Exhibit 10.2
LICENSE AGREEMENT
This License Agreement (the "Agreement"), when executed by both
parties, is effective as of the 27th day of March 2003, by and between Marvel
Enterprises Inc., a Delaware corporation with offices at 00 Xxxx 00xx Xxxxxx,
Xxx Xxxx, XX 00000 ("Enterprises") and Marvel Characters, Inc., a Delaware
corporation with an office at 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000 ("Character", Enterprises and Character, collectively
"Marvel"), on the one hand and the party identified below ("Licensee") on the
other.
1. BASIC INFORMATION AND TERMS
The following information and terms appear for ease of reference in
this Section 1 and are set forth in greater detail in the indicated sections of
this Agreement which follow. This Section 1 is not itself a contract, but only a
summary of certain terms of this Agreement.
(a) Licensee: ("LICENSEE")
Tele-V, Inc Attention: Xxxx Xxx-Xxxx
00 Xxxx 00*Xxxxxx, 00xx Xxxxx Tel: 000-000-0000
Xxx Xxxx, XX 00000 Fax:
Email: xxxx@xxxx.xxx
Numbered
Section
(b) Characters: Listed in Exhibit A 2
(c) Licensed Articles: Listed in Exhibit B 3(a)
(d) Territory: Worldwide 3(b)
(e) Channels of Distribution: Listed in Exhibit C 3(b)
(f) Term: 3(c)
Commencement Date: March 31, 2003
Expiration Date: June 31, 2005
(g) Product Development/Submission Date: April 1, 2003 8(b)
(h) Trade Introduction Date: April 15, 2003 1.5(d)
(i) Consumer Introduction Marketing Date: May 15, 2003 15(e)
(j) Post-Expiration Disposal Period: 60 Days 16(e)
(k) Royalty Rate: Seven and One Half percent (7.5%) of Net Sales. 5(a)
Four percent (4%) of Retail Sales for all direct
sales.
Four and One Half percent (4.5%) shall be added to
Royalty Rates if Licensed Articles are sold F.O.B.
from a shipping point outside of the United States
or Canada.
(l) Minimum Per Article Royalty: n/a 5(a)
(m) Calendar Period for Royalty Payments: Quarterly 5(a)
(n) Royalty Report due with payment: Within thirty (30) days following the end of 5(e)
Calendar Period
(o) Minimum Royalty Guarantee: One Hundred Fifty Thousand Dollars ($150,000). 5(c)
Advance: Fifty Thousand Dollars ($50,000 payable upon the signing of this
Agreement by Licensee.
Balance Twenty Five Thousand Dollars ($25,000) payable on or before December 31,
2003;
Twenty Five Thousand Dollars ($25,000) payable on or before March 31,
2004;
Twenty Five Thousand Dollars ($25,000) payable on or before June 30,
2004.
Twenty Five Thousand Dollars ($25,000) payable on or before December 31,
2004;
(p) Currency for all payments: U.S. Dollars 5(d)
(q) Accounting statements with Royalties sent via wire transfer to: bank of America, San 6(e)
Francisco, California; Branch: Bank of America, Warner Center,,, Regional .Commercial Banking
Office, 0000 Xxxxxx Xxxxxx, Xxxxxxxx Xxxxx, Xxxxxxxxxx 91; ABA#: 000000000; Credit: Marvel
Characters, Inc.; Reference: D03002; Account #: 14650-00999. If wire is to be made via SWIFT
or CHIPS: SWIFT address no.: XXXXXX0X; CHIPS participant no.: 043131; with a copy of reports
to Accounts Receivable, Marvel Enterprises, Inc., 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000
(Marvel's New York Office).
(r) Examination/Audit Fee: $1500.00 per diem 5(e)
(s) Trademark and Copyright Notices: 7(b)
[Name(s) of character(s)] and the Copyright (C) [year of first publication
distinctive likeness(es) thereof are of Marvel material by Licensee, in Arabic
Trademarks of Marvel Characters, Inc. and numerals] Marvel Characters, Inc. All
are used with permission. Rights Reserved.
www. marvel. com www. marvel. com
(t) Notice of Supervision Text: 7(c) This [Description of Licensed Article]is
produced under license from Marvel Characters, Inc.
(u) Submission for approval to Marvel's New York Office, to the attention of Marvel's Senior 9(a)
Contracts Administrator: Xxxxxx X. Xxxxxxxxx
Twelve (12) samples of the Licensed Article upon completion of first
production and each different piece of Associated Material therefor
prior to sale or publication. Twelve (12) samples of finished Licensed
Article and each different piece of Associated Material annually
thereafter, so long as it is being distributed by Licensee. Upon
submission of each finished Licensed Article, Licensee m submit each
corresponding article's SKU number. Marvel shall have the option upon
written notice to Licensee for an additional Twelve (12) samples per
year of any Licensed Article at no cost to Marvel.
(v) Insurance: 10(e)
A Combined Single Limit of $3,000,000 per occurrence.
(w) Advertising and Promotion Commitment and Common Marketing Fund: Refer to
Section 13(c) 13
(x) Artwork Fee: 11
Licensee may purchase Marvel Online Style Guides depicting the Property for
use in the Licensed Articles for a fee of Five Hundred Dollars ($500.00)
per character group.
2. RECITALS
(a) Marvel has rights in and to the names, nicknames, abbreviated
names, depictions, likenesses, poses, costumes, emblems, powers, characteristic
concepts, themes, settings, pictorial and written graphics and other
characteristic elements and contexts of the Characters identified in Section
1(b) hereof (excluding those utilized in motion pictures, television films and
home-video versions of any thereof, unless otherwise specifically included
herein) and any copyrights, trademarks, service marks and other intellectual,
literary, artistic, design, moral, industrial or commercial property rights and
goodwill in connection with the Characters, incidents, language, artwork,
symbols, designs, depictions, likenesses, formats, poses, concepts, themes and
graphic, photographic and other visual representations of, relating to and
associated with the Characters identified in Section 1(b) hereof (which names,
characters, etc. and/or each of the individual components thereof shall
hereinafter be referred to as the "Property"), said Property being known and
recognized by the general public and associated in the public mind with Marvel.
(b) Licensee desires to utilize the Property in the manner hereinafter
described.
3. GRANT OF LICENSE
(a) Licensed Articles. Upon the terms and conditions and with the
limitations and--exceptions hereinafter set forth, Marvel hereby grants to
Licensee and Licensee hereby accepts the non-exclusive license right to utilize
the Property but solely upon and in connection with the manufacture, promotion,
sale, and distribution of the articles, products and/or services identified on
Exhibit B ("Licensed Articles") and in the Channels of Distribution identified
in Exhibit C ("Channels of Distribution"). Notwithstanding the immediately
preceding sentence, but subject to all licensing agreements entered into by
Marvel prior to execution of this Agreement, so long as no default has occurred
under this Agreement or any other agreement between Licensee or any of its
affiliates and Marvel, Marvel shall not grant the right during the Term to any
third party to use the Characters in the production of the Licensed Articles
identified on Exhibit B. If Licensee fails to pay Marvel Five Hundred Thousand
Dollars ($500,000) in royalties on or before June 30, 2004, the rights granted
herein shall become non-exclusive for the remainder of the Term of this
Agreement.
(b) Territory/Channels of Distribution. The license hereby granted
extends only to the Territory identified in Section 1(d) and within the Channels
of Distribution identified in Section 1(e) Licensee expressly acknowledges and
agrees that it is not licensed or authorized to use the Property, directly or
indirectly, in any other area or Channel of Distribution, and that it is not
licensed to and will not knowingly sell the Licensed Articles to persons who
intend or are likely to resell them in any other area or Channel of
Distribution, to the extent this provision is permitted by the applicable law at
the time of such use, license or sale. Licensee shall stamp on all invoices, and
shall require any affiliated distributor to stamp on its invoices, a prominent
legend that states that the Articles are allowed to be sold only within the
Territory. In the event that Licensee knowingly (or given the facts should
reasonably know), sells or exploits the Licensed Articles outside either the
Territory or Channels of Distribution in violation of this Section 3(b),
notwithstanding Sections 1(j) and 5(a), the royalty due Marvel on such sales
shall be the Net Sales.
(c) Term. The license hereby granted shall commence on the Commencement
Date and terminate automatically on the Expiration Date (the "Term") set forth
in Section 1(9 or the expiration of any renewal as provided herein, unless
sooner terminated in accordance with the provisions hereof. In the event
Licensee commences any activities in connection with the Property prior to the
Commencement Date, all provisions of this Agreement for the benefit and
protection of Marvel shall apply in full to such activities.
(d) Scope of License. Notwithstanding anything contained herein to the
contrary and subject to Section 3(a) above, nothing in this Agreement shall be
construed to prevent Marvel from granting any other licenses for the use of the
Property, in connection with the Licensed Articles, for the Territory or
Channels of Distribution to which this license extends, during the Term of this
license or from utilizing directly or through one or more subsidiaries and
affiliates the Property in any manner whatsoever. Licensee hereby acknowledges
that the aforesaid licenses or uses do not conflict with or derogate from any
rights being granted to Licensee hereunder.
4. RESERVATION OF RIGHTS
(a) Marvel hereby reserves all rights not herein specifically granted
to Licensee, including but not limited to all rights with respect to the
Licensed Articles for any and all Channels of Distribution and/or delivery,
including but not limited to premiums or giveaways, and vending machines and for
sale at commercial venues presenting a live stage show based upon the Property
such as an arena show or a touring mall show. As between the parties, such
reserved rights are the sole and exclusive property of, and may be used or
exercised solely by, Marvel. Any use or license by Marvel of such reserved
rights, in any manner whatsoever, shall not be deemed unfair competition with,
interference with, breach
of or infringement of any of Licensee's rights hereunder. It is also understood
that Marvel is not required to itself continue the production of the Property or
any part thereof. The scope of Licensee's rights will not be considered as
expanded in any respect, by implication, operation of law or any other means
except by a writing in accordance with Section 19(h). All reproduction and use
of the Property will accrue solely to the benefit of Marvel. All rights and
interests in any derivations, adaptations, compilations, translations, titles
and other versions of the Property are the exclusive property of Marvel,
regardless of who created, produced or paid for such materials.
(b) Television, etc. Except only for the visual reproduction or
presentation of the actual Licensed Articles licensed hereunder or of the actual
packaging therefor or as may be expressly provided in this Agreement, Licensee
shall not use the Property or the Licensed Articles identified with the Property
in connection with any manner of television, radio, motion picture, filmstrip,
webcast, internet broadcast, sound and/or visual recording or transmission
device or media, or anything similar to the foregoing now known or hereafter
developed without Marvel's prior written approval. The name and/or likeness of
any performer portraying any character included within the Property on radio,
television, or in any other media or form shall not be deemed to be included in
the Property, and the use thereof is not licensed.
5. ROYALTIES, PAYMENTS, REPORTS AND RECORDS
(a) Royalties. Licensee agrees to pay Marvel royalties at the Royalty
Rate identified in Section 1(k), determined as follows:
(i) Royalties shall be calculated by either (i) applying the
Royalty Rate to Licensee's Net Sales (as herein defined) or for direct response
only - applying the Royalty Rate to Licensee's Retail Sales (as herein defined)
; or if applicable (ii) multiplying the Minimum Per Article Royalty identified
in Section 1(l) by the number of units sold by Licensee, its agents, affiliates,
associates, subsidiaries or other related persons or companies ("Related
Entities") from the sale or other exploitation of the Licensed Articles or from
any use of the Property permitted hereunder, whichever yields the greater
royalty payment.
(ii) Net Sales shall mean the number of units sold by Licensee, or
its Related Entities from the sale or other exploitation of the Licensed
Articles or from any use of the Property permitted hereunder multiplied by the
greater of either (i) the highest gross wholesale list price of each Licensed
Article or (ii) the highest gross invoice price of each Licensed Article (the
"Established Price"). Retail Sales shall mean the number of units sold by
Licensee, or its Related Entities from the sale or other exploitation of the
Licensed Articles or from any use permitted hereunder multiplied by the highest
retail sales price of the Licensed Articles. of any kind may be taken in the
determination of Net Sales or the royalties d pt only that Licensee may deduct
standard trade discounts actually given and actual returns in the determination
of Net Sales. Notwithstanding the foregoing, the total deduction for trade
discounts and actual returns may not exceed seven percent (7%1 of Licensee's
total gross sales for the Licensed Articles.
(iii) In the event that any sale or other exploitation of the
Licensed Articles licensed hereunder is made at a price lower than Licensee's
Established Price for such items in the applicable Channels of Distribution, the
royalty on any such sale or exploitation shall be calculated as the highest
Established Price, regardless of whether or not Marvel has consented to such
reduced price pursuant to Section 13 hereof. Royalties as specified herein shall
become due on the last day of each Calendar Period specified in Section 1(m),
for all Net Sales accruing in that Calendar Period and shall be paid not
later than the number of days thereafter specified in Section 1(n), accompanied
by the Royalty Report required herein. Net Sales shall be deemed accrued for all
purposes hereunder no later than ten (10) days after the invoice to which they
relate is issued or the goods to which they relate are shipped, whichever is
first to occur.
(b) Advance and Minimum Royalty Guarantee. Licensee agrees to pay
Marvel the Minimum Royalty Guarantee specified in Section 1(o) as a minimum
guarantee against royalties to be paid Marvel each Contact Year during the Term
of this license. As the first installment of the Minimum Royalty Guarantee, upon
the signing hereof, Licensee shall pay Marvel the Advance specified in Section
l(o). Any unpaid balance of said Minimum Royalty Guarantee shall be paid to
Marvel as provided in Section l(o). No part of the Advance or Minimum Royalty
Guarantee shall in any event be repayable or refundable to Licensee.
(c) Currency and Taxes. All payments to Marvel shall be made in the
currency set forth in Section 1(p), which amounts, if not stated shall be in
United States Dollars, shall be computed at the exchange rate existing at noon
on the last business day preceding the day payment is due to be made hereunder.
If payment is late, Marvel has the option to require that payment be made at the
exchange rate existing on the day preceding payment. All taxes, levies, charges
or duties imposed on license rights, artwork or similar material, or payments
therefor, shall be paid by Licensee and no deductions for such taxes, levies,
charges or duties shall be made from amounts owed Marvel hereunder, it being the
intent hereof that all royalties payable to Marvel be free and clear of any
taxes, levies, charges or duties of any kind whatsoever, except in jurisdictions
where such is prohibited by law, and where the Licensee is required to withhold
certain taxes. Licensee agrees that where taxes are withheld it will submit to
Marvel the original tax certificate.
(d) Royalty Reports. For each Calendar Period specified in Section
1(m), commencing with the end of the Calendar Period following the Commencement
Date of this license and continuing until a final certification of wind-up is
delivered, Licensee shall furnish Marvel with a detailed Royalty Report
certified to be accurate by an authorized officer of Licensee, showing all
information called for by the statement form annexed hereto as Exhibit D for
each Licensed Article. Each such Royalty Report shall be furnished to Marvel
within the time specified in Section 1(m) after the end of the Calendar Period
for which such Royalty Report is made, and shall be accompanied by payment to
Marvel of any and all monies due Marvel and by Licensee's most current standard
price (setting forth Licensee's wholesale and suggested retail prices) for the
Licensed Articles. Such Royalty Report shall be furnished to Marvel whether or
not there are any Net Sales during the preceding Calendar Period, and whether or
not any monies are then due Marvel. The failure or refusal of Licensee to timely
furnish any such Royalty Report or payment shall be deemed a substantial and
material breach of this Agreement and shall entitle Marvel to terminate this
license as set forth in Section 15(a) hereof. The receipt or acceptance by
Marvel of any of the Royalty Reports furnished pursuant to this Agreement or of
any payments made hereunder (or the cashing of any checks paid hereunder) shall
not preclude Marvel from questioning its accuracy at any time, and in the event
that any inconsistencies or mistakes are discovered in such Royalty Reports or
payments, they shall immediately be rectified and the appropriate payment made
by Licensee, together with interest on any overdue payments at the rate
specified in Section 17(c) hereof.
(e) Records. Licensee shall maintain at its expense, detailed,
accurate, full and complete records and books of account covering all
transactions by it relating to this Agreement, and Marvel and its duly
authorized representatives shall have the right, no more than twice during each
calendar year during normal business hours, and upon reasonable notice, to
examine and/or audit such records and books of account and all other documents
and materials in the possession or under the control of
Licensee relating or pertaining to the subject matter or provisions of this
Agreement and to make copies and/or extracts therefrom. In the event that
Marvel's duly authorized representatives shall discover a deficiency for any
accounting period of five percent (5%) or more by any such examination and/or
audit, Licensee shall pay to Marvel the cost of such examination and/or audit or
the Examination Audit Fee per diem set forth in Section 1(r), whichever is
higher. Upon Marvel's demand, Licensee shall at its own expense furnish Marvel
with a detailed report by an independent certified public accountant on the
accuracy and preparation of the aforesaid Royalty Reports. Licensee shall keep
all such books of account and records available to Marvel for at least two (2)
years after the termination or expiration of this license. If Licensee fails to
keep and disclose such records, Marvel shall have the right to estimate, and
demand payment for, such additional royalty as may be indicated owing by such
trade information as may be available.
6. MARVEL'S TITLE AND GOODWILL
(a) General. Licensee acknowledges (i) that Marvel is the owner of all
right, title and interest in and to the Property, (ii) the great value of the
goodwill associated with the Property, and that the Property has acquired
secondary meaning in the mind of the public and (iii) that the trademarks and
copyrights included in the Property, and the registrations therefor, are valid
and subsisting. Licensee further agrees that it shall not during the Term of
this license or at any time thereafter dispute or contest directly or
indirectly, or do or cause to be done any act which in any way contests, impairs
or tends to impair Marvel's exclusive rights and title to the Property, as well
as any properties owned by Marvel which are not licensed hereunder, or the
validity thereof or the validity of this Agreement, and shall not assist others
in so doing.
(b) Representations of Ownership, etc. Licensee shall not in any manner
represent that it has any ownership in the Property, or in any properties owned
by Marvel which are not licensed hereunder, or in any trademarks or copyrights
included in the Property (or registrations therefor), but may, only during the
Term of this license, and only if Licensee has complied with all laws and
registration requirements within the Territory for so doing, represent that it
is a "licensee" or "official licensee" hereunder. Licensee shall not register or
attempt to register any copyright or trademark in the Property, or in any
properties owned by Marvel which are not licensed hereunder, in its own name or
that of any third party, nor shall it assist any third party in doing so.
(c) Use for Benefit of Marvel. Licensee agrees that any and all uses
and sales by Licensee of the Property under this Agreement shall inure to the
benefit of Marvel and that neither such uses or sales nor anything contained in
this Agreement shall give or assign Licensee or any other person or entity any
right, title or interest in the Property, or in any properties owned by Marvel
which are not licensed hereunder, except the right to use the Property
specifically in accordance with the provisions of this Agreement.
7. PROTECTION OF RIGHTS-INCLUDING COPYRIGHTS AND TRADEMARKS
(a) General. Licensee shall cooperate fully and in good faith with
Marvel for the purpose of Marvel's securing and preserving Marvel's (or any
grantor of Marvel's) rights in and to the Property. Upon creation of Licensed
Articles embodying the Property, Licensee shall be deemed to have automatically
assigned to Marvel all copyrights in the Property (and all adaptations,
compilations, modifications, translations and versions thereof) embodied in the
Licensed Articles. In addition, Licensee shall execute any instruments requested
by Marvel to accomplish or confirm the foregoing and hereby irrevocably appoints
Marvel as its attorney-in-fact to execute such instruments if Licensee does not
do so. Any such assignment shall be without consideration other than the mutual
covenants and considerations of this Agreement.
(b) Trademarks. Licensee acknowledges and agrees that the names,
characters, symbols, designs, likenesses, and visual representations, among
other things, comprising the Property are owned by Marvel, and that Licensee
shall cause to appear on everything which uses, bears or displays the Property
or any part thereof, including all Licensed Articles, tags, labels and the
advertising, promotional, packaging and display material therefor, a notice
proclaiming and identifying the relevant portions of the Property appearing
therein as properties of Marvel, as, for example, by labeling each name and
character likeness with the notice specified in Section 1(s) or otherwise as
Marvel may deem appropriate.
(c) Notice of Supervision. Every Licensed Article and all advertising,
promotional, packaging and display material therefor shall also bear the notice
of supervision specified in Section 1(t) (or an equivalent if given prior
written approval by Marvel) in order to notify the public that Marvel's
standards are maintained.
(d) Reference to Source. It is agreed that all trademarks and other
references used by Licensee in connection with the Licensed Articles which might
suggest that they are indicias of source, shall, with all of the goodwill
relating thereto, inure to the benefit of and be the sole property of Marvel,
except only that Licensee may use a house xxxx upon the Licensed Articles
without being deemed to have assigned it to Marvel, provided it fairly appears
only as Licensee's house xxxx.
(e) Confusing Use. Licensee shall not use, and shall use its best
efforts to keep others with whom Licensee does business from using, the Property
in any manner likely to cause confusion or doubt in the mind of the public as to
the ownership and control thereof or in any manner that does not make clear that
the Property is owned and controlled exclusively by Marvel. In addition,
Licensee shall not use or co-mingle with the Property, and shall use its best
efforts to keep others from using or co-mingling with the Property, any other
trademarks, characters or properties, whether owned by Licensee or another, so
as to suggest that such other trademarks, etc. may have been created or may be
owned, controlled, licensed or approved by Marvel or that they are in any way
related to the Property or Marvel.
(f) Registration. Licensee agrees to fully cooperate with and assist
Marvel, at Marvel's expense, in the prosecution of any copyright, trademark or
service xxxx applications concerning the Property that Marvel may desire to
file, and for that purpose, Licensee shall, upon request, supply to Marvel
enough samples of the Licensed Articles or other material as may be required in
connection with any such application. Furthermore, Licensee shall execute any
instrument Marvel shall reasonably deem necessary or desirable to record or
cancel Licensee as a registered user of the trademarks of Marvel included in the
Property, it being understood and agreed that Licensee's right to use the
Property and the trademarks included therein in any country for which the filing
of a registered user application is required, or is requested by Marvel, shall
commence only upon the filing of such registered user application, but shall
continue only so long as this license remains in effect.
(g) Customer Complaints. Licensee shall, in connection with its duty to
use the Property so as to promote the continuing goodwill thereof, give
immediate attention and take necessary action to satisfy all legitimate customer
complaints brought against Licensee in connection with the Licensed Articles or
other materials using the Property. Licensee shall give Marvel immediate notice
of all complaints that might affect the good standing of the Property or the
reputation of Marvel and also of all complaints that might result in legal
action between Marvel and any third party, and cooperate with Marvel upon
request to achieve as good a reputation and press for the Property as possible.
(h) Copyright Notice. It is a condition of this license that prior to
public distribution, Licensee shall cause to appear the copyright notice
specified in Section 1(s) on all Licensed Articles, tags, labels and the
advertising, promotional, packaging and display materials therefor, or otherwise
as Marvel may instruct in writing or approve upon request.
(i) Secure Copyrights. etc. Marvel may secure, in its name (or the name
of another, including Licensee, if desired by Marvel), to the fullest extent
possible, the copyrights in the Property and the registrations, renewals and
extensions thereof, embodied in the Licensed Articles, including all
adaptations, translations, modifications and versions of the Property. It is
also a condition of this license that all Licensed Articles and other materials
produced under this Agreement shall be produced as works made for hire for
Marvel.
(j) Claims by Licensee. Licensee shall not commence any court or
administrative action against Marvel or against any other licensee of Marvel
under the Property without giving Marvel thirty (30) days prior written notice
and an opportunity by Marvel and/or such licensee to cure or correct the matter
giving rise to the proposed action during said thirty (30) day period. In the
event of any such action, Licensee shall give Marvel at least fifteen (15) days
prior written notice before seeking any interim injunctive relief or restraining
order.
8. QUALITY OF MERCHANDISE AND SERVICES; LICENSEE NAME ON LICENSED ARTICLES
(a) Quality of Merchandise. Licensee agrees that
(i) the Licensed Articles shall be of a high standard and of such
style, appearance and quality as shall, in the judgment of Marvel, as per prior
approved samples, be adequate and suited to their exploitation to the best
advantage and to the protection and enhancement of the Property and the goodwill
pertaining thereto;
(ii) the Licensed Articles shall be produced, maintained,
manufactured, packaged, sold, distributed, advertised and serviced in accordance
with all applicable laws;
(iii) the policy of sale, distribution, and/or exploitation by
Licensee shall be of equivalent high standard and style; and that the same shall
in no manner reflect adversely upon the Property or Marvel; and
(iv) all rights granted in this Agreement shall be exploited and
exercised so as not to interfere with, detract from, or alter the concepts used
by Marvel or known to the public and that Licensee shall use its best efforts to
preserve the concepts therein.
(b) Approval of Merchandise. Licensee specifically covenants and agrees
to keep Marvel informed of its plans for use of the Property, and to consult
Marvel as the Licensed Articles are being prepared, so that there will be full
opportunity for Marvel to deter Licensee from any use that would alter the
successful concepts associated with the Property, including any new concepts
Marvel fully develops for the Property. Licensee will consult with Marvel at
every stage in designing the Licensed Articles regarding the utilization of the
Characters and the Property and shall work with Marvel to obtain Marvel's
creative input concerning the Characters and the Property and the overall look
and direction of the Licensed Articles. In connection therewith, Licensee shall
be faithful in the portrayal of the Characters to the basic conceptualization of
the Characters and the Property as well as Marvel's most current style guide for
such Characters. To this end, before the first display of any kind of the
Licensed Articles or
such other materials, but in no event later than the Product
Development/Submission Date provided in Section 1(g), Licensee shall submit to
Marvel's New York Office, to the attention of Senior Contracts Administrator,
for written approval without charge, and in a form acceptable to Marvel, all
rough designs, concepts and/or prototypes of each item, class, part or category
of the Licensed Articles and/or with respect to any Character licensed
hereunder. After such rough material has been approved by Marvel, and before any
public display, Licensee shall further submit to Marvel's New York Office, to
the attention of Senior Contracts Administrator, for written approval without
charge, and in a form acceptable to Marvel, a pre-production sketch or model of
each item, class, part or category of the Licensed Articles and/or with respect
to any Character licensed hereunder. Any item submitted to Marvel shall be
deemed disapproved unless the same shall be approved in writing within twenty
(20) business days of receipt of the samples. If Marvel does not respond within
this twenty (20) business day period the Licensee may re-submit such previously
submitted materials clearly marked as "2nd Submission". If Marvel does not
respond within fourteen (14) business days from second submission the
resubmitted materials shall be deemed approved. Licensee's failure to comply
with any of the provisions of this section shall be deemed a substantial and
material breach of this Agreement and shall entitle Marvel to terminate this
license as set forth in Section 15(a) hereof.
(c) Revocation of Approval. In the event that the, appearance or style
of any Licensed Article previously approved by Marvel ceases to be acceptable to
Marvel, Marvel shall have the right, in its sole discretion, to withdraw its
approval of such Licensed Article and to require that Licensee redesign such
Licensed Article in a manner consistent with Marvel's new policies. In the event
of such withdrawal, Licensee shall as soon as practicable cease the production
of the previously approved Licensed Article and shall have a four (4) month
sell-off period for such Licensed Article.
(d) The Marvel Comic's logo and URL address for Marvel's website,
currently located at WWW. MARVEL. COM (or such other logo as Marvel designates)
and Licensee's name, trade name (or a trademark of Licensee which Licensee has
advised Marvel in writing that it is using) shall prominently appear on
permanently affixed labeling on each Licensed Article and, if the Licensed
Article is sold to the public in packaging or a container, printed on such
packaging or a container so that the public can identify the supplier of the
Licensed Articles. On soft goods, "permanently affixed" shall mean sewn on. On
hard goods, "permanently affixed" shall mean molded into or printed on the
product. On packaging, "permanently affixed" shall mean printed on the package.
Licensee shall advise Marvel in writing of all trade names or trademarks it is
using on Licensed Articles being sold under this license if such names or marks
differ from your corporate name as indicated herein.
9. INSPECTION AND APPROVAL
(a) Samples for Approval. The nature, quality, style and labeling of
the Licensed Articles and the packaging, labels, advertising and promotional
material therefor as well as any press releases or public statements involving
the Licensed Articles or this License Agreement, shall have the prior written
approval of Marvel. To this end, before the first sale, distribution, display or
release of any kind or in any media of the Licensed Articles or such other
materials, Licensee shall submit to Marvel's New York Office, to the attention
of Senior Contracts Administrator, for Marvel's written approval without charge,
the number of samples specified in Section 1(u) of each Licensed Article
manufactured hereunder upon completion of the first production, and each
different piece of advertising, promotional, packaging and label material
therefor as well as any proposed press releases or public statements involving
this License Agreement (the "Associated Material"). Annually thereafter,
Licensee shall submit to Marvel's New York Office, to the attention of Senior
Contracts Administrator, free of cost, for Marvel's written approval, the number
of samples specified in Section 1(u) of each of the finished Licensed Articles
and each different piece of Associated Material therefor. Any item submitted to
Marvel shall be deemed
disapproved unless the same shall be approved in writing within twenty (20)
business days of receipt of the samples. If Marvel does not respond within this
twenty (20) business day period the Licensee may re-submit such previously
submitted materials clearly marked as "2nd Submission". If Marvel does not
respond within fourteen (14) business days from second submission the
resubmitted materials shall be deemed approved. After Licensed Articles or
Associated Materials have been approved pursuant to this Agreement, Licensee
shall not depart therefrom in any respect without Marvel's prior written
consent. No approval of any submitted product or item by Marvel shall be
construed to expand or enlarge the scope of the license granted hereunder.
Licensee shall use reasonable efforts to make such changes as are reasonably
requested by Marvel after an inadvertent approval or a change of conditions. In
the event that this license involves the manufacture and/or sale of a food or
drink product or a product intended for human use in the manner of a soap,
shampoo, or a similar product, then it is an essential condition of this
license, and Licensee covenants and agrees, that there shall not be the
slightest departure from the quality or the formula approved by Marvel without
the written consent of Marvel obtained in advance.
(b) Inspection . Marvel or its authorized agents or representatives
shall have access to Licensee's premises at all reasonable times, upon
reasonable notice, with the right to a full inspection of the production of the
Licensed Articles in order to satisfy itself that its standards are maintained,
and with the right to be supplied, on request, with a reasonable number of free
samples of all Licensed Articles in preparation and the raw materials and
ingredients used therein.
(c) Approval Limitation. Any and all approvals required by Marvel
hereunder shall be valid only if in writing and signed by any of the following
employees of the Marvel Legal Department: Executive Vice President Business and
Legal Affairs, Assistant General Counsel, Senior Contracts Administrator, Senior
Contracts Manager, Director of Intellectual Property and Property Rights or any
other titles which Marvel may designate in writing. Licensee understands that no
oral approval or written approval by any other employee may be relied upon or
shall bind Marvel. Any reliance on any oral or written modification by any other
employee shall be at Licensee's own detriment and risk.
10. INFRINGEMENT, INDEMNIFICATION AND INSURANCE
(a) Infringement of Property. Licensee shall promptly notify Marvel, in
writing, of any imitations or infringements of the Property or the rights
licensed hereunder which may come to Licensee's attention. Marvel shall have the
sole right to determine whether or not any demand, suit or other action shall be
taken on account of or with reference to any such infringements or imitations,
and Licensee shall not institute any suit or take any action on account of any
such infringements or imitations without first obtaining the written consent of
Marvel to do so. Marvel, if it so desires, may commence or prosecute any suits
or make any such demands in its own name or in the name of Licensee or join
Licensee as a party thereto. Licensee shall cooperate with Marvel and in any
manner that Marvel may reasonably request in connection with any such demands,
suits, claims or other actions. If Marvel elects not to xxx, Licensee may
request permission to bring suit and, with written permission, may bring suit at
its own expense, provided Licensee indemnifies Marvel against any loss or
damage, including any loss or damage to reputation or goodwill, and provided
that trial counsel is approved by Marvel, keeps Marvel fully informed, and
further provided that Marvel shall have the right to assume control of the
litigation at any time, but is thereupon responsible for its own further
litigation expense. Nothing herein shall be construed as imposing any obligation
upon Marvel to take action against any alleged infringer, nor to relieve
Licensee from full compliance with any of the terms of this Agreement in the
event that Marvel does not take such action.
(b) Infringement of Other Rights. In its use of the Property, or any
element or portion thereof, Licensee shall exercise reasonable care, and shall
cooperate fully with Marvel, to avoid infringing any rights found to be owned by
others in the Territory. Upon learning of the existence or possible existence of
rights held by others which may be infringed by the use of any element or
portion of the Property under this Agreement, Licensee shall promptly notify
Marvel in writing.
(c) Indemnification of Licensee. Marvel shall defend, indemnify and
hold Licensee harmless of, from and against any charges, suits, damages, costs,
expenses (including attorneys' fees), judgments, penalties, claims, liabilities
or losses of any kind or nature whatsoever, which may be sustained or suffered
by or secured against Licensee based upon or arising out of any actual or
alleged trademark or copyright infringement arising solely out of the use by
Licensee of the Property as authorized in this Agreement, provided that: prompt
notice is given to Marvel of any such claims or suits and provided further that:
Marvel shall have the option to undertake and conduct the defense and/or
settlement of any such claims or suits and that Licensee cooperates with Marvel
in the defense of any such claims or suits and Licensee acts to mitigate any
damages, and that no settlement of any such claims or suits is made without the
prior written consent of Marvel. Marvel does not warrant any present or future
commercial value of the Property.
(d) Indemnification of Marvel. Licensee shall defend, indemnify and
hold Marvel, its parents, subsidiaries, associated and affiliated companies,
harmless of, from and against any charges, suits, damages, costs, expenses
(including attorneys' fees), judgments, penalties, claims, liabilities or losses
of any kind or nature whatsoever, which may be sustained or suffered by or
secured against Marvel in connection with the Licensed Articles, or based upon
or arising out of any actual or alleged unauthorized use of any patent, trade
secret, process, idea, method or device, or any copyright or trademark, other
than under this license, or the packaging, distribution, promotion, sale or
exploitation of the Licensed Articles, any actual or alleged defect in the
Licensed Articles or their packaging, whether latent or patent, including
failure of said Licensed Articles or their packaging, distribution, promotion,
sale or exploitation to meet any Federal, State or local, or other applicable
laws or standards; or any other actual or alleged unauthorized action of
Licensee, including a breach of any term of this Agreement.
(e) Insurance. Licensee shall obtain at its own expense and maintain
during the Term of this Agreement and for three (3) years thereafter, general
liability insurance including advertising, blanket contractual, product
liability and completed operations liability coverages. In the event the
Licensed Articles are books or other published materials or of an electronic
nature such as software, computer programs, etc., Licensee also shall obtain at
its own expense and maintain during the Term of this Agreement and for three (3)
years thereafter (five (5) years if the policy form is claims made) multi-media
liability insurance which provides coverage for claims arising out of the
published material and shall include but not be limited to the allegations of
defamation, copyright infringement, invasion of right of privacy, or other
personal injury and breach of implied contract. All insurance must be provided
by a recognized insurance company having a Best's Rating of no less than "A"
providing adequate protection at least in the amounts specified in Section 1(v)
for personal bodily injury and property damage for Marvel and also for Licensee.
Said insurance shall be primary and non-contributory with respect to any
insurance carried by Marvel. Upon return to Marvel of Licensee's signed
originals of this Agreement, Licensee shall furnish to Marvels New York Office,
to the attention of Senior Contracts Administrator, a certificate evidencing
that such insurance is in force, naming Marvel its subsidiaries, associated and
affiliated companies as additional insured parties and providing that such
coverage will not be canceled without at least thirty (30) days notice to
Marvel. Said insurance coverage shall be effective as of the date first written
above. Any proposed change in the insurance policy(ies) affecting Marvel's
coverage shall be submitted for review as to the policy compliance with the
terms and conditions of this Agreement, to Marvel's New York Office, to the
attention of Senior Contracts Administrator. The
policy(ies) of insurance must be non-cancelable except after thirty (30) days
prior written notice to Marvel's New York Office, sent to the attention of
Senior Contracts Administrator. As used in Section 10(b) and (d), "Marvel" shall
also include the agents, employees, assignees and any sponsor of Marvel, any
advertising agency, and their respective officers, directors, agents and
employees. This provision shall survive the termination or expiration of this
Agreement. Notwithstanding anything herein to the contrary, in the event that
Licensee is not able to obtain, or fails to maintain any of the insurance
coverages in the amounts contemplated by this Section 10(e), Licensee shall
defend, indemnify, and hold Marvel, its parents, subsidiaries and affiliates
harmless of, from and against any charges, suits, damages, costs, expenses
(including attorneys' fees), judgments, penalties, claims, liabilities or losses
of any kind or nature whatsoever which may be sustained or suffered by or
secured against Marvel or any affiliate thereof based on or arising out of the
failure of Licensee to obtain or maintain any of the insurance coverages in the
amounts contemplated by this Section 10.
11. ARTWORK
(a) Licensee may request from Marvel limited amounts of artwork from
the Marvel online style guide (the "Marvel Online Style Guide") depicting the
Property for use in the Licensed Articles for Five Hundred Dollars ($500) per
character group (i. e. Spider-Man, X-Men, Hulk are $500 each). Licensee may
request access to Marvel's additional art database via the internet, (the "D. A.
M. System") for an additional fee of Three Thousand Dollars ($3,000) per year.
The cost of providing copies of additional artwork, and the cost of both
producing and providing copies of additional artwork, other than Style Guide
artwork and D. A. M. System artwork (ii Licensee chooses this option), which is
specifically requested by and specifically prepared for Licensee or the
reproduction thereof shall be paid by Licensee upon invoicing therefor. Licensee
understands that in the event any fees or royalties are due creators or artists
as a result of certain artwork or story-lines, Licensee shall be responsible for
the payment of such fees and/or royalties upon invoicing therefor. Payment of
artwork and any fees associated therewith shall not be credited against any
guarantee or other amount due Marvel. All invoices for artwork shall be paid by
Licensee within ten (10) days of receipt. The failure or refusal of Licensee to
timely furnish any such payment shall be deemed a substantial and material
breach of this Agreement and shall entitle Marvel to terminate this license as
set forth in Section 15(a) hereof.
(b) All artwork involving the Property, or any reproduction thereof,
and all copyrights therein shall, notwithstanding its use by Licensee, be and
remain solely the property of Marvel and Marvel shall be entitled to use the
same and to license the use of the same by others. Any reproduction or use of
such artwork shall be on a non-exclusive basis.
(c) Licensee shall obtain and promptly furnish to Marvel's New York
Office, sent to the attention of Senior Contracts Administrator, on the form
annexed hereto as Exhibit E, an Agreement signed by each person who creates,
prepares or produces for or on behalf of Licensee (whether as an employee, an
independent contractor or otherwise) any artwork involving the Property or any
reproduction thereof, stating that such artwork is a work made for hire for
Licensee under the U. S. Copyright Laws and acknowledging that such person has
no copyright or other rights of any kind in or to such artwork. Licensee shall
be deemed to have automatically assigned to Marvel all copyrights in any
materials created by or for Licensee in the licensed articles. Further, Licensee
shall execute any instruments requested by Marvel to accomplish or confirm the
foregoing assignment, and hereby irrevocably appoints Marvel as its
attorney-in-fact to execute such instruments if Licensee does not do so.
12. PROMOTION
(a) Marvel shall have the right, but shall not be under any obligation,
to use the Property and/or the name of Licensee so as to give the Property,
Licensee, Marvel and/or programs connected with the Property full and favorable
prominence and publicity. If the Licensed Articles appear in film produced by or
under authority of Marvel, there shall be no obligation by Marvel to discontinue
use of such film or any part thereof at the expiration or termination of this
license and such continued use shall in no way be construed as an extension of
the Term hereof or of this license.
13. DISTRIBUTION AND ADVERTISING
(a) Licensee shall diligently and continuously use its best efforts
throughout the entire Territory licensed hereunder and during the entire Term of
this license to distribute solely through the Channels of Distribution
identified in Exhibit C and sell the Licensed Articles, to make and maintain
adequate arrangements for the distribution of the Licensed Articles, to promote
and expand its sales jobbers, wholesalers and distributors for sale and
distribution to retail stores and merchants, and to retail stores and merchants
for sale and distribution direct to the public. Licensee shall also have the
right to distribute and sell the Licensed Articles on home shopping television
programs directly to the public.
(b) Licensee acknowledges that it has no right to and shall not,
without prior written consent of Marvel, knowingly (or given the facts should
reasonably known),sell or distribute the Licensed Articles to anyone whose sales
or distribution are or will be made for publicity, promotional or tie-in
purposes, combination sales, premiums, giveaways, by direct mail, electronic
sales (whether made through the Internet, a commercial online service or
otherwise), vending machines, or similar methods of merchandising, or whose
business methods are or are reported to be questionable. Licensee shall not sell
any of the Licensed Articles at a price twenty-five percent (25%) or more below
the Established Price for such Licensed Article, without obtaining Marvel's
prior written consent, it being recognized that sales below such amount will
result in disparagement of the Licensed Articles and/or Marvel.
(c) Licensee shall purchase one (1) page of advertising Marvel's Comic
books at the following rate: the greater of, Thirty Two Thousand Five Hundred
Dollars ($32,500) or the current rate card at time of placement, on or before
December 31st of each year for the Term of this Agreement (the "Advertising and
Promotion Commitment"). Licensee shall give M-o (2) months prior notice for the
placement of each page of advertising. The amount of the Advertising and
Promotion Commitment shall not be deducted from royalties owed Marvel, the
Minimum Guarantee or applied to any trade discounts permitted under Section
5(a). The failure or refusal of Licensee to timely furnish any such payment
shall be deemed a substantial and material breach of this Agreement and shall
entitle Marvel to terminate this license as set forth in Section 15(a) hereof,
unless Licensee cures such breach completely by paying Marvel in cash any
shortfall within ten (10) business days of receipt of Marvel's written notice of
such breach. In addition, Licensee agrees to participate in Marvel's common
marketing and promotional fund (the "Common Marketing Fund" or "CMF") as
provided in this sub-paragraph. The amount of Licensee's contribution to the CMF
shall be set at Twelve Thousand Five Hundred Dollars ($12,500) and in the event
that Estimated Gross Sales are exceeded excess gross Sales") (i.e. -once
Licensee is in overages) then Licensee's contribution to the CMF shall be two
percent (2%) of the Excess Gross Sales (calculated quarterly) paid to Marvel on
a quarterly basis (payments payable by separate check or wire and labeled as CMF
for convenience). Licensee's CMF payments shall be expended by Marvel and
Marvel's designee's in the amounts and in the manner Marvel deems most
appropriate in order to provide support to the overall program to including, but
not limited to: national
or local advertising, marketing and promotion, related market research, retail
support of the licensed Articles regarding the Characters, the trademarks and/or
the brand(s) licensed hereunder or other Marvel properties. However, Marvel does
not ensure that Licensee or any other particular licensee will benefit directly
or pro-rata from the operation of the Common Marketing Fund. Marvel may apprise
Licensee of the operations and proposed expenditures of the Common Marketing
Fund from time to time and seek Licensee's advice on how the CMF monies relating
to the Characters, the trademarks and/or the brand(s) should be spent but the
final decision on how the CMF monies are spent shall be determined by Marvel in
its sole and absolute discretion. Licensee shall not be entitled to any audit
rights with regard to the CMF system. Payment of CMF shall not be credited
against any guarantee or other amount due Marvel. All invoices for CMF shall be
paid by Licensee within ten (10) days of receipt. The failure or refusal of
Licensee to timely furnish any such payment shall be deemed a substantial and
material breach of this Agreement and shall entitle Marvel to terminate this
license as set forth in Section 15(a) hereof.
14. SALE TO MARVEL
(a) Licensee agrees to sell to Marvel the Licensed Articles at
Licensee's cost for such Licensed Articles, and shall deliver the Licensed
Articles to Marvel at Marvel's expense, and in any quantity Marvel orders,
provided that (i) the Licensed Articles so purchased shall not be resold by
Marvel and (ii) the Licensed Articles so purchased shall be on a royalty-free
basis.
(b) In the event Marvel wishes to purchase the Licensed Articles for
resale purposes, Licensee shall sell to Marvel the Licensed Articles in any
quantity Marvel desires, subject to availability, at no greater than Licensee's
lowest wholesale selling price offered to third parties for such quantities, and
Licensee shall pay royalties on all such sales to Marvel in accordance with the
provisions hereof.
15. TERMINATION
(a) In the event of failure by Licensee to furnish the royalty payments
and/or Royalty Reports required hereunder in accordance with Section 5(a) hereof
or to timely pay the Minimum Royalty Guarantee payments in accordance with
Section 5(b) of the Agreement or pay invoices in accordance with Section 11(a)
and 13(c) of the Agreement, Marvel shall have the right to terminate this
license upon three (3) days' notice in writing, and such notice of termination
shall become effective unless, within such three (3) day period, Licensee shall
completely remedy the breach and furnish the required payments and/or Royalty
Reports. Notwithstanding the foregoing, if Licensee fails to furnish the
required payments and/or Royalty Reports more than twice within an eighteen (18)
month period, Marvel shall have the right to terminate this Agreement
immediately. In the event Licensee fails to submit samples prior to production
or sale of the Licensed Articles or the distribution of associated articles in
accordance with Section 9(a) hereof, or failure by Licensee to obtain Marvel's
written approval of the samples submitted by Licensee in accordance with Section
9(a) hereof, this Agreement will automatically terminate with no prior notice to
Licensee being required.
(b) Marvel shall have the right to terminate this Agreement upon ten
(10) days prior notice upon the occurrence of any of the following events:
(i) If Licensee shall become insolvent or fail to pay its debts and
obligations on a current basis or shall make an assignment for the benefit of
creditors or become involved in a receivership, bankruptcy or other insolvency
or debtor relief proceedings, or any similar proceedings, or in proceedings,
voluntary or forced whereby it is limited in the free and unrestrained exercise
of its own judgment as to the carrying out of the terms of this Agreement;
(ii) if Licensee shall cease to do business;
(iii) if Licensee shall attempt to assign any of its rights under
this Agreement except pursuant to Section 19(f). For purposes of this Agreement,
a merger or consolidation of Licensee with another person or entity, other than
its parent or a wholly owned subsidiary, shall be deemed an assignment of this
Agreement; or
(iv) in the event that this Agreement is held invalid or
unenforceable by the determination of any government or any court of competent
jurisdiction.
(v) if any Licensed Articles become the subject of a recall by the
Federal Consumer Product Safety Commission or any corresponding state or federal
agency and Licensee fails to take immediate action to recall such products.
(c) Change in Character of Licensee. It is understood that the grant of
the license herein by Marvel is premised upon the present character and
composition of Licensee's management and Licensee's general good standing and
reputation in the business community, and is therefore personal to Licensee.
Marvel may terminate this Agreement if: (i) there is a transfer, in a single
transaction or a series of transactions of twenty-five percent (25%) or more of
(a) the then outstanding shares of common capital stock of Licensee or its
"Parent" (as defined below) or (b) the combined voting power of the then
outstanding voting securities of the Licensee or its Parent entitled to vote
generally in the election of directors; or (ii) there is a transfer, in a single
transaction or a series of transactions, of all or substantially all of the
assets of Licensee or its Parent (in each instance, a "Change of Control"). If
Licensee has reason to believe that such a Change of Control has occurred or
will occur in the reasonably foreseeable future or if Licensee or its Parent
proposes to enter into such a Change of Control transaction, Licensee shall give
written notice thereof to Marvel. Within a reasonable time after receiving such
notice, Marvel shall give Licensee written notice stating whether it approves or
disapproves any such Change of Control or proposed Change of Control and, in the
case of its disapproval thereof, whether it exercises its right of termination
hereunder, if the Change of Control has already occurred, or will exercise its
rights of termination if the proposed Change of Control is subsequently made. If
Marvel approves of such Change of Control and such Change of Control actually
occurs, a transfer fee will be immediately payable to Marvel in such an amount
as Marvel may determine [but in no case less than Fifty Thousand Dollars
($50,000) ], based upon such factors including, but not limited to: the Licensed
Articles, the Minimum Royalty Guarantee, the royalty rate and the amount of the
remaining Term. This fee will represent consideration to Marvel for, among other
issues, Marvel's risk that sales or production may be delayed, approval and
supervision of the use of the Property may be compromised, the possible risk
associated with the new identity, relationships, credit standing, capabilities,
and image associated with a new or altered Licensee, and Marvel's administrative
expenses. Marvel shall approve and charge no transfer fee for any Change of
Control which fits the standards set forth above but which does not constitute a
change in beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the US. Securities Exchange Act of 1934, as amended) of Licensee or its
Parent. The foregoing shall not limit in any way the right of Marvel, under
Section 19(f), to disapprove assignments and other transfers of this Agreement
and the rights hereunder. For purposes of this Section 15(c), Licensee's
"Parent" shall mean any person or entity in control of Licensee directly or
indirectly through one or more intermediaries.
(d) Trade Introduction. In the event of failure by Licensee to
introduce the Licensed Articles to retail accounts constituting a majority of
Licensee's anticipated Net Sales by the Trade Introduction Date
provided in Section 1(h), Marvel shall have the right to terminate this license
upon thirty (30) days notice in writing, and such notice of termination shall
become effective unless, within said thirty (30) day period, Licensee shall
remedy the violation and comply with all conditions, and reasonably satisfy
Marvel that it has done so.
(e) Diligent Distribution. If within three (3) months from the
applicable Consumer Introduction Marketing Date or if no such date is specified,
within six (6) months after the effective date of this Agreement, or thereafter
if in any three (3) consecutive months, Licensee fails to manufacture and sell
meaningful quantities of each item, class, part or category of the Licensed
Articles within the Territory, or fails to so manufacture and sell Licensed
Articles using each of the Characters included in the Property, Marvel, in
addition to all other options and remedies available to it hereunder, may
terminate this license on written notice with respect to any such item, class,
part or category of the Licensed Articles and/or with respect to any Characters
which have not been so used, sold and distributed. Such notice shall be
effective when mailed to Licensee with no prior notice to Licensee being
required.
(f) Other Breach. Except as otherwise specifically set forth in this
Agreement, if Licensee shall violate, breach or be in default of any of its
covenants or obligations under this Agreement or shall use bad faith in carrying
out the provisions of this Agreement, Marvel, in addition to all other rights,
also shall have the right to terminate this license upon thirty (30) days
written notice, and such notice of termination shall become effective within
said thirty (30) day period, unless Licensee shall completely remedy the
violation and satisfy Marvel that all reasonable steps have been taken to
prevent reoccurrence. Notwithstanding the foregoing, if Licensee violates,
breaches or is in default of any of its covenants or obligations under this
Agreement or shall use bad faith in carrying out the provisions of this
Agreement more than twice within an eighteen (18) month period, Marvel shall
have the right to terminate this Agreement immediately with no cure period.
(g) Other Licenses and Properties. Licensee acknowledges and agrees
that if Licensee violates any of its obligations under this Agreement, Marvel
shall have the right to terminate any other License Agreement with Licensee (or
any affiliate of Licensee). In addition, Licensee acknowledges and agrees that
if Licensee violates its obligations under any other License Agreement between
Marvel and Licensee (or any affiliate of Licensee), or if Licensee (or any
affiliate of Licensee) uses the Property or any part thereof beyond the scope of
the license granted herein or uses any properties owned by Marvel which are not
licensed to Licensee, Marvel shall have the right to terminate this License
Agreement. In either event, Marvel's right to terminate shall be effective upon
ten (10) days notice in writing and such notice shall become effective unless
Licensee shall completely remedy the violation within the ten (10) day period
and satisfy Marvel that such violation has been remedied.
16. OBLIGATIONS ON EXPIRATION OR TERMINATION
(a) Reversion of Right. Immediately upon the expiration or termination
of this license for any cause whatsoever, all the rights granted to Licensee
hereunder shall cease and revert to Marvel, who shall be free to license others
to use any or all of the rights granted herein effective on and after such date
of expiration or termination. To this end, Licensee will be deemed to have
automatically assigned to Marvel upon such expiration or termination, all
copyrights, trademark and service xxxx rights, equities, good will, titles and
other rights in or to the Property and all adaptations, compilations,
modifications, translations and versions thereof, and (except for Licensee's
house xxxx) all other trademarks and service marks used in connection therewith
which have been or may be obtained by Licensee or which may vest in Licensee and
which have not already been assigned to Marvel. Licensee shall upon the
expiration or termination of this license execute any instruments requested by
Marvel to
accomplish or confirm the foregoing, and hereby irrevocably appoints Marvel as
its attorney-in-fact to execute such instruments if Licensee does not do so. Any
such assignment shall be without other consideration than the mutual covenants
and considerations of this Agreement. In addition, upon and specifically
provided in Section 16(e) hereof, forthwith refrain from further use of the
Property or Marvel's name, or any further reference to any of them, direct or
indirect, or of anything deemed by Marvel to be similar to the Property.
(b) Return of Artwork. Upon termination or expiration of this Agreement
for any reason whatsoever, Licensee shall return to Marvel's New York Office,
sent to the attention of Senior Contracts Administrator, all artwork containing
or featuring the Property, including but not limited to all reproductions and
all artwork containing or featuring the Property, specially produced for
Licensee by Marvel or others, whether or not paid for by Licensee.
(c) No Release. The termination or expiration of this license shall not
release any party of any obligation to pay any monies that became due or owing
or arose out of any transaction prior to the date of termination or expiration,
and all royalties on sales or shipments theretofore made shall become
immediately due and payable with no part of the Minimum Royalty Guarantee being
repayable, and any balances of the Minimum Royalty Guarantee owed to Marvel
shall be immediately due and payable.
(d) Inventory. Fifteen (15) days before the expiration of this license
and, in the event of its termination, fifteen (15) days after receipt of notice
of termination or the happening of the event which terminates this license where
no notice is required, a statement executed by an officer of Licensee certifying
the number and description of the Licensed Articles in inventory or in process
shall be furnished by Licensee to Marvel's New York Office to the attention of
Senior Contracts Administrator. Marvel shall have the right to take a physical
inventory to ascertain or verify such inventory and statement, and Licensee's
failure to furnish such statement or the refusal by Licensee to submit to such
physical inventory shall forfeit Licensee's right to dispose of such Licensed
Articles as provided in Section 16(e) hereof. (e) Disposal. After expiration of
this license, for the Post-Expiration Disposal Period specified in Section 1(j),
Licensee may, except as otherwise provided in this Agreement, dispose of, on a
nonexclusive basis, and in compliance with all of the terms and conditions
hereof, including Section 13, those Licensed Articles which are on hand or in
process at expiration or termination, provided royalties with respect to such
Calendar Period are paid and Royalty Reports are furnished for such Calendar
Period in accordance with Section 5 hereof. Royalties on Net Sales during the
Disposal Period may not be applied against any unearned balance of the Minimum
Royalty Guarantee. Licensee shall not be authorized to dispose of the excess
inventory in the Disposal Period to the extent that it exceeds ten percent (10%)
of the total number of Licensed Articles sold during the twelve (12) month
period immediately prior to the Expiration Date without Marvel's prior written
consent. Notwithstanding anything to the contrary herein, Licensee shall not
sell or dispose of any Licensed Articles after termination of this Agreement
pursuant to Section 15. In the event that Licensee sells or exploits the
Licensed Articles after the Post-Expiration Disposal Period the royalty due
Marvel on such sales shall be the Net Sales.
(f) Undisposed Licensed Articles. Upon expiration or termination of
this license, or upon the expiration of the period for disposal where permitted
under the previous subsection, title to all remaining Licensed Articles, if any,
and all tags, labels, packaging, advertising, promotional, and display materials
therefor, and all molds, plates, engravings and/or mechanicals used to make any
of the Licensed Articles which contain the Property or any of the aforesaid
materials, shall be deemed to have automatically vested in Marvel. Licensee
shall immediately deliver such remaining Licensed Articles,
materials, and items to Marvel's New York Office, to the attention of Senior
Contracts Administrator, at no expense to Marvel, and Marvel shall have the
right to enter the business premises of Licensee and take possession of them or
Licensee shall destroy such Licensed Articles, materials and items if SO
requested by Marvel, and shall furnish Marvel's New York Office, sent to the
attention of Senior Contracts Administrator. with a certificate of destruction
executed by an officer of Licensee.
17. REMEDIES
(a) General. In addition to the right to terminate, Marvel may, upon
any default by Licensee, take whatever action it deems reasonably necessary to
protect its rights and interests hereunder, and termination of this license
shall be without prejudice to any rights or remedies which Marvel may otherwise
have against Licensee.
(b) Use after Termination, etc. Licensee acknowledges that its failure
to cease the use of the Property or to cease sale or distribution of the
Licensed Articles at the termination or expiration of this license, except as
expressly provided herein, may result in immediate and irreparable damage to
Marvel and to the rights of any subsequent licensee. Licensee acknowledges and
admits that there may not be an adequate remedy at law for such failure, and
Licensee agrees that in the event of such failure, Marvel shall be entitled to
injunctive relief and such other and further relief as any court with
jurisdiction may deem just and proper.
(c) Interest, Damages and Cost. In the event Licensee shall default in
the payment of monies required to be paid to Marvel hereunder, in addition to
any remedies which Marvel may have at law or in equity to recover any such
monies as may be due and owing, Marvel shall be entitled to receive from
Licensee interest on such monies as may be owing from the date of default at a
rate equal to three percent (3%) above the prime lending rate charged by
Marvel's bank in New York on the date of default. In the event that Licensee is
in breach or default hereof, then Licensee shall be responsible for the damages
and expenses caused Marvel thereby, including attorneys' fees, incurred by
Marvel to enforce any of its rights hereunder, such as, for example, the seeking
of a temporary restraining order or an injunction, or the obtaining of damages.
18. SUBCONTRACT MANUFACTURE
Licensee may utilize a third party subcontract manufacturer approved in
writing by Marvel in connection with the manufacture and production of the
Licensed Articles, provided that such subcontractor shall execute a letter in
the form of Exhibit F 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. In no event shall any such subcontract
manufacturer Agreement include the right to grant any further sublicenses.
19. GENERAL
(a) Integrity of Agreement. This Agreement contains and embodies the
entire Agreement and understanding of the parties concerning the subject matter
hereof. No warranties, representations, understandings, inducements, promises,
guarantees, Agreements or conditions, express or implied, not expressly
contained herein, have been made or shall be enforceable by either party
concerning the subject matter hereof or any relationship between the parties.
Nothing contained herein shall be deemed an express or implied warranty on the
part of Marvel that efforts to gain copyright, trademark or service xxxx
registration will be successful, or that the Property has or will in the future
have any
commercial value, and it is understood that no liability shall attach to Marvel
for any failure to secure such registration, nor shall there be any modification
hereof for such reason.
(b) Relationship Between the Parties, The relationship between the
parties hereto is that of licenser and licensee, and this Agreement is not to be
construed as creating a partnership, joint venture, master-servant,
principal-agent, or other relationship for any purpose whatsoever. Except as may
be expressly provided herein, neither party may be held for the acts either of
omission or commission of the other party, and neither party is authorized to or
has the power to obligate or bind the other party by contract, Agreement,
warranty, representation or otherwise in any manner whatsoever.
(c) Force Majeure. Licensee and Marvel shall be released from their
obligations hereunder and this license shall terminate with respect to such
territory, field or part thereof as to which governmental regulations or other
causes arising out of a state of national emergency renders performance
impossible, for a period of more than ninety (90) days, and one party so informs
the other in writing of such causes and its desire to be released. In such
event, all royalties on sales theretofore made with respect to such territory,
field or part shall become immediately due and payable to Marvel. In addition,
the Minimum Guarantee, prorated until the time of termination, or all Advance
and Minimum Guarantee payments made to Marvel as of the date of the Force
Majeure event shall become retained or become due and/or payable, as applicable,
to Marvel. No part of the aforementioned payments shall be repayable to
Licensee.
(d) Mailing Addresses. All notices, reports and statements to be given
and all payments to be made hereunder, shall be given or made by first class,
Registered or Certified mail, or Federal Express or any overnight delivery
service providing notice of receipt at the respective addresses of the parties
as set forth above, unless notification of a change of address is given in
writing, and three (3) days after the date of mailing by first class, Registered
or Certified mail, Federal Express or any overnight delivery service, as
post-marked shall be deemed the date the notice, report or statement is given.
The mailing of a notice by Registered or Certified mail shall constitute notice
hereunder even in the event of refusal to accept by addressee.
(e) Survival and Separability. Notwithstanding anything to the contrary
herein, all provisions hereof are hereby limited to the extent mandated by any
applicable law or decisions. If any one or more paragraphs, clauses or other
portions hereof should ever be determined to be illegal, invalid or otherwise
unenforceable by a court of competent jurisdiction or be illegal, invalid or
invalidated or unenforceable within any jurisdiction by reason of any existing
law or statute, then to that extent and within the jurisdiction in which it is
illegal, invalid or unenforceable it shall be limited, construed or severed and
deleted herefrom, and the remaining extent and/or remaining portions hereof
shall survive, remain in full force and effect and continue to be binding and
shall not be affected except insofar as may be necessary to make sense hereof,
and shall be interpreted to give effect to the intention of the parties insofar
as that is possible.
(f) Assignment or Sublicense. This Agreement and the license rights
granted hereunder are personal to Licensee and shall not in any manner
whatsoever be assigned, sublicensed, hypothecated, mortgaged, divided or
otherwise encumbered by Licensee to or with any other person or entity without
Marvel's prior written consent which it may withhold in its sole discretion but
no such assignment by Licensee shall release Licensee from any of its
obligations or liabilities hereunder. This Agreement and the provisions hereof
shall be binding at all times upon and inure to the benefit of the parties
hereto, their successors and permitted assigns. Any attempted assignment in
violation of the provisions hereof shall be void ab initio and the assignee
shall obtain no rights by reason thereof.
(g) Construction and Jurisdiction. This Agreement shall be construed
and interpreted in accordance with the laws of the State of New York applying to
contracts fully executed and performed in New York. Licensee agrees to submit to
exclusive jurisdiction in the courts (both Federal and State) of New York State
for any action brought by Marvel or Licensee hereunder, to bring no action in
any other Court, and Licensee further agrees to accept service of process by
mail at its above written address, and Licensee also designates the Secretary of
State of New York and the state of Licensee's incorporation to accept service of
process by mail on behalf of Licensee. The titles and headings of the sections,
subsections and other divisions of this Agreement are inserted merely for
convenience and identification and shall not be used or relied upon in
connection with the construction or interpretation of this Agreement.
(h) No Waiver. None of the provisions hereof shall be deemed to be
waived or modified, nor shall they be renewed, extended, altered, changed or
modified in any respect except by an express Agreement in writing duly executed
by the party against whom enforcement of such waiver, modification, etc. is
sought. The failure of either party hereto to object to the failure on the part
of the other party to perform any of the terms, provisions or conditions hereof
or to exercise any option herein given or to require performance on the part of
the other party of any term, provision or condition hereof, or any delay in
doing so, or any custom or practice of the parties at variance therewith, shall
not constitute a waiver or modification hereof or of any subsequent breach or
default of the same or a different nature, nor affect the validity of any part
hereof, nor the right of either party thereafter to enforce the same, nor
constitute a novation or laches.
(i) Licensee Ethics. agrees that no part of the consideration paid
pursuant to this Agreement shall be offered, paid or payable, directly or
indirectly, to any governmental official, political party or official thereof,
or any candidate for political office, for the purpose of influencing any act or
decision of such person or party or inducing such person or party to use his or
its influence to affect or influence any act or decision of any national, state
or local government or instrumentality thereof. For the purposes of this Section
(i), the term "governmental official" shall include any officer or employee of a
national, state or local government, or any department, agency or
instrumentality thereof, or any person acting in an official capacity of or on
behalf of such government or department, agency or instrumentality.
(j) Prevailing Languages. In the event of any conflict of
interpretation between this Agreement and any translation, the original English
version shall prevail.
20. WAIVER OF JURY TRIAL AND RIGHT TO COUNTERCLAIM
LICENSEE HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY SUMMARY OR
OTHER ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY CONNECTED
WITH THIS AGREEMENT, AND ANY CLAIM FOR INJURY OR DAMAGES.
IN WITNESS WHEREOF, and intending to be legally bound thereby the
parties hereto have caused this
MARVEL CHARACTERS, INC. MARVEL ENTERPRISES, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: President and Chief Executive Officer
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Date: March 31, 2003
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LICENSEE: TELE-V, INC.
By: /s/ Xxxx Xxx-Xxxx
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Name: Xxxx Xxx-Xxxx
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Title: President
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Date: March 31, 2003
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