LICENSED BOOK PUBLISHING AGREEMENT
This book publishing license agreement (the "Agreement") dated October 1, 1997,
is made by and between Disney Licensed Publishing ("Licensor") located at ▇▇▇ ▇.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Kideo Productions, Inc.
("Licensee") located at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
1. GRANT OF RIGHTS
1.1 Subject to the terms and conditions of this Agreement, and in
consideration for Licensee's promise to pay and Licensee's payments
of all royalties, advances and guarantees required hereunder,
Licensor grants to Licensee the nonexclusive right to publish in the
English language only, to print and bind in the United States or
Canada, or other parts of the world with Licensor's prior written
approval, and sell as set forth in paragraph 4 in the Territory
during the Term hereof, personalized storybooks utilizing Disney
Standard Characters (i.e., MICKEY MOUSE, ▇▇▇▇▇▇ MOUSE, ▇▇▇▇▇▇ DUCK,
DAISY DUCK, PLUTO and GOOFY), and such characters as may be
designated by Licensor from the animated motion pictures entitled
DISNEY'S THE LION KING and TOY STORY which books are hereinafter
referred to jointly and severally as the "Book". Licensee shall
produce two (2) early learning versions of the Book utilizing Disney
Standard Characters and characters from Disney's The Lion King, and
two (2) original story versions of the Book utilizing Disney
Standard Characters and characters from Toy Story. The Book shall
measure six and one-fourth inches by nine and one-fourth inches (6
1/4" x 9 1/4"), contain twenty-eight (28) pages with a hard cover
and be of a type and quality designed to sell at a suggested retail
price of approximately nineteen dollars and ninety-five cents
($19.95); provided, however, that Licensee has the absolute
discretion to price the Book as Licensee deems appropriate.
1.2 Although this is a non-exclusive agreement, Licensor will not
authorize any publisher other than Licensee to publish and sell the
Book in the Territory during the Term, and Licensor itself will not
publish and sell the Book in the Territory during the Term. However,
Licensor may cause to be published and sold, in any language, and
without limit as to time or territory, different books based on the
same subject and containing excerpts from the text and art contained
in the Book.
1.3 Licensee recognizes and acknowledges the vital importance to
Licensor of the characters and other proprietary material owned and
created by The ▇▇▇▇ Disney Company and its Affiliates (collectively
referred to herein as "Disney") and the association of the Disney
name with them. In order to prevent the denigration of
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Disney's products and the value of their association with the Disney
name, and in order to ensure the dedication of Licensee's best
efforts to preserve and maintain that value, Licensee agrees that,
during the Term and any extension thereof, Licensee will neither
itself manufacture, advertise, promote, merchandise, display,
package, sell and/or distribute (nor permit any sublicensee,
distributor or other person or entity to do so) (a) any non-Disney
product, in such a manner as to imply an association with Disney
and/or its properties, (b) any product which contains any artwork or
other representation not owned by Disney, but which Licensor
determines, in its reasonable discretion, is confusingly similar to
Disney characters or other proprietary material, (c) any book which
contains any non-Disney owned images of a character for which there
is a Disney-owned image, or (d) any product containing material
which Licensor determines, in its sole discretion, is lewd,
lascivious, obscene, offensive, defamatory or otherwise injurious to
Disney or the Disney name, business or products.
2. TERM AND SELL-OFF
2.1 The term of this Agreement (the "Term") shall commence November 1,
1997 and continue through April 30, 2000. Distribution of all
versions of the Book shall commence on or before April 1, 1998 and
continue through the end of the Term. The Term shall not be extended
or continued beyond such date by implication or otherwise than by a
separate written agreement newly entered into.
2.2 Licensee agrees that the Book shall be manufactured during the Term
in quantities consistent with anticipated demand therefor so as not
to result in an excessive inventory build-up immediately prior to
the end of the Term. Licensee agrees that from the expiration or
termination of the Term Licensee shall neither manufacture nor have
manufactured for Licensee any Books, and that except as hereinafter
provided, Licensee will cease selling Books. Any unauthorized
distribution of Books after the expiration or termination of this
Agreement shall constitute copyright infringement. If Licensee has
any unsold copies of the Book in inventory on the expiration or
termination date, Licensee shall provide Licensor with an itemized
statement, certified by an authorized accredited officer of
Licensee, of all unsold copies of the Book remaining in stock.
2.3 Commencing as of the expiration of the Term by passage of time,
Licensee shall have the right to fill orders from its then remaining
stocks of the Book during a period of one hundred eighty (180)
consecutive days (inclusive of Saturdays,
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Sundays and legal holidays), following the expiration date (the
"Sell-off Period"). Licensee's sell-off right is conditional upon
Licensee's freedom from default or breach of any term or condition
hereof, upon Licensor's receipt of the itemized inventory statement,
and upon Licensee's continued payment of royalties to Licensor based
upon such sales. Such royalties shall not be applied against any
advance or any guarantee hereunder. Following the expiration of the
Sell-off Period Licensee shall again advise Licensor of all unsold
copies of the Book remaining in stock. All unsold copies of the Book
shall, at the end of the Sell-off Period (or, if there is no
Sell-off Period, upon the expiration or earlier termination of the
Term) at Licensor's option be sold to Licensor at Licensee's actual
cost of manufacture, excluding overhead, or shall be destroyed, and
Licensee shall furnish Licensor with an affidavit of such
destruction signed by a principal officer of Licensee.
2.4 Licensee agrees that all pre-pricing and pricing of the Book shall
be in compliance with any and all applicable Laws (as hereinafter
defined in paragraph 8). In recognition of Licensor's interest in
maintaining a stable and viable market for the Book during and after
the Term and any Sell-off Period, Licensee agrees to refrain from
"dumping" the Book in the market during the Term and any Sell-off
Period granted to Licensee. "Dumping" shall mean the distribution of
the Book at volume levels significantly above Licensee's prior sales
practices with respect to the Book, and at price levels so far below
Licensee's prior sales practices with respect to the Book as to
disparage the Book. Other than the foregoing, nothing contained in
this Agreement shall be deemed to restrict Licensee's freedom and
that of Licensee's customers to pre-price and sell the Book at such
prices as Licensee or Licensee's customers shall determine.
3. TERRITORY
The territory of this Agreement (the "Territory") is Canada, the
United States, United States PX's wherever located, and United
States territories and possessions, excluding Puerto Rico, Guam,
Commonwealth of Northern Mariana Islands and Palau. Licensee is
expressly prohibited from exporting the Book to any country outside
of the Territory, unless the Book is destined for ultimate delivery
in the Territory, and Licensee is expressly prohibited from selling
the Book to any party if Licensee knows, or in the exercise of
prudent business judgment should know, that such sale(s) ultimately
will result in the exporting of the Book outside of the Territory.
Licensee shall give Licensor prior written
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notice of the country(ies) to which Licensee desires to export the
Book and such export shall be subject to Licensor's prior written
approval.
4. DISTRIBUTION
4.1 The Book may be sold only through direct response marketing efforts
using direct mail, magazines, catalogs, co-operative mailings and
package insert programs. All other advertising methods must be
submitted to Licensor for Licensor's prior written approval on a
case-by-case basis. Licensee may not sell the Book to retailers that
sell the Book on a duty-free basis, or to wholesalers for resale to
such retailers, unless such retailer or wholesaler has a
then-current license agreement with Licensor or an affiliate of
Licensor permitting it to make such duty-free sales. Licensee agrees
not to sell the Book, including any part or adaptation thereof,
otherwise than as herein provided without Licensor's prior written
approval. In addition, the Book shall not be used or sold to others
for use as a giveaway, fundraiser, or for lotteries, premiums,
promotions, or advertising purposes in connection with other
publications or articles, or to sell other products without the
prior written consent of Licensor. Licensee shall make all
solicitations, sales and collections solely in its own name and in
accordance with all applicable Laws.
4.2 Customer Lists
A. Licensor shall have the right to add new Book customer files
to Licensor's customer database at no cost to Licensor. The
customer list may be used by Licensor in any manner, including
the promotion of other businesses affiliated with Licensor
(such as magazines, catalogs, vacation clubs, etc.) except
that such files may not be used for the purpose of soliciting
orders for juvenile book product distribution to customers by
direct mail unless such product is an insignificant component
of the solicitation. Licensee shall furnish at no cost to
Licensor on a monthly basis, new Book customer files in an
available format requested by Licensor.
B. Licensee may use Book generated customer files in unrelated
businesses with the prior written approval of Licensor, except
that any such customer files may be used without prior consent
for purposes relating to the direct marketing business of
Licensee and its U.S. affiliates.
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C. "Customer file" shall include all active, inactive and
substandard Book customer names, addresses, phone numbers,
presence of child and birthdate/age of child without
duplication.
D. Licensee will consult with Licensor in the area of customer
contact with those consumers who purchase Disney Books,
including but not limited to, customer service, and credit and
collection.
E. All standard forms of planned customer promotional contact for
the Book (i.e., direct mail promotion pieces, invoices/letters
accompanying product shipment) shall be submitted to Licensor
no less frequently than on an annual basis and whenever
materially updated from its prior written approval. Collection
letters shall clearly indicate the source of the letter, which
in no case shall be Licensor.
F. Licensor shall have the right, from time to time without prior
notice, to visit any and all customer service facilities to
observe all manner of handling of customer service related
matters.
G. Records of all contacts are to be maintained for a minimum of
twelve (12) months so that problems, if any, can be
investigated and tracked. After the twelve (12) month period,
this data shall be deleted in a secure manner.
H. A do-not-promote file shall be maintained for those customers
who request not to be contacted any further. These files shall
be sent to Licensor on a monthly basis for the same purpose.
5. CONSIDERATION
5.1 Advance
Licensee agrees to pay to Licensor, as a non-refundable advance
against the royalties payable to Licensor pursuant to paragraph 5.2
below, the sum of twenty-five thousand dollars ($25,000.00) upon the
execution of this Agreement by Licensee.
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5.2 Royalties
In connection with the publication of the Book hereunder Licensee agrees
to pay to Licensor the following royalties:
A. A sum of ten percent (10%) of net cash receipts of the
suggested retail price of each copy of the Book sold, but in
no event shall the minimum royalty payable to Licensor be less
than one dollar and sixty cents ($1.60) per copy sold. "Net
cash receipts" shall be defined as all cash receipts actually
received by Licensee (including amounts from collection
agencies for the Book accounts turned over to such agencies)
less actual refunds, less amounts received for shipping and
handling charges billed to the customer, and less applicable
sales and use tax charges. Shipping and handling charges shall
have no element of profit or overhead. They shall be
excludable only to the extent that they comprise reasonable
out-of-pocket expenses for shipping cartons, cartoning.
transfer of the Book to cartoning areas, invoice forms,
labels, outer envelopes affixed to cartons shipping advise
forms, and express freight charges for shipping advises and a
reasonable and realistic factor for bad debt expense related
to non-recovery of postage and handling charges from
customers. A reasonable and actual handling charge can be
allocated to each return to cover opening and checking.
B. When the Book is sold at wholesale to catalogs, Licensee shall
pay a sum of twenty percent (20%) of the wholesale price of
each copy of the Book sold, but in no event shall the minimum
royalty payable to Licensor be less than one dollar and sixty
cents ($1.60) per copy sold.
C. With respect to copies of the Book sold in Canada, the
foregoing royalties shall be computed based on the
corresponding price of the Book as sold in the United States,
provided that if the Canadian price, when such price is
converted to United States Dollars at the average rate of
exchange existing during the respective calendar month of
sale, is higher than the corresponding price of the Book as
sold in the United States, the foregoing royalties shall be
computed based on such higher price. All Canadian sales of the
Book shall be accounted for by Licensee separately from copies
of the Book sold in the United States.
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D. No royalties will be payable on copies of the Book that are
provided gratis for review, promotion, advertising, sample, or
similar purposes intended to promote the Book, which copies
are not intended for sale, up to a maximum of two hundred
(200) copies. In addition, no royalties will be payable on
copies provided to Licensor pursuant to paragraph 6 of this
Agreement.
5.3 Guarantee
Licensee agrees and guarantees to pay Licensor not less than one
hundred thousand dollars ($100,000.00) in royalties based on sales
of the Book during the Term. Advances, if any, which shall have been
paid to Licensor against royalties payable hereunder shall apply
towards meeting such guarantee. If Licensee has not paid to Licensor
the total of such guaranteed sum prior to the expiration or earlier
termination of the Term, Licensee agrees to pay to Licensor with its
statement of account for the last monthly period of the Term the
difference between the total amount of payments, including advances,
paid to Licensor during the Term and such guaranteed sum.
5.4 Taxes
In no case shall amounts paid to Licensor be reduced by reason of
the imposition of any tax thereon or of any tax on receipts from the
distribution or sale of the Book at any level of distribution, other
than as set forth in paragraph 5.2 A. Any applicable GST on
royalties for sales in Canada shall be paid to Licensor in addition
to such royalties.
5.5 Letter of Credit
Together with the Advance payable upon the signing of this Agreement
Licensee shall provide Licensor with an irrevocable letter of credit
securing payment of Licensee's obligations hereunder and under any
other prior, concurrent or subsequent agreement between the parties
(in addition to any and all separate letters of credit that may be
in place regarding such agreement(s)), drawn on the Los Angeles or
New York City office of the bank and in all other respects
satisfactory to Licensor, in the amount of up to $75,000.00 and
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expiring not earlier than November 30, 2000. In the event of one or
more partial draws on such letter of credit, Licensee agrees to
restore it to the original amount within fifteen (15) days after the
partial draw(s).
6. PUBLICATION, PRESS RUN & FREE COPIES
6.1 Unless another distribution date is set forth elsewhere in this
Agreement, Licensee shall publish the Book within six (6) months
after the beginning of the Term and shall keep the Book in print and
available for purchase in the distribution channels licensed
hereunder during the remainder of the Term. Licensee shall notify
Licensor of the publication date(s) of the Book, ninety (90) days
prior to such publication date(s).
6.2 Licensee agrees to print a minimum of five thousand (5,000) copies
per title of the Book during the Term.
6.3 Licensee agrees to furnish to Licensor, free of charge, fifty (50)
copies of each title of the Book from the first shipment of the
Book, and to sell to Licensor at fifty percent (50%) below the
published retail price any additional copies which Licensor requires
for purposes other than resale. Two of the free copies shall be
delivered by Licensee directly to Licensor's legal department for
copyright registration purposes, attention Copyright Paralegal, The
▇▇▇▇ Disney Company, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
7. CONTENT
7.1 Licensor agrees to cooperate with Licensee in the preparation by
Licensee of the art work and text for the Book, and to that end
Licensor agrees to provide to Licensee such pre-existing art work,
textual and reproduction materials, and style guide in Licensor's
possession as may be available and which Licensor and Licensee deem
suitable for inclusion in the Book. The foregoing materials shall be
provided at Licensor's cost, with the exception that all shipping
costs (e.g. overnight delivery charges) for such materials shall be
borne by Licensee. Licensee shall notify Licensor of its choice of
courier and Licensee's courier account number.
7.2 The book shall be prepared only by one or more employees of Licensee
or by third parties who have conveyed all rights to Disney pursuant
to paragraph 11.3 hereof,
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and written, designed, printed, published and sold at no expense to
Licensor. All aspects of the Book and its contents including without
limitation the format and size, the quality of paper, textual,
artistic and photographic content, printing, cover, notices (e.g.
copyright, trademark, logos), dust jacket (if any), slip case (if
any), audio elements (if any) and title thereof shall be subject to
Licensor's prior written approval, which shall lie in Licensor's
sole discretion. Licensor shall indicate approval or lack thereof in
a timely fashion. Licensee shall for this purpose supply Licensor
with layout, design, black line sketches, finished art, manuscript
drafts, finished manuscripts and sample of paper stock and color
proofs in advance of printing and shall supply from the first print
run and each subsequent print run samples for Licensor's written
approval. Licensor shall indicate the reasons for disapprovals and
the changes needed to obtain approval. Licensee shall ensure that
each copy thereafter printed shall conform in all respects to what
has been approved by Licensor and shall not ship or deliver copies
of the Book which do not so conform. If any nonconforming Book is
sold by Licensee, Licensor may, in addition to any other remedies
available to Licensor (including but not limited to termination of
this Agreement) by written notice require such Book be immediately
withdrawn from the market.
7.3 No material which is owned by a third party or in which a third
party has rights shall be embodied in the Book or used in
conjunction with the Book, unless Licensor has given knowing prior
approval in writing, such approval to be granted or withheld within
Licensor's sole discretion. In the event that Licensor does so
approve, Licensee shall obtain all necessary licenses (and all other
licenses required by Licensor) for the use of such material
(including but not limited to all audio elements, if any) in or in
conjunction with the Book. Licensee represents and warrants that the
following materials which will be embodied in the Book are subject
to patent ownership by Licensee as follows: manufacturing
methodologies encompassed in Licensee's U.S. Patent Number
5,623,587. Based on the foregoing, Licensor hereby acknowledges and
approves of the embodiment of the foregoing patented materials in
the Book, on condition that the quality of such materials meet
Licensor's approval during the approval process.
7.4 Except with respect to material supplied by Licensor, Licensee shall
pay and be solely responsible for the payment of all obligations to
third parties arising from the manufacture, distribution,
advertising and sale of the Book, including, but not limited to,
payments to designers, printers, recording artists, musicians and
applicable unions and guilds, and shall pay or cause to be paid to
the copyright
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proprietors of the material referenced in paragraph 7.3 above, or to
their duly authorized agents, all royalties and other sums
(including the full statutory mechanical royalty rate if required
for audio material) which may become due under and in accordance
with said licenses and all applicable Laws.
7.5 Licensee understands that Licensor's interim and final approvals or
disapprovals of the Book or any part of the contents of the Book may
depend on whether necessary permissions from third parties have been
obtained.
7.6 The Book, (which by definition includes any and all of its
components), shall be of good quality, shall be free of defects in
design, materials and workmanship, shall comply with all applicable
Laws, and shall conform to any specifications set forth in this
Agreement and to the sample approved by Licensor. Licensee shall
follow reasonable and proper procedures for testing that the Book
complies with such Laws and shall provide Licensor with all safety
testing information. Upon reasonable notice, Licensor's designers
may inspect testing, manufacturing and quality control records and
procedures and to test the Book for compliance. Licensee shall also
give due consideration to any recommendations of Licensor that the
Book exceeds the requirements of applicable Laws. Any part of the
Book not in compliance with applicable Laws shall be deemed
unapproved, even if previously approved by Licensor and shall be
brought into full compliance therewith.
7.7 As early as possible, and in any case before commercial production
of the Book, Licensee shall submit to Licensor for Licensor's review
and written approval (to utilize such materials in preparing a
pre-production sample) all preliminary and proposed models of the
Book (including models of all separable components of the Book, if
any). Thereafter, Licensee shall submit to Licensor for Licensor's
written approval a pre-production sample thereof. Licensor shall
endeavor to respond to such requests within a reasonable time, but
such approvals should be sought as early as possible in case of
delays. In addition to the foregoing, as early as possible, and in
any case no later than sixty (60) days following written conceptual
approval, Licensee shall supply to Licensor for Licensor's use for
internal purposes, a prototype or pre-production sample of the Book.
7.8 Before shipping the Book, Licensee agrees to furnish to Licensor,
from the first production run of each supplier of the Book, for
Licensor's approval of all aspects thereof, samples with packaging,
which shall conform to the approved pre-
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production samples. Approval or disapproval of the artwork as it
appears in the Book, as well as of the quality of the Book, shall
lie in Licensor's sole discretion and may, among other things, be
based on unacceptable quality of the artwork or of any part of the
Book as manufactured. Any part not so approved shall be destroyed.
Such destruction shall be attested to in a certificate signed by one
of Licensee's officers. Production samples of the Book for which
Licensor has approved a pre-production sample shall be deemed
approved, unless within twenty (20) days of Licensor's receipt of
such production sample Licensor notifies Licensee to the contrary.
7.9 Licensee agrees to make available at no charge such additional
samples of the Book as Licensor may from time to time reasonably
request for the purpose of comparison with earlier samples, or to
test for compliance with applicable Laws, and to permit Licensor
upon reasonable request to inspect Licensee's manufacturing
operations and testing records (and those of Licensee's Suppliers
(as hereinafter defined in paragraph 8)) of the Book.
7.10 It is specifically understood that Licensor may disapprove any part
of the Book or a production run because the quality is unacceptable
to Licensor, and accordingly, Licensor recommends that Licensee
submit production samples to Licensor for approval before committing
to a large original production run or to purchase a large shipment
from a new supplier.
7.11 No modification of an approved production sample shall be made
without Licensor's further prior written approval. The Book must
conform in all respects to the approved production samples.
7.12 Any part of the Book not meeting the standard of approved samples
shall be destroyed and replaced.
7.13 Notwithstanding the above, as Licensor relies primarily on Licensee
for the consistent quality and safety of the Book and its compliance
with applicable Laws, Licensor will not unreasonably object to any
change in the design of the Book or in the materials used in the
manufacture of the Book or in the process of manufacturing the Book
which Licensee advises Licensor in writing is intended to make the
Book safer or more durable.
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7.14 Licensor shall have the right, by written notice to Licensee, to
require modification of any part of the Book approved by Licensor
under any previous agreement between Licensee and Licensor.
Likewise, if the Term of this Agreement is extended by mutual
agreement, Licensor shall have the right, by written notice to
Licensee, to require modification of any part of the Book approved
by Licensor under this Agreement. It is understood that there is no
obligation upon either party to extend the Agreement.
7.15 If Licensor notifies Licensee of a required modification under
paragraph 7.14 above, such notification shall advise Licensee of the
nature of the changes required, and Licensee shall not manufacture
the Book until it has been resubmitted to Licensor with such changes
and Licensee has received Licensor's written approval of such
modifications.
8. COMPLIANCE WITH APPLICABLE LAWS AND STANDARDS
8.1 "Suppliers" means any of Licensee's third-party manufacturers and
suppliers (and their sub-manufacturers and suppliers) which
reproduce or use the Disney Property (as hereinafter defined) and/or
trademarks in the Book, or components thereof, and/or which assemble
the Book.
8.2 "Laws" means any and all applicable laws, rules, and regulations,
including but not limited to, local and national laws, rules and
regulations, treaties, voluntary industry standards, association
laws, codes or other obligations pertaining to any of Licensee's
activities under this Agreement, including but not limited to those
applicable to the manufacture, pricing, sale and/or distribution of
the Book.
8.3 Licensee covenants that the Book and any component thereof
distributed hereunder shall be of good quality and free of defects
in design, materials and workmanship, and shall comply with all
applicable Laws, and such specifications, if any, as may have been
specified in connection with this Agreement and shall conform to the
sample thereof approved by Licensor.
8.4 Without limiting the foregoing, Licensee covenants on behalf of
Licensee's own manufacturing facilities, and agrees to require all
Suppliers to covenant by signing the Supplier's Agreement, as
follows:
A. Licensee and the Suppliers agree not to use child labor in the
manufacturing, packaging or distribution of the Book. The term
"child"
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refers to a person younger than the local legal minimum age
for employment or the age for completing compulsory education,
but in no case shall any child younger than fifteen (15) years
of age (or fourteen (14) years of age where local law allows)
be employed in the manufacturing, packaging or distribution of
the Book. Licensee and the Suppliers employing young persons
who do not fall within the definition of "children" agree also
to comply with any Laws applicable to such persons.
B. Licensee and the Suppliers agree only to employ persons whose
presence is voluntary. Licensee and the Suppliers agree not to
use any forced or involuntary labor, whether prison, bonded,
indentured or otherwise.
C. Licensee and the Suppliers agree to treat each employee with
dignity and respect, and not to use corporal punishment,
threats of violence, or other forms of physical, sexual,
psychological or verbal harassment or abuse.
D. Licensee and the Suppliers agree not to discriminate in hiring
and employment practices, including salary, benefits,
advancement, discipline, termination, or retirement, on the
basis of race, religion, age, nationality, social or ethnic
origin, sexual orientation, gender, political opinion or
disability.
E. Licensee and the Suppliers recognize that wages are essential
to meeting employees' basic needs. Licensee and the Suppliers
agree to comply, at a minimum, with all applicable wage and
hour Laws, including minimum wage, overtime, maximum hours,
piece rates and other elements of compensation, and to provide
legally mandated benefits. If local Laws do not provide for
overtime pay, Licensee and the Suppliers agree to pay at least
regular wages for overtime work. Except in extraordinary
business circumstances, Licensee and the Suppliers will not
require employees to work more than the lesser of (a) 48 hours
per week and 12 hours overtime or (b) the limits on regular
and overtime hours allowed by local law, or, where local law
does not limit the hours of work, the regular work week in
such country plus 12 hours overtime. In addition, except in
extraordinary business circumstances, employees will be
entitled to at least one day off in every seven-day period.
Licensee and the Suppliers agree that, where local industry
standards are higher than applicable legal requirements, they
will meet the higher standards.
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F. Licensee and the Suppliers agree to provide employees with a
safe and healthy Workplace in compliance with all applicable
Laws, ensuring, at a minimum, reasonable access to potable
water and sanitary facilities, fire safety and adequate
lighting and ventilation. Licensee and the Suppliers also
agree to ensure that the same standards of health and safety
are applied in any housing they provide for employees.
Licensee and the Suppliers agree to provide Licensor with all
information Licensor may request about manufacturing,
packaging and distribution facilities for the Book.
G. Licensee and the Suppliers agree to respect the rights of
employees to associate, organize and bargain collectively in a
lawful and peaceful manner, without penalty or interference,
in accordance with applicable Laws.
H. Licensee and the Suppliers agree to comply with all applicable
environmental Laws.
I. Licensee and the Suppliers agree to comply with all applicable
Laws, including those pertaining to the manufacture, pricing,
sale and distribution of the Book.
J. Licensee and the Suppliers agree that Licensor and its
designated agents (including third parties) may engage in
monitoring activities to confirm compliance with this
Paragraph 8, including unannounced on-site inspections of
manufacturing, packaging and distribution facilities, and
employer-provided housing, such inspections to include reviews
of books and records relating to employment matters and
private interviews with employees. Licensee and the Suppliers
agree to maintain on site all documentation necessary to
demonstrate compliance with this Paragraph 8. Licensee agrees
to promptly reimburse Licensor for the actual costs of
inspections performed pursuant to this Paragraph 8 when any of
Licensee's manufacturing facilities or any Suppliers does not
pass the inspection(s).
K. Licensee and the Suppliers agree to take appropriate steps to
ensure that the provisions of this Code of Conduct are
communicated to employees, including the prominent posting of
a copy of the Code of Conduct for Suppliers (copy attached) in
the local language and in a place readily accessible to
employees at all times.
Kideo Productions, Inc.
Disney Standard Characters, Disney's
The Lion King, and Toy Story
Agreement dated October I, 1997
Page 15
8.5 Licensee agrees to take appropriate steps, in consultation with
Licensor, to develop, implement and maintain procedures to evaluate
and monitor the Suppliers it uses to manufacture the Book or any
components thereof, and to ensure compliance with this Paragraph 8,
including but not limited to, unannounced on-site inspections,
packaging and distribution facilities and employer-provided housing,
reviews of books and records relating to employment matters and
private interviews with employees.
8.6 Both before and after Licensee puts the Book on the market, Licensee
shall follow reasonable and proper procedures for testing that the
Book complies with all applicable product safety Laws, and shall
permit Licensor's designees to inspect testing, manufacturing and
quality control records and procedures and to test the Book for
compliance with product safety and other applicable Laws. Licensee
agrees to promptly reimburse Licensor for the actual costs of such
testing. Licensee shall also give due consideration to any
recommendations by Licensor that the Book exceeds the requirements
of applicable Laws. Books not manufactured, packaged or distributed
in accordance with applicable Laws 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.
9. PUBLISHING MATERIALS AND PRINTING
9.1 All film positives, film negatives and other reproduction material
used in the manufacture of the Book shall be prepared only by
Licensee or by a third party under Licensee's control and who has
been approved by Licensor and who has executed and delivered to
Licensor the Supplier's Letter of Agreement in the form attached
hereto as Exhibit A and incorporated by this reference, and the Book
shall be printed only by Licensee or by a printer approved by
Licensor who has executed and delivered to Licensor the said
Supplier's Letter of Agreement. Licensee shall, upon Licensor's
request, deliver to Licensor, or to publishers designated by
Licensor, one or more duplicate sets of such film positives, film
negatives and other reproduction material used in the manufacture of
the Book, and Licensor or such publishers, as the case may be, shall
reimburse Licensee for the actual cost of duplicating any such
materials delivered. In no case shall the charge for such material
exceed the lowest price Licensee charges other publishers for
similar material.
9.2 It is not Licensor's policy to reveal the names of Licensee's
Suppliers to third parties or to any division of Licensor's involved
with buying products, except as
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The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 16
may be necessary to enforce Licensor's contract rights or protect
its trademarks, copyrights, and intellectual property.
9.3 If any such supplier utilizes characters or trademarks for any
unauthorized purpose, Licensee shall cooperate fully in bringing
such utilization to an immediate halt. If, by reason of Licensee's
not having supplied the above-mentioned agreements to Licensor or
not having given Licensor the name of any supplier, Licensor makes
any representation or takes any action and is thereby subjected to
any penalty or expense, Licensee will fully compensate Licensor for
any cost or loss Licensor sustains.
9.4 At the expiration or earlier termination of this Agreement or at any
other time upon Licensor's written request therefor, Licensee agrees
that upon request of Licensor, all film positives, four-color
separations, photographs, transparencies, film negatives, black
keyplate proofs, other reproduction material used in the manufacture
of the Book, and all original artwork, whether furnished by Licensor
or otherwise acquired by Licensee (the property rights in all of
which such materials shall remain vested in Disney Enterprises, Inc.
(hereinafter referred to as "Disney Enterprises") or its
licensor(s), as the case may be, at all times) shall be delivered to
Licensor without charge other than the cost of delivery. If Licensee
should for any reason fail to deliver such materials or any part
thereof and Licensor thereafter must recreate such material,
Licensee agrees to reimburse Licensor for the reasonable costs
incurred by Licensor in so doing. If such materials are not
requested to be delivered to Licensor within one (1) year after the
Term, they shall be destroyed by Licensee.
10. ADVERTISING AND PROMOTION COMMITMENT
10.1 Licensee may advertise the Book in newspapers, periodicals,
magazines and other publications and, subject to receiving
Licensor's prior written approval in each case, in catalogs, on
billboards, radio, television or by other advertising or promotional
techniques; provided, however, that all artwork, text, scripts and
storyboards for all advertising shall be submitted to Licensor for
its prior review and written approval as to the content of such
advertising. Licensor's approval or lack thereof will be given in a
timely fashion. As a condition to the right of public distribution
licensed hereunder, appropriate and legally sufficient copyright
notice in Disney Enterprises' name shall be included in all
advertising for the Book in which any of Disney's characters or
other copyrighted materials appear.
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The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 17
10.2 Following the expiration or earlier termination of this Agreement
and the Sell-off Period, if any, referred to in this Agreement,
Licensee will not advertise or promote the Book in any manner or
issue any offering literature or material with respect thereto.
10.3 Licensee warrants that all advertising and promotions shall comply
with all applicable Laws and shall not infringe the rights of any
person or entity. Licensor's approval for the use or manner of use
of any proposed advertising or promotion hereunder shall not
constitute an opinion as to the legal appropriateness or adequacy of
such use or manner of use, and Licensee shall be solely responsible
for any liability or risk of liability arising out of, or connected
with, the use of any such proposed advertising or promotion.
10.4 Licensee shall pay to Licensor an amount equal to one percent (1%)
of Licensee's annual wholesale sales of the Book (the "Common
Marketing Fund Payment"), which amount Licensee agrees to pay
Licensor concurrently with royalties due each royalty payment period
as detailed in Paragraph 12 hereof. Licensee further agrees to pay
Licensor the following sums as a guarantee of such minimum payment
(the "CMF Guarantee') on Licensee's cumulative sales in the
following periods: twenty thousand dollars ($20,000.00) for the
period commencing November 1, 1997 and ending April 30, 2000.
Licensee shall pay Licensor the following non-refundable
installment(s) of the CMF Guarantee (the "CMF Advances"), due and
payable on the following date(s): $5,000.00 upon Licensee's signing
of this Agreement.
10.5 The Common Marketing Fund Payment shall be placed in a general fund
(the "Common Marketing Fund") for use in marketing and promoting the
Licensed Property, Disney characters, Disney's copyrights, and
trademarks (which may include the Licensed Property) and licensee
activities generally, all as Licensor deems appropriate in Licensor'
sole discretion. Such funds shall be expended by Licensor and/or
Licensor's designees in the amounts and in the manner Licensor deems
most appropriate in order to provide advertising and general sales
promotion and market research activities and in order to reimburse
Licensor for Licensor's actual administrative expenses or those of
Licensor's designees, incurred in administering and supervising such
advertising and promotion activities. In administering promotion
fees, Licensor and/or its agents and
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The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 18
designees undertake no obligation to make expenditures for Licensee
which are equivalent or proportionate to Licensee's contribution or
to ensure that Licensee or any other particular Licensee benefits
directly or pro-rata from the placement of any advertising or
promotion by Licensor or its designees. Licensee shall not be
entitled to any audit rights with regard to the Common Marketing
Fund.
10.6 Licensee agrees to pay in full the CMF Advances plus value added
taxes or other applicable taxes thereon, if any, on account of the
CMF Guarantee to accrue during the Term only and only with respect
to sales in the Territory. In addition, with Licensee's statement
for each royalty payment period ending on a date indicated
hereinabove with respect to the CMF Guarantee, Licensee shall pay
Licensor the amount, if any, by which cumulative payment made with
respect to sales in the Territory during any period or periods
covered by such provision fall short of the amount of the CMF
Guarantee specified for that period.
11. OWNERSHIP
11.1 Pursuant to this Agreement, Licensee shall not acquire or assert any
proprietary right, interest, or title to any fanciful character used
in the Book, to the title of the Book, or to any other material
prepared for or contained on or in the Book, or to any copy,
reproduction, translation, or derivative work thereof (collectively
referred to herein as "Disney Property") in any format or media,
through the exercise of any rights granted to Licensee hereunder.
All copyrights and trademarks, service marks and tradenames
pertaining to the Book, as well as all rights of every kind in and
to the Disney Property, shall be Disney Enterprises' or its
licensor(s), as the case may be, exclusive property, except such
trademarks, tradenames or service marks as do not relate to any
Disney material and do relate to the business name of the Licensee
or the name of any line of books heretofore published by Licensee.
No part thereof or excerpt therefrom may be used by or under the
authority of Licensee in any way separate from the Book without
Licensor's prior written consent.
11.2 As a condition to the right of public distribution licensed
hereunder, each copy of the Book shall bear a properly located
copyright notice comprised of c in a circle plus the yeardate (if
requested by Licensor) of publication plus "Disney Enterprises,
Inc." (or such other notices as Licensor may notify Licensee of in
writing), together with such other notice of copyright or trademark
as may be prescribed or required by Laws applicable to the Territory
in order to establish,
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Disney Standard Characters, Disney's
The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 19
protect and preserve Disney Enterprises' or its licensor(s)
copyrights and trademarks. Licensee shall also include such credit
lines in the Book as Licensor may require by written notice to
Licensee, provided that Licensor shall not require such credit lines
to interfere with the Licensee's line look or to be obtrusive.
11.3 It is specifically agreed that if Licensee creates or acquires
material for use in the Book, whether or not based on or using
Disney Enterprises' fanciful characters and whether or not actually
used in the Book or published, such material shall be deemed a
work-for-hire for Disney Enterprises and all ownership rights
(including but not limited to the copyright therein) shall belong to
Disney Enterprises. Licensee agrees that prior to the creation of
any such material by third parties it will obtain from the artists
and/or writers who create such material, or from the owners of the
rights thereto, an agreement executed by Licensee and such artists
and/or writers that all such material shall be considered a
work-made-for-hire for Disney Enterprises and Licensee shall also
cause such artists, writers and/or owners to execute a full release
or assignment (in such form as Licensor may require) of all rights,
including but not limited to all copyrights, so that all such rights
shall inure to Disney Enterprises and become a part of Disney
Enterprises' copyright and other rights in and to the Book. Licensee
agrees that it will not give, or agree to give, credit of any kind
to any such artists or writers without the prior written approval of
Licensor. Licensee shall provide Licensor with a copy of every
work-for-hire agreement, release, assignment, mechanical license (if
applicable), and any other agreement entered into with respect to
the ownership of the Book.
11.4 Subject to the rights granted hereunder, title (including copyright
and physical ownership) to all material objects incorporating the
Disney Property (excluding copies of the Book, promotion pieces,
catalogue sheets and other advertising, but including without
limitation, original drawings and illustrations used in the Book or
in promotional or advertising material which portray the Disney
Property as well as all photographs and reproductions of the
originals), whether supplied by Licensor or prepared by or for
Licensee, shall be in Disney Enterprises, and such material objects
shall be delivered to Licensor in good condition (subject to normal
wear and tear) upon request, Licensor to pay delivery costs. In no
event shall Licensee sell or lease the use of any such material
objects or otherwise part with control thereof. In addition,
Licensor shall be granted a security interest in all material
objects incorporating the Disney Property (including without
limitation, any unsold inventory of the Book and any work in
progress containing Disney Property).
Kideo Productions, Inc.
Disney Standard Characters, Disney's
The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 20
Licensee shall execute all documents and take all actions necessary
to evidence and perfect such security interest.
11.5 Licensee hereby assigns to Disney Enterprises all rights, title and
interest (including but not limited to all copyright(s) and any
extensions and renewals thereof) throughout the universe which
Licensee may have acquired relating to any and all material prepared
or published hereunder or contemplated hereby, or relating to the
Disney Property or its use of the same hereunder. Licensee hereby
appoints Licensor to act as Licensee's attorney-in-fact to execute
any documents in Licensee's name and/or on Licensee's behalf
necessary to grant or assign such copyrights or other rights to
Disney Enterprises.
11.6 Except with Licensor's written consent, neither Licensee nor any
affiliate of Licensee will register or seek to register in any
country copyright in the Book and/or in any part of the Disney
Property, and/or any trademark which is identical with any ▇▇▇▇ used
by Disney or which is so similar thereto as to suggest some
association with Disney. In the event of breach of the foregoing,
Licensee agrees, at its expense and at Licensor's request,
immediately to terminate the unauthorized registration activity and
promptly to execute and deliver, or cause to be delivered, to
Licensor such assignments and other documents as Licensor may
require to transfer to Disney Enterprises all rights to the
registrations or applications involved. Upon the expiration or
earlier termination of this Agreement and the Sell-off Period,
Licensee will cease to use in any manner any of the Disney Property,
trademarks or other proprietary rights owned by Disney Enterprises
or its licensor(s).
11.7 Should Licensee become aware of any infringing use or unauthorized
use of the Book, its contents, and/or the characters, Licensee
agrees to give Licensor prompt written notice, and that Licensee
will not, without Licensor's written consent, bring or cause to be
brought any criminal prosecution, lawsuit or administrative action
for infringement, interference with or violation of any rights to
the Book, its contents and/or the characters. Because of the need
for and the high costs of an effective anti-piracy enforcement
program, Licensee agrees to cooperate with Licensor, and, if
necessary, to be named by Licensor as a sole complainant or
co-complainant in any action against an infringer and,
notwithstanding any right of Licensee's to recover same, legal or
otherwise, Licensee agrees to pay to Licensor, and hereby waive all
claims to, all damages or other monetary relief recovered in such
action by reason of a judgment or settlement whether or not such
damages or
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Disney Standard Characters, Disney's
The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 21
other monetary relief, or any part thereof, represent or are
intended to represent injury sustained by Licensee as a licensee
hereunder. In any such action against an infringer, Licensor agrees
to reimburse Licensee for reasonable expenses incurred at Licensor's
request, including reasonable attorneys fees if Licensor has
requested Licensee to retain separate counsel.
12. WARRANTIES AND INDEMNITIES
12.1 Licensee hereby represents and warrants that if any material other
than material supplied by Licensor is used in the Book, neither said
material nor any part thereof shall infringe upon or interfere with
any common law right or any other right of any person or entity and
that the creation, manufacture, publishing, marketing, pre-pricing,
pricing, sale and distribution of the Book shall be in compliance
with all applicable Laws and shall not infringe the rights of any
person or entity, that Licensee has obtained all necessary
permissions to use the patented materials referenced in paragraph
7.3 hereof at no cost to Licensor, and that such patents are not now
being challenged or reasonably expected to be challenged in the
future. Without limiting the foregoing, Licensee represents and
warrants that no such material shall in any way infringe any
copyright or defame or invade the rights of privacy or publicity of
any person or entity. Licensee further represents and warrants that
it will not use or allow the use of the name "▇▇▇▇ Disney" or the
name "Disney", or the name or likeness of the fanciful characters of
Disney or any name, ▇▇▇▇, emblem, logo or designation that suggests
or implies an association with Disney, for any purpose other than as
specified in this Agreement, unless explicitly authorized by
Licensor in writing to do so. In the event Licensee is required by
law to make reference to the "Disney" name in any public document to
be filed by Licensee, then Licensee agrees to give Licensor prior
written notice thereof and to allow Licensor reasonable opportunity
to make any comments regarding the proposed reference.
12.2 Licensee hereby indemnifies and holds Disney harmless, during and
after the Term hereof, from and against any loss, liability,
judgment, settlement, cost or expense arising out of Licensee's
performance or non-performance of any act, duty or obligation
specified or contemplated by this Agreement, or arising out of
Licensee's negligence or breach or alleged breach of any of
Licensee's representations and warranties hereunder, provided that
Licensee is given timely notice of such claimed breach. In no event
shall Licensee be liable for loss of profits beyond the sum
guaranteed to Licensor herein.
Kideo Productions, Inc.
Disney Standard Characters, Disney's
The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 22
12.3 Licensee further indemnities Licensor during and after the Term
hereof against all claims, liabilities (including settlements
entered into in good faith with Licensee's consent, not to be
unreasonably withheld) and expenses (including reasonable attorney's
fees) arising out of any defect (whether obvious or hidden and
whether or not present in any sample approved by Licensor) in the
Book, or arising from personal injury or any infringement of any
rights of any other person by the manufacture, sale, possession or
use of the Book, or its failure to comply with applicable Laws. The
parties indemnified hereunder shall include Licensor, its
licensor(s), and its and their parent, successors and subsidiaries,
and its and their officers, directors, employees and agents.
12.4 Licensor hereby warrants that the Disney Property supplied by
Licensor hereunder shall not infringe or interfere with any common
law right or other right of any person or entity or infringe any
copyright and hereby indemnities and holds Licensee harmless from
and against any loss, liability, judgment, settlement, cost or
expense arising out of Licensor's breach or alleged breach of the
foregoing warranty, provided that Licensor is given timely notice of
such claimed breach and is allowed to control the defense thereof.
In no event shall Licensor be liable for loss of profits, however.
12.5 Licensee shall maintain in full force and effect at all times while
this Agreement is in effect and for three (3) years thereafter
commercial general liability insurance on a per occurrence form,
including broad form coverage for contractual liability, property
damage, products liability and personal injury liability (including
bodily injury and death), waiving subrogation, with minimum limits
of no less than two million U.S. dollars (U.S. $2,000,000.00) per
occurrence, and naming as additional insureds those indemnified in
paragraphs 12.2 and 12.3 hereof. Licensee also agrees to maintain in
full force and effect at all times while this Agreement is in effect
such Worker's Compensation Insurance as is required by applicable
provincial or state law and, if Licensee is a U.S.-based licensee,
Employer's Liability Insurance with minimum limits of one million
dollars (U.S. $1,000,000.00) per occurrence. All insurance shall be
primary and not contributory. Licensee shall deliver to Licensor a
certificate or certificates of insurance evidencing satisfactory
coverage and indicating that Licensor shall receive thirty (30) days
unrestricted prior written notice of cancellation, non-renewal, or
material change in coverage. Licensee's insurance shall be carried
by an insurer with a Best Guide rating of B + VII or better.
Compliance herewith in
Kideo Productions, Inc.
Disney Standard Characters, Disney's
The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 23
no way limits Licensee's indemnity obligations, except to the extent
that Licensee's insurance company actually pays Licensor amounts
which Licensee would otherwise pay Licensor.
13. STATEMENTS OF ACCOUNT
13.1 Licensee shall submit to Licensor monthly statements of account so
as to be received by Licensor no later than twenty-five (25) days
after the end of each monthly period throughout the Term and the
Sell-off Period, regardless of whether any sales have taken place
and/or any royalties are payable to Licensor. Licensee's statements
shall be on forms designated by Licensor for Licensee's use, showing
all information requested by such forms, including but not limited
to, the number of Books sold by title (a sale shall be deemed to
have occurred on the date the Book is shipped to the customer), the
price(s) on which the royalty is calculated and the royalty payment
due. The statement forms Licensor designates for Licensee's use may
be changed from time to time, and Licensee agrees to use the most
current form Licensor provides to Licensee. Licensee shall fully
comply with all of Licensor's instructions for completing such
forms. Sales of books licensed under contracts with Licensor other
than this Agreement shall not be reported on the same statement as
sales of the Book under this Agreement. Sales to countries other
than the United States, if any such are permitted, shall be reported
separately by country. Royalty payments shown as due shall be
delivered to Licensor with such statements. Royalties are also
payable, and due with such statements, on inventory shrinkage that
exceeds two percent (2%). Inventory shrinkage is defined as the
reduction in Licensee's inventory of the Book which cannot be
accounted for by sales or damaged copies. Licensee's statements and
payments shall be directed to the attention of Licensor at ▇.▇. ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, with a copy sent to the attention of
Licensee's designated account executive at the address set forth in
paragraph 18 hereof. To the extent that royalties are not paid,
Licensor may offset royalties due hereunder against any sums which
Licensor or any of its affiliates may owe to Licensee or any of its
affiliates. No deduction or withholding from royalties payable shall
be made by reason of any tax. GST applicable to royalties (including
advances and guarantees) or to any other payments due to Licensor
shall be indicated on the statement and paid to Licensor along with
the royalty or other payment. My applicable tax on the manufacture,
distribution and sale of the Book shall be borne by Licensee.
Kideo Productions, Inc.
Disney Standard Characters, Disney's
The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 24
13.2 Licensee shall indicate on its statements the amount of any reserve
for returns maintained and Licensee shall not maintain an
unreasonable reserve. In no event shall a reserve exceed fifteen
percent (15%) of sales reported in any royalty period unless with
the written agreement of Licensor. In the event that actual returns
exceed the reserve and cannot be recouped out of royalties otherwise
due in the relevant reporting period or any subsequent reporting
period, Licensor shall refund at the end of the Term, or at the end
of the Sell-off Period if any, unearned royalties previously paid in
excess of any advances and subject to payment by Licensee when due
of any guarantee obligation. Such refund may be applied by Licensor
against any late charges that may be due by Licensee hereunder. In
the event that reserves exceed actual returns, Licensee shall pay
royalties on the difference with Licensee's final statement of
account for the Term, or for the Sell-off Period if any.
13.3 Royalties received later than the due date shall bear interest at
eighteen percent (18%) per annum from the due date, or at the
maximum rate permissible by law if less than eighteen percent (18%).
13.4 Within thirty (30) days prior to the beginning of each royalty
reporting period and within ninety (90) days prior to the beginning
of each calendar year, Licensee shall submit to Licensor a forecast
of the expected net sales and royalties for each title of the Book
for each respective time period.
13.5 Licensee shall take all necessary steps to ensure that its
information systems, including without limitation, all its
proprietary and all third party hardware and software, process dates
correctly prior to, during and after the calendar year 2000 ("Year
2000 Compliance"). Year 2000 Compliance shall include, without
limitation, correct century recognition, calculations that properly
accommodate same century and multi-century formulas and date values,
and interface values that reflect the appropriate century. Necessary
steps to ensure Year 2000 Compliance shall include, without
limitation, analysis of all components of Licensee's information
systems and as necessary, development, installation and testing of
software fixes, patches and/or updates. In a timely manner, but no
later than by December 31, 1998, Licensee shall certify to Licensor
in writing that its information systems are Year 2000 Compliant.
Such certification is a material term of this Agreement. Upon a
breach by Licensee of its obligation under this paragraph, Licensor
shall be entitled to terminate this Agreement in accordance with the
provisions for termination set forth herein.
Kideo Productions, Inc.
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The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 25
14. AUDITS
14.1 Licensor and/or a representative of Licensor shall have access
during the Term hereof and for two (2) years thereafter to the
pertinent books and records of Licensee (including the materials
referenced in paragraphs 11.3, 11.4, and 9 of this Agreement) during
reasonable business hours upon a prior request made by Licensor, and
Licensor and/or such representative may examine the same, make
copies thereof, take exhibits therefrom and conduct such audits
thereof as Licensor may from time to time deem necessary. Licensee
agrees that for the purpose of the foregoing, it will keep and
preserve accurate records concerning transactions entered into by it
under this Agreement during the Term and for a period of two (2)
years following the expiration of the Term, as extended, including
print runs, shipments to Licensee, inventory records, records of
sales and shipments by Licensee and records of returns. Licensor's
representatives shall be entitled to examine all invoices, whether
or not they pertain to the Book, for the purpose of determining
whether all invoices for the Book have been properly reflected in
the statements of account.
14.2 If in any audit of Licensee's records it is determined that there is
a shortfall of five percent (5%) or more in royalties reported for
any reporting period, Licensee shall, upon request from Licensor,
reimburse Licensor for the full out-of-pocket costs of the audit
including the costs of employee auditors at their then current
hourly rate for travel time during normal working hours and actual
working time.
15. WITHDRAWAL OF MATERIAL
The rights conferred by Licensor under this Agreement are subject to the
right of Licensor to require Licensee to withhold and/or withdraw any
character or material, or any part thereof, from use in connection with
the endeavors contemplated in this Agreement if such use should violate or
infringe or reasonably be claimed to violate or infringe the rights of any
third parties, provided that Licensor shall reimburse Licensee its
expenses reasonably incurred in complying with any withdrawal made
hereunder of previously approved material.
Kideo Productions, Inc.
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The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 26
16. TERMINATION
Without prejudice to any other right or remedy available to it, Licensor
shall have the right at any time to terminate this Agreement prior to the
expiration of the Term in the event of the occurrence of one (1) or more
of the following:
16.1 If Licensee delivers to any customer without Licensor's written
authorization anything containing materials owned by Disney
Enterprises other than the Book described herein and approved in
accordance with the provisions hereof; or
16.2 If Licensee delivers the Book outside the Territory (unless the Book
is destined for ultimate delivery in the Territory) or sells the
Book to a third party if Licensee knows, or in the exercise of
prudent business judgment should know, that such sale will result in
delivery of the Book outside the Territory; or
16.3 If Licensee shall fail to make any payment and/or furnish any
statement as herein provided, and if such failure shall continue for
a period of thirty (30) days following the date said statement or
payment was due; or
16.4 If Licensee fails to publish the Book by the distribution date, if
any, set forth in paragraph 2.1 above or, if no distribution date is
set, within six (6) months after the commencement of the Term; or
16.5 If Licensee shall breach any other terms of this Agreement and if
any such breach is not corrected within thirty (30) days after
notification by Licensor of the breach (or, in the event of a breach
which cannot be corrected within thirty days, if Licensee fails to
commence such correction within thirty days and thereafter
diligently prosecutes it to completion); or
16.6 If Licensee breaches any material term of any other agreement
between the parties, and Licensor terminates such other agreement
for cause; or
16.7 If Licensee shall make any assignment for the benefit of creditors,
or file a petition in bankruptcy, or be adjudged bankrupt, or become
insolvent, or be placed in the hands of a receiver. The equivalent
of any of the proceedings or acts referred to in this paragraph,
though known and/or designated by some other name or term in
Kideo Productions, Inc.
Disney Standard Characters, Disney's
The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 27
any part of the Territory shall likewise constitute a ground for
termination of this Agreement by Licensor; or
16.8 If Licensee fails for any reason to operate its business in the
usual manner, or fails for any reason to provide Licensor with
assurances satisfactory to Licensor that Licensee will so operate
its business, or if Licensee fails for any reason to otherwise meet
its obligations under this Agreement or to provide Licensor with
assurance satisfactory to Licensor that Licensee will meet such
obligations; or
16.9 If Licensee breaches any provision of this Agreement after having
breached such provision and cured such breach within the designated
period after notice from Licensor; or
16.10 If there should occur a change in Licensee's management, ownership
or control, or if Licensee transfers or attempts to transfer this
Agreement in contravention of paragraph 17 hereof; or
16.11 If Licensee breaches any covenant set forth in paragraph 8 of this
Agreement; or
16.12 If more than three (3) Supplier's Agreements are terminated in any
twelve-month period by Licensor for the Suppliers' failure to pass
compliance inspections as referenced in paragraph 8; or
16.13 If the patent referred to in paragraph 12.1 hereof, or Licensee's
right to practice such patent is limited in any material respects.
In the event of the expiration or termination of this Agreement all rights
herein granted to Licensee shall revert to Licensor, and Licensor shall be
entitled to retain any and all consideration paid to Licensor and other
things of value theretofore paid or delivered to Licensor. Without
limitation to the carry over of other obligations hereunder, Licensee's
obligations to permit audits and to turn over to Licensor all material
required to be turned over hereunder shall survive the expiration or
termination hereof
17. ASSIGNMENT
17.1 This license and the rights granted and obligations undertaken
hereunder are personal to Licensee and based upon the continued
personal involvement, control, and responsibility of and for
Licensee's management and operations by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
and Chief Executive Officer. Licensee shall not voluntarily or
Kideo Productions, Inc.
Disney Standard Characters, Disney's
The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 28
by operation of law assign, sublicense, transfer, encumber or
otherwise dispose of all or any part of Licensee's interest in this
Agreement (including, but not limited to, any encumbrance of the
Book) without Licensor's prior written consent, to be granted or
withheld in Licensor's absolute discretion. Any attempted
assignment, sublicense, transfer, encumbrance or other disposal
without such consent shall be void and shall constitute a material
default and breach of this Agreement. "Transfer" within the meaning
of this paragraph shall include any merger or consolidation of
Licensee or any directly or indirectly controlling affiliate(s) of
Licensee ("Controlling Affiliate"); any sale or transfer of all or
substantially all of Licensee's or its Controlling Affiliate(s)'
assets; any transfer of Licensee's rights hereunder to a division,
business segment, or other entity different from the one
specifically referenced on page 1 hereof, (or any sale or attempted
sale of the Book under a trademark or tradename of such division,
business segment or other entity); any public offering, or series of
public offerings, whereby a cumulative total of thirty-three and
one-third percent (33 1/3%) or more the voting stock of Licensee or
its Controlling Affiliate(s) is offered for purchase; and any
acquisition or series of acquisitions by any person or entity, or
group of related persons or entities, the cumulative total of
thirty-three and one-third percent (33 1/3%) or more of the voting
stock of Licensee or its Controlling Affiliate(s), or the right to
vote such percentage (or, if Licensee is a partnership, resulting in
the transfer of thirty-three and one-third percent (33 1/3%) or more
of the profit and loss participation in Licensee, or the occurrence
of any of the foregoing with respect to any general partner of
Licensee).
17.2 Licensee agrees to provide Licensor with at least thirty (30) days
prior written notice of any desired assignment of this Agreement or
other transfer as defined in paragraph 17.1 above. At the time
Licensee gives such notice, Licensee shall provide Licensor with the
information and documentation necessary to evaluate the contemplated
transaction. Licensor's consent (if given) to any assignment of this
Agreement or other transfer as defined in paragraph 17.1 above shall
be subject to such terms and conditions as Licensor deems
appropriate, including but not limited to payment of a transfer fee.
The amount of the transfer fee shall be determined by Licensor based
upon the circumstances of the particular assignment or transfer,
taking into account such factors as the estimated value of the
license being assigned or otherwise transferred; the risk of
business interruption or loss of quality, production or control
Licensor may suffer as a result of the assignment or other transfer;
the identity, reputation, creditworthiness, financial condition and
business capabilities of the proposed assignee or other entity
involved in the transfer; and Licensor's internal costs related to
the assignment or other transfer; provided, however, in no event
shall the transfer fee be less than ten percent (10%)
Kideo Productions, Inc.
Disney Standard Characters, Disney's
The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 29
of royalties earned for the Book in the preceding twelve (12) month
period (if twelve (12) months of royalties have been reported), or
ten percent (10%) of the guarantee, whichever is higher. The
foregoing transfer fee shall not apply if this Agreement is assigned
to one of Licensee's affiliates as part of a corporate
reorganization exclusively among some or all of the entities
existing in Licensee's corporate structure when this Agreement is
signed; provided, however, that Licensee must give Licensor written
notice of such assignment and a description of the reorganization.
The provisions of this Subparagraph 17 shall supersede any
conflicting provisions on this subject in any publishing license
agreement previously entered into by the parties for this Territory.
17.3 Notwithstanding paragraphs 17.1 and 17.2, Licensee may, upon
Licensor's prior written consent, sublicense its rights and/or
obligations hereunder to any of Licensee s affiliates, provided that
each such affiliate agrees to be bound by all of the terms and
conditions of this Agreement, and provided, that each such affiliate
agrees to guarantee Licensee's full performance of this Agreement
(including, but not limited to, paragraph 12) and to indemnify
Licensor for any failure of such performance, and further provided
that Licensee and each such affiliate agree to provide Licensor with
satisfactory documentation of such agreement(s), guarantee(s), and
indemnification upon Licensor's request therefor. Licensee hereby
irrevocably and unconditionally guarantees that any and all
affiliates sublicensed hereunder will observe and perform all of
Licensee's obligations under this Agreement, including, but not
limited to, the provisions governing approvals, and compliance with
approved samples, applicable Laws, and all other provisions hereof,
and that they will otherwise adhere strictly to all of the terms
hereof and act in accordance with Licensee's obligations hereunder.
Any involvement of an affiliate in the activities which are the
subject of this Agreement shall be deemed carried on pursuant to
such a sublicense and thus covered by such guarantee; however,
unless Licensee has obtained Licensor's consent to sublicense an
affiliate in each instance, such affiliate shall be deemed to be
included in the term "Licensee" for all purposes under this
Agreement, and Licensor may treat such unapproved involvement of the
affiliate as a breach of the Agreement. In the event of any
sublicense to an affiliate hereunder, the reference in paragraph
17.1 to "Controlling Affiliate" shall include such affiliate
sublicensee. "Affiliate" means, with regard to Licensee, any
corporation or other entity which directly or indirectly controls,
is controlled by, or is under common control with Licensee.
"Control" of an entity shall mean possession, directly or
indirectly, of power to direct or cause the direction of management
or policies of such entity, whether through ownership of voting
securities, by contract or otherwise.
Kideo Productions, Inc.
Disney Standard Characters, Disney's
The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 30
17.4 Licensor's rights and obligations hereunder may be assigned,
delegated or otherwise transferred by Licensor.
18. NOTICES
All notices which either party is required to or may desire to serve upon
the other party hereunder shall be in writing and addressed to the party
to be served at the address set forth below, or to such other address as
either party may hereafter designate:
To Licensor: Disney Licensed Publishing
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
With a copy to: The ▇▇▇▇ Disney Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President - Eastern Regional Counsel
To Licensee: Kideo Productions, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Any notice, served by either party, may be served personally or by
depositing the same addressed as herein provided (unless and until
otherwise notified), postage prepaid, in the official mail of the country
in which deposited, or by documented overnight delivery service. Any
notice mailed as aforesaid shall be deemed to have been served on the date
of mailing. However, Licensor shall be deemed to have been served with a
notice of a request for approval of materials under this Agreement only
upon Licensor's actual receipt of the request and of any required
accompanying materials.
19. ADDITIONAL PROVISIONS
19.1 Licensee hereby acknowledges that the rights and powers retained by
Licensor hereunder are necessary to protect Disney Enterprises' or
its licensor(s), as the case may be, copyrights and property rights
generally, and specifically to conserve the goodwill and good name
of Licensor's products, the Disney Property and the
Kideo Productions, Inc.
Disney Standard Characters, Disney's
The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 31
name "Disney". Nothing contained herein shall be construed to allow
Licensee to do any act or activity that could or might deprecate or
detract from such goodwill or in any way impugn the public
acceptance and popularity of any fanciful character of Disney or
impair its legal status.
19.2 Nothing herein contained shall be construed so as to constitute the
parties hereto principal and agent, employer and employee, partners
or joint venturers, nor shall any similar relationship be deemed to
exist between them. Neither party shall have any power to obligate
or bind the other party, except as specifically provided herein.
19.3 The paragraph headings contained herein are for convenient reference
only. They shall not be used in any way to govern, limit, modify or
construe this Agreement and shall not be given any legal effect.
19.4 All rights not specifically granted and licensed to Licensee
hereunder are reserved to Licensor.
19.5 No waiver by either party, whether express or implied, of any
provision of this Agreement shall constitute a continuing waiver of
such provision or a waiver of any other provision of this Agreement.
No waiver by either party, whether express or implied, of any breach
or default by the other party shall constitute a continuing waiver
of such breach or default or a waiver of any other breach or default
of the same or any other provision of this Agreement, nor shall any
failure of either party to object to conduct of the other be deemed
to waive such party's right to claim that a repetition of such
conduct is a breach hereof
19.6 In the event any provision contained herein is held to be unlawful
or unenforceable, such provision shall be severable from the
remaining provisions of this Agreement, which shall remain in full
force and effect.
19.7 This Agreement shall be deemed to have been made, entered into and
finally executed and delivered in the State of California, United
States of America (which execution and delivery are hereby
acknowledged by both parties hereto), and shall be governed,
controlled, interpreted and defined by and under the laws of the
State of California. Any legal actions pertaining to this Agreement
shall be commenced within the State of California and within either
Los Angeles or Orange Counties,
Kideo Productions, Inc.
Disney Standard Characters, Disney's
The Lion King, and Toy Story
Agreement dated October 1, 1997
Page 32
and Licensee hereby waives trial by jury and consents to the
jurisdiction of the courts located in Los Angeles or Orange
Counties.
19.8 This Agreement, and any confidentiality agreement Licensee may have
signed pertaining to the Disney Property, shall constitute the whole
and complete agreement between the parties hereto concerning the
subject matter hereof, and no oral or prior written agreements shall
be deemed a part of or a modification of this Agreement. This
Agreement can only be modified by a written agreement between the
parties executed after the effective date hereof
ACCEPTED AND AGREED:
KIDEO PRODUCTIONS, INC. DISNEY LICENSED PUBLISHING
By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
------------------------------- -------------------------------
Title: President & CEO Title: Vice President
---------------------------- ----------------------------
Date: 12/8/97 Date: 12/12/97
----------------------------- -----------------------------
jaw
kp1015.doc
revised 111797
SUPPLIER'S AGREEMENT
EXHIBIT A
--------------------------------------------------------------------------------
SUPPLIER: _________
_________
_________
Reference is made to the license agreement dated ________ between Disney
Licensed Publishing ("Licensor") and __________ ("Licensee") in which Licenser
has licensed the publication by Licensee of ________________________________
(the "publication"). Licensor hereby authorizes you ("Supplier") to prepare,
from material supplied to Supplier by Licensee and/or Licensor, reproduction
material, including as applicable film positives, four color separations,
photographs, transparencies, film negatives, black separations, black keyplate
proofs and other reproduction material used in the manufacture of the
publication, upon the condition that the Supplier shall sign and fully comply in
all respects with this agreement. Failure of said condition shall entitle
Licensor to terminate this agreement forthwith. The property rights (including
but not limited to copyright and physical ownership) in all such materials shall
remain vested in Disney Enterprises, Inc., at all times. Said reproduction
material will be delivered by Supplier to no one other than Licensee, or as
Licensor may otherwise direct. Licensor shall be under no obligation to Supplier
with respect to such charges as may be incurred in connection with reproduction
material prepared at the request of Licensee.
The Supplier signing below agrees that (except as may be authorized under a
separate agreement with Licensor):
1. The Supplier will not manufacture the publication or components
thereof to the order of anyone but the Licensee, will invoice only
the Licensee, will not ship to anyone other than the Licensee or
Licensee's designees and will not ship after the expiration date of
the License Agreement.
2. The Supplier will not subcontract production of the publication or
components thereof without Licensor's written consent.
3. The Supplier will not (without Licensor's written consent)
manufacture the publication or components thereof listed above,
other than in accordance with this agreement.
4. From time to time, the Supplier will permit Licensor's authorized
representatives to inspect its activities and premises, accounting
books and invoices relevant to its manufacture and supply of the
publication.
5. The Supplier will not publish or cause the publication of pictures
from the publication in any other publication or promotional
material, nor advertise the fact that it is permitted to manufacture
the publication or components thereof, nor use the name "Disney" or
any variant thereof without Licensor's prior written consent.
6. In manufacturing the publication, the Supplier will comply with all
applicable local and national laws and regulations, treaties,
voluntary industry standards, codes or other obligations
(collectively "Laws"), including but not limited to, applicable
health and safety standards and labor laws for manufacturing
operations. Specifically, the Supplier covenants that:
(a) The Supplier will not use child labor in the manufacturing,
packaging or distribution of the publication or components
thereof. The term "child" refers to a person younger than the
local legal minimum age for employment or the age for
completing compulsory education, but in no case shall any
child younger than fifteen (15) years of age (or fourteen (14)
years of age where local law allows) be employed in the
manufacturing, packaging or distribution of the publication or
components thereof. The Supplier employing young persons who
do not fall within the definition of "children" agrees also to
comply with any Laws applicable to such persons.
(b) The Supplier agrees only to employ persons whose presence is
voluntary. The Supplier agrees not to use any forced or
involuntary labor, whether prison, bonded, indentured or
otherwise.
(c) The Supplier agrees to treat each employee with dignity and
respect, and not to use corporal punishment, threats of
violence, or other forms of physical, sexual, psychological or
verbal harassment or abuse.
(d) The Supplier agrees not to discriminate in hiring and
employment practices, including salary, benefits, advancement,
discipline, termination, or retirement, on the basis of race,
religion, age, nationality, social or ethnic origin, sexual
orientation, gender, political opinion or disability.
(e) The Supplier recognizes that wages are essential to meeting
employees' basic needs. The Supplier agrees to comply, at a
minimum, with all applicable wage and hour Laws, including
minimum wage, overtime, maximum hours, piece rates and other
elements of compensation, and to provide legally mandated
benefits. If local Laws do not provide for overtime pay, the
Supplier agrees to pay at least regular wages for overtime
work. Except in extraordinary business circumstances, the
Supplier will not require employees to work more than the
lesser of (1) 48 hours per week and 12 hours overtime or (2)
the limits on regular and overtime hours allowed by local law,
or, where local law does not limit the hours of work, the
regular work week in such country plus 12 hours overtime. In
addition, except in extraordinary business circumstances,
employees will be entitled to at least one day off in every
seven-day period. The Supplier agrees that, where local
industry standards are higher than applicable legal
requirements, it will meet the higher standards.
(f) The Supplier agrees to provide employees with a safe and
healthy workplace in compliance with all applicable Laws,
ensuring, at a minimum, reasonable access to potable water and
sanitary facilities, fire safety, and adequate lighting and
ventilation. The Supplier also agrees to ensure that the same
standards of health and safety are applied in any housing it
provides for employees. The Supplier agrees to provide
Licensor with all information Licensor may request about
manufacturing, packaging and distribution facilities for the
publication.
(g) The Supplier agrees to respect the rights of employees to
associate, organize and bargain collectively in a lawful and
peaceful manner, without penalty or interference, in
accordance with applicable Laws.
(h) The Supplier agrees to comply with all applicable Laws,
including those pertaining to the manufacture, pricing, sale
and distribution of the publication.
(i) The Supplier agrees to comply with all applicable
environmental Laws.
(j) The Supplier agrees that Licensor and its designated agents
(including third parties) may engage in monitoring activities
to confirm compliance with this Agreement, including
unannounced on-site inspections of manufacturing, packaging
and distribution facilities, and employer-provided housing,
such inspections to include reviews of books and records
relating to employment matters and private interviews with
employees. The Supplier agrees to maintain on site all
documentation necessary to demonstrate compliance with this
Agreement.
(k) The Supplier agrees to take appropriate steps to ensure that
the provisions of this Paragraph 6 are communicated to
employees, including the prominent posting of a copy of
Disney's Code of Conduct for Suppliers in the local language
and in a place readily accessible to employees at all times.
7. Upon expiration or termination of the License Agreement, or upon
notification by Licensor or Licensee, Supplier will immediately
cease manufacturing the publication and deliver to Licenser or its
authorized representative such reproduction materials as are
necessary for printing, and shall deliver to Licensee, or to
Licensor if Licensor so requests, all artwork, textual and
reproduction materials for the publication which Licensor or
Licensee may have caused to be furnished to Supplier, and all
original and reproduction material prepared by Supplier hereunder,
unless Licensee has engaged Supplier to do the printing, in which
case Supplier will deliver such original and reproduction material
at such other time as Licensor may direct, or in the absence of such
direction, upon completion of Supplier's use of such original and
reproduction materials for the printing of the publication. Said
materials shall be so delivered without charge other than the
expense of delivery, and shall be complete and in reproduction
condition. Supplier agrees to provide Licensor upon request, a
statement and/or a duplicate invoice as to all materials provided to
Licensee hereunder.
8. This Agreement shall be deemed to be entered into in California and
shall be governed and interpreted according to the laws of the State
of California. Any legal actions pertaining to this Agreement shall
be commenced within the State of California and within either Los
Angeles or Orange Counties.
DISNEY LICENSED PUBLISHING ACCEPTED AND AGREED BY:
By: By:
-------------------------------- -----------------------------------
(to be signed by Supplier)
Title: Title:
----------------------------- ---------------------------------
Company:
-------------------------------
Code of Conduct for Suppliers
At The ▇▇▇▇ Disney Company, we are committed to:
o standard of excellence in every aspect of our business and in every
corner of the world;
o ethical and responsible conduct in all of our operations;
o respect for the rights of all individuals; and
o respect for the environment.
We expect these same commitments to be shared by all suppliers of Disney
publications. At a minimum, we require that all suppliers of Disney publications
meet the following standards:
Child Labor Suppliers will not use child labor.
The term "child" refers to a person younger than 15 (or 14
where local law allows) or, if higher, the local legal
minimum age for employment or the age for completing
compulsory education.
Suppliers employing young persons who do not fall within the
definition of "children" will also comply with any laws and
regulations applicable to such persons.
Involuntary Labor Suppliers will not use any forced or involuntary labor,
whether prison, bonded, indentured or otherwise.
Coercion and
Harassment Suppliers will treat each employee with dignity and respect,
and will not use corporal punishment, threats of violence or
other forms of physical, sexual, psychological or verbal
harassment or abuse.
Nondiscrimination Suppliers will not discriminate in hiring and employment
practices, including salary, benefits, advancement,
discipline, termination or retirement, on the basis of race,
religion, age, nationality, social or ethnic origin, sexual
orientation, gender, political opinion or disability.
Association Suppliers will respect the rights of employees to associate,
organize and bargain collectively in a lawful and peaceful
manner, without penalty or interference.
Health and Safety Suppliers will provide employees with a safe and healthy
workplace in compliance with all applicable laws and
regulations, ensuring at a minimum, reasonable access to
potable water and sanitary facilities, fire safety, and
adequate lighting and ventilation.
Suppliers will also ensure that the same standards of health
and safety are applied in any housing that they provide for
employees.
Compensation We expect suppliers to recognize that wages are essential to
meeting employees' basic needs. Suppliers will, at a minimum,
comply with all applicable wage and hour laws and
regulations, including those relating to minimum wages,
overtime, maximum hours, piece rates and other elements of
compensation, and provide legally mandated benefits. If local
laws do not provide for overtime pay, suppliers will pay at
least regular wages for overtime work. Except in
extraordinary business circumstances, suppliers will not
require employees to work more than the lesser of (a) 48
hours per week and 12 hours overtime or (b) the limits on
regular and overtime hours allowed by local law or, where
local law does not limit the hours of work, the regular work
week in such country plus 12 hours overtime. In addition,
except in extraordinary business circumstances, employees
will be entitled to at least one day off in every seven-day
period.
Where local industry standards are higher than applicable
legal requirements, we expect suppliers to meet the higher
standards.
Protection of the
Environment Suppliers will comply with all applicable environmental laws
and regulations.
Other Laws Suppliers will comply with all applicable laws and
regulations, including those pertaining to the manufacture,
pricing, sale and distribution of publications.
All references to "applicable laws and regulations" in this
Code of Conduct include local and national codes, rules and
regulations as well as applicable treaties and voluntary
industry standards.
Subcontracting Suppliers will not use subcontractors for the manufacture of
Disney publications or components thereof without Disney's
express written consent, and only after the subcontractor has
entered into a written commitment with Disney to comply with
this Code of Conduct.
Monitoring and
Compliance Suppliers will authorize Disney and its designated agents
(including third parties) to engage in monitoring activities
to confirm compliance with this Code of Conduct, including
unannounced on-site inspections of manufacturing facilities
and employer-provided housing; reviews of books and records
relating to employment matters; and private interviews with
employees. Suppliers will maintain on site all documentation
that may be needed to demonstrate compliance with this Code
of Conduct.
Publication Suppliers will take appropriate steps to ensure that the
provisions of this Code of Conduct are communicated to
employees, including the prominent posting of a copy of this
Code of Conduct, in the local language and in a place readily
accessible to employees, at all times.
Code of Conduct for Licensees
At The ▇▇▇▇ Disney Company, we are committed to:
o a standard of excellence in every aspect of our business and in
every corner of the world;
o ethical and responsible conduct in all of our operations;
o respect for the rights of all individuals; and
o respect for the environment.
We expect these same commitments to be shared by all Disney licensees and the
suppliers with which they work in the production of Disney publications. At a
minimum, we require that all Disney licensees meet the following standards:
Conduct of
Manufacturing Licensees that engage directly in the manufacturing of Disney
publications will comply with all of the standards set forth
in Disney's Code of Conduct for Suppliers, a copy of which is
attached.
Licensees will ensure that each manufacturer other than the
licensee also enters into a written commitment with Disney to
comply with the standards set forth in Disney's Code of
Conduct for Suppliers.
Licensees will prohibit suppliers from subcontracting the
manufacture of Disney publications or components thereof
without Disney's express written consent, and only after the
subcontractor has entered into a written commitment with
Disney to comply with Disney's Code of Conduct for Suppliers.
Monitoring and
Compliance Licensees will take appropriate steps, in consultation with
Disney, to develop, implement and maintain procedures to
evaluate and monitor suppliers of Disney publications and
ensure compliance with Disney's Code of Conduct for
Suppliers, including unannounced on-site inspections of
manufacturing facilities and employer-provided housing;
review of books and records relating to employment matters;
and private interviews with employees.
Licensees will authorize Disney and its designated agents
(including third parties) to engage in similar monitoring
activities to confirm Licensees' compliance with this Code of
Conduct. Licensees will maintain on site all documentation
that may be needed to demonstrate such compliance.