*Omitted and filed separately with the Commission.
EXHIBIT 10.12
RETAIL LICENSE -- WORLDWIDE
WARNER BROS. CONSUMER PRODUCTS
#8700-BLT ("BABY LOONEY TUNES")
LICENSE AGREEMENT made September 10, 1997 by and between 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., whose address is
0000 Xxxxxx Xxxx., Xxxxxxx, XX 00000 (hereinafter referred to as "LICENSOR") and
PLAY-BY-PLAY TOYS & NOVELTIES, INC., whose address is 0000 Xxxxxxx, Xxx Xxxxxxx,
XX 00000-0000, c/o 00000 X.X. 00xx Xx., Xxxxxxxx, XX 00000, Attention: Xxxx
Xxxxxxx (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) "LICENSED PROPERTY": 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,
BABY XXXXXX THE MARTIAN and BABY K-9 which constitute "BABY LOONEY
TUNES", including the names of said characters and all trademarks,
copyrights, environmental settings and artwork associated therewith.
Unless otherwise set forth below, specifically excluded herefrom are
any other properties, trademarks or copyrights of Licensor,
including but not limited to 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. Without
limiting the generality of the foregoing, Licensee is obtaining no
right 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,
XXXXXX THE MARTIAN and K-9.
(b) "TERRITORY": Worldwide, composed of the following delineated regions
(the "Region(s)"):
(i) UNITED STATES
(ii) CANADA
(iii) ASIA/PACIFIC RIM
(iv) EUROPE/MIDDLE EAST/AFRICA ("EMEA")
(v) LATIN AMERICA
(c) "LICENSED PRODUCT(S)": As defined for each Region in Schedules
*REDACTED through *REDACTED as set forth below, attached hereto and
incorporated by reference:
*REDACTED *REDACTED
*REDACTED *REDACTED
*REDACTED *REDACTED
*REDACTED *REDACTED
(d) "TERM": January 1, 1998 through *REDACTED.
(e) "MARKETING DATE": January 31, 1998.
-1-
*Omitted and filed separately with the Commission.
(f) "GUARANTEED CONSIDERATION": The sum of *REDACTED U.S. Dollars
*REDACTED to be allotted among the Regions and payable according to
the following schedule:
UNITED STATES CANADA ASIA/PACIFIC RIM EMEA LATIN AMERICA TOTAL
-------------- -------------- -------------- -------------- -------------- --------------
*REDACTED
All payments hereunder shall be made in U.S. Dollars.
It is understood and agree that the amounts listed above shall not
be cross-collateralized among the Regions.
(g) ROYALTY RATE: Licenses shall pay to Licensor the following sums:
(i) *REDACTED of Licensee's Net Sales (as defined in Paragraph
4.(b) below) of the Licensed Product(s) that are sold directly
to retailers;
(ii) *REDACTED for all Licensed Products sold FOB to Authorized
Distributers (as defined below) for final sale to retailers in
Asia/Pacific Rim, EMEA and Latin America.
(h) "CHANNELS OF DISTRIBUTION": Licensee may distribute the Licensed
Products through the channels respective to each Region in the
Territory as set forth on Schedules B-1 through B-4, attached hereto
and incorporated by reference:
Schedule B-1: *REDACTED
Schedule B-2: *REDACTED
Schedule B-3: *REDACTED
Schedule B-4: *REDACTED
Licensee and Licensor agree that Licensee shall be permitted to
utilize third-party distributors within specific Regions
("Authorized Distributors"), which shall have the right to import,
manufacture, distribute and sell Licensed Products subject to (i)
Licensor's prior written approval, not to be unreasonably withheld,
or (ii) subject to Licensee's approval, the execution of a separate
license agreement between each such Authorized Distributor and
Licensor with respect to the Licensed Property. In such event,
Licensee shall remain primarily obligated under all of the
provisions of this Agreement and any default of this Agreement by
such Authorized distributor shall be deemed a default by Licensee
hereunder.
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
Licensed Property solely on or in connection with the manufacture,
distribution and sale of the Licensed Products as specified above
for the ultimate distribution to the public throughout the
-2-
*Omitted and filed separately with the Commission.
Territory on an exclusive or non-exclusive basis, as set forth in
Schedules A-1 through A-4.
(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.
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
specifically reserves the right, without limitation throughout the
world, to itself use, or license any third party(s) of its choice to
use the Licensed Property for the manufacture, distribution and sale
of products similar or identical to those licensed herein in
Paragraph 1.(c) above for sale through any catalogue (s) produced or
distributed by or on behalf of Licensor or its affiliated companies
or franchisees, or for sale or distribution in any theaters or
arenas, 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 and its affiliated companies, including
without limitation, the Six Flags and Movie World parks. In
addition, Licensor reserves the right to allow Six Flags Corporation
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 both Six Flags Corporation and Movie World. Further,
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.
(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.
(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 consent of Licensor. Subject to Licensor's prior
written approval as aforesaid, Licensee shall pay to Licensor a sum
equal to *REDACTED of all premium sales. 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, including traffic
building 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 way as to promote, publicize and or sell
the products, services or business image of the user of such item.
-3-
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 Guarantor 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
(i) actual quantity discounts and actual returns, but no
deductions shall be made for uncollectible accounts and
deductions for actual returns may not exceed five percent (5%)
of total sales; and
(ii) any sales, excise or value added taxes which are separately
stated and which are required to be collected from customers
and which are payable to tax authorities. No deduction shall
be taken in computing Net Sales for taxes not described
immediately above, including but not limited to income taxes,
withholding taxes or remittance taxes.
No costs incurred in the manufacture, sale, distribution,
advertisement, or exploitation of the Licensed Products shall be
deducted from any royalties payable by Licensee.
(c) IT IS A MATERIAL TERM AND CONDITION OF THIS AGREEMENT THAT LICENSEE
REPORT NET SALES ON A COUNTRY-BY-COUNTRY BASIS. IN THE EVENT
LICENSEE FAILS TO DO SO, LICENSOR SHALL HAVE THE RIGHT TO TERMINATE
THIS AGREEMENT.
(d) Licensee will pay all taxes, customs, duties, assessments, excise
except as provided in Subparagraph 4.(b)(ii), and other charges
levied upon the importation of or assessed against the Licensed
Product under this Agreement, as well as all Licensee's costs of
doing business and Licensor shall have no liability therefor.
(e) In the event Licensee has earned royalties in currencies other than
in U.S. Dollars, then Licensee shall convert said amounts into U.S.
Dollars based upon the exchange rate published by the Wall Street
Journal as of the fifteenth (15th) day of the applicable month or if
such day shall fall on a non-business day then as of the first
business day following said fifteenth (15th) day.
(f) Royalties shall be payable concurrently with the periodic statements
required in Paragraph 5.(a) hereof, except to the extent offset by
Guaranteed Consideration theretofore remitted.
5. PERIODIC STATEMENTS:
(a) Within thirty (30) days after the initial shipment of the Licensed
Products and promptly on the thirtieth (30th) day of every 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
-4-
preceding calendar month the (i) number of units; (ii) country in
which manufactured, sold and/or to which shipped; (iii) Description
(as such term is defined below) of the Licensed Products; (iv) gross
sales price; and (v) itemized deductions from gross sales price, and
net sales price together with any returns made during the preceding
calendar month. Such statements shall be furnished to Licensor
whether or not any of the Licensed Products have been sold during
calendar months to which such statements refer. Receipt or
acceptance by Licensor of any of the statements furnished pursuant
to this Agreement or 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 rectifies 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) month period, furnish to Licensor a detailed statement
by an independent certified public accountant showing the (i) number
of units; (ii) country in which manufactured, sold and/or shipped;
(iii) Description of the Licensed Products; (iv) gross sales price;
and (v) itemized deductions from gross sales price and 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 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. 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. 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.
(b) The statements and payments required hereunder shall be delivered
to:
WARNER BROS. CONSUMER PRODUCTS
0000 Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Attention: Assistant Controller, Domestic Accounting
(c) Any payments which are made to Licensor hereunder after the due date
required therefore, shall bear interest at the then current prime
rate plus six percent (6%) (or the maximum rate permissible by law,
if less than the current prime rate) form 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
-5-
to this Agreement or otherwise with regard to Licensee's failure to
make timely remittances.
(d) Any income taxes, withholding taxes, other taxes and/or fees which
local law requires to be levied against Licensor's royalty shall be
paid by Licensee on behalf of Licensor within the period of time
required by local law, provided that Licensee shall not make such
payment if Licensor has advised Licensee in writing not to do so,
and has taken appropriate legal action to contest the propriety of
such taxes and/or fees. In such event, Licensor shall indemnify
Licensee against any interest charges or penalties with respect to
such taxes. Any such taxes or fees which Licensee pays on behalf of
Licensor shall be deducted from the royalty otherwise payable to
Licensor. The original receipt (or a bona fide copy thereof) for
such taxes as may be deducted from royalties shall accompany the
statements described in Paragraph 5.(a) above for the accounting
period in which such deduction is made. Licensee shall timely file
all necessary tax returns or other government documents on
Licensor's behalf, as required by local law, at Licensee's cost.
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 submittted by
Licensee as well as to ensure Licensee's compliance with local laws
as required pursuant to Paragraph 13.(k) hereof. 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 as it 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.
(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 deficency, 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 five percent (5%) 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.
-6-
(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 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 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 Licensor 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,
copyright, design, patent, process, method or device, except for
those uses of the Licensed Property that are specifically approved
by Licensor pursuant to the terms of this Agreement; (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 7(b)(v) above, Licensee agrees to obtain, at its own
expense, product liability insurance 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 as an additional insured party 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 and delivery of
the policy or certificate are material obligations of Licensee.
-7-
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 apporved 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" as used
herein shall include, without limitation, all pictorial, graphic,
visual, audio, audio-visual, digital, literary, animated, artistic,
dramatic, sculptural, musical or any other tyupe of creations and
applications, whether finished or not, including, but not limited
to, animation, drawings, designs, sketches, images, 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) (i) Licensee acknowledge 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
prusuant to this Agreement and subject to its terms and
conditions.
(ii) 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) or 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, re-color, 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 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
-8-
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.
(iii) Licensee hereby warants 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, ensuring that all rights in the Artwork and Licensed
Property arise in and are assigned to Licensor. Promptly upon
entering into each such Agreement, Licensee shall give
Licensor a copy of such agreement. Licensee assumes all
responsbility 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.
(iv) Upon expiration of 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, material, for
any purpose other than is permitted, under this Agreement.
(c) Licensee shall, within thirty (30) days of receiving an invoice, pay
Licensor for artwork executed for Licensee by Licensor (or by third
parties under contract to Licensor) for use in the development of
the Licensed Products and any related packaging, display and
promotional materials at Licensor's prevailing commercial art rates.
The foregoing shall include any artwork that,
-9-
in Licensor's opinion, is necessary to modify artwork initially
prepared by Licensee and submitted for approval. Estimates of
artwork charges are available upon request.
(d) Licensee shall reimburse WB Toy for its product development costs
with respect to the Licensed Products (including without limitation
a percentage of WB Toy's salary costs and overhead based on the
amount of time spent working on the Licensed Products). Licensor and
Licensee shall mutually agree upon the mechanism, details and
payment plan with respect to the payments to be made under this
paragraph.
(e) Licensee shall cause to be imprinted, irremovably and legibly on
each Licensed Product 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):
"BABY LOONEY TUNES, characters, names and all related indicia
are trademarks of Warner Bros. (C)19 ."
(The year date shall be as instructed by Licensor.)
(f) 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.
(g) 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.
(h) 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
or 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 thereof. Licensee shall not institute any suit or take
any action on account of such infringements, imitations or
unauthorized uses.
-10-
9. APPROVALS AND QUALITY CONTROLS:
(a) Licensee agrees to strictly comply and maintain compliance with the
quality standards, specifications and rights of approval of Licensor
in respect to any and 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 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.
(b) No Licensed Products and no material whatever 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 materials 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. Any
Licensed Products not so approved in writing 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 must be submitted in advance
for Licensor's written approval as if it were a new 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 or manufacturer approved pursuant to
Paragraph 10.(b) below) with respect to the Licensed Product.
(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.
-11-
(h) Subsequent to final approval, no fewer than twenty-four (24)
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 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 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, stationary or forms, nor as part of the name of Licensee's
business or any division thereof.
(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.
(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 customary rates. Any payment made to Warner Bros.
Animation for such animation shall be in addition to and shall not
offset the Guaranteed Consideration set forth in Paragraph 1.(f).
(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; SUBLICENSE MANUFACTURE:
(a) Within the Channels of Distribution set forth in Paragraph 1.(h)
hereof, Licensee shall sell the Licensed Products either to jobbers,
wholesalers, distributors or retailers for sale or resale and
distribution directly to the public. Unless explicitly set forth in
Paragraph 1.(h) hereof, Licensee shall not sell the Licensed
Products through any cable home shopping service or through
electronic media, including on any on-line network or service. 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 or its officers, directors
or major stockholders, for ultimate sale to unrelated third parties,
Licensee shall pay royalties with respect to such sales or
distribution, based upon the price generally charged the trade by
Licensee.
(b) Except as specifically permitted hereunder, Licensee shall not be
entitled to sublicense 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
-12-
the manufacture and production of the Licensed Products, provided
that such manufacturer shall execute a letter in the form of Exhibit
1 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 to grant any rights to subcontractors.
11. GOOD WILL: Licensee recognizes the great value of the publicity and good
will associated with the Licensed Property and, acknowledges that: (i)
such good will is exclusively that of Licensor; and (ii) 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 licenses 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 Terms 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 attach the
validity of the license granted hereunder;
(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 the Licensed Property;
(e) It will protect to the best of its ability its right to manufacture,
sell, promote, and distribute the Licensed Products hereunder;
-13-
(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 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 property 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;
(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, 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 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 a 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 at all times comply with all manufacturing, sales,
distributions, retail and marketing policies and strategies
promulgated by Licensor from time-to-time;
(m) If requested by Licensor to do so, it will utilize specific design
elements of the Licensed Property provided to Licensee by Licensor
or hangtags, labels, and other materials; and
(n) It will participate in a maximum of two (2) Warner Bros. Consumer
Products' sponsored creative programs per contract year.
-14-
14. TERMINATION BY LICENSOR:
(a) 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 any governmental agency or other body, office or official
vested with appropriate authority finds that the Licensed
Products are harmful or defective in any way, manner or form,
or are being manufactured, sold or distributed in
contravention or applicable laws, regulations or standards or
in a manner likely to cause harm; or
(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 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; or
(viii) Licensee shall manufacture, sell or distribute, whichever
first occurs, any of the Licensed Products(s) without the
prior written approval of Licensor as provided in Paragraph 9
hereof; or
(ix) Licensee undergoes a substantial change of management; or
-15-
(x) A manufacturer approved pursuant to Paragraph 10.(b) hereof
shall sell Licensed Products to parties other than Licensee or
engage in conduct, which conduct if engaged in by Licensee
would entitle Licensor to terminate this Agreement; or
(xi) Licensee delivers or sells Licensed Products outside the
Territory or knowingly sells Licensed Products(s) 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
(xii) 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
(xiii) Licensee has made a material misrepresentation or has omitted
to state a material fact necessary to make the statements not
misleading; or
(xiv) 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 by facsimile and certified
mail. Licensee shall have ten (10) days from the date of giving
notice in which to correct any of these defaults (except
subdivisions (vii), (viii), (xi) and (xiii) 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.
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 for a period not to exceed
sixty (60) 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 sixty (60) 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. 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,
-16-
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 the legal remedies available to it.
16. MCDONALD'S SPACE JAM PLUSH ("SJ PLUSH"):
(a) Licensee acknowledges the receipt of substantially all of the
balance of 4,147,392 units of SJ Plush from McDonald's , the
remainder of which Licensee has been promised it will receive by
September 30, 1997. Licensee further acknowledges its obligation to
pay Licensor for the SJ Plush at the rate of $1.69 per unit for a
total of $7,009,092.48. Licensee has agreed to separately account to
Licensor and pay to Licensor on a quarterly basis for its sales of
SJ Plush during the prior calendar quarter. Licensor further agrees
to pay to Licensor any outstanding balance between $7,009,092.48 and
actual sales times $1.69 per unit by no later than March 31, 1999.
Licensor acknowledges that, as of the date hereof, it has received
the amount of $1,114,605.60 from Licensee in connection herewith,
leaving a balance due in the amount of $5,894,486.88. Licensee shall
be permitted to sell the SJ Plush in any and all Regions within the
Territory.
(b) It is understood and agreed that the amounts paid by Licensee to
Licensor with respect to the SJ Plush shall not offset the
Guaranteed consideration for this Agreement set forth in Paragraph
1.(f) and that other than the unit price set froth in 16.(a) above,
Licensee shall not pay royalties to Licensor on its sales of the SJ
Plush.
(c) Licensee agrees that it has no claim against Licensor for any
damages and/or losses it may have against Licensor in connection
with its purchase and/or subsequent resale and/or any other
disposition of the SJ Plush and Licensee hereby specifically waives
any and all such claims which have been, may have been or may be
made in connection therewith.
17. NOTICES: Except as otherwise specifically provided herein, all notices
which either party hereto is 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 to 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.
18. 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.
19. 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
-17-
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.
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. 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.
This Agreement shall be of no force of 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, a PLAY-BY-PLAY TOYS &
Division of Time Warner Entertainment Company NOVELTIES, INC.
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/ XXXX XXXXXXX
Xxxx X. Xxxxx
Vice President, Legal Affairs
Date: 9/10/97 Date: 9-9-97
-18-
*Omitted and filed separately with the Commission.
#8700-BLT ("BABY LOONEY TUNES")
SCHEDULE 1-A
LICENSED PRODUCTS - *REDACTED
1. EXCLUSIVE PRODUCTS:
(a) PLUSH TOYS*:
Plush dolls (all materials and sizes; with or without mechanical
features)
Talking plush
Plush puppets
Plush and plastic musical toys
Plush balls
Plush blocks (with or w/o sound)
Plush infant activity toys
*REDACTED
(b) INFANT PRE-SCHOOL TOYS:
*REDACTED
(c) ROLE PLAYING TOYS:
(d) VEHICLES:
*REDACTED
(e) MISCELLANEOUS TOYS:
*REDACTED
2. NON-EXCLUSIVE PRODUCTS:
(a) CRAFTS:
*REDACTED
(b) PUZZLES AND GAMES:
*REDACTED
A1-1
*Omitted and filed separately with the Commission.
3. RIDE-ONS:
*REDACTED
(a) MISCELLANEOUS TOYS:
*REDACTED
4. ITEMS SPECIFICALLY EXCLUDED:
*REDACTED
5. ADDITIONAL TERMS SPECIFIC TO THIS REGION:
(a) *REDACTED
(b) Licensee agrees to hire a dedicated preschool/infant marketing
person to manage product line in San Antonio, Texas.
(c) *REDACTED
A1 - 2
*Omitted and filed separately with the Commission.
#8700-BLT ("BABY LOONEY TUNES")
SCHEDULE A-2
LICENSED PRODUCTS - *REDACTED
1. EXCLUSIVE PRODUCTS:
(a) PLUSH DOLLS:
Plush dolls (all materials and sizes; with or without mechanical
features)
Talking plush
Plush Puppets
Plush and plastic musical toys
Plush balls
Plush blocks (with or w/o sound)
Plush infant activity toys
Plush rattles
Plush dolls with rattles
(b) INFANT PRE-SCHOOL TOYS:
*REDACTED
(c) ROLE PLAYING TOYS:
(d) VEHICLES:
*REDACTED
(e) MISCELLANEOUS TOYS:
*REDACTED
2. NON-EXCLUSIVE PRODUCTS:
(a) CRAFTS:
*REDACTED
(b) PUZZLES AND GAMES:
*REDACTED
A2-1
*Omitted and filed separately with the Commission.
(c) RIDE-ONS:
*REDACTED
(d) MISCELLANEOUS TOYS
*REDACTED
3. ITEMS SPECIFICALLY EXCLUDED:
*REDACTED
4. ADDITIONAL TERRMS SPECIFIC TO THIS REGION:
(a) Licensee agrees to hire a dedicated preschool/infant marketing
person to manage product line in Asia/Pacific Rim Region.
(b) Licensee agrees to submit marketing plan directed to both retail and
to consumers.
(c) Licensee and Licensor shall work together to develop a business plan
specifically to address the needs of China with respect to the
Licensed Products. Licensor shall have final approval of such
business plan, such approval not to be unreasonably withheld.
(d) Licensor shall have input into the pricing of the Licensed Products
due to import duties, provided however, Licensor and Licensee shall
not enter into any agreement to set minimum price points for any
Licensed Products. In some countries (including without limitation
Indonesia, Thailand, Malaysia and the Philippines), due to high duty
fees, Licensee shall be permitted to subcontract local production in
order to reduce retail price points to competitive levels.
(e) Licensee agrees to modify designs for Plush Toys in Japan if
Licensor and Licensee agree that sales of such Licensed Products are
not adequate for that country.
A2-2
*Omitted and filed separately with the Commission.
#8700-BLT ("BABY LOONEY TUNES")
SCHEDULE A-3
LICENSED PRODUCTS - EUROPE, MIDDLE EAST, AFRICA
1. EXCLUSIVE PRODUCTS:
(a) PLUSH TOYS:
Plush dolls (all materials and sizes; with or without mechanical
features)
Talking plush
Plush puppets
Plush and plastic musical toys
Plush infant activity toys
Plush rattles
Plush dolls with rattles
(b) INFANT PRE-SCHOOL TOYS:
*REDACTED
(c) ROLE PLAYING TOYS:
(d) VEHICLES:
*REDACTED
(e) MISCELLANEOUS TOYS:
*REDACTED
2. NON-EXCLUSIVE PRODUCTS
(a) CRAFTS:
*REDACTED
(b) PUZZLES AND GAMES:
*REDACTED
A3-1
*Omitted and filed separately with the Commission.
(c) RIDE-ONS:
*REDACTED
(d) MISCELLANEOUS TOYS
*REDACTED
3. ITEMS SPECIFICALLY EXCLUDED:
*REDACTED
4. ADDITIONAL TERMS SPECIFIC TO THIS REGION
(a) Licensee agrees to hire a dedicated preschool/infant marketing
person to manage product line in EMEA Region.
A3-2
*Omitted and filed separately with the Commission.
#8700-BLT ("BABY LOONEY TUNES")
SCHEDULE A-4
LICENSED PRODUCTS - LATIN AMERICA
1. EXCLUSIVE PRODUCTS
(a) PLUSH TOYS:
Plush dolls (all materials and sizes; with or without mechanical
features)
Talking plush
Plush puppets
Plush and plastic musical toys
Plush infant activity toys
Plush rattles
Plush dolls with rattles
(b) INFANT PRE-SCHOOL TOYS:
*REDACTED
(c) ROLE PLAYING TOYS:
(d) VEHICLES:
*REDACTED
2. NON-EXCLUSIVE PRODUCTS:
(a) PLUSH TOYS:
*REDACTED
(b) PVC TOYS:
*REDACTED
(c) CRAFTS:
*REDACTED
(d) RIDE-ONS:
*REDACTED
A4-1
*Omitted and filed separately with the Commission.
(e) MISCELLANEOUS TOYS:
*REDACTED
3. ITEMS SPECIFICALLY EXCLUDED:
*REDACTED
4. ADDITIONAL TERMS SPECIFIC TO THIS REGION:
(a) Licensee agrees to hire a dedicated preschool/infant marketing
person to manage product line in Latin America Region.
(b) Licensee agrees to hire a dedicated staff for Warner Bros. Business
in Latin America.
(c) Licensee shall develop a business plan specifically to address the
needs of Brazil and Mexico with respect to the Licensed Products.
Licensor shall have final approval of such business plan, such
approval not to be unreasonably withheld.
(d) All pre-existing agreements and any automatic renewals therof within
the Latin America Region which conflict with this Agreement shall
continue during the Term of this Agreement and shall not be affected
by this Agreement in any way. All such conflicting agreements are
listed below:
LICENSEE COUNTRY EXP. DATE PRODUCTS
-------- ------- --------- --------
Festcolor Ind. E Brazil 4/30/98 Figures
Comecio Ltda..
Comercializadora Ecuador 7/31/98 Plush
Procomfa S.A. Peru 8/14/98 Bath Toys, Blocks, Musical Toys,
Plush, Plush Dolls and Characters
(talking and non-talking), Toy
Vehicles (electronic and
non-electronic)
A4-2
*Omitted and filed separately with the Commission.
#8700-BLT ("BABY LOONEY TUNES")
SCHEDULE B-1
CHANNELS OF DISTRIBUTION - *REDACTED
1. EXCLUSIVE CHANNELS OF DISTRIBUTION:
(a) DISCOUNT/MASS MARKET* *REDACTED
(b) SUPERMARKET/GROCERY *REDACTED
(c) DRUGSTORES *REDACTED
(d) TOY WHOLESALERS *REDACTED
(e) TOY STORES *REDACTED
(f) WAREHOUSE CLUBS *REDACTED
(g) COMIC BOOK STORES *REDACTED
"Discount/Mass" channel of distribution is defined as a retailer which
usually carries a broad assortment of unrelated product categories and is
usually self service with more of an emphasis on price than aesthetics.
Discount/Mass suppliers typically advertise in trade publications such as
"DISCOUNT STORE NEWS" and "DISCOUNT MERCHANDISER." Additionally, this type
of retailer/supplier usually attends the IMRA (International MassRetailer
Association) trade show. This type of retailer generally carries products
which do not classify as "better/best" quality in terms of general trade
categories. This type of store generally does not need individual store
servicing.
Licensee shall not sell to Home Furnishings buyers within the
Discount/Mass channels. In cases where the retailer has a Toy buyer,
Licensee must sell specifically to the Toy Buyer.
2. NON-EXLUSIVE CHANNELS OF DISTRIBUITON:
(a) ELECTRONIC MEDIA *REDACTED
(b) ART SUPPLY & CRAFT STORES *REDACTED
(c) HOBBY & MODEL STORES *REDACTED
(d) PARTY STORES *REDACTED
(e) OTHER STORES *REDACTED
B1-1
(f) MID-TIER STORES *REDACTED
(g) DIRECT MAIL CATALOGS *REDACTED
(h) ELECTRONICS *REDACTED
(i) WARNER KIDS SHOPS
3. EXCLUDED CHANNELS OF DISTRIBUTION:
(a) *REDACTED
(b) *REDACTED
(c) *REDACTED
(d) *REDACTED
(e) *REDACTED
(f) *REDACTED
(g) *REDACTED
(h) *REDACTED
(i) *REDACTED
(j) *REDACTED
(k) *REDACTED
(l) *REDACTED
(m) *REDACTED
(n) *REDACTED
(o) *REDACTED
(p) *REDACTED
(q) *REDACTED
(r) *REDACTED
(s) *REDACTED
(t) *REDACTED
(u) *REDACTED
(v) *REDACTED
B1-2
(w) *REDACTED
(x) *REDACTED
(y) *REDACTED
(z) *REDACTED
(aa) *REDACTED
(ab) *REDACTED
(ac) *REDACTED
(ad) *REDACTED
(ae) *REDACTED
(af) *REDACTED
(ag) *REDACTED
(ah) *REDACTED
(ai) *REDACTED
A "Gift Retailer" is defined as a retailer that generally carries better
quality, higher priced merchandise typically known as "gifts" in the
trade. This retailer does not usually discount merchandise or sell it at a
greatly reduced suggested retail. Gross margins are usually at fifty
percent (50%) or more. Merchandise displays are usually more focused on
aesthetics as opposed to price. Product categories carried are generally
somewhat related.
Such retailers will often carry other "gift" type products from companies
like Enesco, Midwest of Xxxxxx Falls, New Creative Enterprises, Xxxx
Xxxxxxx, Pacific Rim, Xxxx Xxxxxx, Waterford, GriftCraft, Xxxxxx
Industries, Possible Dreams, Lenox, Department 56, Lefton, Swarovski,
Flambro, etc. (Obviously, this is not a complete listing and Licensor
reserves the right to add/delete as it sees fit).
"Gift" suppliers typically advertise in trade publications such as "GIFT &
STATIONARY BUSINESS"", "Giftware news" and "GIFTS & DECORATIVE
ACCESSORIES." This type of store generally requires servicing of
individual stores in merchandise set up, display, sku maintenance and
reordering.
Any other category of retailer not listed above where rights have no been
specifically granted is excluded hereunder unless Licensee receives prior
written approval from Licensor. Licensor reserves the right to make the final
decision as to how to classify a retail channel of distribution.
B1-3
*Omitted and filed separately with the Commission.
#8700-BLT ("BABY LOONEY TUNES")
SCHEDULE B-2
CHANNELS OF DISTRIBUTION - *REDACTED
Department Stores
Specialty Stores
Gift Stores
Toy Stores
Mass Retailers (where applicable)
B2-1
*Omitted and filed separately with the Commission.
#8700-BLT ("BABY LOONEY TUNTES")
SCHEDULE B-3
CHANNELS OF DISTRIBUTION - *REDACTED
1. EXCLUSIVE CHANNELS OF DISTRIBUTION:
(a) MIXED MULTIPLES *REDACTED
(b) DEPARTMENT STORES *REDACTED
(c) SUPERMARKET/GROCERY *REDACTED
(d) DRUGSTORES *REDACTED
(e) SPECIALIST NURSERY RETAILERS *REDACTED
(f) TOY WHOLESALERS *REDACTED
(g) TOY STORES *REDACTED
(h) WAREHOUSE CLUBS *REDACTED
(i) CATALOGUE AND MAIL ORDER *REDACTED
Licensee shall not sell to Home Furnishings/Domestics buyers within the
channels of distribution. In cease where the retailer has a Toy buyer,
Licensee must sell specifically to the Toy Buyer.
2. EXCLUDED CHANNELS: "Gift Specialist" retailers are specifically excluded
hereunder (Clinton's Cards).
Any other category of retailer not listed above where rights have not been
specifically granted is excluded hereunder unless Licensee receives prior
written approval from Licensor. Licensor reserves the right to make the final
decision as to how to classify a retail channel of distribution.
B3-1
*Omitted and filed separately with the Commission.
#8700-BLT ("BABY LOONEY TUNES")
SCHEDULE B-4
CHANNELS OF DISTRIBUTION - *REDACTED
1. EXCLUSIVE CHANNELS OF DISTRIBUTION:
(a) DISCOUNT/MASS MARKET" (As defined below)
(b) SUPERMARKET/GROCERY
(c) DRUGSTORES
(d) TOY WHOLESALERS *REDACTED
(e) TOY STORES *REDACTED
(f) WAREHOUSE CLUBS
*"Discount/Mass" channels of distribution is defined as a retailer which
usually carries a broad assortment of unrelated product categories and is
usually self service with more of an emphasis on price than aesthetics.
2. NON-EXCLUSIVE CHANNELS OF DISTRIBUTION:
(a) ELECTRONIC MEDIA *REDACTED
(b) ART SUPPLY & CRAFT STORES
(c) HOBBY & MODEL STORES
(d) PARTY STORES
(e) MID-TIER STORES *REDACTED
(f) DIRECT MAIL CATALOGS
(g) ELECTRONICS
(h) CONVENIENCE STORES
(i) COMIC BOOK STORES
Any other category of retailer not listed above where rights have not been
specifically granted is excluded hereunder unless Licensee receives prior
written approval from Licensor. Licensor reserves the right to make the final
decision as to how to classify a retail channel of distribution.
B4-1
EXHIBIT 1
#8700-BLT ("BABY LOONEY TUNES")
WARNER BROS. CONSUMER PRODUCTS
0000 Xxxxxx Xxxx.
Xxxxxxxx Xxxx. - 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 ___________________, between WARNER BROS., A
DIVISION OF TIME WARNER ENTERTAINMENT COMPANY L.P. and PLAY-BY-PLAY TOYS &
NOVELTIES, INC. ("Licensee"), we have been engaged as the manufacturer for
Licensee in connection with the manufacture of 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 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 representative 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 regquest, 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
_______________________________
printed name
_______________________________
address
AGREED TO AND ACCEPTED: _______________________________
WARNER BROS. CONSUMER PRODUCTS, _______________________________
A DIVISION OF TIME WARNER dated
ENTERTAINMENT COMPANY, L.P.
_______________________________
By: _______________________________ product(s) manufacturing
Xxxx X. Xxxxx
Vice President, Legal Affairs _______________________________
_______________________________ _______________________________
dated
_______________________________
EXHIBIT 2
#8700-BLT ("BABY LOONEY TUNES")
CONTRIBUTOR'S AGREEMENT
I, _____________________, the undersigned ("Contributor"), have been engaged by
_________________ ("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: _________________________________
Date: _______________________________
WARNER BROS. CONSUMER PRODUCTS:
By: _________________________________
Date: _______________________________
