Merchandise License Agreement
This Merchandise License Agreement (the Agreement ) is entered into as of
_____________________ (date), 2000 (the Effective Date ) by and between
_____________________ (Name of Licensor), a corporation organized and existing
under the laws of the state of _____________________ (name of state) , with its
principal office located at _________________________________________ (street
address, city, county, state, zip code) , referred to herein as the Licensor, and
_____________________ (Name of Licensee), a corporation organized and existing
under the laws of the state of _____________________ (name of state) , with its
principal office located at _________________________________________ (street
address, city, county, state, zip code) , referred to herein as the Licensee.
Whereas, the parties to this Agreement acknowledge that they enjoy a unique historical
relationship to each other; and
Whereas, Licensor is the owner of all right, title and interest throughout the world to the
(Names of Trademarks and Service Marks) trademarks and service marks, and variants
thereof as represented on Exhibit A attached hereto and incorporated herein by
reference (the Marks ); and
Whereas, Licensor desires to license the use of the Marks to Licensee solely in
connection with the retail sale of merchandise by Licensee and its Affiliates (as
hereinafter defined) pursuant to the terms of this Agreement, and Licensee desires to
accept such license from Licensor;
Now, therefore, for and in consideration of the foregoing and of the mutual promises
hereinafter set forth, and for other good and valuable consideration, the receipt and
sufficiency of which is acknowledged by the parties, the parties agree as follows:
I. Incorporation of Recitals. The parties acknowledge and agree that the recitals
to this Agreement are true and correct and are incorporated in and made a part of this
Agreement.
II. Definitions. For purposes of this Agreement, the following terms shall have the
respective meanings set forth below:
A. Advertising Materials shall have the meaning set forth in Section IV.B.
B. Affiliate means any person or entity that directly or indirectly, through one
or more intermediaries, controls, is controlled by or is under common control with
the person or entity specified.
C. Annual Period shall mean each period of one year beginning on the
Effective Date and on each anniversary of the Effective Date.
D. Effective Date shall have the meaning set forth in the first paragraph of
this Agreement.
E. License shall have the meaning set forth in Section III.
F. Licensee shall have the meaning set forth in the first paragraph of this
Agreement.
G. Licensor shall have the meaning set forth in the first paragraph of this
Agreement.
H. Marks shall have the meaning set forth in the second Recital to this
Agreement.
I. Merchandise means retail merchandise which bears any of the Marks,
including without limitation _________________________________________
(e.g., wearing apparel, jewelry and personal accessories, housewares, stationery
and backpacks, tote bags and duffel bags), in each case subject to the approval
rights of Licensor as set forth in Section IV.
K. Net Revenues means the gross revenues actually received by Licensee
or any Affiliate of Licensee from retail sales of Merchandise pursuant to this
Agreement, as determined in accordance with Licensee’s or such Affiliate’s
invoice, less
1. Sales, value added, use and similar taxes that are separately
itemized, billed by Licensee or its Affiliate to its customers and required to
paid to the appropriate taxing authority by Licensee or its Affiliate;
2. Amounts paid by Licensee or its Affiliate and billed to its customers
for insurance, shipping and similar charges; and
3. Credits for refunds and returns of Merchandise.
L. Packaging Materials shall have the meaning set forth in Section XI.2.
M. Royalties means royalty payments by Licensee to Licensor as provided in
Section VI.
N. Term shall have the meaning set forth in Section V.
III. Grant of License. Licensor grants to Licensee during the Term the right and
license (the License ) to use the Marks solely for the design, manufacture, production,
marketing, advertising, promotion and sale of Merchandise by Licensee or its Affiliates
at the Licensed Locations.
IV. Licensor’s Approval Rights.
A. Licensee warrants that the Merchandise will be of good quality in design,
materials and workmanship and suitable for its intended purpose, that no
injurious or deleterious substances will be used in or on the Merchandise, that
the Merchandise will not cause harm when used as intended and with ordinary
care and that the Merchandise will be manufactured, marketed, advertised,
promoted and sold or otherwise distributed in compliance with all applicable laws
and regulations.
B. Prior to the proposed sale of any Merchandise which has not been
previously approved by Licensor, or the proposed use of any advertising or
promotional materials in connection with the Merchandise ( Advertising Materials )
which have not previously been approved by Licensor, Licensee shall submit the
concepts for such Merchandise or Advertising Materials to Licensor for its review.
Licensor shall have 10 business days from its receipt in which to approve or
disapprove, by written notice to Licensee, such concepts for Merchandise or
Advertising Materials. In the event that Licensor does not approve of such
concepts for Merchandise or Advertising Materials within such 10-business-day
period, they shall not be deemed to be approved for all purposes of this
Agreement.
C. Licensor shall have the right to disapprove of any concepts for
Merchandise or Advertising Materials if it determines, in the exercise of its
reasonable good faith judgment, that the Merchandise or Advertising Materials
would impair the value and goodwill associated with the Marks or Licensor’s
associated copyrights or trademarks by reason of (i) their failure to satisfy the
general quality standards set forth in Section IV.B, (ii) their use of artwork,
designs or concepts which fail accurately to depict the Marks, (iii) their use of
materials which are unethical, immoral or offensive to good taste, (iv) their failure
to carry proper copyright or trademark notices or (v) any other reasonable cause.
In the event that Licensor does not approve of any concepts for Merchandise or
Advertising Materials as provided herein, it shall notify Licensee in writing of the
specific reasons for disapproval and Licensee shall not sell such Merchandise or
use such Advertising Materials until they have been revised as provided in
Licensors notice to Licensee and resubmitted to Licensor for approval as
provided in this Section IV.C.
D. Licensee agrees to maintain the quality of all Merchandise manufactured
pursuant to this Agreement up to the specifications, quality and finish of the
production sample of such Merchandise approved by Licensor under Section
IV.B, and agrees not to change the Merchandise in any respect or to make any
change in the Advertising Materials without first submitting to Licensor a sample
showing such proposed changes and obtaining Licensors approval of such
sample. Upon request of Licensor, Licensee shall furnish to Licensor the
addresses of the production facilities used by Licensor for manufacturing the
Merchandise, and shall make arrangements for Licensor to inspect such
production facilities upon reasonable advance notice during normal business
hours.
E. Licensee shall not, and shall not permit its Affiliates, to use any other
name, trademark or logo on any Merchandise or on the packaging of any
Merchandise which contains, reflects or otherwise uses the Marks.
Notwithstanding the foregoing, Licensee and its Affiliates shall be entitled to use
their own marks in association with the Marks for the purposes of identification
and promotion of the Licensed Locations.
V. Term. The term of this Agreement (the Term ) shall commence on the Effective
Date and terminate on the fifth anniversary of the Effective Date, unless terminated
earlier by Licensee at its option upon 60 days’ notice to Licensor. Licensee shall have
the right to extend the Term for one additional five-year period, provided that
A. Licensee notifies Licensor of such extension at least 60 days prior to the
end of the original Term and
B. Licensee is not then in breach of this Agreement.
VI. Royalty Payments. Licensee shall pay royalties (“Royalties”) to Licensor based
on Net Revenues from sales of Merchandise during the Term or subsequent to the
termination of this Agreement for any reason. The applicable Royalty percentage shall
be calculated based on total Net Revenues from sales of all Merchandise during the
Term of this Agreement. The Royalty percentages shall be as follows: (i) _________ %
of Net Revenues up to $ _________ accrued during the Term of this Agreement, plus (ii)
_________ % of Net Revenues between $ _____________________ and
$ _____________________ accrued during the Term of this Agreement, plus (iii)
_________ % of Net Revenues in excess of $ _____________________ accrued during
the Term of this Agreement.
VII. Monthly Royalty Payments and Statements.
A. All Royalties due to Licensor shall accrue upon the sale of the
Merchandise. For purposes of this Agreement, Merchandise shall be considered
sold as of the date on which such Merchandise is sold by Licensee or an Affiliate
of Licensee to any customer or other third party. Licensee shall pay all Royalties
due to Licensor under this Agreement in respect of sales of Merchandise during
any month within 15 days following the end of such month.
B. All Royalty statements required to be submitted by Licensee shall be
submitted within 15 days following the end of the month to which they relate and
shall accompany the Royalty payment to Licensor. The first such Royalty
payment and statement shall be due no later than _____________________
(date) and shall include any sales of Merchandise between the Effective Date
and _____________________ (date) .
C. In the event that Licensee or its Affiliates sell any Merchandise at a price
less than ________ % above Licensee’s manufactured cost of such Merchandise
without the prior approval of Licensor, Net Revenues with respect to such sale
shall be deemed to reflect a retail selling price of ________ % above Licensee’s
manufactured cost of such Merchandise.
D. Except as otherwise provided in this Agreement, there shall be no
deduction from the Royalties payable to Licensor for taxes, fees, assessments or
expenses of any kind which may be incurred or paid by Licensee in connection
with (i) Royalty payments due to Licensor or (ii) the manufacture, sale,
distribution or advertising of the Merchandise. Licensee shall have the sole
responsibility at its expense to obtain the approval of any governmental
authorities, to take any required steps to effect the payment of funds to Licensor,
to enable Licensee to commence or continue doing business in any jurisdiction
and to comply in all respects with all applicable laws and regulations.
Notwithstanding the foregoing, if (i) any country imposes a withholding tax
against Licensor, as licensor, with respect to the Royalties payable to Licensor
on sales of Merchandise in such country, (ii) such tax is paid by Licensee on
behalf of Licensor and (iii) such tax is an income tax as to which a foreign tax
credit is allowable to Licensor under Section 901 of the Internal Revenue Code of
1986, as amended, then Licensee may deduct the amount of such withholding
tax from the Royalties payable to Licensor under this Agreement, on the
condition that Licensee furnishes to Licensor all information and documentation
required by Licensor to enable Licensor to obtain a foreign tax credit on its U.S.
income tax return with respect to such withholding tax payment by Licensee.
E. Licensee shall furnish to Licensor, at the same time it makes payment of
Royalties, a complete statement, certified by an officer of Licensee to be true and
accurate, setting forth the basis upon which Royalty payments were accrued
during the preceding calendar month, the amount of the Royalty payments
payable with respect to such calendar month and such other information as
Licensor may reasonably request.
F. The receipt or acceptance by Licensor of any Royalty statement furnished
pursuant to this Agreement, or any Royalty payment made, shall not preclude
Licensor from questioning their accuracy at any time for a period of three years
from the receipt of the Royalty statement. If any mistakes are discovered in such
statements or payments, appropriate adjustments shall be promptly made by the
parties. Licensee shall pay Licensor interest on late Royalty payments at an
annual rate of ________ (e.g. 2.0%) above the prevailing prime interest rate of
_____________________ (e.g., Bank of America, Los Angeles, California), in
effect on the date on which such late Royalty payment should have been paid to
Licensor, but in no event shall such interest rate exceed the maximum rate
permitted by applicable law.
VIII. Records and Audit Rights.
A. While this Agreement remains in effect and for three years thereafter,
Licensee shall keep accurate books of account and copies of all documents
relating to this Agreement at Licensee’s principal office. Licensor, through its duly
authorized agents and representatives, shall have the right, to be exercised not
more than once per Annual Period and upon not less than five business days’
prior notice to Licensee, solely for the purpose set forth in Section VII.F, to
examine and audit such books and documents during normal business hours,
and shall have the right at its own expense to make copies of such books and
documents except to the extent expressly prohibited by applicable law or
regulation, including without limitation the Nevada Gaming Control Act and the
regulations promulgated thereunder. At Licensee’s request, Licensee shall
provide an authorized employee to assist in the examination of Licensee’s
records. All information regarding Licensee’s or its Affiliates’ business received in
any such examination shall be held in strict confidence by Licensor and shall not
be used or disclosed by Licensor in any manner. Licensor shall not unreasonably
interfere with Licensee’s business operations in exercising the foregoing right of
examination.
B. The expenses of examinations and audits pursuant to Section VIII.A shall
be home by Licensor; provided, however, that Licensee shall be charged for the
reasonable out-of-pocket expenses of any such examination or audit that
conclusively establishes an underpayment of Royalties in excess of ________ %
of the Royalties reported and paid for relevant calendar month.
IX. Exploitation of License; Restrictions on Sale.
A. Licensee agrees to manufacture or cause to be manufactured the
Merchandise in sufficient quantities to meet the reasonably anticipated demand.
Licensee also agrees to use reasonable efforts to advertise and promote the
Merchandise at its own expense and to sell the Merchandise at the Licensed
Locations, consistent with Licensee’s good faith business judgment. Nothing
contained in this Section IX.A shall constitute a representation by Licensee that
any specified minimum amount of Merchandise will actually be sold or that a
specified minimum amount of Net Revenues will actually be achieved in any
period. Licensor acknowledges and agrees that Licensee does not intend to sell
Merchandise in all of the Licensed Locations and that Licensee may not
commence selling Merchandise for some period of time following the Effective
Date.
B. The Merchandise shall be sold to the public only in the manner in which
merchandise articles of the same general type are customarily sold to the public.
Licensee shall not use or sell the Merchandise as premiums, or distribute the
Merchandise to persons which Licensee has reason to believe intend to use or
sell the Merchandise as premiums. For purposes of the foregoing provision, use
or sale of the Merchandise as premiums shall mean use or sale of the
Merchandise in connection with self-liquidator programs, joint merchandising
programs, giveaways, sales incentive programs, door-openers, traffic-builders
and any other kind of promotional program designed to promote the sale of the
Merchandise or other goods or services of Licensee or its Affiliates or a third
party.
X. Trademark Protection.
A. Licensee recognizes the substantial goodwill associated with the Marks
and acknowledges that such goodwill belongs exclusively to Licensor, that its use
of the Marks inures to Licensee’s benefit and that Licensee shall not thereby
acquire any rights in the licensed Marks. Licensee shall not, during the Term
hereof or thereafter, assert rights in the Marks, challenge the rights of Licensor in
and to the Marks or attack the validity of this Agreement. In addition, Licensee
shall not, during the Term hereof or thereafter, attempt to obtain rights to the
Marks through use, registration or otherwise in any state or country or otherwise
throughout the universe. Licensee shall not use the Marks in a scandalous or
demeaning manner or in any other manner which would, in the reasonable
opinion of Licensor, cause loss of value or goodwill or otherwise cause injury to
the Marks or to Licensor. Licensee also agrees not to attempt to register or to
use or to aid any third party in attempting to register or to use any trademark or
service mark which may be, in the opinion of Licensor, confusingly similar to the
Marks, in any state or country. It is expressly understood that this covenant shall
survive termination or expiration of this Agreement. Any violation of this
paragraph shall constitute a material breach of this Agreement.
B. Licensee shall keep appropriate records relating to the dates when each
article of Merchandise is first placed on sale or sold in each country, and the
dates of use in each country of each different Mark on the Merchandise and
Advertising Materials. At Licensee’s request, Licensee shall supply Licensor with
samples of the trademark usages in question and other information which will
enable Licensor to complete and obtain trademark or design applications or
registrations, or to evaluate or oppose any trademark or design applications,
registrations or uses by third parties, all at the expense of Licensor.
C. Licensee agrees to affix to Merchandise and to the Advertising Materials the
following notice or such other notice as may be specified in writing by Licensor:
(Notice of Trademark). When one of the Marks is used as a trademark for any
Merchandise, the name shall be properly used as a trademark in a larger or
bolder type than the name of the Merchandise, and shall not be used as the
generic name of the Merchandise.
XI. Copyright Provisions.
A. The authorization of Licensor to Licensee to make public distribution of the
Merchandise and Advertising Materials is expressly conditioned upon the
agreement of Licensee to place on all Merchandise and Advertising Materials the
copyright notice in the name of Licensor as set forth in Section X.D.
B. Licensee acknowledges that the copyright notice must be permanently
affixed to all Merchandise and packaging thereof (the Packaging Materials ) and
Advertising Materials and to any separate portions of the Merchandise or
Packaging Materials or Advertising Materials which contain the Marks and which
are intended to be used separately by the purchaser. Licensee agrees that it will
not, without Licensee’s prior written consent, affix to the Merchandise or the
Packaging Materials which contain, reflect or otherwise use the Marks a
copyright notice in Licensee’s name or the name of any person or entity other
than Licensor.
C. Licensee hereby sells, signs and transfers to Licensor all of its worldwide
right, title and interest in and to all new works or derivative works heretofore or
hereafter created using the Marks, including without limitation the copyrights
thereon. If persons who are not employees of Licensee or its Affiliates living in
the U.S. make or have made any contribution to the creation of a new work, so
that such persons might be deemed to be authors of the same as that term is
used in present or future U.S. copyright statutes, Licensee agrees to obtain from
such persons a comparable full assignment of rights so that the foregoing
assignment by Licensee vests in Licensor full rights in the new work, free of any
claims, interests or rights of other parties. Licensee agrees not to permit any of
its employees or the employees of its Affiliates to obtain or reserve by oral or
written employment agreements any rights as authors of such new works. At
Licensor’s request, Licensee agrees to furnish Licensor with information
concerning the creation of new works and with copies of assignments of rights
obtained from other parties.
XII. Representations and Warranties; Indemnification.
A. Each party represents and warrants to the other that: (i) this Agreement
has been duty authorized, executed and delivered by such party; (ii) such party
has the full power and authority to enter into this Agreement and to perform its
obligations hereunder; (iii) this Agreement constitutes a valid and binding
obligation of such party, enforceable in accordance with its terms; and (iv) the
execution and performance of this Agreement by such party does and will not
violate any agreement or obligation between such party and any other person or
entity.
B. Licensee agrees to indemnify and hold Licensor harmless from and
against any and all claims (and liabilities, judgments, penalties, losses, costs,
damages and expenses resulting therefrom, including reasonable attorneys’
fees, but excluding lost profits) made by third parties against Licensor arising out
of or in connection with any action taken under or in violation of this Agreement
by Licensee, its Affiliates, manufacturers, distributors or the employees or agents
of any of the foregoing, including without limitation the manufacture, distribution,
advertising, sale or use of the Merchandise, but excluding any claims to the
extent based on or arising out of the use of the Marks by Licensee or its Affiliates
in accordance with the terms of this Agreement.
C. Licensor agrees to indemnify and hold Licensee and its Affiliates
harmless from and against any and all claims (and liabilities, judgments,
penalties, losses, costs, damages and expenses resulting therefrom,
including reasonable attorneys’ fees, but excluding lost profits) made by
third parties against Licensee or its Affiliates asserting rights in the Marks
and to the extent based upon or arising out of the use of the Marks by
Licensee or its Affiliates in accordance with the terms of this Agreement.
D. With respect to any claims falling within the scope of the foregoing
indemnifications, (i) each party shall promptly notify the other of and keep
the other fully advised with respect to such claims and the progress of any
suits in which the party is not participating, (ii) 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 for which such party is required to indemnify
the other party, (iii) each party shall have the right to participate, at its sole
expense, in the defense of any suit instituted against it and to approve any
attorneys selected by the other party to defend it, which approval shall not
be unreasonably withheld or delayed and (iv) 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.
XIII. Reservation of Rights. All rights in and to the Marks are retained by Licensor for
its own use, except for the specific rights in the Marks licensed to Licensee under this
Agreement. Licensor reserves the right to use, and to license other parties to use, the
Marks throughout the world for any purpose Licensor may determine, except as
otherwise expressly provided in this Agreement, but neither Licensor nor any party
licensed by Licensor shall have the right to use the Marks in any manner which would
conflict with the rights granted to Licensee under this Agreement, including the right to
maximize sales of Merchandise bearing the Marks.
XIV. Infringements; Claims.
A. If Licensee learns that a party is making unauthorized use of the Marks,
Licensee agrees to promptly give Licensor written notice, providing full
information (to the extent actually known by Licensee) with respect to the actions
of such party. Licensee agrees not to make any demands or claims, bring suit,
effect any settlement or take any other action against such party without the prior
written consent of Licensor. Licensee agrees to cooperate with Licensor, without
expense to Licensee (except with respect to costs associated with providing
samples and evidence of use), in connection with any action taken by Licensor to
terminate infringements.
B. If claims are made against Licensor or Licensee or Licensee’s Affiliates by
a party asserting ownership of rights in a name or design which is the same as or
similar to the Marks, and asserting further that the use of a particular Mark by
Licensee or its Affiliates infringes the rights of such party, or if the parties learn
that another party has or claims rights in a trademark, name or design which
would conflict with the proposed or actual use of a Mark by Licensee, Licensor
and Licensee agree in any such case to consult with each other on a suitable
course of action. In no event shall Licensee have the right, without the prior
written consent of Licensor, 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 Licensor to contest the claim of such party if
Licensor so elects. Licensee agrees at Licensee’s request to make reasonable
modifications requested by Licensor in Licensee’s use of the Marks in question or
to discontinue their use in the country of the Licensed Location in question on the
particular Merchandise which is involved, if Licensor, in its reasonable discretion,
determines that such action is necessary to resolve or settle the claim or suit or
eliminate the threat of a claim or suit by such party. Licensor shall have the right
to participate fully at its own expense in defense of any claim or suit instituted
against Licensee or its Affiliates with respect to the use by Licensee or its
Affiliates of a Mark.
XV. No Sublicensing; Agreements with Manufacturers.
A. The License shall not include the right to sublicense any of the rights
granted to Licensee under this Agreement.
B. Licensee and its Affiliates shall have the right to arrange with another
party to manufacture Merchandise or components of Merchandise for exclusive
sale, use and distribution by Licensee and its Affiliates. Licensee agrees to enter
into a written agreement with all such manufacturers and to incorporate into such
written agreements all of the provisions, for the protection of the rights of
Licensor, which are contained in the form manufacturer agreement which has
been prepared by Licensor for such purpose and which is available from
Licensor. Licensee further agrees to furnish Licensor, within 30 days of their
execution, copies of all agreements with such manufacturers.
C. Licensee agrees to enforce against its manufacturers all of the provisions
which are required to be included in such agreements for the protection of
Licensor as provided in Section XV.B, to advise Licensor of any violations
thereof by manufacturers of which Licensee has actual knowledge, and of
corrective actions taken by Licensee and the results thereof, and, at the request
of Licensor, to terminate such agreement with any manufacturer which violates
any of such provisions for the protection of Licensor.
XVI. Breach and Termination.
A. Licensor shall have the right to terminate this Agreement for any breach of
this Agreement set forth below if after 30 days’ written notice from Licensor to
Licensee specifying the breach and stating prominently that it is a NOTICE OF
BREACH (the Initial Cure Period ), Licensee (i) has failed to or is unable to cure
such breach, (ii) has commenced to cure such breach sand such cure is not fully
effectuated within an additional 30 days after the Initial Cure Period to Licensor’s
reasonable satisfaction or (ii) has given written notice of the proposed steps and
period of time reasonably necessary for effectuating such cure, acceptable to
Licensor, and failed to complete the cure within the agreed-upon cure period:
1. If Licensee or its Affiliates make, sell, offer for sale or distribute or
use any Merchandise or Advertising Materials without prior approval of
Licensor as provided in Section IV, or make any use of the Marks not
authorized under this Agreement.
2. If Licensee fails to include on any Merchandise or any Advertising
Materials or Packaging Materials the required trademark and copyright
notice as provided in Section X.D.
3. If Licensee fails to submit Royalty statements or Royalty payments
to Licensor within 30 days following the end of any calendar month.
4. If Licensee becomes subject to any voluntary or involuntary order of
any governmental agency involving the recall of any Merchandise
because of safety, health or other hazards to the public and Licensee falls
or refuses to stop the sale or use of such Merchandise within 10 days of
receipt of the recall notice.
5. If, other than under Title 11 of the U.S. Code, Licensee becomes
subject to any voluntary or involuntary insolvency, cessation, bankruptcy
or similar proceedings, or an assignment for the benefit of creditors is
made by Licensee, or an agreement between 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 Licensee, or the assets
of Licensee are liquidated, or any distress, execution or attachment is
levied on such of its equipment as is used in the production and
distribution of the Merchandise and remains undischarged for a period of
60 days.
6. If Licensee breaches any of the provisions of Section XV or
Section XVII.A
B. Notwithstanding the provisions of Section XVI.A, if Licensee fails to obtain
proper approvals or fails to timely submit Royalty statements or Royalty
payments on more than two occasions during any one Annual Period, Licensor
shall have the right to terminate this Agreement upon written notice to Licensee
without further opportunity for Licensee to cure.
C. If any order for relief under the Bankruptcy Code is entered against
Licensee, Licensee must assume or reject this Agreement within 60 days after
the order for relief is entered. If Licensee does not assume this Agreement within
such 60-day period, Licensor may, at its sole option, terminate this Agreement by
giving written notice to Licensee, without further liability on the part of Licensor.
D. Termination of this Agreement as provided in this Section XVI shall be
without prejudice to any rights or claims which Licensor may otherwise have
against Licensee, except that in no event shall Licensor have any claim for lost
profits. Upon termination of this Agreement as a result of a breach by Licensee,
all Royalties based on sales previously made shall become immediately due and
payable to Licensor. Upon termination of this Agreement under Section XVI.A.4,
XVI.B or XVI.C, Licensee, its receivers, trustees, assignees and other
representatives shall have no right to sell, exploit or in any way deal with the
Merchandise, the Advertising Materials or the Marks, except with the express
written consent of Licensor.
E. S ubject to the provisions of Section XVI.F, upon the expiration or
termination of this Agreement for any reason, Licensee and its Affiliates agree
immediately and permanently to discontinue manufacturing, selling, advertising,
distributing and using the Merchandise and Advertising Materials, immediately
and permanently to discontinue using the Marks, to undertake with third-party
manufacturers to immediately destroy any molds, dies, patterns or similar items
from which Merchandise and Advertising Materials were made where any Mark 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 Merchandise.
F. Upon termination or expiration of this Agreement for any reason, except
as a result of a breach set forth in XVI.B, Licensee and its Affiliates shall have a
sell-off period of one year, subject to the payment of Royalties to Licensor on any
such sales in accordance with this Agreement. Licensee shall deliver to Licensor
within 30 days following expiration or termination a written inventory listing all
Merchandise in Licensee’s possession or control as of the date of such inventory.
XVII. General Provisions.
A. Neither party shall directly or indirectly assign, transfer, sublicense or
encumber any of its rights under this Agreement without the prior written consent
of the other party, except that Licensor may assign its right to receive Royalty
payments to any party. A request by Licensee to assign this Agreement to an
Affiliate of Licensee, which Affiliate is not in breach of Section XVI.A.7 hereof,
shall not be unreasonably withheld or delayed by Licensor. This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
successors and assigns.
B. Nothing contained in this Agreement shall be construed so as to make the
parties partners or joint venturers with each other or to permit either party to bind
the other or purport to act on behalf of the other in any respect.
C. No waiver or modification of any of the terms of this Agreement shall be
effective unless in writing and signed by both parties. Failure by either party to
enforce any rights under this Agreement shall not be construed as a waiver of
such rights, and a waiver by either party of a default in one or more instances
shall not be construed as a continuing waiver or as a waiver in other instances.
D. The invalidity of any portion of this Agreement will not and shall not be
deemed to affect the validity of any other provision. If any provision of this
Agreement is held to be invalid, the parties agree that the remaining provisions
shall be deemed to be in full force and effect as if they had been executed by
both parties subsequent to the expungement of the invalid provision.
E. The paragraph and section headings of this Agreement are inserted only
for convenience and shall not be construed as a part of this Agreement.
F. This Agreement contains the entire understanding of the parties with
respect to its subject matter and supersedes any and all prior agreements,
understandings and negotiations, whether oral or written.
G. This Agreement shall be governed by, construed, and enforced in
accordance with the laws of the State of _____________________ (name of
state).
H. Any dispute under this Agreement shall be required to be resolved by
binding arbitration of the parties hereto. If the parties cannot agree on an
arbitrator, each party shall select one arbitrator and both arbitrators shall then
select a third. The third arbitrator so selected shall arbitrate said dispute. The
arbitration shall be governed by the rules of the American Arbitration Association
then in force and effect.
I. Licensor acknowledges that Licensee’s Affiliates are engaged in
businesses that are or may be subject to and exist because of privileged licenses
issued by governmental authorities. If Licensee or any parent, subsidiary or other
Affiliate of Licensee is directed to cease doing business with Licensor by any
such authority, or if Licensee shall determine in good faith, in Licensee’s sole and
exclusive judgment, that Licensor or any of its officers, directors, key employees,
agents or representatives (i) is or might be engaged in, or is about to be engaged
in, any activity or (ii) was or is involved in any relationship, either of which could
or does jeopardize Licensee’s business or such licenses, or those of a parent,
subsidiary or other Affiliate, or if any such license is threatened to be or is denied,
suspended or revoked, then this Agreement may be terminated by Licensee
without further liability to either party upon notice to Licensor, provided that
Licensor shall be entitled to retain all Royalties previously paid and to receive
Royalties due but unpaid at the time of termination.
J. Unless provided herein to the contrary, any notice provided for or
concerning this Agreement shall be in writing and shall be deemed sufficiently
given when sent by certified or registered mail if sent to the respective address of
each party as set forth at the beginning of this Agreement.
K. In the event that any lawsuit is filed in relation to this Agreement, the
unsuccessful party in the action shall pay to the successful party, in addition to all
the sums that either party may be called on to pay, a reasonable sum for the
successful party's attorney fees.
L. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute
but one and the same instrument.
M. In performing under this Agreement, all applicable governmental laws,
regulations, orders, and other rules of duly-constituted authority will be followed
and complied with in all respects by both parties.
WITNESS our signatures as of the day and date first above stated.
_____________________ _____________________
(Name of Licensor) (Name of Licensee)
By:________________________ By:_________________________
(Signature of Officer) (Signature of Officer)
_____________________ _____________________
(P rinted Name & Office in Corporation) (P rinted Name & Office in Corporation)
