MERCHANDISING LICENSE AGREEMENT
Date: as of February 2, 1995
Property: The 1942 motion picture CASABLANCA
License No.: D95017
TURNER LICENSEE
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TURNER HOME ENTERTAINMENT, INC. ARTISAN HOUSE, INC.
One CNN Center 1755 Glendale Blvd.
Post Office Box 105366 P.O. Box 26566
Atlanta, Georgia 30348-5366 Los Angeles, CA 90026
Contact: Mr. Henry Goldman
Tel: 213-664-1111
Fax: 213-664-5679
This Agreement is made as of the date specified above between Turner and
Licensee, whereby Turner grants Licensee a license to utilize certain names,
likenesses, characters, trademarks and/or copyrights in connection with the
manufacture, distribution, advertising, promotion and sale of certain articles
of merchandise on the following terms and conditions:
1. Licensed Elements: See Schedule "1" attached below.
2. Authorized Articles: Metal wall sculpture.
3. Licensed Territory: United States, its territories and possessions.
4. License Period: February 1, 1995 - December 31, 1996
5. Direct Response Marketing Permitted (check one):
X Yes __ No
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6. Exclusivity (check one): X Non-exclusive license __ Exclusive license
7. Royalty Rate: Five percent (5%) of direct mail selling price.
8. Advance/Guarantee: Advance: $1,000.00
Balance of
Guarantee: $1,500.00
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Total Guarantee: $2,500.00
The Advance of $1,000.00 is payable in full concurrently with Turner's
receipt of copies of this Agreement (without amendments or modifications)
signed by Licensee, which in any event will be not later than the date
twelve (12) days after Licensee receives copies of this Agreement for
signature.
$1,500.00 due not later than December 31, 1996.
(All references to "Dollar(s)" and/or "$" anywhere in this Agreement will
refer to United States Dollars.)
9. Marketing / Shipping Dates:
(a) Marketing of each of the Authorized Articles will begin not later than
June 1, 1995.
(b) Shipment to retailers of each of the Authorized Articles will begin not
later than June 1, 1995
10. Distribution: Authorized Articles may be sold through the home furnishing
industry and direct mail. Licensee shall not knowingly sell Authorized
Articles to persons or entities whom Licensee knows, or reasonably should
know, intend to resell or are likely to resell the Authorized Articles
outside the Licensed Territory.
11. Form of Copyright and Trademark Notice: Each Authorized Article shall bear
copyright and trademark notices in the following form (or in such other
form as Turner may hereafter designate, for prospective implementation, by
notice to Licensee):
Copyright: (C) 19XX Turner Entertainment, Co. All Rights Reserved.
Trademark: CASABLANCA(TM) and [name of each related CASABLANCA
character](TM) are trademarks of Turner Entertainment Co.
12. Notices: Payments and royalty statements to Turner shall be made or given
to Turner Home Entertainment, Inc., Licensing & Merchandising, P.O. Box
930387, Atlanta, Georgia 31193, attention: Controller; with a copy of
royalty statements to Turner Home Entertainment, Inc., 420 Fifth Avenue,
7th Floor, New York, NY 10018, attention: Licensing and Merchandising. All
other notices to Turner shall be sent to Turner at the New York address
specified above, with a copy to the Atlanta address specified above,
Attention: Legal Department.
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13. Special Terms: Notwithstanding anything herein to the contrary, the parties
understand and agree that Licensee may use the names and static visual
likenesses of any characters in the Picture only in strict compliance with
the following, in addition to all other terms set forth in Exhibit "A":
(a) The characters are licensed elements hereunder only in the context of
exact representations of actual acts, poses, or appearances from
"Casablanca."
(b) Licensee, and not Turner, shall be responsible for ensuring that any
use of the names and static visual likenesses of the characters
conforms to Paragraph (a) above. Turner makes no warranty,
representation or grant as to any other use of the image of any of the
characters. Any commercial use of the images of any of the characters
shall constitute Licensee's undertaking to Turner that such use in
fact incorporates only actual acts, poses or appearances from
"Casablanca."
(c) Licensee understands and acknowledges that this Agreement grants
rights to the Licensed Elements only to the extent of Turner's
ownership and control and that the use of the Licensed Elements may
also require consent or licenses from parties other than Turner.
Accordingly, Licensee represents and warrants that it has entered into
an agreement with the estates of Humphrey Bogart and Ingrid Bergman,
respectively as of the date hereof and agrees to provide Turner with
copies of said agreements upon execution of this Agreement.
14. Standard Terms: The attached "Exhibit 'A' (Standard Terms and Conditions)"
are incorporated by this reference into the terms of this Merchandising
License Agreement (collectively referred to herein as "Agreement"). If any
provision set forth above in this Agreement conflicts (or is construed to
conflict) with any provision of the Standard Terms and Conditions, the
provisions hereinabove set forth will control.
IN WITNESS WHEREOF, Turner and Licensee have executed this Agreement as of
the date first above written.
TURNER HOME ENTERTAINMENT, INC. ARTISAN HOUSE, INC.
("Turner") ("Licensee")
By: [ILLEGIBLE] By: /s/ Henry Goldman
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Title: VP SALES Title: President
SCHEDULE "1"
1. "Licensed Elements" means only the names and static visual likenesses of
the following specific fictional characters, only as depicted in the 1942
motion picture entitled "CASABLANCA" (the "Picture")(excluding storylines
and plot elements from the Picture, except as specifically agreed in
writing and in advance by Turner) and dialogue taken from the Picture. It
is specifically understood and agreed that the character names, likenesses
and other elements referred to above (including, if applicable, the names
of actors, voice-over artists, and/or other elements listed in this
Schedule "1") are included within the definition of "Licensed Elements" (i)
only to the extent of Turner's ownership or control thereof and (ii) only
as specifically depicted in and as part of the Picture.
PICTURE(S) LICENSED ELEMENTS
CASABLANCA Rick Blaine, as portrayed by Humphrey Bogart
Sam, as portrayed by Dooley Wilson
Ilsa Lund, as portrayed by Ingrid Bergman
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EXHIBIT "A"
MERCHANDISING LICENSE AGREEMENT
STANDARD TERMS AND CONDITIONS
These Standard Terms and Conditions shall be deemed fully incorporated
in the License Agreement ("Underlying Agreement") to which this Exhibit "A" is
attached, and these Standard Terms and Conditions and the Underlying Agreement
shall hereinafter be collectively referred to as the "Agreement." All terms
shall, unless expressly provided to the contrary herein, have the same
respective meanings as set forth in the Underlying Agreement. Unless expressly
provided to the contrary herein, to the extent that any provision of these
Standard Terms and Conditions conflicts with any provisions of the Underlying
Agreement, the Underlying Agreement shall control.
A-1 LICENSE
Turner hereby grants to Licensee, and Licensee hereby accepts, a
license to utilize the Licensed Elements upon or in connection with the
Authorized Articles, for the purpose of the manufacture, distribution,
advertising, promotion and sale of the Authorized Articles in the Licensed
Territory during the License Period, upon and subject to all of the terms and
conditions of this Agreement. Any and all rights not expressly granted to
Licensee hereunder are expressly reserved by Turner and may be exercised and
exploited freely by Turner at any time, and Licensee covenants and agrees that
it shall not exercise, or authorize or permit others to exercise, any rights
with respect to the Licensed Elements other than the limited and specific rights
licensed hereunder. It is understood that the license granted hereunder relates
to the sale of Authorized Articles and does not grant Licensee any rights with
respect to the use of the Licensed Elements in connection with premium
promotions or other giveaways.
A-2 PAYMENT AND ACCOUNTINGS
(a) Royalty. Licensee shall pay to Turner a royalty as specified in the
Underlying Agreement with respect to all Net Sales of Authorized Articles. "Net
Sales" shall mean gross sales by License or any of its affiliated, associated or
subsidiary companies, without any deductions whatsoever (including, without
limitation, freight, taxes, uncollectible accounts, manufacturing, distribution,
advertising, marketing or promotion costs with the exception of trade quantity
discounts only), except for actual returns. Credit against sales shall be
allowed only for actual returns and shall not be allowed on the basis of an
accrual or reserve system. Net Sales for each Authorized Article shall be
computed on no less than Licensee's regular, full, "top- of-the-line" gross
wholesale invoice price calculated at source in the Licensed Territory, based
upon the usual billing price for items sold in the normal course of business
("Royalty Base Price"). The foregoing royalty shall be payable on all Authorized
Articles distributed by Licensee, including Authorized Articles not billed,
except for a reasonable number of samples which may be given away to the trade
in the normal course of business.
(b) Advance and Guarantee. Licensee shall pay to Turner the Advance and
Guarantee in accordance with the payment schedule specified in the Underlying
Agreement. The Advance and installments of the balance of the Guarantee
constitute a non-refundable advances against royalties to be earned as provided
above. The total Guarantee shall be deemed accrued to Turner's account as of the
date of this Agreement.
(c) Quarterly Statements. Not later than thirty (30) days after the end
of each calendar quarter during the License Period, Licensee shall furnish to
Turner complete and accurate statements (certified to be accurate by Licensee)
showing the product and style number, description, unit sales, Royalty Base
Price, gross sales and Net Sales of each and every Authorized Article covered by
this Agreement. All statements shall be prepared by Licensee utilizing the form
attached as Exhibit "B" hereto and incorporated by reference, as said form may
be revised from time to time by Turner. Royalty reports shall be prepared
separately for each country within the Licensed Territory, and shall include a
product sales breakdown by style number, which indicates clearly which of the
Licensed Elements were utilized in connection with each Authorized Article,
including a breakdown for each Licensed Element, by character. Reporting will be
completed in such a manner, and in sufficient detail, to enable Turner to
separate royalties by the respective elements used; including, without
limitation, the contract number present in the upper left-hand corner of the
first page of this contract.
(d) Royalty Payments. Royalty payments due hereunder shall be paid not
later than thirty (30) days after the end of each calendar quarter and such
payments shall accompany the statements required above. Licensee shall also
include the contract number, present in the upper left-hand corner of the first
page of this contract, on the face of the royalty check. If the License Period
is extended beyond the term specified in Paragraph 4 of the Underlying
Agreement, royalty payments which exceed the total Guarantee shall not be
credited toward any similar guarantee which is payable with respect to the
extension period. All payments shall be in U.S. funds. Licensee shall pay, and
hold Turner forever harmless from, all taxes, customs, duties, levies, imports
or any other charges now or hereafter imposed or based upon the manufacture,
delivery, license, sale, possession or use hereunder to or by Licensee of the
Authorized Articles or the Licensed Elements (including but not limited to
sales, use, inventory, income and value added taxes on sales of Authorized
Articles), which charges shall not be deducted from Turner's royalties. All
monies payable to or received by Licensee from the exploitation of the rights
granted herein shall be held by Licensee in trust for Turner's account to the
extent of Turner's entitlement to such monies as set forth in this Agreement.
(e) Timeliness. All payments hereunder shall be made to Turner (or its
authorized representative) at the address set forth in the Underlying Agreement
within the time and in the manner specified herein, it being intended and agreed
that the time within which Licensee is required to make payment in accordance
with the terms hereof is of the essence of this Agreement and any failure so to
do on the part of Licensee shall constitute an event of default hereunder in
accordance with Paragraph A-13 below. In addition to any other rights Turner may
have in the event of such default, Licensee agrees to pay interest to Turner on
any sums which have not been received by Turner within thirty (30) days
following the due date. Such interest shall accrue from said date and shall be
payable at the lesser of eighteen percent (18%) per annum or the maximum rate
allowed by law.
A-3 BOOKS AND RECORDS
Licensee shall keep accurate books of account and records in a form
meeting the generally accepted standards of the profession of certified public
accountants covering all transactions relating to the license hereby granted,
and Turner and its authorized representatives shall have the right at all
reasonable business hours, and upon reasonable notice, to examine and audit said
books of account and records and all other documents and materials in the
possession or under the control of Licensee with respect to the subject matter
and terms of this Agreement, and shall have free and full access thereto for
said purposes and for the purpose of taking extracts therefrom. Upon demand of
Turner, but not more than twice per calendar year, Licensee shall at its own
expense furnish to Turner a detailed statement prepared by an independent
certified public accountant, or certified to be accurate by a duly authorized
official of Licensee, showing the product and style number, description, Net
Sales, itemized deductions from Net Sales and Royalty Base Price of the
Authorized Articles distributed and/or sold by Licensee to the date of Turner's
demand. If an audit reveals that Licensee has misrepresented or underreported
any item bearing upon the royalties or other compensation due or payable to
Turner, then, in addition to recomputing and making immediate payment of the
sums due based on the true items together with interest thereon at the rate at
which Turner is entitled to borrow from its principal lending institution (after
giving effect to compensating balance requirements and any commitment fees),
Licensee shall pay costs and expenses incurred by Turner for the audit and
checking and attorney's fees incurred by Turner in connection therewith or in
connection with enforcing the collection thereof. All books of account and
records shall be kept available for at least three (3) years after the
termination of this license.
A-4 EXCLUSIVITY
(a)(i) If, and only if, the Underlying Agreement specifies that
Licensee's license hereunder is exclusive, Turner shall not, except as otherwise
provided herein, grant any other licenses effective during the License Period
for the use of the Licensed Elements in connection with the manufacture,
distribution and
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sale, in the Licensed Territory, of the Authorized Articles as expressly
described in the Underlying Agreement. Notwithstanding the foregoing, nothing in
this Agreement shall be construed to prevent Turner from granting any licenses
for the use of the Licensed Elements other than as provided herein, or from
utilizing the Licensed Elements in any manner whatsoever other than as provided
herein, regardless of the extent to which such use or utilization may be
competitive with the license granted hereunder.
(ii) If the Underlying Agreement specified that Licensee's license
hereunder is non-exclusive, then Turner shall be free to utilize, or to grant
any licenses to third parties to utilize, the Licensed Elements in any manner
for any purposes whatsoever.
(b) In all cases, Turner expressly reserves all rights whatsoever
relating to the promotion, sale and other exploitation of Authorized Articles at
(i) the MGM Grand Hotel/Casino complex in Las Vegas, Nevada, and (ii) concert
halls, arena shows, circuses, stadiums, theaters, theme parks and all other
public performance venues at which television programs or motion pictures
containing elements included in the Licensed Elements or derivative works (e.g.,
concerts, musicals and other stage plays, motion picture sequels, audio-visual
performances, etc.) based thereon are exhibited or performed, and (iii) retail
outlets or any other facilities owned, operated or controlled by Turner (or its
parent, subsidiaries or affiliates), and (iv) catalogs or similar direct mail
sales publications featuring Turner products published by Turner (or its parent,
subsidiaries, or affiliates). The foregoing venues, retail outlets, other
facilities, and catalogs are collectively referred to herein as "Turner Venues".
Licensee acknowledges that Turner Venues are expressly excluded from the
Licensed Territory and that Licensee has not been granted any rights with
respect to the exploitation of Authorized Articles at Turner Venues, it being
understood that Turner may itself exercise such rights or grant other licenses
for the manufacture and distribution of Authorized Articles for sale or other
exploitation at Turner Venues.
(c) Turner reserves the right to permit distribution of stock on hand
or in process as of termination or expiration of prior licenses, even if the
exercise of said rights may conflict with those rights granted Licensee
hereunder.
A-5 QUALITY OF MERCHANDISE
(a) The Authorized Articles shall be of high standard and of such
style, appearance and quality as to be adequate and suited to their exploitation
to the best advantage and to the protection and enhancement of the Licensed
Elements and the good will pertaining thereto. The Authorized Articles shall be
manufactured, sold, distributed, promoted and advertised in accordance with all
applicable governmental, regulatory, professional and industry-wide codes,
statutes, rules and regulations. Licensee shall, before manufacturing any of the
Authorized Articles, furnish to Turner free of cost, for its written approval as
to quality, style, and adherence to the requirements set forth in this
Agreement, one (1) prototype, layout, or sample of each Authorized Article and
its cartons, containers, and advertising, promotional, packing and wrapping
material. After such prototype, layout or sample has been approved pursuant to
this Paragraph, Licensee shall not depart therefrom in any material respect
without first submitting to Turner a prototype, layout or sample of the modified
article carton, container, packing, advertising, promotional and/or wrapping
material and obtaining Turner's prior written consent to such modification.
After items have been approved in their final form in accordance with this
paragraph, Licensee shall submit to Turner six (6) samples of each such item
(provided, however, that if the Authorized Articles incorporate Licensed
Elements from the Hanna-Barbera Library, with its address at 3400 Cahuenga
Boulevard, Hollywood, CA 90068-1376, and twelve (12) samples of each such item
shall be submitted to Turner at its New York office for approval). From time to
time after Licensee has commenced selling the Authorized Articles and upon
Turner's written request, Licensee shall furnish without cost to Turner a
reasonable number of additional random samples of each Authorized Article being
manufactured by Licensee hereunder, together with any cartons, containers and
packing and wrapping material used in connection therewith. Turner shall have
the right to take a reasonable number of samples at random from production runs
at least twice a year, it being agreed that if quality problems are encountered
as a result of the examination of samples, Turner shall have the right to take
such samples as frequently as Turner in its sole discretion deems desirable in
an effort to assure that proper quality control has been established. Moreover,
Turner shall have the right to have its representatives visit the plant or
plants where the Authorized Articles are produced and where the containers,
packaging material and the like are printed or produced in order to determine
whether or not proper quality controls are being exercised.
(b) Any item submitted to Turner under this Agreement shall not be
deemed approved unless and until Turner has approved it in writing.
A-6 LABELING
(a) As a condition to Turner's authorization of the public distribution
of items bearing reproductions of the Licensed Elements, including, without
limitation, Authorized Articles sold under this license and advertising,
promotional and display material therefor, all such items shall bear copyright
and trademark notices as set forth in Paragraph 11 of the Underlying Agreement
as well as any other legal notices which Turner may from time to time reasonably
direct.
(b) In the event that any Authorized Article is marketed in a carton,
container and/or packing or wrapping material employing the Licensed Elements,
such notice shall also appear upon the said carton, container and/or packing or
wrapping material. Each and every tag, label, imprint or other device containing
any such notice and all advertising, promotional or display material bearing the
Licensed Elements shall be submitted by Licensee to Turner for its written
approval prior to use by Licensee in accordance with Paragraph A-5 above. Any
such approval by Turner shall not constitute waiver of Turner's rights or
Licensee's duties under any provision of this Agreement.
A-7 TECHNICAL AND PROMOTIONAL MATERIAL
Turner reserves the right to require Licensee to pay for film footage
or other technical materials for which Turner from time to time might charge.
All technical materials involving the Licensed Elements or any reproduction
thereof, notwithstanding their invention, creation or use by Licensee, shall be
and remain the property of Turner, and Turner shall be entitled to use same and
to license the use of same by others provided such use does not conflict with
the terms of this Agreement. "Technical materials" shall mean all artwork and
designs, pictures, separations, textual material, screens, films, proofs and any
and all materials used in the creation, production and/or reproduction of the
Authorized Articles.
A-8 DISTRIBUTION
(a) Commencing not later than the Marketing Date specified in the
Underlying Agreement, and thereafter during the License Period (including any
extensions thereof), Licensee shall diligently and continuously manufacture,
sell, distribute and promote Authorized Articles in interstate commerce
throughout the Licensed Territory and Licensee shall make and maintain adequate
arrangements for the distribution of the Authorized Articles. Licensee's failure
(except as otherwise provided herein) to commence in good faith to manufacture
and distribute in substantial commercial quantities any of the Authorized
Articles on or before the Marketing Date and to continue during the License
Period diligently and continuously to manufacture, sell, distribute and promote
each such Authorized Article throughout the Licensed Territory will result in
immediate damage to Turner. In such a case, in addition to all other remedies
available to it hereunder, Turner may remove from this Agreement any Licensed
Elements listed in the Underlying Agreement or any article or class or category
of articles included within the definition of Authorized Articles which is not
so diligently and continuously used by Licensee for a period of three (3)
consecutive months, by giving thirty (30) days' written notice to Licensee.
(b) Unless expressly provided herein otherwise, Licensee shall not,
without the express prior written consent of Turner, permit the distribution or
other marketing of any Authorized Articles on an F.O.B. or L.C. basis (as those
terms are commonly understood in the international merchandising business). All
Authorized Articles distributed or marketed (as subject to Turner's prior
written approval) on an F.O.B. or L.C. basis will be subject to a Royalty Rate
of ten percent (10%).
(c) Licensee shall sell to Turner such quantities of the Authorized
Articles as Turner shall request at as low a rate and on as favorable terms as
Licensee sells similar quantities of the Authorized Articles to the general
trade.
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A-9 GOOD WILL AND PUBLICITY
(a) Licensee acknowledges that particular and substantial good will
values are associated with the Licensed Elements as well as the names "Turner
Entertainment Company", "Turner Home Entertainment, Inc.", "Hanna Barbera" and
all related corporate names, and that said Licensed Elements and names and all
rights therein and good will pertaining thereto belong exclusively to Turner.
Licensee further acknowledges that said Licensed Elements and names have
secondary meanings in the mind of the public and that the value thereof cannot
readily be fixed in amounts or sums of money. Licensee shall not by any act or
omission jeopardize such good will, and any good will developed hereunder shall
accrue to the benefit of Turner. Licensee acknowledges the necessity of
protecting Turner's name, copyrights and trademarks generally and specifically
to conserve the good will and good name of Turner and the Licensed Elements, and
the right of Turner to supervise or intervene in the activities of Licensee in
connection therewith.
(b) Turner shall have the right, but shall not be under any obligation,
to use the Licensed Elements and/or the name of Licensee so as to give the
Licensed Elements, Licensee, Turner and/or Turner's television programs and/or
motion pictures full and favorable prominence and publicity. Turner shall not be
under any obligation whatsoever to broadcast or exhibit, or to continue
broadcasting or exhibiting, any television program or motion picture or use the
Licensed Elements or any person, character, symbol, design or likeness or visual
representation thereof in any medium, nor shall Turner be restricted in any way
whatsoever from producing and distributing derivative works which contain or are
derived from the Licensed Elements or any element or component part thereof.
A-10 WARRANTIES AND REPRESENTATIONS
(a) By Turner. Turner has the right and power to enter into and perform
this Agreement, and has taken all steps necessary and appropriate to authorize
the execution and performance hereof. Turner owns or controls all rights
necessary to grant Licensee the rights granted to it hereunder.
(b) By Licensee. Licensee has the right and power to enter into and
perform this Agreement, and has taken all steps necessary and appropriate to
authorize the execution and performance hereof. Licensee will not act in any
manner that is inconsistent with the provisions hereof.
A-11 INDEMNIFICATION AND INSURANCE
Subject to the full performance by Licensee of all of its obligations
hereunder, Turner hereby indemnifies Licensee and undertakes to defend Licensee
against and hold Licensee harmless from all claims, suits, liabilities, losses,
damages, penalties, costs and expenses (including reasonable attorneys fees)
which may be suffered by or obtained against Licensee arising solely out of the
use by Licensee of the Licensed Elements in strict accordance with this
Agreement. Licensee hereby indemnifies Turner and undertakes to defend Turner
against and hold Turner harmless from any and all claims, suits, liabilities,
losses, damages, penalties, costs and expenses (including reasonable attorneys
fees, which may include, without limitation, an allocation for in-house counsel)
of any nature which may be suffered by or obtained against Turner arising from
(i) any allegedly unauthorized use of any patent, design, mark, process, idea,
method or device by Licensee (none of the same being included in the Licensed
Elements) in connection with the Authorized Articles or any other alleged action
or omission by Licensee constituting a breach by Licensee of any term or
provision of, or representation, warranty, covenant or agreement made by
Licensee under, this Agreement, and (ii) alleged defects in the Authorized
Articles, any alleged inadequacy or failure to perform any agreement or render
any service, or personal damages or injury resulting from the use of the
Authorized Articles. Licensee shall obtain, at its own expense, a comprehensive
general liability insurance policy for the entire License Period (including any
extensions thereof) including coverage for contractual liability (applying to
the terms and conditions of this Agreement), product liability, personal injury
liability and advertiser's liability, and including a vendor's liability
endorsement in favor of Turner. Said policy shall be written by a recognized
insurance company which has qualified to do business in the State of California,
the State of New York and the State of Georgia, or which has an A.M. Best
Company rating of "B" or better in the latest edition of Best's Insurance Guide
and Key Ratings, and shall provide for minimum combined single limit of
liability coverage of not less than $1,000,000 for each occurrence. As proof of
such insurance, fully paid certificates of insurance naming Turner as an insured
party will be submitted by Licensee to the following address for Turner's prior
approval before any Authorized Articles are distributed, advertised or sold, and
at the latest within thirty (30) days after
the commencement of the License Period: Turner Broadcasting System, Inc., One
CNN Center, Box 105366, Atlanta, GA 30348-5366, Attn: Director of Risk
Management. Any proposed change in such certificates of insurance shall be
submitted to Turner for its prior approval, and Licensee shall furnish Turner
with a copy of the then prevailing certificate of insurance. For purposes of
Licensee's indemnity and insurance policy coverage under this Paragraph,
"Turner" shall also include the officers, directors, shareholders, agents and
employees of Turner and Turner's parent, and of its and its parent's
subsidiaries, affiliates and related entities, as well as any person(s) the use
of whose name or likeness may be licensed hereunder.
A-12 PROTECTION OF TURNER'S RIGHTS
(a) Licensee acknowledges that Turner owns or controls the copyrighted
works which underlie this license and Licensee shall not during the term hereof
or thereafter attack the rights of Turner in the Licensed Elements or any
trademarks based thereon, regardless of the basis of such attack and regardless
of whether the same relates to title or validity. Licensee shall at no time use
or authorize the use of any trademark, trade name or other designation identical
with or confusingly or colorably similarly to the Licensed Elements.
(b) Licensee shall cooperate fully and in good faith with Turner for
the purpose of securing and preserving rights of Turner (or any grantor of
Turner) in and to the Licensed Elements. Turner may commence or prosecute any
claims or suits in its own name or in the name of Licensee or join Licensee as a
party thereto. Licensee shall immediately notify Turner in writing of any
infringements or imitations by others of the Licensed Elements on articles
similar to those covered by this Agreement, and Turner shall have the sole right
to determine whether or not any action shall be taken on account of any such
infringements or imitations. Licensee shall not institute any suit or take any
actions on account of any such infringements or imitations without first
obtaining the written consent of Turner so to do.
(c) Licensee shall utilize all necessary and adequate security measures
to prevent the loss, theft, destruction or unauthorized exploitation of the
technical materials and/or Licensed Elements delivered to Licensee, and Licensee
shall immediately report to Turner any such loss, theft, destruction or
unauthorized exploitation upon its gaining knowledge thereof. Upon the
expiration of the License Period (or earlier termination of this Agreement)
Licensee shall, at Turner's election, either erase or destroy all technical and
advertising materials relating to the Authorized Articles and provide Turner
with satisfactory proof of such erasure or destruction, or deliver such material
to Turner via such method as Turner specifies, on a charges collect basis.
(d) Licensee will be deemed to have simultaneously assigned,
transferred and conveyed to Turner any trade rights, trademark, service mark or
copyright, equities, good will, titles or other rights in and to the Licensed
Elements, including any copyright in an article derived from the Licensed
Elements, which may have been obtained or created by Licensee during the term
hereof pursuant to any endeavors covered hereby. Any such assignment, transfer
or conveyance shall be made without other consideration than the mutual
covenants and considerations of this Agreement. If any materials bearing the
Licensed Elements (or any element or component part thereof) utilized by
Licensee hereunder on or in connection with the Authorized Articles were not
created or owned by Turner, it is an essential condition of this Agreement that
Licensee shall do all that is necessary to ensure that such materials achieve
copyright protection and that valid title to such copyright is, at the earliest
possible moment, transferred to Turner. To this end, Licensee shall, among other
things, enter into a contract with anyone not directly in its employ who creates
such materials bearing the Licensed Elements, or any element or component part
thereof, which states that such materials are created as works made for hire, as
such term is defined in the U.S. Copyright Act, 17 U.S.C. Section. 101 et seq.,
or otherwise contractually bind such person to execute all such documents as may
be necessary to transfer valid title in the copyright in such materials to
Turner and shall arrange for the execution of such documents and their
transmittal to Turner at the earliest possible moment.
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(e) Licensee shall fully cooperate with Turner in undertaking the
registration of any copyright, trademark, service mark or other intellectual
property registration or filing with respect to the Licensed Elements and/or
Authorized Articles as requested by Turner in writing, and all such
registrations shall be in Turner's name (or such other name as Turner
designates). Such registration shall be handled by attorneys selected or
approved by Turner. In the event of any registration relating to the Licensed
Elements by Licensee in its own name or that of any third party, such
registration shall be deemed to be for Turner's benefit, and shall be held in
trust for Turner by Licensee. Licensee shall bear all costs, expenses, damages
and loss occasioned by such registration and/or Turner's correction of same.
(f) Licensee shall execute and deliver to Turner, in such form as
Turner shall reasonably request, any and all documents which may be necessary or
desirable to assist Turner in recording Licensee as a registered user of the
Licensed Elements (as trademark and/or servicemark) in the Licensed Territory,
if appropriate. Upon or after the expiration or termination of this Agreement,
Licensee shall execute and deliver to Turner, in such form as Turner shall
reasonably request, any and all documents which may be necessary or desirable to
cancel the recordation of Licensee as a registered user of the Licensed Elements
in the Licensed Territory; provided, however, that if Turner elects first to
complete the recordation of Licensee as a registered user, Licensee shall also
provide any and all documents which may be necessary or desirable to achieve
this purpose.
(g) Licensee shall not commingle on Authorized Articles manufactured
hereunder (or in the advertising and promotion thereof) names, characters and/or
likenesses from any individual motion picture or television program which are
included in the Licensed Elements with those associated with any other motion
picture or television program (whether or not containing elements included in
the Licensed Elements) without Turner's prior written consent.
(h) Turner may, in its absolute discretion, withdraw any element of the
Licensed Elements, or any component part thereof, from the terms of this
Agreement of Turner determines that the exploitation thereof hereunder would or
might violate or infringe or reasonably tend to violate or infringe the
copyright, trademark or other rights of third parties, or subject Turner to any
liability, or violate any law, court order, government regulation or other
ruling of any governmental agency, or if, on account of the expiration or sooner
termination of an agreement between Turner and a third party from whom Turner
has obtained certain underlying rights relating to the exploitation of the
Licensed Elements hereunder or otherwise, Turner shall no longer have the right
to act in the capacity herein contemplated on behalf of any third party or
parties, or if Turner determines that it cannot adequately protect its rights in
the Licensed Elements under the copyright, trademark or other laws of the
Licensed Territory; provided, however, that in the event of any such withdrawal,
Turner shall reimburse Licensee its actual, out-of-pocket cost of any Authorized
Articles (bearing such withdrawn Licensed Element) which were produced, but not
sold, prior to Licensee's receipt of notice of such withdrawal. Any such
withdrawal shall not constitute grounds for termination of this Agreement unless
all elements and component parts of the Licensed Elements are simultaneously
withdrawn by Turner.
A-13 DEFAULT
The following shall be events of default hereunder: if Licensee (i)
becomes the subject of any bankruptcy proceeding, becomes insolvent, makes an
assignment for the benefit of its creditors, or a receiver, liquidator or
trustee is appointed for its affairs, (ii) breaches any other agreement with
Turner, (iii) fails to make payment of royalties, Guarantee(s) and/or any other
sums payable to Turner pursuant to this Agreement when due or fails to perform
any of its other material obligations hereunder or otherwise breaches any
representation, warranty, covenant or agreement referred to or contained in this
Agreement, and does not fully cure such failure or breach within ten (10)
business days after receipt of written notice thereof from Turner, in the case
of failure to make payments, or within fifteen (15) business days in the case of
other failure or breach, or (iv) discontinues its business or loses any license
or authorization required to permit Licensee to perform fully its obligations
hereunder pursuant to an action of any duly constituted governmental, judicial
or legislative authority. Upon any default, Turner may, in addition and without
prejudice to any other rights it may have, terminate this Agreement, in which
event the entire unpaid balance of all royalties and Guarantees accrued to
Turner's account hereunder shall immediately become due and payable. In the
event this Agreement is so terminated, Licensee, its receivers, representatives,
trustees, agents administrators, successors, and/or assigns shall not have the
right to sell, exploit or in any way deal with or in any Authorized Articles or
any carton, container, packing or wrapping material, advertising, promotional or
display materials pertaining thereto, except with and under the special consent
and instructions of Turner in writing, which they shall be obligated to follow.
A-14 FORCE MAJEURE
This license shall terminate in the event that any act of God, fire,
flood, public disaster, or any action, rule, regulation, requirement or order of
any governmental authority or any other cause or reason beyond the control of
the parties renders performance impossible and one party so informs the other in
writing of such causes and its desire to be so released. In such event, all
royalties on sales theretofore made shall become immediately due and payable and
neither the Guarantee nor any portion thereof shall be repayable.
A-15 EFFECT OF TERMINATION OR EXPIRATION
Upon and after the expiration or sooner termination of this license,
(a) all rights licensed to Licensee hereunder shall forthwith revert to Turner,
(b) if the Underlying Agreement specifies that the license granted hereunder is
an exclusive license, Turner shall be free to license others to use the Licensed
Elements in connection with the manufacture, sale, distribution and promotion of
the Authorized Articles in the Licensed Territory (it being acknowledged that
Turner has the full and complete right so to do during the License Period if the
license granted hereunder is a non-exclusive license), and (c) Licensee shall
refrain from further use of the Licensed Elements or any further reference,
direct or indirect, thereto or to anything deemed by Turner to be similar to the
Licensed Elements, in connection with the manufacture, sale, distribution or
promotion of Licensee's products, except as permitted in Paragraph A-17 below.
It shall not be a violation of any right of Licensee if Turner should at any
time during the License Period enter into negotiations with another to license
use of the Licensed Elements in respect of the Authorized Articles within the
Licensed Territory provided that, in the event that the license granted to
Licensee hereunder is an exclusive license, it is contemplated that such
prospective license shall commence after termination of this Agreement. In the
event of any termination hereunder, no monies or other consideration with Turner
may receive in respect of any licenses of the Licensed Elements within or
outside the Licensed Territory shall be deemed in mitigation of, or be otherwise
offset, credited or applied against, any sums payable to Turner pursuant to this
Agreement.
A-16 FINAL STATEMENT
Ninety (90) days before the expiration of the License Period, and, in
the event of its sooner termination, ten (10) business days after receipt of
notice of termination, a statement showing the number and description of
Authorized Articles on hand or in process shall be furnished by Licensee to
Turner. Turner shall have the right to take a physical inventory to ascertain or
verify such inventory and statement. Refusal by Licensee to submit to such
physical inventory by Turner and/or failure by Licensee to render the final
statement as and when required by this provision, shall result in a forfeiture
by Licensee of Licensee's right to dispose of its inventory (as provided by the
next paragraph hereof), Turner retaining all other legal and equitable rights
Turner may have in the circumstances.
A-17 DISPOSAL OF INVENTORY
(a) Licensee shall not at any time manufacture Authorized Articles in
excess of those reasonably anticipated to meet normal customer requirements.
Provided that Licensee is in compliance with the foregoing, after termination or
expiration of the license under the provisions hereof, Licensee, except as
otherwise provided in this Agreement, may dispose of Authorized Articles which
are on hand or in process at the time notice of termination is received or upon
the expiration date, whatever the case may be, for a period of ninety (90) days
thereafter, on a nonexclusive basis, provided Guarantee and royalty payments are
up-to-date for the current period and payments and statements are made and
furnished for that period in accordance with Paragraph A-2 above. Licensee shall
not be authorized to dispose of such excess inventory to the extent that it
exceeds ten percent (10%) of the total number of Authorized Articles sold during
the License Period, without Turner's prior written consent.
4
Notwithstanding anything to the contrary herein, Licensee shall not manufacture,
sell or dispose of any Authorized Articles after any expiration or termination
of this license based on the failure of Licensee to affix notice of copyright,
trademark or servicemark registration or any other notice to the Authorized
Articles, cartons, containers or packing or wrapping material or advertising,
promotional or display material or because of the departure by Licensee from the
quality and style approved by Turner pursuant to Paragraph A-5 above. All
applicable royalties shall be paid on Authorized Articles sold during the
sell-off period within fifteen (15) days following the expiration of said
sell-off period. Any Authorized Articles which have not been sold as of the
expiration of the sell-off period shall, at Turner's election, be delivered to
Turner or destroyed.
(b) Licensee acknowledges that its failure (except as otherwise
provided herein) to cease the manufacture, sale, distribution or promotion of
the Authorized Articles or any class of category thereof after the termination
or expiration of this Agreement or any portion thereof will result in immediate
and irremediable damage to Turner and to the rights of any subsequent licensee,
Licensee acknowledges and admits that there is no adequate remedy at law for
such failure to cease manufacture, sale, distribution or promotion, and Licensee
agrees that in the event of such failure, Turner shall be entitled to equitable
relief by way of temporary and permanent injunctions and such other and further
relief as any court with jurisdiction may deem just and proper, other provisions
to the contrary elsewhere herein notwithstanding.
A-18 ASSIGNMENT
Turner reserves the right to assign this Agreement to any third party
and to hypothecate or pledge this Agreement as collateral for any purpose. In
the event of any such assignment, Licensee shall pay the royalties and
Guarantees due hereunder as directed by Turner. This Agreement shall be binding
upon and shall inure to the benefit of the successors and assigns of Turner. The
license herein granted is personal to Licensee and this Agreement may not be
assigned, transferred, sublicensed, pledged, mortgaged or otherwise encumbered,
in whole or in part, by Licensee either voluntarily or by operation of law or as
part of a merger, consolidation or otherwise without Turner's prior written
consent, which shall not be unreasonably withheld.
A-19 NOTICES
All notices, statements, accountings and other documents required to be
given or delivered hereunder shall be given in writing either by personal
delivery, by certified mail which delivery is evidenced by a signed receipt, or
by telex or telecopier unless otherwise specified. Licensee's and Turner's
respective addresses for notice purposes shall be as set forth in the Underlying
Agreement unless either party notifies the other as provided herein that notices
to such party should be sent to a different address. All such notices shall be
sufficiently given when the same shall be deposited, so addressed, postage
prepaid in the mail, or when the same shall have been telexed, telecopied or
personally delivered to the recipient. The date of said telexing, telecopying or
personal delivery, or the date which is three (3) business days following the
date of said mailing, shall be deemed to be the date of the giving of such
notice, except statements and payments to Turner hereunder and notice of change
of address, which shall be deemed effective only upon actual receipt thereof.
A-20 FURTHER DOCUMENTS
Licensee shall execute, verify, acknowledge, deliver and file any
formal assignments, recordations and any and all other documents which Turner
may prepare and reasonably call for to give effect to any of the provisions of
this Agreement. If Licensee fails to do so within ten (10) days after Turner
requests such execution, verification, acknowledgment, delivery or filing,
Licensee hereby irrevocably appoints Turner its attorney-in-fact (which
appointment shall be deemed a power coupled with an interest), with full powers
of substitution and delegation, to execute, verify, acknowledge and deliver any
such assignments, recordations and/or such other documents.
A-21 MISCELLANEOUS PROVISIONS
In the event any provision of this Agreement shall be found to be
contrary to any law or regulation of any federal, state or municipal
administrative agency or body, the other provisions of this Agreement shall not
be affected thereby but shall notwithstanding continue in full force and effect.
If any legal action or other proceeding is brought for the enforcement of this
Agreement or as a result of a breach, default or misrepresentation in connection
with any of the provisions of this Agreement, the successful or prevailing party
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in such action or proceeding, in addition to any other relief to which such
party may be entitled. No waiver by either party hereto of any breach or default
by the other party shall be construed to be a waiver of any other breach or
default by such other party. Resort to any remedies referred to herein shall not
be construed as a waiver of any other rights and remedies to which either party
is entitled under this Agreement or otherwise, nor shall an election to
terminate be deemed an election of remedies or a waiver of any claim for damages
or otherwise. This Agreement may not be altered or modified except in writing
signed by the party to be charged with such alteration or modification. This
Agreement constitutes the entire understanding between the parties with respect
to the subject matter hereof and all prior understandings, whether oral or
written, have been merged herein. Irrespective of the place of execution or
performance, this Agreement shall be governed, construed and enforced in
accordance with the laws of the State of Georgia applicable to agreements
entered into and to be wholly performed therein, the Licensee hereby consents to
the exclusive jurisdiction of the courts of the State of Georgia and United
States courts located in the State of Georgia in connection with any suit,
action or proceeding brought by Licensee arising out of or related in any manner
to this Agreement. Licensee agrees that the service of process by mail shall be
effective service of same and that such service shall have the same effect as
personal service within the State of Georgia and result in jurisdiction over
Licensee in the appropriate forum in the State of Georgia. Nothing herein
contained shall constitute a partnership between or joint venture by, the
parties hereto or constitute either party the employee or agent of the other,
and Licensee shall have no right or power to obligate or bind Turner in any
manner whatsoever. This Agreement is not for the benefit of any third party and
shall not be deemed to give any right or remedy to any third party whether
referred to herein or not. Paragraph headings as used in this Agreement are for
convenience only and are not a part hereof, and shall not be used in any manner
to interpret or otherwise modify any provision of this Agreement. As used
herein, the word "person" means any individual, firm, partnership, association,
corporation or other entity.
END OF STANDARD TERMS AND CONDITIONS
5
EXHIBIT "B"
Date: ______
Page ___ of ____ LICENSEE ROYALTY REPORT
NOTE: THIS FORM MUST BE [LOGO]
SUBMITTED WHEN DUE WHETHER TURNER HOME ENTERTAINMENT
OR NOT THERE ARE ANY SALES Territory: ________
IN THE PERIOD. Film/Series/ ________
Licensee: ______ Contract Date: Property: ________
Address: ______ Product Description:
Address: ______
Address: ______
Phone #: ______
Fax #: ______
Contact: ______
Current Period
- ------------------------------------------------------------------------------------------------------------------------------------
Total
Contract Minimum Product Character Units Total Royalty Royalties Unit Gross
Number Guarantee Code Likeness Shipped Sales % Earned Price Sales
- ----------- ------------ ------------ -------------- ------------ --------- ------------ ------------- ------------ -----------
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
Totals ________ _______ _________ ________
- --------------------------------------------------------------------------------
Statement of Certification
I certify that all sales of Licensed Product(s) for the period of ____________
have been reported in the above Royalty Report, that the above report is in
accordance with the License Agreement dated _____________, and that the above
figures are an accurate statement of actual figures appearing in the relevant
invoices.
- ------------------------------- ------------------
Officer of Licensee Date
- --------------------------------------------------------------------------------
Inception to Date
- ------------------------------------------------------------------------------------------------------------
Net
Total Royalty Royalties Advances Less Less Amount
Returns Sales % Earned Paid Commissions Taxes Due
- ------------ ------------- ------------- ------------ ----------- -------------- --------- -----------
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
--------------- -----------------------------------
Period Reported Guarantee $_____
---------------
---------------
From To Unearned Guarantee $_____
_______ ______ ------------------------------------
_______ ______
----------------- Reviewed By ______________
Check # ______________
Check Amount ______________