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EXHIBIT 10.12.3 WORLD WRESTLING FEDERATION
LICENSE AGREEMENT
THIS AGREEMENT, dated as of 2/10/97, 1997, between TITAN SPORTS, INC., a
Delaware corporation with its principal office at Titan Tower, 0000 Xxxx Xxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 ("Titan"), and JAKKS PACIFIC, INC. a
corporation with its principal office at 00000 Xxxxxxx Xxxxx Xxxxxxx, Xxxxx
X000, Xxxxxx, XX 00000 (the "Licensee"), is to evidence:
1. Definitions. For purposes of this Agreement the following definitions
shall apply:
(a) The term "Advertising Materials" shall mean all advertising and
promotional materials and all packaging, wrapping, and labeling materials for
the Licensed Products (including, by way of illustration but not limitation,
catalogs, trade advertisements, flyers, sales sheets, labels, package inserts,
hangtags and displays) which are produced by or for the Licensee and which make
use of the Intellectual Property.
(b) The term "Copyrights" shall mean all copyrights now or hereafter owned
by Titan relating to the Events or the Talent.
(c) The term "Events" shall mean the professional wrestling exhibition
produced, promoted, and performed by Titan, before a live audience and/or
broadcast via pay, cable, or free television.
(d) The term "Intellectual Property" shall mean the Rights of Publicity,
the Trademarks, the Copyrights, and all other proprietary rights relating to the
Events.
(e) The term "Licensed Products" shall mean the following items:
articulated and non-articulated molded plastic six inch (6") figures,
articulated molded plastic three inch (3") figure sets inclusive of wrestling
ring, articulated seven inch (7") figures with special features (first special
feature will be Lenticular), figure finger rings, wrestling ring scaled to
figures and action figures with sound and microphone which may utilize infrared
technology.
(f) The term "Net Sales Price" shall mean the Licensee's invoiced billing
price to its customers or distributors for the Licensed Products, less returns
for damaged goods, discounts and allowances.
(g) The term "Rights of Publicity" shall mean the likenesses, physical
characteristics, personalities, characters, and personas of the Talent.
(h) The term "Talent" shall mean all individuals who perform in the Events,
including, but not limited to, the professional wrestlers who perform in the
Events.
(i) The term "Territory" shall mean Australia, Bahrain, Cyprus, Egypt,
France, Germany, Israel, Italy, Kuwait, Lebanon, Jordan, Morocco, New Zealand,
Oman, Qatar, Saudi Arabia, South Africa, Spain, Syria, Tunisia, United Arab
Emirates, United Kingdom.
(j) The term "Trademarks" shall mean all symbols, designs, styles, emblems,
logos and marks used in connection with the Events, including, but not limited
to, the name WORLD WRESTLING FEDERATION, the WWF logo or logos, the xxxx WORLD
WRESTLING FEDERATION SUPERSTARS, and the names of the Talent, but excluding the
initials WWF in block letters.
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2. Grant of License; Channels of Distribution Reserved to Titan.
(a) Grant of License. Titan grants to the Licensee, upon the terms and
conditions set forth in this Agreement, the exclusive right and license to use
the Intellectual Property in connection with the manufacture, distribution,
sale, and advertising of the Licensed Products in the Territory through all
channels of distribution except those reserved to Titan under subparagraph 2(b).
(b) Titan's Channels of Distribution. The rights granted to the Licensee by
Titan under subparagraph 2(a) shall not include the right to distribute the
Licensed Products through the following Titan channels of distribution: (i)
at-Event sales; (ii) catalog sales; (iii) direct mail sales; (iv) sales via
television or other electronic media; and (v) vending machine sales.
3. Period of Agreement. The period of this Agreement shall commence on
January 1, 1997 and end on December 31, 1999 unless terminated earlier pursuant
to the terms hereof. Thereafter, if the Licensee wishes to renew this, it shall
provide written notice of such intent to Titan no less than sixty (60) days
prior to the commencement of the renewal period in question. In that event,
provided the Licensee is not in default of any term under this Agreement, and
further provided that Licensee has paid to Titan all royalties during the then
current period, Titan will discuss with Licensee such potential renewal, and the
terms thereof. No renewal period will be effective unless and until the parties
reach a mutual agreement as to the terms applicable to such renewal. This
paragraph is in no way to be construed so as to obligate Titan to renew this
Agreement, or to renew this Agreement with any particular terms.
4. Royalties. In consideration for the rights granted to it under this
Agreement, the Licensee agrees to pay Titan the following royalties:
(a) Advance Royalties. On execution of this Agreement the Licensee agrees
to pay to Titan the following non-refundable Advance Royalty Amount, which shall
be set off as a credit against the royalties due to Titan under subparagraph
4(b):
Advance Royalty Amount US$150,000.00
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If Titan has not received the Advance Royalty Amount due on execution of this
Agreement by the date 15 days from the date of Titan's execution of this
Agreement, Titan shall have the right to terminate this Agreement, with
immediate effect, by providing the Licensee with written notice of termination
at any time prior to Titan's receipt of said Advance Royalty Amount payment.
(b) Percentage Royalties. Percentage Royalties shall be computed as
follows:
(i) The Licensee shall pay Titan a percentage royalty of 10% of the
Net Sales Price on all sales of the Licensed Products by the Licensee to
its customers or distributors. If the Licensee sells any Licensed Products
to a customer or distributor in the Territory on an F.O.B. basis from a
manufacturing source outside the Territory (for example, a shipment of
Licensed Products F.O.B. Hong Kong to a customer in the
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Territory), the royalty rate on such sales shall be computed on the basis
of the average Net Sales Price of all non-F.O.B. sales of the same Licensed
Products by the Licensee during the accounting period in which such F.O.B.
sale occurs.
(ii) All royalty computations under this subparagraph 4(b) shall be
made on the basis of the Net Sales Price charged by the Licensee, or, if
the Licensee sells a Licensed Product to a subsidiary or other party
controlled by the Licensee, on the basis of the Net Sales Price for such
Licensed Product charged by such subsidiary or controlled party on resale
of the Licensed Product.
(c) Guaranteed Royalties. If the total of all royalties payable to Titan
under the foregoing subparagraphs 4(a) and 4(b) is less than the Guaranteed
Royalty Amount set forth below, the Licensee shall pay Titan, on or before
December 31, 1999, the difference between the Guaranteed Royalty Amount and the
total of all royalties paid to Titan under subparagraphs 4(a) and 4(b):
Guaranteed Royalty Amount US$375,000.00
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(Payment Schedule Attached)
5. Non-Competition. The Licensee agrees that it shall not, while this
Agreement remains in effect and for six months thereafter, produce any products
or provide any services using the name or other trademarks or service marks
associated with any professional wrestling organization other than the WORLD
WRESTLING FEDERATION or its affiliates, or the name and/or likeness of any
professional wrestler not associated with Titan.
6. Marketing Plans. Within 90 days of the execution of this Agreement, and
on or before each one-year anniversary of the commencement date of this
Agreement, the Licensee shall provide Titan with a written marketing plan with
respect to the Licensed Products. Each such marketing plan shall include, on a
Licensed Product-by-Licensed Product basis, a marketing timetable, sales
projections, channels and methods of distribution, nature and amount of
advertising and advertising expenditures, and any other information which Titan
may ask the Licensee to include. Each marketing plan shall contain specific
information for the one-year period immediately succeeding its submission and
general estimates or projections for subsequent periods during which this
agreement remains in effect.
7. Licensee Acknowledgment. The Licensee by executing this Agreement
acknowledges that it has reviewed and understands all provisions of this
Agreement, including the attached Standard Terms and Conditions.
8. Standard Terms and Conditions. This Agreement is subject to all of the
provisions of the Standard Terms and Conditions which are attached to and made a
part of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth above.
TITAN SPORTS, INC.
Date 2/24/97 By: /s/ Xxxxx X. XxXxxxx
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Pres. - Co-CEO (Title)
JAKKS PACIFIC, INC.
By: Xxxx X. Xxxxxxx
---------------------------------
Chief Financial Officer (Title)
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APPENDIX A
MINIMUM GUARANTEE PAYMENT SCHEDULE
1997
January 1, 1997 to March 31, 1997 $31,250
April 1, 1997 to June 30, 1997 31,250
July 1, 1997 to September 30, 1997 31,250
October 1, 1997 to December 31, 1997 31,250
1998
January 1, 1998 to March 31, 1998 $31,250
April 1, 1998 to June 30, 1998 31,250
July 1, 1998 to September 30, 1998 31,250
October 1, 1998 to December 31, 1998 31,250
1998
January 1, 1999 to March 31, 1999 $31,250
April 1, 1999 to June 30, 1999 31,250
July 1, 1999 to September 30, 1999 31,250
October 1, 1999 to December 31, 1999 31,250
TOTAL PAYMENT US$375,000
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WORLD WRESTLING FEDERATION LICENSE AGREEMENT
STANDARD TERMS AND CONDITIONS
SECTION A. QUALITY CONTROLS AND APPROVAL PROCEDURES FOR LICENSED PRODUCTS
AND ADVERTISING MATERIALS.
A(1) Warranty of Quality. The Licensee warrants that the Licensed Products
will be of good quality in design, material and workmanship and suitable for
their intended purpose; that no injurious, deleterious, or toxic substances will
be used in or on the Licensed Products; that the Licensed Products will not
cause harm when used as instructed and with ordinary care for their intended
purpose; and that the Licensed Products will be manufactured, sold, and
distributed in strict compliance with all applicable laws and regulations.
A(2) Approval Procedures for Licensed Products and Advertising Materials;
Approval Standards; Time for Approval by Titan.
(a) General. the Licensee shall comply with all reasonable procedures which
Titan may from time to time adopt regarding its approval of Licensed Products
and Advertising Materials which the Licensee proposes to manufacture, sell, or
use under this Agreement. These approval procedures shall be implemented using
prescribed forms to be supplied to the Licensee by Titan, and shall incorporate
the basic approval requirements and steps outlined in the following sections.
the Licensee agrees to retain all materials relating to approvals in its files
while this Agreement remains in effect and for one year thereafter.
(b) Approval of Licensed Products. With respect to each different Licensed
Product which the Licensee proposes to manufacture and sell under this
Agreement, the Licensee shall submit to Titan for its review and approval the
following materials in the order stated:
(i) generic sample of the type of Licensed Product in question (that is, a
sample of the kind of merchandise article to which the Licensee proposes to add
the Intellectual Property in producing the Licensed Product, showing the general
quality standard which will be met by the Licensed Product);
(ii) finished art for the Licensed Product, showing the exact use of the
Intellectual Property on or in connection with the proposed Licensed Product;
(iii) a preproduction prototype sample of the Licensed Product, where
appropriate, or a preproduction final sample of the Licensed Product, showing in
either case the exact form, finish, and quality the Licensed Product will have
when manufactured in production quantities; and
(iv) forty-eight identical production samples of the Licensed Product, to
be submitted immediately upon commencement of production.
The Licensee shall comply with all of the foregoing approval steps for each
Licensed Product, obtaining Titan's written approval at each step of the
procedure, unless by prior written notice from Titan it is exempted from any
such step with respect to a specific Licensed Product.
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(c) Approval of Advertising Materials. With respect to each different item
of Advertising Material which the Licensee (or any party acting on its behalf)
proposes to produce and use under this Agreement, the Licensee shall submit to
Titan for its review and approval the following materials, in the order stated:
(i) proposed written copy for the item of Advertising Material, with
attached rough art showing how the Intellectual Property will be used in
connection with the copy;
(ii) a final printed sample of the item, where feasible (as, for example,
in the case of labels, hangtags, printed brochures, catalogs, and the like).
The Licensee shall comply with all of the foregoing approval steps for each item
of Advertising Material, obtaining Titan's written approval at each step of the
procedure, unless by prior written notice from Titan it is exempted from any
such step with respect to a specific item of Advertising Material.
(d) Approval Standards. Titan shall have the right to disapprove any
materials submitted to it under Sections A(2)(b) or A(2)(c) if it determines, in
its sole and unfettered discretion, that the materials in question would impair
the value and goodwill associated with the Events or Titan's licensing program
for the Intellectual Property, by reason of (i) their failure to satisfy the
general quality standards including those set forth in Section A(1); (ii) their
use of artwork, designs, or concepts which fail to depict accurately the Talent
or the Intellectual Property; (iii) their use of materials which are unethical,
immoral, or offensive to good taste; (iv) their failure to carry proper
copyright or trademark notices; or (v) any other reasonable cause.
(e) Time for Approval by Titan. Titan agrees to use reasonable efforts to
notify the Licensee in writing of its approval or disapproval of any materials
submitted to it under Section A(2)(b) and A(2)(c) within 15 business days after
its receipt of such materials, and agrees, in the case of its disapproval, to
notify the Licensee in writing of its reasons for disapproval.
A(3) Maintenance of Quality of Licensed Products; Inspection of Production
Facilities. The Licensee agrees to maintain the quality of each Licensed Product
manufactured under this Agreement up to the specifications, quality, and finish
of the production sample of such Licensed Product approved by Titan under
Section A(2)(b), and agrees not to change the Licensed Product in any respect or
to make any change in the artwork for the Licensed Product without first
submitting to Titan samples showing such proposed changes and obtaining Titan's
written approval of such samples. From time to time after it has commenced
manufacturing the Licensed Products, the Licensee, upon request, shall furnish
free of charge to Titan a reasonable number of random production samples of any
Licensed Product specified by Titan. The Licensee shall also furnish to Titan
upon request the addresses of the production facilities used by the Licensee for
manufacturing the Licensed Products, and shall make arrangements for Titan or
its representatives to inspect such production facilities during reasonable
business hours.
A(4) Miscellaneous.
(a) Artwork for Licensed Products. If the Licensee requests Titan to
furnish it with any photographs or special artwork incorporating the
Intellectual Property, the Licensee agrees to reimburse Titan for its costs of
supplying such materials to the Licensee.
(b) Translations. All translations of written material used on or in
connection with the Licensed Products or Advertising Materials shall be
accurate, and the Licensee, when submitting the Licensed Products
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and the Advertising Materials for approval, shall provide Titan with English
translations of all such written materials in a language other than English.
(c) Use of Talent in Licensed Products and Advertising Materials. With
prior written consent of Titan Licensee shall be allowed to use any Talent for
purposes of explicit endorsement in any Licensed Product or items as
contemplated by the definition of Intellectual Property set forth above.
(d) Transactions with Other Licensee. The Licensee shall not, without
Titan's prior written consent, (i) sell or deliver to another Titan licensee the
films or other devices used by the Licensee to produce the Licensed Products; or
(ii) print or otherwise produce any items using the Intellectual Property for
another Titan licensee.
(e) Duplicate Films. If the Licensee in connection with the manufacture of
the Licensed Products develops film or other reproductive media incorporating
the Intellectual Property, the Licensee, when requested by Titan to do so, shall
supply duplicates of such films or other reproductive media to other licensees
of Titan outside the Territory, at cost of duplication plus 10%.
(f) Titan's Right to Purchase Licensed Products. In addition to the random
production samples of the Licensed Products to be supplied by the Licensee to
Titan free of charge under Section A(3), Titan shall be entitled at any time
while this Agreement remains in effect to purchase from the Licensee, at the
Licensee's cost of manufacture plus 13.5% of cost any available quantity of the
Licensed Products. Any such Licensed Products purchased by Titan shall be
royalty-free.
SECTION B. EFFORTS TO SELL LICENSED PRODUCTS; RESTRICTIONS ON SALE
B(1) Manufacture and Sale of Licensed Products. The Licensee agrees to
manufacture the Licensed Products at the Licensee's own expense in sufficient
quantities to meet the reasonably anticipated demand. The Licensee also agrees
to exercise reasonable efforts to advertise and promote the Licensed Products at
its own expense and to use its best efforts to sell the licensed Products in the
Territory.
B(2) Good Faith Effort to Exploit Rights. If within three months of the
execution of this Agreement the Licensee has failed to take any good faith steps
to exploit the rights granted to it (for example, by seeking to obtain Titan's
approval of a proposed Licensed Product, or commencing to manufacture and sell
an approved Licensed Product), Titan shall have the right to terminate this
Agreement immediately by giving written notice of termination to the Licensee.
If within three months of the execution of this Agreement the Licensee has
failed to submit to Titan a prototype of a particular Licensed Product, such
Licensed Product shall be automatically deleted from the definition of "Licensed
Products" under subparagraph 1(e) of this Agreement, and all rights to such
Licensed Product shall revert to Titan.
B(3) Titan's Right to Eliminate Country from Territory. If at any time
during the period of this Agreement the Licensee is not making regular sales of
more than a nominal nature of any of the Licensed Products in a country of the
Territory, Titan shall have the right, upon giving 30 days prior written notice
to the Licensee, to terminate the Licensee's rights for all Licensed Products of
such country.
B(4) Titan's Right to Terminate License for Specific Licensed Product. If
at any time during the period of this Agreement the Licensee is not making
regular sales of more than a nominal nature of a particular Licensed Product in
a country of the Territory, Titan shall have the right, upon giving 30 days
prior written notice to the Licensee, to terminate the Licensee's rights for
such Licensed Product for such country. In order
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to assist Titan in reviewing its marketing activities, the Licensee agrees to
furnish Titan upon request complete information evidencing on a
country-by-country basis the Licensee's efforts to market the Licensed Products
in such countries.
B(5) Restrictions on Sale of Licensed Products. The Licensed Products shall
be sold to the public only in the manner in which merchandise articles of the
same general description are customarily merchandised to the public. the
Licensee shall not use or sell the Licensed Products as premiums, or distribute
the Licensed Products to parties which the Licensee has reason to believe intend
to use or sell the Licensed Products as premiums. Use or sale of the Licensed
Products as "premiums," for purposes of the foregoing provisions, shall mean use
or sale of the Licensed Products in connection with the following kinds of
promotional activities: self-liquidator programs; joint merchandising programs;
giveaways; sales incentive programs; door openers; traffic builders; and any
other kinds of promotional programs designed to promote the sale of the Licensed
Products or other goods or services of the Licensee or a third party.
SECTION C ROYALTIES; STATEMENTS.
C(1) Computation of Royalties. All royalties due to Titan shall accrue upon
the sale of the Licensed Products, regardless of the time of collection by the
Licensee. For purposes of this agreement, a Licensed Product shall be considered
"sold" as of the date on which such Licensed Product is billed, invoiced,
shipped, or paid for, whichever event occurs first. If any Licensed Products are
consigned to a distributor by the Licensee, the Licensed Products shall be
considered "sold" by the Licensee upon the date on which such distributor bills,
invoices, ships, or receives payment for any of the Licensed Products, whichever
event occurs first.
C(2) Time of Payment. The Licensee shall pay all royalties owing to Titan
under this Agreement for any calendar quarter within 30 days following the end
of the calendar quarter in question. All royalty amounts in this Agreement are
stated in U.S. Dollars, and all royalty payments shall be made in U.S. Dollars.
All royalty statements required to be submitted by the Licensee shall be
submitted within 30 days following the end of the calendar quarter to which they
relate and shall accompany the royalty payments made to Titan.
C(3) Titan Approval of Discounted Sales. If the Licensee proposes to sell
any Licensed Product at a price which is less than 10% above the Licensee's
manufactured cost of such Licensed Product, Titan shall have a right of prior
approval over the terms of such sale and the percentage royalty to be payable by
the Licensee under paragraph 4 with respect to such sale.
C(4) Deductions; Taxes.
(a) There shall be no deduction from the royalties owed to Titan for
uncollectible accounts, or for taxes, fees, assessments, or other expenses of
any kind which may be incurred or paid by the Licensee in connection with: (i)
royalty payments to Titan; (ii) the manufacture, sale, distribution, or
advertising of the Licensed Products in the Territory; or (iii) the transfer of
funds or royalties or the conversion of any currency into U.S. Dollars. It shall
be the Licensee's sole responsibility at its expense to obtain the approval of
any foreign authorities; to take whatever steps may be required to effect the
payment of funds from abroad; to minimize or eliminate the incidence of foreign
taxes, fees, or assessments which may be imposed; to protect its investments in
foreign territories; to enable it to commence or continue doing business in any
foreign territory; and to comply in any and all respects with all applicable
laws and regulations.
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(b) Notwithstanding the provisions of the preceding Section C(4)(a), if (i)
any country imposes a withholding tax against Titan, as licensor, with respect
to the royalties payable to Titan by the Licensee on sales of the Licensed
Products in such country, (ii) such tax is paid by the Licensee on behalf of
Titan, and (iii) such tax is an income tax as to which a foreign tax credit is
allowable to Titan under Section 901 of the Internal Revenue Code of 1986, as
amended, the Licensee may deduct the amount of such withholding tax from the
royalties owing to Titan on the condition that the Licensee furnishes to Titan
such information as Titan requires to evidence Titan's right to credit such
withholding tax against its federal income tax liability in the United States.
C(5) Royalty Statements. The Licensee shall furnish to Titan, at the same
time it makes payment of royalties, a full and complete statement, duly
certified by an officer of the Licensee to be true and accurate, showing the
number of each type of Licensed Product sold during the calendar quarter in
question, the total gross sales revenues for each such Licensed Product, an
itemization of all allowable deductions, if any, the Net Sales Price for each
Licensed Product sold, the amount of royalties due with respect to such sales,
and the quantities of each Licensed Product on hand and in transit as of the end
of such quarter, together with such other pertinent information as Titan may
reasonably request from time to time. The Licensee's royalty accountings shall
identify with specificity the types of Intellectual Property used on or in
connection with each Licensed Product sold, including the identities of all
Talent appearing on each Licensed Product. there shall be a breakdown of sales
of Licensed Products by country, and all figures and monetary amounts shall
first be stated in the currency in which the sales were actually made. If
several currencies are involved in any reporting category, that category shall
be broken down by each such currency. Next to each currency amount shall be set
forth the equivalent amount stated in U.S. Dollars, and the rate of exchange
used in making the required conversion calculation. The rate of exchange shall
be the actual rate of exchange obtained by the Licensee on the date of payment.
C(6) Royalty Adjustments. The receipt or acceptance by Titan of any royalty
statements furnished pursuant to this Agreement, or the receipt or acceptance of
any royalty payments made, shall not preclude Titan from questioning their
accuracy at any time. If any inconsistencies or mistakes are discovered in such
statements or payments, appropriate adjustments shall be made immediately by the
parties. The Licensee shall pay Titan interest on a late royalty payments at an
annual rate of 2% over the prevailing prime interest rate in effect at New York,
New York, on the date on which such late royalty payments should have been
received by Titan.
SECTION D BOOKS OF ACCOUNT AND OTHER RECORDS; AUDITS
D(a) Retention of Records. While this Agreement remains in effect and for
two years thereafter, the Licensee shall keep full and accurate books of account
and copies of all documents and other material relating to this Agreement at the
Licensee's principal office. Titan, by its duly authorized agents and
representatives, and by giving licensee five days advance notice, shall have the
right to audit such books, documents, and other material, shall have access
thereto during ordinary business hours, and shall be at liberty to make copies
of such books, documents, and other material. Audits by Titan will be limited to
one per year. At Titan's request, the Licensee shall provide an authorized
employee to assist in the examination of the Licensee's records.
D(2) Audits by Titan. If any audit of the Licensee's books and records
reveals that the Licensee has failed properly to account for and pay royalties
owing to Titan, and the amount of any royalties which the Licensee has failed
properly to account for an pay for any quarterly accounting period exceeds, by
5% or more, the royalties actually accounted for and paid to Titan for such
period, the Licensee shall, in addition to paying Titan such past due royalties,
reimburse Titan for its direct out-of-pocket expenses incurred in conducting
such audit, together with interest on the overdue royalty amount at an annual
rate of 2% over the prevailing prime
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interest rate in effect at New York, New York, on the date on which such overdue
royalty amount should have been paid to Titan.
SECTION E TRADEMARK PROTECTION.
E(1) Trademark Uses Inure to Titan's Benefit. All trademark uses of the
Trademarks and other Intellectual Property by the Licensee shall inure to the
benefit of Titan, which shall own all trademarks and trademark rights created by
such uses. the Licensee hereby assigns and transfers to Titan all trademarks and
trademark rights created by such uses of the Trademarks and other Intellectual
Property, together with the goodwill of the business in connection with which
such trademarks are sued.
E(2) Trademark Registrations. Titan shall have the right, but not the
obligation, to file in the appropriate offices of countries of the Territory, at
its own expense, trademark applications relating to the use or proposed use by
the Licensee of any of the Trademarks and any other Intellectual Property in
connection with the Licensed Products, such filings to be made in the name of
Titan.
E(3) Records Relative to Trademark Uses. The Licensee shall keep
appropriate records (including copies of pertinent invoices and correspondence)
relating to the dates when each of the Licensed Products is first placed on sale
or sold in each country of the Territory, and the dates of first use in each
country of each different element of the Intellectual Property on the Licensed
Products and Advertising Materials, If requested to do so by Titan, the Licensee
agrees to supply Titan with samples of the trademark usages in question and
other information which will enable Titan to complete and obtain trademark
applications or registrations, or to valuable or oppose any trademark
applications, registrations, or uses of other parties.
E(4) Registered User Laws. As to those countries which require applications
to register the Licensee as a registered user of a Trademark or Trademarks or
other element of the Intellectual Property used on or in connection with the
Licensed Products or which require the recordation of this Agreement, the
Licensee agrees to execute and deliver to Titan such documents as may be
necessary and as are furnished by Titan for such purposes.
E(5) Trademark Notices. The Licensee agrees to affix or to cause its
authorized manufacturing sources to affix to the Licensed Products and to the
Advertising Materials such trademark notice as may be supplied by Titan.
E(6) No Use of Initials WWF. The Licensee agrees that it will not use the
initials WWF in block letters on or in connection with any Advertising Materials
or Licensed Products.
SECTION F COPYRIGHT PROVISIONS
F(1) Copyright Notices. The authorization of Titan to the Licensee to make
public distribution of the Licensed Products and Advertising Materials is
expressly conditioned upon the following agreement of the Licensee. The Licensee
agrees to place on all Licensed Products and on all Advertising Materials the
copyright notice or notices in the name of Titan specified in writing by Titan.
F(2) Assignment by Licensee. The Licensee hereby sells, assigns, and
transfers to Titan its entire, worldwide right, title, and interest in and to
all "new works" or "derivative works" heretofore or hereafter created using the
Intellectual Property, including, but not limited to, the copyrights thereon. If
parties who are not
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employees of the Licensee living in the United States make or have made any
contribution to the creation of a "new work", so that such parties might be
deemed to be "authors" of such "new work" as that term is used in present or
future United States copyright statutes, the Licensee agrees to obtain from such
parties a comparable full assignment of rights so that the foregoing assignment
by the Licensee vests in Titan full rights in the "new work", free of any
claims, interests, or rights of other parties. The Licensee agrees not to permit
any of its employees to obtain or reserve by oral or written employment
agreements any rights as "authors" of such "new works". At Titan's request, the
Licensee agrees to furnish Titan with full information concerning the creation
of "new works" and with copies of assignments of rights obtained form other
parties.
SECTION G INDEMNIFICATIONS; PRODUCT LIABILITY INSURANCE
G(1) Licensee's Indemnification. The Licensee agrees to indemnify and hold
Titan harmless from any and all claims (and liabilities, judgments, penalties,
losses, costs, damages, and expenses resulting therefrom, including reasonable
attorneys' fees but excluding lost profits) made by third parties against Titan
arising by reason of or in connection with any act under or in violation of this
Agreement by the Licensee, its subsidiaries, manufacturers, distributors, or
other persons, or the employees or agents of any of the foregoing or of the
Licensee, including, but not limited to, the manufacture, distribution,
exploitation, advertising, sale, or use of the Licensed Products by any of them,
but excluding any claims based solely upon the use of the Intellectual Property
by the Licensee in strict accordance with the terms of this Agreement.
G(2) Titan's Indemnification. Titan agrees to indemnify and hold the
Licensee, its directors, officers, employees and agents harmless from any and
all claims (and liabilities, judgments, penalties, losses, costs, damages, and
expenses resulting therefrom, including reasonable attorneys' fees, but
excluding lost profits) made by third parties against the Licensee asserting
rights in one or more elements of the Intellectual Property and based solely
upon the use of the Intellectual Property by the Licensee in strict accordance
with the terms of this Agreement.
G(3) Claims Procedures. With respect to any claims falling within the scope
of the foregoing indemnifications: (a) each party agrees promptly to notify the
other of and keep the other fully advised with respect to such claims and the
progress of any suits in which the other party is not participating; (b) each
party shall have the right to assume, at its sole expense, the defense of a
claim or suit made or filed against the other party; (c) each party shall have
the right to participate, at its sole expense, in any suit instituted against it
and to approve any attorneys selected by the other party to defend it, which
approval shall not be unreasonably withheld or delayed; and (d) a party assuming
the defense of a claim or suit against the other party shall not settle such
claim or suit without the prior written approval of the other party, which
approval shall not be unreasonably withheld or delayed.
G(4) Product Liability Insurance. the Licensee agrees to obtain and
maintain during the term of this Agreement, at its own expense, product
liability insurance providing protection (at a minimum, in the amount of
$1,000,000 per occurrence/$2,000,000 annual aggregate) applicable to any claims,
liabilities, damages, costs or expenses arising out of any defects or alleged
defects in the Licensed Products. Such insurance shall include coverage of
Titan, its directors, officers, agents, employees, assignees, and successors.
Within 30 days after execution of this Agreement by Titan, the Licensee shall
cause the insurance company issuing such policy to issue a certificate to Titan
confirming that such policy has been issued and is in full force and effect and
provides coverage of Titan as required by this Section G(4), and also confirming
that before any cancellation, modification, or reduction in coverage of such
policy, the insurance company shall give Titan 30 days prior written notice of
such proposed cancellation, modification, or reduction.
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SECTION H RESERVATION OF RIGHTS.
All rights in and to the Intellectual Property (including premium rights in
the Licensed Products) are retained by Titan for its own use, except for the
specific rights which are granted to the Licensee under this Agreement. Titan
reserves the right to use, and to license other parties to use, the Intellectual
Property in the Territory for any purpose Titan may determinate.
SECTION I INFRINGEMENTS; CLAIMS.
I(1) Infringements. When the Licensee learns that a party is making
unauthorized uses of the Intellectual Property, the Licensee agrees promptly to
give Titan written notice giving full information with respect to the actions of
such party. The Licensee agrees not to make any demands or claims, bring suit,
effect any settlements, or take any other action against such party without the
prior written consent of Titan. The Licensee agrees to cooperate with Titan, at
no out-of-pocket expense to the Licensee, in connection with any action taken by
Titan to terminate infringements.
I(2) Claims. If claims or suits are made against Titan or the Licensee by a
party asserting the ownership of rights in a name or design which is the same as
or similar to one of the elements of the Intellectual Property, and asserting
further that the use of a particular element of the Intellectual Property by the
Licensee infringes the right of such party, or if the parties learn that another
party has or claims rights in a trademark, name, or design which would or might
conflict with the proposed or actual use of an element of the Intellectual
Property by the Licensee, Titan and the Licensee agree in any such cast to
consult with each other on a suitable course of action. In no event shall the
Licensee have the right, without the prior written consent of Titan, to
acknowledge the validity of the claim of such party, to obtain or seek a license
from such party, or to take any other action which might impair the ability of
Titan to contest the claim of such party if Titan so elects. The Licensee agrees
at the request of Titan to make reasonable modifications requested by Titan in
the Licensee's use of the element of the Intellectual Property in question or to
discontinue use of such element in the country of the Territory in question on
the particular Licensed Product or Licensed Products which are involved, if
Titan, in its sole discretion, reasonably exercised, determines that such action
is necessary or desirable to resolve or settle the claim or suit or eliminate or
reduce the threat of a claim or suit by such party. If this event should occur,
the Licensee will have the right to negotiate a reduction in the Guaranteed
Royalty Amount due under paragraph 4(c) of this Agreement. Titan shall have the
right to participate fully at its own expense in the defense of any claim or
suit instituted against the Licensee with respect to the use by the Licensee of
an element of the Intellectual Property.
SECTION J NO SUBLICENSING OR RIGHTS; AGREEMENTS WITH MANUFACTURERS.
J(1) Sublicensing. The Licensee shall not have the right to sublicense any
of the rights granted to it under this Agreement except to a wholly owned
subsidiary with the written approval of Titan.
J(2) Agreements with Manufacturers. The Licensee shall have the right to
arrange with another party to manufacture the Licensed Products or components of
the Licensed Products for exclusive sale, use, and distribution by the Licensee.
the Licensee agrees to enter into a written agreement with all such
manufacturers, and agrees to incorporate into such written agreements all of the
provisions, for the protection of the rights of Titan, which are contained in
the form manufacturer agreement which is available from Titan. The Licensee
further agrees to furnish Titan within 30 days of their execution copies of all
agreement with such manufacturers.
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J(3) Enforcement of Manufacturer Agreements. The Licensee agrees strictly
to enforce against its manufacturers all of the provisions which are required to
be included in such agreements for the protection of Titan, as provided in
Section J(2); to advise Titan of any violations thereof by manufacturers, and of
corrective actions taken by the Licensee and the results thereof; and at the
request of Titan to terminate such an agreement with any manufacturer which
violates any of such provisions for the protection of Titan. If the Licensee
fails to exercise such termination rights by giving written notice to the
manufacturer within 20 days after being requested to do so in writing by Titan,
the Licensee appoints Titan its irrevocable attorney-in-fact to send a notice of
termination in the name of the Licensee to the manufacturer for the purpose of
terminating the agreement or any specific rights of the party under such
agreement.
SECTION K BREACH AND TERMINATION.
K(1) Immediate Right of Termination. Titan shall have the right to
terminate this Agreement immediately, by giving written notice to the Licensee,
in any of the following situations:
(a) If the Licensee make, sells, offers for sale, or distributes or uses
any Licensed Product or Advertising Material without having the prior written
approval of Titan, as required by Section A, or makes any use of the
Intellectual Property not authorized under this Agreement.
(b) If the Licensee Fails to make any Advance Royalty Amount payment or
Guaranteed Royalty Amount payment by the date such payment is required under the
provisions of paragraph 4, or if the Licensee fails to submit royalty statements
and/or royalty payments to Titan during the time period specified in Section
C(2).
(c) If the Licensee becomes subject to any voluntary or involuntary order
of any governmental agency involving the recall of any of the Licensed Products
because of safety, health, or other hazards or risks to the public.
(d) If, other than under Title 11 of the United States Code, the Licensee
becomes subject to any voluntary or involuntary insolvency, cession, bankruptcy,
or similar proceedings, or an assignment for the benefit of creditors is made by
the Licensee, or an agreement between the Licensee and its creditors generally
is entered into providing for extension or composition of debt, or a receiver is
appointed to administer the assets of the Licensee, or the assets of the
Licensee are liquidated, or any distress, execution, or attachment is levied on
such of its manufacturing or other equipment as is used in the production and
distribution of the Licensed Products and remains undischarged for a period of
30 days.
(e) If the Licensee breaches any of the provisions of Section J.
(f) If the Licensee breaches any of the provisions of Section L(1).
K(2) Assumption and Rejection Pursuant to United States Bankruptcy Code.
After any order for relief under the Bankruptcy Code is entered against the
Licensee, the Licensee must assume or reject this Agreement within 60 days after
the order for relief is entered. If the Licensee does not assume this Agreement
within such 60-day period, Titan may, at its sole option, terminate this
Agreement immediately by giving written notice to the Licensee, without further
liability on the part of Titan.
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K(3) Curable Breaches. If either party breaches any of the terms and
provisions of this Agreement, other than those specified in Section K(1), and
the party involved fails to cure the breach within 30 days after receiving
written notice by certified or registered mail from the other party specifying
the particulars of the breach, the nondefaulting party shall have the right to
terminate this Agreement by giving written notice to the defaulting party by
registered or certified mail.
K(4) Effect of Termination. Termination of this Agreement under the
provisions of this Section K or the provisions set forth elsewhere in this
Agreement shall be without prejudice to any rights or claims which either party
may otherwise have against the other party. Upon the termination of this
Agreement, all royalties on sales previously made shall become immediately due
and payable to Titan. Upon the termination of this Agreement under the
provisions of Section K(1)(d) or K(2) of this Agreement, the Licensee, its
receivers, trustees, assignees, or other representatives shall have no right to
sell, exploit, or in any way deal with the Licensed Products, the Advertising
Materials, or the Intellectual Property, except with the special written consent
and instructions of Titan.
K(5) Discontinuance of Use of Intellectual Property, Etc. Subject to the
provisions of Section K(6), upon the expiration or earlier termination of this
Agreement, the Licensee agrees immediately and permanently to discontinue
manufacturing, selling, advertising, distributing, and using the Licensed
Products and Advertising Materials; immediately and permanently to discontinue
using the Intellectual Property: immediately to destroy any films, molds, dies,
patterns, or similar items from which the Licensed Products and Advertising
Materials were made, where any element of the Intellectual Property is an
integral part thereof; and immediately to terminate all agreements with
manufacturers, distributors, and others which related to the manufacture, sale,
distribution, and use of the Licensed Products.
K(6) Disposition of Inventory upon Expiration. Notwithstanding the
provisions of Section K(5), if this Agreement expires in accordance with its
terms, and is not terminated for cause by Titan, the provisions of this Section
K(6) shall apply. If the Licensee delivers to Titan on or before the date 30
days prior to the expiration of this Agreement a written inventory listing, on a
Licensed Product-by-Licensed Product basis, all Licensed Products in the
Licensee's possession, custody, or control as of the date of such inventory, the
Licensee shall have the non-exclusive right to sell any Licensed Products listed
on such inventory for a period of 120 days immediately following such
expiration, subject to the payment of royalties to Titan on any such sales in
accordance with the terms of this Agreement. Titan shall have the right (but not
the obligation) to buy any or all of the Licensed Products listed on such
inventory at the Licensee's cost of manufacture. The sell-off right granted the
Licensee under this Section K(6) shall in no event apply to a quantity of any
Licensed Product exceeding 50% of the Licensee's average quarterly unit sales of
such Licensed Product during the one-year period immediately preceding the
expiration of this Agreement.
SECTION L MISCELLANEOUS PROVISIONS.
L(1) Restriction on Assignments. Without the prior written consent of
Titan, the Licensee shall not directly or indirectly assign, transfer,
sublicense, or encumber any of its rights under this Agreement. This Agreement
shall be binding upon and inure to the benefit of the successors and assigns of
Titan.
L(2) Parties Not Joint Venturers. Nothing contained in this Agreement shall
be construed so as to make the parties partners or joint venturers or to permit
the Licensee to bind Titan to any agreement or purport to act on behalf of Titan
in any respect.
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L(3) Modifications of Agreement; Remedies. No waiver or modification of any
of the terms of this Agreement shall be valid unless in writing, signed by both
parties. Failure by either party to enforce any rights under this Agreement
shall not be construed as a waiver of such rights, and a waiver by either party
of a default in one or more instances shall not be construed as a continuing
waiver or as a waiver in other instances.
L(4) Invalidity of Separable Provisions. If any term or provision of this
Agreement is for any reason held to be invalid, such invalidity shall not affect
any other term or provision, and this Agreement shall be interpreted as if such
term or provision has never been contained in this Agreement.
L(5) Notices. All notices to be given under this Agreement (which shall be
in writing) shall be given at the respective addresses of the parties as set
forth on page 1, unless notification of a change of address is given in writing.
The date of mailing shall be deemed to be the date the notice is given.
L(6) Headings. the paragraph and section headings of this Agreement are
inserted only for convenience and shall not be construed as a part of this
Agreement.
L(7) Entire Understanding. This Agreement contains the entire understanding
of the parties with respect to its subject matter. Any and all representations
or agreements by any agent or representative of either party to the contrary
shall be of no effect.
L(8) Governing Law. This Agreement shall be construed and governed in
accordance with the laws of the State of Connecticut, regardless of the place or
places of its physical execution and performance.
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