EXHIBIT 10.9
XXX XXX THE JET PLANE
MERCHANDISING LICENSE AGREEMENT
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Agreement No: 016
This Merchandising License Agreement (the "Agreement") is made as of
the 17th day of December, 2001 (the "Effective Date"), between the following
parties (referred to collectively herein as the "Parties" and individually as a
"Party"):
PORCHLIGHT ENTERTAINMENT, INC. ("Agent" or "PorchLight"), a Delaware
corporation having a place of business at 00000 Xxxxxxxxxxx Xxxxxx, Xxx
Xxxxxxx, XX 00000, XXX XXX THE JET PLANE PRODUCTIONS, INC. ("JJPP"), a Nevada
corporation having a place of business at 00000 Xxxxxxxxxxx Xxxxxx, Xxx
Xxxxxxx, XX 00000, and KIDQUEST, INC., dba XxxxxxXxxxx.xxx Entertainment
("WonderWings"), a Texas corporation having a place of business at 00000
Xxxxxxxxxx Xxxxxx, #000, Xxxxxx, XX 00000, on the one hand, and
ACTION PRODUCTS INTERNATIONAL, INC. ("Licensee"), a Florida corporation having
its place of business at 000 X. Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxx
00000, on the other hand.
WHEREAS, in separate agreements between Agent, JJPP and WonderWings (herein
referred to as the "Representation/Option agreements"), Agent has been granted
certain rights, including interalia, the right to license or otherwise exploit
throughout the world certain merchandising rights in and to a certain property
entitled "Xxx Xxx The Jet Plane" (the "Property") and (a) the trademark rights
therein of WonderWings; and (b) the joint and individual copyright rights
therein of JJPP and WonderWings, and their respective affiliates and
subsidiaries (JJPP and WonderWings shall be referred to herein collectively in
their respective capacities as rights holders as "Licensor"); and
WHEREAS, Licensee desires a license to utilize the Property in connection with
the manufacture, marketing, sale and distribution of certain products in a
certain territory, and Agent, with the consent and approval of Licensor,
desires to grant such license to Licensee upon the terms and conditions set
forth herein.
NOW THEREFORE, in consideration of the mutual promises contained herein, the
Parties hereby agree as follows:
1. GRANT OF LICENSE: Subject to the terms and conditions set forth
herein, Agent, with the consent and approval of Licensor, hereby grants to
Licensee, and Licensee hereby accepts, this license to utilize the Property as
specifically set forth in Schedule "B", solely and only in connection with the
manufacture, marketing, sale and distribution of the product(s) identified in
Schedule "A" as the Licensed Product(s), during the Licensed Period and in the
Licensed Territory and designated
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Distribution Channels defined herein. Agent and Licensor (as applicable and
agreed upon between Agent and Licensor in the Representation/Option
agreements), specifically reserve all rights not granted to Licensee under this
Agreement including, without limitation, the right to grant other licenses for
use of the Property in any manner whatsoever as well as the rights set forth
herein below in the Exclusions.
2. LICENSED TERRITORY AND DISTRIBUTION CHANNELS: The Licensed
Territory shall mean the country or countries set forth in Schedule "A" as its
or their political boundaries exist on the date of this Agreement and the
Distribution Channels shall mean the channels of retail distribution designated
in Schedule "A". Licensee acknowledges that this license extends only to the
Licensed Territory and Distribution Channels specified in Schedule "A" and
Licensee agrees that it will not solicit, make, or authorize any use, direct or
indirect, of the Licensed Products and the Property outside the Licensed
Territory and designated Distribution Channels without Agent's specific written
approval and it will not knowingly sell or distribute the Licensed Products to
persons or entities (herein "customers") who intend or are likely to resell the
Licensed Products outside of the Licensed Territory and designated Distribution
Channels nor, will Licensee advertise or maintain stock of the Licensed
Products or open a new branch or office outside of the Licensed Territory for
the purpose of selling or otherwise distributing the Licensed Products outside
of the Licensed Territory. Licensee shall be required to advise all customers
of the obligation to sell the Licensed Products only within the Licensed
Territory and designated Distribution Channels and Licensee shall use its best
efforts to ensure that its customers comply therewith.
3. LICENSED PERIOD: The Licensed Period shall mean the Initial Term
and Renewal Term if applicable, commencing and ending on the dates set forth in
Schedule "A" attached hereto unless sooner terminated in accordance with the
terms and conditions of this Agreement.
4. EXCLUSIONS: Licensee acknowledges that the rights granted herein do
not include the right to, and Licensee warrants and represents that it will
not, use the Property or the Licensed Products for, an endorsement of any
product or service unless specifically authorized herein and Licensee shall not
make or authorize any use, direct or indirect, of the Property in connection
with any other products, goods or services other than the Licensed Products.
Additionally, Licensee specifically acknowledges that the rights granted herein
to Licensee do not include the right to manufacture, market, sell, distribute
or otherwise exploit the Licensed Products in connection with any: giveaway,
premium, promotion (other than in-store play dates wherein Licensee will
furnish retailers in the Territory and Distribution Channels with Licensed
Products for in-store play promotions to promote the sale of the Licensed
Products by such retailer), direct mail/direct response and catalog shopping
other than Licensee's own catalog, electronic shopping and E-Commerce including
television and computer/Internet shopping for Licensee's direct to consumer
sales, fan club, amusement and theme parks, live stage show, in-theater sale or
other channels of distribution which are not specifically included in the
Distribution Channels set forth in Schedule "A". Additionally, Licensee will
not sell the Licensed Products to
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jobbers, wholesalers, distributors, retail stores, merchants or any other
entities whose sales or distribution will be made for publicity purposes,
combination sales, premiums, giveaways or similar methods of merchandising or
means of distribution set forth herein above. All of the aforementioned rights,
methods of merchandising and means of distribution ("Exclusions") are expressly
retained and reserved by Agent and/or Licensor (to the extent agreed upon by
Agent and Licensor in the Representation/Option agreements), and any and all
such Exclusions may be exercised by Agent and/or Licensor, as applicable,
and/or their designee concurrently with the rights licensed to Licensee
hereunder without regard to the extent to which any such Exclusions may be
competitive with Licensee or the rights granted to Licensee herein. However,
Agent and Licensor acknowledge and agree that except with respect to the Pilot
Wings, should Agent and/or Licensor intend to use articles within the
definition of the Licensed Products set forth in Schedule "A" as give-aways,
premium and/or promotional items for the Property, Agent and Licensor shall use
their best efforts to ensure that Licensee shall be given an opportunity to
supply the Licensed Products for such give-aways, premiums and/or promotions
provided, Agent and/or Licensor are in control of choosing a source for such
give-aways, premiums and/or promotions, and to the extent that Licensee is able
to supply the Licensed Products for such give-aways, premiums and/or promotions
in a timely manner and at a competitive price. Notwithstanding the foregoing,
the Parties hereto acknowledge and agree that should Agent and Licensor be in
control of the source of the articles to be supplied for such give-away,
premiums and/or promotions, and should the articles to be used therefore be of
the same exact type and size as the Licensed Products produced by Licensee
hereunder, Licensee shall have the right (except with respect to the Pilot
Wings) to supply such items for Agent's and/or Licensor's use at Licensee's
best selling price (based on the Domestic or F.O.B. selling price as
applicable) or at such lower selling price to be agreed upon between the
Parties. Licensee acknowledges that Agent and Licensor have not granted
Licensee any rights herein to supply the Pilot Wings for any give-away, premium
and/or promotion or to sell Pilot Wings separately.
5. PAYMENT: In consideration for the rights granted herein, on behalf
of Agent and Licensor, Licensee shall pay in accordance with Paragraph 5(c),
the following compensation:
(a) Guaranteed Minimum Compensation: Licensee shall pay as a
guaranteed minimum payment ("Guaranteed Minimum Payment") for the Licensed
Period, the amount specified in Schedule "A". Such amount shall be payable in
accordance with the Payment Schedule(s) for the Guaranteed Minimum Payment(s)
set forth in Schedule "A". No portion of the Guaranteed Minimum Payment(s)
shall be returnable or refundable to Licensee, however, the Percentage
Compensation/Royalties due during the Initial Term shall be offset against the
Guaranteed Minimum Payment for the Initial Term already paid by Licensee as an
advance ("Advance") for such Term as provided in Schedule "A" and likewise, any
Percentage Compensation/Royalties due during the Renewal Term if applicable,
shall be offset against the additional Guaranteed Minimum Payment for the
Renewal Term paid by Licensee. The Parties acknowledge and agree that the
Percentage
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Compensation/Royalties paid during the Initial Term may not be offset against
the Guaranteed Minimum Payment due for the Renewal Term.
(b) Percentage Compensation/Royalties: Licensee shall pay, on
a calendar quarterly basis (the "Royalty Period"), within forty-five (45) days
after the end of each calendar quarter during the Licensed Period, the
percentage compensation/royalty amount ("Percentage Compensation/Royalties")
specified in Schedule "A" on all Net Sales of the Licensed Products at the
established gross price of the Licensed Products or any higher selling price if
applicable, less only deductions for actual, verifiable returns of damaged
Licensed Products actually credited to a customer and normal trade discounts
actually given to a customer provided all such deductions and discounts shall
not exceed a total of fourteen percent (14%) of the gross sales for the period.
As used in this Agreement, the term "Net Sales" shall mean the gross number of
Licensed Products sold by or on behalf of Licensee or any directly or
indirectly related, affiliated, associated, parent or subsidiary companies
("Affiliated Entity") less only Licensed Products distributed free of charge to
Agent and Licensor as required herein below in paragraph 8. as samples and for
copyright/trademark purposes, or in the normal course of business as samples,
provided that Licensee does not receive compensation of any type for such
samples and the distribution of such samples is limited to a reasonable number
for the purposes of stimulating sales and orders of the Licensed Products. For
purposes of this Agreement, a Licensed Product shall be considered "sold" upon
the date when such Licensed Product is billed, invoiced, shipped/distributed,
or paid for, whichever event occurs first and except as provided above, the
Percentage Compensation/Royalties shall be payable by Licensee on the
distribution of all Licensed Products whether distributed to third parties, to
an Affiliated Entity or otherwise, whether or not billed. No deductions from
the gross selling price shall be permitted for trade or cash discounts or other
discounts, whether or not similar to the foregoing, advertising allowances,
uncollectable accounts or bad debts and no deductions for returns shall be
allowed on the basis of an accrual or reserve system, except as specifically
permitted herein. Additionally, no costs incurred in the manufacture,
distribution, shipping, sale, exploitation, promotion or advertisement of the
Licensed Products shall be deducted from the amount payable hereunder. In the
event that Licensee sells and/or distributes the Licensed Products to an entity
in any way related to Licensee or in a manner other than in an arms length
transaction, the Percentage Compensation/Royalties payable on such sales and/or
distribution shall be calculated based on the higher of the amount charged by
Licensee or the amount charged by such other entity in connection with the
sales and/or distribution of the Licensed Products by such other entity,
whichever is greater. Notwithstanding the foregoing, Licensee acknowledges and
agrees that the Percentage Compensation/Royalties payable hereunder in
connection with sales to, or by, an Affiliated Entity shall not be less that
the Percentage Compensation/Royalties based upon the price generally charged to
the trade by Licensee in an arms-length transaction.
(c) Any and all payments payable in accordance with this
Agreement (including, but not limited to the Guaranteed Minimum Payment(s) and
Percentage
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Compensation/Royalties set forth above) shall be paid in United States currency
(US$) and such payments shall be made at Licensee's expense by bank check to
Xxx Xxx the Jet Plane Productions, Inc. or by wire transfer to the account of
Xxx Xxx the Jet Plane Productions, Inc. (Collection Account) at City National
Bank (Account No. [000-000-000]; ABA Routing No. 000000000) at 000 X. Xxxxxxx
Xxxxx, Xxxxxxx Xxxxx, XX 00000 and such payments shall be made simultaneously
with the rendition of quarterly accounting statements referred to in Paragraph
6 below. No payments due hereunder shall be considered paid by Licensee until
such payments are actually received by Xxx Xxx the Jet Plane Productions, Inc.
(d) Taxes, Duties, Levies, VAT and Restricted Sums:
(i) Licensee shall pay all taxes, duties, levies,
handling charges and other fees (other than Agent's and Licensor's direct net
income taxes) due under any law now or hereafter in effect, imposed, levied or
based upon the license, delivery, shipment, import, export, manufacture or
Licensee's possession, use or sale of the products licensed hereunder or upon
the grant of this license or the exercise thereof or based upon or measured by
the license fees or payment thereof or any part thereof.
(ii) Licensee hereby declares that, should the
applicable authorities in the Licensed Territory require that Value Added Taxes
("VAT") or Goods and Services Taxes ("GST") or other similar taxes are to be
levied on payments hereunder, Licensee will be solely responsible for payment
of said VAT and GST levies.
6. ACCOUNTING:
(a) Licensee will, not later than the forty-fifth
(45th) day following the end of each calendar quarter during the Licensed
Period and any extension thereof, and thereafter for so long as any sales
and/or distribution of the Licensed Products are made by Licensee under
Paragraph 16, or otherwise, furnish to Agent at the address set forth above, a
full, complete and accurate accounting statement showing the item number,
description, gross selling price and the quantity of the Licensed Products
distributed and/or sold by Licensee during the calendar quarter and any
deductions therefrom in the form attached hereto as Exhibit "1" or such other
form provided or approved by Agent. On all accounting statements rendered
hereunder Licensee may retain a five percent (5%) reserve against allowed
returns as permitted herein, provided that Licensee shall include a statement
clearly indicating the amount of any reserve held, and the amount of any
allowable returns made. Additionally, any amount held as a reserve against
allowed returns shall be held only until the next accounting is rendered and
only for actual allowable returns as permitted in Paragraph 5(b) above, and
provided the subsequent statement shall clearly indicate how such reserve has
been applied and/or liquidated and Licensee shall provide copies of all related
invoices with such statements. If any reserves are insufficient to cover actual
allowed returns for a related accounting period, resulting in an overpayment of
Percentage Compensation/Royalties, the same may be deducted from sums due
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hereunder during the subsequent reporting period, however, in no event will
Agent or Licensor be required to refund or return any sums paid hereunder by
Licensee. Upon request, Licensee shall submit to Agent a written explanation of
any reserve held and upon expiration or termination of this Agreement such
reserve shall be fully liquidated within thirty (30) days and any remaining
reserve shall be immediately remitted to Agent as provided in Paragraph 5(c).
All accounting statements will be furnished as required herein whether or not
any of the Licensed Products have been sold during the calendar quarter and
will be certified to be accurate by a duly authorized officer of Licensee.
Copies of all statements to Agent shall also be sent to WonderWings at the
address set forth above.
(b) Agent's receipt of statements or the receipt or
acceptance of any payments (or the cashing of any checks paid hereunder) will
not prevent Agent and/or Licensor from thereafter questioning or disputing the
correctness of any such statements and/or payments. Licensee agrees that any
inconsistencies or mistakes discovered in the statements and/or payments will
be promptly rectified and the appropriate payments made by Licensee. Interest
at the rate of one and one-half percent (1 1/2%) per month (but in no event
more than the maximum amount permitted by law in the Licensed Territory), shall
accrue on the amount of any late payments due hereunder, from the date upon
which the payment was due until the date payment is actually received as
provided herein above in Paragraph 5(c). Time is of the essence with respect to
all statements and payments due under this Agreement and in the event that
Agent and/or Licensor shall be required to incur any legal expenses or other
expenses of debt collection by reason of Licensee's failure to render any
statements and/or payments due hereunder, in addition to and without prejudice
to any other rights of Agent and Licensor (including such rights of termination
as set forth herein below in Paragraph 15), Licensee shall indemnify and pay
Agent and Licensor for any and all reasonable legal fees and expenses of debt
collection which may have been incurred by Agent and/or Licensor in securing a
remedy to Licensee's failure as aforesaid.
7. BOOKS AND RECORDS: Licensee will keep at its principal place of
business, full, complete and accurate books of account and records covering all
transactions relating to the subject matter and terms of this Agreement.
Agent's and/or Licensor's duly authorized representative(s) shall have the
right to examine and make copies of such books of account and records and other
documents and material in Licensee's possession or under its control with
respect to the subject matter and terms of this Agreement. The duly appointed
representatives of Agent and/or Licensor shall have free and full access
thereto for such purpose and for the purpose of making extracts therefrom at
all reasonable business hours and with five (5) days notice to Licensee. In the
event that a discrepancy or a deficiency in payment of five percent (5%) or
more shall be discovered, Licensee shall pay the costs of such examination in
addition to immediately paying all deficiencies in Percentage
Compensation/Royalties and any other sums found to be due with interest
thereon. Agent and/or Licensor shall have the right to challenge any statement
rendered by Licensee, and Licensee shall preserve such books of account,
records, documents and material, for a period of three (3) years after the
expiration or earlier termination of this Agreement and Agent and/or
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Licensor may examine said books of account and records during such three (3)
year period. Notwithstanding the foregoing, Agent and Licensor acknowledge and
agree that no more than one (1) examination of Licensee's books and records
shall be conducted per year.
8. QUALITY; SAMPLES:
(a) Licensee acknowledges that if the Licensed Products or
any packaging or advertising relating thereto were of inferior quality in
design, material, workmanship or content, the substantial goodwill in the
Property, would be impaired. Accordingly, Licensee agrees that the Licensed
Products shall be of high standard and quality so as to maintain the integrity,
prestige and reputation of the Property and the name of Agent and Licensor.
(b) Licensor shall have absolute approval, exercisable in its
sole discretion, over all uses of the Property, the Licensed Products, and all
packaging, advertising and related materials.
(i) In that regard, Licensee shall, before it
manufactures or publishes any particular Licensed Product, furnish to Agent
free of cost, for Agent's and Licensor's review and Agent's written approval on
behalf of Licensor, two (2) samples of the concept art, text, final art and
pre-production samples of each of the Licensed Products in the: 1) conceptual;
2) final artwork; and 3) pre-production stage together with conceptual, final
artwork and pre-production samples of the cartons and containers, tags, labels,
wrapping material, packaging and galley proofs, if any, for the Licensed
Products or intended for display to the consumer, as well as advertising or
promotional material for use in any media in connection with the Licensed
Product ("Collateral Materials"). Licensee may not manufacture, use or
advertise any Licensed Product or any of the Collateral Materials until it has
received written approval therefore from Agent.
(ii) Additionally, after the manufacture of all such
Licensed Products, but prior to the sale or distribution of such Licensed
Products, Licensee shall furnish to Agent, free of cost, for Agent's written
approval on behalf of Licensor, twelve (12) finished samples of each of the
Licensed Products together with all Collateral Materials. Licensee may not
distribute any Licensed Product or any of the Collateral Materials until it has
received written approval of the finished samples and Collateral Materials from
Agent.
(c) Licensee acknowledges and agrees that Agent's written
approval of each of the Licensed Products and Collateral Materials in each of
the stages required above, may be granted or withheld as Licensor, in its sole
discretion, may instruct Agent to assure the quality of the merchandise and
reputation of the Property. If Agent has not indicated its approval in writing
of any submission within ten (10) business days after the date of submission
thereof, Agent and Licensor shall be deemed to have disapproved same. Once
Licensed Products and Collateral Materials have been approved by Agent on
behalf of Licensor, Licensee shall not depart in the
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manufacture of such Licensed Product in any manner from the characteristics of
the approved Licensed Product without first obtaining Agent's written consent on
behalf of Licensor for any such changes in accordance herewith. Licensee shall,
at all times, have in place appropriate procedures to promptly recall any
Licensed Products which fail to conform to the approved samples or which may be
defective. Notwithstanding the foregoing, the Parties mutually agree to make
best reasonable efforts to ensure timely implementation of the approval process.
(d) (i) All rights granted hereunder are conditioned upon
Licensee's compliance with all marketing, advertising, manufacture and sales
provisions and laws in each and every country or territory in the Licensed
Territory applicable to the rights granted herein. In that regard, Licensee
acknowledges and agrees that Licensee shall have the sole and complete
responsibility for ensuring that all of the Licensed Products and the
Collateral Materials will be produced, manufactured, sold, distributed,
marketed and advertised in full compliance and in accordance with all
applicable and relevant laws, codes, rules, standards and regulations
applicable in the Licensed Territory (including, but not limited to, consumer
product safety standards and laws, health, workplace and labor standards and
laws, environmental protection standards and laws, customs and importation laws
and all other standards and laws governing the production, manufacture and sale
of goods in the Licensed Territory. Licensee shall pretest all proposed and
approved Licensed Products and shall cause truthful labeling regarding care,
maintenance and use to be affixed to the Licensed Products, packaging or
hangtags therefore, as appropriate. Licensee shall immediately notify Agent of
all complaints coming to Licensee's attention from any consumer, customer, or
governmental body relevant to any of the Licensed Products and shall regularly
keep Agent advised by notice of the status and resolution thereof. Licensee
shall resolve all such complaints as expeditiously as possible.
(ii) Licensee further acknowledges and agrees that
Agent's approval of the Licensed Products and Collateral Materials as provided
above shall not constitute a waiver of any of Agent's and/or Licensor's rights
or of Licensee's duties under this Agreement. Licensee hereby acknowledges that
neither Agent nor Licensor are competent to determine whether any of the
Licensed Products are fit for the use normally and reasonably intended or safe
for sale and/or distribution to the public at large. Accordingly, all approval
rights set forth herein relate to aspects of quality and not to determination
of the safety of the Licensed Products, and any approval of the Licensed
Products shall in no way detract from the Licensee's obligations to comply with
statutory or other safety guidelines applicable in the Licensed Territory nor
shall such approval be deemed approval of Licensee's creation and/or use of any
verbiage, copy, xxxx, artwork, design or other material which is not owned or
controlled by Agent and/or Licensor (hereinafter referred to as "Ancillary
Material"). Such Ancillary Material shall be used at Licensee's own risk and
Licensee shall take any and all precautions deemed appropriate to ensure that
such Ancillary Material is wholly original with or fully cleared by Licensee
and that the use by Licensee of Ancillary Material does not infringe the rights
of any third parties. Licensee shall fully indemnify, hold harmless and defend
Agent and Licensor, and their
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officers, directors, agents, and employees against any claims, suits, losses or
damages (including reasonable attorney's fees) arising out of such use of
Ancillary Material by Licensee.
(e) Licensee shall permit Agent and/or Licensor or their
representative, at all reasonable business hours and upon at least five (5)
business days written notice, to enter Licensee's premises for the purpose of
inspecting the Licensed Products or the method of manufacture thereof prior to
and during the sale and distribution of such Licensed Products and in the event
that License shall appoint a sub-contractor to manufacture any of the Licensed
Products or a part thereof as provided in Paragraph 26, Licensee shall make
similar arrangements for inspection of any process performed by a
sub-contractor.
9. GOODWILL AND PROTECTION:
(a) WonderWings owns the trademark rights in and to the
Property and JJPP and WonderWings own certain joint and individual copyrights
in and to the Property which together comprise all of the copyrights in the
Property and JJPP and WonderWings have granted to Agent the right to license
such trademark rights and copyrights in and to the Property and JJPP and
WonderWings specifically acknowledge their approval and consent of the grant of
this license to Licensee on the terms and conditions set forth herein.
(b) Licensee recognizes the great value of the goodwill
associated with the Property and acknowledges that as between Licensor and
Licensee, all rights therein (including trademark and copyright) and goodwill
attached thereto belongs exclusively to Licensor, that the Property has
secondary meanings in the minds of the public and that all use of the Property
will inure to the benefit of Licensor. Licensee agrees that it will not, during
the Licensed Period or thereafter, attack Licensor's property rights, in and to
the Property.
(c) As between Licensor and Licensee, Licensor shall be
deemed to be the owner of all materials created for the Licensed Products
hereunder which bears, utilizes, refers to, or in any way becomes associated
with, or is derivative of the Property, including but not limited to all
artwork therefore. Licensee agrees that any such materials created and
furnished by Licensee or its employees or by a third-party assisting Licensee
in the creation of such materials, shall be-considered "works made for hire",
as that phrase is used in Sections 101 and 201 of the U.S. Copyright Revision
Act of 1976 and such materials may be freely used by Agent, Licensor, and their
designees. If any such materials or elements shall not be deemed a "work made
for hire", Licensee hereby assigns and transfers to Licensor or its designee,
all rights, including copyright, moral rights, title and interest in and to all
such materials and elements and Licensee shall sign any documents,
acknowledgments and instruments, or obtain the signature on such documents,
acknowledgments and instrument of any third-parties assisting Licensee in the
creation of such materials, which may be required to effectuate the rights of
Licensor in and to such materials, and Licensee undertakes to cooperate in
effectuating the foregoing.
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(d) Licensee shall not, during the Licensed Period or any
time thereafter, dispute or contest, nor cause or assist or aid others in
disputing or contesting, Licensor's right and title to the Property, or any
other rights of Licensor in and to the subject matter of this Agreement or
Agent's rights to license the Property as provided herein, or disclose the
terms of this Agreement to any person without the prior written consent of
Agent and Licensor. Licensee will fully cooperate with and assist Licensor, in
preventing or prosecuting any infringement of the rights of Licensor in the
Property. Licensee will notify Agent in writing of any manufacture, sale,
distribution or advertisement which it believes may constitute an infringement
upon Licensor's rights. Licensee shall not commence any action or proceeding
against any person or enter into a settlement relating to the Property or
Licensor's rights without Agent's and/or Licensor's prior written consent. In
the event that an infringement or violation of the Property shall be materially
and negatively impacting on Licensee's sales of the Licensed Products, Agent
and Licensor shall consider in good faith, the advisability of any such action,
however, Licensee shall not have any rights against Agent or Licensor for
damages or otherwise for failure to act in, or settle, any action or proceeding
relating to alleged infringements or violations of the Property or Licensor's
rights nor shall any such act or failure to act by Agent or Licensor affect the
validity or enforceability of this Agreement.
(e) Agent and Licensor 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, or any of the Parties and their respective programs full and
favorable prominence and publicity. However, neither Agent nor Licensor shall
be under any obligation whatsoever to use the Property or any part thereof in
any medium.
10. TRADEMARK LICENSE:
(a) As between Licensor and Licensee, Licensee acknowledges
that WonderWings is and shall remain the sole owner of all trademarks related
to the Property, and that Licensor is and shall remain the owner of all
copyrights, and other rights associated with the Property, and in all artwork,
packaging, copy, literary text, advertising and promotional material of any
sort which utilize the Property, including all such materials, creations and/or
modifications to the Property developed by Licensee, (collectively, the
"Copyrighted Materials") and the goodwill pertaining to all of the foregoing.
Licensee shall not at any time register or apply to register for Licensee's
benefit any trademarks, logos, marks, or names which are identical or
confusingly similar to the Property.
(b) Subject to the terms and conditions of this Agreement,
Licensee is hereby granted the non-exclusive right and license in the Territory
to use the trademarks and servicemarks depicted on the attached Schedule "B"
and Schedule "C" including PorchLight's, JJPP's and WonderWings' logos as set
forth therein during the Licensed Period, however, such trademarks,
servicemarks and logos may be used by Licensee only in connection with the
manufacture, marketing, sale and distribution of the Licensed Products and
Collateral Materials, subject to Agent's
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written approval of all such materials. Licensee agrees not to associate any
other characters or properties of any other entity, including Licensee, with
the Property or its trademarks either on the Licensed Products or in their
packaging, advertising, promotional or display materials or other Collateral
Materials so as to promote such other characters or properties or to create the
impression that any trademark or property rights in the Property are related to
any such rights of such other entity. However, Licensee may use its own
trademarks and other identifying materials in such manner as to identify
Licensee as the actual source of the manufactured products subject always to
Agent's approval as provided hereinabove in Paragraph 8.
(c) Licensee shall also reference the following websites on
all packaging and tags: XxxxxXxxxx.xxx, XxxxxxXxxxx.xxx and xxxxxxx.xxx/xxxxxx
or such other names and URL/website addresses as Agent shall advise Licensee in
writing.
(d) All rights in said trademarks and servicemarks other than
those specifically granted herein are reserved to Licensor for its own use and
benefit, subject to the rights of Agent to license and exploit such trademarks
and servicemarks (as such rights are possessed by Agent and specifically agreed
upon by Agent and Licensor in the Representation/Option agreements). Licensee
acknowledges that it will not acquire any rights in said trademarks and
servicemarks as a result of Licensee's creation and/or use thereof and that all
right to use said trademarks and servicemarks which arises as a result of
Licensee's creation and/or use shall inure to the benefit of Licensor and
Licensee will execute any documents, acknowledgments and instruments required
to effectuate the foregoing, and Licensee undertakes to cooperate in
effectuating such recordation.
(e) Licensee will at no time use or authorize the use of any
trademark, trade name or other designation identical with or confusingly or
colorably similar to Licensor's trademarks or servicemarks.
(f) Except as otherwise provided in Paragraph 16, upon the
expiration or earlier termination of the Licensed Period of this Agreement, all
rights to use the trademark and servicemarks in and to the Property shall
automatically revert to Licensor, subject to the rights of Agent to license and
exploit such trademarks and servicemarks (as such rights are possessed by Agent
and specifically agreed upon by Agent and Licensor in the Representation/Option
agreements), and Licensee shall immediately discontinue all use of said
trademarks and servicemarks.
(g) (i) In the event that Agent or Licensor shall advise
Licensee that in order for use of trademarks to be valid, a direct license from
the trademark owner of record is required in favor of the trademark user,
Licensee shall enter into such direct license or agreement with the trademark
owner of record, with respect to the licensed trademarks. Licensee undertakes
in addition, to execute such further documents, acknowledgments and instruments
as are necessary for the purposes of effectuating recordation of Licensee as a
user of said trademark, in such jurisdictions where required and in accordance
with the requirements of the specific jurisdictions
11
concerned, and Licensee undertakes to cooperate with Agent and the trademark
owner of record in effectuating such recordation.
(ii) Upon termination of Licensee's right to use the
licensed trademarks in the aforesaid jurisdictions, Licensee undertakes to
cooperate in the cancellation of the aforesaid recordation, and further
undertakes to execute any and all documents as are necessary for that purpose.
11. COPYRIGHT AND TRADEMARK NOTICES:
(a) Licensee shall place or cause to be imprinted on all
Licensed Products and Collateral Materials as and where appropriate, the
complete copyright notice in the following form: "(c) [or Copyright] (Date) Xxx
Xxx the Jet Plane Productions, Inc. and XxxxxxXxxxx.xxx Entertainment. All
Rights Reserved", or in such other name or form as Agent shall advise Licensee
in writing.
(b) Licensee shall also place or cause to be imprinted on all
Licensed Products and Packaging, where appropriate, the appropriate trademark
or servicemark notice, either "TM", "SM" or (R), as Agent shall direct.
(c) Licensee agrees that it shall use no markings, legends or
notices on and in connection with the Licensed Products and Collateral
Materials without first obtaining Agent's prior written approval.
(d) Licensee, at its expense, will from time to time during
the Licensed Period, submit to Agent, upon request from Agent, a reasonable
number of additional free samples of the finished Licensed Products and
Collateral Materials and all other materials, bearing copyrights and trademarks
or servicemarks of Licensor in order to assure Agent that these provisions are
being fulfilled, and for Licensor's copyright, and trademark registration,
however, Licensee acknowledges that neither Licensor nor Agent have any
obligation to apply for and/or obtain such registration. In the event that
Licensor elects to undertake such registration, Licensee will provide such
other materials and documentation as Licensor, or Agent on behalf of Licensor,
may request to effectuate such registration. Copyrights and trademarks in all
such material, and any new versions, translations and rearrangements of such
material shall be owned by JJPP and/or WonderWings, as applicable. If, as a
result of its exploitation of the Licensed Products, Licensee acquires any
trade rights, moral rights, equities, titles or other rights therein, Licensee
shall immediately assign and transfer same as directed by Licensor, or Agent on
behalf of Licensor, without additional consideration, other than the
consideration of this Agreement. Notwithstanding the foregoing, Agent and
Licensor acknowledge that Licensor has applied for trademark protection for Xxx
Xxx The Jet Plane in International Trademark Class 28 for the Licensed
Territory granted herein.
(e) Upon request from Agent or Licensor, Licensee agrees to
assist in procuring and maintaining the rights of Licensor in the Property
(including trademark and copyright) at no cost to Licensee. Licensee agrees
that it shall notify
12
Agent in writing of all those jurisdictions and those Licensed Products
(specifying the International Classification of Goods and Services category) in
which it intends to distribute, ship or sell Licensed Products as soon as such
information is available to Licensee. Upon written request therefor, Licensee
agrees to execute and/or deliver to Agent in such form as Agent may reasonably
request, all instruments necessary to effectuate Licensor's copyright and,
where applicable, trademark protection or to record Licensee as a registered
user of any trademarks, where applicable, or to cancel such registration. If
Licensee fails to execute any such instruments within ten (10) business days
following Agent's request therefor, Licensee hereby appoints Agent as its
attorney-in-fact, which such appointment shall be deemed a power coupled with
an interest, to do so on Licensee's behalf and such appointment shall be
irrevocable for the purposes set forth herein. Licensee acknowledges that only
Licensor may file and prosecute trademark and copyright applications regarding
any trademarks and/or copyrightable material used by Licensee of the Property
in such jurisdictions within the Licensed Territory as Licensor may, from time
to time, deem advisable. Licensor shall control absolutely all infringement
litigation brought against third parties involving or affecting the Property
and Licensor may, at its sole discretion, add Licensee as a party thereto at no
cost or expense to Licensee unless otherwise specifically agreed to in writing
between the Parties.
12. PURCHASES: Agent and Licensor may purchase Licensed Products from
Licensee at Licensee's lowest domestic selling price or, if such Licensed
Products are purchased by Agent or Licensor on an F.O.B. basis, at Licensee's
lowest F.O.B selling price, for such Licensed Product and Licensee shall
include any such sales to Agent and/or Licensor in its quarterly accounting
statements and Licensee shall pay a royalty at the royalty rate set forth
herein on all such sales to Agent and/or Licensor. Agent and/or Licensor may
use such Licensed Products for give-aways, premiums and/or promotional
purposes, and may sell such Licensed Products in any territory including the
Licensed Territory via the Xxx Xxx Fan Club and websites operated or owned in
part by Agent and/or Licensor.
13. ADVERTISING: Licensee shall not offer for sale, advertise or
publicize any Licensed Products via television, radio, newspapers, magazines or
any other media without Agent's prior written approval which such approval
shall not be unreasonably withheld and Licensee shall advise Agent of the
general use and contemplated placement for such advertising and publicity and
when reasonably possible, the approximate dates for such use.
14. PARTIES' OBLIGATIONS:
(a) Licensee shall produce, manufacture, distribute and sell
the Licensed Products in an ethical manner and in accordance with the
provisions and the intent of this Agreement, and shall not engage in unfair or
anti-competitive business practices. The Licensed Products shall be produced,
manufactured, distributed, sold, packaged, labeled and advertised in accordance
with all applicable federal, state and local laws, treaties and governmental
orders and regulations in the Licensed Territory.
13
(b) Licensee shall not encumber or cause to be encumbered in
any manner, the Licensed Products, or cause or permit any expenses to be
charged to Agent or Licensor without Agent's and Licensor's prior approval in
writing in each instance.
(c) Licensee shall exercise its best efforts to manufacture
and ship quantities of the Licensed Products to meet the market demand for the
Licensed Products and shall diligently and timely fulfill all orders and make
and maintain adequate arrangements for the distribution of the Licensed
Products throughout the Licensed Territory in the Distribution Channels and
continuously offer the Licensed Products for sale throughout the Licensed
Territory and Distribution Channels in accordance with the applicable Marketing
Date and Distribution Date set forth in Schedule "A" to achieve the highest
sales reasonably attainable.
(d) (i) Licensee shall be required to submit a prototype
for each of the Licensed Products in the minimum number of required SKUs set
forth in Schedule "A" within seven (7) months of the Effective Date of this
Agreement and Licensee shall be required to begin manufacturing the approved
prototypes within two (2) months after Licensee receives Agent's written
approval therefore. In the event Licensee shall fail to submit a prototype for
each of the Licensed Products in the minimum number of required SKUs within
such period, or should Licensee fail to begin manufacturing the approved
Licensed Product within the time period specified, Agent, at its sole option
and in its absolute discretion, shall have the right to terminate this
Agreement as to that Licensed Product by giving Licensee written notice thereof
to take effect thirty days after the date of such notice if Licensee fails to
submit such prototype or fails to begin manufacturing the Licensed Product, as
applicable, within said thirty day period unless such failure is a result of
Agent's failure to timely provide Licensee with a style guide, or if Agent or
Licensor fails to perform any of their obligations hereunder, in a timely
manner, which such failure affects the development of the prototype or the
manufacture of the Licensed Products.
(ii) Licensee shall begin commercial
distribution of each Licensed Product in the minimum number of required SKUs
set forth in Schedule "A" hereof by the Distribution Date specified in Schedule
"A". In the event Licensee shall fail to begin commercial distribution by such
Distribution Date, Agent, at its sole option and in its absolute discretion,
shall have the right to terminate this Agreement as to that Licensed Product by
giving Licensee written notice thereof to take effect thirty days after the
date of such notice if Licensee fails to begin commercial distribution of such
Licensed Product within said thirty day period unless such failure is a result
of Agent's failure to provide Licensee with reasons for disapproval of the
prototype, in a timely manner, after a written request therefore from Licensee,
or if Agent or Licensor fails to perform any of their obligations hereunder, in
a timely manner, which such failure affects the timely commencement of the
initial distribution of any such Licensed Product.
(iii) Additionally, after such Distribution Date,
should Licensee fail to continue to offer for sale any of the Licensed Products
for a period of
14
ninety (90) days or, if the Licensed Products are seasonal in nature, during
the normal selling season for such Licensed Products, Agent, at its sole option
and in its absolute discretion, shall have the right to terminate this
Agreement as to that Licensed Product by giving Licensee written notice thereof
to take effect thirty days after the date of such notice if Licensee fails to
sell and distribute such Licensed Product within said thirty day period.
(e) As a condition of this Agreement, Agent or Licensor shall
be required to provide Licensee with a style guide for the Property prior to,
or promptly after all Parties' execution of this Agreement and such style guide
shall be provided at no cost to Licensee. Additionally, upon request from
Licensee, Agent shall provide Licensee with a reasonable number of high
resolution computer generated graphic images for the Property, to the extent
any such images are available. In the event that any costs and expenses shall
be incurred by Agent and Licensor in connection with supplying Licensee with
such high resolution computer generated graphic images, Licensee shall bear the
costs and expenses thereof, however, Agent and Licensor will not incur any cost
or expenses in connection with this provision without receiving specific
written approval of Licensee.
15. TERMINATION OF LICENSE:
(a) Events of Default:
(i) Licensee Bankruptcy: If Licensee files a
petition in bankruptcy, or is adjudicated as bankrupt, or if a petition in
bankruptcy is filed against Licensee by a third party and is not dismissed
within sixty (60) days thereafter, or if Licensee becomes insolvent, or makes
an assignment for the benefit of its creditors, or if Licensee files or has
filed against it a petition for the adoption of an arrangement pursuant to any
bankruptcy law, discontinues its business, or if a receiver is appointed for
Licensee or its business, such occurrence shall constitute an event of default
under this Agreement (an "Event of Default") and the license herein granted
shall, without notice, terminate automatically. Further, and without limitation
to the foregoing, to the extent permissible under Chapter 11 of Title 11 of the
United States Code (the "Bankruptcy Code"), and to the extent that this
provision does not conflict with any other provisions set forth in this
Agreement or any laws or regulations applicable hereto, if Licensor is a
debtor-in-possession under Chapter 11 of Title 11 of the Bankruptcy Code, or if
a trustee is appointed for Licensor under any Chapter of the Bankruptcy Code,
and this Agreement is rejected under Section 365 of the Bankruptcy Code,
Licensee may elect to retain its rights under this Agreement as provided in
Section 365 (n) of the Bankruptcy Code for the balance of the then in effect
Term of this Agreement provided all payments due in connection with this
Agreement are promptly paid as required hereunder and in such event, upon
written request of Licensee to Licensor, Licensor will not interfere with the
rights of Licensee provided in this Agreement to continue to use the Property,
trademarks, copyrights and other intellectual property of Licensor, provided
such use is strictly in accordance with and pursuant to the terms of this
Agreement.
15
(ii) Failure to Manufacture, Market or Distribute:
Licensee's failure to commence in good faith the marketing of the Licensed
Products by the date set forth in Schedule "A" (the "Marketing Date"), or if
Licensee fails to meet the Distribution Date set forth in Schedule "A" for the
shipping and sale of the Licensed Products, and to continue during the Licensed
Period to distribute and sell commercially reasonable quantities of the minimum
number of required SKUs of the Licensed Products as set forth in Schedule "A"
in the Distribution Channels in all parts of the Licensed Territory, will
result in immediate damage to Agent and Licensor and shall constitute an Event
of Default under this Agreement.
(iii) Licensee's Violation of Agreement: The
violation by Licensee of any other material obligations or conditions or the
violation of Licensee's representations and warranties under this Agreement,
whether such breach pertains to a default or failure to make proper and timely
payment of any and all sums due hereunder or otherwise, shall also constitute
an Event of Default hereunder.
(b) Notice of Event of Default and Cure: Upon the occurrence
of an Event of Default hereunder as set forth in Paragraphs 15(a)(ii) and (iii)
above, (but not in the case of a bankruptcy as set forth in Paragraph 15(a)(i)
above, in which event termination of this Agreement shall be automatic), Agent
shall have the right (but not the obligation) to terminate this Agreement. In
the event Agent elects to terminate this Agreement, Agent shall serve upon
Licensee a written notice of such election.
(i) Licensee shall thereupon have a period of thirty
days after receipt of such notice within which to remedy the breach except with
respect to any and all payments due hereunder, Licensee shall have a period of
fifteen (15) business days after receipt of notice to remedy any failure to
make payment of sums due hereunder.
(ii) If Licensee fails to duly remedy the same, then
upon the expiration of the thirty day period or fifteen (15) business day
period with respect to payments, as applicable, this Agreement and the license
herein granted shall in all respects cease and terminate, and Licensee shall
have no further rights hereunder.
(iii) Notwithstanding such termination, all rights
of Agent and/or Licensor arising out of this Agreement or in connection
therewith or existing prior thereto shall nevertheless continue in full force
and effect, including but not limited to Agent's and/or Licensor's right to xxx
for damages caused to it by Licensee's default and the right hereunder to
receive earned but unpaid Compensation/Royalties or other sums due from
Licensee pursuant to Paragraph 5.
(iv) Upon any termination under this Paragraph 15,
neither Licensee nor its receiver, representative, trustees, agents,
administrators, successors and/or assigns shall have any right to sell, exploit
or in any way deal with or in any Licensed Products or Collateral Materials
hereunder except with and pursuant to Agent's consent and instructions in
writing.
16
(c) Effect of Termination or Expiration:
(i) Upon expiration or earlier termination of this
Agreement, all rights granted to Licensee hereunder shall revert to Agent
and/or Licensor (as specifically agreed upon by Agent and Licensor in the
Representation/Option agreements), and except as provided in Paragraph 16,
Licensee shall not use or refer to the Property or any characters, names,
titles or other elements in connection with the manufacture, sale or
distribution of products of Licensee, which in Agent's or Licensor's opinion
are similar to the Property.
(ii) Upon expiration or earlier termination of this
Agreement, Licensee will cease manufacture and sale of the Licensed Products
except as expressly permitted herein and Licensee will turn over to Agent all
artwork and other materials provided hereunder and all molds and other
materials which reproduce the Licensed Products or otherwise utilize the
Property shall be destroyed or, at Licensee's option, Licensee may retain such
molds provided that all use and reference to the Property shall be removed
therefrom, including all names, logos, images, trademarks and characteristic
elements of the Property, and Licensee shall provide Agent with satisfactory
evidence of such destruction or proof of removal.
(iii) Licensee's failure to cease the manufacture,
distribution, sale or advertisement for sale of the Licensed Products upon the
expiration or earlier termination of this Agreement except as provided in
Paragraph 16, will result in immediate and irreparable damage to Agent and
Licensor. Licensee acknowledges that no adequate remedy at law exists for such
failure and Licensee agrees that Agent and/or Licensor shall be entitled to an
injunction or other equitable relief to prevent a breach of this Agreement by
Licensee.
(iv) If this Agreement is terminated, all unpaid
Percentage Compensation/Royalties, and the unpaid Guaranteed Minimum Payment(s)
due hereunder shall be immediately due and payable in accordance with Paragraph
5(c) within ten (10) days after the effective date of termination.
(v) On a date at least sixty (60) days prior to
expiration of this Agreement or, if applicable, within ten (10) days after the
effective date of any earlier termination, Licensee shall account to Agent in a
statement, sworn to by an authorized officer of Licensee, indicating the number
and description of the Licensed Products on hand and/or in process of
manufacture. Agent may, at its option, conduct a physical inventory of Licensee
to verify such statement of remaining inventory. If Licensee shall refuse to
permit Agent to conduct such physical inventory, Licensee shall forfeit its
right to dispose of such inventory in accordance with Paragraph 16 below.
Licensee acknowledges and agrees that during the last three (3) months of the
Licensed Period, Licensee will not manufacture any more quantities of the
Licensed Products than it genuinely anticipates selling during the balance of
the Licensed Period (based upon prior sales of such Licensed Products during
the preceding six (6) months of the Licensed Period) in the normal course of
business and without any special promotional activities.
17
(vi) Nothing in this Paragraph 15 shall be construed
to limit Agent's and Licensor's rights or remedies.
16. DISPOSAL UPON EXPIRATION: Upon expiration of the Licensed Period,
Licensee shall have the non-exclusive right, pursuant to the provisions hereof,
for a period of not more than the Sell-Off Period set forth in Schedule "A", to
dispose of all unsold Licensed Products manufactured by it or in the process of
manufacture during the one hundred eighty (180) days prior to expiration;
provided that Licensee has provided Agent with all accountings and has paid all
compensation accrued to such time (including, but not limited to, the
Guaranteed Minimum Payment(s) and Percentage Compensation/Royalties). During
the Sell-Off Period, Licensee shall be required to account to and pay as
provided in Paragraph 5(c), the Percentage Compensation/Royalties set forth in
Schedule "A" on all Net Sales of the Licensed Products during the Sell-Off
Period. Licensee shall deliver a report to Licensor in the form required in
Paragraph 6 and shall make payment of all sums shown to be due therein on a
monthly basis during the Sell-Off Period and Licensee shall provide Agent with
a final accounting and any unpaid sums shown to be due on such final accounting
within thirty (30) days following the end of the Sell-Off Period. Licensee
shall comply with all terms and conditions herein with respect to sales,
distribution and use of the Property during said Sell-Off Period. It is
specifically understood that Licensee shall not sell or dispose of any such
Licensed Products in job lots at reduced prices or other than as is customary
in the ordinary course of business; and provided further that Licensee shall
not sell or dispose of any Licensed Products if this Agreement was terminated
for any reason by Agent and/or Licensor, including but not limited to, any
reason set forth in Paragraph 15. Following the Sell-Off Period, all remaining
Licensed Products shall either be returned to Agent or destroyed (and Licensee
shall deliver a certificate of destruction promptly thereafter) at Licensee's
sole cost and expense.
17. FORCE MAJEURE: Licensee shall be released from its obligations
under this Agreement in the event that governmental regulations, act of God,
war, riot, fire, strike or other labor dispute, epidemic or other causes beyond
the control of Licensee, render performance by Licensee impossible. In such
force majeure event, all future Percentage Compensation/Royalties payable in
accordance with the provisions of this Agreement shall continue to be payable
as provided herein, however, all Royalty amounts which may be due with respect
to sales already made by Licensee of the Licensed Products shall become
immediately due and payable and no portion of the Minimum Guaranteed Payment(s)
shall be repayable or returnable to Licensee. If such event shall continue for
a period in excess of two (2) months, Agent shall have the right to terminate
this Agreement by giving Licensee ten (10) days prior written notice. In the
event of such termination, the provisions of Paragraph 16 shall apply.
18. INSURANCE: Licensee shall obtain and maintain at its sole cost and
expense for the life of the Licensed Product standard commercial general and
product liability insurance, the form of which must be acceptable to Agent,
from a qualified insurance company, naming PorchLight, JJPP and WonderWings, as
additional named
18
insureds, which policy shall provide protection against any and all claims,
demands and causes of action arising out of any defects or failure to perform,
alleged or otherwise, in the Licensed Product(s) or any material used in
connection therewith or any use thereof including for product liability and
personal injury, and for breach of contract, copyright and trademark
infringement, advertising, libel, slander, or other form of defamation,
invasion, infringement of or interference with the rights of privacy or
publicity, whether under statutory or common law, caused by Licensee or the
Licensed Products. The amount of coverage shall be a minimum of One Million
U.S. Dollars (US$1,000,000.00) combined single limit for each single occurrence
for bodily injury and property damage and Three Million U.S. Dollars
(US$3,000,000.00) in the aggregate with a deductible no greater than $10,000.
Said policy shall provide for thirty (30) days notice to Agent from the insurer
by registered or certified mail, return receipt requested, in the event of any
modification, cancellation or termination of said policy. Licensee shall
furnish to Agent a certified copy of said policy providing such coverage within
ten (10) days after the effective date of this Agreement and in no event shall
Licensee manufacture, distribute or sell the Licensed Products prior to the
receipt by Agent of such evidence of insurance.
19. INDEMNITY:
(a) Licensee will at all times indemnify, defend and hold
harmless PorchLight, JJPP and WonderWings and their respective officers,
directors, employees, agents and representatives from and against any and all
claims, damages, litigation, judgments, costs and expenses caused by or arising
out of any (i) breach of any representation, warranty, obligation or covenant
of Licensee contained herein, (ii) misuse of the Property by Licensee in
connection with the Licensed Products or otherwise or (iii) alleged defects in
or other claim relating to the Licensed Products. However, PorchLight, JJPP and
WonderWings, may, at their election, individually or collectively, defend any
such action, by their respective counsel and at Licensee's expense in which
they are a named party or which may affect the ownership or rights in and to
the Property or trademarks and copyrights related thereto. Licensee will cause
its counsel to cooperate fully with PorchLight, JJPP and/or WonderWings and
their counsel in the defense of such action. No Party hereto shall admit any
liability or compromise or settle any suit, pertaining to any other Party
without first obtaining such other Party or Parties consent in writing, which
such consent shall not be unreasonably withheld.
(b) Licensor represents and warrants that it has all rights
necessary to grant the rights hereunder to Licensee. Additionally, Licensor and
Agent represent and warrant that they have not licensed rights to any other
entity which would in any way prohibit Licensee's exercise of any rights granted
hereunder to Licensee. Licensor will at all times indemnify, and hold harmless,
Licensee and its officers, directors, employees, agents and representatives from
and against any and all claims, damages, litigation, judgments, costs and
expenses arising as a result of any claim brought by a third party that the
Property infringes upon or violates the rights of such third party and Licensor
and/or Agent, jointly or individually, as applicable, will at all times
indemnify, and hold harmless, Licensee and its officers, directors, employees,
19
agents and representative from and against any and all claims brought by a third
party arising as a result of a breach of Licensor's and/or Agent's
representations, warranties and covenants made under this Agreement. Licensee
shall promptly notify Agent in writing upon Licensee's acquiring knowledge of
any such claim or action, and PorchLight, JJPP and WonderWings shall,
individually or collectively, undertake the defense or settlement of such claim
or action.
20. NO JOINT VENTURE: Licensee shall not have the power to bind or
obligate any of the other Parties, individually or collectively, in any manner
whatsoever. Nothing herein contained shall be construed to constitute the
Parties as partners or joint venturers, nor shall any similar relationship be
deemed to exist between them.
21. NO ASSIGNMENT: The license hereby granted is and shall be personal
to Licensee, and shall not be assignable by any act of Licensee or by operation
of law. Licensee shall have no right to grant any sub-licenses. Any attempt by
Licensee to grant a sub-license or to assign, mortgage or part with possession
or control of this license or of any of its rights hereunder shall constitute a
material breach of this Agreement. This Agreement shall inure to the benefit of
and shall be binding upon Agent's and Licensor's successors and assigns and may
at Agent's and Licensor's election be assigned.
22. WAIVER; MODIFICATION: No waiver or modification of any of the
terms of this Agreement shall be valid unless in writing. No waiver by any of
the Parties of a breach hereof or a default hereunder shall be deemed a waiver
by such Party of the same or any other breach or default or a waiver by such
Party of its right to enforce any such breach or default in the future. Should
any provision of this Agreement be found to be invalid or unenforceable by a
court of competent jurisdiction, then such provision shall be deemed severed
from this Agreement or enforceable only to the extent permitted by law and any
such invalidity or unenforceability shall not affect the validity or
enforceability of any of the other provisions of this Agreement and all
remaining provisions shall survive and be fully enforceable.
23. REMEDIES: The Parties recognize the unique and special nature and
value of the use of the Property and agree that it is extremely difficult and
impractical to ascertain the extent of the detriment to Agent and Licensor
which would be caused in the event of any use of the Property contrary to the
terms of this Agreement. The Parties further acknowledge that Agent and
Licensor will have no adequate remedy at law in the event Licensee uses the
Property in any way not permitted hereunder including, without limitation, use
of the Property or sale of Licensed Products after the Licensed Period, and
that Agent and Licensor shall be entitled to equitable relief by way of
temporary and permanent injunction, and such other and further relief at law or
equity as any arbitrator or court of competent jurisdiction may deem just and
proper, in addition to any and all other remedies provided for herein.
Notwithstanding the foregoing, Licensee agrees that its sole remedy in the
event of a breach of this Agreement by Agent and/or Licensor shall be an action
at law against such Party or Parties, as applicable, for damages, and in no
event shall Licensee be entitled to
20
equitable relief against Agent and/or Licensor or to enjoin the production,
distribution or any exploitation of the Property or the Licensed Products.
24. ARBITRATION: Any dispute between the Parties arising under or
related to this Agreement, other than to protect Licensor's copyright and
trademark rights in and to the Property, to secure compliance with or involving
a continuance of this Agreement, to prevent a violation or threatened violation
thereof or to prevent unauthorized or improper use of the Property, shall be
resolved exclusively by arbitration, which shall be held in Los Angeles,
California and conducted in accordance with the Commercial Rules of the
American Arbitration Association then in effect. The Parties hereto agree that
they will abide by and perform any award rendered in such an arbitration
conducted pursuant hereto, and any judgment upon the award rendered shall be
final, binding and non-appealable and may be entered in any court having
jurisdiction. Each Party shall bear its own expenses of the arbitration, except
that the arbitrator's fees and costs shall be borne equally by the Parties and
the arbitrator shall have the power to award costs and expenses, including
attorneys' fees, to the prevailing Party.
25. ENFORCEMENT OF RIGHTS: Any and all rights granted to Licensee
pursuant to the terms of this Agreement may be enforced by either or both of
Agent and/or Licensor, at any time and from time to time, to the extent such
rights are possessed by such Party. Licensee acknowledges and agrees that
should Licensee receive notice from Licensor or Agent that Agent's rights have
expired or been terminated, Licensee shall continue abiding by all of the terms
and conditions contained herein directly with Licensor and all statements and
payments to be made hereunder shall be made as directed by Licensor.
26. MANUFACTURE OF MERCHANDISE: Licensee shall provide Agent with a
list of all third parties who will be engaged to provide services in connection
with the manufacture of merchandise relating to the Property. Licensee shall
also insure that each such manufacture executes an agreement in the form
attached hereto as Exhibit "2" or such other form approved by Agent, pursuant
to which the manufacturer: (a) acknowledges WonderWings' trademark and JJPP's
and WonderWings' copyright rights in the Property and the merchandise, and (b)
represents and warrants that it will sell merchandise in connection with the
Property only to Licensee and that it will use the Property only as directed by
Licensee, Licensor or Agent and upon notification of expiration or termination
of this License Agreement or, when Licensee ceases to require the manufacture
of the Licensed Products, whichever is earlier, it will immediately cease
manufacturing the Licensed Products and destroy or deliver to Licensee, as
advised, any devices used to reproduce the Property of any
21
elements thereof. Notwithstanding the foregoing, Licensee acknowledges and
agrees that any act of such manufacturer appointed by Licensee shall be deemed
the acts of Licensee for all purposes and such manufacturer's failure to fully
and properly account to Licensee shall not relieve Licensee of any liability
resulting therefrom.
27. NOTICES: Notices by any Party to the other shall be given by
telefax, with confirmed delivery, and by registered or certified mail, return
receipt requested, or by other reputable overnight mail/delivery services (such
as Federal Express or United Parcel Service) with proof of delivery, all
charges prepaid. All statements, payments and notices hereunder shall be given
at the respective addresses of the Parties as set forth on the first page of
this Agreement unless written notice of a change of address is given. Notices
shall be deemed given the date the notice is sent as provided above, except
that notices of change of address shall be effective when received. Copies of
all notices to Agent and JJPP shall be sent to Agent at 00000 Xxxxxxxxxxx
Xxxxxx, Xxx Xxxxxxx, XX 00000, Attention: Business Affairs, Tel.: 000-000-0000,
Fax: 000-000-0000; and to WonderWings at P. O. Xxx 000000, Xxxxxx, XX 00000,
Tel.: 000-000-0000, Fax: 000-000-0000, with a copy to Xxxxxxxxx Xxxxxx, Esq.,
at Xxxxxx & Pucci LLP, Suite 4, 00 Xxxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000-0000,
Tel.: 000-000-0000, Fax: 000-000-0000; and to Licensee at the address set forth
in Schedule "A".
28. JURISDICTION; ATTORNEYS' FEES: This Agreement shall be governed by
and construed in accordance with the laws of the State of California and the
United States. It is hereby agreed that any matter arising under this Agreement
(subject to the arbitration provisions hereof) and including, without
limitation, any suit to enforce an award under the arbitration provisions
hereof, must be finally adjudged or determined in any court or courts of the
State of California or of the United States of America, in Los Angeles County,
California, and the Parties hereto hereby submit generally, exclusively,
irrevocably and unconditionally to the jurisdiction and venue of such courts
and of any of them in respect of any such matter and consent to service of
process by any means authorized by California law. In the event that any legal
action or any other proceeding is commenced to enforce any provision of this
Agreement or as a result of a breach, default or misrepresentation in
connection with any provision of this Agreement, the successful or prevailing
party shall be entitled, in addition to any other relief to which said party
may be entitled, to recover actual attorneys' fees and costs incurred in such
action or proceeding.
29. ENTIRE AGREEMENT: This Agreement (including Schedule "A," Schedule
"B," Schedule "C", Exhibit "1" and Exhibit "2") constitutes the entire
understanding between the Parties and shall not be modified or amended unless
in writing signed by all Parties.
By signing in the spaces provided below, the Parties have agreed to all of the
terms and conditions contained in this Agreement and the attached Schedules and
Exhibits
22
incorporated herein by reference as part of this Agreement. Subject to full
execution of this Agreement by all Parties set forth below, this Agreement
shall be effective upon the Effective Date first written above.
PORCHLIGHT ENTERTAINMENT, INC.
BY: /S/XXXXXXX XXXXXXX
---------------------
XXXXXXX X. XXXXXXX
ITS: EXECUTIVE VP, COO & CFO
XXX XXX THE JET PLANE PRODUCTIONS, INC.
BY: /S/XXXXXXX XXXXXXX
------------------
XXXXXXX X. XXXXXXX
ITS: EXECUTIVE VP, COO & CFO
KIDQUEST, INC. DBA XXXXXXXXXXX.XXX ENTERTAINMENT
BY: /S/ XXXXX XXXXXX
----------------
ITS: CEO
ACTION PRODUCTS INTERNATIONAL, INC.
BY: /S/ XXXXXX X. XXXXXX
--------------------
ITS: CEO
23
XXX XXX THE JET PLANE
MERCHANDISE LICENSE AGREEMENT
SCHEDULE "A"
1. LICENSED PRODUCTS:
Licensed Products shall include only the following:
(1) Wooden Sky-Track Adventure System consisting of Wooden Character
Vehicles, Wooden Destination Play Boards, Wooden Buildings,
3-Dimensional Sky Track and Wooden Play Table components as defined
below:
Wooden Character Vehicles - Approximate size: 3-3.5" in length. The
primary material from which these Character Vehicles will be
constructed will be wood. Specifically, wood will be used for the
fuselage and wings of the airplanes. Plastic will only be used for
rendering character faces, and as needed for minimal minor trim that
cannot be fabricated from wood. All of the Wooden Character Vehicles
will be compatible with the Sky-Track Adventure System. Each may have
additional features to be approved by Agent and Licensor on a case by
case basis, such as implanted electronic components, which interact
with other products in the Sky-Track Adventure System. Ultimately to
include all 9 recurring character/vehicles, with a minimum of 5
different character/vehicle SKUs to be produced and marketed in the
first year of the Initial Term, with the additional character/vehicles
and new custom variations to be introduced by Licensee during the
balance of the Initial Term.
Wooden Destination Play Boards - Approximate size: 16x16" square or
16x32" square. The Wooden Destination Play Boards are to consist of
flat wooden boards with full-color artwork. In addition, these will
include 3-dimensional play elements to make up the "scenery" of the
various story locations, and each will feature story-appropriate
electronic and mechanical functions, to be approved by Agent and
Licensor on a case by case basis, that will interact with the Wooden
Character Vehicles. These 3-Dimensional "scenery" will be constructed
of wood when feasible with a minimal amount of plastic materials for
trim. Each of the Destination Play Boards will combine to create
extended play surfaces. At least 5 initial SKUs of the Destination
Play Boards will be produced and marketed in the first year of the
Initial Term and will together make up the 48x32" play surface for use
with the Play Table described below.
Wooden Buildings - Size: Various but in scale with the Wooden
Destination Play Boards. The Wooden Buildings will be made primarily
of wood, with minimal plastic and metal decorative elements as
necessary to achieve accurate and durable reproductions (for example,
the "donut" atop the Donut Shop). The Buildings will be designed as
replicas of buildings shown in the Xxx Xxx The Jet Plane television
series, such as the Tarrytown Airport hangars and the Donut Shop and
Hardware Store in Tarrytown village and will be sized in scale for use
with the Wooden Destination Play Boards. A minimum of 6 initial SKUs
of the Wooden Buildings will be produced and marketed in the first
year of the Initial Term with the additional Buildings to be
introduced by Licensee during the balance of the Initial Term.
24
3-Dimensional Sky Track - Size: Various but in scale with the Wooden
Destination Play Boards. These will assemble to create 3-dimensional
flight paths for the Wooden Character Vehicles to follow, to simulate
the appearance of flight. As this system is intended to suggest
imaginative flight it is necessary to fabricate these components out
of a multiplicity of materials as approved by Agent and Licensor,
including plastic provided use of such Sky Track is designed only for
the Sky Track Adventure System.
Wooden Play Table - Size: 48X32" square, 18-24" high. The Wooden Play
Table is intended to serve as a surface for assembling the Destination
Play Boards, Buildings, and Sky-Track into a complete play environment
which demonstrates all of the features of the Sky-Track Adventure
System. Materials are not yet determined, but will likely be wood,
Formica, and/or composites, with metal hardware as approved by Agent
and Licensor. Wooden Play Table to be produced and marketed during the
first year of the Initial Term. Not to conflict with furniture items.
(2) Die Cast Metal Vehicles as defined below:
Approximate size: 2.5-3.5" in length. The vehicle body to be fabricated
from die cast metal. Plastic will be used only for the chassis and
wheels and for rendering character faces. Such design is consistent
with industry standards for die cast metal vehicles, particularly those
depicting characters. These will include free-moving or mechanically
actuated wheels, propellers, and other elements as appropriate and
approved by Agent and Licensor. Ultimately to include all nine
recurring character/vehicles, with a minimum of 5 different
character/vehicle SKUs to be produced and marketed during the first
year of the Initial Term, with the additional character/vehicles and
new custom variations to be introduced during the balance of the
Initial Term.
(3) Bead "Coasters" as defined below:
Wooden bases with coated metal wire and diminimus plastic trim to
depict Xxx Xxx The Jet Plane characters and sky elements (sun, clouds,
etc.) moving through 3-dimensional space along rigid guide-wires.
Ultimately 2-3 SKUs will be produced during the Initial Term at varying
size/price points, with a minimum of 1 SKU to be produced and marketed
during the first year of the Initial Term.
(4) Character Carry-All as defined below:
Carry case with individual, non-removable storage compartments to hold
wooden or die-cast metal character vehicles as well as additional play
elements from the Wooden Sky-Track Adventure System. May be constructed
of vinyl, fabric, or a mixture thereof, in only 1 SKU to be produced
and marketed during the first year of the Initial Term. Not to conflict
with hand-held luggage or luggage on wheels.
(5) Pilot Wings as defined below:
Plastic "pilot" wings, which may be included with the Character
Carry-All, Wooden Character Vehicles or with the other Licensed
Products. Pilot Wings may not be sold separately.
2. LICENSED TERRITORY:
United States, its territories and possessions and Canada.
3. DISTRIBUTION CHANNELS:
25
Licensee's rights are specifically limited to sales and distribution
through the following retail channels of distribution:
Specialty Toy Stores to include, without limitation, but by way of
example of such category: Imaginarium, Right Start, Zany Brainy, FAO
Xxxxxxx, and Leaning Express; Airport Shops to include, without
limitation, but by way of example of such category: XX Xxxxx, Host
Marriott and Paradies Shops;
Book Stores to include, without limitation, but by way of example of
such category: Xxxxxx and Noble, Borders, Waldenbooks, X. Xxxxxx, Books
A Million and Independent "Mom and Pop" type Book/Gift Stores;
Craft Stores to include, without limitation, but by way of example of
such category: Xxxxxxxx, Xxxxx Paint and Joanne's;
Mid-Tier and Upper-Tier Department Stores such as JC Penney, Sears and
May Co. and other similar Mid-Tier and Upper-Tier Department Stores;
Museum Shops; and
Catalogs including, without limitation: Lilly's Kids and X.X. Xxxxxx'x
catalogs, provided that all such catalogs sales and distribution are
designed for and limited to the Territory granted herein.
Additionally, QVC/Television Home Shopping, Internet Sales, Aviation
Attractions, Rainforest Cafe outlets, Theme Parks such as Six Flags,
Mass Market Retail Stores and Brand Name Discounters, such as Target,
TJ Maxx, Xxxxxxxx'x, Xxxx Stores, Toys R Us and Xxx Bee Toys shall be
subject to Agent's written approval on a case by case basis.
4. LICENSED PERIOD:
Initial Term: The period commencing on December 1, 2001 and expiring
on December 31, 2004, subject to the full execution of this Agreement.
Renewal Term: Provided that Licensee is fully performing its
obligations as set forth herein and is not in breach of any of the
terms and conditions of this Agreement, Licensee shall have the right
to extend the Agreement for an additional one (1) year period (herein
the "Renewal Term"), provided that, Licensee shall give written notice
to Agent of its election to extend the Initial Term no later than
ninety (90) days prior to the expiration of the Initial Term and
further provided that Licensee shall pay an additional sum of Seventy
Five Thousand Dollars ($75,000) as and for an additional Guaranteed
Minimum Payment for the Renewal Term which such additional sum shall
be payable in accordance with the Payment Schedule for the Guaranteed
Minimum Payment for the Renewal Term set forth below.
In the event that Licensee shall elect to extend the Initial Term for
the Renewal Term in accordance with the provisions set forth herein,
the Initial Term and Renewal Term shall be collectively referred to in
this Agreement as the Licensed Period.
5. PAYMENT:
GUARANTEED MINIMUM PAYMENT FOR THE INITIAL TERM:
ONE HUNDRED THOUSAND DOLLARS ($100,000) PAYABLE AS AN ADVANCE
("ADVANCE") AS FOLLOWS:
PAYMENT SCHEDULE FOR GUARANTEED MINIMUM PAYMENT/ADVANCE FOR THE
INITIAL TERM:
TWENTY FIVE THOUSAND DOLLARS ($25,000) due upon execution of the
Agreement;
26
TWENTY FIVE THOUSAND DOLLARS ($25,000) due on or before June 30, 2002;
FIFTEEN THOUSAND DOLLARS ($15,000) due on or before December 31, 2002
SEVENTEEN THOUSAND FIVE HUNDRED DOLLARS ($17,500) due on or before
December 31, 2003; and
SEVENTEEN THOUSAND FIVE HUNDRED DOLLARS ($17,500) due on or before
September 30, 2004.
GUARANTEED MINIMUM PAYMENT FOR THE RENEWAL TERM:
SEVENTY FIVE THOUSAND DOLLARS ($75,000) PAYABLE AS AN ADVANCE FOR THE
RENEWAL TERM AS FOLLOWS:
PAYMENT SCHEDULE FOR THE ADDITIONAL GUARANTEED MINIMUM PAYMENT FOR THE
RENEWAL TERM:
THIRTY SEVEN THOUSAND FIVE HUNDRED DOLLARS ($37,500) due on January 1,
2005; and
THIRTY SEVEN THOUSAND FIVE HUNDRED DOLLARS ($37,500) due on or before
July 1, 2005.
THE PARTIES ACKNOWLEDGE AND AGREE THAT THE ADDITIONAL GUARANTEED
MINIMUM PAYMENT FOR THE RENEWAL TERM SHALL ONLY BE PAYABLE IN THE
EVENT THAT LICENSEE SHALL ELECT TO EXTEND THE INITIAL TERM FOR THE
RENEWAL TERM AS SET FORTH ABOVE.
PERCENTAGE COMPENSATION/ROYALTY:
Ten percent (10%) Domestic; or
Twelve percent (12%) F.O.B. Hong Kong, as applicable.
6. MARKETING DATE AND DISTRIBUTION DATE:
The Licensed Products shall be marketed and previewed at the 2002 Toy
Fair held in New York on or before February 28, 2002 (the "Marketing
Date") and distributed on or before September 30, 2002 (the
"Distribution Date") for a Fall 2002 Launch.
7. EXCLUSIVITY:
NON-EXCLUSIVE.
Subject to the terms and conditions set forth in the Agreement to
which this Schedule "A" is incorporated by reference and attached to
and made a part thereof, Licensee shall have the non-exclusive right
to manufacture, sell and distribute the Licensed Products (see "1"
above) in the Licensed Territory (see "2" above) and in the designated
Distribution Channels (see "3" above) during the Licensed Period (see
"4" above) set forth in this Schedule "A".
8. SELL-OFF PERIOD:
Ninety (90) days.
27
9. ADDRESS FOR NOTICES TO LICENSEE:
Name: Action Products International, Inc.
Address: 000 X. Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxx Xxxxxx
28
SCHEDULE "B"
PROPERTY
The name(s), design(s), artwork, logo(s), copyright(s) and trademark(s)
appearing in the animated television series entitled "Xxx Xxx The Jet Plane"
(herein the "Series"), including the following animated characters as they
appear in said Series:
Xxx Xxx
Snuffy
Old Xxxxx
Xxxxx
Savannah
Big Jake
Herky
Revvin' Xxxx
Xxxxx
29
SCHEDULE "C"
TRADEMARK AND LOGOS
(TO BE USED ON ALL PRODUCT PACKAGING AND ADVERTISING)
[PORCHLIGHT ENTERTAINMENT GRAPHIC OMITTED]
[XXXXXXXXXXX.XXX ENTERTAINMENT GRAPHIC OMITTED]
[MODERN CARTOONS GRAPHIC OMITTED]
[XXX XXX THE JET PLANE GRAPHIC OMITTED]
Trademark footnote:
The xxxx set forth above, "Xxx Xxx The Jet Plane", is owned by KIDQUEST, INC.,
d/b/a XxxxxxXxxxx.xxx Entertainment which has granted to PorchLight
Entertainment, Inc., as agent, the right to license such xxxx.
30
EXHIBIT "1"
LICENSEE REPORT FORM
(PAGE 1 OF 2)
ROYALTY REPORT SUMMARY STATEMENT
--------------------------------------------------------------------------------
Licensee Name:
--------------------------------------------------------------------------------
Date:
--------------------------------------------------------------------------------
Agreement Number:
--------------------------------------------------------------------------------
Property:
--------------------------------------------------------------------------------
Quarter (circle one)
0xx, 0xx, 0xx, 0xx, 200[ ]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PRE-PAID ADVANCE (IF APPLICABLE):
$[ ]
Total Net Sales Dollars: $[ ]
(from Detailed Royalty Report)
Royalty Rate:
(from Detailed Royalty Report) [ %]
TOTAL ROYALTY AMOUNT DUE:
$[ ]
(from Detailed Royalty Report)
LESS UNRECOUPED BALANCE OF ADVANCE FROM
PRIOR STATEMENT (IF APPLICABLE):
$[ ]
--------------------------------------------------------------------------------
BALANCE DUE/(UNRECOUPED BALANCE): $[ ]
--------------------------------------------------------------------------------
Please make payments by check or wire transfer to: Xxx Xxx The Jet Plane
Productions, Inc.
Certification: We have examined this report and certify it to be a true and
accurate statement as reflected by our books and records for the quarter
concerned.
Authorized Licensee Signature:
---------------------------
Printed Licensee Signature/Title:
------------------------
Date Signed:
----------------------
31
LICENSEE REPORT FORM
(PAGE 2 OF 2)
DETAILED ROYALTY REPORT
------------------------------------------------------------------------------------------------------------------------------------
LICENSEE NAME:
------------------------------------------------------------------------------------------------------------------------------------
DATE:
------------------------------------------------------------------------------------------------------------------------------------
AGREEMENT NUMBER:
------------------------------------------------------------------------------------------------------------------------------------
PROPERTY:
------------------------------------------------------------------------------------------------------------------------------------
PERIOD COVERED: 1ST QTR/2ND QTR/3RD QTR/4TH QTR 200[ ] (PLEASE CIRCLE ONE) FROM: TO:
------------------------------------------------------------------------------------------------------------------------------------
TERRITORY: (PLEASE LIST ALL COUNTRIES WITHIN THE TERRITORY SEPARATELY)
------------------------------------------------------------------------------------------------------------------------------------
LICENSEE INFORMATION
------------------------------------------------------------------------------------------------------------------------------------
ADDRESS:
------------------------------------------------------------------------------------------------------------------------------------
CITY/STATE/ZIP:
------------------------------------------------------------------------------------------------------------------------------------
TELEPHONE NUMBER:
------------------------------------------------------------------------------------------------------------------------------------
FAX NUMBER:
------------------------------------------------------------------------------------------------------------------------------------
ATTENTION:
------------------------------------------------------------------------------------------------------------------------------------
LICENSED
PRODUCTS
SKU
Number -------------------------------------------------------------------------------------------------
Description Total Units Total Units Gross Sales Allowable Net Sales
Manufactured Ship/Distributed (Units) Returns* (Units)
During Qtr During Qtr (Units)
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
TOTAL AMOUNT
----------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
LICENSEE NAME:
------------------------------------------------------------------------------------------------------------------------------------
DATE:
------------------------------------------------------------------------------------------------------------------------------------
AGREEMENT NUMBER:
------------------------------------------------------------------------------------------------------------------------------------
PROPERTY:
------------------------------------------------------------------------------------------------------------------------------------
PERIOD COVERED: 1ST QTR/2ND QTR/3RD QTR/4TH QTR 200[ ] (PLEASE CIRCLE ONE) FROM: TO:
------------------------------------------------------------------------------------------------------------------------------------
TERRITORY: (PLEASE LIST ALL COUNTRIES WITHIN THE TERRITORY SEPARATELY)
------------------------------------------------------------------------------------------------------------------------------------
LICENSEE INFORMATION
------------------------------------------------------------------------------------------------------------------------------------
ADDRESS:
------------------------------------------------------------------------------------------------------------------------------------
CITY/STATE/ZIP:
------------------------------------------------------------------------------------------------------------------------------------
TELEPHONE NUMBER:
------------------------------------------------------------------------------------------------------------------------------------
FAX NUMBER:
------------------------------------------------------------------------------------------------------------------------------------
ATTENTION:
------------------------------------------------------------------------------------------------------------------------------------
LICENSED
PRODUCTS
SKU
Number -------------------------------------------------------------------------------------------------------------------------
Unit Selling Gross Sales Allowable Net Sales Royalty Royalty
Price ($) Returns* ($) Rate Amount Due
($) ($) (%) ($)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
TOTAL AMOUNT
----------------------------------------------------------------------------------------------------------------
* Please provide copies of relevant invoices for verification of allowable
returns, if applicable.
EXHIBIT "2"
MANUFACTURER'S AGREEMENT
Dated:
------------------------------
To: PorchLight Entertainment, Inc.
00000 Xxxxxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Re: Merchandising License Agreement dated __________, 200_ between
PORCHLIGHT ENTERTAINMENT, INC. ("Agent" or "PorchLight"), XXX XXX THE
JET PLANE PRODUCTIONS, INC. ("JJJP"), and KIDQUEST, INC., dba
XxxxxxXxxxx.xxx Entertainment ("WonderWings") on the one hand, and
___________________________________________ ("Licensee"), on the other
hand.
This letter will serve as notice to you that we, ______________________________
(the "Manufacturer"), located at: ________________________________________,
have been engaged by the above-referenced Licensee to manufacture
_______________________________________________ (the "Licensed Products"),
utilizing the Xxx Xxx The Jet Plane(TM) Property (the "Property"), in
accordance with the terms and conditions of the Merchandising License Agreement
referenced above (herein referred to as the "Agreement") and we are cognizant
of, and agree to the terms and conditions set forth in said Agreement as they
relate to our function as the Manufacturer.
We hereby acknowledge WonderWings' trademarks in and to the Property and the
copyrights of JJJP and WonderWings (JJJP and WonderWings shall be referred to
collectively herein as the "Licensor") and Licensor's respective rights and
ownership thereof and the right of Agent to license said Property. We agree
that we will not claim any rights or ownership in and to the Property or in any
parts thereof and we will not use any trademark, copyright, servicemarks or
trade name which is identical to or confusingly similar to the Property or any
part thereof. Further, we acknowledge and agree that all copyrights in any
literary, artistic or musical work made by us or on our behalf for the purposes
of manufacturing the Licensed Products which incorporate the Property or any
part thereof, shall inure to the benefit of Licensor and we shall take such
steps that may be necessary to assign all such copyrights to Licensor.
We understand and agree that the Manufacturer has no right to use the Property
and the licensed material, trademarks, copyrights or servicemarks thereof
except as specifically authorized in writing by Licensee, Licensor or Agent in
connection with the manufacture of the Licensed Products, and Manufacturer may
not sublicense, subcontract or in any way transfer the rights hereunder or
dispose of, sell or distribute the Licensed Products or licensed material to
any person or entity other than Licensee. Manufacturer further acknowledges and
agrees that upon notice from Licensee, Licensor or Agent of expiration
or termination of the aforementioned Agreement or, when Licensee ceases to
require the manufacture of the Licensed Products, which ever is earlier,
Manufacturer will deliver to Licensee, or if otherwise advised, to Licensor or
Agent, any artwork, molds, patterns, plates, designs or other devices used to
reproduce the name or any likeness, design or other elements of the Property
and we will immediately cease any further manufacture of Licensed Products or
any part thereof.
We agree to supply Agent, at Agent's request, but not more frequently than
quarterly, with a statement detailing all items manufactured and/or supplied to
Licensee in connection with the Property and/or the Licensed Products and we
hereby acknowledge that Agent and/or Licensor, or their representative(s) shall
have the right to examine the books and records of Manufacturer as they relate
to the Licensed Products as well as the right of Agent and/or Licensor, or
their representative(s) to visit the plant or plants where the Licensed
Products are manufactured and where the containers, packaging material and the
like are printed or produced in order to determine whether the Manufacturer and
Licensee are in compliance with the terms herein and in the aforementioned
Agreement. We further agree that we will look solely to Licensee for any
payments and/or compensation or other sums with respect to the manufacture,
shipment and/or supply of the Licensed Products or any part thereof and that we
will have no claim against Licensor or Agent with respect to such payments or
any other matters in connection with the Licensed Products or the Property.
We understand that our engagement as Manufacturer for the Licensee is subject
to our agreement to the foregoing terms and Agent and/or Licensor shall be
entitled to invoke any remedy permitted by law for violation of this
Manufacturer's Agreement. Manufacturer's appointment shall also be subject to
Licensor's and Agent's approval which will not be deemed granted unless and
until this Manufacturer's Agreement is executed below by all parties.
Read and Agreed to:
By:
-------------------------
Manufacturer
By:
-------------------------
Licensee
Approved:
By: and
---------------------------, --------------------------
Licensor
By:
---------------------------
Agent
