RETAIL LICENSE
WARNER BROS. CONSUMER PRODUCTS
#7635-WBLT
LICENSE AGREEMENT made Sept 24, 1996, by and between WARNER BROS., A DIVISION OF
TIME WARNER ENTERTAINMENT COMPANY, L.P., c/o Warner Bros. Consumer Products, a
Time Warner Entertainment Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(hereinafter referred to as "LICENSOR") and ARTISAN HOUSE, whose address is ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇ (hereinafter referred
to as "LICENSEE").
WITNESSETH:
The parties hereto mutually agree as follows:
1. DEFINITIONS: As used in this Agreement, the following terms shall have the
following respective meanings:
(a) "Channels of Distribution": Licensee may sell the Licensed Products
only through the following channels of distribution: mid-tier,
furniture stores and specialty catalogs (direct mail to consumer).
(b) "Guaranteed Consideration": The sum of $25,000.00 payable as follows:
$5,000.00 payable simultaneously with the execution of this Agreement;
and
$5,000.00 payable on or before June 30, 1997; and
$5,000.00 payable on or before September 30, 1997; and
$5,000.00 payable on or before December 31, 1997; and
$5,000.00 payable on or before March 31, 1998.
(c) "Licensed Product(s)":
i) Metal Wall Sculptures
ii) Metal Tabletop Sculptures
(d) "Licensed Property": The representations, names, logos, movements,
personalities, artwork, photographs and other material in connection
with the following "LOONEY TUNES" characters: BUGS BUNNY, SYLVESTER,
TWEETY, PORK PIG, SPEEDY ▇▇▇▇▇▇▇▇, ROAD RUNNER, DAFFY DUCK, YOSEMITE
▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ E. COYOTE, TASMANIAN DEVIL, SHE-DEVIL, ▇▇▇▇ ▇▇
▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, FOGHORN LEGHORN, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇., GRANNY,
PETUNIA PIG, ▇▇▇▇▇▇, ▇▇▇▇▇▇ THE MARTIAN, PENELOPE, PUSSYFOOT, LOLA
BUNNY and MICHIGAN J. FROG only.
(e) "Marketing Date": January 1, 1997
Licensee specifically understands and agrees that merchandise bearing
the image of licensed character "LOLA BUNNY" shall not be displayed
for sale before October 1, 1997.
(f) "Royalty Rate": Licensee shall pay to Licensor the sum equal to Twelve
Percent (12%) of all net sales by Licensee of the Licensed Product(s).
(g) "Term": August 1, 1996 through December 31, 1998
(h) "Territory": United States (fifty states)
2. GRANT OF LICENSE:
(a) Subject to the restrictions, limitations, reservations and conditions
and Licensor's approval rights set forth in this Agreement, 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 retail sale to
the public throughout the Territory on a non-exclusive basis.
(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.
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
specifical1y 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, subject to Licensee's proprietary rights, similar 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 arena or for sale or distribution in any retail stores operated by
or on behalf of Licensor, its affiliated companies or franchises 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,
subject to Licensee's proprietary rights, 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 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 specifically understands and agrees that no rights are
granted herein with respect to the Warner Bros. "LOONEY TUNES
LOVABLES" baby property, it being understood that all rights in and
to said property are reserved exclusively to Licensor for use and/or
licensing as it deems appropriate to third parties of its choice.
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(e) Licensee further understands and agrees that the rights granted herein
are limited only to the cartoon characters set forth above and that
any and all rights in, to or associated with the theatrical motion
picture tentatively entitled "Space Jam", as well as with any sequels
thereto, are specifically excluded herefrom, it being understood that
all rights in and to said property are reserved exclusively to
Licensor for use and/or licensing as it deems appropriate to third
parties of its choice.
(f) 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. Subject to Licensor's prior written
approval as aforesaid, Licensee shall pay to Licensor a sum equal to
TEN PERCENT (10%) 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 or 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
actual quantity discounts and actual returns, but no deductions shall
be made for uncollectible accounts and deductions for actual returns
may not exceed 5% of total sales. 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 payable concurrently with the periodic statements
required in Paragraph 5 hereof, except to the extent offset by
Guaranteed Consideration theretofore remitted.
5. PERIODIC STATEMENTS.
(a) Within THIRTY (30) days after the initial shipment of the Licensed
Product(s) and promptly on the thirtieth (30th) day after every month
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, showing with respect to all Licensed
Product(s) distributed and sold by Licensee during the preceding
calendar month the number of units, description
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of items sold (specifying the components of the Licensed Property
utilized and specifying the nature of the Licensed Product(s), gross
sales price and itemized deductions from gross sales price, and net
sales price together with any returns made during the preceding
calendar month. Such statements shall be furnished to Licensor whether
or not any of the Licensed Product(s) have been sold during calendar
months to which such statements refer. Receipt or acceptance by
Licensor of any of the statements furnished pursuant to this Agreement
or on 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 number, description of items
sold specifying the components of the Licensed Property utilized and
nature of Licensed Product(s), gross sales price itemized deductions
from gross sales price and net sales price of the Licensed Product(s)
covered by this Agreement distributed and/or sold by Licensee up to
and including the date upon which Licensor has made such demand.
(b) The statements and payments required hereunder shall be delivered to:
Warner Bros. Consumer Products
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Asst. Controller, Domestic Accounting
(c) Licensee agrees to provide, in the event of material default in
payment, at Licensor's request: (i) a letter of credit issued in favor
of Licensor from a financial institution as approved by Licensor in an
amount up to the Guaranteed Consideration; and/or (ii) such other form
of security acceptable to Licensor. Licensee agrees to execute all
documentation as Licensor may require in connection with perfecting
such security interests.
(d) Any payments which are made to Licensor hereunder after the due date
required therefor, shall bear interest at the then current prime rate
(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.
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,
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. 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
#7635-WBLT - Page 4
renewal(s) hereof 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 rights 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 be responsible
for payment of 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 3%, 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 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, including those set forth in Paragraph 13 hereof; (ii) any
unauthorized use of the Licensed Property; (iii) any use of any
trademark, copyright, design, patent, process, method or device,
except for those uses by 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 Product(s) or the use thereof.
(c) With regard to 7(b) above, Licensee agrees to obtain, at its own
expense, product liability insurance providing
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adequate protection for Licensor and Licensee against any such claims
or suits in amounts no less than two million dollars ($2,000,000) 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 without written notice to Licensor
at least twenty (20) days in advance thereof.
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 the License Property solely as approved hereunder.
Licensee further agrees and acknowledges that any and all artwork
authorized for use hereunder by Licensor in connection with the
Licensed Product(s) or which otherwise features or includes the
Licensed Property shall be owned in its entirety exclusively by
Licensor. Licensor reserves for itself or its designees all rights to
use any and all artwork created, utilized without limitation and/or
approved hereunder without limitation.
(b) Licensee acknowledges that, as between Licensor and Licensee, the
Licensed Property and all copyrights, trademarks and other proprietary
rights in and to the Licensed Property are owned exclusively by
Licensor. Licensee acknowledges that Licensor shall have the right to
terminate this Agreement the event Licensee asserts any rights (other
than those granted pursuant to the Agreement) in or to the Licensed
Property. Licensee further agrees and acknowledges that Licensor shall
own the copyright and other Proprietary rights in any and all artwork
authorized for use hereunder that incorporates the Licensed Property.
At the request of Licensor, Licensee shall execute such form(s) of
assignment of copyright in any amendments or derivative works based in
whole or part on the Licensed Property as Licensor may reasonably
request. 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 assignment of rights so that the
foregoing assignment by Licensee shall vest full rights in Licensor.
(c) Licensee shall, within thirty (30) days of receiving an invoice, pay
Licensor for artwork executed by Licensor (or by third parties under
contract to Licensor) for use in the development of the Licensed
Product(s) 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(s) manufactured, distributed or sold under this
Agreement, and all advertising, promotional, packaging and wrapping
material wherein the Licensed Property appears, the following as
directed by Licensor:
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(i) The appropriate Copyright Notices, as directed and in each
instance specified by Licensor, including an encircled c, the
name of Licensor, year date of first publication of the art
and/or textual material generally in the following form:
LOONEY TUNES, characters, names and all related indicia are
trademarks of Warner Bros. (C) 199_.
(The year date shall be as instructed by Licensor)
(ii) The appropriate Trademark Notices with respect to the
Trademark(s) and Character(s) (and any component thereof) as
specified in each instance by Licensor, including the initials
"TM", or the letter "R" encircled or "*" (asterisk), and/or such
legend(s) as may be required by Licensor, including but not
limited to a legend indicating that the Licensed Property (and
any component thereof) are trademarks of Licensor used under
license by Licensee.
(e) In no event shall Licensee use, in respect to the Licensed Product(s)
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 three (3) of each
of the Licensed Product(s) 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 Property 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 Product(s) 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 or similar to or related to the
Licensed Product(s). 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 comply and maintain compliance with the quality
standards and specifications of Licensor in respect to all usage of
the Licensed Property on or in relation to the Licensed Product(s)
throughout the Term
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of this Agreement and any renewals or extensions thereof. Licensee
agrees to furnish to Licensor free of cost for its written approval as
to quality and style, samples of each of the Licensed Product(s),
together with their packaging, hangtags, and wrapping material, as
follows in the successive stages indicated (a) rough sketches/layout
concepts; (b) finished artwork or final proofs; (c) pre-production
samples or strike-offs; (d) finished products, including packaged
samples.
(b) No Licensed Product(s) and no material whatever utilizing the Licensed
Property shall be manufactured, sold, distributed or promoted by
Licensee without prior 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 Product(s). All advertising and Promotional
material relating to the Licensed Product(s) must be submitted to the
Licensor for its written approval at the following stages appropriate
to the medium used: (a) rough concepts (b) layout, storyboard, script;
and (c) finished materials.
(c) Approval or disapproval shall lie in Licensor's sole discretion. Any
Licensed Product(s) not approved in writing shall be deemed
unlicensed and shall not be manufactured or sold. If any unapproved
Licensed Product(s) 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 Product(s) 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 Product(s) 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, upon reasonable notice, to inspect
Licensee's manufacturing operations and testing records (including
those operations and records of any supplier or manufacturer approved
pursuant to Paragraph 10 below) with respect to the Licensed
Product(s).
(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. Subsequent to final approval, no fewer than three (3)
production samples of Licensed Product(s) will be sent to Licensor, to
ensure quality control simultaneously upon distribution to the public.
In addition, Licensor shall have the right to purchase any and all
Licensed
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Product(s) in any quantity at the price Licensee charges its best
customer at the maximum discount price.
(h) To avoid confusion of the public, Licensee agrees not to associate
other characters or licensed properties with the Licensed Property on
the Licensed Product(s) 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 to use the Licensed Property as part of the name of
Licensee's business or any division thereof.
(i) 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.
(j) 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 pursuant to a separate agreement
between Licensee and Warner Bros. Animation, subject to Warner Bros.
Animation customary rates. Any payment made to Warner Bros. Animation
for such animation shall be in addition to and shall not offset the
Consideration set forth in Paragraph 4.
(k) Licensor's approval of Licensed Product(s) (including without
limitation, the Licened Product(s) 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.
l0. DISTRIBUTION; SUB-LICENSE MANUFACTURE.
(a) Within the Channels of Distribution as set forth in Paragraph 1(a)
hereof, Licensee shall sell the Licensed Product(s) either to jobbers,
wholesalers, distributors or retailers for sale or resale and
distribution directly to the public. Unless explicitly set forth in
Paragraph 1(a) hereof, Licensee shall not sell the Licensed Product(s)
through any cable home shopping service without the prior written
consent of Licensor, it being expressly understood that Licensor will
consent to the sale of individual Licensed Products, but will not
consent to a "full show" dedicated to the sale of a line of the
Licensed Products. If Licensee sells or distributes the Licensed
Product(s) 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
unrelated third parties, Licensee shall pay royalties with respect to
such sales or distribution, based upon the price generally charged to
the trade by Licensee.
(b) Licensee shall not be entitled to sub-license any of its rights under
this Agreement. In the event Licensee is not the manufacturer of the
Licensed Product(s), Licensee shall be, 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
Product(s) provided that such manufacturer shall execute a letter in
the form of
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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. In no event shall any such sublicense
agreement include the right to grant any further sublicenses.
11. GOODWILL.
Licensee recognizes the great value of the publicity and goodwill
associated with the Licensed Property and, acknowledges (i) such goodwill
is exclusively that of Licensor and (ii) that the Licensed Property have
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 seek 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 existing between Licensor and any
other person, firm or corporation.
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 its Grantors in and to the
Licensed Property or any copyright or trademark 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
Product(s) 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;
(e) It will protect to the best of its ability its right to manufacture,
sell, promote, and distribute the Licensed Product(s) 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 Product(s), and shall maintain its
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appropriate customary high quality standards. It shall comply with any
regulatory agencies which shall have jurisdiction over the Licensed
Product(s) 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
relation 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
Product(s) comply with such laws, regulations and standards. Upon
reasonable notice, Licensee shall permit Licensor or its designees to
inspect testing records and procedures with respect to the Licensed
Product(s) for compliance. Licensed Product(s) that do not comply with
all applicable laws, regulations and standards shall automatically be
deemed unapproved;
(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;
(h) It will provide Licensor with the date(s) of first use of the Licensed
Product(s) in interstate and intrastate commerce, where appropriate;
(i) 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; and
(j) 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.
14. TERMINATION BY LICENSOR.
(a) Licensor shall have the right to terminate this Agreement without
prejudice to any rights which it may have in the premises, whether
pursuant to the provisions of this Agreement, in law, or in equity, or
otherwise, upon the occurrence of any one or more of the following
events (herein called "defaults"):
(i) If 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) If Licensee shall fail to make any payments due hereunder on the
date due; or
(iv) If Licensee shall fail to deliver any of the statements
hereinabove referred to 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
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(v) If Licensee shall fail to comply with any laws, regulations or
voluntary industry standards as provided in Paragraph 13(f) or if
any governmental agency or other body, office or official vested
with appropriate authority finds that the Licensed Product(s) 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) If Licensee shall be unable to pay its debts when due, or shall
make any assignment for the benefit of creditor, 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) In the event that Licensee does not commence in good faith to
manufacture, distribute and sell the Licensed Product(s) and
utilize the Characters set forth in the Licensed Property within
the Territory on or before the Marketing Date and thereafter
fails to diligently and continuously manufacture, distribute and
sell the Licensed Products and utilize the characters within the
Territory. Such default and Licensor's resultant right of
termination (or recapture) shall only apply to the specific
Character(s) and/or the specific Licensed Product(s), which or
wherein Licensee fails to meet said Marketing Date retirement; or
(viii) If 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;
or
(ix) If Licensee undergoes a substantial change of management; or
(x) If a manufacturer approved pursuant to Paragraph 10(b) hereof
shall engage in conduct, which conduct if engaged in by Licensee
would entitle Licensor to terminate this Agreement; or
(xi) If Licensee delivers or sells Licensed Product(s) outside the
Territory or knowingly sells Licensed Products(s) to a third
party for delivery outside the Territory; or
(xii) If Licensee has made a material misrepresentation or has omitted
to state a material fact necessary to make the statements not
misleading; or
(xiii) If Licensee shall breach any other agreement in effect between
Licensee and Licensor.
(b) In the event any of these defaults occur, Licensor shall give notice
of termination in writing to Licensee by certified mail. Licensee
shall have ten (10) days from the date of receiving notice in which to
correct any of these defaults (except subdivisions (vii), (viii), (xi)
and (xii) above which are not curable), 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 and
no portion of prior payments shall be repayable to Licensee.
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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, a statement
indicating the number and description of Licensed Product(s) on hand
together with a description of all advertising and promotional materials
relating thereto. Following expiration or termination, Licensee shall not
continue to manufacture the Licensed Product(s). 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 then,
Licensee may continue to distribute and sell its remaining inventory on a
non-exclusive basis for a period not to exceed SIXTY (60) days following
such termination or expiration, subject to payment of applicable royalties
thereto. In no event, however, may Licensee distribute and sell during such
period an amount of Licensed Product(s) that exceeds the average amount of
Licensed Product(s) sold during a consecutive SIXTY (60) day period during
the Term. If Licensee has any remaining inventory of the Licensed
Product(s) following such SIXTY (60) day period, Licensee shall, at
Licensor's option, make available such inventory to Licensor for purchase
at 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 physical
inventory. In the event this Agreement is terminated by Licensor for cause,
Licensee shall be deemed to have forfeited its sell-off rights hereunder.
In addition to the forfeiture, Licensor shall have recourse to all other
legal remedies available to it.
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,
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, to a facsimile or
over-night delivery service and the date of said mailing shall be the date
of the giving of such notice and/or transmitted via facsimile with receipt
of a confirming copy.
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 contained herein shall give, or
is intended to give, any rights of any kind to any third persons.
18. NON-ASSIGNABILITY.
This Agreement shall bind and inure to the benefit of Licensor, its
successors and assigns. This Agreement is personal to Licensee, and
Licensee shall not sub-license nor franchise its rights hereunder, and
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.
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19. CONSTRUCTION.
This Agreement shall be construed in accordance with the laws of the
State of California of the United States of America.
20. 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 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.
21. 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 and/or deposit 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, A ARTISAN HOUSE
TIME WARNER ENTERTAINMENT COMPANY
as Agent for Warner Bros., a
division of Time Warner
Entertainment Company, L.P.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------ ------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Vice President, Legal Affairs
Date: 9/24/96 Date: 9/16/96
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EXHIBIT 1 #7635-WBLT
Dated
Warner Bros. Consumer Products
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: Approval for Third Party Manufacturer
Gentlemen:
This letter will serve as notice to you that pursuant to Paragraph 10(b) of
the License Agreement dated _____________ 199_ between your client WARNER BROS.
and ARTISAN HOUSE ("Licensee"), we have been engaged as the manufacturer for
LICENSEE in connection with the manufacture of the Licensed Product(s) as
defined in the aforesaid License Agreement. We hereby acknowledge that we may
not manufacture Licensed Product(s) for, or sell or distribute Licensed
Product(s) 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 Product(s). It is understood that this engagement is on a royalty free
basis.
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.
Sincerely,
/s/ Artisan House, Inc.
-------------------------
MANUFACTURER/COMPANY NAME
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
signature
▇▇▇▇▇ ▇▇▇▇▇▇▇
------------
printed name
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------
address
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------
9/16/96
-------
dated
AGREED TO AND ACCEPTED:
WARNER BROS. CONSUMER PRODUCTS
By: __________________________
▇▇▇▇ ▇. ▇▇▇▇▇
Vice President, Legal Affairs
Date: __________________
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