EXHIBIT 10.2
WORLD WRESTLING FEDERATION
CONSUMER PRODUCTS LICENSE AGREEMENT
THIS WORLD WRESTLING FEDERATION CONSUMER PRODUCTS LICENSE AGREEMENT
("Agreement"), entered into on this 13th day of October, 1998 and effective as
of January 1, 1999, by and between TITAN SPORTS, INC., a Delaware corporation
with its principal office at Titan Tower, 1241 East Main Street, Stamford,
Connecticut 06902 ("Titan"), and Power Photo Enterprises, Inc., a Canadian
Corporation with its principal office at 181 Whitehall Drive, Unit #1, Markham,
Ontario, Canada L3R 4T1 (the "Licensee"). In consideration of the promises and
undertakings set forth below, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby established, Titan and Licensee
hereby agree as follows;
1) Definitions. For purposes of this Agreement the following definitions
shall apply:
a) The term "Advertising Materials" shall mean all advertising
and promotional materials and all packaging, wrapping, and labeling
materials for the Licensed Products (including, by way of illustration
but not limitation, catalogs, trade advertisements, flyers, sales
sheets, labels, package inserts, hangtags, and displays) which are
produced by or for the Licensee and which make use of the Intellectual
Property.
b) The term "Copyrights" shall mean all copyrights now or
hereafter owned by Titan relating to the Events or the Talent.
c) The term "Events" shall mean the professional wrestling
events produced, promoted, and performed by Titan, whether live, via
television, or via any other method of dissemination now known or
hereinafter discovered, provided however, the term Events shall not
include any comic, cartoon, or animated events, characters,
characterizations, designs or visual representations, including without
limitation comic books, magazines or portions of magazines, animated
television programs or portions of programs, and comic, cartoon or
animated internet events, even if such comic, cartoon, or animated
events, characters, characterizations, designs or visual
representations are subsequently produced, promoted or performed by
Titan otherwise.
d) The term "Intellectual Property" shall mean the Rights
of Publicity, the Trademarks, the Copyrights, and all other
proprietary rights relating to the Talent and/or Events.
e) (i) The term "Kiosks" shall mean the following items:
Automatic photo kiosks and automatic photo booths which
include image package software containing the intellectual
Property, each of which shall have specialized signs placed
on the booths and/or kiosks depicting World Wrestling
Federation logos, sayings and trademarks and/or the
Intellectual Property defined herein, and as approved in
advance bv Titan. Notwithstanding the kiosks can only
display advertising or graphics utilizing the Intellectual
Property if said kiosks actually sell the Licensed Products,
as defined herein.
(ii) The term Licensed Products" shall mean:
the Kiosks, photographs and other materials produced by the
operation of the Kiosks which shall contain portions of the
Intellectual Property.
f) The term "Retail Sales Price" shall mean the purchase price of
Licensed Products sold directly to the ultimate consumer at retail outlets or
through mail order, catalogs or any other forms of direct response.
g) The term "Rights of Publicity" shall mean the likenesses,
physical characteristics, personalities, characters, and personas of the Talent.
h) The term "Talent" shall mean all individuals who perform in or at
the Events, including, but not limited to, the professional wrestlers who
perform in the Events.
i) The term "Territory" shall mean the United States, its
territories and possessions and Canada.
j) The term "Trademarks" shall mean all symbols, designs, styles,
emblems, logos, and marks used in connection with the Events and/or Talent,
including, but not limited to, the name WORLD WRFSTLING FEDERATION, the WWF logo
or logos, the mark WORLD WRESTLING FFDERATION SUPFRSTARS, and the names
nicknames or other distinctive and identifying indicia of the Talent, but
excluding the initials WWF in block letters.
k) The term "Owner" shall mean the purchasers of Kiosks from
Licensee who shall operate the Kiosks and sell the Licensed Products as
retailers.
2) Grant of License; Channels of Distribution Reserved to Titian.
a) Grant of License. Titan grants to the Licensee, upon the terms and
conditions set forth in this Agreement, the exclusive right and license to use
the Intellectual Property in connection with the manufacture, distribution,
sale, and advertising of the Licensed Products, in the Territory during the term
of this Agreement, as defined below, through all channels of distribution except
those reserved to Titan under subparagraph 2(b). The exclusive right and license
granted hereunder shall pertain only to the items specifically set forth in
subparagraph 1(e) above entitled "Licensed Products". Licensee shall not make
use of or authorize any use of this License or the Licensed Products outside the
Territory or distribute or sell the Licensed Products directly or through others
to wholesalers or retailers outside the Territory. Licensee is further
prohibited from selling or transferring the Licensed Products in any manner to
any party or entity, within the Territory, other than a wholesaler or retailer,
as those terms are customarily understood, or an Owner as defined herein. For
the avoidance of doubt, Licensee may not sell to any who1esaler or retailer or
any other entity when Licensee knows or has reason to believe that the Licensed
Products will be sold by street vendors and/or other similar non-conventional
manners of distribution. Licensee shall also not manufacture, sell or distribute
the Licensed Products to any party or entity who changes, alters, or adds to the
Licensed Products in any manner whatsoever and/or then resells or distributes
the Licensed Products to retailers, wholesalers, vendors or the general public,
unless approved in advance in writing by Titan. Notwithstanding anything to the
contrary herein, Licensee shall have the writing by Titan. Notwithstanding
anything to the contrary herein, Licensee shall have the right to sell
and/or distribute the Kiosks to Owners, as defined herein. The right to sell
and/or distribute same is conditioned upon Licensee entering into written
agreement with all Owners, incorporating similar provisions for the protection
of the Intellectual Property and Titan as set forth herein or as otherwise
directed by Titan. Licensee further agrees to furnish Titan within thirty (30)
days of their execution, copies of all agreements with such entities.
b) Titan's Channels of Distribution
i) The rights granted to the Licensee by Titan under
subparagraph 2(a) shall not include the right to distribute the Licensed
Products through the following Titan channels of distribution; (i) sales at
World Wrestling Federation Events; (ii) World Wrestling Federation catalog
sales; (iii) World Wrestling Federation direct mail sales; (iv) sales via
television or other electronic media now known or hereinafier discovered,
relating to the World Wrestling Federation, and (v) World Wrestling Federation
vending machine sales.
ii) During the term of this Agreement, as defined below,
Licensee, its distributors, manufacturers, vendors, agents and/or
representatives agree not to sell, distribute or otherwise disseminate any of
the Licensed Products within a five (5) mile radius of an Event. The preceding
sentence does not include retailers and/or wholesalers, as those terms are
customarily understood, with permanent pre-existing store fronts within that
five (5) mile radius. Licensee agrees to enter into a written agreement with
every distributor, manufacturer, vendor, agent or other representative related
in any manner to the Licensed Products and as a condition to this Agreement,
incorporate into such agreements the limitations specifically set forth in the
preceding sentence, for the sole benefit and protection of Titan's rights
hereunder. Licensee further agrees to furnish Titan within thirty (30) days of
their execution, copies of all agreements with such entities. The failure to
comply with any aspect of this Paragraph is a material breach and Titan shall
have the right to immediately terminate this Agreement.
iii) Licensee agrees to defend, indemnify and hold Titan
and its licensees, successors and assigns, parent corporation, subsidiaries and
affiliates and its and their respective officers, directors, employees,
advertisers, insurers and representatives harmless from any and all liabilities,
claims, suits, judgments, costs or damages, including but not limited to
reasonable attorneys fees including an appropriate allocation for in house
counsel, related in any manner to the seizure of Licensed Products at an Event
within the five (5) mile radius specified above. This provision is in addition
to and in no way limits Section H in the Standard Terms and Conditions attached
hereto.
c) Minimum Product Development Requirement. As a material condition to
this Agreement, Licensee shall, at a minimum, sell, distribute or otherwise
disseminate the following numbers of Licensed Product per each contract year of
the Agreement as defined below:
One Hundred (100) Licensed Products in the first (1st) contract
year;
Five Hundred (500) Licensed Products in second (2nd) contract
year;
One Thousand (1,000) Licensed Products in third (3rd) contract
year;
One Thousand Five Hundred (1,500) Licensed Products in the fourth
(4th) contract year; and
Two Thousand (2,000) Licensed Products in the fifth (5th) contract year.
For the avoidance of doubt, each calendar year of the Agreement (i.e. January 1,
1999 to December 31, 1999, January 1, 2000 to December 31, 2000, etc.) shall
hereinafter be referred to as Contract Year. Failure to meet the conditions set
forth in this provision may result in immediate termination of this Agreement by
Titan.
3) Period of Agreement. The period of this Agreement shall commence on
January 1, 1999 and end on December 31, 2003 (hereinafter "Term"), unless
terminated earlier pursuant to the terms hereof. Thereafter, if the Licensee
wishes to renew this Agreement, it shall provide written notice of such intent
to Titan no less than sixty (60) days prior to the commencement of the renewal
period in quesnon. In that event, provided the Licensee is not in default of any
term under this Agreement, and further provided that Licensee has paid to Titan
all royalties during the then current period, Titan will discuss with Licensee
such potential renewal, and the terms thereof. No renewal period will be
effective unless and until the parties reach a mutual written agreement as to
the terms applicable to such renewal. This paragraph is in no way to be
construed so as to obligate Titan to renew this Agreement, or to renew this
Agreement with any particular terms.
4) Royalties. In consideration of the rights granted to it under this
Agreement, the Licensee agrees to pay Titan the following royalties:
a) Advance Royalties. On execution of this Agreement, the Licensee
agrees to pay to Titan the following non-refundable Advance Royalty Amount,
which shall be set off as a credit against the royalties due to Titan under
subparagraph 4(b):
Advance Royalty Amount
Five Thousand US Dollars (US $5,000.00)
If Titan has not received the Advance Royalty Amount due on the execution of
this Agreement within fifteen (15) days from the date of Titan's execution of
this Agreement, Titan shall have the right to terminate this Agreement, with
immediate effect, by providing the Licensee with written notice of termination
b) Percentage Royalties. Percentage royalties shall be computed as
follows;
i) The Licensee shall pay Titan a percentage royalty
of Six Percent (6%) of the Retail Sales Price on all sales of the Licensed
Products, excluding the kiosks by the Licensee to its customers or distributors.
For greater certainty, the parties hereto agree that there will be no royalty
payable on the sale or repurchase of any kiosk by the Licensee.
ii) All royalty computations under this subparagraph
4(b) shall be made on the basis of the Retail Sales Price charged by the
Licensee, or, if the Licensee sells a Licensed Product to a subsidiary or other
party controlled by the Licensee, on the basis of the Retail Sales Price for
such Licensed Product charged by such subsidiary or controlled party on the sale
of the Licensed Product.
c) Guaranteed Royalties. If the total of alt royalties payable to
Titan under the foregoing subparagraphs 4(a) and 4(b) is less than the
Guaranteed Royalty Amounts set forth below, the Licensee shall pay Titan, on or
before the dates stated in the payment schedule
below, the difference between the Guaranteed Royalty Amounts and the total of
all royalties paid to Titan under subparagraphs 4(a) and 4(b):
GUARANTEED ROYALTY AMOUNT
One Hundred Thousand US Dollars (US $100,000.00)
DUE DATE AMOUNT DUE
Upon execution of Agreement US $5,000.00
April 30, 1999 US $5,000.00
July 31, 1999 US $5,000.00
October 31, 1999 US $5,000.00
January 31,2000 US $5,000.00
April 30, 2000 US $5,000.00
July 31,2000 US $5,000.00
October 31 2000 US $5,000.00
January 31,2001 US $5,000.00
April 30,2001 US $5,000.00
July 31,2001 US $5,000.00
October 31,2001 US $5,000.00
January 31,2002 US $5,000.00
April 30, 2002 US $5,000.00
July 31,2002 US $5,000.00
October 31, 2002 US $5,000.00
January 31,2003 US $5,000.00
April 30, 2003 US $5,000.00
July 31,2003 US $5,000.00
October 31,2003 US $5,000.00
TOTAL US $100,000.00
5) Non-Competition. Licensee agrees, represents and warrants that during
the Term of this Agreement and for one (1) year after the termination or
expiration thereof, it shall not produce any products or provide any services
using the name and/or other trademarks or service marks associated with World
Championship Wrestling, New World Order or any subsidiary or affiliate thereof,
or for or on behalf of any other wrestling organization owned by Time Warner,
Inc., Turner Broadcasting Systems, Inc. or any subsidiary or affiliate thereof.
6) Marketing Plans. Within ninety (90) days of the execution of this
Agreement, and on or before each one (1) year anniversary of the commencement
date of this Agreement, the Licensee shall provide Titan with a written
marketing plan with respect to the Licensed Products. Each such marketing plan
shall include, on a Licensed Product-by-Licensed Product basis, a marketing
timetable, sales projections, channels and methods of distribution, nature and
amount of advertising and advertising expenditures, and any other information
which Titan may ask the Licensee to include. Each marketing plan shall contain
specific information for the one (1) year period immediately succeeding its
submission and general estimates or projections for subsequent periods during
which this Agreement remains in effect.
7) Advertising Expenditures: Promotion of Events
a) Advertising Expenditures. Licensee shall be required to expend no
less than two percent (2%) of the total annual revenues from sales of the
Licensed Products to advertise said Licensed Products via television, print
media, radio, billboards or any other form of advertising ("Advertising
Expenditures"). In addition, the Licensee is required to advertise at its own
cost, the Licensed Products in the World Wrestling Federation Magazine at no
less than two (2) times per year. Licensee shall keep accurate account and
copies of all documents and records relating to said Advertising Expenditures
and shall be required to send in quarterly reports simultaneously with its
quarterly royalty statements describing the nature and amount of Advertising.
b) Promotion of Events. Licensee agrees that it will incorporate
information associated with the Events and/or Talent as directed by Titan on all
packaging, product inserts and wrapping materials for the Licensed Products.
8) Display of Official Tag.
a) Licensee agrees and shall undertake to attach to each Licensed
Product and/or Kiosk an "Officially Licensed WWF Product" tag or label in a form
prescribed and/or approved by Titan ("Official Tag"). In addition, Licensee
shall cause its own name to appear on each Licensed Product and/or its Kiosks on
a tag or label in a form prescribed and/or approved by Titan.
b) Licensee agrees to defend, indemnify and hold Titan and its
licensees, successors and assigns, parent corporation, subsidiaries and
affiliates and its and their respective officers, directors, employees,
advertisers, insurers, and representatives harmless from any and all
liabilities, claims, suits, costs, judgments, damages, including but not limited
to reasonable attorney fees including an appropriate allocation for in house
counsel, related in any manner to the seizure of any of the Licensed Products
resulting from Licensee's failure to affix the Official Tag and/or Licensee's
name to any Licensed Product or Kiosks pursuant to this paragraph. This
provision is in addition to and in no way limits Section H in the Standard Terms
and Conditions attached hereto.
9) Licensee Acknowledgment. The Licensee by executing this Agreement
acknowledges that it has reviewed and understands all provisions of this
Agreement, including the attached Standard Terms and Conditions.
10) Standard Terms and Conditions. This Agreement is subject to all of
the provisions of the Standard Terms and Conditions which are attached to and
made a part of this Agreement by reference.
11) Attorney Acknowledgment. Each party has reviewed the terms of this
Agreement with their respective attorneys and, as a direct result thereof, has
executed this Agreement with the consent and acknowledgment of their attorneys.
12) Conflict. In the event of a conflict between this Agreement and the
attached Standard Terms and Conditions, the provision of this agreement shall
govern.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth above.
TITAN
SPORTS, INC.
(" Titan")
By: /s/ Linda E. McMahon
------------------------
Linda E. McMahon
President and CEO
Date:
POWER PHOTO ENTERPRISES, INC.
("Licensee")
By: Ron Thompson
-------------------
Its: President
Date: Nov. 27th 1998
WORLD WRESTLING FEDERATION LICENSE AGREEMENT
STANDARD TERMS AND CONDITIONS
SECTION A. QUALITY CONTROLS AND APPROVAL PROCEDURES FOR LICENSED
PRODUCTS AND ADVERTISING MATERIALS
A(1) Warranty of Quality. The Licensee warrants that the
Licensed Products will be of good quality in design, material, and
workmanship and suitable for their intended purpose; that no
injurious, deleterious, or toxic substances will be used in or on the
Licensed Products; that the Licensed Products will not cause harm
when used as instructed and with ordinary care for their
intended purpose; and that the Licensed Products will be
manufactured, sold; and distributed in strict compliance with all
applicable laws and regulations Licensee agrees not to ship, sell or
have its manufacturer(s) ship or sell any Licensed Products or
component pans of the Licensed Products containing the Intellectual
Property if they are damaged, defective, irregular, seconds, or
otherwise unacceptable to the Licensee and/or Titan.
A(2) Approval Procedures for Licensed Products and
Advertising Materials Approval Standards: Time for Approval by Titan.
a) General. The Licensee shall comply with all
reasonable procedures which Titan may from time to time adopt
regarding its approval of Licensed Products and Advertising Materials
which the Licensee proposes to manufacture, sell, or use under this
Agreement. These approval procedures shall be implemented using
prescribed forms to be supplied to the Licensee by Titan, and shall
incorporate the basic approval requirements and steps outlined in the
following sections. The Licensee agrees to retain all materials
relating to approvals in its files while this Agreement remains in
effect and for one year thereafter.
b) Approval of Licensed Products. With respect to
each different Licensed Product which the Licensee proposes to
manufacture and sell under this Agreement, the Licensee shall submit
to Titan for its review and approval the following materials in the
order stated:
i) a generic sample of the type of
Licensed Product in question (that is, a sample of this kind of
merchandise article to which the Licensee proposes to add the
Intellectual Property in producing the Licensed Product, showing the
general quality standard which will be met by the Licensed Product);
ii) finished art for the Licensed Product,
showing the exact use of the Intellectual Property on or in connection
with the proposed Licensed Product; iii) a preproduction prototype
sample of the Licensed Product, where appropriate, or a preproduction
final sample of the Licensed Product, showing in either case the exact
form, finish, and quality the Licensed Product will have when
manufactured in production quantities; and
iv) forty-eight (48) identical production
samples of the Licensed Product, to be submitted immediately upon
commencement of production.
v) The Licensee shall comply with all of
the foregoing approval steps for each Licensed Product, obtaining
Titan's written approval at each step of the procedure unless by prior
written notice from Titan it is exempted from any such step with
respect to a specific Licensed Product.
c) Approval of Advertising Materials. With respect to each
different item of Advertising Material which the Licensee (or any
party acting on its behalf) proposes to produce and use under this
Agreement, the Licensee shall submit to Titan for its review and
approval the following materials, in the order stated;
i) proposed written copy for the item of Advertising
Material, with attached rough art showing how the Intellectual
Property will be used in connection with the copy;
ii) a final printed sample of the item, where feasible
(as, for example, in the case of labels, hangtags, printed brochures,
catalogs, and the like).
d) Approval Standards. Titan shall have the right to
disapprove any materials submitted to it under Sections A(2)(b) or
A(2)(c) if it determines, in its sole and unfettered discretion, that
the materials in question would impair the value and good will
associated with the Talent, Events or Titan's licensing program for
the Intellectual Property, by reason of (i) their failure to satisfy
the general quality standards including those set forth in Section
A(l); (ii) their use of artwork, designs, or concepts which fail to
depict accurately the Talent, Events and/or the Intellectual
Property; (iii) their use of materials which are unethical, immoral,
or offensive to good taste; (iv) their failure to carry proper
copyright or trademark notices; (v) any other reasonable cause.
e) Time for Approval bv Titan. Titan agrees to use
reasonable efforts to notify the Licensee in writing of its approval
or disapproval of any materials submitted to it under Sections
A(2)(b) and A(2)(c) within fifteen (15) business days after its
receipt of such materials, and agrees, in the case of its
disapproval, to notify the Licensee in writing of its reasons for
disapproval. In the event Titan fails to approve or disapprove of any
materials submitted as provided for above within twenty (20) business
days after Titan's receipt of such materials, the materials shall be
deemed disapproved.
A(3) Maintenance of Quality of Licensed Products:
Inspection of Production Facilities. The Licensee agrees to maintain
the quality of each Licensed Product manufactured under this
Agreement up to the specifications, quality, and finish of the
production sample of such Licensed Product approved by Titan under
Section A(2)(b), and agrees not to change the Licensed Product in any
respect or to make any change in the artwork for the Licensed Product
without first submitting to Titan samples showing such proposed
changes and obtaining Titan's written approval of such samples, in
the manner, order and form set forth in subsections A(2)(b) and/or
A(2)(c). From time to time after it has commenced manufacturing the
Licensed Products, the Licensee, upon request, shall furnish free of
charge to Titan a reasonable number of random production samples of
any Licensed Products specified by Titan. The Licensee shall also
furnish to Titan upon request the addresses of the production
facilities used by the Licensee for manufacturing the Licensed
Products, and shall make arrangements for Titan or its
representatives to inspect such production facilities during
reasonable business hours
A(4) Miscellaneous.
a) Artwork for Licensed Products. If the Licensee
requests Titan to furnish it with any photographs or special artwork
incorporating the Intellectual Property, the Licensee agrees to
reimburse Titan for its costs of supplying such materials to the
Licensee.
b) Translations, All translations of written
material used on or in connection with the Licensed Products or
Advertising Materials shall be accurate, and the Licensee, when
submitting the Licensed Products and the Advertising Materials for
approval, shall provide Titan with translations of all such written
materials in English.
c) Use of Talent in Licensed Products and
Advertising Materials. With prior written consent of Titan, Licensee
shall be allowed to use any Talent for purposes of explicit
endorsement in any Licensed Product or items as contemplated by the
definition of Intellectual Property set forth above.
d) Transactions with Other Licensees. The
Licensee shall not, without Titan's prior written consent, (i) sell
or deliver to another Titan licensee the films or other devices used
by the Licensee to produce the Licensed Products; or (ii) print or
otherwise produce any items using the Intellectual Property for
another Titan licensee.
e) Duplicate Films. If the Licensee in connection
with the manufacture of the Licensed Products develops film or other
reproductive media incorporating the Intellectual Property, the
Licensee, when requested by Titan to do so, shall supply duplicates
of such films or other reproductive media to Titan or any of its
licensees, at cost of duplication plus ten percent (10%).
f) Titan's Right to Purchase Licensed Products.
In addition to the random production samples of the Licensed Products
to be supplied by the Licensee to Titan free of charge under Section
A(3), Titan shall be entitled at any time while this Agreement
remains in effect to purchase from the Licensee (i) any available
quantity of the Licensed Products as may be reasonably available at
the Licensee's best wholesale price and (ii) in the case of a
manufacturer's closeout such inventory must first be offered to Titan
at no more than 110% of the Licensee's cost of manufacture.
SECTION B. EFFORTS TO SELL LICENSED PRODUCTS: RESTRICTIONS
ON SALE
B(1) Manufacture and Sale of Licensed Products. The
Licensee agrees to manufacture the Licensed Products at the Licensee's
own expense in sufficient quantities to meet the reasonably
anticipated demand. The Licensee also agrees to exercise reasonable
efforts to advertise and promote the Licensed Products at its own
expense and to use its best efforts to sell the Licensed Products in
the Territory.
B(2) Good Faith Effort to Exploit Rights. If within three
(3) months of the execution of this Agreement, the Licensee has
failed to take any good faith steps to exploit the rights granted to
it (for example, by seeking to obtain Titan's approval of a proposed
Licensed Product, or commencing to manufacture and sell an approved
Licensed Product), Titan shall have the right to terminate this
Agreement immediately by giving written notice of termination to the
Licensee. If within three (3) months of the execution of this
Agreement, the Licensee has failed to submit to Titan a prototype of
a particular Licensed Product, such Licensed Product shall be
automatically deleted from the definition of "Licensed Products"
under subparagraph 1(e) of this Agreement, and all rights to such
Licensed Product shall revert to Titan.
B(3) Titan's Right to Eliminate Country from Territory. If
at any time during the Term of this Agreement, the Licensee is not
making regular sales of more than a nominal nature of any of the
Licensed Products in a country within the Territory, Titan shall have
the right, upon thirty (30) days prior written notice to the
Licensee, to terminate the Licensee's rights for all Licensed
Products for such country.
B(4) Titan's Right to Terminate License for Specific
Licensed Product. If at any time during the Term of this Agreement,
the Licensee is not making regular sales of more than a nominal
nature of a particular Licensed Product in a country within the
Territory, Titan shall have the right, upon thirty (30) days prior
written notice to the Licensee, to terminate the Licensee's rights
for such Licensed Product for such country. In order to assist Titan
in reviewing its marketing activities, the Licensee agrees to furnish
Titan within twenty (20) days upon request complete information
evidencing on a country-by-country basis the Licensee's efforts to
market the Licensed Products in such countries.
B(5) Restrictions on Sale of Licensed Products, Subject to
the applicable provisions of this Agreement including without
limitation Paragraphs 2(b)(ii) and Paragraph 8, the Licensed Products
shall be sold to the public only in the manner in which merchandise
articles of the same general description are customarily merchandised
to the public. The Licensee shall not use or sell the Licensed
Product as premiums, or distribute the Licensed Products to parties
which the Licensee has reason to believe intend to use or sell the
Licensed Products as premiums. Use or sale of the Licensed Products
as "premiums," for purposes of the forgoing provisions, shall mean
use or sale of the Licensed Products in connection with the following
kinds of promotional activities: self- liquidator programs; joint
merchandising programs; giveaways; sales incentive programs; door
openers; traffic builders; and any other kinds of promotional
programs designed to promote the sale of the Licensed Products or
other goods or services or the Licensee or a third party.
SECTION C. ROYALTIES; STATEMENTS
C(1) Computation of Royalties. All royalties due to Titan
shall accrue upon the sale of the Licensed Products, regardless of
the time of collection by the Licensee. For purposes of this
Agreement, a Licensed Product shall be considered "sold" as of the
date on which such Licensed Product is billed, invoiced, shipped, or
paid for, whichever event occurs first. If any Licensed Products are
consigned to a distributor by the Licensee, the Licensed Products
shall be considered "sold" by the Licensee upon the date on which
such distributor bills, invoices, ships, or receives payment for any
of the Licensed Products, whichever event occurs first.
C(2) Time of Payment. All royalty payments shall be made in
accordance with the payment schedule set forth in Paragraph 4(c) of
this Agreement. All royalty amounts in this Agreement are stated in
U.S. Dollars, and all royalty payments shall be made in U.S. Dollars.
All royalty statements required to be submitted by the Licensee shall
accompany the royalty payments made to Titan. The failure to make
royalty payments when due is a material breach and cause for
immediate termination of this Agreement if not received by Titan
within ten (10) days of written notice of default sent to Licensee by
Titan.
C(3) Titan Approval of Discounted Sales. If the Licensee
proposes to sell any Licensed Product at a price which is less than
ten percent (10%) above the Licensee's manufactured cost for such
Licensed Products, Titan shall have a right of prior approval over
the terms of such sale and the percentage royalty to be payable by
the Licensee under paragraph 4 with respect to such sale.
C(4) Deductions: Taxes.
a) There shall be no deduction from the royalties owed to Titan for
uncollectible accounts, or for taxes, fees, assessments, or other
expenses of any kind which may be incurred or paid by the Licensee in
connection with: (i) royalty payments to Titan; (ii) the manufacture,
sale, distribution, or advertising of the Licensed Products in the
Territory; or (iii) the transfer of funds or royalties or the
conversion of any currency into U.S. Dollars. It shall be the
Licensee's sole responsibility at its expense to obtain the approval
of any foreign authorities; to take whatever steps may be required to
effect the payment of funds from abroad; to minimize or eliminate the
incidence of foreign taxes, fees, or assessments which may be
imposed; to protect its investments in foreign territories; to enable
it to commence or continue doing business in any foreign territory;
and to comply in any and all respects with all applicable laws and
regulations.
b) Notwithstanding the provisions of the preceding Section C(4)(a),
if (i) any country imposes a withholding tax against Titan, as
licensor, with respect to the royalties payable to Titan by the
Licensee on sales of the Licensed Products in such country, (ii) such
tax is paid by the Licensee on behalf of Titan, and (iii) such tax is
an income tax as to which a foreign tax credit is allowable to Titan
under Section 901 of the Internal Revenue Code of 1986, as amended,
the Licensee may deduct the amount of such withholding tax from the
royalties owing to Titan on the condition that the Licensee furnishes
to Titan such information as Titan requires to evidence Titan's right
to credit such withholding tax against its federal income tax
liability in the United States.
C(5) Royalty Statements. The Licensee shall furnish to
Titan, within thirty (30) days after the close of each calendar
quarter, along with any royalty payments then due, a good faith
estimate showing an estimated number of each type of Licensed Product
sold during the calendar quarter in question, the projected sales
revenues for each such Licensed Product, an estimate of all
deductions, if any, the Retail Sales Price for each Licensed Product
sold, the amount of estimated royalties due with respect to such
sales, and the quantities of each Licensed Product on hand and in
transit as of the end of such quarter, together with such other
pertinent information as Titan may reasonably request from time to
time ("Good Faith Estimate"). The Licensee's royalty accountings shall
identify with specificity the types of Intellectual Property used on
or in connection with each Licensed Product sold, including the
identities of all Talent appearing on each Licensed Product. There
shall be a breakdown of sales of Licensed Products by country, and all
figures and monetary amounts shall first be stated in the currency in
which the sales were actually made. If several currencies are involved
in any reporting category, that category shall be broken down by each
such currency. Next to each currency amount shall be set forth the
equivalent amount stated in U.S. Dollars, and the rate of exchange
used in making the required conversion calculation. The rate of
exchange shall be the actual rate of exchange obtained by the Licensee
on the date of payment. Notwithstanding any of the foregoing, after
receipt of the Good Faith Estimate by Titan, Licensee Licensee shall
have until thirty (30) days after the close of the next, consecutive
calendar quarter during the Term to submit a complete and accurate
royalty statement ("Accurate Statement"') to Titan along with any
additional royalties then due as a result of any reconciliation
between the
Good Faith Estimate and the Accurate Statement relative thereto. The
accurate statement shall be duly certified by an officer of the
Licensee to be true and accurate, showing the number of each type of
Licensed Products sold during the calendar quarter in question, the
total gross sales revenues for each such Licensed Product, an
itemization of all allowable deductions, if any, the Retail Sales
Price for each Licensed Product sold, the amount of royalties due
with respect to such sales, and the qualities of each Licensed
Product in hand and in transit as of the end of such quarter,
together with such other pertinent information as Titan may
reasonably request from time to time. Licensee acknowledges that the
royalty accounting system set forth herein is at their specific
request. At any time, in Titan's sole discretion, should Titan desire
to change this provision back to Titan's normal accounting practices,
similar to the Accurate Statement, as defined above, said changes
shall be made immediately, unless otherwise agreed to by the parties.
C(6) Royalty Adjustments. The receipt or acceptance by Titan
of any royalty statements furnished pursuant to this Agreement, or
the receipt or acceptance of any royalty payments made, shall not
preclude Titan from questioning their accuracy at any time. If any
inconsistencies or mistakes are discovered in such statements or
payments, appropriate adjustments shall be made immediately by the
parties. The Licensee shall pay Titan interest on a late royalty
payment at one and one-half percent (1 1/2%) per month or eighteen
percent (18%) per annum.
SECTION D. BOOKS OF ACCOUNT AND OTHER RECORDS; AUDITS
D( 1) Retention of Records. while this Agreement remains in
effect and for two years thereafter, the Licensee shall keep full and
accurate books of account and copies of all documents and other
material relating to this Agreement at the Licensee's principal
office. Titan, by its duly authorized agents and representatives,
shall have the right to audit such books, documents, and other
material, shall have access thereto during ordinary business hours,
and shall be at liberty to make copies of such books, documents, and
other material. At Titan's request, the Licensee shall provide an
authorized employee to assist in the examination of the Licensee's
records. The breach of any aspect of this section shall be and is
cause for immediate termination of this Agreement.
D(2) Audits by Titan. If any audit of the Licensee's books
and records reveals that the Licensee has failed properly to account
for and pay royalties owning to Titan, and the amount of any
royalties which the Licensee has failed properly to account for and
pay for any quarterly accounting period exceeds, by five percent (5%)
or more, the royalties actually accounted for and paid to Titan for
such period, then Licensee shall, in addition to paying Titan such
past due royalties, reimburse Titan for its direct out-of- pocket
expenses incurred in conducting such audit, together with interest on
the overdue royalty amount at one and one-half percent (1 1/2%) per
month or eighteen percent (18%) per annum on which such overdue
royalty amount should have been paid to Titan. Additionally, at its
option, Titan shall have the right to terminate this Agreement
immediately
D(3) Rights Reserved by Titan. The exercise by Titan, in
whole or in part or at any time or times, of the right to audit
records and accounts or of any other right herein granted under
Section D, the acceptance by Titan of any statement or statements or
the receipt and deposit by Titan of any payments tendered by or on
behalf of Licensee shall be without prejudice to any rights or
remedies of Titan, whether at law, equity or otherwise, and shall not
estop or prevent Titan from thereafter disputing the accuracy of any
such statement or payment.
SECTION E. TRADEMARK PROTECTION
E(l) Trademark Uses Inure to Titan's Benefit. All trademark
uses of the Trademarks and other Intellectual Property by the
Licensee shall inure to the benefit of Titan, which shall own all
trademarks and trademark rights created by such uses of the
Trademarks and other Intellectual Property, together with the
goodwill of the business in connection with which such trademarks are
used.
E(2) Trademark Registrations. Titan shall have the right,
but not the obligation, to file in the appropriate offices of
countries of the Territory, at its own expense, trademark
applications relating to the use or proposed use by the Licensee of
any of the Trademarks and any other Intellectual Property in
connection with the Licensed Products. Any and all such filings shall
be made in the name of Titan.
E(3) Records Relative to Trademark Uses. The Licensee shall
keep appropriate records (including copies of pertinent invoices and
correspondence) relating to the dates each of the Licensed Products
is first placed on sale or sold in each country of the Territory, and
the dates of first use in each country of each different element of
the Intellectual Property on the Licensed Products and Advertising
Materials. If requested to do so by Titan, the Licensee agrees to
supply Titan with samples of the trademark usage in question and
other information which will enable Titan to complete and obtain
trademark applications or registrations, or to evaluate or oppose any
trademark applications, registrations, or uses of other parties.
E(4) Registered User Laws. As to those countries which
require applications to register the Licensee as a registered user of
a Trademark or Trademarks or other element of the Intellectual
Property used on or in connection with the Licensed Products or which
require the recordation of this Agreement, the Licensee agrees to
execute and deliver to Titan such documents as may be necessary and
as are Airnished by Titan for such purposes.
E(5) Trademark Notices. The Licensee agrees to affix or to
cause its authorized manufacturing sources to affix to the Licensed
Products and to the Advertising Materials such trademark notices as
may be supplied by Titan.
E(6) No Use of Initials WWF. The Licensee agrees that it
will not use the initials WWF in block letters on or in connection
with any Advertising Materials or Licensed Products.
SECTION F. COPYRIGHT PROVISIONS
F(1) Copyright Notices. The authorization of Titan to the
Licensee to make public distribution of the Licensed Products and
Advertising Materials is expressly conditioned upon the following
agreement of the Licensee. The Licensee agrees to place on all
Licensed Products and on all Advertising Materials the copyright
notice or notices in the name of Titan, as specified in writing by
Titan.
F(2) Assignment by Licensee The Licensee hereby sells, assigns, and
transfers to Titan its entire; worldwide right, title and interest in
and to all "new works" or "derivative works" heretofore or hereafter
created using the Intellectual Property, including, but not limited
to, the copyrights thereon. If parties who are not employees of the
Licensee living in the United States make or have made any
contribution to the creation of a "new work" or "derivative work" so
that such parties might be deemed to be "authors" of such "new work"
or "derivative work" as that term is used in present or future United
States copyright statutes, or other such applicable laws, then
Licensee agrees to obtain from such parties a full assignment of
rights so that the foregoing assignment by the Licensee vests in
Titan full rights in the "new work" or "derivative work" free of any
claims, interests, or rights of other parties The licensee agrees not
to permit any of its employees to obtain or reserve by oral or
written employment agreements any rights as "authors" of any such
"new works" or "derivative works". At Titan's request, the Licensee
agrees to furnish Titan with full information concerning the creation
of any "new works" or "derivative works" and with copies of
assignments of rights obtained from other parties.
SECTION G. REPRESENTATIONS AND WARRANTIES
G(1) Titan's Representation and Warranty. Titan hereby
represents and warrants that it is a corporation duly incorporated,
validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated; that it has the full right,
power, legal capacity and authority to enter into this Agreement, to
carry out the terms hereof and to grant Licensee the rights and
privileges granted hereunder. Titan also represents and warrants that
Titan is the sole owner of the Intellectual Property and other
exploitation rights granted in this Agreement and that such rights
shall be unencumbered, unpledged, unattached and neither agreements
nor unilateral claims exist which might affect a control over the
fights sold and granted to Licensee under this Agreement.
Furthermore, Titan warrants that the rights granted herein will not
violate or infringe upon the rights of any third persons and/or
parties.
G(2) Licensee's Warranty and Representation. Licensee hereby
represents and warrants that it is a corporation duly incorporated,
validly existing and in good standing of the laws of the jurisdiction
in which it was incorporated; that it has full right, power, legal
capacity and authority to enter into this Agreement and to carry out
the terms hereof. Licensee hereby agrees that its representation,
warranties and agreements are of the essence to this Agreement and
shall survive the expiration of the Term.
SECTION H. INDEMNIFICATION; PRODUCT LIABILITY INSURANCE
H(1) Licensee's Indemnification. The Licensee agrees to indemnify
and hold Titan and its licensees, successors and assigns, parent
corporation, subsidiaries and affiliates and its and their respective
officers, directors, employees, advertisers, insurers, and
representatives harmless from any and all claims, suits, liabilities,
judgments, penalties, losses, costs, damages, and expenses resulting
therefrom, including but not limited to reasonable attorneys' fees
including an appropriate allocation for in-house counsel, arising from
or by reason of or in connection with (i) any unauthorized use,
infringement or alleged infringement of any trademark, service mark,
copyright, patent, process, method or devise exploited by Licensee in
connection with the Licensed Products covered by this Agreement; (ii)
defects, alleged defects and/or deficiencies in said Licensed Products
or the use thereof, or for false advertising, fraud or
misrepresentations or other claims related to the Licensed Products,
not involving a claim of right to the Intellectual Property, (iii) the
unauthorized use of the Intellectual Property by Licensee, (iv) libel
or slander against, or invasion of the right of privacy, publicity or
property of, or in violation or misappropriation of any other right of
any third party, (v) any agreements or alleged agreements made or
entered into by or with Licensee to effectuate the terms of this
Agreement, including but not limited to, the manufacture,
distribution, exploitation, advertising, sale or use of the Licensed
Products by any of foregoing, (vi) any breaches or alleged breaches of
the terms, representations and warranties under this Agreement by the
Licensee, its subsidiaries, manufacturers, distributors, advertisers
or other persons, employees or agents of any of the foregoing and/or
(vii) any other act under or in violation of this Agreement by
Licensee, its subsidiaries, manufacturers, distributors, advertisers
or other persons, employee or agents of any of the foregoing.
H(2) Titan's Indemnification. Titan agrees to indemnify and hold
the Licensee harmless from any and all claims, suits, liabilities,
judgments, penalties, tosses, costs, damages, and expenses resulting
therefrom, including reasonable attorneys' fee (but excluding lost
profits) made by third parties against the Licensee based solely on a
claim of right in one or more elements of the Intellectual Property.
H(3) Claims Procedures. With respect to any claims falling within
the scope of the foregoing indemnification: (a) each party agrees
promptly to notify the other of and keep the other fully advised with
respect to such claims and the progress of any suits in which the
other party is not participating; (b) each party shall have the right
to assume, at its sole expense, the defense of a claim or suit made or
filed against the other party; (c) each party shall have the right to
participate, at its sole expense, in any suit instituted against it
and/or to approve any attorneys selected by the other party to defend
it, which approval shall not be unreasonably withheld or delayed; and
(d) a party assuming the defense of a claim or suit against the other
party shall not settle such claim or suit without the prior written
approval of the other party, which approval shall not be unreasonably
withheld or delayed.
H(4) Product Liability Insurance. The Licensee agrees to obtain
and maintain during the Term of this Agreement, at its own expense,
product liability insurance from an insurance company acceptable to
Titan providing protection (at a minimum, in the amount of Two Million
US Dollars (US $2,000,000) per occurrence, Four Million US Dollars (US
$4,000,000) annual aggregate) applicable to any
claims, liabilities, damages, costs, or expenses, including but not
limited to attorneys' fees including an allocation for in-house
counsel, arising out of any defects, alleged defects or deficiencies
in the Licensed Products. Such insurance shall include coverage of
Titan, its directors, officers, agents, employees, insurers,
advertisers, assignees, and successors. Such insurance shall remain in
full force and effect at all times during the Term and for a period of
two (2) years thereafter Within thirty (30) days after execution of
this Agreement by Titan and again within thirty (30) days of the
policy's renewal date, the Licensee shall cause the insurance company
issuing such policy to issue a duplicate original certificate with
raised seal to Titan naming Titan as an additional insured together
with evidence of payment in full for the policy, confirming that such
policy has been issued and is in full force and effect and provides
coverage for Titan as required by this Section H(4). Said insurance
policy shall also contain an endorsement that the insurance coverage
shall not be reduced, modified or cancelled without Licensee and the
insurance company providing thirty (30) days prior written notice to
Titan. In the event that the Licensee's product liability insurance
lapses, or if at any time Titan is not covered by insurance in
accordance with provisions set forth herein, or if any other provision
of this section is breached, Titan shall have the right to immediately
terminate this Agreement.
SECTION I RESERVATION OF RIGHTS
I(1) Reservation of Rights. All rights in and to the
Intellectual Property (including premium rights in the Licensed
Products) are retained by Titan for its own use, except for the
specific rights which are granted to the Licensee under this
Agreement. Licensee shall not acquire any rights whatsoever in the
Intellectual Property as a result of its use hereunder and all use of
the Intellectual Property will inure to Titan's benefit, Titan
reserves the right to use, and to license other parties to use, the
Intellectual Property within the Territory for any purpose Titan may
determine.
SECTION J. INFRINGEMENTS: CLAIMS
J(1) Representations and Warranties by Licensee. Licensee
represents and warrants to Titan that all designs and products
submitted for approval (other than the Intellectual Property) are not
subject to any valid patent, copyright, trademark or other
proprietary rights of any third party It is understood and agreed
that Titan shall not be liable as a result of the activities of
Licensee under this Agreement for infringement or alleged
infringement of any patent, copyright, trademark or other proprietary
rights belonging to any third party, or for damages or costs involved
in any proceeding based upon such infringement or alleged
infringement, or for any royalty or obligation incurred by Licensee
because of any patent, copyright, trademark or other proprietary
interest held by a third party, other than claims based solely upon a
right to or in one or more elements of the Intellectual Property.
J(2) Infringements. When the Licensee learns that a party is
making unauthorized uses of the Intellectual Property, the Licensee
agrees promptly to give Titan written notice giving full information
with respect to the actions of such party. The Licensee agrees not to
make any demands or claims, bring suit, effect any settlements, or
take any other action against such party without the prior written
consent of Titan The Licensee agrees to cooperate with Titan, at no
out-of-pocket expense to the Licensee, in connection with any action
taken by Titan to terminate infringements.
J(3) Claims. If claims or suits are made against Titan or
the Licensee by a party asserting the ownership of rights in a name
or design which is the same as or similar to one of the elements of
the Intellectual Property, and asserting further that the use of a
particular element of the Intellectual Property by the Licensee
infringes the rights of such party, or if the parties learn that
another party has or claims rights in a trademark, name, design which
would or might conflict with the proposed or actual use of an element
of the Intellectual Property by the Licensee, Titan and the Licensee
agrees in any such case to consult with each other on a suitable
course of action. In no event shall the Licensee have the right,
without the prior 'written consent of Titan, to acknowledge the
validity of the claim of such party, to obtain or seek a license from
such party, or to take any other action which might impair the
ability of Titan to contest the claim of such party if Titan so
elects. The Licensee agrees at the request of Titan to make any and
all reasonable modifications requested by Titan in the Licensee's use
of the element of the Intellectual Property in question or to
discontinue use of
such element in the country of the territory in question on the
particular Licensed Product or Licensed Products which are involved,
if Titan, in its sole discretion, reasonably exercised, determines
that such action is necessary or desirable to resolve or settle a
claim or suit or eliminate or reduce the threat of a claim or suit by
such party. Titan shall have the right to participate fully at its
own expense in the defense of any claim or suit instituted against
the Licensee with respect to the use by the Licensee of an element of
the Intellectual Property.
SECTION K. NO SUBLICENSING OF RIGHTS: AGREEMENTS WITH
MANUFACTURERS
K(I) Sublicensing. The Licensee shall not have the
right to sublicense any of the rights granted to it under this
Agreement.
K(2) Agreements with Manufacturers. With the advance
written approval of Titan, Licensee may arrange with another party to
manufacture the Licensed Products or components of the Licensed
Products for exclusive sale, use and distribution by the Licensee. In
that instance, Licensee agrees to enter into a written agreement with
all such manufacturers, and agrees to incorporate into such written
agreements all of the provisions, for the protection of the rights of
Titan, which are contained in the form manufacturer agreement which
is available from Titan. The Licensee further agrees to furnish
Titan, within thirty (30) days of their execution, copies of all
agreements with such manufacturers. The failure to comply with any
aspect of this section is a material breach and Titan shall have the
right to immediately terminate this Agreement
K(3) Enforcement of Manufacturer Agreements. The Licensee
agrees strictly to enforce against its manufacturers all of the
provisions which are required to be included in such agreements for
the protection of Titan, as provided in Section K(2), to advise Titan
of any violations thereof by manufacturers, and of corrective actions
taken by the Licensee and the results thereof; and at the request of
Titan to terminate such an agreement with any manufacturer which
violates any such provisions; all for the protection of Titan. If the
Licensee fails to exercise such termination rights by giving written
notice to the manufacturer within twenty (20) days after being
requested to do so in writing by Titan, the Licensee appoints Titan
its irrevocable attorney-in-fact to send a notice of termination in
the name of the Licensee to the manufacturer for the purpose of
terminating the agreement or any specific rights of the party under
such agreement.
SECTION L. BREACH AND TERMINATION
L(l) Immediate Right of Termination. In addition to the
termination rights stated elsewhere in the Agreement, Titan shall
have the right to terminate this Agreement immediately by giving
written notice to the Licensee, in any of the following situations:
a) If the Licensee makes, sells, offers for
sale, or distributes or uses any Licensed Product or Advertising
Material without having the prior written approval of Titan, as
required by Section A, or makes any use of the Intellectual Property
not authorized under this Agreement.
b) If the Licensee fails to make any Advance
Royalty Amount payment or Guaranteed Royalty Amount payment by the
date such payment is required under the provisions of paragraph 4, or
if the Licensee fails to submit royalty statements and/or royalty
payments to Titan during the time period specified in Section C(2).
c) If the Licensee becomes subject to any
voluntary or involuntary order of any governmental agency involving
the recall of any of the Licensed Products because of safety, health,
or other hazards or risks to the public.
d) If, other than under Title 11of the United
States Code, the Licensee becomes subject to any voluntary or
involuntary insolvency, cession, bankruptcy, or similar proceedings,
or an assignment for the benefit of creditors is made by the Licensee,
or an agreement between the Licensee and its creditors generally is
entered into providing for extension or composition of debt, or a
receiver is appointed to administer the assets of the Licensee, or the
assets of the Licensee are liquidated, or any distress, execution, or
attachment is levied on such of its manufacturing or other equipment
as is used in the production and distribution of the Licensed Products
and remains undischarged for a period of thirty (30) days.
e) If the Licensee breaches any of the
provisions of Section B, D(1), D(2), H(4), K, and/or M(1).
L(2) Assumption and Rejection Pursuant to United States
Bankruptcy Code. After any order for relief under the Bankruptcy Code
is entered against the Licensee, the Licensee must assume or reject
this Agreement within sixty (60) days after the order for relief is
entered. If the Licensee does not assume this Agreement within such
sixty (60) day period, Titan may, at its sole option, terminate this
Agreement immediately by giving 'written notice to the Licensee,
without further liability on the part of Titan.
L(3) Effect of Termination. Termination of this Agreement
under the provisions of this Section L or the provisions set forth
elsewhere in this Agreement shall be without prejudice to any rights
or claims which Titan may otherwise have against the Licensee. Upon
the termination of this Agreement, all royalties on sales previously
made shall become immediately due and payable to Titan. Upon
termination of this Agreement under the provisions of Section L(l)(d)
or L(2) of this Agreement, the Licensee, its receivers, trustees,
successors, assignees, or other representatives shall have no right
whatsoever to sell, exploit, or in any way deal with the Licensed
Products, the Advertising Materials, or the Intellectual Property,
except with the special written consent and instructions of Titan.
L(4) Discontinuance of Use of Intellectual Property etc
Subject to the provisions of Section L(5), upon the expiration or
earlier termination of this Agreement, the Licensee agrees
immediately and permanently to discontinue manufacturing, selling,
advertising, distributing, and using the Licensed Products and
Advertising Materials; immediately and permanently to discontinue
using the Intellectual Property; immediately to destroy any films,
molds, dies, patterns, or similar items from which the Licensed
Products and Advertising Materials were made, where any element of
the Intellectual Property is an integral part thereof; and
immediately to terminate all agreements with manufacturers,
distributors, and others which relate to the manufacture, sale,
distribution, and use of the Licensed Products.
L(5) Disposition of Inventory Upon Expiration.
Notwithstanding the provisions of Section L(4), if this Agreement
expires in accordance with its terms, and is not terminated for cause
by Titan, the provisions of this Section L(5) apply. If the Licensee
delivers to Titan on or before thirty (30) days prior to the
expiration of this Agreement, a written inventory listing, on a
Licensed Product-by-Licensed Product basis, all Licensed Products in
the Licensee's possession, custody, or control as of the date of such
inventory, the Licensee shall have the non-exclusive right to sell
any Licensed Products listed on such inventory for a period of ninety
(90) days immediately following such expiration7 subject to the
payment of royalties to Titan on any such sales in accordance with
the terms of this Agreement. Titan shall have the right (but not the
obligation) to buy any or all of the Licensed Products listed on such
inventory at the Licensee's cost of manufacture. The sell-off right
granted the Licensee under this Section L(5) shall in no event apply
to a quantity of any Licensed Product exceeding fifty percent (50%)
of the Licensee's average quarterly unit sales of such Licensed
Product during the one (1) year period immediately preceding the
expiration of this Agreement.
L(6) Injunction. Licensee acknowledges that its failure to perform
any of the terms or conditions of this Agreement, or its failure upon
the expiration or termination of this Agreement to cease manufacture
of the Licensed Products and limit their distribution and sale as set
forth in Section L(4) and L(5) above, shall result in immediate and
irreparable damage to Titan. Licensee also acknowledges that there
may be no adequate remedy at law for such failures and that, in the
event thereof, Titan shall be entitled to equitable relief in the
nature of an injunction and to all other available relief, at law
and/or equity.
SECTION M MISCELLANEOUS PROVISIONS
M(l) Restriction on Assignments. Without the prior
written consent of Titan, the Licensee shall not directly or
indirectly assign, transfer, sublicense, or encumber any of its
rights under this Agreement. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of Titan.
M(2) Parties Not Joint Venturers. Nothing contained in
this Agreement shall be construed so as to make the parties partners
or joint venturers or to permit the Licensee to bind Titan to any
agreement or purport to act on behalf of Titan in any respect.
M(3) Modifications of Agreement: Remedies. No waiver or
modification of any of the terms of this Agreement shall be valid
unless in writing, signed by both parties. Failure by either party to
enforce any rights under this Agreement shall not be construed as a
continuing waiver or as a waiver in other instances.
M(4) No waiver of Termination Rights. The failure of Titan
to exercise any right to terminate the agreement for any reasons
stated herein shall not be and is not a waiver of the right to
terminate for such reason, and such right shall be exercisable when
it is deemed appropriate by Titan.
M(5) Invalidity of Separable Provisions. If any term or
provision of this Agreement is for any reason held to be invalid,
such invalidity shall not affect any other term or provision, and
this Agreement shall be interpreted as if such term or provision had
never been contained in this Agreement.
M(6) Notices. All notices to be given under this Agreement
(which shall be in writing) shall be given at the respective
addresses of the parties as set forth on page 1, unless notification
of a change of address is given in writing. The date of mailing shall
be deemed to be the date the notice is given.
M(7) Headings. The paragraph and section headings of this
Agreement are inserted only for convenience and shall not be
construed as a part of this Agreement.
M(8) Entire Understanding. This Agreement contains the
entire understanding of the parties with respect to its subject
matter. Any and all representations or agreements by any agent or
representative of either party to the contrary shall be of no effect.
M(9) Governing Law. This Agreement shall be construed and
governed in accordance with the laws of the State of Connecticut,
regardless of the place or places of its physical execution and
performance execution in multiple forms.
M(IO) Arbitration. The parties agree that if a claim or
controversy should arise concerning this Agreement, or the breach of
any obligation arising under this Agreement, or the interpretation of
this Agreement, such dispute shall be resolved by binding arbitration
under the Commercial Arbitration Rules of the American Arbitration
Association with the arbitration to be held in Stamford, Connecticut.
The parties shall each pay one-half (1/2) of the costs of the
arbitrator and the arbitrator shall thereafter award costs and
attorneys' fees to the prevailing party. The arbitration award shall
be binding and non-appealable, and may be entered as a final judgment
in any court having jurisdiction over the award.