EXHIBIT 10.26
Licensed Book Publishing Agreement
Between
Disney Licensed Publishing
and
Golden Books Publishing Company, Inc.
Dated December 12, 1998
Note: Portions of this Agreement have been intentionally omitted pursuant to a
confidential treatment request and are separately filed with the
Commission.
INDEX
Page
Number
1. DEFINITIONS.......................................................... 1
1.1 "Licensed Property"......................................... 1
1.2 "Book"...................................................... 1
1.3 "Term"...................................................... 1
1.4 "Distribution Period"....................................... 1
1.5 "Territory"................................................. 1
1.6 "Royalties"................................................. 2
1.7 "Royalty Payment Period".................................... 4
1.8 [Intentionally omitted pursuant to a confidential
treatment request and separately filed with the
Commission]................................................. 4
1.9 "Guarantee"................................................. 4
1.10 "Promotion Commitment"...................................... 5
1.11 "Affiliate"................................................. 6
1.12 "Laws"...................................................... 6
1.13 "Suppliers"................................................. 7
1.14 [Intentionally omitted pursuant to a confidential
treatment request and separately filed
with the Commission]........................................ 7
2. GRANT OF RIGHTS...................................................... 7
3. ADVANCE............................................................. 10
4. GUARANTEE........................................................... 10
5. PUBLICATION, PRESS RUN & FREE COPIES................................ 11
6. CONTENT............................................................. 11
7. PRE-PRODUCTION APPROVALS............................................ 12
8. APPROVAL OF PRODUCTION SAMPLES...................................... 13
9. THIRD PARTY APPROVALS............................................... 15
10. COMPLIANCE WITH APPLICABLE LAWS AND STANDARDS....................... 15
11. PRINTING AND/OR MANUFACTURING BY THIRD PARTIES...................... 18
12. ADVERTISING......................................................... 20
13. PROMOTION COMMITMENT................................................ 20
14. COMMON MARKETING FUND............................................... 20
15. OWNERSHIP........................................................... 21
16. COPYRIGHT NOTICE.................................................... 23
17. REGISTRATIONS....................................................... 24
18. UNLICENSED USE OF LICENSED PROPERTY................................. 24
19. WARRANTIES AND INDEMNITIES.......................................... 25
20. INSURANCE........................................................... 27
21. STATEMENTS AND PAYMENT OF ROYALTIES................................. 27
22. INTEREST............................................................ 31
23. AUDITS AND MAINTAINING RECORDS...................................... 32
24. WITHDRAWAL OF LICENSED MATERIAL..................................... 33
25. TERMINATION......................................................... 33
26. RIGHTS AND OBLIGATIONS UPON EXPIRATION OR TERMINATION............... 35
27. NON-ASSIGNABILITY................................................... 37
28. NOTICES............................................................. 39
29. MUSIC............................................................... 40
30. GOODWILL............................................................ 40
31. RELATIONSHIP........................................................ 41
32. CONSTRUCTION........................................................ 41
33. MODIFICATIONS OR EXTENSIONS OF THIS AGREEMENT....................... 41
34. RESERVATION OF RIGHTS............................................... 41
35. WAIVERS............................................................. 41
36. SEVERABILITY........................................................ 41
37. CHOICE OF LAW AND FORUM............................................. 42
38. EQUITABLE RELIEF.................................................... 42
39. POWER TO SIGN....................................................... 42
40. CONFIDENTIALITY..................................................... 42
41. PREVIOUS AGREEMENTS................................................. 43
42. SURVIVAL OF OBLIGATIONS............................................. 44
LICENSED BOOK PUBLISHING AGREEMENT
This book publishing license agreement (the "Agreement") dated December 12,
1998, is made by and between Buena Vista Books, Inc., doing business as Disney
Licensed Publishing ("Licensor") located at ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Golden Books Publishing Company, Inc., a wholly-owned
subsidiary of Golden Books Family Entertainment, Inc. ("Licensee") located at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
1. DEFINITIONS
1.1 "Licensed Property" means the characters set forth in Schedule A,
which is attached hereto and incorporated herein by this reference.
It is hereby mutually acknowledged and agreed that the Licensed
Property shall not include any characters the publishing rights to
which Licensor does not own and that Licensee's use of the Licensed
Property is subject to Licensor's rights of approval as more fully
set forth in this Agreement.
1.2 "Book" means the book(s) described in Schedules B and C, which are
attached hereto and incorporated herein by this reference, in the
English language as developed by Licensee. For purposes of this
Agreement, the term "Book" shall not include educational books or
educational workbooks.
1.3 "Term" means the period commencing December 12, 1998, and ending
September 30, 2000. Subject to Subparagraph 2.7 below, the Term shall
not be extended or continued beyond such date, by implication or
otherwise, than by a separate written agreement newly entered into.
1.4 "Distribution Period" means the following period during which the
Book shall be distributed and available for purchase in the
distribution channels authorized pursuant to Subparagraph 2.3 below:
December 12, 1998 through the end of the Term, and any extension
thereof. Without limiting the foregoing, Licensee agrees to use its
best efforts to distribute any Book the publication of which is tied
to the release (or re-release) in any medium (e.g., home video and
motion picture) of a Disney- branded feature animation or live action
movie on or about the official release date for the overall licensing
program established for that movie, but in no event prior to such
official release date.
1.5 "Territory" means 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.
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 2
1.6 "Royalties" means a royalty in the amounts set forth below:
(i) The royalty rates set forth in Schedule C, which is attached
hereto and incorporated herein by this reference.
(ii) On sublicenses (all sublicenses are subject to Licensor's
prior written approval pursuant to Subparagraph 27.4 below),
Licensee shall pay Licensor a royalty rate of [Intentionally
omitted pursuant to a confidential treatment request and
separately filed with the Commission] of Licensee's Net
Invoiced ▇▇▇▇▇▇▇▇ for such sales of the Book;
(iii) For sales of the Book to book clubs, book fairs, schools,
libraries and other educational outlets (all of which are
subject to Licensor's prior written approval) and "special"
sales (i.e., sales of the Book outside of the distribution
channels set forth herein for which Licensee must obtain
Licensor's prior written approval), a royalty rate of
[Intentionally omitted pursuant to a confidential treatment
request and separately filed with the Commission] of
Licensee's Net Invoiced ▇▇▇▇▇▇▇▇ if the sales are based on a
sublicense sale, or [Intentionally omitted pursuant to a
confidential treatment request and separately filed with the
Commission] of the applicable royalty rate for sales made on
an "inventory/all-in basis" (i.e., when the Book is sold
directly from Licensee's inventory stock to the purchaser).
(iv) For sales of "Golden Value" versions of the Book, for which
Licensee must obtain Licensor's prior written approval, a
royalty rate of [Intentionally omitted pursuant to a
confidential treatment request and separately filed with the
Commission] of the applicable royalty rate as set forth in
Schedule C hereto.
(v) "Net Invoiced ▇▇▇▇▇▇▇▇" means the following: actual invoiced
▇▇▇▇▇▇▇▇ (i.e., gross sales quantity multiplied by
Licensee's selling price) for copies of the Book sold, and
all other receivables of any kind whatsoever, received in
payment for the Book, whether received by Licensee or any of
Licensee's Affiliates, except as provided in Subparagraph
1.6(vi) below, less "Allowable Deductions" as hereinafter
defined. The following are not part of Net Invoiced
▇▇▇▇▇▇▇▇: invoiced charges for transportation of the Book
within the Territory which are separately identified on the
sales invoice, and sales taxes.
(vi) "Allowable Deductions" means the following: volume
discounts, and other discounts from the invoice price (or
post-invoice credits) unilaterally imposed
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 3
in the regular course of business by Licensee's customers,
so long as Licensee documents such discounts (or credits) to
Licensor's satisfaction. In the event a documented
unilateral discount (or credit) is taken with respect to
combined sales of the Book and other products not licensed
by Licensor, and Licensee cannot document the portion of the
discount (or credit) applicable to the Book, Licensee may
apply only a pro rata portion of the discount (or credit) to
the Book. Unilateral discounts or credits are never
deductible if they represent items listed hereinbelow.
Without limiting the generality of the foregoing, the
following are not Allowable Deductions, whether granted on
sales invoices or unilaterally imposed as discounts or as
post-invoice credits: cash discounts granted as terms of
payment; early payment discounts; allowances or discounts
relating to advertising; costs incurred in manufacturing,
importing, selling or advertising the Book; freight costs
incorporated in the selling price; uncollectible accounts;
▇▇▇▇ down allowances, new store allowances, and defective
goods allowances or allowances taken by customers in lieu of
returning goods.
(vi) Licensee shall pay Royalties for sales of the Book based on
the royalty rates set forth in this Subparagraph 1.6.
(viii) 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 five
hundred (500) copies of each title of the Book. In addition,
no Royalties will be payable on free copies provided to
Licensor pursuant to Subparagraph 5.3 of this Agreement.
(ix) It is intended that the royalty on sales of the Book covered
by Subparagraphs 1.6 (ii), (iii), and (iv) above which
require the approval of Licensor shall be agreed in writing
when such sale is approved. If it is not so agreed in
writing, the royalty payable shall be the same as would be
payable if the Book had been sold through the distribution
channels authorized in Subparagraph 2.3 below. Licensee
shall submit all requests for approval for proposed sales of
the Book covered by Subparagraphs 1.6(ii), (iii), and (iv)
to the Vice-President of Disney Licensed Publishing (or his
or her designee) on the form attached hereto as Exhibit 5,
which form may change from time to time. Licensor shall
endeavor to indicate its approval or disapproval of such
requests in a timely manner, but such approvals should be
sought as early as possible.
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 4
(x) 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.
(xi) Royalties reported on sales of the Book which have been
returned to Licensee for credit or refund and on which a
refund has been made or credit memo issued may be credited
against Royalties due. The credit shall be taken in the
Royalty Payment Period in which the refund is given or
credit memo issued. Unused credits may be carried forward,
but in no event shall Licensee be entitled to a refund of
Royalties.
1.7 "Royalty Payment Period" means each calendar monthly period during
the Term, and during the Sell-off Period, if any.
1.8 "Advance"[Intentionally omitted pursuant to a confidential treatment
request and separately filed with the Commission]
1.9 "Guarantee" [Intentionally omitted pursuant to a confidential
treatment request and separately filed with the Commission]
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 5
1.10 "Promotion Commitment" means the following promotional and marketing
support which Licensee agrees to provide for the Book:
(i) Licensee shall include the Book in its catalog, if any, in
accordance with the following: the catalogs shall have a
separate page or pages showing all new formats and titles.
The Book shall in addition to being included in the main
index of the catalog be separately indexed in an index
listing all formats and titles of the Book. All such catalog
pages are subject to Licensor's prior written approval.
(ii) Licensee shall make available point-of-purchase marketing
support materials for all new theatrical and video releases
and, as it deems appropriate, for Disney-animated television
programs and brand programs covered by the Book. All such
marketing support materials are subject to Licensor's prior
written approval.
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 6
(iii) Licensee shall endeavor to conduct two (2) major
Territory-wide in-store marketing promotions for any of the
character(s) included in the Licensed Property, at
Licensee's sole discretion, during each year of the Term,
and any extension thereof, and Licensor will contribute
without charge creative and marketing direction assistance
for such annual promotions. Notwithstanding the foregoing,
Licensee acknowledges the importance to Licensor of
supporting the Disney-animated feature releases. All such
promotions are subject to Licensor's prior written approval.
(iv) Twice each calendar year, Licensee agrees to provide
Licensor with a detailed sales, marketing, and creative
program (the "Program") specifying how Licensee intends to
support and promote each of the character classes in the
Licensed Property (i.e., the "A" , "B" and "C" Properties as
set forth in Schedule A hereto). Licensee shall use its best
efforts to implement the Program presented to Licensor, with
the goal of meeting Licensor's expectation and intention
that Licensee will actively and mutually support each of the
character classes in the Licensed Property in approximately
the following ratios: [Intentionally omitted pursuant to a
confidential treatment request and separately filed with the
Commission] License shall provide Licensor with complete
copies of all materials utilized in presenting the Program.
(v) All requests for approval required under this Subparagraph
1.10 shall be sought by Licensee as early as possible and
should include all information necessary to allow Licensor
to make an informed decision. Licensor shall endeavor to
indicate its approval or disapproval of such requests in a
timely manner.
1.11 "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; with regard to Licensor,
"Affiliate" means any corporation or other entity which directly or
indirectly controls, or is controlled by, or is under common control
with, Disney Enterprises, Inc. "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.
1.12 "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
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 7
activities under this Agreement, including but not limited to those
applicable to the manufacture, pricing, sales and/or distribution of
the Book.
1.13 "Suppliers" means any of Licensee's third-party manufacturers and
suppliers (and their sub- manufacturers and suppliers) which
reproduce or use the Licensed Property in the Book, or components of
the Book, and/or which assemble the Book.
1.14 [Intentionally omitted pursuant to a confidential treatment request
and separately filed with the Commission]
2. GRANT OF RIGHTS
2.1 Subject to the terms and conditions of this Agreement, and in
consideration for Licensee's promise to pay and Licensee's payment of
all Royalties, Fees, Advances, Guarantees, and Common Marketing Fund
payments required hereunder, Licensor hereby grants to Licensee,
during the Term, the non- exclusive right throughout the Territory,
to create, print, bind, market, advertise, publish, and sell the
English language version(s) of the Book. Licensee shall have the
right to publish Licensee's existing backlist of "Sturdy Shape"
titles of the Book, plus up to six (6) new "Sturdy Shape" versions of
the Book per each year of the Term; provided, however, that no
"Sturdy Shape" versions of the Book (including backlist titles) may
utilize the Licensed Property "WINNIE THE POOH". For purposes of the
preceding sentence, "backlist titles" shall include all "Sturdy
Shape" titles being published by Licensee as of the date of this
Agreement. The Licensed Property shall include Licensee's backlist of
titles to the Book; provided, however, that prior to such
publication, Licensor shall have the opportunity to review the
backlist and may require Licensee to update the artwork and/or any
other creative aspects of the Book (including, but not limited to,
the interior art and covers) so as to be fresh and current, to
conform to all new or updated publishing reference material
guidelines, to comply with any material changes in character art
styles or standards introduced by Licensor, to conform with all
material branding initiatives of Licensor, or to maintain all art
quality standards as required by Licensor, to be determined solely at
Licensor's discretion, so long as such creative aspect(s) of the Book
were not previously approved by Licensor within the preceding
twenty-four (24) months. During the first twelve (12) months of the
Term, the parties hereby agree to conduct a review of the backlist of
those titles of the Book which Licensee intends to seek approval for
publication pursuant to this Agreement. Licensor shall not
unreasonably withhold its approval of backlist titles submitted by
Licensee. Notwithstanding the foregoing, Licensee may continue to
publish those backlist titles or group of backlist titles which
Licensee is actively publishing as of the date of this Agreement
until such time as
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 8
Licensor notifies Licensee of its desire to exercise the approval
rights set forth hereinabove with respect to a title or group of
titles.
2.2 Licensee shall use its reasonable best efforts to maximize sales of
the Book in the Territory during the Term (or any renewal thereof),
and to support the Licensed Property and each of the properties
contained therein in a focused, substantive, and meaningful way and
Licensor agrees to accord due consideration to Licensee in connection
with Licensor's marketing and promotional planning and efforts and to
assess and consult with Licensee regarding the impact Licensor's
other licensed publishing plans may have on Licensee's activities
under this Agreement. [Intentionally omitted pursuant to a
confidential treatment request and separately filed with the
Commission].
Further, Licensor shall not be obligated to offer to Licensee, any
color and activity or storybook concepts or ideas to the extent such
disclosure violates any applicable Laws, professional obligations
customary in the publishing industry, and/or based on a reasonable
and good faith determination by Licensor, constitutes confidential
proprietary information or trade secrets of Licensor or a third
party.
2.3 The Book may be sold only to department stores, gift stores,
specialty retail stores, mass market stores, discount stores,
supermarkets, drug stores, convenience stores, toy stores, airport
stores, warehouse clubs, major and independent book stores and book
store chains, wholesalers and jobbers, and book wholesalers and
jobbers who may sell to schools, libraries and other educational
outlets. If there is a question as to whether a particular customer
falls within any of the categories specified above, Licensor's
determination shall be binding. 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. In addition, the
Book may not be sold by direct marketing methods, which include, but
are not limited to, computer on-line selling, home shopping
television programs, direct mail and door-to-door solicitation.
Licensee shall make all solicitations, sales and collections solely
in its own name and in accordance with all applicable Laws. Licensee
agrees not to sell the Book, including any part or adaptation
thereof, otherwise than as herein provided without Licensor's prior
written approval.
2.4 The Book shall not be used or sold to others for use as a giveaway,
fundraiser, or to customers for inclusion in another product, or for
lotteries, premiums, promotions, sweepstakes, or advertising purposes
in connection with other publications or articles, or to sell other
products, without the prior written consent of Licensor.
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 9
2.5 The prohibition of computer on-line selling referenced in
Subparagraph 2.3 above includes, but is not limited to, the display,
promotion or offering of the Book in or on any on-line venues (e.g.
Websites), except as specifically permitted in the following two
sentences. With Licensor's prior written permission, the Book
approved by Licensor may be displayed and promoted on
Disney-controlled on- line venues, only within the Territory.
Licensee may sell the Book to retailers, within the channels of
distribution authorized pursuant to Subparagraph 2.3, who sell the
Book in or on such retailer's own Website. In the event any such
retailer is displaying and/or selling the Book in an unauthorized
manner, Licensee agrees to cooperate with Licensor in Licensor's
efforts to prohibit such unauthorized activity.
2.6 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 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 proprietary material,
(b) any published 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 Disney 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, products, or proprietary material.
[Intentionally omitted pursuant to a confidential treatment request
and separately filed with the Commission].
2.7 Provided that all of the following conditions are met: (i) Licensee
has complied with all terms and conditions of this Agreement,
including without limitation Subparagraph 1.10(iv) above, and its
Guarantee obligation, as set forth in Subparagraph 1.9 above, for the
period commencing October 1, 1999, and ending September 30, 2000,
(ii) Licensee or Licensee's parent company has consummated a
pre-packaged plan of reorganization on terms acceptable to Licensor
on or before June 30, 1999 -- then this Agreement shall renew for an
additional twelve (12) month period commencing on October 1, 2000,
and ending September 30, 2001, unless
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 10
either party advises the other in writing before April 15, 2000, that
it determines not to renew.
2.8 Licensor may during the Term of this Agreement determine to license a
new category of educational workbooks. In the event Licensor agrees
to do so, prior to licensing the publication of such books, Licensor
shall provide Licensee with the opportunity to present proposals to
become a licensed publisher for this new product category . For
purposes of clarity, any educational workbooks licensed to Licensee
by Licensor under this Subparagraph shall be subject to a separate
written agreement to be mutually negotiated by the parties, and shall
not be included within the meaning of "Book" under this Agreement and
shall not apply towards meeting Licensee's Advance and Guarantee
obligations under this Agreement.
2.9 Nothing contained herein shall affect any of the rights and
obligations of the rates under that certain Warrant Agreement dated
September 26, 1997 (the "Warrant Agreement").
3. ADVANCE
3.1 Licensee agrees to pay to Licensor the Advance, which shall be on
account of Royalties accruing during the Term only, and only with
respect to sales in the Territory; provided, however, that if any
part of the Advance is specified in Subparagraph 1.8 above as
applying to any period less than the Term, such part shall be on
account of Royalties accruing during such lesser period only. If said
Royalties should be less than the Advance, no part of the Advance
shall be refundable.
3.2 Royalties accruing during the Sell-off Period, if any, or any
extension of the Term shall not be offset against the Advance, unless
otherwise agreed in writing. Subject to Subparagraph 1.9 above,
Royalties accruing during any extension of the Term or any other term
shall be offset only against an advance paid with respect to such
extended term.
3.3 Licensee shall pay the Fee on the date(s) set forth in Paragraph 1.14
hereof.
4. GUARANTEE
4.1 Licensee shall, with Licensee's statement of account for the last
Royalty Payment Period of each Guarantee period set forth in
Subparagraph 1.9 above, pay Licensor the amount, if any, by which
Royalties paid with respect to sales in the Territory during the
Guarantee period fall short of the amount of the Guarantee for that
period.
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 11
In addition, Licensee shall, with Licensee's statement of account for
the last Royalty Payment Period of the Term, or immediately upon
termination if the Agreement is terminated prior to the expiration of
the Term, pay Licensor the amount, if any, by which Royalties paid
with respect to sales in the Territory during the Term fall short of
the amount of the cumulative Guarantee.
4.2 Advances, if any, applicable to Royalties due on sales in the period
to which the Guarantee relates shall apply towards meeting the
respective Guarantees for those periods set forth in Subparagraph
1.9.
5. PUBLICATION, PRESS RUN & FREE COPIES
5.1 Licensee agrees to exercise actively the rights granted herein.
Licensee shall publish the Book and shall keep a sufficient quantity
and selection of titles of the Book in print and available for
purchase in the distribution channels authorized pursuant to
Subparagraph 2.3 above, during the Term of this Agreement, in order
to, at a minimum, comply with Licensee's obligations as set forth in
Subparagraphs 1.10 and 2.2 above. Licensee shall notify Licensor in
writing of the publication date(s) of the Book ninety (90) days prior
to such publication date(s).
5.2 Licensee agrees to print a minimum number of copies of the Book
during the Term sufficient to meet the requirements of the Program.
5.3 Licensee agrees to furnish to Licensor, free of charge, one hundred
(100) 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 reasonable quantities of additional copies
which Licensor requires for purposes other than resale; provided,
however, that if Licensor desires to purchase more than five hundred
(500) copies of any title of the Book, Licensor shall advise Licensee
of the reasons for such purchase. Licensor agrees not to purchase
more than five hundred (500) copies of any title of the Book solely
for purposes of giving away such copies to the public for free,
without Licensee's prior written consent. Two (2) 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, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
6. CONTENT
All creative costs for the Book shall be borne by Licensee. Notwithstanding the
foregoing, Licensor agrees to cooperate with Licensee in the preparation of the
artwork and text for the Book. To that
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 12
end, Licensor agrees to make a good faith attempt to provide Licensee such
pre-existing artwork, textual, reproduction materials, and reference materials
in Licensor's possession as may be available and which Licensor and Licensee
deem suitable for inclusion in the Book. Licensee acknowledges that Licensor may
charge Licensee for the cost of the foregoing materials or other costs incurred
in connection with the preparation of the Book. Licensor shall make reasonable,
good faith attempts to provide Licensee with prior notice of any such charges,
including the estimated amounts thereof. Estimates of the charges for such
materials are available upon request.
7. PRE-PRODUCTION APPROVALS
7.1 All aspects of the Book and its contents (the "Materials"), including
without limitation, concepts, format and size, 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), non- printed components (e.g.,
PVCs, toys) (if any), and title, shall be subject to Licensor's prior
review and written approval. Approval or disapproval of the Materials
shall lie in Licensor's sole discretion. Licensee shall endeavor to
submit the Materials and requests for approval or other action by
Licensor early enough to avoid unnecessary time pressure on Licensor.
Requests for approvals of the Materials must be accompanied by an
approval form provided by Licensor. Licensor shall indicate the
reasons for disapprovals and the changes needed to obtain approval.
Any approval Licensor may give will not constitute or imply a
representation or belief by Licensor that such materials comply with
any applicable Laws. Without limiting Licensor's right to approve the
Materials under this Subparagraph 7.1, Licensor hereby recognizes and
acknowledges that Licensor's timely processing of the Materials is
important to Licensee's ability to perform its obligations under this
Agreement. Licensee hereby recognizes and acknowledges that
Licensor's ability to process the Materials is often dependent on,
and subject to, extenuating factors, including, but not limited to,
when Licensee submits materials, the quality of the materials
submitted, the volume of materials submitted (including by other
licensees), and the need or requirement for Licensor to consult with
third parties to obtain certain approvals. In order to facilitate and
expedite the process of submitting and approving the Materials so as
to meet the concerns of both parties, Licensor and Licensee have
agreed upon, a set of detailed written artwork submission and
approval policies and guidelines (the "Policy"). Licensor and
Licensee shall periodically review and, as necessary, revise the
Policy to ensure it is properly functioning. Licensor and Licensee
shall also give priority to establishing computer links to facilitate
and improve upon the submission and approval of the Materials.
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 13
7.2 Subject to the provisions set forth in the Policy, 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 all aspects of the Book, at each stage of creation,
including, but not limited to, any concepts (covers and interiors),
story outlines, layouts, rough pencils, tight pencils, final art,
mechanicals, pre-press proofs (digital proof for mechanicals plus a
film proof), manuscript drafts, finished manuscripts and sample of
paper stock and sound/electronics (if any), and shall supply from the
first print run, and each subsequent print run, samples for
Licensor's written 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 to be immediately
withdrawn from the market. Licensee acknowledges that Licensor may
not approve concepts or artwork submitted near the end of the Term.
Licensee further acknowledges that the fact that artwork has been
created by an artist recommended by Licensor or by an artist who has
worked in the past on a Disney publication does not mean that any
such artwork will necessarily be approved in connection with the Book
licensed hereunder.
8. APPROVAL OF PRODUCTION SAMPLES
8.1 Before shipping the Book to any customer, 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, if any, which shall conform to the approved pre-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 deemed unlicensed, shall not be
sold and, unless otherwise agreed by Licensor in writing, 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.
Any approval of a production sample attributable to Licensor shall
not constitute or imply a representation or belief by Licensor that
such production sample complies with applicable Laws.
8.2 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
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 14
with earlier samples or for Licensor's anti-piracy efforts, or to
test for compliance with applicable Laws, and to permit Licensor to
inspect Licensee's manufacturing operations and testing records (and
those of Licensee's Suppliers) of the Book.
8.3 Licensee acknowledges that Licensor may disapprove any part of the
Book or a production run of the Book 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.
8.4 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. It is
understood that if in Licensor's reasonable judgment the quality of
the Book as originally approved has deteriorated in later production
runs, or if the Book has otherwise been altered, Licensor may, in
addition to other remedies available to Licensor, by written notice
require such Books to be withdrawn immediately from the market.
8.5 Any part of the Book not meeting the standard of approved samples
shall be destroyed or all Licensed Property shall be removed or
obliterated therefrom.
8.6 Licensee is responsible 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.
8.7 Licensor shall have the right, by written notice to Licensee, to
require modification of any part of the Book approved by Licensor
under this or any previous agreement between Licensee and Licensor
pertaining to the Licensed Property. Likewise, if the Term of this
Agreement is extended by mutual agreement, or pursuant to
Subparagraph 2.7, 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, except as may
be provided in Subparagraph 2.7.
8.8 If Licensor notifies Licensee of a required modification under
Subparagraph 8.7 above, such notification shall advise Licensee of
the nature of the changes required. If the required modification is
material to the integrity of the Book, the Licensed Property in the
Book, and/or the Disney Property (as defined below), then Licensee
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 15
shall not accept any order for the Book until it has been resubmitted
to Licensor with such changes and Licensee has received Licensor's
written approval of the Book as modified. However, Licensee may
continue to distribute Licensee's inventory of the previously
approved Book until such inventory has been exhausted (unless the
Book is dangerously defective, as determined by Licensor,
8.9 Without limiting Licensor's approval rights under this Paragraph 8,
the Policy referenced in Subparagraph 7.1 shall include provisions
governing all submissions and approvals which are the subject of this
Paragraph 8.
9. THIRD PARTY APPROVALS
9.1 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.
9.2 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
proprietors of the material referenced in Subparagraph 9.1 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.
9.3 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.
10. COMPLIANCE WITH APPLICABLE LAWS AND STANDARDS
10.1 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
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 16
sample thereof approved by Licensor. Licensee covenants that it will
comply with all applicable Laws in performing this Agreement,
including but not limited to, those pertaining to the manufacture,
pricing, sale and distribution of the Book.
10.2 Without limiting the foregoing, Licensee covenants on behalf of
Licensee's own company, and agrees to require all Suppliers to
covenant by signing the Supplier's Agreement (referenced in Paragraph
11 below), as follows:
(i) Licensee and the Suppliers agree not to use child labor in
the manufacturing, packaging or distribution of the Book.
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 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.
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 17
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.
(vi) 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.
(vii) 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.
(viii) Licensee and the Suppliers agree to comply with all
applicable environmental Laws.
(ix) Licensee and the Suppliers agree to comply with all
applicable Laws, including those pertaining to the
manufacture, pricing, sale and distribution of the Book.
(x) 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 10, 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 10.
Licensee agrees to promptly reimburse Disney for the actual
costs of inspections performed pursuant to this Paragraph 10
when any of Licensee's manufacturing facilities or any
Suppliers do not pass the inspection(s).
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 18
(xi) Licensee and the Suppliers agree to take appropriate steps
to ensure that the provisions of this code of conduct (the
"Code of Conduct") are communicated to employees, including
the prominent posting of a copy of the Code of Conduct for
Suppliers and Licensees, (copies of which are attached
hereto as Exhibits 3 and 4, respectively), as may be
applicable, in the local language and in a place readily
accessible to employees at all times.
10.3 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 10,
including but not limited to, unannounced on-site inspections of
manufacturing, packaging and distribution facilities and
employer-provided housing, reviews of books and records relating to
employment matters and private interviews with employees.
10.4 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 if the Book fails to comply with such Laws. 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.
11. PRINTING AND/OR MANUFACTURING BY THIRD PARTIES
11.1 All film positives/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 Agreement in the form attached hereto as Exhibit 1, 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 Agreement. Licensor hereby approves the Suppliers and
printers identified on the list attached hereto as Exhibit 6.
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 19
11.2 Licensee shall, upon Licensor's request, deliver to Licensor, or to
publishers designated by Licensor, one or more duplicate sets of all
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 as well as for the actual
cost of removing Licensee's trade dress from any such materials. In
no case shall the charge for such material exceed the lowest price
Licensee charges other publishers for similar material. Without
limiting the foregoing, Licensor shall not authorize any publisher
who is licensed by Licensor to publish in the United States or Canada
to repurpose any covers of the Book or to repurpose substantial
quantities of artwork or text from the Book without Licensee's prior
consent. The foregoing sentence shall apply only to books published
during the Term and in the Territory which are similar in format,
price point, and distribution channel to the Book.
11.3 Licensee agrees to supply Licensor with the names and addresses of
all of its own manufacturing facilities for the Book. If Licensee at
any time desires to have any non-printed components of the Book
containing Licensed Property manufactured by a third party, whether
the third party is located within or outside the United States,
Licensee must, as a condition to the continuation of this Agreement,
notify Licensor of the accurate name and complete address of such
Supplier and the Book or components involved and obtain Licensor's
prior written permission to do so. If Licensor is prepared to grant
permission, Licensor will do so if Licensee and each of Licensee's
Suppliers sign a Consent/Manufacturer's Agreement in a form which
Licensor will furnish to Licensee and Licensor receives all such
agreements properly signed.
11.4 Licensor shall use reasonable efforts not to disclose the names of
Licensee's Suppliers to third parties, including Affiliates of
Licensor, except as may be necessary to enforce Licensor's contract
rights or protect Licensor's trademarks, copyrights, and intellectual
property.
11.5 If any such Supplier utilizes the Licensed Property 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 (in addition to any other legal or
equitable remedies available to Licensor).
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 20
12. ADVERTISING
12.1 Licensee may, subject to receiving Licensor's prior written approval
in each case, advertise the Book in newspapers, periodicals,
magazines and other publications and, in catalogs, on billboards,
radio, television or by other advertising or promotional techniques;
provided, however, that all photography, 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 the
name of Disney Enterprises, Inc. (hereinafter referred in this
Agreement as "Disney Enterprises") shall be included in all
advertising for the Book in which any of Disney's characters or other
copyrighted materials appear.
12.2 Following the expiration or termination of this Agreement, and the
Sell-off Period, if any, Licensee will not advertise or promote the
Book in any manner or issue any offering literature or material with
respect thereto.
12.3 Licensee warrants that all advertising and promotions for the Book
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.
13. PROMOTION COMMITMENT
Licensee agrees to carry out the Promotion Commitment set forth in Subparagraph
1.10 above.
14. COMMON MARKETING FUND
14.1 Licensee shall pay to Licensor an amount equal to [Intentionally
omitted pursuant to a confidential treatment request and separately
filed with the Commission] (the "Common Marketing Fund Payment"),
which amount Licensee agrees to pay Licensor concurrently with
Royalties due each Royalty Payment Period as detailed in Paragraph 21
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 and as
non-refundable installments of such
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 21
guarantee payments (the "CMF Advances"), due and payable on the dates
indicated below:
[Intentionally omitted pursuant to a confidential treatment request
and separately filed with the Commission].
14.2 The Common Marketing Fund Payment as defined hereinabove shall be
placed in a general fund for use in 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's sole discretion. Such
funds shall be expended by Licensor and/or Licensor's designees (but
not paid to Licensor's own employees for services they render) in the
amounts and in the manner Licensor deems most appropriate in order to
provide national, territorial, regional or local advertising,
marketing and promotion, and market research related thereto, of the
License Property licensed hereunder or other Disney properties in the
same property classification. [Intentionally omitted pursuant to a
confidential treatment request and separately filed with the
Commission].
14.3 Licensee agrees to pay in full the CMF Advances 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.
15. OWNERSHIP
15.1 Licensee acknowledges that the copyrights and all other proprietary
rights in and to the Licensed Property are exclusively owned by and
reserved to Disney Enterprises. Licensee shall neither acquire nor
assert any proprietary right, interest, or title to any 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, now
existing or hereafter developed, through the exercise of any rights
granted to Licensee hereunder. All copyrights and trademarks, service
marks, trade dress, and tradenames pertaining to the Book, as well as
all rights of every kind in and to the Disney Property, shall be
Disney Enterprises' 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
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 22
heretofore published by Licensee. No part of the Book 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.
Licensor acknowledges Licensee's exclusive rights in and to
Licensee's trademarks, tradenames, service marks, and trade dress
used in connection with Licensee's own publishing activities,
including, without limitation, Licensee's distinctive differentiated
book spine treatment (collectively, the "Golden Marks). Licensor
agrees that it will not use, or knowingly allow the use by a
publishing licensee (in connection with that licensee's publishing
activities authorized by Licensor), any such Golden Marks or any
marks that are confusingly similar in the reasonable judgment of
Licensee without Licensee's prior written consent. If Licensee
becomes aware of any such unauthorized use before Licensor does, then
Licensee shall promptly notify Licensor and provide Licensor with an
opportunity to take reasonable corrective action.
15.2 If Licensee creates or acquires material for use in the Book, whether
or not based on or using Disney Enterprises' 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, Licensee shall cause
the artists and/or writers who create such material, or the owners of
the rights thereto, to execute the work for hire/copyright assignment
agreement in the form attached hereto as Exhibit 2, agreeing that all
such material shall be considered a work-made-for-hire for Disney
Enterprises and fully releasing or assigning to Disney Enterprises
all rights in such material, 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 shall provide Licensor with a copy of
every work for hire/copyright assignment agreement, and any other
agreement entered into with respect to the ownership of 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.
15.3 Subject to the rights granted hereunder, title (including copyright
and physical ownership) to all material objects incorporating the
Disney Property (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 in
no event shall Licensee sell or lease the use of any such material
objects or otherwise part with control thereof. Such material objects
shall be delivered to Licensor in good
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 23
condition (subject to normal wear and tear) upon request, at
Licensee's sole expense. If Licensee advises Licensor that any such
material objects requested to be returned are being utilized by
Licensee for the current development of any title to the Book, then
Licensor shall allow Licensee ninety (90) days to create films or
other reproduction material necessary for the manufacture of the
Book, after which the requested materials must be immediately
returned.
15.4 Licensee hereby assigns to Disney Enterprises all right, title and
interest (including but not limited to all copyright(s) and any
extensions and renewals thereof) throughout the universe in
perpetuity 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.
16. COPYRIGHT NOTICE
As a condition to the grant of rights hereunder, each copy of the Book, and any
other matter containing Licensed Property, shall bear a properly located
permanently affixed copyright notice comprised of c in a circle, plus a yeardate
of publication, plus "Disney Enterprises, Inc.", and for those versions of the
Book containing Disney-stylized Winnie The Pooh characters, "Based on the Pooh
stories by ▇.▇. ▇▇▇▇▇ (copyright the Pooh Properties Trust)" or such other
notices as Licensor specifies to Licensee 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, protect, and preserve Disney
Enterprises' copyrights and trademarks. If, through inadvertence or otherwise, a
copyright notice on the Book or other such matter should appear in Licensee's
name or the name of a third party, Licensee hereby agrees to assign to Disney
Enterprises the copyright represented by any such copyright notice in Licensee's
name and, upon request, cause the execution and delivery to Licensor of whatever
documents are necessary to convey to Disney Enterprises that copyright
represented by any such copyright notice. If, by inadvertence, a proper
copyright notice is omitted from the Book or any other matter containing
Licensed Property, Licensee agrees at Licensee's expense to use all reasonable
efforts to correct the omission on the Book or other matter in the process of
manufacture or in distribution. Licensee agrees to advise Licensor promptly and
in writing of the steps being taken to correct any such omission and to make the
corrections on existing copies of the Book which can be located. 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.
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 24
17. REGISTRATIONS
Except with Licensor's written consent, neither Licensee nor any Affiliate of
Licensee will register or attempt 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
present, within the reasonable judgment of Licensor, a likelihood of confusion.
In the event of a breach of the foregoing, Licensee agrees, at Licensee's
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.
18. UNLICENSED USE OF LICENSED PROPERTY
18.1 Licensee agrees that Licensee will not use the Licensed Property, or
the trademarks, or any other material the copyright to which is owned
by Disney Enterprises in any way other than as herein authorized (or
as is authorized in any other written contract in effect between the
parties). In addition to any other remedy Licensor may have, Licensee
agrees that all revenues from any use thereof on products other than
the Book (unless authorized by Licensor in writing), and all revenues
from the use of any other copyrighted material of Disney Enterprises'
without written authorization, shall be immediately payable to
Licensor.
18.2 Licensee agrees to give Licensor prompt written notice of any
unlicensed use by third parties of the Licensed Property or
trademarks of which Licensee becomes aware, 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 of the Licensed Property and,
notwithstanding any right of Licensee to recover same, legal or
otherwise, Licensee agrees to pay to Licensor, and hereby waives 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 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 attorney's fees and disbursements if
Licensor has requested Licensee to retain separate counsel.
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 25
19. WARRANTIES AND INDEMNITIES
19.1 Licensee hereby represents and warrants that any material used in the
Book, other than material supplied by Licensor, shall not 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. Without limiting the
foregoing, Licensee represents and warrants that no such material
shall 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.
19.2 Licensee hereby indemnifies and holds Disney harmless, during and
after the Term hereof, against all claims, demands, suits, judgments,
losses, liabilities (including settlements entered into in good faith
with Licensee's consent, not to be unreasonably withheld) and
expenses of any nature (including reasonable attorneys' fees and
disbursements) arising out of Licensee's activities under this
Agreement, including but not limited to, any actual or alleged: (1)
negligent acts or omissions on Licensee's part, (2) defect (whether
obvious or hidden and whether or not present in any sample approved
by Licensor) in the Book, (3) personal injury, (4) infringement of
any rights of any other person by the manufacture, sale, possession
or use of the Book, (5) breach on Licensee's part of any covenant,
representation or warranty contained in this Agreement or (6) failure
of the Book, or by Licensee, to comply with applicable Laws. The
parties indemnified hereunder shall include Licensor, and its parent,
successors and subsidiaries, and their officers, directors, employees
and agents. The indemnity shall not apply to any claim or liability
relating to any infringement of the copyright of a third party caused
by Licensee's utilization of the Licensed Property in accordance with
the provisions hereof, unless such claim or liability arises out of
Licensee's failure to obtain the full assignment of rights referenced
in Paragraph 15 above.
19.3 Licensor hereby represents and warrants that the Disney Property
supplied by Licensor hereunder shall not infringe the copyright of
any third party or any right granted by Licensor to such third party.
Licensor hereby indemnifies and holds Licensee harmless during and
after the Term hereof against all claims, demands, suits, judgments,
losses, liabilities, (including settlements entered into in good
faith
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 26
with Licensor's consent, not to be unreasonably withheld), and
expenses of any nature (including reasonable attorney's fees and
disbursements) arising out of any claim that Licensee's use of any
representation of the Licensed Property approved in accordance with
the provisions of this Agreement infringes the copyright of any third
party or infringes any right granted by Licensor to such third party,
except for claims arising out of Licensee's failure to obtain the
full assignment of rights referenced in Paragraph 15 above. In no
event shall Licensor be liable for lost profits. Without limiting the
generality of this Subparagraph 19.3, if during the term of this
Agreement Licensor enters into another licensed publishing agreement
for the Territory in which Licensor agrees to provide representations
and warranties which exceed the scope of this Subparagraph 19.3, then
such additional representations and warranties shall be included in
the representations and warranties provided by Licensor herein.
19.4 If by reason of any claims referred to in Subparagraph 19.3 above,
Licensee is precluded from selling any stock of the Book or utilizing
any materials in Licensee's possession or which come into Licensee's
possession by reason of any required recall, Licensor shall be
obligated to purchase such Books and materials from Licensee at the
out-of-pocket cost to Licensee, excluding overhead, but Licensor
shall have no other responsibility or liability with respect to such
Books or materials, except that the Advance and Guarantee shall be
adjusted to correspond to the time remaining in the Term at the date
of the purchase by Licensor.
19.5 Licensor gives no warranty or indemnity with respect to any liability
or expense arising from any claim that use of the Licensed Property
or the trademarks on or in connection with the Book hereunder or any
packaging, advertising or promotional material infringes on any
trademark right of any third party or otherwise constitutes unfair
competition by reason of any prior rights acquired by such third
party, other than rights acquired from Disney Enterprises. It is
expressly agreed that it is Licensee's responsibility to carry out
such investigations as Licensee may deem appropriate to establish
that the Book, packaging, and promotional and advertising material
which are manufactured or created hereunder, including any use made
of the Licensed Property and the trademarks therewith, do not
infringe such right of any third party, and Licensor shall not be
liable to Licensee if such infringement occurs.
19.6 Licensee and Licensor agree to give each other prompt written notice
of any claim or suit which may arise under the indemnity provisions
set forth above. Without limiting the foregoing, Licensee agrees to
give Licensor written notice of any product liability claim made or
suit filed with respect to the Book, any investigations or directives
regarding the Book issued by the Consumer Product Safety Commission
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 27
("CPSC") or other federal, state or local consumer safety agency, and
any notices sent by Licensee to, or received by Licensee from, the
CPSC or other consumer safety agency regarding
the Book within seven (7) days of Licensee's receipt or promulgation
of the claim, suit, investigation, directive, or notice.
20. INSURANCE
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 United States Dollars (U.S. $2,000,000.00)
per occurrence, and naming as additional insureds those indemnified in
Subparagraph 19 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 law and Employer's Liability Insurance
with minimum limits of one million United States Dollars (U.S. $1,000,000.00)
per occurrence. All insurance shall be primary and not contributory. Licensee
shall deliver to Licensor a certificate(s) 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 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.
21. STATEMENTS AND PAYMENT OF ROYALTIES
21.1 Licensee agrees to pay and shall pay to Licensor all Royalties
required under this Agreement. Licensee shall submit to Licensor
statements of account so as to be received by Licensor no later than
twenty-five (25) days after the end of each Royalty Payment Period
during the Term. Licensee shall submit such statements of account
regardless of whether any sales have taken place and/or any Royalties
are payable to Licensor. Licensee's statements shall be on forms
substantially similar to those designated by Licensor for Licensee's
use (a sample copy of the current form is attached hereto as Exhibit
7), showing all information requested by such forms (subject to
Subparagraph 21.8 below), including but not limited to the following:
If Licensee's Royalty calculation is based on a percentage of the
suggested retail price ("SRP") of the Book:
(i) Licensee's product number, ISBN, and title;
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 28
(ii) the Royalty rate code as provided by Licensor;
(iii) the applicable SRP Royalty rate;
(iv) the applicable Net Invoiced ▇▇▇▇▇▇▇▇ ("NIB") Royalty rate;
(v) the gross quantities by title of the Book sold (a sale of
the Book shall be deemed to have occurred on the date the
Book is shipped to the customer);
(vi) the SRP(s) on which the Royalty is calculated;
(vii) the sum of the units sold multiplied by the applicable SRP
("Gross SRP Dollars)
(viii) Net Invoiced ▇▇▇▇▇▇▇▇ ("NIB Dollars");
(ix) the applicable SRP Royalty rate multiplied by Gross SRP
Dollars;
(x) the applicable NIB Royalty rate multiplied by NIB Dollars;
(xi) the Royalty payment due; and
(xii) a separate report for each item number (i) through (xi)
above as they apply to returns.
If Licensee's Royalty calculation is based on Net Invoiced ▇▇▇▇▇▇▇▇:
(i) Licensee's product number, ISBN, and title;
(ii) the Royalty rate code as provided by Licensor;
(iii) the applicable NIB Royalty rate;
(iv) the gross quantities by title of the Book sold (a sale of
the Book shall be deemed to have occurred on the date the
Book is shipped to the customer);
(v) NIB Dollars;
(vi) the Royalty payment due; and
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 29
(vii) a separate report for each item number (i) through (vi)
above as they apply to returns.
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; provided, however, that Licensee shall
deliver directly to Licensor's Canadian office, at the
address listed below in Subparagraph 21.4, Royalties payable
on sales of the Book in Canada and a separate statement of
account for such sales. GST applicable to Royalties or to
any other payments due to Licensor shall be indicated on
Licensee's statements of account for Canada and paid to
Licensor along with the Royalty or other payment. Royalties
are also payable, and due with such statements, on inventory
shrinkage that exceeds [Intentionally omitted pursuant to a
confidential treatment request and separately filed with the
Commission] (excluding free copies authorized pursuant to
Subparagraph 1.6(viii) above). Inventory shrinkage means the
reduction in Licensee's inventory of the Book not caused by
sales or damaged copies. 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 to Licensor shall be made
by reason of any tax. Any applicable tax on the manufacture,
distribution and sale of the Book shall be borne by
Licensee.
21.2 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.
Licensee shall submit,
concurrently with Licensee's written statement of account for each
Royalty Payment Period, an electronic version (e.g., computer
diskette or electronic transmission) of such statement of account.
Licensee shall continue to submit, in electronic or written form, the
"Supplemental Schedule" which Licensee has heretofore been submitting
to Licensor in conjunction with Licensee's statements of account,
identifying the new titles being sold for each Royalty Payment
Period.
21.3 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.
21.4 Licensee's payments, including all Royalties (excluding Royalties
payable to Canada), shall be delivered to the attention of the Disney
Publishing Group, ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. A copy of
each statement and payment must be
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 30
sent to The Disney Publishing Group, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, to the attention of Disney Licensed
Publishing. If Licensee wishes to send statements and payments by
overnight courier, please use the following address: The Disney
Publishing Group, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention Disney Licensed Publishing. Any
Advances should be mailed directly to The Disney Publishing Group,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
to the attention of the Contract Administrator. Statements and
Royalties payable to Canada shall be delivered to Disney Worldwide
Services, Inc. - T6071, P.O. Box 6100, Postal Station "F", Toronto,
Ontario ▇▇▇ ▇▇▇.
21.5 Licensee shall indicate on Licensee's statement of account the amount
of any reserve for returns maintained. Licensee shall not maintain an
unreasonable reserve for returns. In no event shall Licensee's
reserve for returns exceed [Intentionally omitted pursuant to a
confidential treatment request and separately filed with the
Commission] of the Royalties due in the Royalty Payment Period being
reported, unless Licensee has obtained the prior written consent of
Licensor. In the event that actual returns exceed the reserve for
returns and cannot be recouped out of Royalties otherwise due in the
relevant Royalty Payment Period, or any subsequent Royalty Payment
Period, Licensor shall refund at the end of the Term 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. Licensee may
report returns during the Term of the Agreement only. In no event may
Licensee report returns which occur during the Sell-off Period, if
granted. For purposes of clarity, in no event shall Licensee be
entitled to offset any returns against Licensee's Guarantee
obligations. Without limiting the generality of the foregoing, once
Licensee has attained the capability to report actual returns on a
consistent basis and can demonstrate to Licensor the need to increase
the allowable reserve for returns percentage, Licensor shall in good
faith consider permitting a reasonable increase.
21.6 Within thirty (30) days prior to the beginning of each Royalty
Payment Period and within ninety (90) days prior to the beginning of
each Guarantee period, Licensee shall submit to Licensor a forecast
of the expected Net Invoiced ▇▇▇▇▇▇▇▇, projected unit volumes to be
sold, unit volumes to be returned, reserve percentages, suggested
retail prices, and Royalties for each title of the Book for each
respective time period.
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 31
21.7 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 December 31, 1998, Licensee shall advise Licensor in
writing whether or not its information systems are Year 2000
Compliant. If Licensee advises Licensor that Licensee's information
systems are not Year 2000 Compliant, Licensee shall endeavor to
ensure that its information systems are substantially Year 2000
Compliant on or before June 30, 1999.
21.8 Without limiting the generality of this Paragraph 21, Licensor
recognizes and acknowledges that Licensee's current automated
accounting system may not have the capability to report all of the
information required by Licensor, including the information required
under Subparagraphs 21.1 and 21.6 above. Licensee represents that it
is currently working to improve its automated accounting system so as
to be in a position to provide Licensor with all of the information
requested by Licensor for reporting purposes under those
Subparagraphs by January 1, 2000. Until such time, Licensee shall not
be deemed to be in breach of Subparagraphs 21.1 or 21.6 if Licensee
(a) uses its best efforts to report to Licensor the maximum amount of
information required under Subparagraphs 21.1 and 21.6 which Licensee
is reasonably capable of reporting and (b) Licensee provides Licensor
any such additional information required, if reasonably available and
whether or not contained in Licensee's automated accounting system,
on an as-needed basis when requested by Licensor, including, but not
limited to, in connection with Licensor's audit rights under
Paragraph 23 below.
22. INTEREST
Royalties, audit findings or any other payments due to Licensor hereunder which
are received after the due date shall bear interest at the rate of
[Intentionally omitted pursuant to a confidential treatment request and
separately filed with the Commission] per annum from the due date, or at the
maximum rate permissible by law if less than [Intentionally omitted pursuant to
a confidential treatment request and separately filed with the Commission].
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 32
23. AUDITS AND MAINTAINING RECORDS
23.1 Licensee agrees to keep and preserve accurate records, during the
Term hereof and for two (2) years after the expiration or termination
of this Agreement, of all transactions relating to this Agreement and
any prior agreement with Licensor regarding the Licensed Property,
including, without limitation, print runs, shipments to Licensee of
the Book and any components thereof, inventory records, records of
sales and shipments by Licensee, and records of returns. Licensor,
and/or a representative of Licensor, shall have the right at any
time, during the Term hereof and for two (2) years after the
expiration or termination of this Agreement, during reasonable
business hours upon a prior request made by Licensor, to examine and
make extracts from all such records, including the general ledger,
invoices, and any other records which Licensor reasonably deems
appropriate to verify the accuracy of Licensee's statements of
account or Licensee's performance under this Agreement. Licensee
acknowledges that Licensor may furnish Licensee with an audit
questionnaire, and Licensee agrees to fully and accurately complete
such questionnaire, and return it to Licensor within the designated
time. Licensor's use of an audit questionnaire shall not limit
Licensor's ability to conduct any on-site audit(s) as provided above.
Licensee acknowledges that an audit conducted by Licensor or its
representatives, may involve one or more license agreements at a
time.
23.2 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 Royalty Payment 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 calculated at their
then current hourly rate per person for travel time during normal
working hours and actual working time.
23.3 If Licensee has failed to keep accurate records for one or more
Royalty Payment Periods, Licensor will assume that the Royalties owed
to Licensor for such Royalty Payment Period(s) are equal to a
reasonable amount, determined in Licensor's absolute discretion,
which may be up to, but will not exceed, the highest Royalties owed
to Licensor in a Royalty Payment Period for which Licensee has kept
accurate records. If Licensee has failed to keep adequate records for
any Royalty Payment Period, Licensor will assume a reasonable amount
of Royalties which Licensee will owe to Licensor, based on the
records Licensee has kept and other reasonable assumptions Licensor
deems appropriate.
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 33
24. WITHDRAWAL OF LICENSED MATERIAL
Licensor may require Licensee to withhold and/or withdraw the Licensed Property,
or any part thereof, the use or sale of which under this Agreement would
infringe or reasonably be claimed to infringe the rights of a third party, other
than rights granted by Disney Enterprises, in which case Licensor's obligations
to Licensee shall be limited to the purchase at cost of the Books and other
materials utilizing such withdrawn Licensed Property which cannot be used or
sold. In the case of any withdrawal under the preceding sentence, the Advance
and Guarantee shall be adjusted to correspond to the time remaining in the Term
at the date of withdrawal.
25. TERMINATION
Without prejudice to any other right or remedy available to it, Licensor shall
have the right at any time to terminate this Agreement, by giving written notice
thereof, in the event of the occurrence of one (1) or more of the following:
25.1 If Licensee delivers to any customer without Licensor's written
authorization anything containing representations of the Licensed
Property or other material the copyright or other proprietary rights
to which are owned by Disney Enterprises, other than the Book
described herein and approved in accordance with the provisions
hereof and such breach is not cured within thirty (30) days after
notification by Licensor of the breach (or, in the event of a breach
which cannot be corrected within thirty (30) days, if Licensee fails
to commence such correction within such thirty (30) day period and
thereafter diligently prosecute it to completion); or
25.2 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 and such breach is not cured within
thirty (30) days after notification by Licensor of the breach (or, in
the event of a breach which cannot be corrected within thirty (30)
days, if Licensee fails to commence such correction within such
thirty (30) day period and thereafter diligently prosecute it to
completion); or
25.3 If Licensee fails to make any payment and/or furnish any statement as
herein provided, and if such failure is not corrected within thirty
(30) days following the date said statement or payment was due; or
25.4 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,
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 34
in the event of a breach which cannot be corrected within thirty (30)
days, if Licensee fails to commence such correction within such 30
day period and thereafter diligently prosecute it to completion); or
25.5 If Licensee breaches any material term of any other agreement between
the parties to this Agreement, and Licensor terminates such other
agreement for cause; or
25.6 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 Subparagraph,
though known and/or designated by some other name or term in any part
of the Territory shall likewise constitute a ground for termination
of this Agreement by Licensor; or
25.7 If Licensee is not permitted or is unable to operate its business in
the usual manner, or is not permitted or is unable to provide
Licensor with assurances satisfactory to Licensor that Licensee will
so operate Licensee's business, as debtor in possession or its
equivalent, or is not permitted, unable to otherwise meet Licensee's
obligations under this Agreement or to provide Licensor with
assurance satisfactory to Licensor that Licensee will meet such
obligations; or
25.8 If [Intentionally omitted pursuant to a confidential treatment
request and separately filed with the Commission] during the Term of
this Agreement (and any extension thereof) Licensee breaches any
material provision of this Agreement which is of the same nature, and
which violates the same provision of this Agreement, as a breach of
which Licensor has previously given Licensee written notice; or
25.9 If Licensee transfers or attempts to transfer this Agreement in
contravention of Paragraph 27 below; or
25.10 If [Intentionally omitted pursuant to a confidential treatment
request and separately filed with the Commission] during the Term of
this Agreement (and any extension thereof) Licensee breaches any
covenant set forth in Paragraph 10 of this Agreement after Licensor
has previously given Licensee written notice of a breach of any
covenant set forth in such Paragraph 10; or
25.11 If [Intentionally omitted pursuant to a confidential treatment
request and separately filed with the Commission]
Consent/Manufacturer's Agreements or Supplier's Agreements, either
combined or separately, are terminated in any twelve-month
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 35
period by Licensor for the Suppliers' failure to pass compliance
inspections as referenced in Paragraphs 10 and 11 above; and/or
25.12 If Licensee materially breaches any provision of the Warrant, and
such breach is not cured within thirty (30) days after notification
by Licensor of the breach (or, in the event of a breach which cannot
be corrected within thirty (30) days, if Licensee fails to commence
such correction within such thirty (30) day period and thereafter
diligently prosecute it to completion).
26. RIGHTS AND OBLIGATIONS UPON EXPIRATION OR TERMINATION
26.1 Upon the expiration or termination of this Agreement, all rights
granted herein to Licensee shall revert to Licensor, any unpaid
portion of the Guarantee shall be due and payable in accordance with
the
provisions set forth in Subparagraph 4.1 below, and Licensor shall be
entitled to retain any and all consideration paid to Licensor and
other things of value paid or delivered to Licensor.
26.2 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 this Agreement, Licensee shall neither manufacture nor
have manufactured for Licensee the Book, and that except as
hereinafter may be provided, Licensee will cease selling the Book.
Any unauthorized distribution of the Book after the expiration or
termination of this Agreement shall constitute copyright
infringement.
26.3 If Licensee has any unsold copies of the Book in inventory on the
expiration or termination date, Licensee shall provide Licensor with
a full itemized statement, certified by an authorized accredited
officer of Licensee, of all unsold copies of the Book remaining in
stock. If such statement has been provided to Licensor and if
Licensee has complied with the material terms of this Agreement,
including the payment of all Royalties due and the Guarantee, upon
notice from Licensor, Licensee shall have the right to fill orders,
as authorized under Paragraph 2 above, from its then remaining stocks
of the Book for a limited period of twelve (12) calendar months
following the expiration of the Term by the passage of time (the
"Sell-off Period"). Licensee shall consult with Licensor regarding
its sell-off plan and sell off remaining stocks of the Book only
pursuant to such plan and in such distribution channels as are
mutually acceptable to the parties. Licensee shall furnish Licensor
with statements of account covering such sales and pay Licensor
Royalties upon such sales.
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 36
Such Royalties shall not be applied against the Advance or towards
meetingthe Guarantee. All rights and remedies available to Licensor
during the Term shall be equally available to Licensor during the
Sell- off Period.
26.4 Following the expiration of the Sell-off Period, Licensee shall
provide Licensor with an itemized statement 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.
26.5 Licensee agrees that all pre-pricing and pricing of the Book shall be
in compliance with any and all Laws applicable thereto. 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.
[Intentionally omitted pursuant to a confidential treatment request
and separately filed with the Commission].
26.6 Except as otherwise agreed by Licensor in writing, any inventory of
the Book in Licensee's possession or control after the expiration or
termination of this Agreement, and any Sell-off Period granted
hereunder, shall be destroyed, or all Licensed Property removed or
obliterated therefrom.
26.7 At the expiration or earlier termination of this Agreement, Licensee
agrees to deliver to Licensor, without charge to Licensor, any and
all artwork, including without limitation, reference materials,
mechanicals, digital files, original manuscripts and paintings, film
and film positives/negatives, four- color separations, photographs,
transparencies, film proofs, and any other reproduction material used
in the creation, development, and manufacture of the Book, whether
furnished by Licensor, created by Licensee or otherwise acquired by
Licensee (the property rights in all of which such materials shall
remain vested in Disney Enterprises at all times). 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.
26.8 Notwithstanding any provision to the contrary, in the case of
termination under Subparagraphs 25.6 or 25.7 above, in order to
protect the value of the Book and to avoid any disparagement of the
Book which would occur as a result of the circumstances of
termination, Licensor shall have the option, in Licensor's absolute
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 37
discretion, to purchase any or all unsold copies of the Book in
Licensee's inventory on the termination date at [Intentionally
omitted pursuant to a confidential treatment request and separately
filed with the Commission].
27. NON-ASSIGNABILITY
27.1 This license and the rights granted and obligations undertaken
hereunder are personal to Licensee. Licensee shall not voluntarily or
by operation of law assign, sub-license, 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,
sub-license, 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 27 shall include (1) any merger or consolidation involving
Licensee or Golden Books Family Entertainment, Inc. ("GBFE"); (2) any
sale or transfer of all or substantially all of Licensee's or GBFE's
assets; (3) any transfer of Licensee's rights or duties 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 trade name of such division,
business segment or other entity); (4) any public offering, or series
of public offerings, whereby a cumulative total of thirty-three and
one-third percent (33 1/3%) or more of the voting stock (or any other
capital stock cumulatively convertible into the right to vote such
percentage) of Licensee or GBFE is offered for purchase; and (5) any
acquisition, or series of acquisitions, by any person or entity, or
group of related persons or entities, of a cumulative total of
thirty-three and one-third percent (33-1/3%) or more of the voting
stock (or any other capital stock cumulatively convertible into the
right to vote such percentage) or the Beneficial Ownership (as
defined in Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of Licensee or GBFE.
27.2 Licensee hereby represents that, as of the date of this Agreement,
Golden Press Holdings, L.L.C. ("GPH") holds all Series "B" Preferred
Shares in GBFE (the "Series B Shareholder"). For purposes of
clarification, "transfer" within the meaning of this Paragraph 27
shall not include (i) any conversion of Series "B" Preferred Shares
into Common Shares by the Series B Shareholder or (ii) any actions
described in the definition of "transfer" in Subparagraph 27.1 if
such actions occur between or among ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company and
its Affiliates. Licensee further represents that, as of the date of
this Agreement, ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Warburg, ▇▇▇▇▇▇ & Co.,
Warburg Pincus Ventures, L.P., and their respective Affiliates are
the Beneficial Owners (as defined above) of thirty-three and
one-third percent (33-1/3%)
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 38
or more of the voting stock (or other capital stock cumulatively
convertible into the right to vote such percentage) of GBFE (the
"Warburg Pincus Shares"). The following shall apply with respect to
any transfer of the Warburg Pincus Shares which requires the consent
of Licensor pursuant to Subparagraph 27.1 above:
(1) Licensor hereby consents to the transfer by a widely-distributed
public offering of the Warburg Pincus Shares to individual
investors [Intentionally omitted pursuant to a confidential
treatment request and separately filed with the Commission].
(2) [Intentionally omitted pursuant to a confidential treatment
request and separately filed with the Commission].
(3) [Intentionally omitted pursuant to a confidential treatment
request and separately filed with the Commission].
27.3 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 this Paragraph 27. At the time Licensee
gives such notice, Licensee shall provide Licensor with the
information and documentation necessary to evaluate the contemplated
transaction. Except as otherwise provided in Subparagraph 27.2 above,
Licensor's consent (if given) to any assignment of this Agreement or
other transfer as defined in this Paragraph 27 shall be subject to
such terms and conditions as Licensor deems appropriate, including
but not limited to, payment of a transfer fee, provided however that
no such transfer fee shall be applicable to a desired assignment of
this Agreement or other transfer as defined in this Paragraph 27
effectuated in connection with a pre-packaged plan of reorganization
consummated on or before June 30, 1999. 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 [Intentionally omitted pursuant to a confidential treatment
request and separately filed with the Commission] for any license
between Licensor and Licensee involved in an assignment or other
transfer. The foregoing transfer fee shall not apply if this
Agreement is assigned to one or more of Licensee's Affiliates as part
of a corporate
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 39
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 27 shall supersede any conflicting
provisions on this subject in any publishing license agreements
previously entered into between Licensee and Licensor for this
Territory.
27.4 Notwithstanding Subparagraphs 27.1 and 27.3 above, Licensee may, upon
Licensor's prior written consent sublicense Licensee's 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 19) 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 such companies 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 Subparagraph
27.1 to Licensee shall include such Affiliate sublicensee.
27.5 Licensor's rights and obligations hereunder may be assigned,
delegated or otherwise transferred by Licensor.
28. NOTICES
All notices which either party is required 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:
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 40
To Licensor: Disney Licensed Publishing
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice-President
With a copy to: The ▇▇▇▇ Disney Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President - Eastern Regional Counsel
To Licensee: Golden Books Publishing Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to: Golden Books Publishing Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
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. Such notice shall be deemed to have been
served upon personal delivery or upon 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.
29. MUSIC
Music is not licensed hereunder. Any charges, fees or royalties payable for
music rights or any other rights not covered by this Agreement shall be
additional to the Royalties and covered by separate agreement.
30. GOODWILL
Licensee hereby acknowledges that the rights and powers retained by Licensor
hereunder are necessary to protect Disney Enterprises' copyrights and property
rights, and, specifically, to conserve the goodwill and good name of Licensor's
products and Licensor's Affiliates, the Disney Property
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 41
and the name "Disney", and therefore Licensee agrees that Licensee will not
allow the same to become involved in matters which will, or could, detract from
or impugn the public acceptance and popularity thereof, or impair their legal
status.
31. RELATIONSHIP
This Agreement does not provide for a joint venture, partnership, franchise,
agency or employment relationship between the parties, or any other relationship
than that of licensor and licensee.
32. CONSTRUCTION
The language of all parts of this Agreement shall in all cases be construed as a
whole, according to its fair meaning and not strictly for or against any of the
parties. Headings of paragraphs herein are for convenience of reference only and
are without substantive significance.
33. MODIFICATIONS OR EXTENSIONS OF THIS AGREEMENT
Except as otherwise provided herein, this Agreement can only be extended or
modified by a writing signed by both parties executed after the effective date
hereof; provided, however, that certain modifications shall be effective if
signed by the party to be charged and communicated to the other party. The
parties agree to execute such further documents as may be necessary to implement
or make effective the terms of this Agreement.
34. RESERVATION OF RIGHTS
All rights not specifically granted and licensed to Licensee hereunder are
reserved to Licensor.
35. WAIVERS
A waiver by either party at any time of a breach of any provision of this
Agreement shall not apply to any breach of any other provision of this
Agreement, or imply that a breach of the same provision at any other time has
been or will be waived, or that this Agreement has been in any way amended, nor
shall any failure by 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.
36. SEVERABILITY
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.
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 42
37. CHOICE OF LAW AND FORUM
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
applicable to contracts made and to be fully performed in California. Any legal
actions pertaining to this Agreement shall be commenced within the State of
California and within either Los Angeles or Orange Counties, and Licensee hereby
consents to the jurisdiction of the courts located in Los Angeles or Orange
Counties.
38. EQUITABLE RELIEF
Licensee acknowledges that Licensor will have no adequate remedy at law if
Licensee continues to manufacture, sell, advertise, promote or distribute the
Book upon the expiration or termination of this Agreement. Licensee acknowledges
and agrees that, in addition to any and all other remedies available to
Licensor, Licensor shall have the right to have any such activity by Licensee
restrained by equitable relief, including, but not limited to, a temporary
restraining order, a preliminary injunction, a permanent injunction, or such
other alternative relief as may be appropriate, without the necessity of
Licensor posting any bond.
39. POWER TO SIGN
The parties warrant and represent that their respective representatives signing
this Agreement have full power and proper authority to sign this Agreement and
to bind the parties.
40. CONFIDENTIALITY
40.1 Licensee represents and warrants that Licensee did not trade on the
prospect of a license from Licensor, prior to full execution of this
Agreement. Licensee agrees to keep the terms and conditions of this
Agreement confidential, and Licensee shall not disclose such terms
and conditions to any third party without obtaining Licensor's prior
written consent; provided, however, that the terms and conditions of
this Agreement may be disclosed on a need-to-know basis to Licensee's
outside attorneys and accountants who agree to be bound by this
confidentiality provision. In addition, Licensee may have access to
information concerning Licensor's and/or its Affiliates' business and
operations, and/or information concerning works in progress, artwork,
plots, characters or other matters relating to Licensor's and/or its
Affiliates' artistic creations, which information may not be
accessible or known to the general public. Licensee agrees not to use
or disclose such information to any third party without obtaining
Licensor's prior written consent.
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 43
40.2 Licensor agrees to use reasonable care to keep confidential those
terms and conditions of this Agreement which are not standard terms
and conditions contained in Licensor's licensed publishing agreements
with other licensees, and Licensor shall not disclose such terms and
conditions to any third party without obtaining Licensee's prior
written consent; provided, however, that the terms and conditions of
this Agreement may be disclosed on a need-to-know basis to Licensor's
outside attorneys and accountants who agree to be bound by this
confidentiality provision. In addition, Licensor may have access to
information concerning Licensee's and/or its Affiliates' business and
operations which information may not be accessible or known to the
general public. Licensor agrees not to use or disclose such
information to any third party without obtaining Licensee's prior
written consent.
40.3 In the event either party is required to disclose the information
deemed confidential in Subparagraphs 40.1 and 40.2 above, pursuant to
any law, court order or process, the rules and regulations of any
governmental department, agency or authority (including, but not
limited to, the Securities and Exchange Commission) or any generally
accepted accounting rules mandating disclosure in the disclosing
party's financial statements, the disclosing party agrees to give the
non-disclosing party prior written notice and the disclosing party
shall use its best efforts to obtain confidential treatment of the
information required to be disclosed. Upon the non-disclosing party's
request, the disclosing party agrees to incorporate, to the extent
reasonably possible, the non-disclosing party's comments into the
disclosing party's request for confidential treatment, provided such
request and comments are received by the disclosing party within five
(5) business days after receipt the notice referred to in the
preceding sentence.
40.4 Licensor and Licensee shall consult with each other before issuing
any press release or making any public statement with respect to the
execution, termination, expiration or terms and conditions of this
Agreement. and, except as may be required by law, shall not issue any
such press release or make any public statement unless the text of
such statement shall first have been agreed upon by the parties.
Golden Books Publishing Company, Inc.
Agreement dated December 12, 1998
Page 44
41. PREVIOUS AGREEMENTS
Effective as of December 11, 1998, the Licensed Book Publishing Agreement dated
September 26, 1997 has been terminated. This Agreement, and any confidentiality
agreement Licensee may have signed pertaining to any of the Licensed Property,
contains the entire agreement between the parties concerning the subject matter
hereof and supersedes any pre-existing or contemporaneous agreement and any oral
or written communications between the parties.
42. SURVIVAL OF OBLIGATIONS
The respective obligations of the parties under this Agreement, which by their
nature would continue beyond the termination, cancellation or expiration of this
Agreement, including but not limited to indemnification, insurance, payment of
Royalties, and Paragraph 26 above, shall survive termination, cancellation or
expiration of this Agreement.
ACCEPTED AND AGREED:
GOLDEN BOOKS PUBLISHING BUENA VISTA BOOKS, INC. COMPANY,
INC. DBA DISNEY LICENSED PUBLISHING
By: /s/ By: /s/
--------------------------- ---------------------------
Title:___________________________ Title:__________________________
Date:____________________________ Date:___________________________
GOLDEN BOOKS PUBLISHING COMPANY, INC.
AGREEMENT DATED DECEMBER 12, 1998
SCHEDULE A
"A" PROPERTIES
[Intentionally omitted pursuant to a confidential treatment request and
separately filed with the Commission]
(18) Characters from each new major children-oriented Disney-branded feature
animation film, animation video, and Disney-branded live action film released or
re-released during the Term;
(19) Children-oriented television properties which Licensor has previously
licensed to Licensee as well as new properties which are derived from the
non-television Properties listed above and are developed by Disney for a
children- oriented television series; and
(20) New children-oriented television properties originally developed by Disney
or acquired by Disney, but only if Licensor and Licensee mutually agree to a
program whereby Licensee shall provide sufficient publishing support for such
new television property.
*Tentative title
Licensor shall determine the classification of any given property into "A", "B"
or "C" Properties, in good faith, in Licensor's absolute discretion, and
consistent with existing property classifications.
GOLDEN BOOKS PUBLISHING COMPANY, INC.
GOLDEN BOOKS PUBLISHING COMPANY, INC.
AGREEMENT DATED DECEMBER 12, 1998
SCHEDULE A
"B" PROPERTIES
[Intentionally omitted pursuant to a confidential treatment request and
separately filed with the Commission]
(24) Children-oriented television properties which Licensor has previously
licensed to Licensee as well as new properties which are derived from the
non-television Properties listed above and which are developed by Disney for a
children-oriented television series; and
(25) New children-oriented television properties originally developed by Disney
or acquired by Disney, but only if Licensor and Licensee mutually agree to a
program whereby Licensee shall provide sufficient publishing support for such
new television property.
*Tentative title
GOLDEN BOOKS PUBLISHING COMPANY, INC.
AGREEMENT DATED DECEMBER 12, 1998
SCHEDULE A
"C" PROPERTIES
[Intentionally omitted pursuant to a confidential treatment request and
separately filed with the Commission]
(19) Children-oriented television properties which Licensor has previously
licensed to Licensee as well as new properties which are derived from the
non-television Properties listed above and which are developed by Disney for a
children-oriented television series; and
(20) New children-oriented television properties originally developed by Disney
or acquired by Disney, but only if Licensor and Licensee mutually agree to a
program whereby Licensee shall provide sufficient publishing support for such
new television property.
GOLDEN BOOKS PUBLISHING COMPANY, INC.
AGREEMENT DATED DECEMBER 12, 1998
SCHEDULE B
FORMATS [Intentionally omitted pursuant to a confidential
treatment request and separately filed with the Commission]
Color & Activity
Activity pads [Intentionally omitted pursuant to a
Color-by-Number confidential treatment request and separately
Color Surprise (magic) filed with the Commission]
Easy Peel Sticker books "
Foil sticker books "
Magic slates* "
▇▇▇▇ & See Magic "
Match & Color "
My Coloring book "
My First Activity book "
Paint with water "
Paint box books "
Paint 'N' Marker "
Paper doll book "
Posters to color "
Press-out activity book "
Scented sticker book "
Shaped coloring book "
Special edition coloring book "
Sticker by Number "
Sticker fun "
Super coloring book "
Super paint with water "
Tell-a-Story sticker book "
Trace & Color "
For purposes of this Agreement, the term "Book," as it applies to the color and
activity format, shall include, in addition to those color and activity formats
listed hereinabove, the following:
(a) Licensee's color and activity books, in which the Licensed Property is used,
existing as of the date of this Agreement in the format specifications (e.g.,
trim size and page count) previously approved by Licensor under any prior
license agreements between Licensor and Licensee (or their predecessors);
(b) New color and activity formats developed by Licensee which meet each of the
following criteria:
(i) Derivative of any color and activity formats approved by Licensor under this
Agreement or under any prior license agreement between Licensor and Licensee (or
their predecessors);
(ii) Similar in price point to any color and activity formats approved by
Licensor under this Agreement or under any prior license agreement between
Licensor and Licensee (or its predecessors); and
(iii) Subject to the same distribution channels authorized in Subparagraph 2.3
of this Agreement.
For purposes of this Agreement, the term "Book," as it applies to the color and
activity format, shall not include the following:
(a) Any product which is or could be reasonably construed as an entirely new
category of product (e.g., educational workbooks or foreign language teaching
products);
(b) Any product which includes any new or substantially new technology, or a key
component of which, was not contemplated by the scope of the authorized color
and activity formats licensed hereunder (e.g., a talking coloring book or a
color and activity book with a toy or audiocassette);
(c) Any product which has been licensed by Licensor to another licensee as of
the date of this Agreement, but only for the duration of the term of such
license(s); and
(d) Any product which, in whole or in part, falls outside of Licensor's
customary licensed publishing business or which is published, manufactured or
licensed or being published, manufactured or licensed by Licensor's Affiliates.
GOLDEN BOOKS PUBLISHING COMPANY, INC.
AGREEMENT DATED DECEMBER 12, 1998
SCHEDULE B
FORMAT [Intentionally omitted pursuant to a confidential
treatment request and separately filed with the Commission]
Storybook
Deluxe Super Shape book [Intentionally omitted pursuant to a
Little Golden book confidential treatment request and separately
Look Look book filed with the Commission]
Super Shape book "
First Little Golden book "
Sturdy Shape book** "
Little Look Look book "
Little Little Golden book (2-pack) "
Little Super Shape "
Little Golden Storybook "
*Books are to be of a type and quality designed to sell for the suggested retail
prices, provided, however, that Licensee has the absolute discretion to price
the books as Licensee deems appropriate.
**Subject to Subparagraph 2.1 of this Agreement.
For purposes of this Agreement, the term "Book" as it applies to the storybook
format shall include, in addition to those storybook formats listed above,
storybooks developed by Licensee which contain minor modifications (e.g., trim
size and page count) to the specifications of the storybook formats listed
hereinabove and which are subject to the same distribution channels authorized
in Subparagraph 2.3 of this Agreement. Nothing in this Agreement shall preclude
Licensee from submitting for Licensor's consideration new storybook
opportunities.
GOLDEN BOOKS PUBLISHING COMPANY, INC.
AGREEMENT DATED SEPTEMBER 26, 1997
SCHEDULE C
[Intentionally omitted pursuant to a confidential treatment request and
separately filed with the Commission].
SUPPLIER'S AGREEMENT
EXHIBIT 1
________________________________________________________________________________
SUPPLIER: _____________
_____________
_____________
Reference is made to the license agreement dated ________ between Disney
Licensed Publishing ("Licensor") and ___________ ("Licensee") in which Licensor
has licensed the publication by Licensee of ________________________________
(the "publication"). Licensor hereby authorizes you to prepare, from material
supplied to you 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
you to no one other than Licensee, or as Licensor may otherwise direct. Licensor
shall be under no obligation to you 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 laws, regulations, 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 agrees not to use child labor in the manufacturing
or packaging of the publication or components thereof. The term "child" refers
to a person younger than the age for completing compulsory education, but in no
case shall any child younger than fourteen (14) years of age be employed in the
manufacturing or packaging of the publication or components thereof.
(b) The Supplier agrees to provide employees with a safe and healthy
workplace in compliance with all applicable Laws. The Supplier agrees to provide
Licensor with all information Licensor may request about manufacturing or
packaging facilities for the publication or components thereof.
(c) The Supplier agrees only to employ persons whose presence is
voluntary. The Supplier agrees not to use prison labor, or to use corporal
punishment or other forms of mental or physical coercion as a form of discipline
of employees.
(d) The Supplier agrees to comply with all applicable wage and hour
Laws, including minimum wage, overtime, and maximum hours. The Supplier agrees
to utilize fair employment practices as defined by applicable Laws.
(e) The Supplier agrees not to discriminate in hiring and employment
practices on grounds of race, religion, national origin, political affiliation,
sexual preference, or gender.
(f) The Supplier agrees to comply with all applicable environmental
Laws.
(g) The Supplier agrees that Licensor may engage in activities such
as unannounced on-site inspections of manufacturing or packaging facilities in
order to monitor compliance with applicable Laws.
7. Upon expiration or termination of the License Agreement, or upon
notification by Licensor or Licensee, you will immediately cease manufacturing
the publication and deliver to Licensor 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 you, and all original and reproduction material
prepared by you hereunder, unless Licensee has engaged you to do the printing,
in which case you 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 your 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. You agree to provide Licensor upon request, a statement and/or a
duplicate invoice as to all materials provided to Licensee hereunder.
DISNEY LICENSED PUBLISHING ACCEPTED AND AGREED BY:
By: ______________________________ By: __________________________
(to be signed by Supplier)
Title: ____________________________ Title: _________________________
Company:___________________________
EXHIBIT 2
WORK FOR HIRE AGREEMENT/COPYRIGHT ASSIGNMENT
The undersigned agrees that for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, all literary and/or artistic Work
(collectively the "Work") written or otherwise created by the undersigned in
connection with the publication tentatively entitled
___________________________________ (the "Publication") was written and/or
otherwise created by the undersigned as a work made for hire for Disney
Enterprises, Inc. ("Disney") pursuant to an agreement between the undersigned
and _________________ ("Publisher") dated ________________________. The
undersigned acknowledges that the Work was specially ordered or commissioned for
use as a contribution to the Publication, that Disney owns throughout the
universe in perpetuity all right, title and interest in the Work and the results
and proceeds of the undersigned's services, that Disney shall be deemed the
author of the Work for purposes of copyright and that Disney is entitled to the
copyright(s) therein (and all renewals and extensions thereof), with the right
to make such changes in the Work and uses thereof as Disney may from time to
time determine within its sole discretion. The undersigned also assigns to
Disney all now known and hereafter existing rights of every kind (including the
copyright and all renewals and extensions thereof), throughout the universe in
perpetuity and in all languages, pertaining to the Work for all now known and
hereafter existing uses, media, and forms. The undersigned hereby waives any
claims that the undersigned may now or hereafter have in any jurisdiction to
so-called "moral rights" or rights of "droit moral" with respect to the Work.
The undersigned represents and warrants that, except as to any material provided
to the undersigned by Publisher and/or Disney and incorporated in the Work, the
Work is wholly original with the undersigned who is the sole creator thereof,
the Work does not violate the rights of any third party, the Work is not the
subject of any litigation or claim that might give rise to litigation, and that
the undersigned has all rights necessary to convey the rights granted to Disney
herein. The undersigned agrees to indemnify and hold harmless Publisher and
Disney, their respective parent and affiliated companies, successors, licensees,
and assigns against any breach of any of the foregoing representations and
warranties. The undersigned agrees to execute such further documents and do such
other acts as may be required by Disney to evidence or effectuate Disney's
rights hereunder. Failure to do so shall automatically empower Disney as the
undersigned's attorney-in-fact to execute such documents and do such acts in the
place and stead of the undersigned. Disney's rights in the Work may be assigned,
licensed, or otherwise transferred by Disney, and this Agreement shall inure to
the benefit of Publisher's and Disney's respective successors, licensees, and
assignees.
Print Name:_____________________________
Signature:______________________________
Address:________________________________
________________________________________
Date:___________________________________
EXHIBIT 3
Code of Conduct for Suppliers
At The ▇▇▇▇ Disney Company, we are committed to:
- a standard of excellence in every aspect of our business and in every
corner of the world;
- ethical and responsible conduct in all of our operations;
- respect for the rights of all individuals; and
- 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.
EXHIBIT 4
Code of Conduct for Licensees
At The ▇▇▇▇ Disney Company, we are committed to:
- a standard of excellence in every aspect of our business and in every
corner of the world;
- ethical and responsible conduct in all of our operations;
- respect for the rights of all individuals; and
- 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.
EXHIBIT 5
[To Be Supplied]
EXHIBIT 6
[To Be Supplied]
EXHIBIT 7
[To Be Supplied]