Playboy Enterprises Inc. Contracts
Sample Business Contracts
Product License Agreement [China] - Playboy Enterprises Inc. and Chaifa Investment Ltd.
CHINA AGREEMENT
INDEX TO CHAIFA INVESTMENT, LIMITED
PRODUCT LICENSE AGREEMENT
-------------------------
THE SCHEDULE
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PARAGRAPH PAGE NO.
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1. GRANT OF LICENSE
a. Grant 1 - 2
b. Term 2
c. License Year and License Quarter 2
d. Territory 3
e. Minimum Net Sales 3
2. COVENANTS OF LICENSEE
a. Use 3 - 4
b. Best Efforts 4
c. Royalties
(i) Guaranteed Royalties 5
(ii) Earned Royalties 5
(iii) Interest 5
d. Statements 5 - 6
e. Payments 6 - 7
f. Records and Audit 7 - 8
g. Expenses of Conducting Examinations 8
h. Product Quality 8 - 9
i. Approval of Products, Wrapping
Materials and Related Materials 9 - 10
j. Title and Protection and Preservation
of Trademarks and Copyrights 10 - 12
k. Right to Subcontract and
Lists of Sources and Customers 12 - 13
l. Production Costs 13
m. Inventory 13
n. Trademarks and Non-Competitive Brands 13 - 14
o. Indemnification and Product Liability
Insurance 14 - 15
p. Advertisinq Expenditures 15
3. ADDITIONAL COVENANTS OF THE PARTIES
a. Reservation of Rights 16
b. Rights of Licensor 16
4. TITLE AND PROTECTION
a. Indemnification by Licensor 17
b. Enforcement 17 - 18
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INDEX TO CHAIFA INVESTMENT, LIMITED
PRODUCT LICENSE AGREEMENT
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(Continued)
PARAGRAPH PAGE NO.
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5. RELATIONSHIP BETWEEN THE PARTIES
a. No Joint Venture 18
b. Assignment 18
6. SUBLICENSING 19
7. DEFAULTS AND RIGHTS OF TERMINATION
a. Defaults and Right to Cure 19
b. Bankruptcy or Assignment for Creditors,
Business Discontinuance 19
c. Loss of Trademark Rights 19 - 20
d. Impossible Performance 20
8. TERMINATION OR EXPIRATION
a. Effect of Termination or Expiration 20
b. Reserved Rights 20
c. Inventory 20 - 21
d. Continued Sales After Termination or
Expiration 21
e. Equitable Relief 21
f. Continuity of Sales 22
g. Guaranteed Royalties 22
9. NOTICES 22 - 23
10. INVALIDITY 23
11. CONSENTS AND APPROVALS 23
12. APPLICABLE LAW 23
13. NO BROKER 23
14. TITLES 23
15. ENTIRE AGREEMENT 23 - 24
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THE SCHEDULE referred to in the Agreement dated as of March 4, 1991
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<C> <C> <S>
S.l. THE LICENSOR: Playboy Enterprises, Inc.
680 North Lake Shore Drive
Chicago, Illinois 60611
S.2. THE LICENSEE: Chaifa Investment, Limited
Unit 1, 17/F Westlands Centre
20 Westlands Road, Quarry Bay
Hong Kong
S.3. THE TRADEMARKS: PLAYBOY and RABBIT HEAD DESIGN
S.4. THE TYPE OF LICENSE: Exclusive
S.5. THE USE OF THE TRADEMARKS: Design, manufacture, advertise, sell
and distribute
S.6. THE PRODUCTS: Clothing specifically, men's and
ladies underwear, swimwear, socks,
robes, pajamas, outerwear, shirts,
activewear, jeans and jeanswear,
suits, scarves, hankies, ties, hats,
caps, wristbands, headbands, shoes,
and small leather goods, specifically,
belts and luggage including tote bags.
S.7. THE TERRITORY: People's Republic of China
S.8. THE COMMENCEMENT DATE: January 1, 1991
THE EXPIRATION DATE: December 31, 1994
S.9. THE GUARANTEED ROYALTY:
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1st License Year (01/01/91 - 12/31/91) - $50,000
2nd License Year (01/01/92 - 12/31/92) - $50,000
3rd License Year (01/01/93 - 12/31/93) - $50,000
4th License Year (01/01/94 - 12/31/94) - $50,000
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THE SCHEDULE (Continued)
S.10. THE EARNED ROYALTY:
Five percent (5%) of "net sales" (as defined in Paragraph 2.d.(ii) of
the agreement) of the Products.
S.11. MINIMUM NET SALES: 0
S.12. THE ADDRESS WHERE BOOKS KEPT: See S.2
PLAYBOY ENTERPRISES, INC.
(LICENSOR)
By /s/ M. E. Levenson
--------------------------------
CHAIFA INVESTMENT, LIMITED
(LICENSEE)
By /s/ John Chan Chun Tung
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CHAIFA INVESTMENT, LIMITED
--------------------------
This agreement is made as of the 4th day of March, 1991, between the
corporation described in Paragraph S.1. of the Schedule attached hereto and made
a part hereof (hereinafter called "Licensor") and the corporation described in
Paragraph S.2. of the Schedule (hereinafter called "Licensee").
WHEREAS, Licensor has certain rights to the trademark PLAYBOY and other
trademarks identified in Paragraph S.3. of the Schedule (hereinafter
collectively referred to as the "Trademarks");
WHEREAS, Licensee recognizes that the Trademarks have been used:
a. in an internationally distributed magazine (Playboy) published by
Licensor or its subsidiaries, affiliates or licensees;
b. in widespread advertising, publicity, broadcasting and
telecasting and allied fields by Licensor, its subsidiaries and affiliates;
c. in promotional and advertising material in diverse businesses by
Licensor, its subsidiaries and affiliates;
d. in the manufacture, advertisement, distribution and sale world-
wide of a broad range of consumer products, including, but not limited to,
jewelry, clothing, footwear, leather goods, audio and visual recordings,
and personal health and home articles and accessories;
WHEREAS, the parties hereto desire that Licensor grant to Licensee a
license to use the Trademarks in the design, manufacture, advertising and sale
of "Products" (as hereinafter defined);
NOW, THEREFORE, in consideration of the mutual promises herein contained,
it is mutuallY aqreed as follows:
1. GRANT OF LICENSE.
----------------
a. Grant:
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(i) Upon and subject to the terms and conditions hereinafter set
forth, Licensor hereby grants to Licensee, and Licensee hereby accepts
the right, license and privilege specified in Paragraph S.4. of the
Schedule, of using the Trademarks in connection with, and only with,
the use, specified in Paragraph S.5. of the Schedule, of specifically
designated and approved articles of merchandise specified in Paragraph
S.6. of
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the Schedule (such articles of merchandise bearing the Trademarks are
hereinafter collectively referred to as the "Products") in the
territory specified in Paragraph S.7. of the Schedule (hereinafter
called the "Territory"). Such right, license and privilege is
hereinafter called the "License."
(ii) Nothing contained in this agreement shall prevent Licensor
from (a) using or granting others the right or license to use the
Trademarks on or in connection with the Products in any area of the
world other than the Territory or on or in connection with any goods
other than the Products in any area of the world including the
Territory, (b) manufacturing or having manufactured in the Territory
the Products for sale outside the Territory, or (c) producing or
having produced limited quantities of the Products to be used in the
Territory specifically for promotional and advertising purposes and
not for sale. In-house direct mail order sales, premium sales and
incentive sales of the Products are specifically excluded from this
License and are expressly reserved by Licensor.
b. Term: The term of this License shall commence on the date
specified in Paragraph S.8. of the Schedule (hereinafter called
"Commencement Date") and shall expire on the date specified in Paragraph
S.8. of the Schedule, unless sooner terminated as provided under this
agreement.
c. License Year and License Ouarter:
--------------------------------
(i) For all purposes under this agreement a "License Year" shall
be twelve (12) consecutive calendar months commencing on the
Commencement Date and ending twelve (12) months thereafter and each
twelve (12) month period thereafter, and if the termination or
expiration of this License is effective other than at the end of such
twelve (12) month period, then the final less than twelve (12) month
period ending on the effective date of termination or expiration shall
be deemed to be a License Year.
(ii) For all purposes under this agreement, a "License Quarter"
shall be the first (lst) and each succeeding three (3) month period of
each License Year; and if the termination of this License is effective
other than at the end of a License Year, then the final less than
three (3) month period ending on the effective date of termination
shall be deemed to be a License Quarter.
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d. Territory: The License shall extend only to the Territory and the use by
Licensee of the Trademarks shall be confined to the Territory.
e. Minimum Net Sales: Anything in this agreement to the contrary
notwithstanding, if Licensee's "net sales" (as hereinafter defined), in any
License Year shall be less than the Minimum Net Sales specified in Paragraph
S.11. of the Schedule for the Territory in such License Year, then Licensor
shall have the right at any time to either declare the License in the Territory
to be a non-exclusive License thereby giving Licensor the right to design,
manufacture, advertise, distribute and sell the Products itself or grant non-
exclusive licenses to other parties to design, manufacture, advertise,
distribute and sell the Products; or terminate the License herein granted by
notifying Licensee of its election to terminate within thirty (30) days after
Licensor's receipt of the statement for such License Year for which Minimum Net
Sales were not attained. Such declaration of non-exclusivity or termination as
set forth above shall have no effect upon the amounts due and payable to
Licensor for periods prior to or after such declaration or deletion or prior to
termination.
2. COVENANTS OF LICENSEE.
a. Use:
(i) Subject to Licensor's prior approval as hereinafter required,
Licensee shall commence the manufacture, sale and distribution of each and
every one of the Products as soon as practicable after the Commencement
Date. If Licensee has not commenced the manufacture, sale and distribution
of an approved line of Products within 6 months (180 days) of the
Commencement Date, Licensor may elect to treat such an occurrence as an
incurable default by Licensee under this agreement. If, during any License
Year, Licensee has not on a regular and ongoing basis sold or distributed
any specific Product within the category of Products under Paragraph S.6.
of the Schedule in the Territory, Licensor shall have the right to delete
any one or more of such Products from this License upon not less than
thirty (30) days prior written notice to Licensee with the effect that
Licensee shall have no further right to manufacture, sell or distribute
such Products and Licensor may license such right to manufacture, sell or
distribute to any party Licensor may designate.
(ii) Licensee shall not cause or authorize any use of the Trademarks
in any area of the world outside the Territory and shall not knowingly
manufacture, sell or otherwise deal with or distribute any of the Products
on
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behalf of, or to, any person, firm or corporation, that Licensee believes
or has reason to believe intend, or are likely, to deal with the same in
any way outside the Territory. Licensee shall, upon notice from Licensor,
immediately and permanently cease delivering Products to any person, firm
or corporation named in such notice as one that directly or indirectly
deals with the Products outside the Territory. (However, Licensee may
manufacture the Products outside the Territory provided that Licensee
strictly complies with Paragraph 2.k. herein.)
(iii) Licensee warrants and represents that it has, and will continue
to have throughout the entire term of this agreement, the legal right to
enter into this agreement and to assume the obligations hereunder and that
there are no, and Licensee shall not enter into during the term hereof,
contracts, agreements or understandings with anyone which would in any way
restrict or prevent Licensee or Licensor from their performances and
obligations under this agreement or which would in any way interfere with
Licensor's contractual relationships with any other Licensees,
subsidiaries, affiliates or other 3rd parties. Licensee shall be
responsible for obtaining, at its own expense, any and all licenses,
permits, approvals (including governmental or other agency licenses,
permits and approvals) necessary for Licensee to design, manufacture,
advertise, distribute and sell the Products, or to pay royalties or taxes
or to fulfill any other obligation or exercise any right of Licensee under
this License. In the event Licensee is unable, for any reason, to obtain
prior to the Commencement Date or maintain throughout the term of this
License all of the necessary permits, licenses or approvals, Licensor shall
have the right to terminate this agreement upon notice to Licensee without
any period of grace and without any obligation to Licensee whatsoever.
b. Best Efforts: Licensee shall, throughout the term of the License and
as permitted by this agreement, constantly use its best efforts in the
advertising, promoting, selling and distributing and any other dealing with or
disposal of the Products to protect the good name and goodwill associated with
the Trademarks and Licensor and to obtain the greatest number of sales of the
Products throughout the entire Territory and the entire term of this agreement.
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c. Royalties:
(i) Guaranteed Royalties: Licensee shall pay to Licensor or its
nominee guaranteed minimum royalties (hereinafter called "Guaranteed
Royalty" or "Guaranteed Royalties") in the amount specified in Paragraph
S.9. of the Schedule; which shall be payable in four (4) equal installments
with each such installment due on or before the first (lst) day of each
License Quarter of each such License Year. Licensee's obligation to pay
Guaranteed Royalties hereunder shall be secured by an irrevocable letter of
credit in Licensor's favor in form and content reasonably satisfactory to
Licensor and drawn on a bank reasonably satisfactory to Licensor. Licensee
will provide Licensor with a copy of such letter of credit upon execution
of this agreement for the first (lst) License Year and will provide
Licensor with letters of credit for each subsequent License Year not later
than thirty (30) days prior to the first (lst) day of each such subsequent
License Year.
(ii) Earned Royalties: In addition to Guaranteed Royalties, Licensee
shall pay to Licensor or its nominee percentage royalties (hereinafter
called "Earned Royalties") for each License Year in the amount equal to the
amount by which in each License Year the amount specified In Paragraph
S.10. of the Schedule exceeds the Guaranteed Royalty for such License Year.
Earned Royalties shall be payable in accordance with the terms and
conditions of Paragraph 2.d. and 2.e. below.
(iii) Interest: All sums including but not limited to the Guaranteed
and Earned Royalties, that shall not be paid on the due date shall bear
interest at an amount equal to the highest percentage allowed by law over
the prime rate of interest as established by The First National Bank of
Chicago in Chicago, Illinois applicable to ninety (90) day commercial loans
effective on the date that such sum should have been paid from such due
date until the date on which such sum is paid in full.
d. Statements:
(i) Within forty-five (45) days after each License Quarter, Licensee
shall furnish to Licensor or its nominee a complete and accurate statement
in a format acceptable to Licensor certified to be true by the Chief
Financial Officer or Company Secretary of Licensee showing for the
preceding License Quarter and the License Year through such period (a) a
listing of Licensee's accounts in each country of the Territory and the
units and description of all the Products distributed and sold
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to each such account or otherwise disposed of by Licensee; (b) the
computations of "net sales" (as hereinafter defined) on all such sales; and
(c) the computation of Earned Royalties as set forth in Paragraph 2.c.(ii)
hereof and the amount of Earned Royalties due and payable thereon. When
during any License Year such statement shows that the amount of the
Guaranteed Royalty for such License Year has been exceeded, Licensee shall
commence payment of Earned Royalties for such License Year by remittance,
accompanying such statement, of Earned Royalties payable through the period
covered by such statement. Any overpayments or underpayments of Earned
Royalties caused by errors in prior quarterly statements revealed by the
statement for the last License Quarter of any License Year shall be
immediately adjusted by the parties. Such statement shall also reflect the
advertising expenditures made by Licensee through such period pursuant to
Paragraph 2.o. hereof (which will include the details of all such
advertising expenditures, supported by copies of vouchers and copies of any
print advertising).
(ii) As used in this agreement, the term "net sales" means the invoice
price charged by Licensee for the Products less (x) refunds, credits and
allowances actually made or allowed to customers for returned Products, (y)
customary trade discounts (including anticipations) afforded to and
actually taken by customers against payment for the Products and (z) value
added tax assessed on sales (only where applicable). If Licensee sells
Products to a marketing organization or any individual or company in whole
or in part controlled by Licensee, the invoice price used to determine net
sales hereunder shall be the invoice price at which the Products are resold
by such entity to an unrelated customer in an arm's length transaction
(iii) In the event the percentage of returns of Products in any
License Year exceeds thirty percent (30%) of net sales for such License
Year, Licensor may elect to treat such an occurrence as an incurable
default by Licensee under this agreement.
e. Payments.
(i) All payments Licensee is required to make by the terms of this
Agreement shall be made in United States Dollars through a bank specified
by Licensor. No deduction shall be made for income or other taxes without
Licensor's written permission, unless Licensee is compelled to do so by
law; in which case Licensee shall provide Licensor with evidence that such
tax has been
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paid in the proper amount. Licensee shall give due notice to Licensor of
any such proposed deductions. In the event payments in the manner provided
in this Paragraph 2.e. shall become impossible or illegal by reason of the
action of governmental authority, then, at Licensor's option, this
Agreement may be terminated; and whether or not Licensor exercises such
option, while such restrictions remain in effect, all payments due Licensor
shall be made to an account in the Territory, or elsewhere where permitted
by law, to be designated by Licensor.
(ii) In determining the proper rate of exchange to be applied to the
payments due hereunder, it is agreed that:
(a) Licensee shall calculate Earned Royalties on a calendar month
basis in local currency (with each such month considered to be a
separate accounting period for the purpose of computing Earned
Royalties).
(b) Licensee shall compute a conversion of each such monthly
total into United States currency utilizing the rate of exchange in
effect on the last day of each relevant calendar month as determined
by the Bankers Trust Co. of New York City, New York (U.S.A.).
(c) The converted amounts (in U.S. currency) shall be added
together on a cumulative basis and when during any License Year such
computation shows that the amount of the Guaranteed Royalty for such
License Year has been exceeded, Licensee shall commence payment of
Earned Royalties for such License Year by remittance of such excess in
U.S. currency to Licensor; which remittance will accompany the
statement required by Paragraph 2.d.(i) hereof. If there is no excess,
no Earned Royalties will be payable for such License Year by Licensee
(but in no event shall Licensor be responsible for returning to
Licensee any portion of the Guaranteed Royalties paid or payable).
f. Records and Audit: Licensee shall keep accurate books of account and
records (including but not limited to utilization of consecutively numbered
invoices) covering all transactions relating to this agreement or arising out of
this License (which records shall be maintained separately from Licensee's books
and records relating to other items manufactured or sold by Licensee) and shall
permit Licensor or any of its nominees, employees or agents to have full
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access to and to inspect the same at all reasonable hours of the day to enable
Licensor and its nominees, employees or agents to conduct an examination of and
to copy, at Licensor's expense, all such books and records. Licensee shall
maintain in good order and condition all such books and records for a period of
two (2) years after the expiration or termination of the License or, in the
event of a dispute between the parties hereto, until that dispute is resolved,
whichever date is later, and such books and records shall be kept at the address
stated in Paragraph S.12 of the Schedule; except as such address may be changed
from time to time in accordance with Paragraph 9. hereof. Receipt or acceptance
by Licensor of any statement furnished pursuant hereto or any sums paid by
Licensee hereunder shall not preclude Licensor from questioning the correctness
thereof at any time, and if any inconsistencies or mistakes are discovered in
such statement or payment, they shall be immediately rectified and prompt
adjustment and corresponding payments shall be made to compensate therefor. In
the event of an underpayment by Licensee in excess of nine percent (9%) in any
License Year, Licensor may elect to treat such occurrence as an incurable
default by Licensee under this agreement.
g. Expenses of Conducting Examinations: If an examination referred to in
Paragraph 2.f. above discloses an overpayment or underpayment of Earned
Royalties, the appropriate amount shall be immediately paid or refunded to the
party entitled thereto. If such examination reveals that for the period covered
by such examination there is an error of five percent (5%) or more in the Earned
Royalty previously reported as being due from Licensee, all expenses involved in
the conducting of such examination shall be borne by Licensee. If such error is
less than five percent (5%), such expenses shall be borne by Licensor.
h. Product Ouality: Licensee hereby warrants and agrees that, the
Products manufactured, advertised, promoted, sold or distributed under this
agreement shall bear faithfully produced Trademarks and shall meet the high
standards of quality, workmanship, material, design, size, color and style
established by Licensor in accordance with the terms and conditions of this
agreement; and Licensee will not knowingly cause or authorize any Product not
conforming to the conditions of this agreement to be available for sale within
the Territory as doing so may adversely affect Licensor's goodwill in the
Trademarks. All Products made available for sale in the Territory shall conform
to and comply with, in all respects, all governmental, jurisdictional and local
laws, rules and regulations governing the design, quality or safety of such
Products. Licensee shall not cause or authorize: (i) the use of any substandard
or offensive materials in Products; (ii) in its actions under or related to this
License, any
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violation of any governmental, jurisdictional or local law or regulation,
including, but not limited to, regulations imposing advertising standards or
requiring trade or content description of Products; or (iii) the use of the
Trademarks or any other word, device or symbol associated in any way with
Licensor, its subsidiaries and affiliates in connection with any product or
activity that is not the subject of this License.
i. Approval of Products, Wrapping Materials and Related Materials:
(i) Licensee understands and agrees that all Products and other items
bearing the Trademarks or intended for use in connection with the Products
(including, but not limited to, cartons, containers, labels, wrappers,
packages and other inner and outer packaging materials, fixtures, displays,
artwork, printing, advertising, sales, marketing and promotional
materials - collectively hereinafter called "Wrapping Materials and Related
Materials") must be approved in advance by Licensor. Licensee shall, at its
own expense submit to Licensor or its nominee for written approval, samples
of each of the Products, Wrapping Materials and Related Materials, which
shall include, but not be limited to: (a) an initial sketch or photograph;
(b) a sample, prototype or equivalent acceptable to Licensor; and (c) two
(2) actual manufactured or produced Products, Wrapping Materials or Related
Materials in its final form as intended to be sold and distributed by
Licensee. In no event shall Licensee commence or permit the mass
manufacture, advertisement, sale or distribution of any Product, Wrapping
Material or Related Material until Licensee has received Licensor's written
approval of the actual manufactured samples of same pursuant to (c) above.
While Licensor shall have the sole and absolute discretion to approve or
withhold approval of any Product, Wrapping Material or Related Material or
any sample of them throughout each stage of development of same without
providing any reasons to Licensee, Licensor shall only withhold approval on
the actual manufactured items submitted pursuant to (c) above because such
items do not conform to the previously approved samples. In the event
Licensor fails to signify its approval or disapproval of any Product,
Wrapping Material or Related Material within fourteen (14) days of
Licensor's receipt of same, Licensor shall be deemed to have disapproved of
same.
(ii) To ensure that all of the Products, Wrapping Materials or Related
Materials dealt with by Licensee are constantly maintained in conformance
with the previously
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approved samples, Licensee shall, within seven (7) days of a demand from
Licensor, dispatch to Licensor, at Licensee's expense, samples of any of
the Products, Wrapping Materials or Related Materials that Licensee is
using, manufacturing, selling, distributing or otherwise disposing of under
the terms of this agreement for inspection. In addition, Licensor and its
designated agents and representatives shall have the right to enter upon
and inspect, at all reasonable hours in the day, any office, factory,
warehouse or other facility where any of the Products, Wrapping Materials
or Related Materials are designed, manufactured, stored or otherwise dealt
with and to take, without payment, such samples of any of the Products,
Wrapping Materials and Related Materials as Licensor reasonably requires
for the purposes of such inspection.
(iii) If any Product, Wrapping Material or Related Material dispatched
or taken pursuant to (ii) above or otherwise comes to the attention of
Licensor does not conform in Licensor's sole opinion to the previously
approved samples, Licensor shall so notify Licensee, in writing, specifying
in what respect such Product, Wrapping Material or Related Material is
unacceptable. Immediately upon receipt of such notice, Licensee shall
suspend all manufacture, sale and distribution of and shall call back from
Licensee's customers all such Product, Wrapping Material or Related
Material and shall not resume the manufacture, sale or distribution of such
item or items unless and until Licensee has made all necessary changes to
the satisfaction of Licensor and has received Licensor's written reapproval
of such Product, Wrapping Material or Related Material.
(iv) Product, Wrapping Materials or Related Materials that are not
approved by Licensor or that are determined by Licensor to be "off-quality"
shall not be sold, distributed or otherwise dealt with by Licensee. All
such Products, Wrapping Materials or Related Materials shall be destroyed
by Licensee with, if Licensor so requests, an appropriate certificate of
destruction provided to Licensor. Sales by Licensee of off-quality or
unapproved Products, Wrapping Materials and Related Materials shall
constitute a material default under the terms of this agreement.
j. Title and Protection and Preservation of Trademarks and Copyriqhts:
(i) Licensee hereby acknowledges; the great value of the goodwill
associated with the Trademarks; the worldwide recognition of the same; that
the proprietary
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rights therein, and goodwill attached thereto, are solely owned and belong
to Licensor; that the Trademarks and other words, devices, designs and
symbols have a secondary meaning that is firmly associated in the mind of
the general public with Licensor, its subsidiaries and affiliates and their
respective publications, published material and other activities; and that
any additional goodwill attached to the Trademarks, created through the use
of such Marks by Licensee shall inure to the benefit of Licensor alone.
During and after the term of the License, Licensee shall not:
(a) attack or question the validity of, or assist any other
person in such action, the title or any rights of Licensor, its
subsidiaries and affiliates or any of their respective licensees or
sublicensees in and to the Trademarks or any other trademark,
copyright or such other intellectual or intangible property associated
or connected with Licensor, its subsidiaries or affiliates or any of
its or their publications, published material or other activities or
licensees;
(b) directly or indirectly seek for itself, or assist any third
party to use or acquire, any rights, proprietary or otherwise, in any
patent, trademark, copyright or such other intellectual or intangible
property so associated or connected, without the prior written
authority of Licensor;
(c) in any way seek to avoid its obligations under this
agreement because of the assertion or allegation by any person(s)
that the Trademarks or any of them are invalid or by reason of any
contest concerning the rights of Licensor;
(d) file or prosecute trademark applications regarding Licensee's
use of the Trademarks unless asked to do so in writing by Licensor.
Licensee will cooperate with Licensor in connection with any such
filings.
(ii) Licensee shall:
(a) use the Trademarks in each jurisdiction strictly in
accordance with the legal requirements in such jurisdiction. Licensee
shall cooperate fully with Licensor in preparing and causing to be
recorded in every jurisdiction where applicable Register User
agreements and all other documents which may be necessary or desirable
to evidence, protect and implement the riqhts of Licensor
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pursuant to this agreement. Upon expiration or termination of this
agreement for any reason whatsoever, Licensee shall execute and file
documents, as required by Licensor, terminating any and all Register
User agreements and other documents regarding the Trademarks or, at
Licensor's option shall, and hereby does, authorize and empower
Licensor to terminate all Registered User or other documents regarding
the Trademarks on Licensee's behalf and in Licensee's name.
(b) affix or imprint irremovably and legibly on each Product, and
on, or within all Wrapping Material and Related Material such
trademark credit notices and copyright notices as Licensor directs;
(c) manufacture, sell, distribute or otherwise deal with Wrapping
Materials and Related Materials solely in connection with the
Products;
(d) not cause or grant permission to any third parties to acquire
any copyright or other proprietary right in connection with any word,
device, design or symbol used by Licensee in connection with any of
the Products, Wrapping Materials or Related Materials.
k. Right to Subcontract, Licensees Financial Statements and Lists of
Sources and Customers:
(i) Licensee may subcontract the manufacture of any Product (or
portion of any Product) bearing the Trademarks under this agreement
provided Licensee obtains from any and all such subcontractors an agreement
in writing, with a copy to Licensor, that no use of the Trademarks will be
made for any purpose other than supplying Products solely to Licensee;
(ii) With the statement submitted at the end of each License Year
pursuant to Paragraph 2.d.(i) hereof and at any other time so requested by
Licensor, Licensee shall provide Licensor: a) copies of Licensee's most
recent financial statements, such as annual reports, 10-K's, balance sheets
or other similar public documents that indicate Licensee's financial
status; and b) with an updated list of the names and addresses of all
manufacturing sources, suppliers, dealers, wholesalers, retailers and
customers who have been engaged in the manufacture, sale, distribution or
other dealings with the Products, Wrapping Materials and Related Materials
during the term of the License (such list shall include customers to whom
Products, Wrapping Materials or Related
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Materials have been delivered after the expiration or termination of this
License); and such list shall, if so requested by Licensor, contain the
full specification of any designs, utility models, patents or trademarks
that may be involved, directly or indirectly, in the manufacture,
production or distribution of any of the Products, Wrapping Materials or
Related Materials; and Licensee shall obtain the consent of any relevant
third parties for such disclosure.
l. Production Costs: Except as provided in Paragraphs 1.a.(ii) and 2.o.
hereof, Licensee shall be responsible for and shall assume and pay for all costs
and expenses related to the design, manufacture, sale, promotion, advertising
and distribution of the Products.
m. Inventory: It is the intent of this agreement that, insofar as
practical, Licensee shall at all times be able to fulfill all orders for
Products promptly and yet not have an excessive inventory on hand at the time of
the termination or expiration of this License. Within forty-five (45) days after
each License Year or within ten (10) days of a request from Licensor, Licensee
will furnish Licensor with a statement signed by the Chief Financial Officer or
Company Secretary of Licensee, setting forth in detail the quantities of
finished goods and work in progress inventories of the Products.
n. Trademarks and Non-Competitive Brands:
(i) Licensee shall not during or after the term of this agreement use
or cause or authorize to be used any words, device, design or symbol
confusingly similar to the Trademarks. Permutations of the Trademarks,
secondary marks or new words, devices, designs, slogans or symbols shall
not be used on or in connection with the Products without Licensor's prior
written consent and approval. Upon such authorization by Licensor and use
by Licensee, such permutations, secondary marks, words, devices, designs,
slogans and symbols shall be and become the property of Licensor and shall
be included as Trademarks subject to this agreement. Should Licensee create
or develop any packaging or tradedress unique to the Products, such
packaging or tradedress shall be and become the property of Licensor and
shall not be used by Licensee on or in connection with any other product or
merchandise during or after the term of this agreement. Upon termination or
expiration of this agreement or at any other time Licensor so requests,
Licensee will assign, without charge to Licensor, all of Licensee's right,
title and interest, including all rights of copyright, in and to such
packaging or tradedress and shall cooperate fully with Licensor in
preparing and
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recording whatever documentation may be necessary to effect said
assignment.
(ii) Licensee shall not during the term of this agreement manufacture,
distribute, advertise, promote, sell or deal with in any way in the
Territory any product that is in Licensor's sole and absolute judgment
competitive with the Products produced by Licensee under this agreement
without Licensor's prior written consent.
(iii) Licensee shall not during or after the term of this agreement
and use color combinations or designs or styles unique to the Products on
or in connection with any other brand of product and will assign to
Licensor the beneficial ownership of all rights that Licensee has acquired
or may acquire in such color combinations, designs or styles upon
expiration or termination of this agreement.
o. Indemnification and Product Liability Insurance:
Licensee shall:
(i) indemnify, defend and hold Licensor, its subsidiaries and
affiliates, their respective shareholders, licensees, franchisees, and the
agents, officers, directors and employees of all the foregoing harmless
from any costs, claims, suits, losses, damages and expenses (including
attorneys' fees) arising out of or in connection with the manufacture,
sale, distribution or any other dealing whatsoever with the Products or any
other alleged action whatsoever by Licensee or arising out of any alleged
defect in any of the Products or non-conformity to or non-compliance with
any statutory or other regulations pertaining to the design, quality,
safety, advertising or marketing of the Products, Wrapping Materials and
Related Materials;
(ii) Forthwith obtain and maintain, at its own expense, satisfactory
product liability insurance in the minimum amount of Five Million Dollars
($5,000,000.00) of primary and umbrella coverage from an insurance company
reasonably satisfactory to Licensor and qualified to transact business in
the Territory (such insurance policy shall name Licensor, its subsidiaries
and affiliates, and their respective shareholders and licensees and the
agents, officers, directors and employees of all of the foregoing, as
required by Licensor, as additional insureds (as Licensors) by reason of
the indemnity contained in this Paragraph 2.o. and shall evidence the
insurer's agreement that such insurance shall not be amended, cancelled,
terminated or permitted to lapse without thirty (30) days' prior
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written notice to Licensor), and provide Licensor with a certificate of
such insurance upon execution of this agreement by Licensee and on each
anniversary date of the grant or issue of each such policy evidencing that
each such policy has not been altered with respect to Licensor, its
subsidiaries and affiliates in any way whatsoever nor permitted to lapse
for any reason, and evidencing the payment of premium of each such policy;
(iii) cause such policies to be in full force and effect prior to the
commencement of any manufacture, sale, distribution or dealing with any of
the Products whatsoever. Failure by Licensee to obtain the required
insurance prior to the commencement of any manufacture, sale, distribution
or dealing with any of the Products whatsoever or failure by Licensee to
adequately maintain such insurance during the term of this License shall
be an incurable default by Licensee under this agreement.
p. Advertisinq Expenditures: In addition to all other amounts or
payments, and not to be credited against any Guaranteed or Earned Royalty
payment otherwise required under this agreement, Licensee agrees to expend
within each License Year for advertising and promotion (specifically trade
and/or consumer media such as newspapers, magazines, television and/or radio,
but specifically excluding displays, fixtures or other point-of-sale materials),
not less than three percent (3%) of Licensee's net sales for such License Year.
A portion of such advertising sums shall be paid to Licensor as follows:
(i) Concurrently with the remittance of the statements required under
Paragraph 2.d.(i) hereof, Licensee shall remit to Licensor for use in
Licensor's advertising and promotion pool an amount equal to one percent
(1%) of Licensee's net sales for the time period covered by such statement,
which amount shall be credited against Licensee's annual advertising
expenditures required herein.
(ii) If the report included with the statement required under
Paragraph 2.d.(i) hereof for the last License Quarter of each License Year
shows that the required amount has not been spent, the difference between
the amount actually spent and the amount to be spent must be remitted to
Licensor for use in Licensor's advertising and promotion pool within thirty
(30) days after such statement is due.
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3. ADDITIONAL COVENANTS OF THE PARTIES.
-----------------------------------
a. Reservation of Rights: All rights not expressly and specifically
granted herein to Licensee are reserved by Licensor.
b. Riqhts of Licensor: Without limiting the generality of Paragraph 3.a.
hereof, nothing herein contained shall be construed as prohibiting Licensor, its
subsidiaries and affiliates from:
(i) purchasing any of the Products from Licensee and offering any
such Products for sale and selling same to consumers in connection with any
business or event operated or sponsored by Licensor, its subsidiaries and
affiliates or through a direct mail fulfillment programs which Licensor may
designate. Licensee shall have the option to fill all such orders at such prices
as given to other customers ordering the same quantities of similar merchandise.
Licensee shall have thirty (30) days from the date it receives such orders
within which to notify Licensor of the exercise of Licensee's option. In the
event Licensee does not exercise such option or fails to notify Licensor of the
exercise of such option within the thirty (30) day time limit, anything in this
Paragraph 3.b. or elsewhere in this agreement to the contrary notwithstanding,
Licensor, its subsidiaries and affiliates shall be allowed to purchase such
Products from other manufacturing sources without liability to Licensee and sell
such Products as indicated in this Paragraph 3.b.
(ii) In the event of any such sale of Products by Licensee to
Licensor, Licensee shall ship or deliver such Products either directly to
Licensor or, as Licensor may direct, to any other business concern or person.
Such sales of Products by Licensee to Licensor shall be, at Licensor's option,
at such prices less the applicable Earned Royalty. If Licensor elects to have
such sales made less the applicable Earned Royalty, Licensee will not have to
pay additional royalties on such sales and will not be required to include such
sales in the statements required under Paragraph 2.d.(i) hereof. Licensee may,
however, include such sales in the computation of net sales under Paragraph l.c.
hereof. Licensee shall bill Licensor in accordance with Licensee's normal
billing procedure for any such Products shipped or delivered.
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4. TITLE AND PROTECTION.
--------------------
a. Indemnification by Licensor: Licensor represents and warrants that: it
is the owner of the Trademarks; the Trademarks are valid; and the Trademarks
are, to the best of its knowledge, free from any claim by third parties that
would interfere with the rights granted to Licensee under this agreement.
Licensor shall indemnify, defend and hold Licensee, its agents, officers,
directors and employees harmless against any claims or suits, provided prompt
notice of which is given Licensor by Licensee, arising solely and directly out
of the authorized use of the Trademarks on the Products by Licensee in the
Territory, but in no event shall such indemnification include consequential
damages, including, but not limited to any compensation or reimbursement for
loss of prospective profits, anticipated sales or other losses occasioned by
cancellation or termination of this agreement or any other reason. Licensor
shall have the option to settle or to undertake and conduct the defense of any
such claim or suit; but Licensee shall, upon notice from Licensor and pursuant
to Licensor's instructions, handle, undertake and conduct the defense of any
such suit at Licensor's expense. If Licensor does not so notify Licensee,
Licensee may through counsel of its own choice and at its own expense
participate in any such litigation, but in such event Licensor shall have sole
and exclusive control over such defense and Licensor's decisions shall govern
and control. Licensee expressly covenants that no compromise or settlement of
any claim or suit, or any preliminary negotiations with respect to any
compromise or settlement, shall be made or entered into without the prior
written approval of Licensor.
b. Enforcement: Licensee shall promptly notify Licensor in writing of any
actual, suspected or apparent infringement or imitation of the Trademarks on
products similar or identical to the Products that may come to the attention of
Licensee. Licensor shall take that action in regard to such infringement or
imitation as Licensor, in its sole judgment, deems to be reasonable. Licensor
shall, in its sole and absolute discretion, decide whether to undertake or
conduct any suit or assert any claim with respect to such infringement or
imitation; but Licensee shall, upon notice from Licensor and pursuant to
Licensor's instructions, vigorously handle, undertake and conduct any such suit
or assert any such claim at Licensor's expense in the name of Licensor, or
Licensee or in both names as Licensor may direct. Licensee expressly covenants
that no compromise or settlement of any such suit or claim, or any preliminary
negotiations with respect to any compromise or settlement, shall be made or
entered into without the prior written approval of Licensor. Licensee may share
in any damage recovery obtained by Licensor as a result of any such suit or
claim only if
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Licensee notified Licensor upon the initiation of such suit or claim that
Licensee desires to participate financially in such suit or claim and only
in an amount that shall bear the same ratio to the damage recovery as the
amount of Licensee's financial participation bears to the total costs and
expenses incurred by Licensor in obtaining such damage recovery. In no
event shall Licensor be responsible to Licensee for any consequential
damages that may result from such infringement or imitation.
5. RELATIONSHIP BETWEEN THE PARTIES.
--------------------------------
a. No Joint Venture: Nothing herein contained shall be construed to
place the parties in the relationship of partners or joint venturers, and
Licensee shall have no power to obligate or bind Licensor, its subsidiaries
or affiliates in any manner whatsoever.
b. Assignment:
----------
(i) Licensor, in entering into this agreement, is relying
entirely upon the skills, reputation and personnel, including the
officers, directors and shareholders, of Licensee. This agreement and
all rights and duties hereunder are personal to Licensee and shall
not, without the prior consent of Licensor (which may be given or
withheld in the sole discretion of Licensor), be sold, transferred,
leased, assigned, mortgaged or otherwise encumbered by Licensee or by
operation of law. Any attempt to sell, transfer, lease, assign,
mortgage or otherwise encumber this agreement, or any of the rights
and duties hereunder, or any change in the principal officers,
principal directors or shareholders of Licensee or an entity having a
financial interest in Licensee (other than non-controlling
shareholders of a corporation whose shares are freely traded on a
nationally recognized stock exchange), without the prior written
consent of Licensor shall constitute a material violation of and an
incurable default under this agreement. The consent of Licensor to any
one assignment or transfer shall not be deemed to be consent to any
subsequent assignment or transfer.
(ii) Licensor may assign this agreement to any of its
subsidiaries or affiliates or to any entity that succeeds to the
interest of Licensor in the Trademarks without the consent of Licensee
and shall have the right to nominate any other person, company or
corporation to receive royalty income or to undertake the obligations
of Licensor under the terms of this agreement whether or not this
agreement is so assigned.
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6. SUBLICENSING. Licensee may not, without the prior written approval of
Licensor, whose approval may be withheld without providing any reasons and whose
discretion shall be final and absolute, enter into sublicense or subcontract
agreements for any of the rights or obligations of Licensee under this License.
The consent of Licensor to any one sublicense shall not be deemed to be a
consent to any subsequent sublicense.
7. DEFAULTS AND RIGHTS OF TERMINATION.
----------------------------------
a. Defaults and Right to Cure: If Licensee shall violate any of its
obligations or warranties under the terms of this agreement, Licensor shall
have the right and option, but not the duty, to terminate this License upon
ten (10) days' prior written notice, but no neglect or failure to serve
such notice shall be deemed to be a waiver of any breach of any covenant or
stipulation under this agreement. Such termination of this License shall
become effective unless the violation complained of shall be completely
remedied to the satisfaction of Licensor within such ten (10) day period.
If the violation complained of is of a kind that a remedy or cure cannot
effectively restore the prior circumstances, then this agreement shall
terminate forthwith upon service of such notice without any period of grace
as aforesaid. The termination of this License shall be without prejudice to
any rights that Licensor may otherwise have against Licensee under this
agreement or under law.
b. Bankruptcy or Assignment for Creditors' Business Discontinuance:
If Licensee files a petition in bankruptcy or is adjudicated a bankrupt, or
if a petition in bankruptcy is filed against Licensee, or if Licensee shall
become insolvent or shall make or agree to make an assignment for the
benefit of creditors or an arrangement pursuant to any bankruptcy law, or
if Licensee discontinues business, or if a receiver shall be appointed for
Licensee, this License shall automatically terminate forthwith without the
necessity of any notice whatsoever. If this License is so terminated,
Licensee or its receivers, representatives, trustees, agents,
administrators, successors or assigns shall have no right to sell, exploit
or in any way deal with any Products, Wrapping Materials or Related
Materials, except with and under the special written consent and
instructions of Licensor that they shall be obligated to follow.
c. Loss of Trademark Riqhts: If Licensee's right to use the
Trademarks is adjudged illegal or invalid, and such adjudication has become
final and non-appealable, or if a settlement agreement is entered by
Licensor into that prohibits Licensee's right to use the Trademarks, this
License shall automatically terminate as of the date of such final and non-
appealable adjudication or the entry of such settlement
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agreement without the necessity of any notice whatsoever. Licensee shall
have no claim of any nature against Licensor for the loss of the right to
use the Trademarks.
d. Impossible Performance: Licensee and Licensor shall be released
from their respective obligations under this agreement and this License
shall terminate, if governmental regulations or other causes arising out of
a state of national emergency or war, or any other similar cause beyond the
control of the parties hereto, shall render performance impossible. Either
party shall so inform the other in writing of any such cause and of its
desire to be released, and immediately thereafter this License shall
terminate and all royalties on sales of the Products theretofore made shall
become immediately due and payable.
8. TERMINATION OR EXPIRATION.
-------------------------
a. Effect of Termination or Expiration: Upon and after the
expiration or termination of this License, all rights granted to Licensee
under this agreement shall forthwith revert to Licensor. Licensee will
refrain from any further use of the Trademarks or any further reference to
anything, including but not limited to words, devices, designs and symbols,
similar to the Trademarks or in any way associated with Licensor, its
subsidiaries and affiliates, in connection with the conduct of Licensee's
business, except with the written consent of Licensor and except as
expressly provided in this Paragraph 8.
b. Reserved Rights: The expiration or termination of this License
under any of the terms of this agreement shall not relieve Licensor or
Licensee, respectively, of any obligations incurred prior or subsequent to
such expiration or termination; nor shall expiration or termination impair
or prejudice any of the rights of Licensor or Licensee, respectively,
accruing prior or subsequent thereto. Upon termination, the Guaranteed
Royalty for the then current License Year shall be prorated based on the
ratio that the number of days in such License Year prior to termination
bears to the number of days in the License Year had the agreement not been
terminated. Earned Royalties due for such License Year shall be the excess
of Earned Royalty over such prorated Guaranteed Royalty. Any overpayment or
underpayment of Guaranteed or Earned Royalties shall be adjusted by the
parties in accordance with Paragraph 2.d.(i) hereof.
c. Inventory: Within ninety (90) days prior to the expiration of
this License, or within ten (10) days after (i) receipt of notice of
termination or (ii) the happening of any event that terminates this License
where no such notice is required, Licensee shall furnish to Licensor a
complete and
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accurate statement showing the number and description of all Products in
process and on hand. Licensor or its authorized agents shall have the right
to conduct a physical inspection and take inventory to ascertain or verify
such inventory and statement, and any refusal by Licensee to submit to such
physical inventory by Licensor or its authorized agents shall forfeit
Licensee's right to complete any work in process and to dispose of any such
inventory; Licensor retaining all other legal and equitable rights it may
have in the circumstances, which rights are hereby reserved.
d. Continued Sales After Termination or Expiration: Upon the
expiration of the term of this License or if this License is terminated
pursuant to any paragraph of this agreement except paragraphs 2.i. or 7.b.
hereof, and except as provided in Paragraph 8.c. and provided Licensee is
in complete compliance with the payment of all royalties or other amounts
owed to Licensor, Licensee may for a period of ninety (90) days after the
Expiration Date or notice of termination (the "Sell-off Period") dispose
of, through Licensee's existing, recognized network of distributors,
Products that have been approved by Licensor and that are in process or on
hand at the date of expiration of the term of this License or the time such
notice of termination is received; but in such event Licensee shall pay
royalties and furnish statements with respect to the Sell-off Period in
accordance with the terms of this agreement as though this License were
still in effect. It is expressly understood and accepted by Licensee that
the Sell-off Period provided for under this Paragraph 8.d. shall be non-
exclusive. If this License is terminated pursuant to Paragraphs 2.i. or
7.b. hereof or for failure of Licensee to pay royalties or any other
payment required under the terms of this agreement, Licensor shall forfeit
any and all rights to a Sell-off Period and shall be obligated to turn over
to Licensor all Products in process or on hand at the time of termination.
e. Equitable Relief: Subject to Paragraph 8.d. above, Licensee hereby
acknowledges that its failure to cease the manufacture, sale or
distribution of the Products, Wrapping Materials and Related Materials upon
the termination or expiration of this agreement, will result in damage to
Licensor and to the rights of any subsequent licensee for which there is no
adequate remedy at law. Accordingly, in the event of such failure, Licensor
shall be entitled to equitable relief by way of temporary and permanent
injunction and such other relief as any court of competent jurisdiction may
deem just and proper. In this regard Licensee hereby consents to the
judgment of temporary and permanent injunction in favor of Licensor in
order to give effect to this Paragraph 8.e.
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f. Continuity of Sales: In order to enable Licensor to maintain
continuity of sales of the Products upon expiration or termination of this
agreement, Licensor shall have the right, notwithstanding anything to the
contrary contained in Paragraph l.a. hereof, to authorize another person or
firm to manufacture, to show, and to solicit and receive orders for, the
Products for a time three (3) months preceding the expiration of this
agreement, or from the time that notice is given of termination of this
agreement, whichever is sooner. Such person or firm shall not, however, be
authorized to ship to its customers any of the Products so manufactured and
shown until after this agreement has expired or has been terminated (but
may ship Products on a nonexclusive basis during the Sell-Off Period, if
any, pursuant to Paragraph 8.d. hereof).
g. Guaranteed Royalties: Anything in this agreement to the contrary
notwithstanding, if Licensor terminates this agreement as a result of
default by Licensee, Licensee shall immediately pay to Licensor as
liquidated damages all outstanding Guaranteed Royalties required to be paid
during the "Full Term" (as hereinafter defined) of this agreement in
addition to any Earned Royalties that may be due through the effective date
of termination. As used in this Paragraph 8.g., "Full Term" shall mean each
and every License Year of the initial term and any renewal term that may be
in effect at the time of such termination as if this agreement had not been
terminated as contemplated under this Paragraph 8.g.
9. Notices. All legal notices, consents, and other communications
required by the terms of this agreement, including any change of address or
addressee, shall be in writing and shall be sent to Licensee at the address
specified in Paragraph S.2. of the Schedule and to Licensor at the address
specified in Paragraph S.1. of the Schedule marked, Attention: Senior Vice
President, Product Licensing, with a separate copy marked, Attention: General
Counsel. Such legal notices shall be sent by telex or facsimile with a copy sent
postage prepaid, certified or registered mail, return receipt requested and
shall be deemed conclusively to have been served when actually received or
refused by the addressee or upon notification of non-deliverability by the
postal authorities, as the case may be. All reports required by the terms of
this agreement shall be sent marked, Attention: Senior Vice President, Product
Licensing. All material requiring approval shall be sent to Licensor marked,
Attention: Brand Director or to such different or additional parties and
addresses as Licensor may designate from time to time. All reports and material
requiring approval and responses to same may be sent by telex or facsimile
provided the sender requests and receives written confirmation from the
addressee that such communication has been received and is legible; and such
reports and material shall be deemed conclusively to have been given upon
receipt by the sender of the confirmation of
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receipt and legibility. Reports or material requiring approval that cannot be
sent by telex or facsimile shall be sent postage pre-paid, DHL or other similar
express mail carrier, return receipt requested and shall be deemed conclusively
to have been given when actually received or refused by the addressee or upon
notification of non-deliverability by the postal authorities, as the case may
be.
10. INVALIDITY. If any provision or any application of any provision
hereof is adjudged illegal, unenforceable or invalid and such adjudication has
become final and non-appealable, such provision or application shall be deemed
deleted without affecting the remainder of this agreement unless such deletion
shall have a material adverse effect upon the rights or obligations of either
party hereto and notice of such effect is given as provided in the following
sentence. Either party may notify the other within forty-five (45) days after
such adjudication has become final and non-appealable that in its opinion such
deletion would have a material adverse effect upon the notifying party and that
this License is terminated by reason thereof; but the existence of such effect
and the termination of this License shall be subject to contest by the party
receiving such notice if it notifies the other party, within forty-five (45)
days after service of the notice of termination upon it, of its desire so to
contest the matter and thereafter proceeds promptly with a proceeding so to
contest the matter. During such time as the matter is being contested, this
agreement shall remain in full force and effect.
11. CONSENTS AND APPROVALS. In this agreement where the consent or
approval of Licensor is required to any action of Licensee, such consent or
approval shall only be effective if granted in writing by Licensor. If Licensor
fails or declines to grant such consent or approval to Licensee, Licensor shall
not be liable to give any reason therefore nor for any events or circumstances
that arise as a result of such failure.
12. APPLICABLE LAW. This agreement shall be governed by the laws of the
State of Illinois (U.S.A.).
13. NO BROKER. Licensee warrants and represents that Licensee used no
broker in connection with this transaction.
14. TITLES. The titles to the sections, subsections or other headings in
this agreement are for reference purposes only and shall not define, limit or
affect the meaning or interpretation of this aqreement.
15. ENTIRE AGREEMENT. This agreement represents the entire understanding
of the parties. None of the terms of this agreement can be waived or modified
except by an express agreement in writing signed by the parties. There are no
representations, promises, warranties, covenants or undertakings other than
those
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contained in this agreement. The failure of either party hereto to enforce, or
the delay by either party in enforcing, any of its rights under this agreement
shall not be deemed as constituting a waiver or a modification thereof and
either party may, within the time provided by applicable law, commence
appropriate proceedings to enforce any or all of such rights. No person, firm,
group or corporation other than Licensee, Licensor, its subsidiaries and
affiliates shall be deemed to have acquired any rights by reason of anything
contained in this agreement.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed as of the day and year first above written.
PLAYBOY ENTERPRISES, INC.
(LICENSOR)
By /s/ M.E. Levenson
-------------------------------
CHAIFA INVESTMENT, LIMITED
(LICENSEE)
By /s/ John Chan Chun Tung
-------------------------------
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