Exhibit 10.4
“*************” DENOTES MATERIAL THAT HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
LICENSE AGREEMENT                     D09001
This license agreement (this “Agreement”), which is effective upon signature by
all parties hereto, is by and between Marvel Characters B.V., with an office at
1600 Rosecrans Avenue, Manhattan Beach, CA 90266 (“Marvel”) and, solely with
respect to characters based on movies and television shows featuring Spider-Man
and produced by Sony Pictures Entertainment Inc. (“Spider-Man Movie
Characters”), Spider-Man Merchandising L.P. with an office at 417 Fifth Avenue,
Mezzanine, New York, NY 10016 (the “LP” and, together with Marvel, “Licensor”),
on the one hand, and the party identified below (“Licensee”) on the other.
Reference is made to License Agreement D05184 (as amended to date, “License
Agreement D05184”), the Service Agreement executed on or about January 1, 2006
between Licensee and Marvel Entertainment, Inc. (as amended to date, the “2006
Service Agreement”), the Fourth Amendment to License Agreement of even date
herewith (the “Fourth Amendment to License Agreement D05184”), the Third
Amendment by Licensee and Marvel Entertainment, Inc. to the 2006 Service
Agreement of even date herewith (the “Third Amendment to 2006 Service
Agreement”), and the Service Agreement between Licensee and Marvel of even date
herewith (the “New Service Agreement”).

 

 

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1. BASIC INFORMATION AND TERMS

                      Numbered         Section
(a) Licensee:
           
 
           
Hasbro, Inc.
  Attention: Brian Goldner        
1027 Newport Avenue
  Tel: 401-727-5202        
Pawtucket, Rhode Island
  Fax:        
02862
  Email: bgoldner@hasbro.com        
 
  With a copy to: Barry Nagler, Esq.        
 
  Tel: 401-727-5008        
 
  Fax: 401-727-5121        
 
  Email: bnagler@hasbro.com        
 
           
(b) Characters:
 
All Marvel Classic Characters. “Classic” Characters refers to the embodiment of
the Marvel characters as originally conceived in the comic books and widely
known to the popular imagination through successive classic (i.e., faithful in
appearance and characterization to the original comic books) interpretations in
comic books, films, TV animation, video games and other media. The Classic
designation includes all of Marvel’s current classic (non-media) style guides
(and future versions thereof) including, for example, Classic Spider-Man,
Classic X-Men and Classic Hulk as well as Marvel Retro, Marvel Heroes and Marvel
Extreme style guides, but specifically as well as all Marvel/LP Entertainment
Properties (i.e., media style guides based on films, live-action TV and/or
animation).
    2  
 
           
 
 
All Marvel Movie Characters, to the extent the applicable merchandising rights
are owned and/or controlled by Marvel and/or the LP, subject to any applicable
third-party restrictions (for example, restrictions on likeness rights due to
cast talent agreements vis-à-vis specific Marvel live-action movies). All rights
to use Marvel Movie Characters as they appear in motion pictures, television
productions or productions in other media are subject to agreements between
Marvel or the LP and third parties (including, but not limited to, talent and
studios) relating to such productions; however, Marvel and the LP shall use
commercially reasonable efforts to obtain from such third parties all rights
necessary for Licensee to fully exploit the rights granted hereunder at no
further expense to Licensee. If Licensee wishes to use any Marvel Movie
Characters other than those characters in Marvel’s style guide and other than in
the form contained in the style guide, then Licensee shall do so only with
Marvel’s prior written approval, and Licensee shall be responsible for any
required third-party clearances.
       
 
           
 
 
All Marvel Animated and Live-Action Television Characters, to the extent the
applicable merchandising rights are owned and/or controlled by Marvel and/or the
LP, and subject to any applicable third-party restrictions (as above). All
rights to use Marvel Animated and Live Action Television Characters as they
appear in animation or television productions are subject to agreements between
Marvel or the LP and third parties (including, but not limited to, talent and
studios) relating to such productions; however, Marvel and the LP shall use
commercially reasonable efforts to obtain from such third parties all rights
necessary for Licensee to fully exploit the rights granted hereunder at no
further expense to Licensee. If Licensee wishes to use any Marvel Animated and
Live Action Television Characters other than those characters in Marvel’s style
guide and other than in the form contained in the style guide, then Licensee
shall do so only with Marvel’s prior written approval, and Licensee shall be
responsible for any required third-party clearances.
       
 
           
 
 
Note #1: Marvel Movie Characters and Marvel Animated and Live Action Television
Characters are collectively “Marvel/LP Entertainment Properties”.
       

 

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                      Numbered         Section
 
 
Note #2: Properties which are not incorporated into and are primarily kept
separate and apart from the Marvel Universe are excluded from this Agreement.
The “Marvel Universe” shall mean:
       
 
           
 
 
(i)   all characters whose visual image and description are contained in the
Official Handbook of the Marvel Universe as it may be expanded from time to
time, in any successor reference work, or in any other reference material
identified by Marvel;
       
 
           
 
 
(ii)  all characters whose visual image and description are intended by Marvel
to be included in future editions of the handbook or successor work described in
clause (i) of this sentence;
       
 
           
 
 
(iii) all characters whose first appearance was in a media production based
primarily on any of the characters described in clause (i) of this sentence; and
       
 
           
 
 
(iv) characters developed by Marvel which, in one or more of their
manifestations, interact with the Marvel Universe (other than in a wholly
insignificant manner, such as an isolated cameo appearance), whether or not such
characters are included in the Official Handbook .
       
 
           
(c) Licensed Categories:
 
1.   Action Figures: All toy “action figures” in all sizes in all plastic (e.g.
pvc/abs) or other similar synthetic materials or combination of materials (but
excluding plush and porcelain), with or without batteries or other electronics,
including figures capable of being assembled, as this category is generally
understood within the boy’s action segment of the toy industry on the date
hereof together with all related accessories (weapons, vehicles, playsets, etc.)
conceived, designed, marketed and sold for interaction with such action figures
(for example, Spider-Man action figures with Spider-Man motor-cycle designed and
built to scale).
    3 (a)
 
           
 
 
Note #1: For the avoidance of doubt, collectible statues, busts, dioramas,
sculpts, plastic models and model kits, Kubricks, Mini-Mates and Bobbleheads,
and Tomy Capsule Collectibles are not included in the Licensed Categories.
       
 
           
 
 
Note #2: For the avoidance of doubt, the following items are not “Action
Figures” for the purposes hereof, and Licensee accepts and understands that
Licensor has on-going licenses in each of these business segments, which shall
continue throughout the Term:
       
 
           
 
 
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * *
       

 

3

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                      Numbered         Section
 
 
2.   Flying Action Figures: defined as any figure (articulated or
non-articulated) that can be, by hand or by air pump, projected, launched,
fired, or propelled through the air or whose primary play pattern is to take
place in mid-air. The Flying Action Figures shall not be motorized nor
electronically powered nor shall they be tethered, remote, radio and/or
infra-red controlled. Notwithstanding the foregoing, Licensee may use limited
radio control or infra red technology to allow for the in-air separation of the
Action Figure and its attachments (planes).
       
 
           
 
 
3.   Articulated Figural Backpack Clips/Backpack Danglers: Notwithstanding the
foregoing, non-articulated figural backpack clips permanently attached to a
backpack (not sold separately) and sold to the “back to school” buyer are
specifically excluded from this Licensed Category.
       
 
           
 
 
4.   Licensee’s Proprietary “Attacktix” Branded Figure Tactics Game: defined as
the existing Hasbro figure-based strategy and tactics tabletop game of this
name, as well as substantially similar variations and extensions thereof.
       
 
           
 
 
5.   Non-Costume/Non-Dress Up Action and Role-Play Weapons and Accessories:
pretend-play wearable accessories, which embody and/or emulate key powers and/or
re-produce key accessories of Marvel Super Heroes. This Licensed Category does
not include prop replicas.
       
 
           
 
 
Note #3: By way of example, this Licensed Category would include Spider-Man Web
Blasters, other blasters and weapons, and role play laser tag, Hulk Hands,
helmets, masks, and Wolverine Claws. Other examples could include, for instance,
a Thor hammer or Captain America shield (re-produce key accessories).
       
 
           
 
 
Note #4: All Non-Costume/Non-Dress Up Action and Role-Play Articles must be
composed of not less than fifty percent (50%) plastic.
       
 
           
 
 
Note #5: For the avoidance of doubt, this Licensed Category does not cover all
weapons (e.g. non-role plays laser tag), non-action Role Play, Video Game
Accessories, Peripherals, and Controllers; provided that Licensor shall consider
in good faith Licensee’s request to produce role play products which have a
secondary feature which would allow a video game accessory or controller to be
incorporated into such product.
       
 
           
 
 
6.   Feature Plush (Figural or Non-Figural): in all styles/types, sizes and
materials. Feature Plush is defined as Plush with animatronics, electronic or
mechanical interactive features or attributes (i.e. lights, sounds and/or
movement). Notwithstanding the foregoing, basic plush with simple features that
do not incorporate any form of electronics, battery power or motion of any kind
are specifically excluded from this Licensed Category #6 and are included in
Licensed Category #7 below.
       

 

4

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                      Numbered         Section
 
 
7.   Basic Plush (Figural or Non-Figural) (NON-EXCLUSIVE): in all styles/types,
sizes, materials, and may include simple features that do not incorporate any
form of electronics, battery power or motion of any kind.
       
 
           
 
 
8.   Figural Wall-Crawling Radio or Infrared Control: in all styles/types, sizes
and materials.
       
 
           
 
 
9.   Co-Branded Transformers Brand Action Figures: defined as a co-branded
program limited to Licensed Article #1 (Action Figures) combining the Characters
and the images, copyrights, and marks of Hasbro’s Transformers brand.
       
 
           
 
 
10. ***********************************and accessories. Licensee shall not
utilize the Marvel brand to ****************************************************
       
 
           
 
 
11. Licensee’s Proprietary Foam Based “Nerf” Branded Sporting Goods and Blasters
that shoot foam darts and balls: all styles/types. The category of foam based
sporting goods shall be non-exclusive and the category of blasters that shoot
foam darts and balls shall be exclusive.
       
 
           
 
 
12.  Water Guns, Water Blasters and Water Cannons.
       
 
           
 
 
13.  Board Games: children’s, family and all-age board games in Licensee’s
proprietary brands (for example, “Monopoly”, “Life”, “Risk”, “Candy Land”,
“Operation”, “Trivial Pursuit”, “Clue”, “Scrabble”, “Heroscape”), in themed
editions, as well as non-proprietary-branded children’s, family and all-age
board games. Notwithstanding the exclusive nature of this Licensed Category,
Licensee agrees to consider in good faith on a case-by-case basis Licensor’s
requests to license out non-competitive age and/or gender specific executions.
       
 
           
 
 
14.  Electronic Hand Held Electronic Games: self-contained dedicated electronic
handheld devices with their corresponding software hard-coded into such device
(which shall be similar to Tiger Electronic dedicated electronic handheld
devices). Such device shall not accept cartridges or any additional software
and/or shall not connect to a computer, television, pc or any other interactive
device nor include any educational, teaching, or learning elements.
Notwithstanding the exclusive nature of this Licensed Category, Licensee agrees
to consider in good faith on a case-by-case basis Licensor’s requests to license
out non-competitive age and/or gender specific executions.
       
 
           
 
 
15.  Puzzles: two-dimensional (2D) cardboard and foam puzzles in all shapes,
piece counts and sizes and cardboard and foam three-dimensional (3D) puzzles
(i.e. Wrebbit, Puzz3D). Notwithstanding the exclusive nature of this Licensed
Category, Licensee agrees to consider in good faith on a case-by-case basis
Licensor’s requests to license out to third parties non-competitive age and/or
gender specific executions.
       

 

5

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                      Numbered         Section
 
 
16. Licensee’s Proprietary “Puzzle Shots”: defined as the application of a
digital photograph on to a digital puzzle and/or poster. The picture puzzle
and/or poster shall be distributed through on-site portrait studio (kiosk) where
a consumer’s digital photograph is taken and super-imposed on a Character
background to create a personalized foam fit puzzle. Licensor agrees to consider
in good faith Licensee’s request to exploit Puzzle Shots through on-line
executions.
       
 
           
 
 
17. Licensee’s Proprietary “Playskool” Branded Pre-School Toys: This category
shall include Licensee’s range of products of the general type developed by
Licensee under License Agreement D06053. Actual styles/types of products shall
be developed in consultation with Licensor with Licensor retaining final
approval over the styles and types of products to be developed, such approval
not to be unreasonably withheld. The category of pre-school toys shall be
non-exclusive.
       
 
           
 
 
18. All Compounds: including, but not limited to Play-Doh.
       
 
           
 
 
19. Electronic IPOD/MP3 Speakers: limited to a dog or figure which interacts
with an Ipod or MP3 player and displays motion, sound and light in reaction and
relation to music in the manner consistent with Licensee’s I-DOG line of
products. Additional styles/types (e.g. fish, and cats) to be approved on a
case-by-case basis in Licensor’s sole written discretion, which approval shall
not be unreasonably withheld.
       
 
           
 
 
20. Musical Toothbrushes: defined as a toothbrush that plays music.
       
 
           
 
 
21. Wall Decals: permanent and removable wall decals. Specifically to exclude
wall paper and wall paper borders. Notwithstanding the exclusive nature of this
Licensed Category, Licensor shall have the right to sell Wall Decals limited to
the home décor buyer of retail customers and further the Wall Decals sold by
Licensor may not be sold in the toy or poster section of any retailer, and
Licensee agrees to consider in good faith on a case-by-case basis Licensor’s
requests to license out non-competitive executions.
       
 
           
 
 
22. Licensee’s Proprietary “Lite Brite” Branded Activity Products: limited to
the following styles types:
       
 
           
 
 
a.   “Lite Brite” Activity Set: defined as an activity set whereby the consumer
uses child friendly pegs which are pushed through perforated paper/panel and
paper to create designs.
       
 
           
 
 
b.   Spinning Paint Activity Sets: defined as a spinning mechanism with paint
and sheets of paper or other material to create designs on the sheets of paper.
The Spinning Paint Activity Sets may also include lights and sounds.
       

 

6

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                      Numbered         Section
 
 
23. Licensee’s Proprietary “Titanium” Branded Die-Cast Figures and Vehicles):
the existing Hasbro die-cast toy line of this name, as well as substantially
similar variations and extensions thereof which maintain the existing
distinctive chrome/metallic finish (painted or non-painted). The category of
die-cast shall be non-exclusive.
       
 
           
 
 
Note #6: QSR premiums — Licensee acknowledges and understands that Licensor
generally does not control promotional rights to Marvel/LP Entertainment
Properties and therefore to third-party promotional/tie-in activities and the
associated premiums which may accompany or be a part of such promotional
activities. With respect to quick-service-restaurant (“QSR”) promotions,
Licensor shall use commercially reasonable and good-faith efforts to consult
with Licensee on the premiums considered for use in Marvel/LP Entertainment
Properties QSR promotions and attempt to influence the choice of such premiums
to non-action-figure-type executions.
       

 

7

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                      Numbered         Section
 
 
(i)   Territory: Worldwide, excluding Japan
    3(b)  
 
           
(d) Territory/ Channels of Distribution:
 
Note #1: Notwithstanding the foregoing, Licensed Article #9 (Co-Branded
Transformers Brand Action Figures) may be sold in Japan and Licensee may
distribute any Licensed Article in Japan through an authorized licensee or
distributor approved by or designated by Licensor.
       
 
           
 
 
(ii)   Channels of Distribution: All Channels of Distribution.
       
 
           
 
 
1.   Internet: may only be sold or shipped within the territory specified in
Section 1(d) (i)
         
 
 
2.   Home Shopping: Subject to Section 13(a)
         
 
 
3.   Direct Sales method, including Internet direct sales: may only be sold or
shipped within the Territory specified in Section 1(d)(i)
       
 
           
 
 
Note #2: Licensed Articles in Licensed Category #6 (Feature Plush) and #7 (Basic
Plush) are excluded from the following Channels of Distribution:
         
 
 
•   Amusement.
         
 
 
•   Redemption.
         
 
 
•   Crane.
         
 
 
•    Charity/Fundraising, unless approved by Licensor, which approval shall not
be unreasonably withheld.
         
 
           
 
 
Note #3: Notwithstanding anything to the contrary, and despite the restrictions
in Section 1(f) and 3(a), Licensor may itself utilize or grant to any other
party the right to sell, distribute or otherwise exploit the Property in
connection with Licensed Category #6 (Feature Plush) in the following Channels
of Distribution:
         
 
 
•    Gift (e.g., Spencer Gift, Hallmark Gold Crown Stores and Hot Topic etc.)
         
 
 
•    Specialty (e.g., FAO Schwartz and Build a Bear, etc.);
         
 
 
•    Upstairs Department Stores (e.g., Macys, Nordstrom’s and Bloomingdales,
etc.).
       

 

8

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                      Numbered         Section
(e) Term:
        3 (c)
 
           
Commencement Date:
 
a)   If the fourth Spider-Man film is released by December 31, 2011, then the
Commencement Date for this Agreement shall be January 1, 2012 for all Characters
other than the fourth Spider-Man film (if released in 2011) and any other
Qualifying Theatrical Releases or Domestic Qualifying Broadcasts which are
released during 2011 (each, a “2011 Release” and collectively, the “2011
Releases”). Each 2011 Release shall remain apart and separate from this
Agreement until the day which is twelve (12) months after the United States
release date of such 2011 Release (for each 2011 Release, the “2011 Release
Term”). For the avoidance of doubt, until expiration of the 2011 Release Term
(on a film by film or animated television show by animated television show
basis), all terms of Licensee Agreement D05184 shall apply to each 2011 Release
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * *, and shall not
cross-collateralize or credit any such royalties against the Minimum Royalty
Guarantee for this Agreement D09001. Upon expiration of the 2011 Release Term
for each 2011 Release, the terms of this Agreement D09001 * * * * * * * * * * *
* * * * * * * * * * * * * * shall apply to all subsequent sales of tie-in
Licensed Articles for each 2011 Release.
       
 
           
 
 
b)   If the fourth Spider-Man film is not released by December 31, 2011, then
the Commencement Date for this Agreement shall be January 1, 2013 for all
Characters other than the fourth Spider-Man film (if released in 2012) and any
other Qualifying Theatrical Releases or Domestic Qualifying Broadcasts which are
released during 2012 (each, a “2012 Release” and collectively, the “2012
Releases”). Each 2012 Release shall remain apart and separate from this
Agreement until the day which is twelve (12) months after the United States
release date of such 2012 Release (for each 2012 Release, the “2012 Release
Term”). For the avoidance of doubt, until expiration of the 2012 Release Term
(on a film by film or animated television show by animated television show
basis), all the terms of Licensee Agreement D05184 shall apply to each 2012
Release * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * *, and shall not cross-collateralize or credit any
royalties against the Minimum Royalty Guarantee for this Agreement D09001. Upon
expiration of the 2012 Release Term for each 2012 Release, the terms of this
Agreement D09001 * * * * * * * * * * * * * * * * * * * * * * * * shall apply to
all subsequent sales of tie-in Licensed Articles for each 2012 Release.
       
 
           
 
 
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
       

 

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                      Numbered         Section
Expiration Date:
 
December 31, 2017 (subject to extension as set forth in Section 3(c) hereof).
Notwithstanding anything to the contrary contained in this Agreement, no
manufacture, sale or distribution of articles utilizing the Property in
Licensee’s exclusive Licensed Categories by parties other than Licensee prior to
the Expiration Date (as it may be extended) shall violate this Agreement as long
as such activity is with respect to retail sales occurring after the Expiration
Date (as it may be extended) and, more particularly, is conducted according to
the following schedule:
       
 
           
 
 
(i)   sales (wholesale) to be made no earlier than six (6) months before the
Expiration Date (as it may be extended);
         
 
 
(ii)  manufacturing to be performed no earlier than six (6) months before the
Expiration Date (as it may be extended); and
         
 
 
(iii) shipment to begin no earlier than two (2) months before the Expiration
Date (as it may be extended);
       
 
           
 
 
but where one of the parties informs the other that variations from the dates in
clauses (i) through (iii) of this sentence would be reasonable under the
circumstances, the parties shall negotiate in good faith on the subject of
whether the requested variation should be made.
       
 
           
 
 
If the Commencement Date becomes January 1, 2013 as described in
Section 1(e)(b), the Expiration Date shall become December 31, 2018, subject to
extension as set forth in Section 3(c) hereof.
       
 
           
(f) Exclusive/Non-Exclusive:
 
Except for the exceptions specifically set forth in the Licensed Category
descriptions in Section 1(c) and Section 1(d)(ii) and Section 14, the license
granted to Licensee under this Agreement shall be exclusive and so long as
Licensee is not in material and uncured default under this Agreement, Licensor
shall not, during the Term as it may be extended and in the Territory, grant to
any third party, nor shall it or any of its affiliates utilize, the right to
sell, distribute or otherwise exploit the Property (to the extent that the
Property continues to be licensed hereunder) in any Licensed Categories in the
Channels of Distribution.
    3(a)  

 

10

--------------------------------------------------------------------------------

 

                      Numbered         Section
(g) Royalty Rate:
 
Note #1: For all sales by Licensee directly to consumers, including any sales
through Licensee-owned retail stores (web-based or traditional), each of the
following Royalty Rates shall be reduced by ********** (e.g., ******* becomes
************) and “Net Sales” shall mean the invoiced consumer retail price.
    5(a)  
 
           
 
 
A. For sales by Licensee (or its Affiliates, as defined in Section 5(a)(i)) to
parties other than *****************************, and credited against
advance/guarantee payments made hereunder:
       
 
           
 
 
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * *
       
 
           
 
 
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * *
       
 
           
 
 
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * *
       
 
           
 
 
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * *
       

 

11

--------------------------------------------------------------------------------

 

                      Numbered         Section
 
 
B. For sales by Licensee (or its Affiliates) to * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * *, and credited against advance/guarantee
payments made hereunder:
       
 
           
 
 
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * *
       
 
           
(h) Minimum Royalty     Guarantee:
 
One Hundred Million Dollars (U.S. $100,000,000) plus the amount of any
Performance Advances payable in accordance with this Section 1(h). In no event
shall the Minimum Royalty Guarantee exceed Two Hundred Forty Million Dollars
(U.S. $240,000,000).
    5(b)  
 
           
Advance:
 
Fifty Million Dollars (U.S. $50,000,000) payable within five (5) business days
after full execution of this Amendment.
       
 
           
Balance:
  Fifty Million Dollars (U.S. $50,000,000) payable on the date that is the last
day of the calendar month in which the final 2011 Release Term or 2012 Release
Term (whichever is applicable) expires, but in no event later than December 31,
2013.        

 

12

--------------------------------------------------------------------------------

 

                      Numbered         Section
 
 
Note #1: All sums payable as Advances and Balances, including all Advances,
Performance Advances and Balance of Minimum Royalty Guarantee are recoupable * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
against any royalty payments due hereunder, whether accruing before or after the
date of payment, and all are cross collateralized against one another.
       
 
           
 
 
Note #2: “Qualifying Theatrical Release” shall mean * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * *
       
 
           
 
 
“Qualifying Marvel Release” shall be defined as a Qualifying Theatrical Release
produced by Marvel Studios.
       
 
           
 
 
“Initial Run” shall mean * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * *.
       
 
           
 
 
(A) Performance Advances: “Performance Advances” shall mean Mega Property
Qualifying Theatrical Release Advances and Qualifying Marvel Release Advances.
       
 
           
 
 
(i) Mega Property Qualifying Theatrical Release Advances:
       
 
 
Subject to Clause B below, Licensee shall pay an advance of Thirty Million
Dollars (U.S. $30,000,000) within five (5) business days after the United States
Release Date of each of up to four (4) Mega Property Qualifying Theatrical
Releases which are released during the Term, and Twenty Million Dollars (U.S.
$20,000,000) within five (5) business days after the United States Release Date
of a fifth Mega Property Qualifying Theatrical Release if no Qualifying Marvel
Release Advances have been paid as of the United States Release Date for such
fifth Mega Property Qualifying Theatrical Release. For purposes of clarity, in
no event will the cumulative total of Mega Property Qualifying Theatrical
Release Advances and Qualifying Marvel Release Advances exceed One Hundred Forty
Million Dollars (U.S. $140,000,000). “Mega Property Qualifying Theatrical
Release” shall be defined as a Qualifying Theatrical Release * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * that is primarily focused upon one of the following
properties:
       
 
           
 
 
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * *
       

 

13

--------------------------------------------------------------------------------

 

                      Numbered         Section
 
 
As used in this Section 1(h), “primarily focused” shall mean that the film uses
the applicable property name in its title and primarily focuses on the
property’s character.
       
 
           
 
 
(ii) Qualifying Marvel Release Advances: Subject to Clause B below, Licensee
shall pay an advance of Ten Million Dollars (U.S. $10,000,000) for each
Qualifying Marvel Release within five (5) business days after receipt of notice
to Licensee from Licensor that such release * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * *, provided that in no event shall the cumulative total
amounts paid as Qualifying Marvel Release Advances and Mega Property Qualifying
Theatrical Advances exceed One Hundred Forty Million Dollars (U.S.
$140,000,000).
       
 
           
 
 
(B) Final Potential Guarantee. The “Final Potential Guarantee” shall be defined
as One Hundred Million United States Dollars (U.S. $100,000,000) plus any earned
Performance Advances (e.g., the cumulative total amounts paid as Qualifying
Marvel Release Advances and Mega Property Qualifying Theatrical Release
Advances) up to One Hundred Forty Million Dollars (U.S. $140,000,000) for a
total of up to Two Hundred Forty Million Dollars (U.S. $240,000,000). Under no
circumstances shall the Final Potential Guarantee exceed Two Hundred Forty
Million Dollars (U.S. $240,000,000). Mega Property Qualifying Theatrical Release
Advances and Qualifying Marvel Release Advances shall be due and payable, as
earned, regardless of the amount of royalties previously paid by Licensee, * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * *
       
 
           
 
 
(C) For calculation of the gross box office revenues referenced herein, the
parties shall use the box office statistics for the Initial Run only of the
applicable film which are published in the entertainment industry trade
magazine/e-zine/newspaper Variety or other such reasonable replacement in the
event Variety is no longer in publication.
       

 

14

--------------------------------------------------------------------------------

 

                      Numbered         Section
 
 
(D) Except as specifically provided herein, no royalties or fees generated under
other agreements may cross-collateralize against this License Agreement D09001.
       
 
           
 
 
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * *
       
 
           
 
 
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * *
       
 
           
(i) Insurance:
 
Combined Single Limit of $3,000,000 per occurrence.
    10(e)  
 
           
(j)   Post-Expiration Disposal Period:
  90 Days     16(e)  

2. RECITALS
(a) Marvel and the LP represent and warrant, to the best of their knowledge with
respect to trademark and servicemark rights (including, but not limited to,
trade dress and goodwill pertaining to such marks), and without limitation with
respect to all other of the following items and rights, that they have all
rights in and to the names, nicknames, abbreviated names, depictions,
likenesses, poses, costumes, emblems, powers, characteristic concepts, themes,
settings, pictorial and written graphics and other characteristic elements and
contexts of the Characters identified in Section 1(b) hereof and any copyrights,
trademarks, service marks and other intellectual, literary, artistic, design,
moral, industrial or commercial property rights and goodwill in connection with
the Characters, incidents, language, artwork, symbols, designs, depictions,
likenesses, formats, poses, concepts, themes and graphic, photographic and other
visual representations of, relating to and associated with the Characters
identified in Section 1(b) hereof (which names, characters, etc. and/or each of
the individual components thereof shall hereinafter be referred to as the
“Property”), said Property being known and recognized by the general public and
associated in the public mind with Marvel.

 

15

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(b) Licensee desires to utilize the Property in the manner hereinafter
described.
(c) Marvel is a wholly owned subsidiary of Marvel Entertainment, Inc. (formerly
known as Marvel Enterprises, Inc.), a Delaware corporation.
(d) Marvel is a general partner of the LP.
(e) Under a separate service agreement dated as of the date hereof (the “New
Service Agreement”), Marvel has agreed to provide Licensee with creative
consultation with respect to the creation, appearance, packaging and marketing
of Licensed Articles in exchange for a service fee * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * *
3. GRANT OF LICENSE
(a) Licensed Articles. Upon the terms and conditions and with the limitations
and exceptions set forth in this Agreement, Licensor hereby grants to Licensee
and Licensee hereby accepts the exclusive (except for the exceptions
specifically set forth in the Licensed Category descriptions in Section 1(c) and
Section 1(d)(ii) above and Section 14 below) license and right to utilize the
Property but solely upon and in connection with the manufacture, promotion,
sale, and distribution of the categories of articles identified in Section 1(c)
(“Licensed Categories”) and in the Channels of Distribution identified in
Section 1(d) (ii) (“Channels of Distribution”) during the Term. Articles in the
Licensed Categories that utilize the Property and are manufactured, promoted,
sold and/or distributed hereunder are referred to herein as “Licensed Articles”.
(b) Territory/Channels of Distribution. The license hereby granted extends only
to the Territory identified in Section 1(d)(i) and within the Channels of
Distribution identified in Section 1(d)(ii). Licensee expressly acknowledges and
agrees that it is not licensed or authorized to use the Property, directly or
indirectly, in any other area or Channel of Distribution, and that it is not
licensed to and will not knowingly sell the Licensed Articles to persons who
intend or are likely to resell them in any other area or Channel of
Distribution, to the extent this provision is permitted by the applicable law at
the time of such use, license or sale. In the event that Licensee sells or
exploits the Licensed Articles outside either the Territory or Channels of
Distribution in violation of this Section 3(b), notwithstanding Sections 1(g)
and 5(a), the royalty due Licensor on such sales shall be the Net Sales.
(c) Term. The license hereby granted shall commence upon the Commencement Date
and terminate automatically on the Expiration Date (the “Term”) set forth in
Section 1(e) or the expiration of any renewal or extension as provided herein,
unless sooner terminated in accordance with the provisions hereof. In the event
Licensee commences any activities in connection with the Property prior to the
Commencement Date, all provisions of this Agreement for the benefit and
protection of Licensor and Licensee shall apply in full to such activities.
Marvel and Licensee shall use commercially reasonable efforts to realize a
smooth commercial transition from Marvel’s current master toy licensee to the
Licensee and, at the end of the Term, from the Licensee to Licensor itself or to
a successor licensee, with regard to maintaining merchandise space at key
retailers, developing new lines in a timely manner and maintaining appropriate
stock and inventory levels during the transition.

 

16

--------------------------------------------------------------------------------

 

(i) If, during the Term, Marvel and its licensees do not release a minimum of
eight (8) Qualifying Theatrical Releases (as defined herein), including a
minimum of four (4) Mega Property Qualifying Theatrical Releases (as defined
herein) (the aggregate release of all of such films being referred to as the
“Marvel Entertainment Commitment”) between the commencement of the Term and
December 31, 2017 (or December 31, 2018, in the event that the Commencement Date
is January 1, 2013) then the Term of this Agreement shall be extended by one
year (i.e., until December 31, 2018 or December 31, 2019, as the case may be).
(ii) Notwithstanding anything to the contrary above, if Marvel and its licensees
release one or more Qualifying Theatrical Releases during the final calendar
year of the Term, as it may be extended (“Term Final Year Releases”), Licensee’s
rights with respect to any Term Final Year Releases shall extend until the end
of the calendar month that is twelve (12) months after the United States release
date of such Term Final Year Release.
(d) Eighteen (18) months prior to expiration of the Term Marvel shall submit in
writing its schedule of films and television series based on its best knowledge
at such time for a prospective renewal term. Licensee shall have a Right of
First Negotiation (as defined below) for the rights granted hereunder after the
expiration of the Term hereof unless Marvel elects to exploit the rights
directly itself. “Right of First Negotiation” shall mean the following: prior to
beginning negotiations with a third party regarding the rights granted herein,
Marvel shall give written notice to Licensee and for seventy five (75) days from
the mailing of the notice (the “Negotiation Period”), Marvel and Licensee shall
negotiate in good faith. If Marvel and Licensee have not executed a binding
agreement by expiration of the Negotiation Period, Licensor shall be free to
grant any and all rights to any third party.
4. RESERVATION OF RIGHTS
(a) Licensor hereby reserves all rights not herein specifically granted to
Licensee.
(b) Television, etc. Except only for the visual reproduction or presentation of
the actual Licensed Articles licensed hereunder or of the actual packaging
therefor or as may be expressly provided in this Agreement, Licensee shall not
use the Property or the Licensed Articles identified with the Property in
connection with any manner of television, radio, motion picture, filmstrip,
webcast, Internet broadcast, sound and/or visual recording or transmission
device or media, or anything similar to the foregoing now known or hereafter
developed without Marvel’s prior written approval. The name and/or likeness of
any performer portraying any character included within the Property on radio,
television, or in any other media or form shall not be deemed to be included in
the Property, and the use thereof is not licensed.
5. ROYALTIES, PAYMENTS, REPORTS, RECORDS AND BRAND INTEGRITY
(a) Royalties. Licensee agrees to pay Licensor royalties at the Royalty Rate
identified in Section 1(g), determined as follows:
(i) Royalties shall be calculated by applying the Royalty Rate identified in
Section 1(g) to Licensee’s (or its Affiliates’) Net Sales (defined below).
“Affiliate” means, with respect to any party, any other party directly or
indirectly controlling or that is controlled by or is under common control with
such party. For the purposes of this definition, “control” means the possession
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise. “Affiliated” and “Unaffiliated” shall have corresponding meanings.

 

17

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(ii) * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * *
(iii) Royalties as specified herein shall become due on the last day of each of
Hasbro’s quarterly fiscal periods, and shall be paid not later than thirty
(30) days following the end of the Hasbro fiscal period for all Net Sales
accruing for the United States, Canada and their respective territories and
possessions in that Hasbro fiscal period and not later than sixty (60) days
following the end of the Hasbro fiscal period for all Net Sales accruing in the
remainder of the Territory in that Hasbro fiscal period, accompanied by the
Royalty Report required herein. Royalties are due on any and all sales or other
disposition of the Products. Products shall be considered sold and Net Sales
shall be deemed accrued for all purposes hereunder on the date of shipment or
the date that the shipment is invoiced by the Licensee, whichever date is
earlier. Hasbro’s fiscal year ends on a Sunday within two weeks of the end of
each calendar year, and Hasbro’s quarterly fiscal periods typically consist of
thirteen (13) weeks each, ending on a Sunday.
(iv) Licensee’s (and its Affiliates’) sales and pricing policies shall
reasonably optimize maximum availability of the Licensed Articles in the
Territory and Channels of Distribution while avoiding deep discounts,
liquidation, close-outs, over-production, “market flooding” or other disparaging
pricing and related production practises which would reasonably constitute
“dumping” as the term is generally understood in the consumer products industry,
unless specifically agreed to in advance and in writing by Licensor. * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * Nothing herein shall be construed as
granting Licensor the right to set or approve Licensee’s pricing, and nothing
shall be deemed to restrict Licensee’s ability to set prices in its own
unfettered discretion. * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * *

 

18

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(b) N/A
(c) Currency, Wire Payment and Taxes. All payments to Licensor shall be made in
United States Dollars, shall be computed at the exchange rate published by the
Wall Street Journal as of the last business day of the month preceding the month
for which the Royalties are being calculated. All payments to Marvel shall be
made via wire transfer to Bank: HSBC Bank USA, Beverly Hills, CA 90210, Branch:
HSBC Bank USA, 445 N. Bedford Drive, Beverly Hills, CA 90210, Account Name:
Marvel Characters B.V., Account # 178-786527, ABA# 122240861, IF WIRE IS TO BE
MADE VIA SWIFT OR CHIPS WIRE SERVICES: Swift Code #: HSBCUS33. Reference:
HASBRO: D09001. (except for Spider-Man Movie Characters royalty payments, in
which event the wire transfer shall be made to HSBC Bank USA, NA., Beverly
Hills, CA; Bank Transit ABA #:122240861; Bank Account #:178788104; Account Name:
Spider-Man Merchandising, L.P. Swift Code: HSBCUS33). If payment is late, Marvel
has the option to require that payment be made at the exchange rate existing on
the day preceding payment. All taxes, levies, charges or duties imposed on
license rights, artwork or similar material, or payments therefor (excluding
income taxes and fees applicable to Licensor) shall be paid by Licensee and no
deductions for such taxes, levies, charges or duties shall be made from amounts
owed Marvel hereunder, it being the intent hereof that all royalties payable to
Marvel be free and clear of any taxes, levies, charges or duties of any kind
whatsoever (excluding income taxes and fees applicable to Licensor).
(d) Royalty Reports. For each Hasbro fiscal period specified in
Section 5(a)(iii), commencing with the end of the Hasbro fiscal period following
the Commencement Date of this license and continuing until a final certification
of wind-up is delivered, Licensee shall furnish Licensor with a detailed Royalty
Report certified to be accurate by an authorized representative of Licensee,
showing all information called for by Licensee’s standard royalty reporting
forms for each Licensed Article. Licensee shall provide two separate Royalty
Reports as follows: one for Licensed Articles utilizing Spider-Man Movie
Characters and one for all other Licensed Articles. Upon request from Marvel,
Licensee shall use reasonable efforts to forecast and project anticipated
royalties for the next four (4) Quarterly Hasbro fiscal periods; provided that
in no way shall Licensee be accountable for the ultimate accuracy of such
forecasts. Each Royalty Report (including Royalty Reports showing only
Spider-Man Movie articles) shall be furnished to Marvel via e-mail (or other
mutually agreed-upon means) to royaltyreports@marvel.com within thirty (30) days
after the end of the Hasbro fiscal period for which such Royalty Report is made
in the United States and Canada and sixty (60) days after the end of the Hasbro
fiscal period for which such Royalty Report is made for the remainder of the
Territory, and shall be accompanied by payment to Marvel or the LP, as
applicable, of any and all monies due for the Licensed Articles. Such Royalty
Report shall be furnished whether or not there are any Net Sales during the
preceding Hasbro fiscal period, and whether or not any monies are then due. The
receipt or acceptance by Licensor of any of the Royalty Reports furnished
pursuant to this Agreement or of any payments made hereunder (or the receipt of
any wires paid hereunder) shall not preclude Licensor from questioning its
accuracy during the period allowed for audits as set forth in this Agreement,
and in the event that any inconsistencies or mistakes are discovered in such
Royalty Reports or payments, they shall promptly be rectified and the
appropriate payment made by Licensee or Licensor as the case may be, together
with interest on any overdue payments at the rate specified in Section 17(c)
hereof. Licensee shall provide to Licensor on a monthly basis, by the fifteenth
day of each calendar month, Licensee’s estimates of approximate royalties earned
on (i) sales of Licensed Articles in the United States and Canada in the
preceding calendar month and (ii) sales of Licensed Articles in all other
territories in the next preceding calendar month (e.g., the estimates provided
by March 15 will be for royalties earned on (i) sales in the United States and
Canada in February and (ii) sales in all other territories in January); provided
that in no way shall Licensee be accountable for the ultimate accuracy of such
estimates.

 

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(e) Records. Licensee shall maintain (or make available at such address upon
Licensor’s request) at its expense, detailed, accurate, full and complete
records and books of account covering all transactions by it relating to this
Agreement, and Licensor and its duly authorized representatives shall have the
right, no more than twice during each calendar year during normal business
hours, and no later than thirty (30) days from written notice, to examine and/or
audit such records and books of account and all other documents and materials in
the possession or under the control of Licensee relating or pertaining to the
subject matter or provisions of this Agreement and to make copies and/or
extracts therefrom for purposes of the audit only. Licensor agrees to coordinate
its audits hereunder with the audits, if any, conducted by Marvel under the New
Service Agreement. In the event that Licensor’s duly authorized representatives
shall discover a deficiency for any accounting period of five percent (5%) or
more by any such examination and/or audit, Licensee shall pay to Licensor the
reasonable cost of such examination. Licensee shall keep all such books of
account and records available to Licensor for at least two (2) years after the
termination or expiration of this Agreement. If Licensee fails to keep and
disclose such records, Licensor shall have the right to reasonably estimate, and
demand payment for, such additional royalty as may be indicated owing by such
trade information as may be available.
6. LICENSOR TITLE AND GOODWILL
(a) General. Licensor represents and warrants to the best of its knowledge with
respect to trademark and servicemark rights (including, but not limited to,
trade dress and goodwill pertaining to such marks), and without limitation with
respect to all other of the following items and rights, and Licensee
acknowledges to the extent of such representation and warranty (i) that Licensor
is the owner and/or controller of all right, title and interest in and to the
Property and the Characters included therein and all associated trademarks and
copyrights, (ii) the great value of the goodwill associated with the Property,
and that the Property has acquired secondary meaning in the mind of the public
and (iii) that the trademarks and copyrights included in the Property, and the
registrations therefor, are valid and subsisting. Licensee further agrees that
it shall not during the Term of this license or at any time thereafter dispute
or contest directly or indirectly, or do or cause to be done any act which in
any way contests, impairs or tends to impair Licensor’s exclusive rights and
title to the Property, or the validity thereof or the validity of this
Agreement, and shall not assist others in so doing. Licensor represents and
warrants that it has all necessary rights to grant to Licensee the rights
contemplated hereby free of any encumbrances whatsoever and that such grant
shall not infringe on the rights of any other party.
(b) Representations of Ownership, etc. Licensee shall not in any manner
represent that it has any ownership in the Property, or in any trademarks or
copyrights included in the Property (or registrations therefor), but may, only
during the Term of this license, and only if Licensee has complied with all laws
and registration requirements (other than registration requirements of which
Licensee has no actual knowledge) within the Territory for so doing of which
Licensor has provided notice to Licensee, represent that it is a “licensee” or
“official licensee” hereunder. Licensee shall not register or attempt to
register any copyright or trademark in the Property, in its own name or that of
any third party, nor shall it assist any third party in doing so.

 

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(c) Use for Benefit of Licensor. Licensee agrees that any and all uses and sales
by Licensee of the Property under this Agreement shall inure to the benefit of
Marvel and that neither such uses or sales nor anything contained in this
Agreement shall give or assign Licensee or any other person or entity any right,
title or interest in the Property, or in any properties owned by Licensor which
are not licensed hereunder, except the right to use the Property specifically in
accordance with the provisions of this Agreement; provided that Licensee shall
remain the owner of all Licensee’s patents, trademarks, copyrights or other
intellectual property contained in the Licensed Articles that are separate or
separable from the Property and all adaptations, compilations, modifications,
translations and versions thereof. Except in connection with “Transformers”
action figures, “Titanium” figures and vehicles, “Beyblade” tops and
accessories, Licensee’s owned or controlled game brands and “Attacktix” figure
tactics games and unless otherwise approved in writing, Marvel Licensed Articles
may not be co-mingled and/or bundled with any non-Marvel properties and/or
trademarks (other than the conventional use of the “Hasbro,” “Playskool,”
“Tiger”, “Galoob”, “Milton Bradley”, “Parker Brothers”, or “Kenner” corporate
trademarks) unless specifically authorized in writing by Marvel. Except as
otherwise approved in writing by Marvel, Licensed Articles shall not include any
other trademarks (except Licensee’s non-character marks and its distributors
marks), characters or properties, whether owned by Licensee or another (e.g. GI
Joe, Star Wars etc. may not appear in the same packaging, advertising or
marketing materials as Licensed Articles). Notwithstanding the foregoing,
Licensor acknowledges that Licensee may co-mingle other brands and trademarks
with the Property for the purpose of advertising, packaging and cross-selling
its Titanium and Attacktix product lines. Licensor further acknowledges that
Licensee shall co-mingle the Property with Licensee’s proprietary brands for the
purpose of manufacturing, distributing and promoting Games hereunder. Except as
provided above, no Licensed Article shall be sold in any manner intended to
promote the sale of any other product or service (other than another Licensed
Article) without Licensor’s prior written consent in each instance.
7. PROTECTION OF RIGHTS-INCLUDING COPYRIGHTS AND TRADEMARKS
(a) General. Licensee shall cooperate reasonably and in good faith with
Licensor, at Licensor’s expense for the purpose of Licensor securing and
preserving Licensor’s (or any grantor of Licensor’s) rights in and to the
Property. Upon creation of Licensed Articles embodying the Property, Licensee
shall be deemed to have automatically assigned to Licensor all copyrights solely
in the Property (and all adaptations, compilations, modifications, translations
and versions of the Property) embodied in the Licensed Articles; provided that
Licensee shall remain the owner of all Licensee’s patents, trademarks,
copyrights or other intellectual property contained in the Licensed Articles
that are separate or separable from the Property and all adaptations,
compilations, modifications, translations and versions thereof. In addition,
each party shall execute any instruments requested by the other party to
accomplish or confirm the foregoing. Any such assignment shall be without
consideration other than the mutual covenants and considerations of this
Agreement. Licensee agrees that it shall be primarily liable to Licensor under
the terms of this Agreement for any actions or omissions on the part of
Licensee’s lenders, including but not limited to (i) shipping and fulfilling
orders for the Licensed Articles (ii) paying the royalties or Minimum Royalty
Guarantee payments (iii) shipping only finished Licensed Articles, in the same
packaging and boxes as Licensee would have used; (iv) sale or other disposition
of Licensed Articles shall be permitted only for so long as the applicable
sell-off period is authorized hereunder, etc.
(b) Trademarks and Copyrights. Licensor represents and warrants to the best of
its knowledge with respect to trademark and servicemark rights (including, but
not limited to, trade dress and goodwill pertaining to such marks), and without
limitation with respect to all other of the following items and rights, and
Licensee acknowledges and agrees to the extent of such representation and
warranty that the names, characters, symbols, designs, likenesses, and visual
representations, among other things, comprising the Property are owned by Marvel
or the LP, and Licensee agrees that it shall cause to appear on everything which
uses, bears or displays the Property or any part thereof, including all Licensed
Articles, tags, labels and the advertising, promotional, packaging and display
material therefor, a notice proclaiming and identifying the relevant portions of
the Property appearing therein as properties of Licensor, as, for example, by
labeling each name and character likeness with this Trademark and Copyright
notice: Name(s) of character(s)] and the distinctive likeness(es) thereof are
Trademarks of Marvel Characters B.V. and are used with permission. Copyright Ó
[year of first publication of Marvel material by Licensee, in Arabic numerals]
Marvel Characters B.V. All Rights Reserved. www.marvel.com, or otherwise as
Marvel may deem appropriate. In the event the product features Spider-Man Movie
Character(s), the notice shall provide © [year date] Columbia Pictures
Industries Inc. All Rights Reserved Trademark: Spider-Man, and all related
characters, ® [year date] Marvel Characters B.V. All Rights Reserved. (or such
other legal line as Licensor may reasonably deem appropriate).

 

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(c) Notice of Supervision. Every Licensed Article and all advertising,
promotional, packaging and display material therefor shall also bear this notice
of supervision: This [Description of Licensed Article] is produced under license
from Marvel Characters B.V. (or an equivalent if given prior written approval by
Licensor) in order to notify the public that Licensor’s standards are
maintained.
(d) N/A
(e) Confusing Use. Licensee shall not use, and shall use reasonable efforts to
keep others with whom Licensee does business from using, the Property in any
manner likely to cause confusion or doubt in the mind of the public as to the
ownership, source, sponsorship and control thereof or in any manner that does
not make clear that the Property is owned and controlled exclusively by
Licensor. In addition, except as noted below, Licensee shall not use or
co-mingle with the Property, and shall use reasonable efforts to keep others
from using or co-mingling with the Property, any other trademarks, characters or
properties, whether owned by Licensee or another, so as to suggest that such
other trademarks, etc. may have been created or may be owned, controlled,
licensed or approved by Licensor or that they are in any way related to the
Property or Licensor. Notwithstanding the foregoing, Licensor acknowledges that
Licensee may co-mingle other brands and trademarks with the Property for the
purpose of developing, advertising, packaging and cross-selling its
Transformers, Beyblade and Titanium and Attacktix product lines. Licensor
further acknowledges that Licensee shall co-mingle the Property with Licensee’s
proprietary brands for the purpose of manufacturing, distributing and promoting
Games hereunder.
(f) Registration. Licensee agrees to reasonably cooperate with and assist
Licensor, at Licensor’s expense, in the prosecution of any copyright, trademark
or service mark applications concerning the Property that Licensor may desire to
file, and for that purpose, Licensee shall, upon request, supply to Licensor a
reasonable number of samples of the Licensed Articles or other material as may
be required in connection with any such application. Furthermore, Licensee shall
execute any instrument Licensor shall reasonably deem necessary or desirable to
record or cancel Licensee as a registered user of the trademarks of Licensor
included in the Property.
(g) Customer Complaints. Licensee shall, in connection with its duty to use the
Property so as to promote the continuing goodwill thereof, give attention to
legitimate customer complaints brought against Licensee in connection with the
Licensed Articles or other materials using the Property. Licensee shall give
Licensor prompt notice of all complaints that might affect the good standing of
the Property or the reputation of Licensor and also of all complaints that might
result in legal action between Licensor and any third party, and reasonably
cooperate with Licensor upon request to achieve as good a reputation and press
for the Property as possible.

 

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(h) Copyright Notice. It is a condition of this license that prior to public
distribution, Licensee shall cause to appear the copyright notice specified in
Section 7(b) on all Licensed Articles, tags, labels and the advertising,
promotional, packaging and display materials therefor, or otherwise as Licensor
may instruct in writing or approve upon request.
(i) Secure Copyrights, etc. Licensor may register, in its name (or the name of
another, including Licensee, if desired by Licensor), to the fullest extent
possible, the copyrights in the Property and the registrations, renewals and
extensions thereof, embodied in the Licensed Articles, including all
adaptations, translations, modifications and versions of the Property. It is
also a condition of this license that all Licensed Articles and other materials
produced under this Agreement only to the extent that they embody the Property
shall be produced as works made for hire for Licensor; provided that Licensee
shall remain the owner of all Licensee’s patents, trademarks, copyrights or
other intellectual property contained in the Licensed Articles that are separate
or separable from the Property and all adaptations, compilations, modifications,
translations and versions thereof.
(j) Licensee shall use commercially reasonable efforts to ensure that all
retailers and authorized distributors purchasing Licensed Articles comply with
Licensee’s anti-counterfeiting/anti-piracy system policies established from time
to time.
8. QUALITY OF MERCHANDISE AND SERVICES; LICENSEE NAME ON LICENSED ARTICLES
(a) Quality of Merchandise. Licensee agrees that the Licensed Articles, all
packaging, labels, advertising and promotional material for the Licensed
Articles (“Associated Materials”) and any press release or other public
statement relating to the Licensed Articles or to this Agreement (other than
legally required disclosures, provided that Licensor is given, to the extent
reasonably practicable, an opportunity to review and comment) shall have the
prior written approval of Licensor before the first sale, distribution, display
or release of any kind or in any media and shall be of a high standard customary
in the entertainment toy industry and of such style, appearance and quality as
shall be adequate and suited to their exploitation to the commercial advantage
and to the protection and enhancement of the Property and the goodwill
pertaining thereto; that the Licensed Articles and/or Associated Materials shall
be manufactured, packaged, sold, distributed, advertised and serviced in
accordance with all applicable laws; that the policy of sale, distribution,
and/or exploitation by Licensee shall be of equivalent high standard and style
customary in the entertainment toy industry; and that the same shall in no
manner reflect adversely upon the Property or Licensor. Licensee further agrees
that it shall comply with all applicable laws, rules and regulations regarding
product safety. Licensee further agrees that all rights granted herein shall be
exploited and exercised by Licensee so as not to interfere with, or detract
from, the public image of the Property. Accordingly, Licensee further
specifically covenants and agrees to keep Licensor reasonably informed of its
plans for use of the Property, and to consult Licensor as the Licensed Articles
and/or Associated Materials are being prepared, so that there will be full
opportunity for Licensor to deter Licensee from any use that would detract from
the public image of the Property. Licensee will abide by the policies,
procedures and processes set forth on Exhibit D attached hereto and will
reasonably consult with Licensor at every stage identified in that Exhibit in
designing the Licensed Articles and/or Associated Materials regarding the
utilization of the Property, and shall work with Licensor to obtain Licensor’s
creative input concerning the Property and the overall look and direction of the
Licensed Articles and/or Associated Materials. Licensee shall submit to
Licensor’s New York Office (e-mail: licensingapprovals@marvel.com) (except in
respect to articles utilizing Spider-Man Movie Characters, in which event each
submission shall be sent to Laetitia_May@spe.sony.com and to
Eric_Thomsen@spe.sony.com; such email addresses may be changed by Licensor from
time to time) or such other office as Licensor may designate in writing, for
written approval without charge, all designs, concepts and/or prototypes of each
item, class, part or category of the Licensed Articles and/or Associated
Materials, with respect to the Properties licensed hereunder upon the Brand
Assurance form (or other form as Licensor may reasonably designate from time to
time) attached hereto as Exhibit E. In connection therewith, Licensee shall be
faithful in the portrayal of the Properties to Licensor’s basic
conceptualization of the Property. Any item submitted to Licensor shall be
deemed disapproved unless the same shall be approved in writing within ten
(10) business days (five (5) to seven (7) business days in Gate 6) of receipt of
the samples. Notwithstanding the foregoing, if Licensor expressly disapproves of
any material it shall state the reasons therefor. Licensee shall use
commercially reasonable efforts to make such changes as are reasonably requested
by Licensor after an inadvertent approval or change of conditions; provided that
Licensor shall reimburse Licensee for Licensee’s reasonable costs associated
with such inadvertent approval and subsequent disapproval. After samples have
been approved pursuant to this section, Licensee shall not depart therefrom in
any respect without Licensor’s prior written consent. No approval of any
submitted product or item by Licensor shall be construed to expand or enlarge
the scope of the license granted hereunder. Licensee shall submit to Licensor’s
New York Office, to the attention of: Legal Department (except in respect to
items utilizing Spider-Man Movie Characters, in which case the address shall be
Spider-Man Merchandising LP West, 10202 W. Washington Blvd., Jimmy Stewart
Building, Third Floor, Culver City, CA 90232), free of cost, thirty (30) samples
of finished Licensed Articles and six (6) copies of each piece of Associated
Material(s) therefor prior to sale or publication, and Licensee shall provide
two additional (2) samples to Licensor upon request.

 

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(b) Revocation of Approval. In the event that the quality, appearance or style
of any Licensed Article previously approved by Licensor ceases to be acceptable
to Licensor, Licensor shall have the right, in its sole discretion, to withdraw
its approval of such Licensed Article and to require that Licensee redesign such
Licensed Article in a manner consistent with Licensor’s new policies. In the
event of such withdrawal, Licensee shall as soon as practicable cease the
production of the previously approved Licensed Article and shall have a six
(6) month sell-off period for such Licensed Article.
(c) The Licensor logo, the URL address for Licensor’s website (www.marvel.com
or, in the case of articles utilizing Spider-Man Movie Characters,
www.spiderman.sony.com), artwork, and customer service information shall be
placed prominently on outside packaging and Licensee’s name or trade name (or a
trademark of Licensee which Licensee has advised Licensor in writing that it is
using) shall prominently appear on permanently affixed labeling on each Licensed
Article and, if the Licensed Article is sold to the public in packaging or a
container, printed on such packaging or a container so that the public can
identify the supplier of the Licensed Articles. On soft goods, “permanently
affixed” shall mean sewn on. On hard goods, “permanently affixed” shall mean
molded into or printed on the product. On packaging, “permanently affixed” shall
mean printed on the package. Upon request, Licensee shall advise Licensor in
writing of all trade names or trademarks it is using on Licensed Articles being
sold under this Agreement if such names or marks differ from Licensee’s
corporate name or other names referenced herein. Licensee agrees that it shall
maintain a toll-free number through which consumers calling from the United
States may contact Licensee during normal working hours concerning the Licensed
Articles.
(d) Notwithstanding any provision that may be construed to the contrary set
forth in this Section 8, Licensor agrees with respect to the exercise of its
approval rights, (i) to take into consideration the common standards and
practices of the entertainment toy industry; (ii) not to withhold or delay any
approvals required hereunder unreasonably, and (iii) to use its commercially
reasonable efforts to expedite its approvals. In each case where any item is
disapproved by Licensor, Licensor will inform Licensee in writing of the
detailed reasons for its disapproval and will make suggestions as to the desired
changes, the implementation of which will result in Licensor’s approval upon
resubmission by Licensee. Licensor agrees that any press release or other public
statement relating to the Licensed Articles or to this Agreement (other than
legally required disclosures, provided that Licensee is given, to the extent
reasonably practicable, an opportunity to review and comment) shall have the
prior written approval of Licensee before release of any kind or in any media.

 

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(e) Approval Limitation. Any and all approvals required by Licensor hereunder
shall be valid only if in writing and signed by (or if in an e-mail message
from) an employee of the Brand Assurance Department or other employees of
Licensor designated in writing by the Brand Assurance Department. Licensee
understands that no oral approval or written approval by any other employee may
be relied upon or shall bind Licensor. Any reliance on any oral or written
modification by any other employee shall be at Licensee’s own detriment and
risk.
(f) Inspection. Licensor or its authorized agents or representatives shall have
access to Licensee’s and/or its subcontract manufacturer(s) premises at all
reasonable times, upon reasonable notice, with the right to a full inspection of
the production of the Licensed Articles in order to satisfy itself that its
standards are maintained, and with the right to be supplied, on request, with a
reasonable number of free samples of all Licensed Articles in preparation and
the raw materials and ingredients used therein.
9. [deleted]
10. INFRINGEMENT, INDEMNIFICATION AND INSURANCE
(a) Infringement of Property. Each party shall promptly notify the other party,
in writing, of any imitations or infringements of the Licensed Articles or the
Property contained therein or the rights licensed hereunder which may come to
such party’s attention. Licensor shall have the sole right to determine whether
or not any demand, suit or other action shall be taken on account of or with
reference to any such infringements or imitations, and Licensee shall not
institute any suit or take any action on account of any such infringements or
imitations without first obtaining the written consent of Licensor to do so.
Licensor, if it so desires, may commence or prosecute any suits or make any such
demands in its own name or, if Licensee approves, which approval shall not be
unreasonably withheld, in the name of Licensee or join Licensee as a party
thereto. Licensee shall cooperate with Licensor, at Licensor’s expense, in any
manner that Licensor may reasonably request in connection with any such demands,
suits, claims or other actions. If Licensor elects not to sue, Licensee may
request permission to bring suit and, with written permission, may bring suit at
its own expense, provided Licensee indemnifies Licensor against any loss or
damage, including any loss or damage to reputation or goodwill, and provided
that trial counsel is approved by Licensor, which approval shall not be
unreasonably withheld, keeps Licensor fully informed, and further provided that
Licensor shall have the right to assume control of the litigation at any time,
but is thereupon responsible for its own further litigation expense and shall
reimburse Licensee for Licensee’s reasonable litigation expenses incurred prior
to such assumption of control. Licensee may not settle any case under this
section without Licensor’s written approval (which approval shall not be
unreasonably withheld). In cases where the infringement was first brought to
Licensor’s attention by Licensee, any recovery shall (i) first go to reimbursing
the party who has ultimately controlled the litigation or claim process and who
has been responsible for payment of expenses associated therewith for such
expenses; (ii) then, go to reimbursing the other party for any of its expenses
associated with the litigation or claim process and (iii) then, be split 50/50
between the parties. Nothing herein shall be construed as imposing any
obligation upon Licensor or Licensee to take action against any alleged
infringer.

 

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(b) Infringement of Other Rights. In its use of the Property, or any element or
portion thereof, Licensee shall exercise reasonable care, and shall cooperate
fully with Licensor, to avoid infringing any rights found to be owned by others
in the Territory. Upon receiving written notice alleging the existence or
possible existence of rights held by others which may be infringed by the use of
any element or portion of the Property under this Agreement, each party shall
promptly notify the other party in writing.
(c) Indemnification of Licensee. Licensor shall defend, indemnify and hold
Licensee and its parents, subsidiaries, and associated and affiliated companies,
harmless of, from and against any charges, suits, actual damages, costs,
expenses (including reasonable attorneys’ fees), judgments, penalties, claims,
liabilities or losses of any kind or nature whatsoever, which may be sustained
or suffered by or secured against Licensee based upon or arising out of any
actual or alleged trademark or copyright infringement arising out of the use by
Licensee of the Property as authorized in this Agreement, or any other actual or
alleged unauthorized action of Licensor, including a breach by Licensor of its
representations or warranties or other term of this Agreement, provided that:
prompt notice is given to Licensor of any such claims or suits (but failure to
give such notice shall relieve Licensor of its obligations under this subsection
only to the extent that such failure is prejudicial to Licensor) and provided
further that: Licensor shall have the option to undertake and conduct the
defense and/or settlement of any such claims or suits against third parties and
that Licensee reasonably cooperates with Licensor in the defense of any such
claims or suits and Licensee acts reasonably to mitigate any damages. No
settlement of any such claims or suits involving more than the payment of money
by Licensor shall be made without the prior written consent of Licensee (which
consent shall not be unreasonably withheld). In no event shall Licensor be
liable for punitive or exemplary damages, nor for lost profits. Licensor does
not warrant any present or future commercial value of the Property.
(d) Indemnification of Licensor. Licensee shall defend, indemnify and hold
Licensor and its parents, subsidiaries, and associated and affiliated companies,
harmless of, from and against any charges, suits, actual damages, costs,
expenses (including reasonable attorneys’ fees), judgments, penalties, claims,
liabilities or losses of any kind or nature whatsoever, which may be sustained
or suffered by or secured against Licensor in connection with the Licensed
Articles, or based upon or arising out of any actual or alleged unauthorized use
of any patent, trade secret, process, idea, method or device, or any copyright
or trademark, other than under this license, or the packaging, distribution,
promotion, sale or exploitation of the Licensed Articles, any actual or alleged
defect in the Licensed Articles or their packaging, whether latent or patent,
including failure of said Licensed Articles or their packaging, distribution,
promotion, sale or exploitation to meet any Federal, State or local, or other
applicable laws or standards; or any other actual or alleged unauthorized action
of Licensee, including a breach by Licensee of any of its representations or
warranties or other term of this Agreement, provided that: prompt notice is
given to Licensee of any such claims or suits (but failure to give such notice
shall relieve Licensee of its obligations under this subsection only to the
extent that such failure is prejudicial to Licensee) and provided further that:
Licensee shall have the option to undertake and conduct the defense and/or
settlement of any such claims or suits against third parties and that Licensor
reasonably cooperates with Licensee in the defense of any such claims or suits
and Licensor acts to reasonably to mitigate any damages. No settlement of any
such claims or suits involving more than the payment of money by Licensee shall
be made without the prior written consent of Licensor (which consent shall not
be unreasonably withheld). In no event shall Licensee be liable for punitive or
exemplary damages, nor for lost profits.

 

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(e) Insurance. Licensee shall obtain at its own expense and maintain during the
Term of this Agreement and for three (3) years thereafter, general liability
insurance including advertising, blanket contractual and product liability
coverages. Hasbro declares it is “self-insured” for all other types of claims.
All insurance must be provided by a recognized insurance company having a Best’s
Rating of no less than “A” providing adequate protection at least in the amounts
specified in Section 1(k) for personal bodily injury and property damage for
Licensor and also for Licensee. Said insurance shall be primary and
non-contributory with respect to any insurance carried by Licensor. Upon return
to Licensor of Licensee’s signed originals of this Agreement, Licensee shall
furnish to Licensor’s New York Office, to the attention of Senior Contracts
Administrator, a certificate evidencing that such insurance is in force, naming
Licensor its subsidiaries, associated and affiliated companies as additional
insured parties and providing that such coverage will not be canceled without at
least thirty (30) days notice to Licensor. Failure to provide the insurance
certificate shall be a matter for Dispute Resolution. Said insurance coverage
shall be effective as of the Commencement Date. Any proposed change in the
insurance policy(ies) affecting Licensor’s coverage shall be submitted for
review as to the policy compliance with the terms and conditions of this
Agreement, to Licensor’s New York Office, to the attention of Senior Contracts
Administrator. The policy(ies) of insurance must be non-cancelable except after
thirty (30) days prior written notice to Licensor’s New York Office, sent to the
attention of Senior Contracts Administrator. As used in Section 10 (d),
“Licensor” shall also include the agents, employees, assignees of Licensor, and
their respective officers, directors, agents and employees. As used in
Section 10 (c), “Licensee” shall also include the agents, employees, assignees
of Licensee, and their respective officers, directors, agents and employees.
This provision shall survive the termination or expiration of this Agreement.
11. ARTWORK
(a) Licensee shall have, at no cost to Licensee, access to Marvel’s online style
guides (the “Style Guide(s)”), which shall depict the Property for use in the
Licensed Articles, as well as other information relating to the Property that
Licensee may reasonably request. Licensee understands that in the event any fees
or royalties are due creators or artists who are independent of Licensor as a
result of certain artwork or story-lines, Licensee shall be responsible for the
payment of such fees and/or royalties upon invoicing therefor; provided Licensor
has notified Licensee of such fees in writing in advance. Payment of any fees
associated therewith shall not be credited against any guarantee or other amount
due Licensor. During the Term, Licensee shall at its cost and upon Licensor’s
reasonable request, promptly provide Licensor (by CD, T-1 line or other digital
means) with any high-resolution artwork of the Property created by Licensee.
Licensor shall use commercially reasonable efforts to support Licensee’s
presentations to retail customers with any available creative materials (sizzle
tapes, images, trailers) cleared for use and pertaining to Marvel/LP
Entertainment Properties.
(b) All artwork involving the Property only to the extent that it embodies the
Property, or any reproduction thereof, and all copyrights therein shall,
notwithstanding its use by Licensee, be and remain solely the property of
Licensor and Licensor shall be entitled to use the same and to license the use
of the same by others. Any reproduction or use of such artwork shall be on a
non-exclusive basis.
(c) Licensee shall obtain and promptly furnish to Licensor’s New York Office,
sent to the attention of Senior Contracts Administrator, on the form annexed
hereto as Exhibit B, an agreement signed by each independent contractor who
creates, prepares or produces for or on behalf of Licensee any artwork involving
the Property only to the extent that it embodies the Property or any
reproduction thereof, stating that such artwork is a work made for hire for
Licensee under the U.S. Copyright Laws and acknowledging that such person has no
copyright or other rights of any kind in or to such artwork. Licensee shall be
deemed to have automatically assigned to Licensor all copyrights in any
materials created by or for Licensee in the Licensed Articles only to the extent
that they embody the Property; provided that Licensee shall not be obligated to
assign, and shall remain the owner of, Licensee’s copyrights contained in the
Licensed Articles to the extent that they are separate or separable from the
Property. Further, each party shall execute any instruments requested by the
other party to accomplish or confirm the foregoing assignment.

 

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12. PROMOTION
Licensor shall have the right, but shall not be under any obligation, to use the
Property so as to give the Property, Licensee, Licensor and/or programs
connected with the Property full and favorable prominence and publicity;
provided that nothing in this section shall mitigate the effects of Sections
3(c) and 5(b) hereof. If the Licensed Articles appear in film produced by or
under authority of Licensor, there shall be no obligation by Licensor to
discontinue use of such film or any part thereof at the expiration or
termination of this license and such continued use shall in no way be construed
as an extension of the Term hereof or of this license.
13. DISTRIBUTION, AND BUSINESS PLANNING/MARKETING AND TOOLING COMMITMENTS
(a) Distribution. Licensee shall diligently and continuously use reasonable
efforts, as determined in Licensee’s business judgment, in the Territory
licensed hereunder and during the Term of this license, to sell the Licensed
Articles, to make and maintain adequate arrangements for the distribution of the
Licensed Articles, and to promote and expand its sales hereunder. Licensee shall
not sell or distribute the Licensed Articles on a consignment basis. Licensee
shall also have the right to distribute and sell the Licensed Articles on home
shopping television programs provided Licensor’s prior written approval of the
dates for the shows, and the Licensor product to be featured thereon, is
obtained so that Licensor may avoid any conflicts with any previously scheduled
home shopping television shows featuring Licensor product. Failure to submit for
prior written approval the dates of the show or the product shall be considered
a matter for Dispute Resolution. Licensee acknowledges that it has no right to
and shall not, without prior written consent of Licensor, sell or distribute the
Licensed Articles to anyone whose sales or distribution are or will be made for
publicity, promotional or tie-in purposes, combination sales, premiums,
giveaways, or whose business methods are or are reported to be questionable.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * *

 

28

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(c) Marketing Commitment. During the Term, Licensee agrees to commit to
marketing and promotional expenditures in direct support of the Licensed
Articles in an amount equal to not less than * * * * * * * * * * * * * * * * * *
of total Net Sales (except close-out sales or sales to Unaffiliated
distributors) in the Territory. The following points shall be “True-Up Points”
for the purposes of this subsection: the end of the second calendar year in
which Licensee sells products hereunder and the end of each following calendar
year during the Term. At each True-Up Point, if Licensee’s marketing and
promotional expenditures over the Term have been less, to date, than the
percentages described above, Licensee’s semi-annual plans (described below) for
the following calendar year shall call for Licensee to make such marketing and
promotional expenditures as would be reasonably calculated to bring those
expenditures over the elapsed Term as of the end of such following year to the
percentages described above. * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
(d) As part of the expenditures described in Section 13(c) above, Licensee
commits to purchase advertising from Marvel, for any Hasbro product that Hasbro
may determine, a total Advertising Commitment of * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * which, if such
expenditures are not begun until the commencement of the Term, such expenditures
shall be spent in amounts of not less * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * per year of
the Term. In no event shall Licensee’s commitment hereunder exceed * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * *. Licensee shall have the option to purchase
(or spend) either (i) advertising in Marvel’s comic book (Junior Network) at the
rate of * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * per page; or (ii) advertising on Marvel’s age appropriate owned and operated
websites at the rate of * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* (for the avoidance of doubt, the online advertising shall not include “Rich
Media” of any kind); or (iii) * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * or (iv) * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * *. Marvel agrees to
credit the Advertising Commitment through any subparagraph (iv) executions that
occur prior to the Commencement Date. In the event of any such executions prior
to the Commencement Date, the obligation for minimum yearly expenditures
referenced above shall be null and void. Licensee shall give Marvel two
(2) months’ prior notice for the placement of advertising. The amount of the
Advertising Commitment shall not be deducted from royalties owed Licensor or
from the Minimum Royalty Guarantee; applied to any deductions permitted under
Section 5(a)(ii).

 

29

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(e) Business Planning Commitment. Licensee shall proactively and openly share
product plans, business plans, sales mix and sales forecast plans, customer
plans and marketing and promotional plans in an on-going manner throughout the
Term. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * *

 

30

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14. MINIMUM PRODUCT LINE DEVELOPMENT AND DISTRIBUTION COMMITMENTS.
(a) LICENSOR MOVIE LINES: * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * *
(b) LICENSOR ANIMATED TV SERIES LINES: * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * *
(c) CLASSIC SPIDER-MAN BRAND LINES: * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * *
(d) MARVEL MULTI-CHARACTER BRANDED LINES: * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
(e) MEGA PROPERTY QUALIFYING THEATRICAL RELEASES LINES * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * *

 

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15. DISPUTE RESOLUTION/TERMINATION
(a) In the event of failure by Licensee to timely pay the royalty payments
and/or the Minimum Royalty Guarantee payments in accordance with Sections 1 and
5 of this Agreement, Licensor shall have the right to terminate this license
fifteen (15) days after receipt by Licensee of notice in writing, and such
notice of termination shall become effective unless, within such fifteen
(15) day period, Licensee shall completely remedy the breach and furnish the
required payments. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * *

 

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* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * *

 

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(d) Change in Character of Licensee. It is understood that the grant of the
license herein by Licensor is personal to Licensee. Licensor may terminate this
Agreement if: (i) there is a transfer, in a single transaction or in a series of
related transactions, of fifty percent (50%) or more of (a) the then outstanding
shares of common capital stock of Licensee or its “Parent” (as defined below) or
(b) the combined voting power of the then outstanding voting securities of the
Licensee or its Parent entitled to vote generally in the election of directors;
(ii) there is a transfer, in a single transaction or a series of related
transactions, of all or substantially all of the assets of Licensee or its
Parent; or (iii) there is a merger or consolidation of Licensee with another
person or entity, in which the shareholders of Licensee immediately prior to the
merger or consolidation cease to control at least fifty percent (50%) of the
outstanding shares of the resulting entity (in each instance, a “Change of
Control”). If Licensor has reason to believe that a Change of Control has
occurred, Licensor may request, and Licensee shall provide, a statement
certified by Licensee’s principal executive officer stating whether or not a
Change of Control has occurred and addressing any other particulars reasonably
requested by Licensor. If Licensee has reason to believe that such a Change of
Control has occurred or if Licensee or its Parent publicly proposes to enter
into such a Change of Control transaction, Licensee shall give written notice
thereof to Licensor. Within fourteen (14) days after receiving such notice,
Licensor shall give Licensee written notice stating whether it approves or
disapproves any such Change of Control or proposed Change of Control and, in the
case of its disapproval thereof, whether it exercises its right of termination
hereunder, if the Change of Control has already occurred, or will exercise its
rights of termination if the proposed Change of Control is subsequently made;
provided, however, that Licensor’s approval of a Change in Control shall not be
unreasonably withheld. The foregoing shall not limit in any way the right of
Licensor, under Section 19(f), to disapprove assignments and other transfers of
this Agreement and the rights hereunder. For purposes of this Section 15(c),
Licensee’s “Parent” shall mean any person or entity in control of Licensee
directly or indirectly through one or more
intermediaries. *****************************************
*************************************************************************************************************************************
*************************************************************************************************************************************
**********************************************
(e) New Service Agreement. In the event that the New Service Agreement
terminates, this Agreement shall automatically terminate. In the event that this
Agreement terminates, the New Service Agreement shall automatically terminate.
16. OBLIGATIONS ON EXPIRATION OR TERMINATION
(a) Reversion of Right. Promptly upon the expiration or termination of this
license for any cause whatsoever, all the rights granted to Licensee hereunder
shall cease and revert to Licensor, who shall be free to license others to use
any or all of the rights granted herein effective on and after such date of
expiration or termination, subject to Licensee’s sell-off rights. To this end,
Licensee will be deemed to have automatically assigned to Licensor upon such
expiration or termination, all copyrights, trademark and service mark rights,
equities, good will, titles and other rights in or to the Property and all
adaptations, compilations, modifications, translations and versions thereof,
(except for Licensee’s patents, trademarks, copyrights or other intellectual
property contained in the Licensed Articles that are separate or separable from
the Property, and all adaptations, compilations, modifications, translations and
versions thereof ). Each party shall upon the expiration or termination of this
license execute any instruments requested by the other party to accomplish or
confirm the foregoing. Any such assignment shall be without other consideration
than the mutual covenants and considerations of this Agreement. In addition,
upon and after such expiration or termination of this license for whatever
reasons, Licensee will, except as specifically provided in Section 16(e) hereof,
forthwith refrain from further use of the Property or Licensor’s name, or any
further reference to any of them, direct or indirect, or of anything deemed by
Licensor to be similar to the Property.

 

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(b) Return of Artwork. Upon termination or expiration of this Agreement for any
reason whatsoever, Licensee shall return to Licensor’s New York Office, sent to
the attention of Senior Contracts Administrator, all artwork or, at Licensee’s
option, furnish to Licensor an affidavit attesting to the destruction of said
artwork Property, and all adaptations, compilations, modifications, translations
and versions thereof, including but not limited to all reproductions and all
artwork specially produced for Licensee by Licensor or others, whether or not
paid for by Licensee.
(c) No Release. (i) The termination or expiration of this license shall not
release any party of any obligation to pay any monies that are owed or are owing
to Licensor or arose out of any transaction prior to the date of termination or
expiration, and in the event of a proper termination by Licensor in accordance
with the Dispute Resolution process, all royalties on sales or shipments
theretofore made shall become immediately due and payable with no part of the
Minimum Royalty Guarantee being repayable except as set forth herein, and any
balances of the Minimum Royalty Guarantee or any other payments owed or owing to
Licensor shall be immediately due and payable except as set forth herein.
Notwithstanding the foregoing, nothing in this section shall mitigate the
effects of the term extensions described in Section 3(c) hereof,
********************************************************************************************************************************
********************************************************************************************************************************
********************************************************************************************************************************
********************************************************************************************************************************
********************************************************************************************************************************
********************************************************************************************************************************
********************************************************************************************************************************
********************************************************************************************************************************
********************************************************************************************************************************
********************************************************************************************************************************
********************************************************************************************************************************
********************************************************************************************************************************
********************************************************************************************************************************
********************************************************************************************************************************
********************************************************************************************************************************
********************************************************************************************************************************
********************************************************************************
(iii) In the event of a full termination by either party of this Agreement
pursuant to Section 15(b)(ii) above or Section 19(c) below, Licensee shall have
no obligation to pay any further advances or minimum royalty guarantee payments
scheduled to occur following such termination.
(iv) The parties acknowledge that in no event shall Licensee have any obligation
whatsoever to pay to Licensor any portion of the Marketing Commitment which has
not been expended by Licensee or its Affiliates as of the date of termination or
expiration of this License.

 

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(d) Inventory. Fifteen (15) days before the expiration of this license and, in
the event of its termination, forty five (45) days after receipt of notice of
termination or the happening of the event which terminates this license where no
notice is required, a statement executed by an officer of Licensee certifying
the number and description of the Licensed Articles in inventory or in process
shall be furnished by Licensee to Licensor’s New York Office to the attention of
Senior Contracts Administrator. Licensor shall have the right to take a physical
inventory to ascertain or verify such inventory and statement, and Licensee’s
failure to furnish such statement or the refusal by Licensee to submit to such
physical inventory shall forfeit Licensee’s right to dispose of such Licensed
Articles as provided in Section 16(e) hereof.
(e) Disposal. After expiration of this license, for the Post-Expiration Disposal
Period specified in Section 1(j), Licensee may, except as otherwise provided in
this Agreement, dispose of, on a nonexclusive basis, and in compliance with all
of the terms and conditions hereof, including Section 13, those Licensed
Articles which are on hand or in process at expiration, provided royalties with
respect to such Calendar Period are paid and Royalty Reports are furnished for
such Calendar Period in accordance with Section 5 hereof. Royalties on Net Sales
during the Disposal Period may be applied against any unearned balance of the
Minimum Royalty Guarantee. Licensee specifically acknowledges and agrees that it
shall carefully plan production, sales and inventory levels in the final year of
the Term so as to leave minimal product and inventory levels of Licensed
Articles within the trade and within its own warehouses or those of distributors
at the end of the Term. *****************************
*************************************************************************************************************************************
*************************************************************************************************************************************
*************************************************************************************************************************************
************************************************************** In the event that
Licensee sells or exploits the Licensed Articles after the Post Expiration
Disposal Period or in excess of the permitted amount, the royalty due Licensor
on such sales shall be the Net Sales. Notwithstanding anything to the contrary
herein, Licensee shall not sell or dispose of any Licensed Articles after
termination of this Agreement pursuant to Section 15.
(f) Undisposed Licensed Articles. Upon expiration or termination of this
license, or upon the expiration of the period for disposal where permitted under
the previous subsection, Licensee shall destroy and furnish to Licensor an
affidavit attesting to the destruction of all remaining Licensed Articles, if
any, and all tags, labels, packaging, advertising, promotional and display
materials therefore, and elements of the Property and all adaptations,
compilations, modifications, translations and versions thereof in all molds,
plates, engravings and/or mechanicals used to make any of the Licensed Articles
or any of the aforesaid materials.
17. REMEDIES
(a) No remedies provided for herein shall limit any other remedies available
under this Agreement or otherwise, provided that the Dispute Resolution process
is complied with wherever applicable.
(b) Use After Termination, etc. Licensee acknowledges that its failure to cease
the use of the Property or to cease sale or distribution of the Licensed
Articles at the termination or expiration of this license, except as expressly
provided herein, will result in immediate and irreparable damage to Licensor and
to the rights of any subsequent licensee. Licensee acknowledges and admits that
there is no adequate remedy at law for such failure, and Licensee agrees that in
the event of such failure, Licensor may be entitled to injunctive relief and
such other and further relief as any court with jurisdiction may deem just and
proper.

 

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(c) Interest, Damages and Cost. In the event Licensee shall default in the
payment of monies required to be paid to Licensor hereunder, in addition to any
remedies which Licensor may have at law or in equity to recover any such monies
as may be due and owing, Licensor shall be entitled to receive from Licensee
interest on such monies as may be owing from the date of default at a rate equal
to three percent (3%) above the prime lending rate charged by Licensor’s bank in
New York on the date of default.
18. SUBCONTRACT MANUFACTURE
Licensee may utilize a third party subcontract manufacturer approved in writing
by Licensor in connection with the manufacture and production of the Licensed
Articles, provided that such subcontractor shall execute a letter in the form of
Exhibit C attached hereto and by this reference made a part hereof. In such
event, Licensee shall remain primarily obligated under all of the provisions of
this Agreement. In no event shall any such subcontract manufacturer Agreement
include the right to grant any further sublicenses. If any manufacturer utilizes
the Property for any unauthorized purposes Licensee shall cooperate fully in
bringing such utilization to an immediate halt. If, by reason of Licensee not
having supplied Exhibit C, Licensor makes any representation or takes any action
and Licensor is therefore subject to any penalty or expense, Licensee shall
fully compensate Licensor for any cost or expense Licensor may sustain.
19. GENERAL
(a) Integrity of Agreement. This Agreement and the New Service Agreement contain
and embodies the entire Agreement and understanding of the parties concerning
the subject matter hereof. No warranties, representations, understandings,
inducements, promises, guarantees, agreements or conditions, express or implied,
not expressly contained herein, have been made or shall be enforceable by either
party concerning the subject matter hereof or any relationship between the
parties. Nothing contained herein shall be deemed an express or implied warranty
on the part of Licensor that efforts to gain copyright, trademark or service
mark registration will be successful, or that the Property has or will in the
future have any commercial value, and it is understood that no liability shall
attach to Licensor for any failure to secure such registration, nor shall there
be any modification hereof for such reason.
(b) Relationship Between the Parties. The relationship between the parties
hereto is that of licensor and licensee, and this Agreement is not to be
construed as creating a partnership, joint venture, master-servant,
principal-agent, or other relationship for any purpose whatsoever. Except as may
be expressly provided herein, neither party may be held for the acts either of
omission or commission of the other party, and neither party is authorized to or
has the power to obligate or bind the other party by contract, Agreement,
warranty, representation or otherwise in any manner whatsoever.
(c) Force Majeure. Licensee and Licensor shall be released from their
obligations hereunder and this license shall terminate with respect to such
territory, field or part thereof as to which governmental regulations or other
causes arising out of a state of national emergency render performance
impossible for a period of more than ninety (90) days, and provided that one
party informs the other in writing of such causes and its desire to be released.
In such event, all royalties on sales theretofore made with respect to such
territory, field or part shall become immediately due and payable to Licensor.
In the event of such a termination or partial termination, Licensee shall be
entitled to a refund of all or a portion of its guarantee payments in the manner
described above in Section 16(c)(ii).

 

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(d) Mailing Addresses. All notices, reports and statements to be given and all
payments to be made hereunder, shall be given or made by hand delivery, email,
first class, Registered or Certified mail, or Federal Express or any overnight
delivery service providing notice of receipt at the address of Licensee set
forth above with notice to Licensor to the attention of Licensor’s legal
department to Marvel Characters B.V. and (if applicable) Spider-Man
Merchandising L.P., 417 Fifth Avenue, Mezzanine, New York, NY 10016, unless
notification of a change of address is given in writing. The date of applicable
tracking information (tracking information, post-mark, email confirmations)
shall be deemed the date the notice, report or statement is given. The mailing
of a notice by Registered or Certified mail shall constitute notice hereunder
even in the event of refusal to accept by addressee.
(e) Survival and Separability. Notwithstanding anything to the contrary herein,
all provisions hereof are hereby limited to the extent mandated by any
applicable law or decisions. If any one or more paragraphs, clauses or other
portions hereof should ever be determined to be illegal, invalid or otherwise
unenforceable by a court of competent jurisdiction or be illegal, invalid or
invalidated or unenforceable within any jurisdiction by reason of any existing
law or statute, then to that extent and within the jurisdiction in which it is
illegal, invalid or unenforceable it shall be limited, construed or severed and
deleted herefrom, and the remaining extent and/or remaining portions hereof
shall survive, remain in full force and effect and continue to be binding and
shall not be affected except insofar as may be necessary to make sense hereof,
and shall be interpreted to give effect to the intention of the parties insofar
as that is possible. In no event shall this Agreement be construed as requiring
Licensee or Licensor to commit any unlawful act or acts whatsoever. All payments
hereunder shall be subject to any and all applicable withholding taxes.
(f) Assignment or Sublicense. This Agreement and the license rights granted
hereunder are personal to Licensee and shall not in any manner whatsoever be
assigned, sublicensed, hypothecated, mortgaged, divided or otherwise encumbered
by Licensee to or with any other person or entity other than to Licensee’s
wholly owned subsidiaries and (to the extent necessary to allow them to act as
distributors) Licensee’s distributors without Licensor’s prior written consent
which it may withhold in its sole discretion but no such assignment by Licensee
shall release Licensee from any of its obligations or liabilities hereunder.
This Agreement and the provisions hereof shall be binding at all times upon and
inure to the benefit of the parties hereto, their successors and permitted
assigns. Any attempted assignment in violation of the provisions hereof shall be
void ab initio and the assignee shall obtain no rights by reason thereof.
(g) Construction and Jurisdiction. This Agreement shall be construed and
interpreted in accordance with the laws of the State of New York applying to
contracts fully executed and performed in New York. With respect to any
provisions of this Agreement that provide for relief in court, each party agrees
to submit to exclusive jurisdiction in the courts (both Federal and State) of
New York State for any action brought by Licensor or Licensee hereunder, to
bring no action in any other court, and each party further agrees to accept
service of process by mail at its above written address. The titles and headings
of the sections, subsections and other divisions of this Agreement are inserted
merely for convenience and identification and shall not be used or relied upon
in connection with the construction or interpretation of this Agreement.

 

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(h) No Waiver. None of the provisions hereof shall be deemed to be waived or
modified, nor shall they be renewed, extended, altered, changed or modified in
any respect except by an express agreement in writing duly executed by the party
against whom enforcement of such waiver, modification, etc. is sought. The
failure of either party hereto to object to the failure on the part of the other
party to perform any of the terms, provisions or conditions hereof or to
exercise any option herein given or to require performance on the part of the
other party of any term, provision or condition hereof, or any delay in doing
so, or any custom or practice of the parties at variance therewith, shall not
constitute a waiver or modification hereof or of any subsequent breach or
default of the same or a different nature, nor affect the validity of any part
hereof, nor the right of either party thereafter to enforce the same, nor
constitute a novation or laches.
(i) Ethics. Each party agrees that no part of the consideration paid pursuant to
this Agreement shall be offered, paid or payable, directly or indirectly, to any
governmental 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 Section (i), 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.
(j) Prevailing Languages. In the event of any conflict of interpretation between
this Agreement and any translation, the original English version shall prevail.
(k) Code of Conduct. Licensee agrees, on its own behalf and on behalf of any
suppliers/third parties/manufacturers (“Third Party Vendors”) (i) it shall, at
its cost, enroll in, and comply with, all requirements of the Customs-Trade
Partnership Against Terrorism (“C-TPAT”) and (ii) wherever located, it shall
ensure that no child labor will be used in the performance of this Agreement
whatsoever. For this purpose, a “child” shall refer to any person younger than
15 (or 14 where local law allows) or, if higher, the local legal minimum age for
employment or the age for completing compulsory education. Third Party Vendors
that are young persons or that are employing young persons who do not fall
within the definition of “children” will also comply with any laws and
regulations applicable to such persons. Additionally, all employees will be
provided with a safe and healthy workplace environment, and all employees will
work on a voluntary basis, and shall not be subject to physical or mental
punishment of any kind. Further, Licensee and all Third Party Vendors shall
comply with all local laws, including but not limited to, applicable wage laws
and fair employment practices including the practice of non-discrimination on
the basis of race, religion, national origin, political affiliation, sexual
preference, or gender. Licensee and all Third Party Vendors will, at a minimum,
comply with all applicable wage and hour laws and regulations, including those
relating to minimum wages, overtime, maximum hours, piece rates and other
elements of compensation, and provide legally mandated benefits. Licensee and
Third Party Vendors will further comply with all applicable environmental laws
and regulations. Licensee and Third Party Vendors shall submit to reasonable
on-site inspections conducted by Licensor or its designated representative, to
ensure compliance with all of the provisions of this Section.

 

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(l) Confidentiality. This Agreement and the contents hereof constitute a
confidential business relationship between the parties. Each party acknowledges
that significant irreparable damage could be done to the other party should the
terms of this Agreement as well as any technical, financial, customer,
personnel, and/or other business information in written, graphic, oral, visual
or other tangible or intangible forms, financial statements and other financial
data, specifications, patent applications, records, data, computer programs,
drawings, schematics, know-how, notes, models, reports, and samples of a party
(together, “Confidential Information”) become public knowledge. Each party
agrees that it will not reveal the terms of this Agreement or any Confidential
Information to any third party (excluding employees, agents, attorneys,
accountants and others to whom Licensor or Licensee has a legal obligation to
disclose and, provided that the other party is given, to the extent reasonably
practicable, an opportunity to review and comment, excluding other legally
required disclosures), and each party shall exercise reasonable precautions to
ensure that it or any of the foregoing persons shall not allow the terms of this
Agreement or any Confidential Information to become public knowledge. If either
party is directed by legal process to disclose such information to any third
party, each party shall notify the other party at least fifteen (15) days (or,
if less than 15 days, as much time as is possible under the time constraints
imposed by the applicable legal process) prior to disclosing the information.
Additionally, the parties agree that Confidential Information shall not be used
by the receiving party for any purpose other than as expressly provided for
herein.
20. N/A
[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, and intending to be legally bound thereby the parties hereto
have caused this instrument to be duly executed as of the day and year first
above written.

          MARVEL CHARACTERS B.V.    
 
       
By:
  /s/ Isaac Perlmutter    
 
 
 
Name: Isaac Perlmutter    
 
  Title: Authorized Representative    
 
  Date: February 17, 2009    
 
        SPIDER-MAN MERCHANDISING L.P.    
 
       
By:
  Marvel Characters, Inc. as General Partner    
 
       
By:
  /s/ Isaac Perlmutter    
 
 
 
Name: Isaac Perlmutter    
 
  Title: Chief Executive Officer    
 
  Date: February 17, 2009    
 
        HASBRO, INC.    
 
       
By:
  /s/ Brian Goldner    
 
 
 
Name: Brian Goldner    
 
  Title: Chief Executive Officer    
 
  Date: February 17, 2009    
 
        HASBRO, INC.    
 
       
By:
  /s/ David D.R. Hargreaves    
 
 
 
Name: David D.R. Hargreaves    
 
  Title: Chief Operating Officer and Chief Financial Officer    
 
  Date: February 17, 2009    

 

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Attachments:

  •  
Exhibit A: Licensee’s Royalty Report Form
    •  
Exhibit B: Work Made For Hire Letter Form
    •  
Exhibit C: Subcontract Manufacturer Letter Form
    •  
Exhibit D: Product and Packaging Approval Process and Stages/Policy and
Procedures
    •  
Exhibit E: Licensing Product Approval Form

 

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