Licensing Agreement re: Terminator - Creative Licensing Corp. and Collective Concepts Group
June 28, 1999
COLLLECTIBLE CONCEPTS GROUP
1600 Lower State Road
Chalfont, PA 18914
Re: TERMINATOR
Gentlemen:
The following will confirm our agreement ("Agreement") pursuant to which
CREATIVE LICENSING CORPORATION, 2551 South Bundy Drive, Los Angeles,
California 90064 ("Licensor") grants COLLECTIBLE CONCEPTS GROUP, 1600 Lower
State Road, Chalfont, Pennsylvania ("Licensee") the exclusive right, license
and privilege of utilizing the Property (as defined below) which Licensor
represents through an agreement with CANAL+ (US), on behalf of CANAL+ DA, 301
North Canon Drive, Beverly Hills, California 90210 ("Canal+") solely in
connection with the manufacture, sale and distribution of the Licensed
Articles (as defined below) upon the following terms and conditions.
1. PROPERTY: The name, artwork, stories, characters, approved likenesses of
actors and logo for the motion picture THE TERMINATOR.
2. LICENSED ARTICLES* The Licensed Articles are:
Collectibles - Gun (solid barrel permanently attached to the
wall mount) Coin Set/Silver, Coin Set/Gold; Coin Set/Platinum;
Ceramic Mug; Sunglasses with Case; Leather Bound Script;
Collector's Club Membership; Metal Notebook' Club Premiums
All Licensed Articles shall be of high standard and shall be distributed via
direct marketing (QVC, HSN) and retail (catalogs, specialty, gift stores,
department stores).and Internet 4
3. TERM: The Term shall commence on the date hereof and continue until December
31, 2001.
4. TERRITORY: The Territory is worldwide. The Licensee agrees that it will not
make, nor authorize any use, direct or indirect, of the Property in any other
area, and that it will not knowingly sell Licensed Articles to persons who
intend or are likely to resell them in any other area.
5. MARKETING: Licensee agrees to offer for sale the Licensed Articles on or
before March 31, 2000. Licensee shall be responsible for manufacturing and
shipping sufficient amounts of the Licensed Articles to reasonably meet the
demands of the marketplace.
<PAGE>
6. ROYALTY: Licensee agrees to pay Licensor a Royalty of Ten Percent (10%) of
one hundred percent(100%) of gross sales,
7. ADVANCE: The non-returnable Advance which Licensee agrees to pay Licensor is
Seven Thousand, Five Hundred Dollars ($7,500.00) payable Three Thousand, Seven
Hundred and Fifty Dollars ($3,750.00) upon signing of this Agreement by Licensee
and Three Thousand, Seven Hundred and Fifty Dollars ($3,750.00) ninety (90) days
later. Said Advance shall be recoupable against future Royalties payable to
Licensor as per paragraph 6.
8. GUARANTEE: Licensee agrees to pay Licensor the sum of Fifteen Thousand
Dollars ($15,000.00) such sum being a Guarantee. Licensee shall receive a credit
against the Guarantee for any Royalties and Advances paid Licensor as per
paragraph 6 and 7 respectively. Any unearned portion of the Guarantee shall be
due and payable on the last day of the Term.
9. Omitted
10. INSURANCE: Licensee shall obtain and maintain during the Term of this
Agreement and the Extended Term, at its own expense, comprehensive general
liability insurance, including product and contractual liability and
advertiser's liability insurance, naming Licensor and Canal+ as additional named
insureds, from a reputable insurance carrier in the amounts of at least $1
million for personal injury, $1 million for property damage, $1 million for
advertiser's liability, with an "umbrella coverage" of at least $2 million. The
policy should provide for ten (10) days notice to Licensor and Canal+ from the
insurer in the event of any modification, cancellation, or termination and the
policy shall not be terminated or canceled unless it is it immediately replaced
with a comparable policy from a substitute reputable insurance carrier. As proof
of such insurance, a fully paid certificate of insurance naming Licensor and
Canal+ as additional named insureds will be submitted to Licensor by Licensee
within thirty (30) days of the final execution of this Agreement Licensee.
11. PROTECTION OF INTELLECTUAL PROPERTY: Licensee agrees to respect and
cooperate with Licensor and Canal+ to protect all trademarks, tradenames,
service marks and symbols, copyrights and patents related to the Property and to
cooperate with Licensor and/or Canal+ in the protection of such marks,
copyrights and patents.
12. APPROVALS: Licensor shall have the right of approval of all Licensed
Articles, including the packaging thereof, and all advertising for the Licensed
Articles issued by or under the control of Licensee. Licensee may not
manufacture, use, offer for sale, sell, advertise, promote, ship or distribute
any Licensed Article or any promotional or packaging material relating thereto
until it has received written approval of same from Licensor. In the event any
submission is disapproved, Licensee shall have the right to alter or correct the
submission and resubmit it. Said approval shall not be unreasonably withheld and
submissions shall be deemed disapproved if
<PAGE>
not approved within fourteen (14) days of submission to Licensor. Said right of
Approval shall include, without limitation, the following items, all to be
created at Licensee's expense:
(a) Approval of the initial concept for the Licensed Articles and concept
artwork to be used on the Licensed Articles,
(b) Approval of preliminary designs for the licensed Articles and of the
artwork to be used on the licensed Articles.
(c) Approval of the final designs for the Licensed Articles and artwork to
be used on the Licensed Articles.
(d) Approval of actual product samples of the Licensed Articles.
(e) Approval of all advertising and promotional materials for use in
media, including storyboards for television advertising.
Failure to provide elements for approval as indicated above, and/or failure to
produce tile Licensed Articles based on approved elements, shall constitute a
material breach of this Agreement by Licensee. After approval of such final
designs, artwork, product samples and other materials, Licensee shall not depart
therefrom in any respect without first obtaining the prior written approval of
Licensor.
13. TRADEMARK AND COPYRIGHT NOTICES: The Licensee agrees, that all Licensed
Articles and all related promotional and packaging materials shall contain
appropriate copyright, trademark and other legends, markings and notices as
required from time to time by the Licensor to give appropriate notice of
Canal+'s right, title and interest thereto. Unless Licensor notifies Licensee
otherwise, the following copyright and trademark legends shall appear at least
once on each Licensed Article and on each piece of promotional and packaging
material:
THE TERMINATOR(TM)
THE TERMINATOR(C)1990 Canal+ DA. All Rights Reserved.
Terminator is a trademark of Canal+ DA
Where patent protection is either pending or has been granted for any portion of
the Property and/or Licensed Articles, the Licensee shall further include the
appropriate patent notice on all Licensed Articles and on all pieces of related
promotional and packaging material. In the event Licensee manufactures and
distributes Licensed Articles without tile appropriate trademark and copyright
notices, Licensee shall, at its sole expense, discontinue such
manufacture, recall said Licensed Articles and correct the notice or destroy the
Licensed Articles.
14. BUY BACK PROVISION: Licensee agrees to sell to Licensor the Licensed
Articles in such reasonable quantities as Licensor requests, for non-commercial
uses, at Licensee's most favorable wholesale price.
<PAGE>
15. PAYMENTS AND STATEMENT: Unless otherwise instructed in writing by Licensor,
any and all Royalty and other payments due Licensor hereunder shall be paid in
United States dollars and remitted to Licensor at 2551 South Bundy Drive, Los
Angeles, California 90064. Licensee shall furnish to Licensor complete and
accurate statements certified to be accurate by licensee allowing the number,
description, and gross sales price for each Licensed Article distributed and/or
sold by Licensee during each calendar quarter, together with Royalty payments,
within thirty (30) days of the conclusion thereof, pursuant to the terms of this
Agreement. Such statements shall be furnished to Licensor whether or not
Licensed Articles have been sold during said period. All information shall be
shown separately for each country within the Territory and all gross sales shall
be stated in the currency of the country where they were made followed by the
equivalent amount of gross sales stated in United States dollars, followed by
the exchange rate applied. If any payment is late, interest shall accrue thereon
from tile due date at the rate of 1.5% per month compounded daily or the maximum
rate permitted by law. Acceptance by Licensor of any statement or Royalty
payment shall not preclude Licensor from questioning the correctness of such
statement or payment at any time. It shall be understood that the timely
rendering of all statements required hereunder is essential under the Terms of
this Agreement, and failure to render such statements and payments in a timely
fashion shall be deemed to be a material breach of this Agreement.
16. AUDIT: Licensee agrees to keep accurate books of account and records,
including machine sensible data if applicable, at its principal place of
business covering all transactions relating to the merchandise license herein
granted. Licensor and its duly authorized representative(s) shall have the right
once each calendar year, at all reasonable hours of the day, to examine said
books of accounts and records and all other documents and material in the
possession or under the control of Licensee with respect to the subject matter
and terms of this Agreement and to make copies and extracts thereof. In the
event any such examination reveals underpayments by the Licensee, the Licensee
shall immediately remit payment to Licensor in the amount of the underpayment
plus interest calculated at the rate of 1.5% per month, compounded daily,
calculated from the date the payment was actually due until the date the payment
is made. In the event of any underpayment in excess of One Thousand Dollars
($1,000.00), Licensee shall reimburse Licensor for the costs of the examination.
Upon demand by Licensor, but no more than once each year, Licensee shall at its
own expense furnish to Licensor a detailed statement by all independent
certified public accountant showing pricing information, the number and
description of the Licensed Articles distributed and/or sold by Licensee up to
the date of licensor's demands All books of account and records shall be kept
available for at least two (2) years after the expiration or earlier termination
of this Agreement.
17. INDEMNITY: (a) Licensee hereby imdemnifies and shall hold harmless Licensor
and Canal+, their respective officers, directors, employees, affiliates,
shareholders, assigns and agents from and against any and all costs, expenses,
losses, claims, demands, causes of action and judgements arising out of
Licensee's unauthorized use of any patent,
<PAGE>
process, method or device or out of Licensee's infringement of any copyright,
tradename or trademark, libel, invasion of the right of privacy, publicity, or
other property right, or any defect in or use of the Licensed Articles or
related promotional or packaging material, or for the breach of any of
Licensee's agreements, warranties and representations herein. Licensee shall
defend and hold harmless all of the indemnified parties whatsoever, including
but not limited to attorney's fees and court costs. Licensor shall have the
right, but not the obligation, to defend any such action or proceeding with
attorneys of its (their) own selection.
(b) Solely as to the copyright, trademark and property rights granted to
Licensee herein, Licensor and Canal+ hereby indemnify and shall hold harmless
Licensee, its officers, directors, employees, affiliates, shareholders, assigns
and agents from and against any and all costs, expenses, losses, claims,
demands, causes, of action and judgements arising out of Licensee's authorized
use of any said rights, or for the breach of any of Licensor's and/or Canal+'s
agreements, warranties and representations herein, provided that Licensee shall
give written notice to Licensor within ten (10) business days after notification
of any such cost, expense, loss, claim, demand, cause of action or judgement,
and Licensor and Canal+ shall have the right, but not the obligation, to
undertake and conduct the defense of any cause of action so brought and to
handle any such claim and/or demand. Licensor and Canal+ shall indemnify and
hold harmless all of the aforementioned indemnified parties whatsoever,
including but not limited to attorney's fees and court costs.
18. LICENSOR WARRANTY: Canal+ Licensor warrants that it has all rights necessary
to enter into this Agreement. Canal+ Licensor makes no other warranty or
representation of any kind. Canal+ and Licensor makes no claim as to the amount
of gross sales or net profits (if any) Licensee will derive hereunder.
19. BENEFITS OF UJSE: Licensee hereby agrees that its every use of the Property
including the goodwill related thereto shall inure to the benefit of Canal+ and
that Licensee shall not at any time attack Licensor's and/or Canal+'s rights and
interests in the Property. Furthermore, Licensee shall not acquire any rights in
the Property by virtue of any use it may make of the Property. Furthermore,
Licensee agrees that to the extent the Licensed Articles are copyrightable as
derivative works such copyrights shall be assigned to Canal+ and the Licensee,
its employees, successors and/or assignees shall not register the Licensed
Articles for copyright. Licensee acknowledges and agrees that Canal+ is the sole
and exclusive owner or proprietor of all rights in and to the Property and
Canal+ has granted to Licensor the exclusive right to solicit and negotitate
licenses with respect to the sale and distribution of goods and services
utilizing the Property, and, with the exception of such grant to Licensor by
Canal+ and the rights granted to Licensee hereunder, all other rights relating
to the Picture and the Property are expressly reserved by Canal+.
20. PREMIUMS AND PROMOTIONAL ARRANGEMENTS: Licensee hereby agrees that Licensor
shall have and retain the sole and exclusive right to utilize
<PAGE>
the Property in connection with any premium, giveaway or promotional
arrangement, or fan club, which retained right it may be exercised by Licensor
concurrently with the rights licensed to Licensee hereunder, without regard to
the extent to which any such right may be competitive with Licensee or the
license granted herein.
21. SAMPLES: Upon commencement of distribution, Licensee shall furnish and ship
free of charge Ten(10) samples of each and every Licensed Article, including
packaging, and two (2) samples of all advertising, promotional and display
material involving or related to the Licensed Articles to licensors at 2551
South Bundy Drive, Los Angeles, California 90064.
22. ASSIGNMENTS AND SUB-LICENSING: Notwithstanding anything herein to the
contrary, the license granted hereunder is and shall be personal to Licensees
and shall not be assignable or transferable by any act of Licensee or by
operation of law. Notwithstanding anything herein to the contrary, Licensee
shall not have Licensed Articles manufactured for Licensee by a third party
unless Licensee first obtains Licensor's approval in writing.
23. TERMINATION AND REVERSION: Either Party shall have the immediate right to
terminate this Agreement in the event the other party is bankrupt, insolvent, in
receivership, is sold, reorganizes or consents to the appointment of a receiver,
liquidator, trustee or assignee in bankruptcy, or materially breaches its
obligations under this Agreement. After expiration or termination of this
Agreement, all rights granted by Licensor to Licensee shall, as between Licensee
and Licensor, immediately revert to Licensor and Licensor shall be free to
license others to use the Property in connection with manufacture, sale and
distribution of tile Licensed Articles, and Licensee and any approved
sublicensee and assignees shall refrain from further use of the Property except
as provided in paragraph 24.
24. DISPOSAL PERIOD: Upon termination of this Agreement, Licensee may dispose of
any Licensed Articles which are on hand or in process at the time notice of
termination is received, or upon the expiration of the Term and the Extended
Term, for a period of nine (9) months after notice of termination or such
expiration date, as the case may be, provided all monies due and payable to
1icensor with respect to the Term or Extended Term are paid and statements are
furnished for that period. During the disposal period, Licensor shall receive a
Royalty for all Licensed Articles disposed as per paragraph 6, and Licensor may
itself use or license the use of the Property in any manner at any time anywhere
in the world. In the last sixty (60) days of the Term, Licensee shall not,
without Licensor's consent, manufacture more than one Hundred and ten percent
(110%) of the number of Licensed Articles manufactured by Licensee in the
previous sixty (60) days. Upon termination of this Agreement all artwork created
by or for Licensee and any other materials used to reproduce the licensed
property for the manufacture of the Licensed Articles shall, at Licensor's
request, either be destroyed by Licensee and verified proof of said destruction
sent to Licensor at the appropriate mailing address, or said artwork shall be
returned to Licensor.
<PAGE>
25. NOTICES: All notices or other communications required or desired to be sent
to either party hereto shall be in writing and shall be sent by Registered or
Certified Mail, postage prepaid, return receipt requested, or sent by facsimile,
telegram or telex service, charges prepaid. A copy of all notices retired to be
sent to Licensor shall be sent to CanaL+ (US) on behalf of Canal+ DA, 301 North
Canon Drive, Beverly Hills, California 90210. The address for all notices
required to be sent to Licensor or Licensee shall be at the mailing address
stated in the signature lines below.
26. INFRINGEMENTS: The Licensee agrees to assist the Licensor and Canal+ in the
enforcement of any rights of the Licensor or Canal+ in the Property. Licensee
agrees to promptly notify the Licensor in writing of any infringement, or
imitations by third parties of the Property, the Licensed Articles or the
promotional and packaging materials related thereto which may come to Licensee's
attention. Licensor and Canal+ shall have the right to determine whether or not
any action shall be taken on account of any such infringement or, imitation.
Licensor and/or Canal+ shall be entitled to receive and retain all amounts
awarded as damages, profits or otherwise in connection with such actions brought
by Licensor and/or Canal+. In the event Licensor and/or Canal+ decide that they
do not wish to pursue any cause of action Licensee, at its own cost, with
Licensor's permission, may pursue said cause of action and retain, all amounts
awarded therefrom as damages, profits or otherwise.
27. APPLICABLE LAW: The validity, construction and performance of this Agreement
shall be governed by, and interpreted in accordance with, the laws of the State
of California, and Licensee hereby consents to the jurisdiction of the courts of
the State of California and the United States courts located in the County of
Los Angeles, State of California, in Connection with any lawsuit, action or
proceeding arising out of or relating to this Agreement.
28. EQUITABLE RELIEF: Licensee acknowledges that its failure to commence in good
faith to manufacture with the appropriate copyright and trademark notice and to
distribute in substantial quantities any one or more of the Licensed Articles as
specified herein and to continue during the Term hereof and the Extended Term to
diligently and continuously manufacture, sell, distribute and promote the
Licensed Articles or any category thereof and to pay any and all sums due
Licensor as specified hereunder will result in immediate and irremediable damage
to Licensor. Licensee acknowledges that its failure to cease the manufacture,
sales, distribution or promotion of the Licensed Articles or any category
thereof at the termination or expiration of this Agreement or any portion
thereof will result in immediate and irremediable damage to Licensor and to the
rights of any subsequent licensee. Licensee agrees that in the event of such
failure(s) Licensor shall be entitled, in addition to any other remedy that may
be available to Licensor, to equitable relief by way of temporary and permanent
injunctions and such other and further relief as any court with jurisdiction may
deem just and proper notwithstanding any other provisions to the contrary
contained herein.
<PAGE>
29. CURE: Licensor and/or Canal+ agrees to give Licensee written notice of any
breach of this Agreement by Licensee, and Licensee shall have thirty (30) days
(seven (7) days for payments and statements) to cure said breach.
30. ENTIRE AGREEMENT: This Agreement contains the full and complete
understanding between the parties hereto and supersedes all prior
understandings, whether written or oral, pertaining to the subject matter hereof
and cannot be modified except by a written instrument signed by the parties
hereto.
AGREED & ACCEPTED:
CANAL+(US) on behalf
CREATIVE LICENSING CORPORATION CANAL+(DA)
2551 South Bundy Drive 301 North Canon Drive
Los Angeles, CA 90064 Beverly Hills, CA 90210
("Licensor") ("Canal+")
BY:
ITS:-
COLLECTIBLE CONCEPTS GROUP
1600 Lower State Road
Doylestown, PA 18901
("Licensee")
BY:______________________________
ITS:______________________________