Licensor (or third parties
that have granted rights to Licensor) in and to the Licensed
Property or any copyright or trademarks pertaining thereto,
nor will it attack the validity of the license granted
hereunder;
20
(B) It will not harm, misuse or bring into disrepute the Licensed
Property, but on the contrary, will maintain the value and
reputation thereof to the best of its ability;
(C) It will manufacture, sell, promote and distribute the Licensed
Products in an ethical manner and in accordance with the terms
and intent of this Agreement, and in compliance with all
applicable government regulations and industry standards;
(D) It will not create any expenses chargeable to Licensor without
the prior written approval of Licensor in each and every
instance. It will not cause or allow any liens or encumbrances
to be placed against, or grant any security interest in, the
Licensed Property without Licensor's prior written consent;
(E) It will protect to the best of its ability its right to
manufacture, sell, promote, and distribute the Licensed
Products hereunder;
(F) It will at all times comply with all government laws and
regulations, including but not limited to product safety,
food, health, drug, cosmetic, sanitary or other similar laws,
and all voluntary industry standards relating or pertaining to
the manufacture, sale, advertising or use of the Licensed
Products, and shall maintain its appropriate customary high
quality standards during the Term hereof. It shall comply with
any laws or regulations of regulatory agencies which shall
have jurisdiction over the Licensed Products and shall procure
and maintain in force any and all permissions, certifications
and/or other authorizations from governmental and/or other
official authorities that may be required in response thereto.
Each Licensed Product and component thereof distributed
hereunder shall comply with all applicable laws, regulations
and voluntary industry standards. Licensee shall follow
reasonable and proper procedures for testing that all Licensed
Products comply with such laws, regulations and standards.
Licensee shall permit Licensor or its designees to inspect
testing records and procedures with respect to the Licensed
Products for compliance. Licensed Products that do not comply
with all applicable laws, regulations and standards shall
automatically be deemed unapproved and immediately taken off
the market;
(G) It shall, upon Licensor's request, provide credit information
to Licensor including, but not limited to, fiscal year-end
financial statements (profit-and-loss statement and balance
sheet) and operating statements, all of which will be
satisfied by submission to Licensor of Licensee's annual
report;
(H) It will provide Licensor with the date(s) of first use of the
Licensed Products in interstate and intrastate commerce, where
appropriate;
(I) It will, pursuant to Licensor's instructions and at Licensor's
expense, duly take any and all necessary steps to secure
execution of all necessary documentation for the recordation
of itself as user of the Licensed Property in any jurisdiction
where this is required or where Licensor reasonably requests
that such recordation shall be effected. Licensee further
agrees that it will at its own expense cooperate with
21
Licensor in cancellation of any such recordation at the
expiration of this Agreement or upon termination of Licensee's
right to use the Licensed Property. Licensee hereby appoints
Licensor its Attorney-in-Fact for such purpose;
(J) It will not deliver or sell Licensed Products outside the
Territory or knowingly sell Licensed Products to a third party
for delivery outside the Territory;
(K) It will not use any labor that violates any local labor laws,
including all wage and hour laws, laws against discrimination
and that it will not use prison, slave or child labor in
connection with the manufacture of the Licensed Products;
(L) It shall not send, share with or otherwise disclose any
Artwork to any third party, including licensees of Licensor,
but with the exception of approved third party manufacturers
hereunder, without the prior written consent of Licensor;
(M) It shall at all times comply with all manufacturing, sales,
distribution, retail and marketing policies and strategies
promulgated by Licensor from time-to-time; and
(N) It will utilize specific design elements of the Licensed
Property provided to Licensee by Licensor on hangtags, labels,
and other materials.
14. TERMINATION BY LICENSOR:
(A) BY LICENSOR: Licensor shall have the right to terminate this
Agreement without prejudice to any rights which it may have,
whether pursuant to the provisions of this Agreement, or
otherwise in law, or in equity, or otherwise, upon the
occurrence of any one or more of the following events (herein
called "defaults"):
(I) Licensee defaults in the performance of any of its
obligations provided for in this Agreement; or
(II) Licensee shall have failed to deliver to Licensor or
to maintain in full force and effect the insurance
referred to in Paragraph 7(c) hereof; or
(III) Licensee shall fail to make any payments due
hereunder on the date due; or
(IV) Licensee shall fail to deliver any of the statements
required herein or to give access to the premises
and/or license records pursuant to the provisions
hereof to Licensor's authorized representatives for
the purposes permitted hereunder; or
(V) Licensee shall fail to comply with any laws,
regulations or voluntary industry standards as
provided in Paragraph 13(f), or if any governmental
agency or other body, office or official vested with
appropriate authority makes a final determination
that the Licensed Products are harmful or defective
in any way, manner or form, or are being
manufactured, sold or distributed in contravention of
applicable laws, regulations or standards, or in a
manner likely to cause harm; or
22
(VI) Licensee shall be unable to pay its debts when due,
or shall make any assignment for the benefit of
creditors, or shall file any petition under the
bankruptcy or insolvency laws of any jurisdiction,
county or place, or shall have or suffer a receiver
or trustee to be appointed for its business or
property, or be adjudicated a bankrupt or an
insolvent; or
(VII) Licensee does not commence in good faith to
manufacture, distribute and sell each of the Licensed
Products and utilize each character set forth in the
Licensed Property ("Character") throughout the
Territory on or before the Marketing Date and
thereafter fails to diligently and continuously
manufacture, distribute and sell each of the Licensed
Products and utilize each Character throughout the
Territory. Such default and Licensor's resultant
right of termination (or recapture) shall only apply
to the specific Character(s) and/or the specific
Licensed Products, which or wherein Licensee fails to
meet said Marketing Date requirement. Licensor shall
also have the right to recapture rights hereunder
with respect to any Channel of Distribution which
Licensee fails to exploit on or before the Marketing
Date. However, Licensee may cure such default as
follows: upon receipt of notice from Licensor that
Licensee has failed to manufacture, distribute and
sell any Licensed Product, within thirty (30) days,
Licensee shall submit to Licensor a marketing plan
for the manufacture, distribution and sale of such
product which shall provide for the product to be
manufactured, distributed and sold in a timely
fashion in accord with industry norms. If Licensee
fails to provide such marketing plan or thereafter
fails to materially meet the provisions of such plan,
Licensor shall recapture all rights to the specific
Licensed Product(s), which or wherein Licensee failed
to meet the requirements of this paragraph; or
(VIII) Licensee shall manufacture, sell or distribute,
whichever first occurs, any of the Licensed Products
without the prior written approval of Licensor as
provided in Paragraph 9 hereof; or
(IX) Licensee undergoes a substantial change of management
or control. A substantial change of control is a
nonpublic offering sale of over fifty (50%) of the
stock or assets of Licensee to a person(s) not a
member of the current senior management or an
entity(s) not (A) controlled by either Citicorp
Venture Capital or its affiliates or by one or more
members of the current senior management of Gerber
Childrenswear, Inc. or (B) approved in writing by
Licensor in the exercise of its sole discretion after
due disclosure of relevant facts concerning such
entity(s). The sale of stock through a public
offering will not be considered a "substantial change
of control"; or
(X) Licensee uses Artwork which has not been approved by
Licensor in compliance with the provisions of
Paragraph 8(h) or (i) hereof; or
(XI) A manufacturer approved pursuant to Paragraph 10(b)
hereof shall sell Licensed Products to parties other
than Licensee or engage in conduct,
23
which conduct if engaged in by Licensee would entitle
Licensor to terminate this Agreement; or
(XII) Licensee delivers or sells Licensed Products outside
the Territory or knowingly sells Licensed Products to
a third party who Licensee knows intends to, or who
Licensee reasonably should suspect intends to, sell
or deliver such Licensed Products outside the
Territory; or
(XIII) Licensee uses any labor that violates any local labor
laws and/or it uses prison, slave or child labor in
connection with the manufacture of the Licensed
Products; or
(XIV) Licensee has made a material misrepresentation or has
omitted to state a material fact necessary to make
the statements not misleading; or
(XV) Licensee shall breach any other agreement in effect
between Licensee on the one hand and Licensor on the
other.
(B) In the event any of these defaults occur, Licensor shall give
notice of termination in writing to Licensee in the manner
prescribed in Paragraph 16 below. Licensee shall have twenty
(20) days from the date of giving notice in which to correct
any of these defaults (except (A) defaults based on
non-payment of monies which must be cured within ten (10) days
and (B) defaults based on subdivisions (vii), (viii) (x) and
(xii) above which are not curable), and failing such, this
Agreement shall thereupon immediately terminate, and any and
all payments then or later due from Licensee hereunder
(including Guaranteed Consideration) shall then be promptly
due and payable in full and no portion of those prior payments
shall be repayable to Licensee.
(C) BY LICENSEE: Licensee shall have the same right(s) to
termination of this Agreement as provided to Licensor under
this paragraph 14, upon the occurrence of any one or more of
the following events (herein called "defaults"):
(I) If Licensor materially defaults in the performance of
any of its obligations provided for in this
Agreement; or
(II) If Licensor shall be unable to pay its debts when
due, or shall make any assignment for the benefit of
creditors, or shall file any petition under the
bankruptcy or insolvency laws of any jurisdiction,
county or place, or shall have or suffer a receiver
or trustee to be appointed for its business or
property, or be adjudicated a bankrupt or an
insolvent; or
(III) If WBCP shall breach any other agreement in effect
between it and Licensee.
(D) In the event any of these defaults occur, Licensee shall give
notice of termination in writing to Licensor by certified
mail. The Licensor shall have twenty (20) days from the date
of giving notice in which to correct any of these defaults,
and failing such, Licensee shall have the option to
immediately terminate this Agreement, in which event
Licensee's obligation to make any further payments of
Guaranteed Consideration
24
provided for in this Agreement shall also terminate and
Licensee's rights shall thereafter be as set forth in
Paragraph 15 hereof,
15. FINAL STATEMENT UPON TERMINATION OR EXPIRATION: Licensee shall deliver,
as soon as practicable, but not later than thirty (30) days following
expiration or termination of this Agreement, a statement indicating the
number and description of Licensed Products on hand together with a
description of all advertising and promotional materials relating
thereto. Following expiration or termination of this Agreement,
Licensee shall immediately cease any and all manufacturing of the
Licensed Product. However, if Licensee has complied with all the terms
of this Agreement, including, but not limited to, complete and timely
payment of the Guaranteed Consideration and Royalty Payments, then
Licensee may continue to distribute and sell its remaining inventory,
on a non-exclusive basis only, for a period not to exceed one hundred
eighty (180) days following such termination or expiration (the
"Sell-Off Period"), subject to payment of applicable royalties thereto.
In no event, however, may Licensee distribute and sell during the
Sell-off Period an amount of Licensed Products that exceeds the average
amount of Licensed Products sold during any consecutive one hundred
eighty (180) day period during the Term. In the event this Agreement is
terminated by Licensor for any reason under this Agreement, Licensee
shall be deemed to have forfeited its Sell-Off Period. If Licensee has
any remaining inventory of the Licensed Products following the Sell-Off
Period, Licensee shall, at Licensor's option, make available such
inventory to Licensor for purchase at or below cost, deliver up to
Licensor for destruction said remaining inventory or furnish to
Licensor an affidavit attesting to the destruction of said remaining
inventory. Licensee shall, at Licensor's option, deliver to Licensor at
no charge all tooling, tooling aids and other Artwork related to the
Licensed Products, deliver up to Licensor for destruction said tooling,
tooling aids and other Artwork or furnish to Licensor an affidavit
attesting to the destruction of said tooling, tooling aids and other
Artwork. Licensor shall have the right to conduct a physical inventory
in order to ascertain or verify such inventory and/or statement. In the
event that Licensee refuses to permit Licensor to conduct such physical
inventory, Licensee shall forfeit its right to the Sell-off Period
hereunder or any other rights to dispose of such inventory. In addition
to the forfeiture, Licensor shall have recourse to all other legal
remedies available to it.
16. NOTICES: Except as otherwise specifically provided herein, all notices
which either party hereto are required or may desire to give to the
other shall be given by addressing the same to the other at the address
set forth above, or at such other address as may be designated in
writing by any such party in a notice to the other given in the manner
prescribed in this paragraph. All such notices shall be sufficiently
given when the same shall be deposited so addressed, postage prepaid,
in the United States mail and/or when the same shall have been
delivered, so addressed, by facsimile or by overnight delivery service,
and the date of transmission by facsimile, receipt of overnight
delivery service or two business days after mailing shall for the
purposes of this Agreement be deemed the date of the giving of such
notice.
17. NO PARTNERSHIP, ETC.: This Agreement does not constitute and shall not
be construed as constitution of a partnership or joint venture between
Licensor and Licensee. Neither party shall have any right to obligate
or bind the other party in any manner whatsoever, and nothing herein
contained shall give, or is intended to give, any rights of any kind to
any third persons.
25
18. NO SUBLICENSING/NON-ASSIGNABILITY: This Agreement shall bind and inure
to the benefit of Licensor, its successors and assigns. This Agreement
is personal to Licensee. Licensee shall not sublicense, franchise or
delegate to third parties its rights hereunder (except as set forth in
Paragraph 10(b) hereof). Neither this Agreement nor any of the rights
of Licensee hereunder shall be sold, transferred or assigned by
Licensee and no rights hereunder shall devolve by operation of law or
otherwise upon any receiver, liquidator, trustee or other party.
19. BANKRUPTCY RELATED PROVISIONS:
(A) The parties hereby agree and intend that this Agreement is an
executory contract within the meaning of Section 365 of the
Bankruptcy Code.
(B) In the event of Licensee's bankruptcy, the parties intend that
any royalties payable under this Agreement during the
bankruptcy period be deemed administrative claims under the
Bankruptcy Code to the extent that the bankruptcy estate's
enjoyment of this Agreement provides a material benefit to the
bankruptcy estate during its reorganization.
(C) Licensor, in its interest to safeguard its valuable interests
(including, without limitation, its intellectual property
rights in the Licensed Property), has relied on the
particular skill and knowledge base of Licensee. Therefore,
the parties acknowledge and agree that in a bankruptcy context
this Agreement is a contract of the type described by Section
365(c)(1) of the Bankruptcy Code and may not be assigned
without the prior written consent of the Licensor.
20. CONSTRUCTION: This Agreement shall be construed in accordance with the
laws of the State of California of the United States of America without
regard to its conflicts of laws provisions.
21. WAIVER, MODIFICATION, ETC.: No waiver, modification or cancellation of
any term or condition of this Agreement shall be effective unless
executed in writing by the party charged therewith. No written waiver
shall excuse the performance of any acts other than those specifically
referred to therein. The fact that the Licensor has not previously
insisted upon Licensee expressly complying with any provision of this
Agreement shall not be deemed to be a waiver of Licensor's future right
to require compliance in respect thereof and Licensee specifically
acknowledges and agrees that the prior forbearance in respect of any
act, term or condition shall not prevent Licensor from subsequently
requiring full and complete compliance thereafter. If any term or
provision of this Agreement is held to be invalid or unenforceable by
any court of competent jurisdiction or any other authority vested with
jurisdiction, such holding shall not affect the validity or
enforceability of any other term or provision hereto and this Agreement
shall be interpreted and construed as if such term or provision, to the
extent the same shall have been held to be invalid, illegal or
unenforceable, had never been contained herein. Headings of paragraphs
herein are for convenience only and are without substantive
significance.
22. CONFIDENTIALITY: The Artwork and the materials and information supplied
to Licensee hereunder constitute, relate to, contain and form a part of
confidential and proprietary information of Licensor, including, but
not limited to, Style Guides, design elements, character profiles,
unpublished
26
copyrighted material, release dates, marketing and promotional
strategies, information about new products, properties and characters,
the terms and conditions of this Agreement, and other information which
is proprietary in nature or is a trade secret (collectively, the
"Proprietary Information"). Licensee acknowledges and agrees that the
Proprietary Information is highly confidential and that disclosure of
the Proprietary Information will result in serious harm to Licensor.
Among other damage, unauthorized disclosure of the Proprietary
Information will (i) damage Licensor's carefully planned marketing
strategies, (ii) reduce interest in the Licensed Property, (iii) make
unique or novel elements of the Licensed Property susceptible to
imitation or copying by competitors, infringers or third parties prior
to Licensor's release of the information or materials, (iv) damage
Licensor's proprietary protection in undisclosed or unpublished
information or materials, and (v) provide unauthorized third parties
with materials capable of being used to create counterfeit and
unauthorized merchandise, audio-visual products or other products, all
of which will seriously damage Licensor's rights and business. Except
as expressly approved in writing by Licensor, Licensee shall not
reproduce or use the Proprietary Information and shall not discuss,
distribute, disseminate or otherwise disclose the Proprietary
Information or the substance or contents thereof, in whole or in part,
in its original form or in any other form, with or to any other person
or entity other than Licensee's employees and third parties who have
executed a Contributor's Agreement (as provided in Paragraph 8(b)) or
third party manufacturer's agreement (as provided in paragraph 10(b))
and been approved by Licensor as provided hereunder, and such employees
and third parties shall be given access to the Proprietary Information
only on a "need-to-know" basis.
23. ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement
between the parties concerning the subject matter hereof and cancels
and supersedes any prior understandings and agreements between the
parties hereto with respect thereto. There are no representations,
warranties, terms, conditions, undertakings or collateral agreements,
expressed, implied or statutory, between the parties other than as
expressly set forth in this Agreement.
24. ACCEPTANCE BY LICENSOR: This instrument, when signed by Licensee, shall
be deemed an application for license and not a binding agreement unless
and until accepted by Warner Bros. Consumer Products by signature of a
duly authorized officer and the delivery of such a signed copy to
Licensee. The receipt and/or deposit by Warner Bros. Consumer Products
of any check or other consideration given by Licensee and/or delivery
of any material by Warner Bros. Consumer Products to Licensee shall not
be deemed an acceptance by Warner Bros. Consumer Products of this
application. The foregoing shall apply to any documents relating to
renewals or modifications hereof.
27
This Agreement shall be of no force or effect unless and until it is
signed by all of the parties listed below:
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
LICENSOR: LICENSEE:
WARNER BROS. CONSUMER PRODUCTS, GERBER CHILDRENSWEAR, INC.
a Division of Time Warner
Entertainment Company, L.P. on
behalf of itself and as Agent for
Warner Bros., a Division of Time
Warner Entertainment Company, L.P.
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxxxxx
----------------------------------- --------------------------------
Xxxx X. Xxxxx President, Apparel Division
Senior Vice President,
Business and Legal Affairs
Date: April 25, 2001 Date: April 19, 2001
--------------------------------- ------------------------------
28
EXHIBIT 1 #12953-BLT/WBLT
CHANNELS OF DISTRIBUTION
DEFINITIONS
LICENSEE MAY SELL THE LICENSED PRODUCTS ONLY THROUGH THE CHANNELS OF
DISTRIBUTION AS SPECIFIED ABOVE IN PARAGRAPH 1(B) OF THIS LICENSE AGREEMENT AND
AS SUCH CHANNELS ARE DEFINED IN THIS EXHIBIT 1. ALL OTHER CHANNELS OF
DISTRIBUTION DEFINED IN THIS EXHIBIT 1, WHICH ARE NOT SPECIFIED IN PARAGRAPH
1(B) ABOVE, ARE SPECIFICALLY EXCLUDED FROM THIS LICENSE AGREEMENT.
1. "Airport Gift and Other Airport Stores" shall mean gift and other
stores located within airports, excluding Duty-Free Store Operators (as
defined below). Examples of Airport Gift and Other Stores include,
without limitation, PARADIES and X.X. XXXXX.
2. "Amusement Game Redemption" shall mean distribution of products as
prizes awarded in amusement games.
3. "Amusement Park Gift Stores" shall mean gift stores located within
amusement parks, such as Six Flags, Paramount Parks, Universal Theme
Parks, Dollywood, Xxxx Disney World and Xxxx Disney Land.
4. "Art & Craft Stores" shall mean stores that offer for sale primarily
art and craft supplies. Examples of Art & Craft Stores include,
without limitation, XXXXX XXXXXXXX, FAST FRAME, MICHAELS and XXXXXXXX
XX DESIGNS.
5. "Athletic Apparel & Footwear Stores" shall means stores that offer for
sale primarily athletic apparel and footwear. Examples of Athletic
Apparel & Footwear Stores include, without limitation, FOOTLOCKER,
ATHLETE'S FOOT and CHAMPS.
6. "Automotive/Carwash Stores" shall mean (a) stores that offer for sale
primarily automotive supplies, or (b) stores located at carwash or
gasoline station premises.
7. "Baby Specialty Stores" shall mean stores that offer for sale primarily
infant apparel, furniture, accessories and other products designed
specifically for babies. Examples of Baby Specialty Stores include,
without limitation, BABIES R US.
8. "Beauty Supply Stores" shall mean stores that offer for sale primarily
cosmetics, haircare products, beauty accessories and personal grooming
related items.
9. "Camera/Photo Specialty Stores" shall mean stores that offer for sale
primarily camera equipment and supplies.
10. "Candy/Confectionery Specialty Stores" shall mean stores that offer for
sale primarily candy and confectionery products. Examples of
Candy/Confectionery Specialty Stores include, without limitation, FAO
SCHWEETZ and THE SWEET FACTORY.
11. "Catalog Showrooms" shall mean stores that offer a broad assortment of
products for sale primarily through a catalog along with display of
samples of products in a showroom. Examples of Catalog Showrooms
include, without limitation, SERVICE MERCHANDISE.
12. "Chain Book Stores" shall mean chain stores (containing twenty (20) or
more individual stores) that offer for sale primarily books. Examples
of Chain Book Stores include,
29
without limitation, X. XXXXXX, SUPERCROWN, XXXXXX BOOKS and BRENTANO'S.
13. "Chain Comic Book Stores" shall mean chain stores (containing twenty
(20) or more individual stores) that offer for sale primarily comic
books.
14. "Chain Drug Stores" shall mean chain stores (containing twenty (20) or
more individual stores) that offer for sale primarily prescription and
over-the-counter drugs, personal care products and household products.
Examples of Chain Drug Stores include, without limitation, WALGREENS,
RITE-AIDE, THRIFTY/PAYLESS, C.V.S./REVCO, THRIFT DRUG, PHAR MOR, LONGS
DRUGS, XXXX XXXXX, LONDON DRUGS and SHOPPER'S DRUG MART.
15. "Chain Jewelry Stores" shall mean chain stores (containing twenty (20)
or more individual stores) that offer for sale primarily jewelry. The
"Chain Jewelry Stores" channel shall specifically exclude Guild
Jewelers (as defined below). Examples of Chain Jewelry Stores include,
without limitation, STERLING, BARRY'S, XXXXXX'X and HELLSBURG.
16. "Chain Toy Stores" shall mean chain stores (containing twenty (20) or
more individual stores) that offer for sale primarily toys. In order to
be considered a "Toy Store" hereunder, the total number of toy-type
SKU's (stock-keeping units) must represent eighty percent (80%) or more
of such store's total SKU's. Examples of Chain Toy Stores include,
without limitation, TOYS R US.
17. "Coffee Specialty Stores" shall mean stores that offer for sale
primarily specialty coffee and related products, such as coffee mugs.
Examples of Coffee Specialty Stores include, without limitation,
STARBUCKS, BUZZ COFFEE, XXXXXX JEANS and THE COFFEE BEANERY.
18. "College/University Stores" shall mean stores located on the campuses
of colleges or universities.
19. "Commercial Facilities" shall mean offering products for sale to
architectural firms or interior designers working with commercial
facilities, such as hotels and daycare facilities.
20. "Computer Specialty Stores" shall mean stores that offer for sale
primarily computer equipment and supplies. Examples of Computer
Specialty Stores include, without limitation, COMP USA.
21. "Convenience Stores" shall mean stores that offer for sale primarily
packaged and "quick service" food products, are generally open 24 hours
a day, and are designed to offer greater convenience than larger
Supermarket/Grocery Stores. Examples of Convenience Stores include,
without limitation, 7-11, AM/PM, DAIRY MART and CIRCLE K.
22. "Dental/Medical Profession" shall mean institutions or offices that
provide dental or medical services, such as hospitals, laboratories or
doctors' offices.
23. "Direct Mail Catalogs" shall mean catalogs that offer products for sale
and are mailed directly to consumers' homes. The "Direct Mail Catalogs"
channel shall specifically exclude catalogs for fundraising purposes
which shall be included in the "Fundraising" channel defined below.
Examples of Direct Mail Catalogs include, without limitation, XXXXXXX,
HEARTH & HOME, DOMESTICATIONS, TAPESTRY, COMPANY STORE, HAMMACHER
SCHLEMMER, FINGERHUT, AMWAY, XXXXXXX XXXXXX, REGAL, AVON and SEARS
CATALOG.
30
If Licensor grants to Licensee the right to distribute Licensed
Products through any Direct Mail Catalogs: (a) each such catalog shall
be specified in the Channels of Distribution set forth in paragraph
1(a) of the License Agreement or otherwise expressly approved in
writing by Licensor on a case-by-case basis, and (b) each such catalog
depicting or referring to the Licensed Products or the Licensed
Property must be submitted to Licensor for prior written approval in
accordance with Licensor's Brand Assurance policies and procedures.
24. "Direct Response" shall mean print advertisement, free standing inserts
("FSI's") and other promotional material (except catalogs) that are
mailed directly to consumers' homes for the purpose of soliciting
product sales directly from consumers. The "Direct Response" channel
shall specifically exclude direct mail catalogs which shall be included
in the "Direct Mail Catalog" channel defined above.
If Licensor grants to Licensee the right to distribute Licensed
Products through Direct Response, each print advertisement, FSI and
other promotional material depicting or referring to the Licensed
Products or the Licensed Property must be submitted to Licensor for
prior written approval in accordance with Licensor's Brand Assurance
policies and procedures.
25. "Door-to-Door Solicitation" shall mean offering products for sale
through personal visits by salespersons to consumers' homes.
26. "Duty-Free Operators" shall mean (a) stores usually located in transit
locations (i.e. airports, in-flight, train, ferry stations, cruise
lines and ports) which offer products for sale to international
travelers free of taxes and duties and (b) sales offered to diplomat
shops, diplomat suppliers and individual diplomats free of taxes and/or
duties. If Licensor grants to Licensee the right to distribute products
through Duty-Free Operators, such channels of distribution (like all
other channels of distribution granted) shall be limited to those
stores located within the Territory.
27. "Educational Institutions" shall mean offering products (generally
books) for sale to public or private schools or other educational
institutions. Examples of Educational Institutions include, without
limitation, the Los Angeles Unified School District.
28. "Educational Specialty Stores" shall mean stores that offer for sale
primarily educational products. Examples of Educational Specialty
Stores include, without limitation, IMAGINARIUM and NATURE COMPANY.
29. "Electronics Stores" shall mean stores that offer for sale primarily
electronic products. Examples of Electronics Stores include, without
limitation, CIRCUIT CITY, FRY'S and BEST BUY.
30. "Family Restaurants" shall mean a food service establishment or group
of food service establishments that offer a sit down meal menu
conducive to all members of the family and generally offers table
service to customers. Examples of Family Restaurants include, without
limitation, DENNY'S and FRIENDLY'S.
31. "Fashion Accessory Stores" shall mean stores that offer for sale
primarily costume jewelry, hair accessories and other fashion
accessories. Examples of Fashion Accessory Stores
31
include, without limitation, CLAIRE'S BOUTIQUE, AFTERTHOUGHTS, IT'S
ABOUT TIME, PIERCING PAGODA, ARDENE and BENTLEY'S.
32. "Florists" shall mean stores or companies that offer for sale
primarily flowers. Examples of Florists include, without limitation,
XXXXXX'X, FTD and 1-800-FLOWERS.
33. "Food Service" shall mean locations that provide food service to
consumers in cafeterias, hospital food services, school lunch programs,
and similar institutional food service locations.
34. "Fundraising" shall mean offering products for sale through catalogs,
direct mail brochures, prize programs and in-school sales, which are
used by schools and charitable, religious or other organizations to
raise funds. Examples of Fundraising companies include, without
limitation, GIFTCO, SPRINGWATER and DARLINGTON FARMS.
35. "Furniture Stores" shall mean stores that offer for sale primarily
furniture. Examples of Furniture Stores include, without limitation,
WICKES, HOMEMAKERS, KIDDLES and XXXXXX.
36. "Garden Specialty Stores" shall mean stores that offer for sale
primarily garden supplies and plants. Examples of Garden Specialty
Stores include, without limitation, XXXXXXXXX'X, CALLAWAY'S and WOLF
NURSERIES.
37. "Gift Retailers" shall mean stores that (a) offer products for sale
that are in somewhat related product categories and are known as
"gifts" in the trade, which products generally are classified in the
trade as "better" quality and are higher priced (as compared to
National and Regional Discount/Mass Retailers' products), (b) do not
usually discount merchandise or sell it at greatly reduced prices, (c)
usually focus more on aesthetics in merchandise displays than on price,
and (d) generally require individual store servicing by suppliers in
merchandise set-up, display, SKU maintenance and reordering. Suppliers
to Gift Retailers typically advertise in trade publications, such as
"Gift & Stationery Business", "Giftware News" and "Gifts & Decorative
Accessories". Suppliers to Gift Retailers usually include companies
such as Enesco, Midwest of Xxxxxx Falls, New Creative Enterprises, Xxxx
Xxxxxxx, Pacific Rim, Xxxx Xxxxxx, Waterford, GiftCraft, Xxxxxx
Industries, Possible Dreams, Lenox, Department 56, Lefton, Swarovski
and Flambro. The "Gift Retailers" channel shall specifically exclude
Novelty Gift Stores (as defined below), Duty-Free Store Operators (as
defined above), and Airport Gift and Other Airport Stores (as defined
above).
38. "Gourmet Food Specialty Stores" shall mean stores that offer for sale
primarily gourmet and specialty food products. Examples of Gourmet Food
Specialty Stores include, without limitation, BRISTOL FARMS, WHOLE
FOODS and GELSONS.
39. "Greeting Card Stores" shall mean stores that offer for sale primarily
greeting cards. Examples of Greeting Card Stores include, without
limitation, HALLMARK.
40. "Guild Jewelers" shall mean stores that offer for sale primarily fine
jewelry which is generally classified in the trade as "best" or
"highest" quality. Examples of Guild Jewelers include, without
limitation, XXXXXX, XXXXXX and XXXXX XXXXX & XXXXXX.
41. "Hobby & Model Stores" shall mean stores that offer for sale primarily
hobby and model supplies.
32
42. "Home Improvement Stores" shall mean stores that offer for sale
primarily hardware and home improvement supplies. Examples of Home
Improvement Stores include, without limitation, HOME DEPOT, OSH, HOME
BASE, LOWES and HOME HARDWARE.
43. "Home Specialty Stores" shall mean stores that offer for sale primarily
bedding, towels and other bathroom products, kitchen merchandise and
housewares. Examples of Home Specialty Stores include, without
limitation, STROUDS, LINENS 'N' THINGS, 3D BED & BATH, BED/BATH/BEYOND
and LUXURY LINENS.
44. "Ice Cream Shops" shall mean stores that offer for sale primarily ice
cream, ice cream cakes and similar frozen dessert products. Examples of
Ice Cream Shops include, without limitation, XXXXXX-XXXXXXX, DAIRY
QUEEN and BEN AND JERRY'S SHOPS.
45. "In-Store Bakeries" shall mean the in-store bakery departments within
Supermarket/Grocery Stores, National and Regional Discount/Mass
Retailers and Warehouse Clubs. Such departments offer for sale
primarily freshly baked breads, cakes, cookies and similar bakery
items.
46. "Internet" shall mean offering products for sale through the electronic
network known as the Internet.
47. "Mall Clothing Specialty Stores" shall mean stores that offer for sale
primarily clothing and are located within a mall. Examples of Mall
Clothing Specialty Stores include, without limitation, MILLERS OUTPOST,
WET SEAL, AU COIN DES PETITES, LA SENZA, XXXXX XXXXX and REITMANS.
48. "Mid-Tier Department Stores" shall mean stores that offer products for
sale in a broad assortment of unrelated product categories, which
products are generally classified in the trade as "better" (but not
"best") quality products. Examples of Mid-Tier Department Stores
include, without limitation, JC PENNEY, SEARS, MERVYN'S, STEINMART,
XXXXX, XXXX XXXXX, XXXXXXXXXX WARDS, THE BAY, CLEMONT and SIMON'S.
49. "Military Exchange Services" shall mean military headquarters as well
as individual bases of armies and/or airforces of each country within
the Territory. Examples of Military Exchange Services include, without
limitation, U.S. ARMY AND AIRFORCE EXCHANGE SERVICE ("AAFES") and THE
CANADIAN FORCES EXCHANGE SERVICE ("CANEX"). If Licensor grants to
Licensee the right to distribute products through Military Exchange
Services, such channel of distribution shall be limited to the Military
Exchange Services of the countries within the Territory, but shall
include all of such Military Exchange Services' stores located anywhere
in the world, excluding Guam and Saipan.
50. "Music/Video Stores" shall mean stores that offer for sale primarily
musical recordings, on compact discs, cassettes or other media, and/or
movie recordings on videos, laser disks or other media for home use by
consumers. Examples of Music/Video Stores include, without limitation,
BLOCKBUSTER, MUSICLAND, TOWER RECORDS, VIRGIN RECORDS, WAREHOUSE
RECORDS, XXX XXXXX'X and SUNCOAST.
51. "National Discount/Mass Retailers" shall mean stores that (a) have
nation-wide distribution, (b) offer products for sale in
33
a broad assortment of unrelated product categories, which products
generally are not classified in the trade as "better/best" quality
products, (c) are usually "self-service" with more of an emphasis on
price than aesthetics, and (d) generally do not require individual
store servicing by suppliers. Suppliers to National Discount/Mass
Retailers typically advertise in trade publications, such as "Discount
Store News" and "Discount Merchandiser", and usually attend the IMRA
(International Mass Retailer Association) trade show. The "National
Discount/Mass Retailers" channel shall specifically exclude the
in-store bakery departments of such stores, which shall be included in
the "In-Store Bakeries" channel defined above. Examples of National
Discount/Mass Retailers include, without limitation, WALMART, K-MART,
TARGET, ZELLERS, BIWAY and CANADIAN TIRE.
52. "Non-Chain Book Stores" shall mean stores or groups of stores
(containing fewer than twenty (20) individual stores) that offer for
sale primarily books.
53. "Non-Chain Comic Book Stores" shall mean stores or groups of stores
(containing fewer than twenty (20) individual stores) that offer for
sale primarily comic books.
54. "Non-Chain Drug Stores" shall mean stores or groups of stores
(containing fewer than twenty (20) individual stores) that offer for
sale primarily prescription and over-the-counter drugs, personal care
products and household products.
55. "Non-Chain Jewelry Stores" shall mean stores or groups of stores
(containing fewer than twenty (20) individual stores) that offer for
sale primarily jewelry. The "Non-Chain Jewelry Stores" channel shall
specifically exclude Guild Jewelers (as defined above).
56. "Non-Chain Toy Stores" shall mean stores or groups of stores
(containing fewer than twenty (20) individual stores) that offer for
sale primarily toys. In order to be considered a "Toy Store" hereunder,
the total number of toy-type SKU's must represent eighty percent (80%)
or more of such store's total SKU's. Examples of Non-Chain Toy Stores
include, without limitation, TALBOT'S TOYLAND and TONS OF TOYS, INC.
57. "Non-Mall Clothing Specialty Stores" shall mean stores that offer for
sale primarily clothing and are not located within a mall. Examples of
Non-Mall Clothing Specialty Stores include, without limitation, KIDS
MART, KIDS R US, CLOTHESTIME and FASHION BUG.
58. "Novelty Gift Stores" shall mean stores that offer for sale primarily
novelty gift items. The "Novelty Gift Stores" channel shall
specifically exclude Airport Gift and Other Airport Stores and
Duty-Free Operators (as such terms are defined above) . Examples of
Novelty Gift Stores include, without limitation, SPENCER'S and IT
STORES.
59. "Off-Price/Closeout Stores" shall mean stores that offer for sale
primarily discounted apparel and other merchandise. Examples of
Off-Price/Closeout Stores include, without limitation, XXXXXXXX'X, X.X.
MAXX, XXXX FOR LESS, HIT OR MISS, TUESDAY MORNING and WINNERS.
60. "Office Specialty Stores" shall mean stores that offer for sale
primarily office supplies. Examples of Office Specialty Stores include,
without limitation, OFFICE DEPOT, STAPLES and OFFICE XXX.
00
00. "Outlet Stores" shall mean stores that offer for sale primarily
discounted merchandise of a particular manufacturer or retailer.
62. "Party Stores" shall mean stores that offer for sale primarily party
supplies. Examples of Party Stores include, without limitation, PARTY
CITY and PARTY WORLD.
63. "Pet Stores" shall mean stores that offer for sale primarily pet
supplies. Examples of Pet Stores include, without limitation, PETCO and
PETSMART.
64. "Quick Service Restaurants" shall mean a food service establishment or
group of food service establishments that offer rapid meal menus to
consumers and generally do not offer table service to customers.
Examples of Quick Service Restaurants include, without limitation,
SUBWAY and BURGER KING.
65. "Regional Discount/Mass Retailers" shall mean stores that (a) have
regional distribution, (b) generally offer products for sale in a broad
assortment of unrelated product categories, which products generally
are not classified in the trade as "better/best" quality products, (c)
are usually "selfservice" with more of an emphasis on price than
aesthetics, and (d) generally do not require individual store servicing
by suppliers. Suppliers to Regional Discount/Mass Retailers typically
advertise in trade publications, such as "Discount Store News" and
"Discount Merchandiser", and usually attend the IMRA (International
Mass Retailer Association) trade show. The "Regional Discount/Mass
Retailers" channel shall specifically exclude the in-store bakery
departments of such stores, which shall be included in the "In-Store
Bakeries" channel defined above. Examples of Regional Discount/Mass
Retailers include, without limitation, MEIJERS, CALDOR, XXXX, BRADLEES,
HILL'S, ROSE'S, VENTURE, SHOPKO, COTTER, FIELDS, GIANT TIGER, HARTS,
NORTHWEST and SAAN STORES.
66. "Retail Bakeries" shall mean stores that offer for sale primarily
freshly baked breads, cakes, cookies and similar bakery items. The
"Retail Bakeries" channel shall specifically exclude In-Store Bakeries
(as defined above).
67. "School Book Clubs/Fairs" shall mean offering products for sale through
book catalogs distributed to teachers and students at public or private
schools (usually elementary or high school) or through book fairs
conducted on the premises of such schools. Examples of School Book
Clubs/Fairs include, without limitation, Troll Book Club and Scholastic
Book Fair.
68. "Souvenir Stores" shall mean stores that offer for sale primarily
souvenirs.
69. "Sporting Good Stores" shall mean stores that offer for sale primarily
sporting goods, equipment, athletic apparel, and other merchandise that
reflects a sports theme. Examples of Sporting Good Stores include,
without limitation, BIG 5 and SPORTS CHALET.
70. "Sports Stadium Shops" shall mean concessionaire shops located within
stadiums or arenas where sporting events are held.
71. "Stationery Stores" shall mean stores that offer for sale primarily
stationery. Examples of Stationery Stores include, without limitation,
XXXX'X STATIONAIRES.
72. "Street Peddlers" shall mean individual merchants who offer
35
products for sale in stands, booths or other non-permanent structures
usually located on the sidewalk and designed to attract passing
pedestrians.
73. "Supermarket/Grocery Stores" shall mean stores that offer for sale
primarily packaged food products. The "Supermarket/Grocery Stores"
channel shall specifically exclude the in-store bakery departments of
such stores, which shall be included in the "In-Store Bakeries" channel
defined above. The "Supermarket/Grocery Stores" channel shall
specifically exclude Gourmet Food Specialty Stores (as defined above)
and Convenience Stores (as defined above). Examples of
Supermarket/Grocery Stores include, without limitation, KROGER,
SAFEWAY, AMERICAN STORES, ALBERTSON'S, XXXX XXXXX, FOOD LION, VON'S,
FINAST, RALPHS, XXXXX and SUPERSTORES.
74. "Swap Meets/Flea Markets" shall mean offering products for sale through
organized events known as swap meets or flea markets, which involve a
group of vendors offering for sale a variety of products, often
collectibles or antiques.
75. "Television Home Shopping" shall mean offering products for sale
through cable and broadcast television, including infomercials, QVC and
Home Shopping Network. The "Television Home Shopping" channel shall
specifically exclude sales through the Internet, CD-Interactive and
other electronic media.
76. "Theatrical Concessions" shall mean the retail section that sells such
items as popcorn, soda and candy within chain and non-chain movie
theater locations such as Cineplex Odeon, Loews and Cinemark.
77. "Toy Wholesalers" shall mean companies that offer for sale primarily
toys to retail stores. In order to be considered a "Toy Wholesaler"
hereunder, the total number of toy-type SKU's must represent eighty
percent (80%) or more of such wholesaler's total SKU's.
78. "Trackside - CART" shall mean offering products for sale at races
organized and sponsored by Championship Auto Racing Teams.
79. "Trackside - NASCAR" shall mean offering products for sale at races
organized and sponsored by the National Association for Stock Car
Racing.
80. "Trackside - NHRA" shall mean offering products for sale at races
organized and sponsored by the National Hot Rod Association.
81. "Upstairs Department Stores" shall mean stores that (a) offer products
for sale in a broad assortment of unrelated product categories, which
products are generally classified in the trade as "best" quality
products, and (b) offer a high level of customer service with a strong
emphasis on store aesthetics. Examples of Upstairs Department Stores
include, without limitation, BLOOMINGDALE'S, MACY'S, NORDSTROM'S, MAY
DEPARTMENT STORES, SAKS FIFTH AVENUE, NEIMAN MARCUS and DILLARDS.
82. "Vending Machines" shall mean self-contained automated dispensing
equipment operated by insertion of coin or paper currency or the
equivalent thereof (i.e. debit cards, credit cards, etc.).
83. "Warehouse Clubs" shall mean stores that offer for sale products in
large sizes and quantities with more of an emphasis on price than
service or store aesthetics. The "Warehouse Clubs" channel shall
specifically exclude the in-
36
store bakery departments of such stores, which shall be included in the
"In-Store Bakeries" channel defined above. Examples of Warehouse Clubs
include, without limitation, SAM'S CLUB and PRICE COSTCO.
84. "WBSS Domestic" shall mean the retail stores known as Warner Bros.
Studio Stores, which are operated by or on behalf of Licensor, its
affiliated companies or its franchisees, including the Warner Bros.
Studio Store catalogs, inside the United States.
If Licensor grants to Licensee the right to sell Licensed Products to
WBSS Domestic, such rights shall be nonexclusive, notwithstanding any
exclusivity provisions contained in the Agreement.
85. "WBSS International" shall mean the retail stores known as Warner Bros.
Studio Stores, which are operated by or on behalf of Licensor, its
affiliated companies or its franchisees, outside the United States.
If Licensor grants to Licensee the right to sell Licensed Products to
WBSS International: (a) such rights shall be worldwide, notwithstanding
any restrictions as to "Territory" contained in the Agreement, and (b)
such rights shall be nonexclusive, notwithstanding any exclusivity
provisions contained in the Agreement.
37
EXHIBIT 2 #12953-BLT/WBLT
CONTRIBUTOR'S AGREEMENT
I, _____________ the undersigned ("Contributor"), have been engaged by GERBER
CHILDRENSWEAR, INC. ("Licensee") to work on or contribute to the creation of
Licensed Products, described as _______________________, by Licensee under an
agreement between Licensee and Warner Bros., a division of Time Warner
Entertainment Company, L.P., c/o Warner Bros. Consumer Products, a division of
Time Warner Entertainment Company, L.P. ("Warner") dated _____________________.
I understand and agree that the Licensed Products, and all artwork or other
results of my services for Licensee in connection with such Licensed Products
("Work") is a "work made for hire" for Warner and that all right, title and
interest in and to the Work shall vest and remain with Warner. I reserve no
rights therein. Without limiting the foregoing, I hereby assign and transfer to
Warner all other rights whatsoever, in perpetuity throughout the universe which
I may have or which may arise in me or in connection with the Work. I hereby
waive all moral rights in connection with such Work together with any other
rights which are not capable of assignment. I further agree to execute any
further documentation relating to such transfer or waiver or relating to such
Work at the request of Warner or Licensee, failing which Warner is authorized to
execute same as my Attorney-in-Fact.
Contributor:
By:
--------------------------------
Signature
--------------------------------
print name
--------------------------------
address
--------------------------------
--------------------------------
country
--------------------------------
date
Warner Bros. Consumer Products:
By:
---------------------------------
Date:
-------------------------------
38
EXHIBIT 3 #12953-BLT/WBLT
WARNER BROS. CONSUMER PRODUCTS
0000 Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxx 000 Xxxxx - 0xx Xxxxx
Xxxxxxx, XX 00000
RE: APPROVAL OF THIRD PARTY MANUFACTURER
Gentlemen:
This letter will serve as notice to you that pursuant to Paragraph
10(b) of the License Agreement dated ______________ 200_ between WARNER BROS., A
DIVISION OF TIME WARNER ENTERTAINMENT COMPANY, L.P. and GERBER CHILDRENSWEAR,
INC. ("Licensee"), we have been engaged as the manufacturer for Licensee in
connection with the manufacture of the Licensed Products as defined in the
aforesaid License Agreement. We hereby acknowledge that we may not manufacture
Licensed Products for, or sell or distribute Licensed Products to, anyone other
than Licensee. We hereby further acknowledge that we have received a copy and
are cognizant of the terms and conditions set forth in said License Agreement
and hereby agree to observe those provisions of said License Agreement which are
applicable to our function as manufacturer of the Licensed Products. It is
expressly understood that we are obligated to comply with all local laws,
including without limitation, labor laws, wage and hour laws and
anti-discrimination laws and that you or your representatives shall, at anytime,
have the right to inspect our facilities and review our records to ensure
compliance therewith. It is understood that this engagement is on a royalty free
basis and that we may not subcontract any of our work without your prior written
approval.
We understand that our engagement as the manufacturer for Licensee is
subject to your written approval. We request, therefore, that you sign in the
space below, thereby showing your acceptance of our engagement as aforesaid.
Very truly yours,
-----------------------------------
manufacturer/company name
By:
-----------------------------------
signature
-----------------------------------
print name
-----------------------------------
address
-----------------------------------
-----------------------------------
country
-----------------------------------
date
-----------------------------------
product(s) manufacturing
AGREED TO AND ACCEPTED:
WARNER BROS. CONSUMER PRODUCTS,
a Division of Time Warner
Entertainment Company, L.P.
By:
-----------------------------------
Xxxx X. Xxxxx
Senior Vice President,
Business and Legal Affairs
Date:
---------------------------------
39
SCHEDULE A #12953-BLT/WBLT
Exclusive Licensed Products are only exclusive when sold through Exclusive
Channels of Distribution as set forth in Paragraph 1(b)
LICENSED PRODUCT DESCRIPTION EXCLUSIVE NON-EXCLUSIVE ROYALTY RATE
With respect to the Licensed
Property set forth in CATEGORY I of
Paragraph 1(d), the Licensed
Products shall be as follows:
BATH PRODUCTS:
1. Hooded Towels X 12%
2. Washcloths X 12%
3. Washmitts X 12%
INFANT COORDINATED BEDDING:
4. Sheets X 12%
5. Comforters X 12%
6. Dust Ruffles X 12%
7. Receiving Blankets X 12%
8. Crib Blankets X 12%
9. Diaper Stackers X 12%
10. Birth Certificate Pillows X 12%
11. Bumper Pads X 12%
12. Bassinet Sheets X 12%
13. Lap Pads X 12%
14. Wall Paper Room Borders and
Window Treatments to be supplied by
Licensor's current wallpaper licensee on
a case-by-case basis X 12%
15. Mat and Pillow Combinations X 12%
16. Changing Table Padcovers X 12%
SLEEPWEAR:
17. Sleep 'n' Play X 10%
18. Blanket Sleepers, sizes 0-24 months
and 2-5T X 10%
19. Pajamas (footed and non-footed),
sizes 0-24 months and 2-5T X 10%
20. Gowns/Dorm Shirts, sizes 0-24
months X 10%
21. Prams, sizes 0-24 months X 10%
UNDERWEAR:
22. One-Piece for Infants, sizes NB, S,
M, L, XL X 10%
23. Two-Piece for Infants, sizes NB, S,
M, L, XL and 2T-5T X 10%
24. Longmates for Infants, sizes NB, S,
M, L, XL X 10%
25. Undershirts for Infants, sizes NB, S,
M, L, XL X 10%
26. Training Pants (excludes
disposable), sizes 2T-5T X 10%
FOOTWEAR/SOCKS:
27. Booties X 10%
28. Infant Socks X 10%
LAYETTES:
29. Gowns X 10%
30. Caps X 10%
31. Gift Sets to include Infant Gown,
Shirt, Bib, Washcloth, Booties, Towel,
Comb, Teether (to be supplied by
Gerber Products), and/or on a case-by-
case basis with Licensor's prior written
approval, an Licensed Products
licensed hereunder and any products
purchased by Licensee from authorized
licensees of Licensor X 10%
32. Cloth Diapers/Burp Cloths (excludes
disposable) X 10%
40
SCHEDULE A #12953-BLT/WBLT
Exclusive Licensed Products are only exclusive when sold through Exclusive
Channels of Distribution as set forth in Paragraph 1(b)
33. Diaper Covers (may include cloth
covered diaper covers with vinyl lining
but excludes all other vinyl diaper
covers) X 10%
INFANT AND TODDLER PLAYWEAR:
(windwear, outwear, sweaters,
leggings when sold as a set with
sweaters, and t-shirts when sold as
coordinates with swimwear are
specifically excluded):
34. Two-Piece Playwear Sets X 12%
35. Creepers X 12%
36. Overalls, Shortalls, and Coveralls X 12%
37. Bibs (exclusive when sold
individually only) X 10%
38. Shirts X 12%
39. Coordinated Playwear Separates X 12%
40. Swim Diapers X 12%
41. Xxxxx Rompers X 12%
With respect to the Licensed
Property set forth in CATEGORY II of
Paragraph 1(d), the Licensed
Products shall be as follows:
42. Toddler Bedding X 12%
