RETAIL LICENSE - EMEA
WARNER BROS. CONSUMER PRODUCTS
#68116
LICENSE AGREEMENT made January 1, 1998 by and between WARNER BROS., A DIVISION
OF TIME WARNER ENTERTAINMENT COMPANY L.P., c/o Warner Bros. Consumer Products, a
Division of Time Warner Entertainment Company L.P., whose address is 0000 Xxxxxx
Xxxx., Xxxxxxx, XX 00000 (hereinafter referred to as "LICENSOR") and PLAY-BY-
PLAY TOYS & NOVELTIES, INC., whose address is 0000 Xxxxxxx, Xxx Xxxxxxx, XX
00000-0000, c/o 0000 0xx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, Attention: Xxxx
Xxxxxxx (hereinafter referred to as "LICENSEE").
W I T N E S S E T H :
The parties hereto mutually agree as follows:
1. DEFINITIONS: As used in this Agreement, the following terms shall have the
following respective meanings:
(a) "LICENSED PROPERTY": As defined in Schedules A-1 through C-13 as set
forth below, attached hereto and incorporated by reference:
(i) PROPERTIES A (ALL ARTICLES):
Schedule A-1: Looney Tunes
Schedule A-2: Animaniacs
(ii) PROPERTIES B (ALL ARTICLES):
Schedule B-3: Scooby Doo
Schedule B-4: Xxx & Xxxxx
Schedule B-5: The Flintstones
Schedule B-6: Yogi Bear
Schedule B-7: Top Cat
Schedule B-8: The Jetsons
Schedule B-9: Wacky Races
In addition, the Licensed Property shall include use of the
Cartoon Network Logo, to be used only in conjunction with one
(1) or more Properties B and subject to Licensor's prior
written approval on a case-by-case basis. It is understood and
agreed that no additional royalties shall be paid to Licensor
for use of the Cartoon Network Logo as set forth herein.
(iii) PROPERTIES C (ARTICLES 4 ONLY):
Schedule C-10: Batman Animated Series/Comics
Schedule C-11: Superman Animated Series/Comics/
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"Superman V" Motion Picture
Schedule C-12: Baby Looney Tunes
Schedule C-13: Quest for Camelot
(b) "TERRITORY": The regions of Europe, Middle East and Africa, as
defined on the attached Exhibit 3.
(c) "LICENSED PRODUCT(S)":
(i) ARTICLES 1 "STANDARD PLUSH":
*REDACTED*
(ii) ARTICLES 2 "FEATURE PLUSH":
*REDACTED*
(iii) ARTICLES 3 "OTHER PLUSH":
*REDACTED*
(iv) ARTICLES 4 "HOUSEWARES":
*REDACTED*
Articles 1, 2, 3 and 4 as defined above shall be referred to
separately and collectively herein as the "Licensed Product(s)."
*REDACTED*
(d) "GUARANTEED CONSIDERATION":
(i) The sum of *REDACTED* DOLLARS ($USD *REDACTED*) which shall be
allocated among the Licensed Properties, the Licensed Products
and the Distribution Channels and payable according to the
payment schedules set forth in Schedules A-1 through D-15.
(ii) In addition to the foregoing, the Guaranteed Consideration
shall also include unrecouped balances from Existing Licenses
(as defined below) in the amount of *REDACTED* DOLLARS
($*REDACTED*) (the "Unrecouped Balances"), which shall be
allocated among the Licensed Properties and the Articles as
follows:
*REDACTED*
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The Royalties payable by Licensee hereunder shall offset the
amounts set forth above for such Property and Article.
Licensor acknowledges that the Unrecouped Balances have been
paid by Licensee.
(iii) It is hereby understood and agreed that:
1. Licensee shall provide Licensor a security instrument in
the form of an irrevocable insurance bond in the amount
of *REDACTED* DOLLARS ($*REDACTED) (the "Security
Instrument") of which (a) *REDACTED* Dollars
($*REDACTED*) shall be security against the Guaranteed
Consideration for this Agreement and (b) *REDACTED*
Dollars ($*REDACTED*) shall be security against the
Guaranteed Consideration for License Agreement #90248
between Licensor and Licensee for the region of Latin
America (including all Guaranteed Consideration amounts
set forth on Schedules A through D-15 attached thereto),
it being expressly understood that there shall be only
one (1) Security Instrument for the two (2) Agreements.
The Security Instrument shall be in a form acceptable to
Licensor and shall be issued from an institution
acceptable to Licensor, such acceptances not to be
unreasonably withheld. Delivery of the Security
Instrument to Licensor shall be no later than thirty
(30) days after Licensee's execution of this Agreement.
The Security Instrument shall have a term concurrent
with the Term of this Agreement and shall be
self-liquidating to the amount of the Guaranteed
Consideration remaining at the conclusion of the Term.
The Security Instrument shall be reduced during the Term
on a dollar for dollar basis as Licensee makes payments
during the Term. Upon payment to Licensor of the total
amount of the Guaranteed Consideration, the Security
Instrument shall terminate;
2. All payments hereunder shall be made in U.S. Dollars;
and
*REDACTED*
(e) "TERM": January 1, 1998 through *REDACTED*.
(f) "MARKETING DATES": "Marketing Date" shall mean the latest date the
Licensed Products shall be made available to the trade or to the
public, whichever applies, as set forth for each Article in Schedule
A, Chart #1.
(g) "ROYALTY RATE": Licensee shall pay to Licensor the following sums as
applicable (the "Royalties"):
*REDACTED*
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(h) "DISTRIBUTION CHANNELS": Licensee may distribute the Licensed
Products through the Distribution Channels (as defined below)
applicable to each such Licensed Product as set forth below:
*REDACTED*
The Distribution Channels shall be defined as follows:
*REDACTED*
(i) "AUTHORIZED DISTRIBUTORS": Licensee and Licensor agree that Licensee
shall be permitted to utilize third-party distributors within
specific countries in the Territory ("Authorized Distributors"),
which shall have the right, subject to Paragraph 1.(j) below, to
import, manufacture, distribute and/or sell Licensed Products,
subject to Licensor's prior written approval in each case. Licensee
agrees that with each request for such approval it shall submit a
comprehensive annual business plan relating to the distribution and
sales of the Licensed Products. No approval, rejection and/or
modification of such annual business plan required by Licensor shall
constitute a guarantee for economic benefit to Licensee and/or the
Authorized Distributor or shall constitute liability on the part of
Licensor for any aspect of Licensee's business.
(j) "EXISTING LICENSES": It is agreed that the existing licenses between
Licensor and/or its affiliated companies and Licensee and/or its
subsidiary companies as set forth in Exhibit 5 attached hereto shall
be terminated effective December 31, 1997, including any sell-off
periods thereunder, and that Unrecouped Balances shall be payable
under this Agreement as set forth in Paragraph 1.(d)(ii); however,
Licensee agrees that such termination is contingent upon Licensee's
execution of this Agreement.
(k) "THIRD PARTY LICENSES": Licensee acknowledges that all rights
hereunder are subject to the rights of preexisting licensees under
third party licenses as listed in Exhibit 4 hereto (the "Third Party
Licenses") , including but not limited to such pre-existing
licensees which have been granted distribution rights in parts of
the Territory for products identical to Articles 1, 2 and 3.
Licensee agrees that it and its affiliated companies shall not
distribute and sell such Articles 1, 2 and 3 in such parts of the
Territory, subject to the terms of Paragraph 10(c) hereof; however
Licensee shall have the right to negotiate with such licensees with
the purpose of acting as the manufacturer for such licensees.
(1) "RECAPTURE RIGHTS": In the event Licensee fails to market any of the
Licensed Products and/or any of the countries in the Territory
and/or any of the Licensed Properties and or any of the Distribution
Channels three (3) months after the Marketing Date, Licensor shall
have the right to recapture such Licensed Product, country, Licensed
Property and/or Distribution Channel from the rights granted
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under this Agreement without obligation to Licensee. Such recapture
may take place on a Property-by-Property, Licensed
Product-by-Licensed Product, country-by-country and/or Distribution
Channel-by-Distribution Channel basis.
(m) "LICENSEE'S COMMITMENTS":
(i) PROMOTIONAL COMMITMENT: Licensee agrees that throughout the
Term it shall spend a minimum of *REDACTED* percent
(*REDACTED*%) of its total Net Sales in each of the countries
in the Territory on promotional and advertising activities in
each such country (the "Promotional Commitment"). The
Promotional Commitment shall include, as a minimum, television
advertising for Articles 2 in the following countries:
*REDACTED*, with a total minimum value of *REDACTED* percent
(*REDACTED*%) of the total Promotional Commitment for each
country. Monies spent by Licensee for Trade Fairs (as defined
below) shall not be taken into account to determine the
Promotional Commitment. Licensee shall submit reports on a
quarterly basis as set forth in Paragraph 5.(a) with respect
to the Promotional Commitment and Licensor shall have the
right to inspect and/or audit Licensee's books and records
with respect to the Promotional Commitment under the terms and
conditions of Paragraph 6 hereof.
(ii) STAFFING COMMITMENT: Licensee agrees that it shall:
1. appoint dedicated sales and marketing managers to
oversee the sales and marketing of the Licensed Products
in the Territory; and
2. *REDACTED*
3. appoint dedicated staff to manage and enhance product
development and production control (as such terms are
commonly understood in the industry) of the Licensed
Products.
(iii) TRADE FAIRS: Licensee shall present the Licensed Products at
such trade fairs as are submitted to and approved by Licensor
prior to the Marketing Date (the "Trade Fairs"). Licensee's
affiliates and/or Authorized Distributors shall have sections
of its booth solely dedicated to the Licensed Properties and
the Licensed Products at the Trade Fairs, with the exception
of Trade Fairs in Developing Markets, where Licensee shall
dedicate sections of its booth to the Licensed Properties and
the Licensed Products together with other products.
"Developing Markets" shall be such countries as are submitted
to and approved by Licensor for such definition prior to the
Marketing Date.
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(n) LICENSOR'S STAFFING COMMITMENT: Licensor shall designate an employee
with primary responsibility for the administration of this License
Agreement.
2. GRANT OF LICENSE:
(a) Subject to the restrictions, limitations, reservations and
conditions and Licensor's approval rights set forth in this
Agreement, and to pre-existing Third Party Licenses in the
Territory, Licensor hereby grants to Licensee and Licensee hereby
accepts for the Term of this Agreement, a license to utilize the
Licensed Property solely on or in connection with the manufacture,
distribution and sale of the Licensed Products as specified above
for the ultimate distribution to the public throughout the Territory
*REDACTED*.
(b) Without limiting any other approval rights of Licensor as contained
herein, no television commercials may be utilized under this
Agreement without the specific prior written approval of Licensor,
such approval not to be unreasonably withheld.
3. RESERVATION OF RIGHTS; PREMIUMS:
(a) Licensor reserves all rights not expressly conveyed to Licensee
hereunder, and Licensor may grant licenses to others to use the
Licensed Property, artwork and textual matter in connection with
other uses, services and products without limitation.
(b) Notwithstanding anything to the contrary stated herein, Licensor
specifically reserves the right, without limitation throughout the
world, to itself use, or license any third party(s) of its choice to
use the Licensed Property for the manufacture, distribution and sale
of products similar or identical to those licensed herein in
Paragraph 1. (c) above for sale through any catalogue(s) produced or
distributed by or on behalf of Licensor or its affiliated companies,
or for sale or distribution in any theaters or arenas, or for sale
or distribution in any retail stores operated by or on behalf of
Licensor, its affiliated companies or franchisees, or for sale or
distribution in any theme/amusement parks operated by or on behalf
of Licensor and its affiliated companies, including without
limitation, the Six Flags and Movie World parks. In addition,
Licensor reserves the right to allow Six Flags Corporation and Movie
World to manufacture (or have manufactured by a third party)
products similar or identical to those licensed herein for
distribution or sale in theme and/or amusement parks owned or
operated by both Six Flags Corporation and Movie World. Further,
Licensor reserves the right to use, or license others to use, and/or
manufacture products similar or identical to those licensed herein
for use as premiums.
(c) Licensee specifically understands and agrees that no rights are
granted herein with respect to the Warner Bros. "shield" logo or
trademark, or any other trademark(s), logo (s) or copyrights owned
by Licensor other than those specifically set forth
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above in the Licensed Property, it being understood that all rights
in and to said properties are reserved exclusively to Licensor for
use and/or licensing as it deems appropriate to third party(s) of
its choice.
(d) Licensee agrees that it will not use, or knowingly permit the use
of, and will exercise due care that its customers likewise will
refrain from the use of, the Licensed Products as a premium, except
with the prior written consent of Licensor, and that it shall not
actively solicit orders for such use of the Licensed Products.
Notwithstanding the foregoing; Licensor shall notify Licensee of any
opportunities which may arise during the Term for Licensee to bid on
and/or supply a third party promotional partner of Licensor's with
Licensed Products for premium use within the Territory and Licensee
shall have the right to do so hereunder. Subject to Licensor's prior
written approval as aforesaid, Licensee shall pay to Licensor a sum
equal to TWELVE PERCENT (12%) of all premium sales. For purposes of
this paragraph, the term "premium" shall be defined as including,
but not necessarily limited to, combination sales, free or
self-liquidating items offered to the public in conjunction with the
sale or promotion of a product or service, including traffic
building or continuity visits by the consumer/customer, or any
similar scheme or device, the prime intent of which is to use the
Licensed Products in such a way as to promote, publicize and or sell
the products, services or business image of the user of such item.
4. CONSIDERATION:
(a) The Guaranteed Consideration paid by Licensee as set forth above
shall be applied against such Royalties as are, or have become, due
to Licensor. No part of such Guaranteed Consideration shall be
repayable to Licensee. Royalties earned in excess of the Guaranteed
Consideration applicable to the Term hereof shall not offset any
Guaranteed Consideration required in respect of the succeeding
renewal term (if any); likewise, Royalties earned in excess of the
Guaranteed Consideration applicable to the renewal term (if any)
shall not offset any Guaranteed Consideration applicable to any
prior term.
(b) ROYALTY PAYMENTS: Licensee shall pay to Licensor a sum equal to the
Royalty Rate as set forth above of all Net Sales by Licensee of the
Licensed Products covered by this Agreement. The term "Net Sales"
herein shall mean the gross invoice price billed customers, less
(i) actual quantity discounts and actual returns, but no
deductions shall be made for uncollectible accounts and
deductions for actual returns may not exceed five percent (5%)
of total sales; and
(ii) any sales, excise or value added taxes which are separately
stated and which are required to be collected from customers
and which are payable to tax authorities. No deduction shall
be taken in computing Net Sales for
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taxes not described immediately above, including but not
limited to income taxes, withholding taxes or remittance
taxes.
No costs incurred in the manufacture, sale, distribution,
advertisement, or exploitation of the Licensed Products shall be
deducted from any Royalties payable by Licensee.
(c) Royalties shall be reported and paid as set forth in Paragraph
5.(a), except to the extent offset by Guaranteed Consideration
theretofore remitted. It is a material term and condition of this
Agreement that Royalty reports shall be broken down by (1) Licensed
Product, (2) country, (3) Licensed Property and (4) Distribution
Channel. In the event Licensee fails to do so, Licensor shall have
the right to terminate this Agreement. Licensor shall also have the
right to require Licensee to report on a retailer-by-retailer basis.
Without prejudice to any other rights and remedies that Licensor may
have, it is agreed that any Royalties due by Licensee accruing from
sales of the Licensed Products outside the Territory and/or outside
the applicable Distribution Channels shall not be offset against the
Guaranteed Consideration.
(d) Licensee shall not have the right to cross-collateralize Royalties
earned (1) between the Licensed Properties, (2) between the
Distribution Channels, or (3) between Articles 1, 2 and 3
collectively and Articles 4 (although Licensee may cross-
collateralize between Articles 1, 2 and 3) ; however, Licensee shall
have the right to set off accrued Royalties for a certain Licensed
Property which exceed the portion of the Guaranteed Consideration
allocated to such Licensed Property against the Unallocated Portion
of the Guaranteed Consideration (as set forth in Schedule A, Chart
#1 and in Schedules D-14 and D-15 attached hereto). Royalties so
accrued under any Licensed Property A or Licensed Property C may
only be offset against the Unallocated Portion of the Guaranteed
Consideration for Licensed Properties A and C; and Royalties so
accrued under any Licensed Property B may only be offset against the
Unallocated Portion of the Guaranteed Consideration for Licensed
Properties B.
(e) Licensee will pay all taxes, customs, duties, assessments, excise
except as provided in Subparagraph 4.(b)(ii) , and other charges
levied upon the importation of or assessed against the Licensed
Product under this Agreement, as well as all Licensee's costs of
doing business and Licensor shall have no liability therefor.
(f) In the event Licensee has earned Royalties in currencies, other than
in U.S. Dollars, then Licensee shall convert said amounts into U.S.
Dollars based upon the exchange rate published by the Wall Street
Journal as of the fifteenth (15th) day of the applicable month or if
such day shall fall on a non-business day then as of the first
business day following said fifteenth (15th) day.
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5. PERIODIC STATEMENTS:
(a) Within thirty (30) days after the initial shipment of the Licensed
Products and promptly on the thirtieth (30th) day of every quarter
thereafter, Licensee shall furnish to Licensor complete and accurate
statements certified to be accurate by Licensee, or if a
corporation, by an officer of Licensee, broken down into the
categories set forth in Paragraph 4. (c) and showing with respect to
all Licensed Products distributed and sold by Licensee during the
preceding calendar quarter the (i) number of units; (ii) country in
which manufactured, sold and/or to which shipped; (iii) Description
(as such term is defined below) of the Licensed Products; (iv) gross
sales price; and (v) itemized deductions from gross sales price, and
net sales price together with any returns made during the preceding
calendar quarter. Such statements shall be furnished to Licensor
whether or not any of the Licensed Products have been sold during
calendar quarters to which such statements refer. Licensee shall
also include with each quarterly statement a statement which shows
the amounts spent during such quarter with respect to the
Promotional Commitment as defined in Paragraph 1. (m) (i). Receipt
or acceptance by Licensor of any of the statements furnished
pursuant to this Agreement or of any sums paid hereunder shall not
preclude Licensor from questioning the correctness thereof at any
time, and in the event that any inconsistencies or mistakes are
discovered in such statements or payments, they shall immediately be
rectified and the appropriate payments made by Licensee. Upon demand
of Licensor, Licensee shall at its own expense, but not more than
once in any twelve (12) month period, furnish to Licensor a detailed
statement by an independent certified public accountant showing the
(i) number of units; (ii) country in which manufactured, sold and/or
to which shipped; (iii) Description of the Licensed Products; (iv)
gross sales price; and (v) itemized deductions from gross sales
price and net sales price of the Licensed Products covered by this
Agreement distributed and/or sold by Licensee up to and including
the date upon which Licensor has made such demand. For purposes of
this subparagraph, the term "Description" shall mean a detailed
description of the Licensed Products including the nature of each of
the Licensed Products, any and all names and likenesses, whether
live actors or animated characters, from the Licensed Property
utilized on the Licensed Products and/or any related packaging
and/or wrapping material, and any other components of the Licensed
Property utilized on the Licensed Products and/or any related
packaging and/or wrapping material. In the event Licensor is
responsible for the payment of any additional third party
participation based on Licensee not reporting by character name and
likeness as provided above, Licensee shall be responsible for
reimbursing Licensor for the full amount of all such third party
claims, including without limitation, the participation itself,
interest, audit and attorneys' fees. Licensee understands and agrees
that it is a material term and condition of this Agreement that
Licensee include the Description on all statements. In the event
Licensee fails to do so, Licensor shall have the right to terminate
this Agreement, in accordance with the provisions of Paragraph 14
herein.
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(b) The statements and payments required hereunder shall be delivered to:
WARNER BROS. CONSUMER PRODUCTS
0000 Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Attention: Accounting Manager, International Accounting
with a copy to:
WARNER BROS. CONSUMER PRODUCTS (U.K.) LTD.
00 Xxxxxxx Xxxxxx
Xxxxxx X0X 0XX
Xxxxxxx
Attention: Director of Operations and Planning
(c) Any payments which are made to Licensor hereunder after the due date
required therefore, shall bear interest at the then current prime
rate plus six percent (6%) (or the maximum rate permissible by law,
if less than the current prime rate) from the date such payments are
due to, the date of payment. Licensor's right hereunder to interest
on late payments shall not preclude Licensor from exercising any of
its other rights or remedies pursuant to this Agreement or otherwise
with regard to Licensee's failure to make timely remittances.
(d) Any income taxes, withholding taxes, other taxes and/or fees which
local law requires to be levied against Licensor's Royalty shall be
paid by Licensee on behalf of Licensor within the period of time
required by local law, provided that Licensee shall not make such
payment if Licensor has advised Licensee in writing not to do so,
and has taken appropriate legal action to contest the propriety of
such taxes and/or fees. In such event, Licensor shall indemnify
Licensee against any interest charges or penalties with respect to
such taxes. Any such taxes or fees which Licensee pays on behalf of
Licensor shall be deducted from the Royalty otherwise payable to
Licensor. The original receipt (or a bona fide copy thereof) for
such taxes as may be deducted from Royalties shall accompany the
statements described in Paragraph 5. (a) above for the accounting
period in which such deduction is made. Licensee shall timely file
all necessary tax returns or other government documents on
Licensor's behalf, as required by local law, at Licensee's cost.
(e) Licensee and Licensor agree that each calendar quarter during the
Term they shall mutually review Licensee's performance hereunder.
Such review shall take place in a format to be submitted by licensee
and approved by Licensor prior to the Marketing Date.
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6. BOOKS AND RECORDS:
(a) Licensee shall keep, maintain and preserve (in Licensee's principal
place of business) for at least two (2) years following termination
or expiration of the Term of this Agreement or any renewal(s) hereof
(if applicable), complete and accurate records of accounts
including, without limitation, purchase orders, inventory records,
invoices, correspondence, banking and financial and other records
pertaining to the various items required to be submitted by Licensee
as well as to ensure Licensee's compliance with its obligations
hereunder, including without limitation (i) Licensee's Commitments
as set forth in Paragraph 1.(m)(ii) local laws as required pursuant
to Paragraph 13.(j) hereof and (iii) the terms and conditions of
Paragraph 19. Such records and accounts shall be available for
inspection and audit at any time or times during or after the Term
of this Agreement or any renewal(s) hereof (if applicable) during
reasonable business hours and upon reasonable notice by Licensor or
its nominees. Licensee agrees not to cause or permit any
interference with Licensor or nominees of Licensor in the
performance of their duties. During such inspections and audits,
Licensor shall have the right to take extracts and/or make copies of
Licensee's records as it deems necessary.
(b) The exercise by Licensor in whole or in part, at any time of the
right to audit records and accounts or of any other right herein
granted, or the acceptance by Licensor of any statement or
statements or the receipt and/or deposit by Licensor, of any payment
tendered by or on behalf of Licensee shall be without prejudice to
any rights or remedies of Licensor and such acceptance, receipt
and/or deposit shall not preclude or prevent Licensor from
thereafter disputing the accuracy of any such statement or payment.
(c) If pursuant to its right hereunder Licensor causes an audit and
inspection to be instituted which thereafter discloses a deficiency
between the amount found to be due to Licensor and the amount
actually received or credited to Licensor, then Licensee shall, upon
Licensor's demand, promptly pay the deficiency, together with
interest thereon at the then current prime rate from the date such
amount became due until the date of payment, and, if the deficiency
is more than five percent (5%) of all Royalties paid by Licensee
during the period covered by the audit, then Licensee shall pay the
reasonable costs and expenses of such audit and inspection.
7. INDEMNIFICATIONS:
(a) During the Term, and continuing after the expiration or termination
of this Agreement, Licensor shall indemnify Licensee and shall hold
it harmless from any loss, liability, damage, cost or expense
arising out of any claims or suits which may be brought or made
against Licensee by reason of the breach by Licensor of the
warranties or representations as set forth in Paragraph 12 hereof,
provided that Licensee shall give prompt written notice, and full
cooperation and assistance to
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Licensor relative to any such claim or suit and provided, further,
that Licensor shall have the option to undertake and conduct the
defense of any suit so brought. Licensee shall not, however, be
entitled to recover for lost profits. Licensee shall cooperate fully
in all respects with Licensor in the conduct and defense of said
suit and/or proceedings related thereto.
(b) During the Term, and continuing after the expiration or termination
of this Agreement, Licensee shall indemnify Licensor and shall hold
it harmless from any loss, liability, damage, cost or expense
arising out of any claims or suits which may be brought or made
against Licensor by reason of: (i) any breach of Licensee's
covenants and undertakings hereunder; (ii) any unauthorized use by
Licensee of the Licensed Property; (iii) any use of any trademark,
copyright, design, patent, process, method or device, except for
those uses of the Licensed Property that are specifically approved
by Licensor pursuant to the terms of this Agreement; (iv) Licensee's
non-compliance with any applicable federal, state or local laws or
with any other applicable regulations; and (v) any alleged defects
and/or inherent dangers (whether obvious or hidden) in the Licensed
Products or the use thereof.
(c) With regard to 7(b)(v) above, Licensee agrees to obtain, at its own
expense, product liability insurance providing adequate protection
for Licensor and Licensee against any such claims or suits in
amounts no less than THREE MILLION U.S. DOLLARS ($USD 3,000,000) per
occurrence, combined single limits. Simultaneously with the
execution of this Agreement, Licensee undertakes to submit to
Licensor a fully paid policy or certificate of insurance naming
Licensor as an additional insured party and, requiring that the
insurer shall not terminate or materially modify such policy or
certificate of insurance without written notice to Licensor at least
twenty (20) days in advance thereof. Such insurance and delivery of
the policy or certificate are material obligations of Licensee.
8. ARTWORK; COPYRIGHT AND TRADEMARK NOTICES:
(a) The Licensed Property shall be displayed or used only in such form
and in such manner as has been specifically approved in writing by
Licensor in advance and Licensee undertakes to assure usage of the
trademark(s) and character(s) solely as approved hereunder. Licensee
further agrees and acknowledges that any and all Artwork (defined
below) created, utilized, approved and/or authorized for use
hereunder by Licensor in connection with the Licensed Products or
which otherwise features or includes the Licensed Property shall be
owned in its entirety exclusively by Licensor. "Artwork" as used
herein shall include, without limitation, all pictorial, graphic,
visual, audio, audio-visual, digital, literary, animated, artistic,
dramatic, sculptural, musical or any other type of creations and
applications, whether finished or not, including, but not limited
to, animation, drawings, designs, sketches, images, illustrations,
film, video, electronic, digitized or computerized information,
software, object code, source code, on-line elements,
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music, text, dialogue, stories, visuals, effects, scripts, voice
overs, logos, one-sheets, promotional pieces, packaging, display
materials, printed materials, photographs, interstitials, notes,
shot logs, character profiles and translations, produced by Licensee
or for Licensee, pursuant to this Agreement. Licensor reserves for
itself or its designees all rights to use any and all Artwork
created, utilized and/or approved hereunder without limitation.
(b) (i) Licensee acknowledges that, as between Licensor and
Licensee, the Licensed Property and Artwork and all other
depictions expressions and derivations thereof, and all
copyrights, trademarks and other proprietary rights therein
are owned exclusively by Licensor and Licensee shall have no
interest in or claim thereto, except for the limited right to
use the same pursuant to this Agreement and subject to its
terms and conditions.
(ii) Licensee agrees and acknowledges that any Artwork created by
Licensee or for Licensee hereunder is a "work made for hire"
for Licensor under the U.S. Copyright Act, and any and all
similar provisions of law under other jurisdictions, and that
Licensor is the author of such works for all purposes, and
that Licensor is the exclusive owner of all the rights
comprised in the undivided copyright and all renewals,
extensions and reversions therein, in and to such works in
perpetuity and throughout the universe. Licensee hereby waives
and releases in favor of Licensor all rights (if any) of
"droit moral," rental rights and similar rights in and to the
Artwork (the "Intangible Rights") and agrees that Licensor
shall have the right to revise, condense, abridge, expand,
adapt, change, modify, add to, subtract from, re-title,
re-draw, re-color, or otherwise modify the Artwork, without
the consent of Licensee. Licensee hereby irrevocably grants,
transfers and assigns to Licensor all right, title and
interest, including copyrights, trademark rights, patent
rights and other proprietary rights, it may have in and to the
Artwork, in perpetuity and throughout the universe, and to all
proprietary depictions, expressions or derivations of the
Licensed Property created by or for Licensee. Licensee
acknowledges that Licensor shall have the right to terminate
this Agreement in the event Licensee asserts any rights (other
than those specifically granted pursuant to this Agreement) in
or to the Licensed Property or Artwork.
(iii) Licensee hereby warrants that any and all work created by
Licensee under this Agreement apart from the materials
provided to Licensee by Licensor is and shall be wholly
original with or fully cleared by Licensee and shall not copy
or otherwise infringe the rights of any third parties, and
Licensee hereby indemnifies Licensor and will hold Licensor
harmless from any such claim of infringement or otherwise
involving Licensee's performance hereunder. At the request of
Licensor, Licensee shall execute such form(s) of assignment of
copyright or other papers as Licensor may reasonably request
in order to confirm and vest in Licensor the rights in the
properties
-13- #68116
as provided for herein. In addition, Licensee hereby appoints
Licensor as Licensee's Attorney-in-Fact to take such actions
and to make, sign, execute, acknowledge and deliver all such
documents as may from time to time be necessary to confirm in
Licensor, its successors and assigns, all rights granted
herein. If any third party makes or has made any contribution
to the creation of Artwork authorized for use hereunder,
Licensee agrees to obtain from such party a full confirmation
and assignment of rights so that the foregoing rights shall
vest fully in Licensor, in the form of the Contributor's
Agreement attached hereto as Exhibit 2 and by this reference
made a part hereof, prior to commencing work, ensuring that
all rights in the Artwork and Licensed Property arise in and
are assigned to Licensor. Promptly upon entering into each
such Agreement, Licensee shall give Licensor a copy of such
Agreement. Licensee assumes all responsibility for such
parties and agrees that Licensee shall bear any and all risks
arising out of or relating to the performance of services by
them and to the fulfillment of their obligations under the
Contributor's Agreement.
(iv) Upon expiration of termination of this Agreement for any
reason, or upon demand by Licensor at any time, Licensee shall
promptly deliver to Licensor all Artwork or Licensed Property,
whether finished or not, including drawings, drafts, sketches,
illustrations, screens, data, digital files and information,
copies or other items, information or things created in the
course of preparing the Licensed Property and all materials
provided to Licensee by Licensor hereunder, or, at Licensor's
option and instruction, shall destroy some or all of the
foregoing and shall confirm to Licensor in writing that
Licensee has done so. Licensee shall not use such Artwork or
Licensed Property, items, information or things, material, for
any purpose other than is permitted under this Agreement.
(c) Licensee shall, within thirty (30) days of receiving an invoice, pay
Licensor for artwork executed for Licensee by Licensor (or by third
parties under contract to Licensor) for use in the development of
the Licensed Products and any related packaging, display and
promotional materials at Licensor's prevailing commercial art rates.
The foregoing shall include any artwork that, in Licensor's opinion,
is necessary to modify artwork initially prepared by Licensee and
submitted for approval. Estimates of artwork charges are available
upon request.
(d) Licensee shall cause to be imprinted, irremovably and legibly on
each Licensed Product manufactured, distributed or sold under this
Agreement, and all advertising, promotional, packaging and wrapping
material wherein the Licensed Property appears, the appropriate
Copyright Notice for each such Licensed Property as set forth on
Schedules A-1 through C-13.
-14- #68116
(e) In no event shall Licensee use, in respect to the Licensed Products
and/or in relation to any advertising, promotional, packaging or
wrapping material, any copyright or trademark notices which shall
conflict with, be confusing with, or negate, any notices required
hereunder by Licensor in respect to the Licensed Property.
(f) Licensee agrees to deliver to Licensor free of cost six (6) of each
of the Licensed Products together with their packaging and wrapping
material for trademark registration purposes in compliance with
applicable laws, simultaneously upon distribution to the public. Any
copyrights or trademarks with respect to the Licensed Products shall
be procured by and for the benefit of Licensor and at Licensor's
expense. Licensee further agrees to provide Licensor with the date
of the first use of the Licensed Products in interstate and
intrastate commerce.
(g) Licensee shall assist Licensor, at Licensor's expense, in the
procurement, protection, and maintenance of Licensor's rights to the
Licensed Property. Licensor may, in its sole discretion, commence or
prosecute and effect the disposition of any claims or suits relative
to the imitation, infringement and/or unauthorized use of the
Licensed Property either in its own name, or in the name of
Licensee, or join Licensee as a party in the prosecution of such
claims or suits. Licensee agrees to cooperate fully with Licensor in
connection with any such claims or suits and undertakes to furnish
full assistance to Licensor in the conduct of all proceedings in
regard thereto. Licensee shall promptly notify Licensor in writing
of any infringements or imitations or unauthorized uses by others of
the Licensed Property, on or in relation to products identical to
similar to or related to the Licensed Products. Licensor shall in
its sole discretion have the right to settle or effect compromises
in respect thereof. Licensee shall not institute any suit or take
any action on account of such infringements, imitations or
unauthorized uses.
9. APPROVALS AND QUALITY CONTROLS:
(a) Licensee agrees to strictly comply and maintain compliance with the
quality standards, specifications and rights of approval of Licensor
in respect to any and all usage of the Licensed Property on or in
relation to the Licensed Products throughout the Term of this
Agreement and any renewals or extensions thereof (if applicable).
Licensee agrees to furnish to Licensor free of cost for its written
approval as to quality and style, samples of each of the Licensed
Products, together with their packaging, hangtags, and wrapping
material, as follows in the successive stages indicated: (i) rough
sketches/layout concepts; (ii) finished artwork or final proofs;
(iii) pre-production samples or strike-offs; and (iv) finished
products, including packaged samples.
(b) No Licensed Products and no material whatever utilizing the Licensed
Property shall be manufactured, sold, distributed or promoted by
Licensee without prior
-15- #68116
written approval. Licensee may, subject to Licensor's prior written
approval, use textual and/or pictorial matter pertaining to the
Licensed Property on such promotional, display and advertising
material as may, in its reasonable judgment, promote the sale of the
Licensed Products. All advertising and promotional material relating
to the Licensed Products must be submitted to the Licensor for its
written approval at the following stages appropriate to the medium
used: (i) rough concepts; (ii) layout, storyboard, script; and (iii)
finished materials.
(c) Approval or disapproval shall lie in Licensor's sole discretion. Any
Licensed Products not so approved in writing shall be deemed
unlicensed and shall not be manufactured or sold. If any unapproved
Licensed Products are being sold, Licensor may, together with other
remedies available to it including, but not limited to, immediate
termination of this Agreement, require such Licensed Products to be
immediately withdrawn from the market and to be destroyed, such
destruction to be attested to in a certificate signed by an officer
of Licensee.
(d) Any modification of a Licensed Product must be submitted in advance
for Licensor's written approval as if it were a new Licensed
Product. Approval of a Licensed Product which uses particular
artwork does not imply approval of such artwork for use with a
different Licensed Product.
(e) Licensed Products must conform in all material respects to the final
production samples approved by Licensor. If in Licensor's reasonable
judgement, the quality of a Licensed Product originally approved has
deteriorated in later production runs, or if a Licensed Product has
otherwise been altered, Licensor may, in addition to other remedies
available to it, require that such Licensed Product be Immediately
withdrawn from the market.
(f) Licensee shall permit Licensor to inspect Licensee's manufacturing
operations, testing and payroll records (including those operations
and records of any supplier or manufacturer approved pursuant to
Paragraph 10.(b) below) with respect to the Licensed Products.
(g) If any changes or modifications are required to be made to any
material submitted to Licensor for its written approval in order to
ensure compliance with Licensor's specifications or standards of
quality, Licensee agrees promptly to make such changes or
modifications.
(h) Subsequent to final approval, no fewer than fifty (50) production
samples of Licensed Products will be sent to Licensor, to ensure
quality control simultaneously upon distribution to the public. In
addition, Licensee shall provide Licensor with fifteen (15) catalogs
which display all of Licensee's products, not just the Licensed
Products. Further, Licensor shall have the right to purchase any and
all Licensed Products in any quantity at the maximum discount price
Licensee charges its best customer.
-16- #68116
(i) To avoid confusion of the public, Licensee agrees not to associate
other characters or properties with the Licensed Property on the
Licensed Products or in any packaging, promotional or display
materials unless Licensee receives Licensor's prior written
approval. Furthermore, Licensee agrees not to use the Licensed
Property (or any component thereof) on any business sign, business
cards, stationery or forms, nor as part of the name of Licensee's
business or any division thereof.
(j) Licensee shall use its best efforts to notify its customers of the
requirement that Licensor has the right to approve all promotional,
display and advertising material pursuant to this Agreement.
(k) It is understood and agreed that any animation used in electronic
media, including but not limited to animation for television
commercials and character voices for radio commercials, shall be
produced by Warner Bros. Animation and/or the Warner/Blanc Audio
Library pursuant to a separate agreement between Licensee and Warner
Bros. Animation and/or the Warner/Blanc Audio Library, subject to
Warner Bros. Animation and/or the Warner/Blanc Audio Library
customary rates. Any payment made to Warner Bros. Animation and/or
the Warner/Blanc Audio Library for such animation or character
voices shall be in addition to and shall not offset the Guaranteed
Consideration set forth in Paragraph 1.(d).
(l) Licensor's approval of Licensed Products (including, without
limitation, the Licensed Products themselves as well as promotional,
display and advertising materials) shall in no way constitute or be
construed as an approval by Licensor of Licensee's use of any
trademark, copyright and/or other proprietary materials not owned by
Licensor.
(m) All Licensed Products must be submitted for approval as set forth
above to Licensor's Brand Assurance Department for the Territory.
Licensor's approval of products licensed under any other agreement
between Licensor and/or its affiliated companies and Licensee and/or
its affiliated companies shall not constitute an approval of any
Licensed Products for distribution in the Territory hereunder.
10. DISTRIBUTION; SUBLICENSE MANUFACTURE:
(a) Within the Distribution Channels set forth in Paragraph 1.(h)
hereof, Licensee shall sell the Licensed Products either to jobbers,
wholesalers, distributors or retailers for sale or resale and
distribution directly to the public. Unless explicitly set forth in
Paragraph 1.(h) hereof, Licensee shall not sell the Licensed
Products through any cable home shopping service or through
electronic media, including on any on- line network or service. If
Licensee sells or distributes the Licensed Products at a special
price, directly or indirectly, to itself, including without
limitation, any subsidiary of Licensee or to any other person, firm,
or corporation affiliated with Licensee or its officers, directors
or major stockholders, for ultimate sale to
-17- #68116
unrelated third parties, Licensee shall pay Royalties with respect
to such sales or distribution, based upon the price generally
charged the trade by Licensee.
(b) Except as specifically permitted hereunder, Licensee shall not be
entitled to sublicense any of its rights under this Agreement. In
the event Licensee is not the manufacturer of the Licensed Products,
Licensee shall, subject to the prior written approval of Licensor,
which approval shall not be unreasonably withheld, be entitled to
utilize a third party manufacturer in connection with the
manufacture and production of the Licensed Products, provided that
such manufacturer shall execute a letter in the form of Exhibit 1
attached hereto and by this reference made a part hereof. In such
event, Licensee shall remain primarily obligated under all of the
provisions of this Agreement and any default of this Agreement by
such manufacturer shall be deemed a default by Licensee hereunder.
In no event shall any such third party manufacturer agreement
include the right to grant any rights to subcontractors.
(c) In the event the Territory or part thereof, now or hereafter, is a
member state of the European Economic Area (the "EEA"), nothing in
this Agreement shall prevent Licensee from supplying unsolicited
orders from customers having registered offices outside the
Territory and/or outside the Distribution Channels but in the EEA,
provided that Licensee shall not pursue an active policy of selling
or marketing the Licensed Products and/or Licensed Property outside
the Territory and/or Distribution Channels but in the EEA.
11. GOOD WILL: Licensee recognizes the great value of the publicity and good
will associated with the Licensed Property and, acknowledges that: (i)
such good will is exclusively that of Licensor; and (ii) the Licensed
Property has acquired a secondary meaning as Licensor's trademarks and/or
identifications in the mind of the purchasing public. Licensee further
recognizes and acknowledges that a breach by Licensee of any of its
covenants, agreements or undertakings hereunder will cause Licensor
irreparable damage, which cannot be readily remedied in damages in an
action at law, and may, in addition thereto, constitute an infringement of
Licensor's copyrights, trademarks and/other proprietary rights in, and to
the Licensed Property, thereby entitling Licensor to equitable remedies
and costs.
12. LICENSOR'S WARRANTIES AND REPRESENTATIONS:
Licensor represents and warrants to Licensee that:
(a) It has, and will have throughout the Term of this Agreement, the
right to license the Licensed Property to Licensee in accordance
with the terms and provisions of this Agreement; and
(b) The making of this Agreement by Licensor does not violate any
agreements, rights or obligations of any person, firm or
corporation.
-18- #68116
13. LICENSEE'S WARRANTIES AND REPRESENTATIONS:
Licensee represents and warrants to Licensor that, during the Term and
thereafter:
(a) It will not attack the title of Licensor (or third parties that have
granted rights to Licensor) in and to the Licensed Property or any
copyright or trademarks pertaining thereto, nor will it attack the
validity of the license granted hereunder;
(b) It will not harm, misuse or bring into disrepute the Licensed
Property, but on the contrary, will maintain the value and
reputation thereof to the best of its ability;
(c) It will manufacture, sell, promote and distribute the Licensed
Products in an ethical manner and in accordance with the terms and
intent of this Agreement, and in compliance with all applicable
government regulations and industry standards;
(d) It will not create any expenses chargeable to Licensor without the
prior written approval of Licensor in each and every instance. It
will not cause or allow any liens or encumbrances to be placed
against the Licensed Property;
(e) It will protect to the best of its ability its right to manufacture,
sell, promote, and distribute the Licensed Products hereunder;
(f) It will at all times comply with all government laws and
regulations, including but not limited to product safety, food,
health, drug, cosmetic, sanitary or other similar laws, and all
voluntary industry standards relating or pertaining to the
manufacture, sale, advertising or use of the Licensed Products, and
shall maintain its appropriate customary high quality standards
during the Term hereof. It shall comply with any regulatory agencies
which shall have jurisdiction over the Licensed Products and shall
procure and maintain in force any and all permissions,
certifications and/or other authorizations from governmental and/or
other official authorities that may be required in response thereto.
Each Licensed Product and component thereof distributed hereunder
shall comply with all applicable laws, regulations and voluntary
industry standards. Licensee shall follow reasonable and proper
procedures for testing that all Licensed Products comply with such
laws, regulations and standards. Licensee shall permit Licensor or
its designees to inspect testing records and procedures with respect
to the Licensed Products for compliance. Licensed Products that do
not comply with all applicable laws, regulations and standards shall
automatically be deemed unapproved and immediately taken off the
market;
(g) It shall, upon Licensor's request, provide credit information to
Licensor including, but not limited to, fiscal year-end financial
statements (profit-and-loss statement and balance sheet) and
operating statements;
-19- #68116
(h) It will, pursuant to Licensor's instructions, duly take any and all
necessary steps to secure execution of all necessary documentation
for the recordation of itself as user of the Licensed Property in
any jurisdiction where this is required or where Licensor reasonably
requests that such recordation shall be effected. Licensee further
agrees that it will at its own expense cooperate with Licensor in
cancellation of any such recordation at the expiration of this
Agreement or upon termination of Licensee's right to use the
Licensed Property. Licensee hereby appoints Licensor its
Attorney-in-Fact for such purpose;
(i) It will not deliver or sell Licensed Products outside the Territory
or knowingly sell Licensed Products to a third party for delivery
outside the Territory, subject to Paragraph 10.(c) hereof;
(j) It will not use any labor that violates any local labor laws,
including all wage and hour laws, laws against discrimination and
that it will not use prison, slave or child labor in connection with
the manufacture of the Licensed Products;
(k) It shall at all times comply with all manufacturing, sales,
distribution, retail and marketing policies and strategies
promulgated by Licensor from time-to-time; and
(1) If requested by Licensor to do so, it will utilize specific design
elements of the Licensed Property provided to Licensee by Licensor
on hangtags, labels, and other materials.
14. TERMINATION BY LICENSOR:
(a) Licensor shall have the right to terminate this Agreement without
prejudice to any rights which it may have, whether pursuant to the
provisions of this Agreement, or otherwise in law, or in equity, or
otherwise upon the occurrence of any one or more of the following
events (herein called "defaults"):
(i) Licensee defaults in the performance of any of its obligations
provided for in this Agreement; or
(ii) Licensee shall have failed to deliver to Licensor or to
maintain in full force and effect the insurance referred to in
Paragraph 7.(c) hereof; or
(iii) Licensee shall fail to make any payments due hereunder on the
date due; or
(iv) Licensee shall fail to deliver any of the statements required
herein or to give access to the premises and/or license
records pursuant to the provisions hereof to Licensor's
authorized representatives for the purposes permitted
hereunder; or
-20- #68116
(v) Licensee shall fail to comply with any laws, regulations or
voluntary industry standards as provided in Paragraph 13.(f)
or any governmental agency or other body, office or official
vested with appropriate authority finds that the Licensed
Products are harmful or defective in any way, manner or form,
or are being manufactured, sold or distributed in
contravention of applicable laws, regulations or standards, or
in a manner likely to cause harm; or
(vi) Licensee shall be unable to pay its debts when due, or shall
make any assignment for the benefit of creditors, or shall
file any petition under the bankruptcy or insolvency laws of
any jurisdiction, county or place, or shall have or suffer a
receiver or trustee to be appointed for its business or
property, or be adjudicated a bankrupt or an insolvent; or
(vii) Licensee does not commence in good faith to manufacture,
distribute and sell each Licensed Products and utilize each
character set forth in the Licensed Property ("Character")
throughout the Territory and the Distribution Channels on or
before the Marketing Date and thereafter fails to diligently
and continuously manufacture, distribute and sell each of the
Licensed Products and utilize each Character throughout the
Territory. Such default and Licensor's resultant right of
termination (or recapture) shall only apply to the specific
Character(s), the specific Licensed Products, the specific
country of the Territory and/or the specific Distribution
Channel, which or wherein Licensee fails to meet said
Marketing Date requirement; or
(viii) Licensee shall manufacture, sell or distribute, whichever
first occurs, any of the Licensed Products(s) without the
prior written approval of Licensor as provided in Paragraph 9
hereof. Notwithstanding the foregoing, in the event Licensee
has manufactured product without Licensor's approval and has
not sold or otherwise distributed such unapproved product,
this Agreement shall not terminate provided that all such
unapproved product is immediately destroyed and Licensee
provides a certificate of destruction to Licensor; or
(ix) Xxxx Xxxxxxx is no longer an executive officer of Licensee; or
(x) A manufacturer approved pursuant to Paragraph 10.(b) hereof
shall sell Licensed Products to parties other than Licensee or
engage in conduct, which conduct if engaged in by Licensee
would entitle Licensor to terminate this Agreement; or
(xi) Licensee delivers or sells Licensed Products outside the
Territory or knowingly sells Licensed Products(s) to a third
party who Licensee knows intends to, or who Licensee
reasonably should suspect intends to, sell or
-21- #68116
deliver such Licensed Products outside the Territory, except
as provided for in Paragraph 10.(c) above; or
(xii) Licensee uses any labor that violates any local labor laws
and/or it uses prison, slave or child labor in connection with
the manufacture of the Licensed Products; or
(xiii) Licensee has made a material misrepresentation or has omitted
to state a material fact necessary to make the statements not
misleading.
(b) In the event any of these defaults occur Licensor shall give notice
of termination in writing to Licensee by facsimile and certified
mail. Licensee shall have the number of days specified as follows
from the date of giving notice in which to correct the default
(except subdivisions (vii), (viii), (xi) and (xiii) above which are
not curable): for subdivisions (iii), (iv) (x) and (xii): ten (10)
days; for subdivisions (ii) , (v) and (vi) : fifteen (15) days; for
all other subdivisions: thirty (30) days; and failing such, this
Agreement shall thereupon immediately terminate, and any and all
payments then or later due from Licensee hereunder (including
Guaranteed Consideration) shall then be promptly due and payable in
full and no portion of those prior payments shall be repayable to
Licensee.
15. FINAL STATEMENT UPON TERMINATION OR EXPIRATION: Licensee shall
deliver, as soon as practicable, but not later than thirty (30) days
following expiration or termination of this Agreement, a statement
indicating the number and description of Licensed Products on hand
together with a description of all advertising and promotional materials
relating thereto. Following expiration or termination of this Agreement,
Licensee shall immediately cease any and all manufacturing of the Licensed
Product. However, if Licensee has complied with all the terms of this
Agreement, including, but not limited to, complete and timely payment of
the Guaranteed Consideration and Royalty Payments, then Licensee may
continue to distribute and sell its remaining inventory for a period not
to exceed ninety (90) days following such termination or expiration (the
"Sell-Off Period"), subject to payment of applicable Royalties thereto. In
no event, however, may Licensee distribute and sell during the Sell-off
Period an amount of Licensed Products that exceeds the average amount of
Licensed Products sold during any consecutive ninety (90) day period
during the Term. In the event this Agreement is terminated by Licensor for
any reason under this Agreement, Licensee shall be deemed to have
forfeited its Sell-Off Period. If Licensee has any remaining inventory of
the Licensed Products following the Sell-Off Period, Licensee shall, at
Licensor's option, make available such inventory to Licensor for purchase
at or below cost, deliver up to Licensor for destruction said remaining
inventory or furnish to Licensor an affidavit attesting to the destruction
of said remaining inventory. Licensor shall have the right to conduct a
physical inventory in order to ascertain or verify such inventory and/or
statement. In the event that Licensee refuses to permit Licensor to
conduct such physical inventory, Licensee shall forfeit its right to the
Sell-Off Period hereunder or any other rights to dispose of such
inventory. In addition to the forfeiture, Licensor shall have recourse to
all other legal remedies available to it.
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16. NOTICES: Except as otherwise specifically provided herein, all notices
which either party hereto is required or may desire to give to the other
shall be given by addressing the same to the other at the address set
forth above, with a copy to WBCP (U.K.) LTD. at the address set forth in
Paragraph 5.(b) above, or at such other address as may be designated in
writing by any such party in a notice to the other given in the manner
prescribed in this paragraph. All such notices shall be sufficiently given
when the same shall be deposited so addressed, postage prepaid, in the
United States mail and/or when the same shall have been delivered, so
addressed, by facsimile or by overnight delivery service and the date of
transmission by facsimile, receipt of overnight delivery service or two
business days after mailing shall for the purposes of this Agreement be
deemed the date of the giving of such notice.
17. NO PARTNERSHIP, ETC.: This Agreement does not constitute and shall not be
construed as constitution of a partnership or joint venture between
Licensor and Licensee. Neither party shall have any right to obligate or
bind the other party in any manner whatsoever, and nothing herein
contained shall give, or is intended to give, any rights of any kind to
any third persons.
18. NO SUBLICENSING/NON-ASSIGNABILITY: This Agreement shall bind and inure to
the benefit of Licensor, its successors and assigns. This Agreement is
personal to Licensee. Licensee shall not sublicense, franchise or delegate
to third parties its rights hereunder (except as set forth in Paragraph
10.(b) hereof). Neither this Agreement nor any of the rights of Licensee
hereunder shall be sold, transferred or assigned by Licensee and no rights
hereunder shall devolve by operation of law or otherwise upon any
receiver, liquidator, trustee or other party.
19. *REDACTED*
20. CONSTRUCTION: This Agreement shall be construed in accordance with the
laws of the State of California of the United States of America without
regard to its conflicts of laws provisions.
21. WAIVER, MODIFICATION ETC.: No waiver, modification or cancellation of any
term or condition of this Agreement shall be effective unless executed in
writing by the party charged therewith. No written waiver shall excuse the
performance of any acts other than those specifically referred to therein.
The fact that the Licensor has not previously insisted upon Licensee
expressly complying with any provision of this Agreement shall not be
deemed to be a waiver of Licensor's future right to require compliance in
respect thereof and Licensee specifically acknowledges and agrees that the
prior forbearance in respect of any act, term or condition shall not
prevent Licensor from subsequently requiring full and complete compliance
thereafter. If any term or provision of this Agreement is held to be
invalid or unenforceable by any court of competent jurisdiction or any
other authority vested with jurisdiction, such holding shall not affect
the validity or enforceability of any other term or provision hereto and
this Agreement shall be interpreted and construed as if such term or
provision, to the extent the same shall have
-23- #68116
been held to be invalid, illegal or unenforceable, had never been
contained herein. Headings of paragraphs herein are for convenience only
and are without substantive significance.
22. ACCEPTANCE BY LICENSOR: This instrument when signed by Licensee shall be
deemed an application for license and not a binding agreement unless and
until accepted by Warner Bros. Consumer Products by signature of a duly
authorized officer and the delivery of such a signed copy to Licensee. The
receipt by Warner Bros. Consumer Products of any check or other
consideration given by Licensee and/or delivery of any material by Warner
Bros. Consumer Products to Licensee shall not be deemed an acceptance by
Warner Bros. Consumer Products of this application. The foregoing shall
apply to any documents relating to renewals or modifications hereof.
This Agreement shall be of no force or effect unless and until it is signed by
all of the parties listed below:
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
LICENSOR: LICENSEE:
WARNER BROS. CONSUMER PRODUCTS, PLAY-BY-PLAY TOYS
A DIVISION OF TIME WARNER ENTERTAINMENT NOVELTIES, INC.
COMPANY L.P., ON BEHALF OF ITSELF AND AS
AGENT FOR WARNER BROS., A DIVISION OF
TIME WARNER ENTERTAINMENT COMPANY L.P.
By:/s/ XXXX X. XXXXX By:/s/ XXXX XXXXXXX
Xxxx X. Xxxxx Xxxx Xxxxxxx
Vice President, Legal Affairs Executive Vice President
and General Counsel
Date: 1/27/98 Date: 1/27/98
-24- #68116
#68116 - EXHIBIT 1
WARNER BROS. CONSUMER PRODUCTS
0000 Xxxxxx Xxxx.
Xxxxxxxx Xxxx. - 0xx Xxxxx
Xxxxxxx, XX 00000
RE: APPROVAL OF THIRD PARTY MANUFACTURER
Gentlemen:
This letter will serve as notice to you that pursuant to Paragraph 10.(b) of
the License Agreement dated _____________________, between WARNER BROS., A
DIVISION OF TIME WARNER ENTERTAINMENT COMPANY L.P. and PLAY-BY-PLAY TOYS &
NOVELTIES, INC. ("Licensee"), we have been engaged as the manufacturer for
Licensee in connection with the manufacture of Licensed Products as defined in
the aforesaid License Agreement. We hereby acknowledge that we may not
manufacture Licensed Products for, or sell or distribute Licensed Products to,
anyone other than Licensee. We hereby further acknowledge that we have received
a copy and are cognizant of the terms and conditions set forth in said License
Agreement and hereby agree to observe those provisions of said License Agreement
which are applicable to our function as manufacturer of the Licensed Products.
It is expressly understood that we are obligated to comply with all local laws,
including without limitation, labor laws, wage and hour laws and
anti-discrimination laws and that you or your representatives shall, at anytime,
have the right to inspect our facilities and review our records to ensure
compliance therewith. It is understood that this engagement is on a royalty free
basis and that we may not subcontract any of our work without your prior written
approval.
We understand that our engagement as the manufacturer for Licensee is subject
to your written approval. We request, therefore, that you sign in the space
below, thereby showing your acceptance of our engagement as aforesaid.
-25- #68116
Very truly yours,
Manufacturer/Company Name
By:
signature
printed name
AGREED TO AND ACCEPTED:
address
WARNER BROS. CONSUMER PRODUCTS,
A DIVISION OF TIME WARNER
ENTERTAINMENT COMPANY, L.P.
dated
By: product(s) manufacturing
Xxxx X. Xxxxx
Vice President, Legal Affairs
dated
-26- #68116
#68116 - EXHIBIT 2
CONTRIBUTOR'S AGREEMENT
I, __________________________________, the undersigned ("Contributor"), have
been engaged by _________________________ ("Licensee") to work on or contribute
to the creation of Licensed Products, described as
__________________________________________, by Licensee under an agreement
between Licensee and Warner Bros., a division of Time Warner Entertainment
Company L.P., c/o Warner Bros. Consumer Products, a division of Time Warner
Entertainment Company L.P. ("Warner"), dated ________________________.
I understand and agree that the Licensed Products, and all artwork or other
results of my services for Licensee in connection with such Licensed Products
("Work") is a "work made for hire" for Warner and that all right, title and
interest in and to the Work shall vest and remain with Warner. I reserve no
rights therein. Without limiting the foregoing, I hereby assign and transfer to
Warner all other rights whatsoever, in perpetuity throughout the universe which
I may have or which may arise in me or in connection with the Work. I hereby
waive all moral rights in connection with such Work together with any other
rights which are not capable of assignment. I further agree to execute any
further documentation relating to such transfer or waiver or relating to such
Work at the request of Warner or Licensee, failing which Warner is authorized to
execute same as my Attorney-in-Fact.
CONTRIBUTOR:
By:
Date:
WARNER BROS. CONSUMER PRODUCTS:
By:
Date:
-27- #68116
EXHIBIT 3
LICENSE AGREEMENT #68116
EUROPE, MIDDLE EAST AND AFRICA:
United Kingdom, Eire, France, Germany, Italy, Spain, Portugal, Belgium, The
Netherlands, Luxembourg, Greece, Denmark, Sweden, Finland, Austria, Norway,
Iceland, Liechtenstein, Switzerland, Turkey, Poland, Czech Republic, Slovak
Republic, Hungary, Bulgaria, Romania, Albania, Croatia, Slovenia,
Bosnia-Herzegovina, Montenegro, Kosovo, Macedonia, Serbia, Vojvodina Latvia,
Estonia, Lithuania, Russia, Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan,
Kyrgystan, Moldova, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, Bahrain,
Cyprus, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar,
Republic of Yemen, South Yemen, Saudi Arabia, Syria, United Arab Emirates,
Algeria, Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Central
African Republic, Chad, Congo, Djibouti, Egypt, Equatorial Guinea, Ethiopia,
Gabon, Gambia, Ghana, Guinea, Guinea Bissau, Ivory Coast, Kenya, Lesotho,
Liberia, Libya, Malawi, Mali, Mauritania, Morocco, Mozambique, Namibia, Niger,
Rwanda, Senegal, Sierra Leone, Somalia, South Africa, Sudan, Swaziland,
Tanzania, Togo, Tunisia, Uganda, Western Sahara, Zaire, Zambia, Zimbabwe.
-28- #68116
