PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
EXHIBIT 10
CRAYOLA(R) LICENSE AGREEMENT
This Agreement, made as of February 6, 2002, with an effective date of
March 1, 2002, in Easton, Pennsylvania by and between Binney & Xxxxx Properties,
Inc. ("Licensor"), and TST IMPRESO, Inc ("Licensee").
1. DEFINITIONS.
(a) Property. Those particular designs, copyrights, characters and
names used in connection therewith and the trademarks set
forth on Exhibit A hereto.
(b) Licensed Products. Those particular products set forth on
Exhibit B hereto and incorporating the Property.
(c) Term. The initial term shall begin on the effective date
hereof and expire on February 28, 2004. The Sell-Off Period
shall be for a period of *************** after expiration of
the Agreement subject to Section 13(g) hereof.
(d) Territory. ***************.
(e) Advance. The Advance set forth below shall be credited against
the Royalties payable and the Minimum Guaranty due and payable
for the first year of the Term:
Upon execution -- $*********
(f) Minimum Guaranty. For each year the Licensee will pay (1) the
greater of Royalties earned on Licensees Net Sales or (2) the
Minimum Guaranty set forth below:
Year 1: Ending February 28, 2003 $***********
Year 2: Ending February 28, 2004 $***********
Minimum Guarantee shall be payable as follows:
Advance at Execution $***********
Year 1 = June 30, 2002: $***********
September 30, 2002: $***********
December 31, 2002: $***********
March 31, 2003: $***********
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CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
Year 2 = June 30, 2003: $***********
September 30, 2003: $***********
December 31, 2003: $***********
March 31, 2004: $***********
(g) Royalty.
Royalty shall be ****% of Net Sales (as defined in Section 4
(b) hereof) of all Licensed Products sold by Licensee.
(h) Licensed Product Introduction. Licensee agrees to commence
shipping the Licensed Products by ***************.
2. GRANT OF RIGHTS.
(a) Licensor hereby grants to Licensee the non-exclusive right
during the Term to manufacture or have manufactured for it and
to promote, advertise, distribute and sell the Licensed
Products throughout the Territory provided, however, that
Licensor and its affiliates retain the right to manufacture or
have manufactured, promote, advertise, distribute and sell the
Licensed Product(s). An affiliate shall mean the parent
corporation of Licensor and any corporation, which is now or
later comes to be under the direct or indirect control of such
parent corporation. Licensee shall have the right to
manufacture or have manufactured for it Licensed Product(s)
outside the Territory subject to Section 6(e) hereof.
(b) All proprietary right and goodwill in the Property shall inure
to the benefit of Licensor and not Licensee. Licensee shall
acquire no property rights in the Property by reason of its
use thereof, and if, by operation of law, or otherwise,
Licensee is deemed to, or appears to, own any property rights
in the Property, Licensee shall, at Licensor's request,
execute any and all documents necessary to confirm or
otherwise establish Licensor's rights therein.
(c) Licensee shall not have the right to manufacture or sell any
Licensed Products combining the Property with the name or logo
of another company (other than Licensee).
3. ARTWORK AND POSITIVES. If from time to time during the term of
this Agreement Licensee should request from Licensor artwork
and positives in
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CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
connection with this license, such artwork and positives will
be rented by Licensor to Licensee on the terms set forth on
Exhibit C attached hereto.
4. ROYALTY.
(a) In consideration of the rights herein granted by Licensor,
Licensee agrees to pay to Licensor the Royalty. Royalties
shall be computed on Net Sales with respect to each quarter,
or portion thereof, during the term of this Agreement, and
shall be paid within *********** after the end of each quarter
(on or before July 15, October 15, January 15, April 15) and
the date of termination of this Agreement. Royalty payments
shall be in U.S. dollars and shall be sent to the address set
forth in Section 17 hereof. All statements shall comply with
the requirements set forth in Section 10.
(b) Net Sales shall mean *************************. For the
purposes of this Agreement, free Licensed Products delivered
by Licensee to any of its customers and Licensed Products sold
by Licensee to any of its customers with whom Licensee shall
not have dealt at arms' length shall be treated as if such
Licensed Products had been sold by Licensee and shall be
included in the calculation of "Net Sales" at Licensee's
normal selling price.
(c) Interest at eighteen percent (18%) per annum shall be incurred
on Royalties from and after the date due which interest shall
not be credited against the Guaranty due and payable.
(d) Licensee shall deliver to Licensor the non-refundable Advance
upon execution of this Agreement. Such Advance shall be
credited against the first dollars of Royalties and the
Guaranty due and payable by Licensee to Licensor hereunder for
such year.
(e) Licensee guarantees that it shall pay at least the Minimum
Guaranty in Royalties as set forth in Section 1 during each
year of this Agreement. If such amount has not been paid on or
before the end of the applicable year, Licensee shall, within
thirty (30) days thereafter, remit to Licensor the amount of
the difference between Royalties paid and the amount of said
Minimum Guaranty.
(f) All Royalties paid by Licensee shall not be refundable under
any circumstances.
5. TERM. The Term shall be as set forth in Section 1, unless
earlier terminated in accordance with Sections 7 or 13 below.
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CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
6. QUALITY AND APPROVALS.
(a) Licensee warrants that the Licensed Products shall be of good
quality and free of defects in design, material and
workmanship and shall be suitable for their intended purpose;
that no injurious, poisonous, deleterious or toxic substance,
material, paint or dye will be used in or on the Licensed
Products; that the Licensed Products will not be inherently
dangerous to the users thereof; and that the Licensed Products
will be manufactured, packaged, marketed, sold and distributed
in compliance with all applicable laws and regulations and
voluntary industry standards in the Territory. Licensee shall
ensure that the printed copy on all Licensed Product packaging
complies with all state and federal packaging and labeling
requirements for such products. Licensed Products not
complying with applicable laws, regulations and voluntary
standards shall be deemed unapproved, even if previously
approved by Licensor, and shall not be shipped unless and
until they have been brought into full compliance therewith.
Both before and after Licensee places Licensed Products on the
market, Licensee shall follow reasonable and proper procedures
for testing that the Licensed Products comply with such laws,
regulations and standards.
(b) Prior to manufacture and/or marketing and/or sale of any
Licensed Products pursuant hereto, Licensee shall submit to
Licensor at each stage, the concept, rough art, final artwork,
prototypes and fifteen (15) production samples of each of the
Licensed Products to be sold, and of the package design
therefor, for Licensor's written approval as to artwork,
quality, appearance, materials, workmanship and all other
construction and aesthetic aspects of the Licensed Products.
Licensee shall also submit to Licensor for its written
approval copies of all proposed advertising and promotional
materials for the Licensed Products. Any such Licensed
Products or material as to which approval or disapproval is
not given in writing within fifteen (15) days after receipt
thereof by Licensor shall be deemed disapproved. During the
term hereof Licensee shall, at Licensor's request and from
time to time, furnish additional samples of finished Licensed
Products to Licensor at cost to insure that the quality of the
Licensed Products made pursuant hereto conforms to the samples
approved.
(c) The rights granted hereunder do not permit the sale of
"seconds" or "irregulars." All Licensed Products not meeting
the standard of approved samples shall be destroyed. Licensee
will adopt a procedure to assure Licensor of such removal.
(d) Licensor shall be entitled to revoke any approval previously
given, by giving written notice of same to Licensee,
explaining the reason for the revocation. Such revocation
shall be effective as to any such Licensed Products or other
materials not yet manufactured or in the process of
manufacture. As to any such Licensed
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CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
Products or other materials already manufactured or in the
process of manufacture, Licensor shall have the right to
purchase same at their Replacement Value (as defined below);
however, Licensee shall have the right to complete and sell or
distribute such Licensed Products or other materials unless
(a) Licensor exercises its purchase rights, or (b) such
Licensed Products or other materials are not in compliance
with the requirements of this Agreement. "Replacement Value"
shall mean the out-of-pocket costs, excluding any overhead,
incurred by Licensee in the manufacture of the Licensed
Products or other materials, minus costs attributable to
damaged or otherwise unusable items, and minus depreciation
for obsolescence, if any.
(e) In the event that Licensee desires to have another person or
firm manufacture any of the Licensed Products for promotion,
advertising, distribution, and sale by Licensee, Licensee
shall first notify Licensor of the name and address of the
manufacturer it wishes to use and obtain the execution by such
manufacturer of the Manufacturer's Agreement attached hereto
as Exhibit D. Licensee shall promptly forward to Licensor a
copy of each such executed Manufacturer's Agreement. If any
such manufacturer utilizes the Property for any unauthorized
use, Licensee shall cooperate fully in bringing such
utilization to an immediate halt. Licensor shall be entitled
to terminate this Agreement if such a manufacturer violates
the terms of the Manufacturer's Agreement.
7. SALES EFFORTS. Licensee agrees to provide for Licensor's
approval an annual marketing plan by *********** of each year
including royalty forecasts and current stock numbers of
Licensed Products. On a quarterly basis, Licensee agrees to
provide Licensor with a ********** forecast of projected
royalties on the form attached hereto as Exhibit F or similar
form generated by Licensee. Licensee agrees to manufacture
Licensed Products in sufficient quantity to meet the
reasonably anticipated demand therefor. Licensee further
agrees to promote the sale of Licensed Products and to make
reasonable efforts to sell Licensed Products as widely as
possible within the Territory. Licensee agrees to have
commenced shipping of the Licensed Products by the date set
forth in Section 1. If Licensee fails to commence shipping by
such date or if Licensee fails to manufacture and sell
Licensed Products in sufficient quantities to meet the
reasonably anticipated demand for same, and to continually
manufacture, sell, and ship same thereafter in the same
fashion; then Licensor may terminate Licensee's rights
hereunder for the Licensed Product by giving ************
written notice of such termination to Licensee. Licensee
further agrees to create and develop a web site, which
includes ideas, art and templates to support the Products in
Exhibit B. Licensee agrees to allow Xxxxxxx.xxx to link
directly to this site.
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CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
8. COPYRIGHT AND TRADEMARK PROTECTION.
(a) Licensee agrees to affix to the Licensed Products, packaging
therefor, and advertising and promotional materials depicting
the Licensed Products, copyright notices in the form
designated by Licensor and any other notices in compliance
with applicable copyright and trademark laws. The required
notices shall appear on hangtags for the Licensed Products
when the Licensed Products are not otherwise packaged. The
size and positioning of the copyright notice shall be approved
in advance by Licensor within fifteen (15) days of submission
and if approval or disapproval is not received within such
time period, the submission shall be deemed disapproved.
(b) Licensee agrees to cooperate with Licensor in obtaining and
preserving for Licensor copyright protection for the Property
and executing all documents that, in Licensor's judgment, are
necessary therefor and to maintain records (including
invoices, correspondence and related material) of and, at
Licensor's request, to advise Licensor with respect to, the
publication dates of all adaptations, derivative works, new
works and other works by Licensee utilizing the likenesses of
any of the characters, scenes, or other elements contained in
the Property. Licensee hereby sells, assigns and transfers to
Licensor its entire worldwide right, title and interest in and
to all such "new works," including, but not limited to, the
copyrights thereon and Licensee agrees that, to the extent
allowed by law, every such new work shall be considered a
"work made for hire" for Licensor. Licensee additionally
agrees when requested to do so by Licensor to register the
copyrights, and obtain design registrations where appropriate,
for any such new works in Licensor's name and at Licensor's
expense in all parts of the Territory, which permit such
registration. Licensee warrants that the use of such new works
by Licensor or its licensees shall not infringe the rights of
any person. During and after the term of this Agreement,
Licensee shall refrain from asserting, directly or indirectly,
any interest or property right in any copyrights of Licensor
which are the subject matter of this Agreement, or any
adaptations thereof, and which are not in the public domain.
(c) Licensee agrees to cooperate with Licensor in obtaining and
preserving for Licensor trademark protection for the names of
the Property and any characters contained therein and
executing all documents that in Licensor's judgment are
necessary therefor and to maintain records of and, at
Licensor's request, to advise Licensor with respect to use by
Licensee of the name of the Property and the names of
individual characters within the Property and to provide
Licensor with such additional samples of said names as used on
the Licensed Products, dates of first use and dates of first
use in interstate commerce, (such as an invoice for shipment),
and other materials and information as Licensor deems
necessary to
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CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
enable Licensor to apply for trademark registration for the
name of the Property and characters in connection with all
Licensed Products. Licensee further agrees to recognize
Licensor's trademark rights in the name used in connection
with the Property and the names of individual characters
within the Property irrespective of whether Licensor or
Licensee selects such name or names and to do nothing in
derogation or dilution thereof, either during the term of this
Agreement or at any time thereafter.
9. BOOKS AND RECORDS. Licensee agrees to keep accurate books of
account and records concerning all transactions hereunder, and
Licensor shall have the right and on reasonable notice during
ordinary business hours (at its expense), either itself or
through a firm of independent certified public accountants, to
examine, and to take excerpts from, such books of account and
records. Said books of account and records shall be preserved
and maintained by Licensee and kept available for inspection
by Licensor for at least two (2) years from the expiration or
termination of this Agreement and Licensee agrees to permit
inspection thereof by Licensor or its independent certified
public accountants during said period. If an audit reveals a
shortfall of ************ or more of Net Sales in any quarter,
Licensee shall reimburse Licensor for the full out-of-pocket
cost of the audit, including cost of auditors for travel and
actual working time.
10. STATEMENTS. On each date Licensee makes payment of royalties
to Licensor pursuant to Section 4 above, Licensee shall
dispatch to Licensor two (2) copies of a written statement in
reasonably specific detail, concerning the computation of
royalties then due and payable to Licensor. Each such
statement shall show the stock number, item description,
quantity shipped, gross invoice amount billed customers, any
deductible discounts, allowances, and returns, and the
reportable sales of each Product and shall be in the form
attached hereto as Exhibit E or similar form generated by
Licensee. Receipt or acceptance by Licensor of any statement
furnished pursuant hereto or any sums paid by Licensee
hereunder shall not preclude Licensor from questioning the
correctness thereof at any time, and if any inconsistencies or
mistakes are discovered in such statements or payments, they
shall be immediately rectified and prompt adjustments and
corresponding payments shall be made to compensate therefor.
Royalties due on Licensed Products sold in each country of the
Territory shall be reported separately.
11. INDEMNIFICATION.
(a) Licensee agrees to defend, indemnify and hold Licensor, its
parent and affiliated companies harmless from and against any
and all claims of third parties (and liabilities, judgments,
penalties, losses, costs, damages and expenses resulting
directly therefrom, including reasonable attorneys' fees)
arising by reason of, or in
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CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
connection with, any act or omission pursuant to or in breach
of this Agreement by Licensee, its agents or employees,
including but not limited to, claims arising out of the
manufacture, distribution, exploitation, advertising, sale,
use or consumption of the Licensed Products, but excepting
claims of third parties in respect of the use by Licensee in
accordance with this Agreement of the Property licensed
hereunder.
(b) Licensor agrees to defend, indemnify and hold Licensee, its
parent and affiliated companies harmless from and against any
and all claims of third parties (and liabilities, judgments,
penalties, losses, costs, damages and expenses resulting
directly therefrom, including reasonable attorneys' fees)
arising by reason of the use by Licensee of the Property
pursuant to the terms hereof.
(c) Without limiting the foregoing indemnification obligations,
Licensee agrees to maintain at its own expense, during the
term of this Agreement and for one (1) year thereafter, with
an insurer or insurers (rated at least A-/XII by the most
current A.M. Best Publication), commercial general liability
insurance including products/completed operations, blanket
contractual liability, and personal injury and advertising
injury liability coverage in amounts no less than Two Million
Dollars ($2,000,000) combined single limit for each single
occurrence for bodily injury and property damage and a ten
million dollar ($10,000,000) umbrella policy, and within
thirty (30) days from the date hereof to submit to Licensor a
certificate evidencing such insurance, that Licensor has been
named as additional insured party on said insurance and that
said insurance shall be primary coverage before any other
similar insurance available to Licensor. The certificate shall
provide for at least thirty (30) days advance written notice
to Licensor of any cancellation or change in such coverage.
(d) Each party agrees to notify the other promptly in writing of,
and to keep the other fully advised with respect to, such
claims indemnified hereunder, and the progress of any legal
actions relating thereto in which the other party is not a
participant. Each party shall have the right to assume the
defense of a claim instituted against the other party for
which the party assuming the defense is obligated to indemnify
the other party. In the event that a party assumes the defense
of a claim against the other party, the party assuming the
defense shall not enter into any compromise or settlement of
the claim without the prior written consent of the other
party, which consent shall not be unreasonably withheld or
delayed. Each party shall have the right to participate at its
own expense in the defense of any claim instituted against it,
and, if such party does so participate, it shall not have the
right to recover against the other party the costs and
expenses of participation in such suit. The foregoing
indemnifications shall not be deemed to entitle either
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CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
party to recover against the other party for consequential
damages or lost profits, whether actual, anticipated or
estimated.
12. THIRD PARTY INFRINGEMENT.
(a) Licensee shall promptly notify Licensor of any apparent
infringement of any rights granted by Licensor to Licensee
hereunder. Licensor shall have the exclusive right to
institute legal action (at its own expense) against the
infringer or to otherwise terminate such infringement,
although Licensor shall not be obligated to do so. Licensee
shall have no right to make any demands or claims, bring suit,
effect any settlements or take any other action with respect
to such an infringement without the prior written consent of
Licensor.
(b) The parties agree to cooperate with each other with respect to
any suits or other action taken under this paragraph and to
keep the other party promptly and fully advised with respect
thereto.
13. BREACH AND TERMINATION.
(a) Licensor shall have the right to terminate this Agreement
immediately by written notice to the Licensee in the event
that
(i) Licensee uses any unapproved artwork or promotional
materials or sells or distributes or authorizes the
sale or distribution of Licensed Products outside the
Territory;
(ii) Licensee fails to make any payment set forth in
Section 4 hereof and does not cure same within
*********** of notice of default;
(iii) Licensee attempts to assign or sublicense its rights
hereunder, except as permitted in Section 18 hereof;
(iv) any governmental agency finds that any of the
Licensed Products are contaminated, defective or
unsafe in any way or Licensor believes in its
reasonable judgment that Licensor may be negatively
impacted in publicity relating to the Licensee
Product;
(v) Licensee fails to maintain the insurance required by
Section 11; or
(vi) Licensee is adjudicated bankrupt, becomes insolvent,
makes any assignment for the benefit of its
creditors, has its assets placed in the hands of a
receiver, files a petition in
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CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
bankruptcy, has filed against it a petition in
bankruptcy which is not discharged within sixty (60)
days after its filing, or is dissolved or liquidated
(in which case, Licensee, its receivers,
representatives, trustees, agents, or successors
shall have no right to sell, exploit or in any way
deal with the Licensed Products, except in accordance
with the written consent and instructions of
Licensor);
(vii) Licensee or any third party manufacturer fails to
comply with the requirements of Section 15 hereof.
(b) If either party hereto is in material breach of any terms and
conditions of this Agreement other than as set forth in
subsection (a), and such party fails to cure the breach within
fifteen (15) days after the date of receipt of written notice
from the other party advising of the nature of such breach; or
if either party breaches a provision of this Agreement after
being notified in writing of a previous breach of the same
provision in the same calendar year (whether the first breach
was cured or not); then the party not in default shall have
the right to terminate this Agreement forthwith by written
notice to the party in breach.
(c) In the event of a termination by Licensor pursuant to
subsection (a) or (b) hereof, all unpaid Advances and Minimum
Guaranties shall be immediately due and payable. Licensee
shall be responsible for any attorneys' fees and expenses,
which Licensor incurs in attempting to collect the same.
(d) Except as provided in subsection (g) below, upon the
termination or expiration of this Agreement, Licensee agrees
to immediately and permanently discontinue the manufacture,
sale and distribution of the Licensed Products, and to
immediately and permanently discontinue use of the Property,
including any adaptations thereof or designs made by others in
the same style, which it is granted the right to use by virtue
of this Agreement.
(e) Termination of this Agreement pursuant to this Section shall
be without prejudice to any rights, which either party may
have against the other party hereto.
(f) Subject to subsection (g) below, Licensee hereby acknowledges
that its failure to cease the manufacture, sale or
distribution of the Licensed Products upon the termination or
expiration of this Agreement will result in damage to Licensor
and to the rights of any subsequent licensee for which there
is no adequate remedy at law; accordingly, in the event of
such failure, Licensor shall be entitled to equitable relief
by way of temporary and permanent injunctions and such other
relief as any court of competent jurisdiction may deem just
and proper.
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CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
(g) Anything herein to the contrary notwithstanding, provided
Licensee is not in breach of this Agreement, in the event of
expiration or termination of this Agreement, except for a
termination by Licensor pursuant to subparagraphs (a) or (b)
hereof, after the date of expiration or termination Licensee
shall have the non-exclusive right, for the Sell-Off Period
indicated in Section 1, to complete Licensed Products in
process, which shall include materials in process already
bearing the Property or adaptations thereof as of said date,
and to promote, advertise, sell and distribute both Licensed
Products in inventory remaining unsold as of, and Licensed
Products so completed after, said date of expiration or
termination pursuant to the terms of this Agreement including
payment of Royalties related thereto. Prior to any Sell-Off
Period Licensee shall have furnished to Licensor within thirty
(30) days after the date of expiration or termination of this
Agreement an inventory, certified to be true and correct, of
all Licensed Products on hand or in process. Except as
specified above, products shall not be deemed to be in process
of manufacture merely because raw materials are available
therefor.
(h) Upon the expiration or termination of this Agreement for
whatever reason, or the expiration of any Sell-Off Period, if
applicable, Licensee shall immediately either return to
Licensor or destroy its remaining inventory of the Licensed
Products as well as any dies, molds, negatives, plates, or
other articles or implements from which the Property can be
perceived or produced, other than those which have been rented
by Licensor to Licensee which must be returned intact to
Licensor. In the event of destruction, Licensee shall furnish
to Licensor a certificate of such destruction, signed by an
appropriate officer of Licensee, and Licensor shall have the
right, at its election, to have a representative selected by
it observe any such destruction.
(i) In order to enable Licensor to maintain continuity of sales of
the Licensed Products upon expiration or termination of this
Agreement, Licensor shall have the right, notwithstanding
anything to the contrary herein, to authorize another person
or firm to manufacture, to show, and to solicit and receive
orders for, such Licensed Products from a time ***************
preceding the expiration of this Agreement, or from the time
that notice is given by either party of the termination of
this Agreement, whichever is sooner. Such person or firm shall
not, however, be authorized to ship to its customers any of
the Licensed Products so manufactured and shown until after
this Agreement has expired or has been terminated.
14. PREMIUMS. Licensee agrees that it will not use or authorize
the use of the Licensed Products as premiums. As used herein,
the term "premium" shall be defined as combination sales, free
or self-liquidating items offered to the public in
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CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
connection with the sale or promotion of a product or service,
or any similar scheme or device, the prime intent of which is
to use the Licensed Product in such a way as to sell products,
services or business image of the user of such item. Licensor
reserves all rights to the utilization of products which
feature the Property in connection with any premium, give-away
or promotional arrangement, fan club, charitable and/or
fund-raising activity, or the like, which reserved right may
be exercised by Licensor concurrently with the rights licensed
to Licensee hereunder without regard to the extent to which
any such rights may be competitive with Licensee or the
license granted hereunder.
15. ETHICAL MANUFACTURING. Licensee agrees that Licensee and any
third party manufacturers shall comply with the following in
manufacturing Licensed Products:
(a) No child labor will be used in manufacturing, packaging or
distribution. The term "child" refers to a person younger than
the age for completing compulsory education under local
guidelines, but in no case will any child younger than
fourteen (14) years of age be employed in the manufacturing,
packaging or distribution of products;
(b) Employees will be provided with a safe and healthy workplace
in compliance with all applicable laws, regulations and
industry standards and ensuring at minimum adequate lighting,
ventilation, access to potable water and sanitary facility and
fire safety;
(c) All employment will be strictly voluntary. No prison, forced
or indentured labor will be used in the supply of materials or
products, and no corporal punishment or other forms of mental
or physical coercion will be used as a form of discipline of
employees. All employees must have the right of free
association and organization;
(d) There will be no discrimination in hiring and or other
employment practices on grounds of race, religion, disability,
age nationality, social or ethnic origin, political
affiliation, sexual preference, or gender;
(e) All applicable wage and hour laws, including minimum wage,
overtime, and maximum hours, and fair employment practices as
defined by applicable laws and standards will be utilized. In
no instance shall an employee be required to work more than
sixty (60) hours per week (including overtime) on a regular
basis or be required to work more than six (6) days per week;
(f) All applicable environmental laws, regulations and industry
standards; and
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CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
(g) All applicable laws, regulations and standards pertaining to
manufacture, pricing, sale, and distribution.
16. WITHDRAWAL OF PROPERTY. Licensee agrees that Licensor may
withdraw any Property hereunder which would infringe, or which
has been claimed to infringe or which could reasonably be
claimed to infringe the right of a third party, provided that
Licensor purchases the Licensed Product and other materials
utilizing such withdrawn Property which cannot be sold or used
by Licensee at their Replacement Value as defined in Section
6(d) hereof.
17. NOTICES. Any notice or other communication required or
permitted to be given by either party hereto shall be mailed
by certified mail, return receipt requested, addressed as set
forth below and by facsimile. Notices or other communications
mailed as herein provided shall be deemed to have been given
when received or when an attempt to deliver same was made as
evidenced by a duly executed return receipt.
If to Licensor: Binney & Xxxxx Properties, Inc.
************************
************************
************************
Attention: ***************
***************
Fax:
If to Licensee: TST IMPRESO, Inc.
000 Xxxxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxxx, CEO President
And Xxxxx Xxxxxx, General Counsel
Fax: (000) 000-0000
18. NON-ASSIGNABILITY. Licensee may not assign or transfer any of
its rights or obligations under this Agreement by law, change
of control or otherwise without the prior written consent of
Licensor.
19. AMENDMENTS. This Agreement expresses the entire understanding
of the parties hereto and replaces any prior oral or written
agreements concerning the subject matter hereof; and Licensee
acknowledges that it has not executed this
13
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
Agreement in reliance upon any promise, agreement,
representation or warranty not expressly set forth in this
Agreement. No amendment or supplementation hereof shall be
effective or binding on either party hereto unless reduced to
writing and executed by the duly authorized representatives of
both parties hereto.
20. FOREIGN TAXES. In the event that the Territory includes
countries outside the United States or its territories,
Licensee shall withhold the amount of income or other taxes,
if any, payable by Licensor and levied by governmental
agencies in such countries on payments payable by Licensee to
Licensor pursuant to this Agreement, and shall promptly effect
payment thereof to the appropriate authority. Licensee shall
transmit to Licensor within thirty (30) calendar days after
such payment, official tax receipts or other documentary
evidence issued by said tax authority sufficient to enable
Licensor to support a claim for United States income tax
credit, if any, in respect of any such taxes so paid. Licensee
agrees to indemnify and hold Licensor harmless from any
governmental claim due to Licensee's failure to perform in
accordance with this Section.
21. APPLICABLE LAW. The validity, construction and performance of
this Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of Missouri. In any
dispute relating to this Agreement, the parties hereto submit
themselves to the exclusive jurisdiction of the tribunals of
the State of Missouri and the United States Courts within the
State of Missouri, expressly waiving any venue to which they
may be entitled by their present or future domiciles.
22. NO AGENCY. Nothing in this Agreement shall be construed to
make either party hereto the agent or representative of the
other party and neither party shall so hold itself out nor
shall either party be liable or be bound by any act or
omission of the other party. This Agreement does not
constitute and shall not be construed as constituting a
partnership or joint venture between Licensor and Licensee,
and nothing herein contained shall give or is intended to give
any rights of any kind to any third person against Licensor.
23. WAIVER. Failure of either party at any time to require the
performance of any provision under this Agreement shall not
affect the right of such party to require full performance
thereafter and a waiver by either party of a breach of any
provision of this Agreement shall not be taken or held to be a
waiver of any further or similar breach or as nullifying the
effectiveness of such provision.
14
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
BINNEY & XXXXX PROPERTIES, INC.
Date By
------------- ------------------------------------
Print Name: **************************
Title: *******************************
TST IMPRESO, INC.
Date By
------------- ------------------------------------
Print Name: XXXXXXXX XXXXXXXXX
Title: PRESIDENT
15
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
EXHIBIT A
PROPERTY
Crayola(R) trademark
serpentine design trademark
chevron design trademark
Crayola(R) trade-dress and proprietary characters
Crayola(R) color names
16
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
EXHIBIT B
Laser and Ink Jet paper, including specialty papers such as
card stock, post cards, magnets, clings, transparencies,
t-shirt transfers, and labels including stickers.
17
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
EXHIBIT C
1. If artwork and/or positives are requested by Licensee from Licensor in
connection with this license, same shall be rented to the Licensee at a price
agreed upon in writing by both parties. Licensor shall ship the requested
artwork and/or positives to Licensee F.O.B. Easton, Pennsylvania, U.S.A.
2. Licensee hereby recognizes the valuable tangible and intangible property
right which Licensor has in its artwork and positives, and accordingly, Licensee
agrees to maintain control at all times over any and all Licensor's artwork and
positives in its possession. Licensee will submit and accounting from time to
time, as requested in writing from Licensor of Licensor's artwork and positives
in its possession, together with any copies thereof, and shall return them to
Licensor provided they are not then in use, if and when requested to do so or
shall release them to Licensor's authorized representative when requested to do
so in writing by Licensor. Licensee will not make any of Licensor's artwork
and/or positives available to third parties for said third parties' use, except
as a subcontractor or manufacturer for Licensee.
18
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
EXHIBIT D
MANUFACTURER'S AGREEMENT
Licensee:
Location of manufacturing facility(s)
Licensed Products:
The undersigned understands that Binney & Xxxxx Properties,
Inc. ("Binney") has licensed the above-named Licensee to manufacture or
have manufactured for it the above-named Licensed Products utilizing
certain designs and names proprietary to Binney (such products with
Binney designs being referred to as ("Licensed Products"). In order to
induce Binney to consent to the manufacture of the Licensed Products by
the undersigned, the undersigned agrees that it will not manufacture
the Licensed Products for anyone but the Licensee or sell the Licensed
Products to anyone but the Licensee; that it will not manufacture the
Licensed Products anywhere other than the above-named Location; that it
will not (unless Binney otherwise consents in writing) manufacture or
sell any other merchandise utilizing any of the same designs or names,
or any substantially similar designs; that it will permit such
representative as Binney may from time to time designate to inspect the
activities of the undersigned with relation to its manufacture of the
Licensed Products; and that whenever the Licensee ceases to require the
undersigned to manufacture the Licensed Products, the undersigned will
deliver to Binney or its designee any molds, plates, engravings,
negatives, transparencies, or other devices used to reproduce the said
designs or will give satisfactory evidence of the destruction thereof.
The undersigned will cease to manufacture Licensed products for the
Licensee upon receiving written notice to that effect from the Licensee
or Binney. Binney shall be entitled to invoke any remedy permitted by
law for violation of this agreement by the undersigned.
The undersigned further agrees that in manufacturing
Licensed Products, the undersigned agrees that it shall take
reasonable steps, including having in place policies, where
appropriate, to comply with the applicable laws of the United
States of America relating to the following:
1. No child labor will be used in manufacturing,
packaging or distribution. The term "child" refers to a person
younger than the age for completing compulsory education under
local guidelines, but in no case will any child younger than
fourteen (14) years of age be employed in the manufacturing,
packaging or distribution of products;
19
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
2. Employees will be provided with a safe and healthy
workplace in compliance with all applicable laws, regulations
and industry standards and ensuring at minimum adequate
lighting, ventilation, access to potable water and sanitary
facility and fire safety;
3. All employment will be strictly voluntary. No
prison, forced or indentured labor will be used in the supply
of materials or products, and no corporal punishment or other
forms of mental or physical coercion will be used as a form of
discipline of employees. All employees must have the right of
free association and organization;
4. There will be no discrimination in hiring and or
other employment practices on grounds of race, religion,
disability, age nationality, social or ethnic origin,
political affiliation, sexual preference, or gender;
5. All applicable wage and hour laws, including
minimum wage, overtime, and maximum hours, and fair employment
practices as defined by applicable laws and standards will be
utilized. In no instance shall an employee be required to work
more than sixty (60) hours per week (including overtime) on a
regular basis or be required to work more than six (6) days
per week;
6. All applicable environmental laws, regulations and
industry standards; and
7. All applicable laws pertaining to manufacture,
pricing, sale, and distribution All applicable laws,
regulations and standards pertaining to manufacture, pricing,
sale, and distribution.
The undersigned agrees to cease manufacturing Licensed
Products for the Licensee upon receiving written instructions to do so
from the Licensee. Binney shall be entitled to invoke any remedy
permitted by law for violation of this agreement by the undersigned.
Name of Manufacturer:
----------------------------
Address:
--------------------
----------------------------
By:
-------------------------
Title:
----------------------
20
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
EXHIBIT E
BINNEY & XXXXX PROPERTIES, INC.
LICENSED PROPERTY - ROYALTY REPORTING FORM
DATE LICENSED PROPERTY
--------------- --------------
LICENSEE ROYALTY RATE
--------------- --------------
QUARTER FOR PERIOD ENDING COUNTRY
--------------- --------------
UNIT TOTAL TOTAL
PRODUCT STYLE UNITS WHOLESALE GROSS NET ROYALTIES
OR I.D. # PRODUCT DESCRIPTION SHIPPED PRICE SALES RETURNS DISCOUNTS SALES EARNED
------------- ------------------- ------- --------- ----- ------- --------- ----- ---------
TOTALS
REMIT TO: TOTAL GROSS SALES
--------------
Binney & Xxxxx Properties, Inc. LESS RETURNS, DISCOUNTS
--------------
Attn: Treasury Department TOTAL NET SALES
--------------
************************ ROYALTY EARNED
--------------
************************ AMOUNT OF CHECK ENCLOSED
--------------
REVISED ADVANCE BALANCE
--------------
SEND COPY TO: Y-T-D ROYALTIES PAID
--------------
Binney & Xxxxx Properties, Inc. ANNUAL GUARANTEE
--------------
Attn: ************************ APPROVED BY
--------------
****************************
****************************
21
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY [****], HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
EXHIBIT F
TO: ALL CRAYOLA LICENSEES/LICENSING AGENTS
PLEASE TAKE THE TIME TO FILL IN THE BLANKS FOR YOUR PROJECTIONS. A SEPARATE
SHEET IS REQUIRED FOR EACH COUNTRY YOU ARE REPORTING SALES AND ROYALTY
INFORMATION. THANK YOU IN ADVANCE FOR YOUR RESPONSE. IF YOU HAVE ANY QUESTIONS,
PLEASE CONTACT ME AT *********************.
CRAYOLA BRAND (YEAR) PROJECTIONS
PLEASE FAX TO: LICENSING COORDINATOR AT ***********
DUE 10 BUSINESS DAYS AFTER THE END OF EACH QUARTER
COMPANY NAME
--------------------------------------------------------------------
COUNTRY
--------------------------------------------------------------------
EXPLANATION OF SIGNIFICANT
CHANGE FROM
PRIOR FORECAST
TIME PERIOD SALES REVENUE ROYALTY REVENUE (IF APPLICABLE)
----------- ------------- --------------- ---------------------------
/ / TO / /
(PREVIOUS QTR ACTUAL)
/ / TO / /
/ / TO / /
/ / TO / /
TOTAL
COMMENTS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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22
