Annual Report — [x] Reg. S-K Item 405 — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K405 Annual Report -- [x] Reg. S-K Item 405 77± 368K
2: EX-1 Underwriting Agreement 24± 93K
3: EX-2 Plan of Acquisition, Reorganization, Arrangement, 24± 95K
Liquidation or Succession
4: EX-3 Articles of Incorporation/Organization or By-Laws 29± 112K
5: EX-4 Instrument Defining the Rights of Security Holders 17± 76K
6: EX-5 Opinion re: Legality 6± 25K
7: EX-23 Consent of Experts or Counsel 1 7K
8: EX-27 ƒ Financial Data Schedule (Pre-XBRL) 1 5K
9: EX-27 ƒ Innovo Group Inc. - Financial Data Schedule 2± 10K
LICENSE AGREEMENT 50541-WBLT
WARNER BROS. CONSUMER PRODUCTS (UK) LIMITED ("LICENSOR") whose
address is 135 Wardour Street, London, W1V 4AP, England and
INNOVO GROUP INC TRADING AS NASCO INTERNATIONAL LTD. ("Licensee")
whose address is 27 North Main Street, Springfield, Tennessee,
37172, USA agree as follows:
As of the Effective Date (as defined below) and subject to the
Standard Terms and Conditions attached hereto, all of which are
incorporated herein by this reference and made a part hereof,
Licensor grants to Licensee a non-exclusive license to utilize the
Licensed Material solely upon or in connection with the
manufacture, distribution, and sale of the Articles throughout the
Territory, as defined and specified as follows:
Licensed Material: The representations, names, logos,
movements, personalities, artwork, photographs and other material
in connection with the following "LOONEY TUNES" cartoon characters:
BUGS BUNNY, SYLVESTER, TWEETY, SPEEDY GONZALES, PORKY PIG, ELMER
FUDD, DAFFY DUCK, YOSEMITE SAM, FOGHORN LEGHORN, ROAD RUNNER, WILE
E. COYOTE, MARVIN the MARTIAN and TASMANIAN DEVIL only.
Licensee acknowledges that the rights granted herein are
limited only to the cartoon characters set forth above and that any
and all rights in, to or associated with the theatrical motion
picture tentatively entitled "Space Jam", as well as with any
sequels thereto, are specifically excluded herefrom.
Further, Licensee specifically understands and agrees that no
rights are granted herein with respect to the Warner Bros. "LOONEY
TUNE LOVABLES AND/OR BABY LOONEY TUNES", infant property, it being
understood that all rights in and to said property are reserved
exclusively to Licensor for use and/or licensing as it deems
appropriate to third party(s) of its choice.
Articles(s):
Article 1-Backpack, ref. MBP 101 Article 2-Backpack, ref. MBP 111
Article 3-Backpack, ref. BNP 171 Article 4-Backpack, ref. BP 121
Article 5-Backpack, ref. BPN 271 Article 6-Backpack, ref. RSN 171
Article 7-Backpack, ref. BPN 161 Article 8-Backpack, ref. BBP 191
Article 9-Backpack, ref. FLBP 1 Article 10-Backpack, ref. FLBPP 9S1
Article 11-Sports bag, ref. TBN 231 Article 12-Sports bag, ref. CBN 271
Article 13-Sports bag, ref. CBN 301 Article 14-Waist pack, ref. FPN 14S1
Article 15-Waist pack, ref. FPN 14E1 Article 16- Duffle bag, ref. BOD 1
Article 17- Wallets, to be used as a premium item only and not for sale
separately.
Territory:
Territory 1- Austria, Belgium, Cyprus, Denmark, Eire, Finland,
Germany, Greece, Iceland, Israel, Italy, Lebanon, Norway, Portugal,
Spain, Sweden, The Netherlands and United Kingdom of Great Britain
& Northern Ireland.
Territory 2- France and Switzerland.
Distribution: Sports stores and sports departments within
department stores only, in accordance with Special Stipulation (a)
herebelow.
Term: 31st May 1996 to 28th February 1998
Effective Date: The date of full execution of this Agreement,
provided that Licensee has not, within seven (7) days of such
execution date, received notice from Licensor that the owner of the
Trademarks which relate to all or any part of the Licensed Material
shall not enter into a Trademark License.
Royalty Rate:
For Articles 1 to 16- thirteen and one half percent (13.5%)
FOB or the following Minimum per Article Royalties
Article 1-US $0.40 Article 2-US $0.54
Article 3-US $0.57 Article 4-US $0.81
Article 5-US $0.98 Article 6-US $1.12
Article 7-US $1.15 Article 8-US $1.17
Article 9-US $1.31 Article 10-US $1.40
Article 11-US $0.95 Article 12-US $1.62
Article 13-US $1.76 Article 14-US $0.31
Article 15-US $0.45 Article 16-US $1.19
- For Article 17- thirteen and one half percent (13.5%) on
purchase price.
Guaranteed Consideration: US $100,000 payable to US $25,000
on execution hereof and US $25,000 on or before 31st July 1996: US
$25,000 on or before 31st July 1997 and US $25,000 on or before
30th November 1997.
Marketing Date:
For Territory 1- August 1996
For Territory 2- from 1st January 1997
1st statement due on: 30th October 1996
Promotion Commitment: Three percent (3%) of the updated
projected sales as communicated by Licensee to Licensor in writing.
Trademark/Copyright notice: LOONEY TUNES names, characters
and all related indicia are trademarks of Warner Bros. a Division
of Time Warner Entertainment Company, L.P.
Samples: Fifteen (15) of each Article.
Insurance: 500,000
Special Stipulations
(a) Distribution: Licensee shall submit its choice of distributor
to Licensor for Licensor's prior written approval.
(b) Business Development: Licensee's Sales Manager agrees to
travel to the Territory and visit Licensor's offices on a monthly
basis to contribute to business development.
(c) Public Relations: All communications by Licensee in relation
to this Agreement and the Licensed Material in general for public
release must be approved in writing by Licensor prior to release.
By signing below, Licensee affirms that it is in agreement
with the foregoing and that it has read and understands and agrees
to be bound by the Standard Terms and Conditions attached hereto
and forming part hereof. Licensee further agrees that this
Agreement shall also serve as an invoice to Licensee with respect
to the amount payable as set forth above and Licensee agrees to pay
such amounts pay such amounts to Licensor as specified above.
Important additional terms of this Agreement are printed on
the attached pages entitled "Standard Terms and Conditions".
Please read carefully.
This agreement shall be of no force and effect unless and
until signed by all parties hereto as specified below.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
LICENSEE LICENSOR
INNOVO GROUP INC. TRADING AS WARNER BROS. CONSUMER PRODUCTS
NASCO INTERNATIONAL LTD. (UK) LIMITED
By:/s/ Joseph T. Assad By:/s/ Karin Visser
Title:Vice President By:Manager, Legal Affairs
Date:June 14, 1996 Date:June 25, 1996
CONSENT FOR MANUFACTURING SUB-LICENSE
Dear Sir:
Reference is made to the basic Agreement of even date herewith
between WARNER BROS. CONSUMER PRODUCTS (UK) LIMITED ("Licensee")
and INNOVO GROUP INC. TRADING AS NASCO INTERNATIONAL LTD.
("Licensee) expiring on 31st December 1997. Licensor hereby
consents to the manufacture of the "Articles" listed below by the
manufacturer named below for the account of Licensee, upon the
following conditions to which Licensee agrees: (1) that the said
manufacturer sign and endorse the Agreement hereto appended; and
(2) that said manufacturer shall fully comply in all respects with
that signed Agreement. Failure of either of said conditions shall
entitle Licensor to terminate this Agreement forthwith and require
that that portion of all copies and moulds or other devices used to
manufacture the "Articles" in the possession of Licensees or the
named manufacturer be immediately delivered to Licensor or be
destroyed to the satisfaction of Licensor. No Royalties are
payable to Licensor for the manufacture of the said Articles, but
Royalties are payable to Licensor on authorized sales by Licensee
thereof if and when such sales are made.
Manufacturer Name & Address:
High Performance
3/F Suite M
Kaiser Estate Phase III
11 Hok Yuen Street
Hunghom
Kowloon
Hong Kong
Articles:
Articles 1 to 17 inclusive.
Territory of Manufacture:
Hong Kong
LICENSEE: LICENSOR:
INNOVO GROUP INC. TRADING AS WARNER BROS. CONSUMER PRODUCTS
NASCO INTERNATIONAL LTD. (UK) LIMITED
BY:/s/ Joseph T. Assad By:/s/ Karin Visser
Dated:June 14, 1996 Dated:June 25, 1996
STANDARD TERMS AND CONDITIONS
1. RIGHTS GRANTED TO LICENSEE
(a) During the Term and any extension thereof, Licensor
grants to Licensee the non-exclusive right in the Territory to use,
and reproduce the Licensed Material only on and in connection with
the manufacture, advertising, distribution and sale of the
Articles. Licensee specifically understands and agrees that no
rights are granted herein in respect of the Warner Bros. WB Shield
Device or any other trademarks, logos, copyrights, tradenames or
other rights of Licensor or any parent, subsidiary or affiliate of
Licensor other than expressly set forth herein.
(b) Licensor further grants to Licensee the non-exclusive
right to reproduce, with Licensor's prior written approval, the
Licensed Material only within the Territory and the European Union
("EU") on containers, packaging, display material and in
advertising for the Articles, subject to the provisions of this
Agreement. It is specifically understood that no television, radio
and/or theatrical commercials may be utilized under this Agreement
without Licensor's prior written approval.
(c) Licensee shall be free to sell Articles to Licensor or to
any subsidiary of Licensor's, subject to the payment to Licensor of
Royalties on such sales. Licensee agrees that sales of Articles to
Licensor shall be at one cost, or at a reduced price or at the best
price available to the trade.
(d) Licensee and its customers shall be free to sell the
Articles at such prices as Licensee or its customers shall
determine. However, Licensee agrees that any proposed sales of
Articles at a liquidation price cannot occur without Licensee first
offering Licensor the opportunity to said Articles.
(e) The Licensee acknowledges that there are subsisting
intellectual property rights parallel to those licensed to the
Licensee hereunder which are either licensed to another licensee of
the Licensor or exploited by the Licensor itself, throughout the EU
and accordingly the Licensee shall not, in any part of the EU
outside the Territory pursue an active policy of selling or
marketing Articles, or engage in advertising of the Articles, the
name Warner Bros. or the WB Shield Device (or any other trademarks,
logos, copyrights, tradenames or other rights of Licensor or any
parent, subsidiary or affiliate of Licensor) or the Licensed
Material, other than expressly set forth herein, including but
without prejudice to the generality of the foregoing, soliciting
orders for Articles from customers, establishing any branch or
maintaining any distribution depot of Articles.
(f) Notwithstanding anything in this Agreement to the
contrary, the Licensee may (upon giving prior written notice to
Licensor) sell Articles pursuant to an unsolicited order which does
not involve or result from a breach by Licensee of the provisions
of Subparagraph (e) above to:
(i) a customer located in another member state of the EU; or
(ii) a customer located in a country outside the EU if
the Articles which are the subject of such sale are destined
for ultimate delivery in the Territory or in the EU.
2. CONSIDERATION
(a) Licensee agrees to pay the Guaranteed Consideration as set
forth above to Licensor, which shall be on account of Royalties to
accrue during the Term only and only with respect to sales in the
Territory. However, if any part of the Guaranteed Consideration as
specified hereinabove applies to any period less than the Term,
such part shall be on account of during such lesser period only.
No part of Guaranteed Consideration shall be repayable to Licensee
for that period.
(b) Royalties accruing from any sales of Articles during an
extension of the Term or after the expiration or termination of the
Agreement as provided in Paragraph 16, shall not be offset against
the Guaranteed Consideration unless otherwise agreed in writing.
(c) Royalty Payments:
(i) Licensee shall pay to Licensor a sum equal to the Royalty
Rate as set forth above of all Net Invoiced Billings (as
defined below) by Licensee of the Articles covered by this
Agreement. Royalties shall be payable concurrently with the
statements required in Paragraph 10 hereof, except to the extent
offset by Guaranteed Consideration theretofore remitted. The
credit shall be taken in the Accounting Period in which the refund
is given or credit memo issued. Unused credits may be carried
forward, but in no event shall Licensee be entitled to a refund of
Royalties.
(ii) The term "Net Invoiced Billings" shall mean all monies billed
or billable by Licensee, or its sub-licensee, if any, from the
exercise of its rights to distribute and sell Articles in the
Territory or in the EU before any allowances or discounts, which
have been deducted from the normal selling price, inclusive of
interest, monetary correction, and any other payment charges
whatsoever, less the following items only:
(A) any sales, excise or value added taxes, which are separately
stated, and which are required to be collected from customers as
part of Net Invoiced Billings, and which are payable to taxing
authorities, and
(B) actual defective returns.
(iii) It is specifically understood and agreed that no deduction
may be made for any actual returns (except for defective returns),
or any reserves therefor, any bad debts, or any reserves therefor,
any manufacturing costs, importing costs, selling costs,
advertising costs, any real estate taxes, business license taxes,
net income taxes, franchise taxes, or any other taxes not billed as
part of Net Invoice Billings. It is also understood, and agreed
that all sums billed in respect of Articles lost and/or unaccounted
for shall also be included in Net Invoiced Billings. The sums,
which Licensor is paid as Royalties on any sales to Affiliated
Customers of Licensee (as defined below), shall be no less than the
sums paid as Royalties on sales to unaffiliated customers. For
purposes of this agreement, Affiliated Customers of Licensee shall
mean any entity which owns or controls, is owned or controlled by,
is under common ownership or control with, licensee, including but
not limited to parent companies, subsidiary companies, sister
companies, partnerships, and joint ventures of Licensee. The word
"control" (including "controlled by" and "controls"), as used in
the preceding sentence shall be deemed to mean possession, directly
or indirectly, of the power to command the course of management,
policy making and business activity of the entity or of the
Licensee, as the case may be, regardless of equity, debt, or voting
securities position.
(iv) Royalties payable for each Article sold shall not be less
than the Minimum Per Article Royalty (if specified). No royalties
are payable on the mere manufacture of Articles to the extent all
manufactured Articles are accounted for as required herein.
3. APPROVALS
(A) (i) Licensee shall submit to Licensor for its prior review
and written approval all preliminary and proposed final artwork and
three-dimensional models which are to appear on or in the Article
and Licensee's proposed use of such materials in preparing a pre-
production sample. Licensee shall submit such material as early as
possible, and in any case at least twenty (20) business days prior
to commercial production of any Article. Thereafter, Licensee
shall submit to Licensor for its written approval a pre-production
sample of each Article.
(ii) All containers, packaging, display material, hangtags,
promotional material, catalogues and advertising for Articles which
utilize or incorporate the Licensed Material must be submitted to
Licensor and receive its written approval before use. Licensor's
approval thereof should be procured when same is still in rough or
storyboard format. Licensor shall endeavor to respond to requests
for approval without undue delay. Approval shall lie in Licensor's
sole discretion, and the use of containers, packaging, display
material, promotional material, catalogues or advertising not
approved by Licensor in writing is strictly prohibited. Whenever
Licensee shall prepare catalogue sheets or other printed matter
containing illustrations of Articles, it will furnish to Licensor
five (5) copies of same.
(iii) Before shipping an Article to any customer, Licensee shall
furnish to Licensor, for its approval of all aspects of the Article
in question, from the first production run of each supplier or
manufacturer of each of the Articles, the number of samples, with
packaging, which is hereinabove set forth. Such samples shall
conform to the approved artwork, three-dimensional models and pre-
production sample previously approved by Licensor hereunder.
(iv) Approval or disapproval of the artwork utilizing or
incorporating Licensed Material as it appears on the Article, as
well as of the quality of the Article, shall lie in Licensor's sole
discretion. If any Article or item not approved hereunder by
Licensor in writing is being sold, distributed, published or
otherwise used, Licensor may at its sole election require, together
with other remedies available to it including but not limited to
immediate termination of this Agreement by written notice, such
Article or item to immediately withdrawn from the market, or from
distribution, publication or other dissemination by Licensee, and
Licensee agrees to so withdraw such Article or item within the
period so stated by Licensor. Articles and items so withdrawn
shall be immediately destroyed and such destruction shall be
attested to in a certificate signed by an independent third party,
firm, or agency approved by Licensor and delivered forthwith to
Licensor. Any Article not approved, as provided in the previous
sentence, shall not be sold and shall be immediately destroyed.
Such destruction shall be attested to by an independent third
party, firm or agency approved by Licensor and delivered forthwith
to Licensor.
(v) Any modification of an Article, including but not limited to,
change of materials, color, design or size of the representation of
Licensed Material, must be submitted in advance for Licensor's
prior written approval as if it were a new Article. approval of an
Article which uses particular artwork does not constitute approval
of such artwork for use with a different Article. The fact that
artwork has been taken from a publication or article previously
approved by Licensor does not mean that its use will be approved in
connection with an Article licensed hereunder. Licensor shall
endeavor to respond to requests for approval within a reasonable
time, but Licensee shall seek such approvals as early as possible
in case of delays. Licensor's failure to respond shall be deemed
disapproval.
(b) (i) If Licensee submits for approval artwork from an article
or book manufactured or published by another licensee of Licensor
or of any subsidiary of Licensor, Licensee must advise Licensor in
writing of the source of such artwork. It is specifically
understood that Licensee may not, in certain cases, be permitted to
utilize any previously published artwork or artwork not
specifically provided by Licensor, it being understood by Licensee
that any and all uses of artwork featuring the Licensed Material
shall be entirely subject to Licensor's approval as provided
herein.
(ii) If Licensee fails to advise Licensor as required in (i)
above, any approval which Licensor may give for use by Licensee of
such artwork may be withdrawn at any time by giving Licensee
written notice thereof, and upon receipt of such written notice
Licensee shall be prohibited by Licensor from selling any Articles
using such artwork.
(iii) If Licensor has supplied Licensee with forms for use in
applying for approval of artwork, models, pre-production and
production samples of Articles , Licensee shall use such forms when
submitting anything for licensor's approval as provided for
hereunder.
(c) Licensee shall make available to Licensor at no charge three
(3) additional samples from each production run of each supplier or
manufacturer of each of the Articles for the purpose of comparison
with samples from the first production run of each supplier or
manufacturer of each of the Articles, to maintain consistent
quality.
(d) Licensee shall permit Licensor, upon reasonable request, to
inspect Licensee's manufacturing operations (and those of its
suppliers) for the Articles.
(e) It is specifically understood that Licensor may in its sole
discretion interalia disapprove an Article or a production run of
an Article because the quality is unacceptable to Licensor.
Accordingly, Licensor recommends that Licensee submit production
samples to it for approval before committing to any original
production run or any purchase of a shipment from a new supplier.
(f) No modification of an approved production sample shall be made
without Licensor's prior written approval. Articles being sold
must conform in all respects to the approved production sample. It
is understood that if in Licensor's reasonable judgement the
quality of an Article originally approved has deteriorated in later
production runs, or if the Article has otherwise been altered,
Licensor may, in addition to other remedies available to it,
require by written notice such Article to immediately withdrawn
from the market, and Licensee agrees to withdraw such Article
within the period so stated by Licensor. Articles so withdrawn
shall be immediately destroyed, and such destruction shall be
attested to in a certificate signed by a independent third party,
firm or agency approved by Licensor and delivered forthwith to
Licensor.
(g) The rights granted hereunder do not permit the sale of
"seconds" or "irregulars." All Articles not meeting the standard
of approval shall be destroyed, pursuant to Subparagraph (f) above,
unless otherwise directed by Licensor.
4. SPECIFIC UNDERTAKINGS OF LICENSEE
During the Term and any renewal period and thereafter, Licensee
warrants, represents, and agrees that:
(a) It shall not sell Articles for use as premiums (including
those in purchase-with-purchase promotions), promotions, giveaways,
fund raisers or entries in sweepstakes or to customers for resale
only by direct mail or other resale through direct marketing
methods. However, nothing contained herein shall preclude Licensee
from soliciting orders by mail from wholesalers or retail outlets,
nor from selling to retailers who include the Articles in their
mail order catalogues or otherwise sell the Articles by direct
marketing methods as well as at retail.
(b) It shall obtain all necessary approvals and bear all expenses
from any third party(s) in connection with any print and/or
broadcast advertising Licensor authorizes. Licensee shall submit
all proposed advertising materials and concepts to Licensor as set
forth in Paragraph 3 and Licensor's approval of copy or storyboards
for such advertising will not constitute a representation or belief
by any code, standard, or other obligation imposed by any third
party(s). No media commercials incorporation any character voices
may be utilized under this Agreement without Licensor's specific
prior written approval.
(c) It shall cause Licensee's name, trade name (or trademark of
Licensee's which it has advised Licensor in writing that it is
using) and its address and the country of manufacture of the
Article to appear on the permanently affixed labeling on each
Article and, if the Article is sold to the public in packaging or
a container, printed on such packaging or container so that the
public can identify the supplier of the Article. On soft goods
"permanently affixed" shall mean sewn on.
(d) It shall advise Licensor in writing of all trade names or
trademarks it is using on or in connection with Articles being sold
under this Agreement if such names or marks differ from its
corporate name as indicated herein.
(e) It shall ensure that each Article distributed hereunder shall
be of high quality and shall comply with all applicable laws,
regulations and established industry standards of the country of
origin and the country of destination and conform to the sample
thereof approved by Licensor.
(f) It shall not associate other characters or other properties
with the Licensed Material, either on the Articles or in their
packaging, on advertising, promotional or display materials without
Licensor's prior written permission.
(g) It shall manufacture (or have manufactured for it) and offer
for sale all of the Articles and exercise the rights granted
herein. Licensee agrees that not later than by the Marketing Date
applicable to a particular Article, shipments to customers of
Articles in quantities sufficient to meet reasonably and
anticipated demand will have taken place and that Articles shall be
available for purchase and prompt delivery to customers. Any
Article as to which such sales have not taken place or which are
not then available for purchase and prompt delivery may be
recaptured from the scope of this Agreement without obligation to
Licensee, other than to provide it with written notice thereof.
Licensee further agrees to use its best endeavors to promote sales
of Articles.
(h) It shall carry out the Promotion Commitment, if applicable,
which shall be defined as the sum set forth above which Licensee
shall budget and expend on advertising of the Articles in the
Territory. Accordingly, within sixty (60) days following the end
of each year of the Term, Licensee shall submit to Licensor a
statement which shall include total Net Invoiced Billings, total
sums expended on advertising the Articles, together with the
resulting percentage. In the event Licensee fails to expend in
full the sum specified herein within the required time period, upon
submission of the statement required in Paragraph 10, Licensee
shall pay to Licensor an amount equal to such shortfall.
(i) Its parent or any subsidiary or affiliate of it shall not
register or attempt to register, in any country, copyrights, or to
register as a trademark, service mark, design patent or industrial
design any of the Licensed Material or derivations or adaptations
thereof, or any word, symbol or design which is so similar thereto
as to suggest association with or sponsorship by Licensor or any
subsidiary of Licensor's. In the event of a breach of the
foregoing, Licensee agrees, at its expense and at Licensor's
request, to immediately terminate the unauthorized registration
activity and to promptly execute and deliver or cause to be
delivered to Licensor such assignments and other documents as it
may require to transfer to it all rights to the registrations,
patents or applications involved.
(j) It shall not use wither the Licensed Material or any other
material, the copyright or trademark to which is owned or
controlled by Licensor, in any way other than as herein authorized
(or as authorized in such other written contract signed by both
Licensee and Licensor in effect). In addition to any other remedy
Licensor may have, Licensee agrees that the total revenues to
licensee from any use of such material on products other than the
Articles (unless authorized by Licensor in writing), and total
revenues to Licensee from the use of any other copyright or
registered material of Licensor's without written authorization,
shall be payable to Licensor.
(k) It shall give Licensor prompt written notice of any unlicensed
use by third parties of Licensed Material or material which
infringes any rights in the Licensed Material due to its similarity
thereto, and Licensee shall not bring or cause to be brought any
criminal prosecution, lawsuit or administrative action for
infringement, interference with or violation of any rights to
Licensed Material or violation of any rights granted herein.
Licensee shall cooperate and, if Licensor deems appropriate, be
named by Licensor as a sole plaintiff or co-plaintiff in any action
against an infringer of Licensor's or Licensee's rights hereunder,
provided it gives Licensee prior written notice of such actions and
bears the expense thereof. Any and all settlements, penalties,
damages, and recoveries arising from or in connection with such
action shall be the sole property of Licensor.
(l) It shall not use any Licensed Material on any business sign,
business cards, stationery or forms (except as licensed herein) or
use any Licensed Material as the name of its business or any
division thereof.
5. RIGHTS RESERVED BY LICENSOR
(a) Licensor reserves all rights not expressly conveyed to
Licensee hereunder. Notwithstanding anything to the contrary in
this Agreement, licensee hereby acknowledges that the rights
granted hereunder are subject to the rights of Licensor, and the
owner of the Licensed Material, to use or license without
limitation throughout the world any third party(s) of its choice
for the manufacture, distribution, advertising and sale of products
similar or identical to those set forth above for sale through any
catalogue(s) produced or distributed by or on Licensor's behalf, or
for sale or distribution in any motion picture theaters, or for
sale or distribution on any retail stores (or portion thereof)
operated by Licensor or on Licensor's behalf.
(b) Licensor reserves the right to withdraw any Licensed Material
or Articles, the use or sale of which under this Agreement would
infringe or reasonable be claimed to infringe the rights, other
than rights granted by Licensor, of a third party(s). In such case
Licensor's obligations to Licensee shall be limited to the
purchase, at cost without overhead, of Articles and other materials
utilizing such withdrawn Licensed Material which cannot be sold or
used.
6. ARTWORK
Should Licensee wish to use Licensor's services in developing
artwork for the creation of Articles, display packaging or
promotional material, (including any artwork which, in Licensor's
opinion, is necessary to modify artwork initially prepared by
Licensee and submitted to Licensor for approval) Licensee shall pay
Licensor, within thirty (30) days following the date of Licensor's
invoice therefor the amounts due, based upon Licensor's prevailing
commercial art rates, including any delivery charges incurred by
Licensor in connection therewith. Estimates of artwork charges are
available upon request. Licensee acknowledges, that in certain
cases it may be required by Licensor to utilize artwork or
renditions of the Licensed Material as specifically provided by
Licensor and Licensee agrees to so utilize such renditions. In
those instances where Licensee is unable or unwilling to use such
renditions, and if Licensor approves in writing, Licensee may
create or procure the creation of artwork to be submitted for
approval as required herein. Nonetheless, in those instances where
Licensee is not obligated to utilize Licensor's services, Licensee
is encouraged to do so in order to minimize delays which may occur
if outside artists do renditions of Licensed Material which
Licensor does not approve and to maximize the attractiveness of the
Articles.
7. LICENSOR'S OWNERSHIP OF ALL RIGHTS IN LICENSED MATERIAL
Licensee acknowledges that, as between Licensee and Licensor, the
Licensed Material and all copyrights and other proprietary rights
in and to the Licensed Material are exclusively owned, reserved
and/or controlled by Licensor. Licensee further agrees and
acknowledges that all rights in and to any and all artwork created
(including if created in whole or in part by Licensee) and
authorized for use hereunder by Licensor in connection with the
Articles or otherwise which utilizes or incorporates any of the
Licensed Material shall, as between Licensee and Licensor, be
owned, reserved, and/or controlled in its entirety exclusively by
Licensor, who shall be the author at law and copyright proprietor
thereof. Licensor reserves itself or its designees all rights to
use any and all artwork created, utilized and or approved hereunder
without limitation in the Territory or the EU, or otherwise during
or after the Term. At the request of Licensor, Licensee shall
execute such form of assignment to Licensor of the copyright in any
amendments to or derivative works based in whole or in part upon
the Licensed Material and all other proprietary rights in and to
the Licensed Material as Licensor may reasonable request.
8. LEGAL NOTICES
As a condition to the grant of rights hereunder, each Article and
any other matter containing Licensed Material shall bear one or
more properly located legal notice in the form as set forth above
or prescribed by Licensor. Licensee will comply with such
instructions as to form, location and content of the notice as
Licensor may give from time to time. Licensee will not affix to
any Article or any other matter containing Licensed Material al
legal notice in any other name. If by inadvertence a proper legal
notice in Licensor's name is omitted from any Article or other
matter containing Licensed Material, Licensee agrees, at its
expense, to immediately use all possible efforts to correct the
omission on all such Articles or other matter in process of
manufacture or in distribution. Licensee agrees to advise Licensor
promptly and in writing of the steps being taken to correct any
such omission and to cooperate fully with Licensor in making the
corrections on all existing Articles which can be located.
9. GOODWILL
Licensee recognizes and acknowledges the great value of the
publicity and goodwill associated with Licensed Material and in
such connection, it acknowledges that such goodwill exclusively
belongs to Licensor and that the Licensed Material has acquired
a secondary meaning in the mind of the purchasing public. Licensee
further recognizes and acknowledges that a breach by it of any of
its covenants, agreements or undertakings hereunder will cause
Licensor irreparable harm, which cannot be readily remedied in
damages in an action at law, and will, in addition thereto,
constitute an infringement of Licensor's rights in and to the
Licensed Materials, thereby entitling Licensor to injunctive relief
and other equitable remedies, costs and reasonable attorney's fees.
10. STATEMENTS, PAYMENTS AND AUDITS
(a) Within thirty (30) days following the end of each calendar
quarter during the Term ("Accounting Period"), Licensee shall
submit to Licensor:
(i) With respect to cumulative New Invoiced Billings, a "Royalty
Statement" which shall include, at a minimum, the information
listed on the format to be provided by Licensor upon execution of
this Agreement.
(ii) A "Statement of Account" which shall include, at a minimum,
the information listed on the format to be provided by Licensor
upon execution of this Agreement.
(iii) With respect to Articles manufactured, sold and defective
sales returns, an "Inventory Movement Report' which shall include,
at a minimum, the information listed on the format to be provided
by Licensor upon execution of this Agreement.
(iv) With respect to sales of Articles by Licensee to customers in
more than one country, as comprises the Territory, such formats as
specified above shall be prepared and submitted on a country-by-
country basis, as well in a summary format.
(v) Licensor will provide the formats for the above-referenced
reports and reserves the right to review and amend the minimum
requirements referred to above, from time to time, and in such
amended version in accordance herewith.
(b) Licensee shall provide Licensor at the beginning of the Term
and thereafter within seven (7) days of the close of each financial
quarter ("Quarterly Accounting Period") with a completed revenue
forecast projected forward to a date twelve (12) months from the
beginning of said quarter ("the Forecast"). The Forecast shall be
completed by Licensee in a format which Licensor shall provide.
Licensor reserves the right to review and amend the format of the
Forecast from time to time and in such event Licensee shall duly
complete and return to Licensor any such amended version in
accordance herewith.
(c) Within thirty (30) days following the end of each year during
the Term, Licensee shall conduct at its own expense a physical
inventory of all Articles in Licensee's possession or control and
submit to Licensor a written statement detailing the results of
such physical inventory.
(d) Licensee shall utilize best efforts to comply on a timely
basis with all reasonable requests of Licensor for supplementary
accounting information and reports in addition to the statements
specifically required by this Agreement.
(e) (i) Within thirty (30) days following the end of each
Accounting Period, Licensee shall pay Licensor in the national
currency of the country of the Territory where remittances are
required the amount shown to be due to Licensor. Licensee further
agrees to pay any amounts due to Licensor as required by the
Trademark License simultaneously with the payment of amounts due
hereunder, as if said amounts were stated herein, and to
incorporate same in any and all statements and/or reports as are
required herein. All sums due Licensor shall be deposited in a
bank account to be designated by Licensor. In the event Licensee
has amounts due Licensor in currencies other than the national
currency of the country of the Territory, where remittances are
required, then Licensee shall convert said amounts into the
national currency of the country of the Territory where remittances
are required based upon the exchange rate published by the national
bank(s) in the country of the Territory, and Licensee shall furnish
Licensor with external evidence with respect to the authenticity of
the exchange rate used, such as a bank statement. Exchange rates
in respect of each Accounting Period shall be determined as of the
30th day of the applicable month, or if such 30th day shall fall on
a non-business day then as of the first business day following said
30th day.
(ii) In the event Licensee cannot, because of laws and
restrictions make remittances to the country of the Territory where
remittances are required, as hereinabove provided, upon submission
to Licensor designates or to have the Royalties due deposited in
licensee's interest bearing account or in a joint trust account
with resulting interest, and the Royalties paid in Licensee's
national currency to Licensor on the date remittance restrictions
terminate. However, in no event shall remittance restrictions in
a particular country as comprises the Territory relieve the
Licensee of the obligation of reporting and remitting Royalties as
required hereunder.
(iii) In the event amounts payable to Licensor are not remitted in
full within the requested thirty (30) days following the end of an
Accounting Period, and Licensee has not provided evidence to
Licensor that because of laws and restrictions in a country or
countries of the Territory, amounts payable could not be remitted,
then Licensee shall pay to Licensor as liquidated damages and not
as a penalty an amount equal to five percent (5%) per month,
without any deductions for tax or other purposes, on the
outstanding balance. Interest will become due on the first day the
payment is not made beyond the said thirty (30) days as aforesaid,
and an additional month will be deemed to have passed for the
purposes hereof on the first day of each subsequent month until the
delinquent amount are paid.
(iv) In the event Licensor shall suffer any exchange losses
arising from late payments, including those late payments arising
as a result of understated amounts due discovered as a result of an
audit, such losses shall be determined by deducting the monies
which would have been received if the delinquent balance had been
paid on the last due date at the exchange rate on that date, said
exchange rate source to be designated and agreed upon by both
parties, from the national currency actually received from such
delinquent balances. Any resulting national currency shortfall
will be paid in the national currency on the date that these
delinquent balances are remitted. This exchange loss protection
described above will also apply to all liquidated damages described
above, and the last due date, for purposes of determining the
exchange rate, shall be deemed to be the first day a payment
becomes delinquent.
(v) If remittance restrictions shall remain in effect for six (6)
months or more, Licensor shall have the right and option,
exercisable by the service of a written notice to such effect upon
Licensee, to terminate this Agreement. Licensee will use its best
efforts at all times to obtain government approval for remittance
of all sums due to Licensor at the earliest possible date.
Licensee is fully obligated to provide this best effort whether
sums due to Licensor are
(A) held by Licensee, or
(B) have been deposited into a bank account in Licensor's name.
(f) Licensee shall keep true and accurate books and records of all
transactions relating to the manufacture, distribution, and
exploitation of Articles hereunder which shall include but not be
limited to the following minimum requirements:
(i) inventory records showing the receipt, dispatch, return and
balance of Articles stocked by Licensee.
(ii) billing records that are capable of being traced to the above
inventory records.
(iii) an overall reconciliation showing the total number of
Articles received and/or manufactured in connection with the
exploitation of Licensee's rights hereunder and showing their
actual disposition, i.e., whether with customers, damaged,
destroyed, lost, or in stock.
(g) Licensor shall have the right from time to time during normal
business hours at reasonable intervals to inspect, audit and make
extracts of the books and records of Licensee insofar as said books
and records relate to the manufacture, distribution, and
exploitation of Articles licensed hereunder and, if applicable, as
said books and records relate to the Promotion Commitment and such
right of audit shall continue for a period of four (4) years
following either expiry or termination of this Agreement. Should
an inspection or audit carried out pursuant hereto reveal any
shortfall, Licensee shall pay to Licensor an amount equal to such
shortfall together with interest thereon from the respective dates
that same should have been payable hereunder until the date of
payment of such shortfall at a rate per annum equal to the maximum
legal rate in such country of the Territory. Should an inspection
or audit carried out pursuant hereto reveal a shortfall of more
than one percent (1%) of the total amount due to Licensor for the
periods reviewed, the costs of such audit or inspection shall be
reimbursed by Licensee to Licensor within thirty (30) days of
Licensor's invoice therefor. Licensor shall also have the right to
inspect or audit, under the same terms described in this Paragraph,
the books and records of any of Licensee's affiliated companies
which charged expenses to Licensee including bills, invoices, and
overhead charges.
(h) Each character or element of the Licensed Material hereunder
shall constitute a separate unit for purposes of accounting
statements and remittance to Licensor hereunder.
(i) Any income taxes, other taxes, and/or fees which local law
requires to be levied against Licensor's royalties shall, in order
to avoid any interest charges or other penalties, be advanced by
Licensee on behalf of Licensor within the period of time required
by such local law; provided that Licensee shall not make such
advance if Licensor has advised Licensee in writing not to do so,
and has taken appropriate legal action to contest the propriety of
such taxes and/or fees and legally withheld payment, and in such
event Licensor shall indemnify Licensee against any interest
charges or other penalties with respect to such taxes. Any such
taxes or fees which Licensee advances shall be deducted from the
total amount of royalty otherwise payable to Licensor. In the
event that new or revised law(s) establishing fees, taxes or other
impositions are promulgated in the Territory, Licensee must notify
Licensor immediately and in ample time to afford Licensor an
opportunity to contest such impositions through the appropriate
legal channels. Licensee shall file all necessary tax returns or
other government documents on licensor's behalf, which agree
required by local law, within the time period required by local
law. The original receipt, and the computations for such taxes as
may be deducted from the royalties must accompany the Statement of
Account (referred to in Subparagraph (a) (ii) above) in the
Accounting Period in which such tax deduction is made. If local
law stipulates that the original tax receipt must be retained by
the Licensee, a bonafide copy thereof must be attached to the
Statement of Account.
11. MANUFACTURE OF ARTICLES BY THIRD PARTY MANUFACTURES
(a) Prior to entering into this Agreement, Licensee shall advise
Licensor in writing of the place of manufacture of the Articles.
If Licensee at any time desires to have Articles or components
thereof containing Licensed Material manufactured by a third party,
it must, as a condition to the continuation of this Agreement,
notify Licensor of the name and address of such manufacturer and
the Articles or components involved and obtain Licensor's prior
written permission to do so. The granting of said permission, if
Licensor is prepared to grant the same, will be conditional upon:
(i) In the case of Manufacture outside the Territory:
(1) Licensee's signing a consent agreement in a form to be
provided by Licensor; and
(2) Licensee causing each such manufacturer and any
submanufacturer to sign a consent agreement in a form to be
provided by Licensor; and
(3) Licensor's receipt of such agreements properly signed; and/or:
(ii) In the case of Manufacture in the Territory:
(1) if Licensor so requests, Licensee causing each such
manufacturer to sign a consent agreement in a form to be provided
by Licensor; and
(2) Licensor's receipt of such agreement properly signed.
(b) Notwithstanding the above subparagraph (a), Licensee
acknowledges and agrees that in the event Licensor shall request
Licensee to have Articles or components thereof containing Licensed
Material manufactured by Licensor's designee or source, Licensee
shall comply with such requests.
(c) If Licensor requests an agreement from a third party
manufacturer of Licensee, Licensee's purchase of Articles from a
third party manufacturer without such an agreement as required
hereunder being signed and delivered to Licensor shall be a
violation of this Agreement. It is not Licensor's policy to reveal
the names of its suppliers to third parties or to any division of
Licensor's involved with buying products except as may be necessary
to enforce its contract rights or protect its property rights.
(d) If any such manufacturer utilizes Licensed Material for any
unauthorized purpose, Licensee shall cooperate fully in bringing
such utilization to an immediate halt. If, by reason of Licensee
not having supplied the above-mentioned agreements to Licensor or
not having given Licensor the name of any supplier, Licensor makes
any representation or takes any action and is thereby subjected to
any penalty or expense, Licensee will indemnify Licensor for any
cost or loss Licensor sustains.
12. LICENSOR'S WARRANTIES AND REPRESENTATIONS
Licensor warrants and represents to Licensee that:
(a) It has, and will have throughout the Term of this Agreement,
the right to license the Licensed Material to Licensee in
accordance with the terms and provisions of this Agreement; and
(b) The entering into of this Agreement by Licensor does not
violate any agreement, rights or obligations existing between
Licensor and any other person, firm or corporation.
13. INDEMNITY
(a) During the Term, and continuing after expiration or
termination of the Agreement, Licensee shall indemnify Licensor
against all claims, liabilities (including settlements entered into
in good faith) and expenses (including reasonable attorney's fees)
arising out of Licensee's activities hereunder or out of any
alleged defect (whether obvious or hidden) in an Article or arising
from personal injury or any infringement of any rights of
Licensor's or of any third party by the manufacture, sale,
possession or use of Articles (or the advertising therefor) or
their failure to comply with applicable laws. The parties
indemnified hereunder shall include Licensor, its parent,
affiliates, subsidiaries and their respective officers, directors,
shareholders, employees and agents.
(b) Licensor shall indemnify Licensee against all claims,
liabilities (including settlements entered into in good faith)
arising out of any claim that Licensee's use of any representation
of the Licensed Material provided by Licensor approved in
accordance with the provisions of this Agreement infringes the
copyright of any third party. Licensee shall not, however, be
entitled to recover for consequential loss including without
limitation or materials.
(c) Additionally, if by reason of any such claims specified in
subparagraph (b) above, and which are sustained in a final
judgement by a court of competent jurisdiction, Licensee is
precluded from selling any stock of Articles or utilizing any
materials in its possession or which come into its possession by
reason of any required recall, Licensor shall be obligated to
purchase such Articles and materials from Licensee at the out-of-
pocket cost to Licensee, excluding overheads, but Licensor shall
have no other responsibility or liability with respect to such
Articles or materials.
(d) No warranty or indemnity is given with respect to any
liability or expense arising from any claim that use of the
Licensed Material on or in connection with the Articles hereunder
or any packaging, advertising or promotional material infringes
upon any trademark right of any third party or otherwise
constitutes unfair competition by reason of any prior rights
acquired by such third party other than rights acquired from
Licensor. It is expressly agreed that it is Licensee's
responsibility to carry out such investigations as it may deem
appropriate to establish that Articles, packaging, promotional and
advertising material which are manufactured or created hereunder,
including any use made of the Licensed Material therewith, do ont
infringe such right of any third party, and Licensor shall not be
liable to Licensee if such infringement occurs.
14. INSURANCE
Licensee shall maintain in full force and effect at all times while
this Agreement is in effect comprehensive general liability
insurance, including product liability coverage with broad form
vendor's endorsement, with combined single limits as set forth
above and naming as additional insureds those indemnified herein.
Licensee shall deliver to Licensor a certificate or certificates of
insurance evidencing satisfactory coverage and indicating that
Licensor shall receive notice of cancellation or of any material
change in coverage at least thirty (30) days prior to the effective
date thereof, and deleting any "other insurance" clause so that the
coverage of said insurance shall be primary and not secondary.
15. CREDIT AND SECURITY INTERESTS
(a) Licensee agrees to provide credit information and other
documentation as Licensor may request including, but not limited
to, fiscal year-end financial statements (profit and loss statement
and balance sheet), and operating statements.
(b) Licensee agrees to provide Licensor at Licensor's request
either a grant to Licensor of a lien and security interest in
Licensee's inventory, contract rights and accounts receivable, and
all proceeds thereof, and/or a letter of credit issued in favor of
Licensor from a financial institution as approved by Licensor in an
account and form approved by Licensor and/or such other form of
security acceptable to Licensor. Licensee agrees to execute all
documentation as Licensor may require in connection with perfecting
such security interests.
16. TERMINATION
(a) This Agreement shall terminate, without prejudice to the
accrued rights and remedies of the parties, forthwith on
termination, howsoever occurring, of the Trademark License which as
used herein shall mean the license or trademark rights which relate
to all or any part of the Licensed Material to be entered into
between the Licensee and the owner of such rights.
(b) Without prejudice to any other right or remedy available to it
and in addition to any other termination rights specified
throughout this Agreement, Licensor shall have the right at any
time to terminate this Agreement forthwith by giving Licensee
written notice thereof:
(i) If Licensee defaults in the performance of any of its material
obligations provided for in this Agreement and any such default is
not corrected within ten (10) days after written notice to Licensee
from Licensor thereof; or
(ii) If Licensee does not commence in good faith to manufacture,
distribute and sell each Article throughout the Territory on or
before the Marketing Date and thereafter fails to diligently and
continuously manufacture, distribute and sell each of the Articles
throughout the Territory. Such default, and Licensor's resultant
right of termination shall apply only to the specific characters,
elements and logos of the Licensed Material and/or the specific
nation of which or wherein Licensee fails to meet said marketing
requirements, and if any such failure is not corrected within ten
(10) days after written notice to Licensee from Licensor thereof.
(c) Licensor shall have the right at any time to terminate this
Agreement by giving Licensee written notice thereof:
(i) if Licensee delivers to anyone without Licensor's written
authorization merchandise containing representations of Licensed
Material or other material, the copyright or other proprietary
rights to which are owned or controlled by Licensor other than the
Articles approved in accordance with the provisions hereof; or
(ii) if Licensee shall breach any other agreement in effect
between Licensee on the on hand and Licensor or any other company
in Time Warner Entertainment Company, L.P. group on the other; or
(iii) if Licensee shall make any assignment for the benefit of
creditors or file a petition in bankruptcy or is adjudged bankrupt
or becomes insolvent or generally unable to pay its debts as and
when due or is placed in the hands of a receiver or if the
equivalent of any such proceedings or acts occurs though known by
some other name or term; or
(iv) if an order is made or effective resolution is passed for the
winding up of Licensee (other than a voluntary winding up for the
purpose of reconstruction or amalgamation or, as the case may be,
the Licensee shall become bankrupt or if Licensee seeks to make any
composition or arrangement with creditors or is unable to pay its
debts within the meaning of Section 518 of the Companies Act of
1985 or any statutory modification or reenactment thereof; or if
any administrator or receiver or administrative receiver or manager
is appointed of the whole or any part of the assets of the Licensee
or if any distress, execution or other process is levied on or
enforced upon any property of the Licensee; or if an application
for administration order in relation to the licensee is presented
to the courts; or if anything analogous to or having substantially
similar effect to any of the events specified above shall occur
under the laws of the applicable jurisdiction; or
(vi) if Licensee undergoes a substantial change of management or
ownership.
17. RIGHTS AND OBLIGATIONS UPON EXPIRATION OR TERMINATION
(a) Upon the expiration or termination of this Agreement, all
rights herein granted to Licensee shall immediately revert to
Licensor. Licensor shall be entitled to retain all Royalties and
other things of value paid or delivered to Licensor.
(b) Licensee agrees that from and after the expiration or
termination of this Agreement Licensee shall neither manufacture
nor have manufactured for it Articles, that Licensee shall destroy
or deface any moulds, plates or other items used to reproduce
Licensed Material and that, except as hereinafter provided, it
shall cease selling Articles.
(c) If Licensee has any unsold Articles in inventory on the
expiration or termination of this Agreement, Licensee shall provide
Licensor with a full statement of the kinds and numbers of such
unsold Articles. If such statement has been provided to Licensor
and if Licensee has fully complied with the terms of this
Agreement, including the payment of all Royalties due, Licensee
shall have the right, for a period of sixty (60) days from such
expiration or earlier termination date, to sell off and deliver
such Articles ("Sell Off Period"). Licensee shall furnish to
Licensor statements covering such sales and pay Licensor Royalties
on such sales, where applicable. In no event, however, may
Licensee distribute and sell during such period an amount of
Articles sold during any consecutive sixty (60) day period during
the Term. In the event this Agreement is terminated by Licensor
for cause, Licensee shall be deemed to have forfeited its sell-off
rights hereunder. Except as otherwise agreed by Licensor in
writing, any inventory of Articles in Licensee's possession or
control after the Sell-Off Period granted hereunder shall be
destroyed forthwith. Such destruction shall be attested to in a
certificate signed by an independent third party, firm, or agency
approved by Licensor delivered forthwith to Licensor.
18. WAIVERS
A waiver by either party at any time of a breach of any provision
of this Agreement shall not apply to any other provision on this
Agreement or imply that a breach of the same provision at any other
time has been or will be waived.
19. ASSIGNABILITY
(a) This Agreement does not provide for a joint venture between
the parties. Licensee's rights as granted hereunder cannot be
assigned, disposed of or transferred, voluntarily or involuntarily,
to anyone else without Licensor's prior written consent. Without
limiting the foregoing, a merger of Licensee's company into another
company or the transfer of a controlling interest in Licensee's
company shall be deemed a disposal of Licensee's rights hereunder
which, to be effective hereunder, would require Licensor's written
consent.
(b) Licensor shall have the right to assign this Agreement or any
of its rights and obligations or interests hereunder to any
subsidiary, affiliate, or successor in interest by merger or
acquisition or otherwise, of Licensor or Time Warner Entertainment
Company, L.P., or to any person or entity succeeding to
substantially all of the assets of Licensor or Time Warner
Entertainment Company, L.P. and such assignment shall not require
the consent of Licensee.
20. CONFIDENTIALITY
Licensee hereby agrees that, both during the term of this Agreement
and after the expiration or termination hereof, it shall maintain
in strict confidence all information, including but not limited to
the Licensed Material, books of account, inventories, production
and sales records, reports correspondence and any other materials
relating to this Agreement, and shall not disclose such information
to third parties without the prior written consent of Licensor.
21. ETHICS
Licensee agrees that no part of the consideration paid pursuant to
this Agreement shall be offered, paid or promised, directly or
indirectly, to any government official, political party or official
thereof, or any candidate for political office, for the purpose of
influencing any act or decision of such person or party or inducing
such person or party to use his or its influence to affect or
influence any act or decision of any national, state or local
government or instrumentality thereof. For the purposes of this
paragraph, the term "governmental official" shall include any
officer or employee of a national, state or local government, or
any department, agency or instrumentality thereof, or any person
acting in an official capacity of or on behalf of such government
or department, agency or instrumentality.
22. HEADINGS
Headings of paragraphs herein are for convenience of reference only
and are without substantive significance.
23. NOTICES/HEADINGS
All notices which either party is required or may desire to serve
upon the other party shall be in writing, addressed to the party to
be served at the address set forth above and may be served
personally or by depositing the same, postage prepaid, in the
official mail of the country of deposit, or by facsimile, provided
that a hard copy of the facsimile is sent by mail (in the manner
described above) on the same day as the facsimile transmission.
Such notice shall be deemed served upon personal delivery or upon
the date of mailing, or, if sent by facsimile, on receipt by the
addressee.
24. FORCE MAJEURE
The parties shall be excused from performance under this Agreement
while and to the extent they are unable to perform by reason of
war, fire, storm, flood, earthquake, explosion, rebellion, labor
dispute, insurrection, action of the elements, or other acts of
God. It is understood, however, that excuse from performance does
not toll the Term of this Agreement. It is further understood that
Licensor's inability to perform for any of the above enumerated
causes shall not excuse Licensee's obligation to pay Licensor the
Guaranteed Consideration. Additionally, if the circumstance of a
force majeure continues for a period of six months or longer, then
either party shall have the right to terminate this Agreement
forthwith on written notice to the other party.
25. CONSTRUCTION
This Agreement shall be enforced, construed and interpreted in
accordance with the laws of England, and the parties hereby submit
to the exclusive jurisdiction of the English courts.
26. MISCELLANEOUS
(a) Each of the parties acknowledges and agrees that the other has
not made any representations, warranties or agreements of any kind,
except as may be expressly set forth herein.
(b) This Agreement constitutes and contains the entire agreement
between the parties with respect to the subject matter hereof and
supersedes any prior or contemporaneous agreements, oral or
written. Nothing herein contained shall be binding upon the
parties until this Agreement has been executed by an officer of
each party. This Agreement may not be changed, modified, amended
or supplemented, except in writing signed by both parties.
(c) If any part of this Agreement shall be declared invalid or
unenforceable by a court of competent jurisdiction, it shall not
affect the validity of the balance of this Agreement, provided,
however, that if any provision of this Agreement pertaining to the
payment of monies to Licensor shall be declared invalid or
unenforceable, Licensor shall have the right, at its option, to
terminate the Term of this Agreement upon giving written notice to
Licensee of its election to do so.
(d) In the event of any action suit, or proceeding hereunder, the
prevailing party shall be entitled to recover its attorney' fees
and the costs of said action, suit, or proceeding.
Dates Referenced Herein and Documents Incorporated by Reference
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