Exhibit 10.48
LICENSING AGREEMENT
This Licensing Agreement (this "Agreement") is made and entered into on
this 19 day of October, 1999 by and between American Champion Media Inc.,
a corporation duly organized and existing under the laws of the state of
California, located at 0000 Xxx Xxxxxxx Xxxxx 000, Xxx Xxxx, Xxxxxxxxxx
00000 ("Licensor") Prestige Toys Corp., a corporation duly organized and
existing under the laws of the state of New York, located at 000 Xxxx 00xx
Xxxxxx Xxxx 000, Xxx Xxxx, Xxx Xxxx 00000 ("Licensee").
The Licensor is the owner of and/or has the right to license the Xxxxx
Xxxxx character and all the related characters including the television
program entitled "Adventures with Xxxxx Xxxxx" (collectively the
"Characters"), the names, symbols, likenesses, designs and other indicia
associated with the Characters, and all copyrights, including all
derivative works, and trademarks which exist in the Characters and the
names and likeness of the characters ("Properties"); and
The License desires to obtain a license to manufacture and sell certain
Products using or based upon the Properties;
In consideration of the mutual covenants contained herein the
parties agree as follows.
1. License To Use Properties.
(a) Grant of License. Licensor grants to licensee a non-transferable
exclusive License to all channels of retail distribution with exception to
the following categories which shall be non-exclusive, (Department Stores,
Educational Chains, Electronic Commerce, Gift Stores) to use the
Properties in connection with the manufacture, distribution and sale of the
Products in the Territory. Except for the specific rights,which are granted
to Licensee under this Agreement, all rights in and to the Properties are
retained by Licensor. Except to the extent set forth in paragraph 10(a)
below, Licensee shall not have the right to sublicense any of the rights
granted to it under this Agreement.
(b) Use of Licensed Properties. The Licensee will: (i) use the
Properties only on Products and Advertising Materials, as defined below;
(ii) package and sell Products only in packaging approved by Licensor;
(iii) refrain from use of the Properties except under the terms of this
Agreement; (iv) notify Licensor in writing of any conflicting uses,
applications for registration or registrations of the properties or marks
similar thereto of which it has knowledge; (v) execute any documentation
requested by Licensor relating to the Properties; (vi) indicate on the
Products and/or their labeling or packaging that the Products are
manufactured by Licensee, or a manufacturer as described in paragraph
10(a), and that such manufacture is pursuant to license from Licensor;
(vii) comply with all of Licensor's instructions relating to the use and
display of the properties; and (viii) not knowingly sell Products to
parties who intend or are likely to resell them outside the Territory.
(c) Restriction on Use of Properties. The properties, either in whole or
in part, will not be shown endorsing the Licensee or products (including
the Products) or services of Licensee or others, without the prior written
approval of Licensor. None of the Properties shall be combined in any
Products or Advertising materials with any other characters or persons.
(d) Restrictions on Sale of Products. Licensee shall not use or sell the
Products as premiums, including, but not limited to, using or selling the
Products in connection with self-liquidating programs, joint merchandising
programs, tie-ins, giveaways, sales incentive programs, door openers,
traffic builders, fundraisers, sweepstakes prizes and any other
promotional programs designed to encourage the sale of the Products or
other goods or services of the Licensee or a third party without the prior
written approval of Licensor.
(e) Method of Sale. Licensee agrees that the products will be sold,
shipped and distributed outright, not on an approval, consignment, sale or
return basis, at a competitive price that does not exceed the price
customarily charged the trade by Licensee. Licensee will not be
discriminate against the Products by granting commissions or discounts to
sales persons, dealers and/or distributors in favor of Licensee's other
products. Licensee further agrees that the Products will only be sold to
retailers or to distributor for sale, shipment and distribution to
retailers, with the understanding that the Products shall be sold to the
public only in the manner in which merchandise of the same general
description is customarily marketed, displayed and sold. License agrees to
offer a warranty to purchasers of the Products substantially similar to
that offered for products competitive with Products, and in no event
shorter or less comprehensive than the warranty offered by Licensee for
other similar items produced by it.
2. Product Quality.
(a) Quality Standards. Licensee acknowledges that the quality of Products
must be high in order to preserve and maintain Licensor's reputation and
the goodwill inherent in the Properties, and agrees that failure to adhere
to Licensor's quality ("Standards") or depicting the Properties in a
manner which is unethical, immoral or offensive to good taste, will impair
the value and goodwill associated with the Properties and Licensor's
licensing program in general. Licensee therefore agrees that prior to the
sale of any Product, it will submit (3) samples of the Product to Licensor
for approval, as provided in Section 3. Once Licensor's approval has been
obtained, Licensee agrees that it will not deviate from the approved
samples. Failure by Licensee to conform its Products to the approved
samples will be considered a breach of this Agreement and upon notice of
such, Licensee agrees that it will immediately stop the manufacture,
distribution and sale of the nonconforming Products. The determination
and the judgement as to whether the Products conform to the approved
samples shall rest solely with Licensor.
(b) Provision of Samples. Licensee will furnish free of charge to
Licensor twenty-four (24) samples of each Product. Upon written request,
Licensor may annually request an additional twelve (12) samples of each
Product.
(c) Inspections. Upon reasonable notice from Licensor, Licensee shall
permit representatives of Licensor to enter Licensee's premises and
plant(s) during normal business hours for the purpose of inspecting
Licensee's plant(s), equipment, records, operation and supplies which
relate to the manufacture, distribution and sale of the Products.
(d) Changes in Standards. Licensor shall have the right from time to time
to change, withdraw, or supplement the Standards or its approval of
samples previously authorized for use and sale by Licensee. Licensee will
have a reasonable period of time to dispose of its existing inventory of
Products if the changes to the Standards or approved samples result solely
from a decision made in Licensor's discretion. In any other event,
Licensee agrees to implement all changes immediately at its own expense.
(e) Product Warranty. Licensee represents and warrants that the Product
will be of good quality in design, material and workmanship and will be
suitable for their intended purpose; that no injuries, detleerious, or
toxic substances will be used in or on the Products; that the Products
will not cause harm when used in a foreseeable manner; and that Licensee
will, at its own expense, comply with all laws and regulations, including
those relating to the operation of Licensee's plants, the manufacture,
sale and distribution of the Products, including the labeling thereof and
including safety standards and testing of the Products.
3. Approval Procedures.
(a) Approval of Products. Prior to producing or offering any Product for
sale, Licensee will submit to Agent for its review and written approval,
three (3) identical production samples of the Product, and the address of
the production facilities where the Product will be produced.
(b) Approval of Advertising Materials. With respect to all advertising
and promotional materials and all packaging wrapping, and labeling
materials for the Products (including, but not limited to, catalogs, sales
shoots, package inserts, hang tags, and displays) which make any use of or
reference to the Properties ("Advertising Materials"), Licensee will
submit three (3) prior to the final printed samples of the Advertising
Materials where feasible (as for example, in the case of labels, hang
tags, printed brochures, catalogs, and the like) to Licensor for its
review and written approval. Advertising Materials must be submitted with
a description of the proposed uses of the Advertising Materials, including
the media in which the items will run, and the duration of such proposed
uses. Approval of Advertising Materials will extend only to proposed uses
described in Licensee's submissions and will not be deemed approval for
other uses.
(c) Approval Standards. Licensor and Agent shall have the right, in their
sole discretion, to approve or disapprove any Products or Advertising
Materials.
(d) Time for Approval. Licensor or Agent will use reasonable efforts to
approve or disapprove any Products or Advertising Materials within fifteen
(15) business days after Agent's receipt thereof. Agent's failure to
approve or disapprove within such period shall be deemed disapproval,
unless Agent subsequently notifies Licensee of its approval.
(e) Artwork for Properties. If Licensee requests Licensor to furnish it
with any artwork or copies of material relating to the Properties,
Licensee agrees to reimburse Licensor for its costs of supplying such
materials to Licensee, to the extent Licensor is able to furnish such
materials.
(f) Translations. All translations of written material used on or in
connection with the Products or Advertising Materials shall be accurate.
Licensee shall pay directly all costs incurred by Licensor in verifying the
accuracy of the translations.
4. Sale of Products.
(a) Initial Approval and Sale. If Licensee has not begun the sale of any
approved Product by the Initial Sale Date in every country in the
Territory. Licensor shall have the right to terminate this Agreement
immediately by giving notices of termination to Licensee in relation to
Products for which approval has not been obtained or for countries in the
Territory where sales have not been made.
(b) Exploitation of Rights. Licensee agrees that during this Agreement, it
will diligently and continuously distribute, ship and sell all of the
Products in all countries of the Territory and that it will use its best
efforts to manufacture the Products in sufficient quantities to meet the
reasonably anticipated demand in the Territory. Licensor shall have the
right to terminate the portion(s) of this Agreement relating to any
Products and any county(s) in the Territory of Licensee, for any reason,
after the commencement of sale, shipment and distribution of Products in
such country or countries, fails for a period in excess of sixty (60) days
to continue to sell, ship and distribute such Products therein. Licensee
also agrees to advertise and promote the Products at its own expense so as
to maximize the sale of the Products in the Territory.
(c) Sale to Licensor. Licensee agrees to sell to Licensor, on request,
up to one hundred (100) units of each Product at Licensee's cost for such
Product. No royalties will be due on sales to Licensor.
5. Protection of the Properties.
(a) Registrations. Licensor shall have the right, in its sole
discretion, to file trademark, design, patent or other applications in the
Territory, relating to the use or proposed use by Licensee of any of the
Properties and/or to record this Agreement. Such filings will be made in
the name of the Licensor or in the name of any third party selected by
Licensor.
(b) Trademark Use For Licensor's Benefit. All uses of the names,
symbols, designs and other works associated with the Properties
("Trademarks") by Licensee shall inure to the benefit of the Licensor,
which shall own all trademarks and trademark rights and all copyrights
created by such uses. To the extent Licensee acquires any rights to any
of the Copyrights and Trademarks, Licensee hereby assigns and transfers to
Licensor and agrees to execute any documentation relating to such
assignment, all trademarks and trademark rights and all copyrights created
by such uses, together with the goodwill of the business in connection
therewith. Licensee agrees to use the text appearing in conjunction with
the trademarks, and not as the generic name of the Product.
(c) Other Uses of Trademarks. Licensee shall not use any of the
Trademarks in combination with any other trademark, word, symbol, letter,
or design, or as part of its company name or in connection with any
product other than the Products. Further, Licensee agrees not to adopt
any trademark, trade name, design, logo or symbol which, in Licensor's
opinion, is similar to or likely to be confused with any of the Trademarks.
(d) Copyright Protection. Licensee recognizes the importance to Licensor
of preserving copyright protection and registrations therefor on the
Properties and all works relating to the Properties, including new works
and derivative works ("Copyrights"), and the importance of securing
copyright protection for the products and Advertising Materials which
constitute "new works" or derivative works" for copyright law purposes,
and for all reproductions of the Properties which appear on the Products
or in the Advertising Materials. Therefore, Licensee's license to
manufacture, distribute and sell products and to display Advertising
Materials is expressly conditioned upon Licensee's agreeing to place a
copyright notice(s) in the name(s) specified by Licensor on all Products
and Advertising Materials. Licensee agrees that it will not affix to the
Products or the Advertising Materials a copyright notice in its name or
the name of any other person, firm, or corporation, except as requested by
Licensor. Licensee acknowledges that proper copyright notices must be
permanently affixed to all products and Advertising Materials and to any
portions of products or Advertising Materials intended to be used
separately by the ultimate purchaser or user. Such notices will be
sufficient in size, legibility, form, location, and permanency to comply
with both the United States copyright laws and also the copyright notice
requirements of the Universal Copyright Convention.
(e) Assignment by licensee. The Licensee hereby sells, assigns, and
transfers to Licensor its entire worldwide right, title, and interest in
and to all "new works", derivative and/or "joint works" heretofore or
hereafter created using all or any portion of the Properties including,
but not limited to the Copyrights and renewal copyrights thereon. If
parties who are not employees of Licensee living in the United States make
or have made any contribution to the creation of a work, so that such
parties might be deemed to be "authors" as that term us used in present or
future United States copyright statutes, Licensee agrees to obtain from
such parties a full assignment of rights so that the foregoing assignment
by Licensee shall vest in Licensor full rights in the work, free of any
claims, interests, or rights of other parties. Licensee will not permit
any of its employees to obtain or reserve any rights as "authors" of such
works and agrees to furnish Licensor with full information concerning the
creation of new works and/or derivative works and with copies of
assignments of rights obtained from other parties, and to execute, without
charge, any documents requested by Licensor for such purposes.
(f) Notices. The Licensee agrees to affix or to cause its authorized
manufacturing sources to affix to both the Products and Advertising
Materials notices in the format shown on Page 1 or as otherwise requested
by Licensor in relation to Licensor's trademark, copyright, patent or
other protection. The Licensee agrees that it will not distribute or
sell, not authorize others to distribute or sell, any Products or
Advertising Materials which do not carry copyright and other notices
meeting the requirements of this section.
(g) Acknowledgement of Validity. Licensee shall not, directly or
indirectly, in any way dispute or impugn the validity of the Trademarks,
Copyrights or Properties, or Licensor's sole ownership and right to use
and control the use of the Trademarks, Copyrights and Properties during
the term of this Agreement and thereafter. Licensee will not do or permit
to be done and action or thing which will in any way impair Licensor's
rights in and to the Trademarks, Copyrights and Properties. Licensee
acknowledges that its use of the Trademarks, Copyrights and Properties
will not create in any right, title or interest therein and agrees that
all use thereof will be for the benefit of Licensor.
6. Infringements.
(a) Infringement by Third Parties. When Licensee learns that a party is
making unauthorized use of the rights granted to the Licensee hereunder,
Licensee agrees promptly to give Licensor written notice containing full
information with respect to the actions of such party. Licensor, entirely
at its option, will decide what, if any, action to take. Licensee agrees
not to make any demands or claims, bring suit, effect any settlement, or
take any other action in relation to such party without the prior written
consent of Licensor. Licensee agrees to cooperate with Licensor, at
Licensor's expense, in connection with any action taken by Licensor to
terminate infringements.
(b) Claims. If a claim is made or suit is brought against Licensor or
Licensee by a party asserting rights in the Properties, or names or
designs similar thereto, or if either party hereto learns that another
party has or claims rights which would or might conflict with the proposed
or actual use of some or all of the Properties by Licensee, Licensee
agrees either to make responsible modifications in its use of the
Properties as requested by Licensor, or to discontinue the us eof the
allegedly infringing part of the Properties in the country of the
Territory in question on the particular Products which are involved, if
Licensor, in its sole discretion, considers such action necessary or
desirable to resolve or settle the claim or suit to eliminate or reduce
the threat of a claim or suit by such party. In no event shall Licensee
have the right to acknowledge the validity of such a claim, to obtain or
seek a license from such party, or to take any other action which might
impair the ability of Licensor to contest h claim. Licensor shall have
the right to participate fully at its own expense in the defense of any
claim or suit instituted against Licensee with respect to the use of the
Properties by Licensee.
7. Indemnification's.
(a) Licensee's Indemnification. Licensee agrees to indemnify and hold
Licensor harmless, from any and all claims, liabilities, judgements,
penalties, losses, costs, damages, and expenses resulting therefrom,
including reasonable attorney's fees, but excluding lost profits,
allegedly arising out of (i) any act pursuant to this Agreement by
Licensee, its subsidiaries, manufactures, distributor, agents or
representatives, or their employees or agents; (ii) the exercise by
Licensor of its termination rights in Section 10. (b) against third
parties appointed by Licensee to manufacture or distribute the Products;
and (iii) Licensee's failure to comply with the terms hereof. Claims
based solely upon the use of the Properties by Licensee in manner which had
been previously approved by Licensor in strict accordance with the terms
of this Agreement are expressly excluded from Licensee's indemnity of
Licensor.
(b) Licensor's Indemnification. Licensor agrees to indemnify and hold
Licensee harmless, up to the amount of royalties paid by Licensee to
Licensor, from any and all claims, liabilities, judgements, penalties,
losses, costs, damages, and expenses resulting therefrom, including
reasonable attorney's fees, but excluding lost profits, made by third
parties asserting rights in the properties as used on Products, when use
of the Properties by Licensee has been in strict accordance with the terms
of this Agreement.
(c) Claims Procedures. With respect to the forgoing indemnification's;
(i) each party agrees promptly to notify and keep the other fully advised
with respect to such claims and the progress suits in which the other
party is not participating; (ii) each party shall have the right to
assume, at its sole expense, in any suit instituted against it and to
approve any attorney's selected by the other party to defend it, which
approval shall not be unreasonably withheld or delayed; and (iv) a party
assuming the defense of a claim or suit against the other party shall not
settle such a claim or suit without the prior or written approval of the
other party, which shall not be unreasonably withheld.
8. Insurance.
(a) Insurance Required. The Licensee agrees during the term hereof and
for as long as Products are offered for sale to end users, to obtain and
maintain at its own cost from an insurance company acceptable to Licensor,
standard Product Liability Insurance, Contractual Liability and
Advertising Insurance, the form of which must be acceptable to Licensor,
naming Licensor, its subsidiaries and affiliates, and their directors,
officers, agents, employees, assignees, and successors as additional named
insureds.
(b) Products Liability Insurance. Licensee's product and contractual
liability insurance policy shall provide coverage for any and all losses,
expenses, claims, demands, causes of action and settlements, including
attorney's fees, allegedly arising out of any contractual liability or any
defects in the Products or any material used in connection therewith,
their failure to perform, or any use thereof. The amount of coverage
shall be a minimum of $1,000,000 combined single limit with no deductible
amount, for each single occurrence for bodily injury and/or for property
damage or contractual liability.
(c) Certificate of Insurance. Within thirty (30) days after the
execution of this Agreement, Licensee will provide a certificate to
Licensor issued by Licensee's carrier confirming that such policy has been
issued and is in full force and effect and provides coverage as required
by this Section 8., and also confirming that before any cancellation,
modification, or reduction in coverage of such policy, the insurance
company will give Licensor thirty (30) days prior written notice thereof.
The policy (s) will include a provision that it will be deemed primary
insurance and any insurance obtained by Licensor will be excess insurance.
In no event will Licensee manufacture, offer for sale, sell, advertise,
promote, ship and/or distribute Products prior to the receipt by Licensor
of such evidence of insurance.
9. Royalties.
(a) Guaranteed and Advance Royalties. Licensee agrees to pay Licensor a
Guaranteed Royalty, and on execution of this Agreement to pay Licensor a
nonrefundable Advance against royalties as stated on page 1 (one) of this
agreement. If, on expiration or termination of this Agreement, the
Advance and Earned Royalties paid to Licensor pursuant to subsections (a)
and (b) are less than the Guaranteed Royalty; Licensee shall immediately
pay the difference to Licensor. Only Earned Royalties paid pursuant to
subsection (b) in relation to products shipped prior to expiration or
termination of this Agreement to persons or entities in the Territory will
be credited against the Guaranteed Royalty. No portion of the Advance or
Guaranteed Royalty will be refundable to Licensee on termination or
expiration of this Agreement.
(b) Earned Royalty. Licensee agrees to pay Licensor the Earned Royalty
on Net Sales of the Products. "Net Sales" as used herein shall mean
Licensee's total invoice price less actual returns for defensive products
or credits given to customers for defective Products in lieu of returns,
up to a maximum of ten percent (10%) of the Net Sales being reported. A
sale shall be deemed to have taken place when the Products are shipped,
transferred or invoiced by Licensee, whichever occurs first. Whenever
Products are transferred in whole or in part in transactions in which some
or all of the consideration is non-monetary, or where the transferee is
affiliated with :Licensee, the transferee shall be deemed to have
purchased the Products at licensee's list price or the price quoted to
non-affiliated buyers for similar Products, whichever is higher.
(c) Deductions. There will be no deduction from royalties for
uncollectible amounts, taxes based on Licensee's income or sales, fees,
assessments, or other expenses of any kind which may be incurred or paid by
Licensee in connection with performance of this Agreement. It is Licensee's
sole responsibility and expense to obtain the approval of any foreign
authorities and to take whatever steps may be required to effect the
remission of funds to Licensor.
(d) Reports. Licensee shall provide Licensor and Agent with a report of
transactions relating to products on which royalties have accrued for each
calendar quarter during the term of this Agreement. Licensee shall
forward the original report to Agent with copies of such report to
Licensor at: American Champion Media, Inc. 0000 Xxx Xxxxxxx, Xxxxx 000,
Xxx Xxxx, XX 00000-0000. Licensee shall furnish to Licensor and Agent a
full and complete statement, duly certified by an officer of Licensee to
be true and accurate, showing the number of each type of product sold by
country in the Territory during the calendar quarter in question, and the
total Gross Sales for each such Product, together with any information
requested by Licensor. Al amounts shall first be stated in the currency
in which the sales were actually made with the equivalent amount stated in
United States dollars or other currency in which royalties are being
remitted, and the actual rate exchange obtained by the Licensee, used in
making the conversion. In the event there have not been any transactions
relating to the Products during the quarter, Licensee will provide
Licensor with a report indicating this. Reports shall be due thirty (30)
days after the end of each calendar quarter. Payment for royalties which
exceed the advance, as provided in Section 9. (a), will accompany each
report to Licensor. All royalties will be due and payable in US dollars,
unless otherwise specified by Licensor.
(e) Taxes. If any taxes imposed by governments other than the U.S based
on funds remitted to Licensor are required to be paid by Licensee on
behalf of Licensor and Licensee in fact pays such taxes. Licensee may
deduct these from the royalties due, provided that Licensee furnishes
Licensor with documentation sufficient to enable Licensor to receive a
credit for such taxes from the U.S government and that Licensor is able to
claim the benefit of such credit. Licensee agrees to reimburse Licensor
for any taxes withheld from royalties for which Licensor does not receive
such a credit.
(f) Retention of Records. During the term of this Agreement and for two
years thereafter, Licensee shall keep full and accurate books of account
and copies of all documents and other material relating to this Agreement
at Licensee's principal office, which are necessary for a ready
determination of royalty obligations due by Licensee. The Licensor, its
agents or representatives, shall have the right to audit books, documents,
and other material, shall have access thereto during ordinary business
hours, and shall be allowed to make copies of such books, documents, and
other material. At Licensor's request, Licensee shall provide an employee
to assist in the examination of Licensee's records.
(g) Audits. If any audit of Licensee's books and records reveals that
License has failed properly to account and pay royalties owing to Licensor
hereunder, and the amount of any royalties which Licensee has failed
properly to account for and pay for any quarterly accounting period
exceeds, by five percent (5%) or more, the royalties actually accounted
for and paid to Licensor for such period, Licensee shall, in addition to
paying Licensor such past due royalties, reimburse Licensor for its
incurred in conducting the audit, together with interest on the overdue
royalty amount at an annual rate of two percent (2%) over the prevailing
prime interest rate fixed and published by The First National Bank of
Chicago, Illinois in effect as of the date on which such overdue royalty
amount should have been paid to Licensor.
10. Agreements with Manufactures and Distributors.
(a) Manufacturers and Distributors. Licensee shall have the right to
arrange with others to manufacture the products or components thereof for
the exclusive sale, use, and distribution by Licensee, or to serve as a
distributor for products which have been made by or for Licensee and sold
to such distributor. Licensee agrees to enter into written agreements
with all manufactures and distributors and agrees to incorporate into such
written agreements all of the provisions contained herein which relate to
the production, distribution and sale of the Products or are otherwise
relevant to the third party's performance as distributor or manufacturer,
including an express agreement by the parties that Licensor is a third
party beneficiary of the agreement. Licensee further agrees to furnish
Licensor within thirty (30) days of execution, copies of all agreements
with such manufactures and distributors.
(b) Enforcement of Agreements. Licensee agrees strictly to enforce its
manufactures and distributors all of the provisions in such agreements
which protect Licensor's rights, to advise Licensor of any violations
thereof and of corrective actions taken by the Licensee and the results
thereof, and, at the request of Licensor, to terminate such agreements if
any manufacturer or distributor is in violation of any provisions
identical or similar to the obligations undertaken by Licensee herein. If
Licensee fails to give notice of termination to the other party within
twenty (20) days after being requested to do so by Licensor, Licensee
irrevocably appoints Licensor as its attorney-in-fact to terminate the
manufacture or distributor in the name of Licensee. Any breach by a
manufacturer or distributor appointed by Licensee will be considered a
breach of this Agreement by Licensee.
11. Term and Termination.
(a) Term. Except as otherwise provided herein, the term of this
Agreement shall be the Term set forth on page 1 of this Agreement.
(b) Immediate Right of termination. Licensor shall have the right to
terminate this Agreement immediately on notice to Licensee, if Licensee:
(i) breaches any of the provisions of Section 2.;
(ii) becomes subject to any order of any governmental agency involving
the recall of any of the Products;
(iii) makes, sells, offers for sale, distributes or uses any Product
or item of Advertising Material without having the prior written approval
of the Licensor or Agent, as required by Section 3.;
(iv) fails to obtain approval of or offer sale products in the
Territory, as required by Section 4. (a); or to continue to sell products
as required by Section 4.(b);
(v) fails to comply with Section 5. (e) or (g);
(vi) fails to obtain or maintain insurance as required by Section 8.;
(vii) two or more times during a twelve-month period fails to make
timely payment of royalties or fails to make timely submission of royalty
statements as provided in Section 9.; or
(viii) is unable to perform for reasons described in Section 12. (a)
for a period in excess of sixty (60) days.
(c) Termination on Thirty Days Notice. If Licensee breaches any of the
terms of this Agreement other than those specified in (a) above, and fails
to cure the breach within thirty (30) days after receiving written notice
thereof, this Agreement will terminate at the end of the thirty (30) day
notice period.
(d) Bankruptcy or Insolvency. Licensor may terminate this Agreement if:
(i) Licensee becomes insolvent, or a petition in bankruptcy or for
reorganization is filed by or against it, or any insolvency proceedings
are instituted by or against it, or (ii) Licensee makes an assignment for
the benefit of its creditors, is placed in the hands of a receiver, or
liquidates its business. If Licensor terminates this Agreement under any
of the foregoing provisions, the Licensee, its receivers, trustees, or
other representatives shall have no right to sell, exploit, or in any way
deal with the Products, Properties or the Advertising Materials, except
with the express written consent of Licensor.
(e) Effect of Termination. Termination of this Agreement shall be
without prejudice to any rights or claims which Licensor may otherwise
have against Licensee. Upon termination of this Agreement,
notwithstanding anything to the contrary herein, all royalties on sales
thereto made shall become immediately due and payable to Licensor,
including the Guaranteed Royalty set forth in Section 9.(a)
(f) Discontinuance of Use of Trademarks. Subject to the provisions of
subsection 11. (g), upon the expiration or termination of this Agreement,
Licensee agrees immediately to discontinue manufacturing selling,
advertising. distributing, and using the Products and Advertising
Materials; to turn over to Licensor or to destroy any molds, dies,
patterns, or similar items from which the Products and Advertising
Materials were made, as requested by Licensor, unless it is possible to
completely obliterate all references to Licensor and the Properties, and
to terminate all agreements with manufactures, distributors, and others
which relate to the manufacture, sale, distribution, and use of the
Products.
(g) Disposition of Inventory Upon Expiration. Notwithstanding the
provisions of subsection 11. (f), if this Agreement expires in accordance
with its terms and is not terminated for a breach by Licensee, Licensee
shall have the right to sell Products on hand or in the process of
manufacture as of such expiration or termination for a period of ninety
(90) days immediately following expiration, subject to payment of
royalties to Licensee on any such sales and compliance with all the terms
of this Agreement. The sell-off right granted to Licensee is expressly
conditioned on Licensee's providing Licensor with an accurate total of all
inventory of Products on hand and on Licensor's having the right to
conduct a physical inventory in order to verify such inventory. In the
event Licensee fails to provide such inventory to Licensor, and/or refuses
to permit Licensor to conduct a physical inventory, the terms of
subsection 11. 9f) will control. Upon expiration of the sell-off period,
all remaining Products shall upon Licensor's option be sold to Licensor at
Licensee's direct cost of manufacture, excluding overhead, or Licensee
shall destroy the Products and furnish Licensor with a sworn certificate
of destruction.
12. General Provisions.
(a) No Liability. Neither party will be liable to the other for any loss
or injury incurred or damages sustained by the other party xxx to a
failure on the part of a party to perform under this Agreement, except
Licensee's failure to make payments to Licensor as provided herein, if
such failure to perform is a result of war, not labor strike or lock-out,
shortages, fire, flood, wind, storm, Act of God, governmental control or
regulation or other similar condition beyond the party's control.
(b) Relationship of the Parties. Nothing contained in this Agreement and
no action taken by either party to this Agreement will be deemed to
constitute any party or any of such party's employees, agents, or
representatives to be an employee, agent or representative of any other
party or will be deemed to create any partnership, joint venture,
association or syndication among or between any of the parties, or will be
deemed to confer on any party any express or implied right, power or
authority to enter into any agreement or commitment, express or implied,
or to incur any obligation or liability on behalf of any other.
(c) Final Agreement. This Agreement sets forth the entire and final
agreement and understanding of the parties with respect to the matter
hereof. Any and all prior agreements or understandings, whether written
or oral, with respect to the subject matter of this Agreement are
terminated. Subject to Licensor's right to delete Products and countries
of the Territory from this Agreement pursuant to Section 4., this
Agreement may not be modified or amended except by an instrument in
writing specifically referring to this Agreement and executed by the
parties hereto.
(d) No Waiver. No waiver, forbearance or failure by any party of its
right to enforce any provision of this Agreement will constitute a waiver
or estoppel of such party's right to enforce any other provision of this
Agreement or such party's right to enforce such provision in the future.
(e) Remedies. The right of or to be indemnified and held harmless under
Section 7. will not be exclusive, but will be in addition to any and all
other rights and remedies to which Licensor may be entitled under this
Agreement or otherwise.
(f) Notice. Any notice or other communication will be and effective only
if given in writing, evidenced by a delivery receipt, and personally
delivered or sent by facsimile, overnight courier, or mail, postage
prepaid to the addresses shown on page 1. Any notice or other
communication if given personally will be effective upon the date shown or
the delivery if given receipt. Notices directed to Licensor will be given
to both Agent and Licensor.
(g) Assignment. Licensee may not assign or otherwise transfer by
operation of law or otherwise, this Agreement to any entity without the
express written consent of Licensor and any attempt to do so will be null
and void. Licensor may assign or otherwise transfer this Agreement
without Licensee's consent.
(h) Governing Law. This Agreement will be constructed and enforced in
accordance with the laws of the State of California, USA. The parties
agree that the exclusive jurisdiction and venue of any action between the
parties arising out of this relationship, including disputes that may
arise following termination of this Agreement, shall be the Superior Court
of California for the County of Santa Xxxxx or the United States District
court for the Northern District of California and each of the parties
hereby submits itself to the exclusive jurisdiction and venue of such
courts for the purpose of such an action.
(i) Submission to Jurisdiction. The Licensee hereby consents to the
jurisdiction of the courts specified above and waives any objection based
on improper venue or forum non conveniences to the court of any proceeding
in such court and waives personal service of any and all process upon it,
and consents that all such service of process be made by mail directed to
it at the address set forth on page one of the Agreement and that service
so made shall be deemed to be completed upon the earlier of actual receipt
or three (3) days after the same shall have been sent to Licensee by
Licensee's agent as set forth below. Licensee irrevocably appoints Xxx
and Dublin, LLP, in Los Angeles, California with notification to Licensor
in writing, as its agent for the purpose of accepting the service of any
process within the State of California.
(j) Captions. The captions in this Agreement are for convenience only
and will not be considered a part of or be deemed to affect the
construction or interpretation of, any provision of this Agreement.
(k) Attorney Fees. If Licensor initiates any action to collect monies
due to Section 9., or to obtain Licensee's compliance with the provisions
of Section 5., Licensee will pay all of Licensor's costs, including
attorney's fees, incurred in relation to such action.
The parties have agreed to the terms of this license contained above.
American Champion Media, Inc. Prestige Toy Corp.
By: /s/ Xxx Xxxxxxxx By: /s/ Xxxxxx Xxxxxxx
(signature) (signature)
Xxxxxx Xxxxxxx, President
Addendum to clause 10(a):
In the event that Licensor has reasons to suspect that manufacturer,
distributor or sub-licensee may be
shipping licensed goods without the knowledge of the licensee or the
Licensor, Licensee agrees to provide
Licensor, upon Licensor's request, copies of all correspondences,
memoranda, and any other document or
record of communication between Licensee and any manufacturer,
distributor or sub-licensee.
