EXHIBIT 10.41

ASTERISKS INDICATE MATERIAL THAT HAS BEEN REDACTED, FOR WHICH

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED.

THEME PARK LICENSE

WARNER BROS. CONSUMER PRODUCTS INC.

#16246 - HP

LICENSE AGREEMENT made May     , 2007, by and between Warner Bros. Consumer
Products Inc., a Delaware corporation, whose address is 4000 Warner Blvd.,
Burbank, CA 91522 (hereinafter referred to as “Licensor”) and Universal City
Development Partners, Ltd. (“Licensee”), a Florida limited partnership, whose
address is 1000 Universal Studios Plaza, Orlando, FL 32819, Attention:
President.

The parties hereto mutually agree as follows:

 

1. DEFINITIONS: As used in this Agreement, the following terms shall have the
following respective meanings:

(a) “Agreement” means this Theme Park License as the same may be amended from
time to time.

(b) “Author” means J.K. Rowling, the author of the Books as defined in
Section 1(c) below.

(c) “Books” means the novels written by the Author entitled “HARRY POTTER AND
THE SORCERER’S STONE,” “HARRY POTTER AND THE CHAMBER OF SECRETS,” “HARRY POTTER
AND THE PRISONER OF AZKABAN,” “HARRY POTTER AND THE GOBLET OF FIRE,” “HARRY
POTTER AND THE ORDER OF THE PHOENIX,” and “HARRY POTTER AND THE HALF-BLOOD
PRINCE”, and to the extent that, during the Term of this Agreement, Licensor
acquires merchandising and theme park rights to the seventh HARRY POTTER book
entitled “HARRY POTTER AND THE DEATHLY HALLOWS” that is anticipated to
constitute the final installment in the series of HARRY POTTER books, the
elements of such seventh book shall be included within the definition of Books
hereunder.

(d) “Brand Guidelines” means Licensor’s requirements and guiding principles for
all licensees of the Licensed Property, as set forth in writing and delivered to
Licensee, as may be amended by Licensor from time to time, provided that no such
amendment shall frustrate Licensee’s ability to utilize the Licensed Property
for the Licensed Uses as contemplated in this Agreement in any material respect.

(e) “Business Plan” has the meaning set forth in Section 3.21 below.

(f) “Business Review” has the meaning set forth in Section 3.22 below.

 

- 1 -

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

(g) “Change in Control” has the meaning set forth in Section 11.1 below.

(h) “Clips” has the meaning set forth in Section 4.5 below.

(i) “Consulting Fee” has the meaning set forth in Section 6.3 below.

(j) “Consumables” means products not separately sold and not usually retained by
the consumer, such as paper cups and napkins (specifically excluding souvenir
cups that are sold to guests and not intended for immediate disposal after use),
which are based upon, utilize or include the Licensed Property.

(k) “Grand Opening” means the date on which the Themed Area is fully operational
and open to the public, which is targeted to occur in or about December 15, 2009
but may occur as late as June 30, 2010.

(l) “Licensed Premiums” means products distributed to a consumer in order to
promote, publicize or sell Licensed Products or services (relating to the Themed
Area, as defined below) at the Themed Area, the Theme Park, as defined below,
and/or the Resort, as defined below, or items distributed in connection with any
similar scheme or device (to promote the Themed Area), including, without
limitation, traffic or continuity building promotions, purchase-with-purchase
promotions (including without limitation souvenir drink cups), combination
sales, sweepstakes or any other giveaways.

(m) “Licensed Products” means merchandise that is based upon, utilizes or
includes the Licensed Property (and/or the character likenesses of any of the
actors or actresses in the Movies, to the extent that Licensor now has or later
acquires the right to utilize such likenesses in merchandise associated with the
Licensed Property) and food and beverages that are described in the Books or the
Movies, that are offered for sale at the Theme Park, the Resort, the
Resort-themed stores at Orlando International Airport, the liquidation stores in
Orlando at which slow-selling or discontinued Resort merchandise items are sold
and in response to unsolicited requests by mail or telephone directly from
individual members of the public. “Licensed Products” shall include food and
beverage items to the extent that such food or beverage item is specifically
described in the Books (e.g., Butter Beer), but shall not include food and
beverage items that are not specifically described in the Books even if such
food or beverage item, with Licensor’s consent, utilizes a name based on the
Licensed Property; provided, however, that any food or beverage item that is
served or packaged in any cup or other packaging that utilizes the Licensed
Property and that is intended to be retained as a souvenir or given as a gift
(e.g., a souvenir sipper cup, a pre-packaged tin of candy or cookies), shall be
deemed to be a Licensed Product.

(n) “Licensed Property” means:

(i) The character names, costumes, environmental settings, plot elements,
artwork, logos and other elements depicted in the Movies (as set forth in
Section 1(q) below), including all copyrights and trademarks relating thereto;

(ii) The fictional character(s) and/or other element(s) from the Books,
including the representations, names and likenesses of such character(s) and/or
other element(s) and all environmental settings, costumes and other indicia
associated with such character(s), together with all copyrights and trademarks
as exploited by Licensor relating thereto; and

 

- 2 -

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

(iii) To the extent that during the Term of this Agreement, Licensor acquires
merchandising and theme park rights to a seventh HARRY POTTER book, entitled
“HARRY POTTER AND THE DEATHLY HALLOWS” that is anticipated to constitute the
final installment in the series of Books, and releases a seventh HARRY POTTER
motion picture based upon such seventh book, that is anticipated to constitute
the final installment in the series of Movies, the elements of such seventh book
and seventh movie shall be included within the definition of Licensed Property
hereunder.

(o) “Licensed Property Developments” has the meaning set forth in Section 8.2
below.

(p) “Licensed Use(s)” means use of the Licensed Property:

(i) Within the Themed Area:

 

  (1) Rides, attractions, signage, facades, atmospheric elements and themed
areas;

 

  (2) Consumables;

 

  (3) Retail stores, kiosks and other retail stands;

 

  (4) Themed restaurants, portable food cart locations and other food stands;

 

  (5) Atmospheric strolling costumed characters (e.g., generic Hogwarts
students), ****;

 

  (6) Clips (subject to Section 4.5 below);

 

  (7) “Green screen” photographic venues at which images of guests will be
incorporated within Clips or Stills (defined below) made available by Licensor
to Licensee for such purpose, each of which may contain images of environments
and sets from the Movies, as defined below, and each of which may contain
character images of the talent from the Movies (subject to Licensor approval in
its sole and absolute, but good faith, discretion and provided that no image of
a guest may touch, gesture at, interact with or be “morphed” into or on, any
character image of any talent from the Movies), which “green screen”
photographic images shall be sold to such guests as souvenir merchandise; and

 

  (8) Street entertainers and movie props (and, if available and if approved by
Licensor, in the sole and absolute but good faith discretion of Licensor, sets
and costumes) integrated into the themed environment.

(ii) Within the Theme Park (but not within other themed lands or islands at the
Theme Park, other than the “Port of Entry” portion of the Theme Park), the
Themed Area and the Resort:

 

  (1) Licensed Products;

 

- 3 -

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

  (2) Licensed Premiums;

 

  (3) Printed matter, including but not limited to, tickets, brochures, Theme
Park maps, menus and signage; and

 

  (4) For the press event associated with the Grand Opening and thereafter for
private events within the Theme Park (i.e., events that are not open to the
general public), atmospheric strolling costumed characters (e.g., generic
Hogwarts students), ****.

(iii) Within and outside the Theme Park, the Themed Area and the Resort:

 

  (1) In advertising, marketing and promotion for the Theme Park, the Themed
Area and/or the Resort, including, without limitation, sweepstakes, signage,
brochures, newspapers, magazines and other print media, billboards, radio and
television, in cinema and on the internet;

 

  (2) Atmospheric strolling costumed characters (e.g., generic Hogwarts
students), ****, at trade shows and promotional events that are open to the
trade only (e.g., travel agency conventions); and

 

  (3) Display elements at the retail stores located near the main entrance/exit
of the Theme Park and the retail stores located at Universal CityWalk Orlando
and at the Universal Orlando on site resort hotels and at Resort-themed stores
at Orlando International Airport and at the liquidation stores in Orlando at
which a variety of merchandise based on Resort attractions and characters are
sold.

(q) “Movies” means the 2001 release of the theatrical motion picture entitled
“HARRY POTTER AND THE SORCERER’S STONE,” the 2002 release of the theatrical
motion picture entitled “HARRY POTTER AND THE CHAMBER OF SECRETS,” the 2004
release of the theatrical motion picture entitled “HARRY POTTER AND THE PRISONER
OF AZKABAN,” the 2005 release of the theatrical motion picture entitled “HARRY
POTTER AND THE GOBLET OF FIRE,” and the following two motion pictures provided
they are produced and generally released: the tentatively scheduled to be
released in 2007 theatrical motion picture entitled “HARRY POTTER AND THE ORDER
OF THE PHOENIX,” and the tentatively scheduled to be released in 2008 theatrical
motion picture entitled “HARRY POTTER AND THE HALF-BLOOD PRINCE”, and to the
extent that during the Term of this Agreement, Licensor acquires merchandising
and theme park rights to a seventh HARRY POTTER book, entitled “HARRY POTTER AND
THE DEATHLY HALLOWS” that is anticipated to constitute the final installment in
the series of Books, and releases a seventh HARRY POTTER motion picture based
upon such seventh book, that is anticipated to constitute the final installment
in the series of Movies, the elements of such seventh movie shall be included
within the definition of Movies hereunder, provided, however, that the above
release dates of the Movies are for identification purposes only and shall not
be included or referred to on or in connection with the Licensed Uses, Licensed
Products or any of Licensee’s activities pursuant to this Agreement.

(r) “Other Developments” shall have the meaning set forth in Section 8.4 below.

 

- 4 -

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

(s) “Pass Through Amounts” has the meaning set forth in Section 6.4 below.

(t) “Resort” means the Universal Orlando Resort, comprised of the Theme Park,
the Universal Studios Florida theme park, Universal CityWalk Orlando, the three
on-site resort hotels existing as of the date of this Agreement (the Portofino
Bay Hotel, a Loews Hotel; the Hard Rock Hotel; and the Royal Pacific Resort, a
Loews Hotel) and any other on-site resort hotels or time-share developments that
may hereafter be built and operated as part of the Universal Orlando Resort, the
parking facilities for the foregoing, and the roadways and waterways that
connect the foregoing (and the Universal Orlando Resort busses, boats and other
vehicles that traverse the same).

(u) “Royalties” has the meaning set forth in Section 6.2 below.

(v) “Sell-Off” has the meaning set forth in Section 12.2 below.

(w) “Stills” has the meaning set forth in Section 4.5 below.

(x) “Style Guide” means any materials provided to Licensee by Licensor setting
forth the style, format and any characterization of the Licensed Property for
all licensees of the Licensed Property.

(y) “Term” has the meaning set forth in Section 2.2 below.

(z) “Territory” means the Theme Park and all areas within a two hundred fifty
(250) mile radius around the Theme Park.

(aa) “Text and Verbiage” has the meaning set forth in Section 3.6 below.

(bb) “Theme Park” means Licensee’s “Universal’s Islands of Adventure” theme park
located at the Resort.

(cc) “Themed Area” means the separate and distinct “land” to be developed,
constructed and operated by Licensee pursuant to this Agreement with theming
based on the Licensed Property within the “Theme Park”, as defined below, to be
comprised of a portion of the real estate currently occupied by “The Lost
Continent” land and a portion of currently unoccupied real estate, and to be
located between the remainder of the real estate currently occupied by “The Lost
Continent” land and the “Jurassic Park” land. Such new land is to be named “The
Wizarding World of Harry Potter” or such other name as may be proposed by
Licensee and approved by Licensor in the sole and absolute but good faith
discretion of Licensor. The Themed Area shall be an extensively themed
environment no less than 20 acres in size (including the back-of-house areas for
the Themed Area and the Themed Area’s proportionate share of the Theme Park’s
central lagoon) and shall include, without limitation, the attractions,
facilities and other items set forth in Exhibit 8.

(dd) “Wholesale Price” means the invoiced cost of the product from the supplier
excluding artwork, sample cost, tooling, product development charges, freight,
duty, insurance and any V.A.T., sales taxes or other goods and services taxes so
as to reflect the invoiced cost of the products from the manufacturer.

 

- 5 -

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

2. LICENSE AND OTHER RIGHTS:

2.1 Subject to the restrictions, limitations, reservations and conditions and
Licensor’s approval rights set forth in this Agreement, Licensor hereby grants
to Licensee and Licensee hereby accepts for the Term of this Agreement, a
license to utilize the Licensed Property solely in connection with the
development, construction and operation of the Themed Area and for the Licensed
Uses. The licenses and rights granted pursuant to this Section 2 shall be
exclusive in relation to use of the Licensed Property in connection with theme
parks, amusement parks, water parks and stand-alone themed venues that are
smaller than typical theme parks but are extensively themed and contain rides,
retail and/or food service, similar to those found in a theme park (e.g., the
“Star Trek: The Experience” attraction at the Las Vegas Hilton), during the Term
within the Territory. Notwithstanding the foregoing, Licensor may use, or permit
others to use, the Licensed Property in connection with a traveling
museum-quality exhibition that may be presented at museums,
convention/exhibition halls and other venues.

2.2 The term of this Agreement (the “Term”) consists of the Initial Term (as
defined below) and, if the option(s) below are exercised, the First Renewal Term
(as defined below) and the Second Renewal Term (as defined below).

(a) “Initial Term” means the period beginning on the date of complete signing of
this Agreement through and including June 30, 2019.

(b) Provided that at the time of each renewal, Licensee is not in material
default of any of its obligations provided for in this Agreement, Licensee shall
be entitled to two (2) successive options to renew this Agreement for successive
five (5) year terms (the “First Renewal Term” and the “Second Renewal Term”)
pursuant to all the same terms, conditions and covenants herein, subject to the
payment of the additional Guaranteed Fee set forth in Section 6.1(b) and (c).

(i) To exercise each such option to renew, Licensee must give notice of such
intent to Licensor in writing not less than twelve (12) months prior to the end
of the then current Initial Term or First Renewal Term.

(ii) Upon the exercise of each such option, the First Renewal Term will begin on
July 1, 2019 and expire on June 30, 2024, and the Second Renewal Term will begin
on July 1, 2024 and expire on June 30, 2029.

 

3. APPROVALS:

3.1 Licensee shall at all times in all respects maintain the general appearance,
maintenance, staffing and overall quality of the Theme Park, including without
limitation, the rides, attractions, themed areas and all other aspects of the
Theme Park at a first class, world class level for destination theme parks
unsurpassed in quality by any other destination theme park worldwide (at a
minimum, equivalent to the quality of the Theme Park as of the date of this
Agreement) throughout the Term.

3.2 Licensee shall use the Licensed Property only in a manner that is consistent
with the Brand Guidelines and with the goodwill and legal rights of Licensor in
the Licensed Property.

 

- 6 -

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

3.3 Licensee shall not initiate any use of the Licensed Property hereunder
unless such use is first approved as set forth herein. Any approved use of the
Licensed Property is permitted only in accordance with all of the terms and
conditions of this Agreement.

3.4 It is understood and agreed that all aspects and elements of the Themed
Area, whether specifically utilizing the Licensed Property or otherwise (and, in
any event, all attractions and facilities, all atmospheric and scenic elements,
all facades and props, all signage, flags and banners, and all other content,
readily observable to guests within the Themed Area), that are observable by
patrons at the Themed Area, shall be subject to the prior written approval of
Licensor in its sole and absolute, but good faith, discretion.

3.5 Licensee and Licensor shall each appoint a contact person to serve as the
point person for presentation and review of all items submitted for approval and
to facilitate the review and decision process as set forth herein (provided that
Licensee may appoint different point persons for approvals with respect to the
Themed Area, with respect to advertising, marketing and promotions, and with
respect to Licensed Products, Licensed Premiums and Consumables). To the extent
any items submitted by Licensee hereunder require the approval of ****,
Licensor, and only Licensor shall submit such items to **** or **** for
approval, and Licensor shall reasonably cooperate with Licensee in endeavoring
to obtain such approval. Licensee shall not directly contact **** or any of
****, including without limitation ****. In the event Licensor determines in its
sole and absolute, but good faith, discretion that **** require assistance in
processing the volume of approvals required for Licensee, Licensee shall, upon
request of Licensor, reimburse to **** the cost of hiring a designated employee
of **** to assist in processing such approvals, provided that such employee
(a) shall not perform any functions other than the processing of approvals
required for Licensee, (b) shall be paid salary and provided benefits no greater
than those Licensor pays and provides to its own employees who perform similar
tasks, and (c) shall not be employed by **** for more than three (3) months
beyond the Grand Opening. Under no circumstances shall such employee be deemed
to be Licensee’s employee, and Licensee shall have no responsibility for
compliance with any labor or employment laws, codes or regulations, nor shall
Licensee incur or be responsible for any labor or employment liability, in
connection with such employee.

3.6 Licensee shall submit a written request to Licensor specifying each specific
Licensed Use that it wishes to make of the Licensed Property, in such detail as
Licensor may require at successive stages of development as specified by
Licensor, for example, at the following stages as indicated for the following
uses (as may be applicable in each particular case) or as Licensor may otherwise
request in the sole and absolute, but good faith, discretion of Licensor:

(a) Two-Dimensional Licensed Products, Licensed Premiums or Consumables:
(i) rough sketches/layout concepts; (ii) finished artwork or final proofs;
(iii) pre-production samples or strike-offs; and (iv) finished products,
including packaged samples together with any packaging, hangtags, and wrapping
material;

(b) Three-Dimensional Licensed Products, Licensed Premiums or Consumables
including clay sculpts & resin (or any other composite material) sculpts:
(i) rough sketches or layout concepts; (ii) finished artwork; (iii) clay sculpts
(or any other composite material); (iv) paint master; (v) pre-production samples
or strike-offs; and (vi) finished products including packaged samples;

 

- 7 -

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

(c) Food and beverage Licensed Products: successive stages of development for
each of the following: (i) product formulation; (ii) recipe; (iii) nutritional
content; (iv) taste; (v) naming; and (vi) menu design and appearance;

(d) Rides and attractions: (i) rough sketches/layout concepts, plans, designs
and elevations; (ii) scripts and music as applicable; (iii) models, finished
artwork, intermediate stages of construction or development; and (iv) finished
construction;

(e) Print media: (i) rough sketches or layout concepts and copy; (ii) finished
artwork; and (iii) finished materials;

(f) Television and internet advertising and promotion: (i) initial concept;
(ii) storyboard, including written text; (iii) pencil tests and voice-overs for
animation, if any (subject to Section 4.6 below), and/or selection of performers
for live action; (iv) rough edit; and (v) a cassette or disc of, or on-line
access to, the finished commercial prior to air date;

(g) Radio or other audio media or materials: (i) initial concept; (ii) script;
(iii) voice recordings; (iv) rough edit; and (v) a cassette or disc of, or
on-line access to, the finished commercial prior to the air date; and

(h) All other Licensed Uses not included above at successive stages of
development as determined by Licensor in the sole and absolute, but good faith,
discretion of Licensor.

In all cases set forth above, Licensor’s approval may be given or denied in its
sole and absolute, but good faith, discretion. Without in any manner limiting
the meaning of the foregoing sentence, it is expressly acknowledged and agreed
by Licensee that any objection whatsoever by the Author with regard to any
submissions relating to or concerning food and beverage and/or uses of Licensed
Property in connection with third party names, logos or other third party
elements is sufficient grounds for disapproval by Licensor.

Licensor shall use reasonable commercial efforts to approve, disapprove or
otherwise comment upon any major concepts and plans for the Themed Area, rides,
attractions and architectural designs submitted to it for approval as may be
required hereunder for the first time and any items that contain any written
text or verbiage other than the pre-approved names of the characters or other
pre-approved names or titles of discrete elements of the Licensed Property
(“Text and Verbiage”) within thirty (30) business days after receipt by it of
such item(s). Licensor shall use reasonable commercial efforts to approve,
disapprove or otherwise comment upon all other items submitted to it for
approval as may be required hereunder within ten (10) business days after
receipt by it of such item(s). In the event that Licensor fails to approve,
disapprove or otherwise comment upon the item(s) so submitted within the
applicable time period, then Licensee shall have the right to notify Licensor of
such failure by the means set forth for giving notice in Section 13.13, below,
and Licensor shall thereafter be required to approve, disapprove or otherwise
comment upon the item(s) so submitted within seven (7) business days after
receipt by it of said notice and failure to do so shall be deemed approval of
any item(s) so submitted. Any denial of approval shall be accompanied by
specific reasons for the denial. All approvals must be in writing in order to be
effective. In the event that Licensor approves any artwork, design, logo,
slogan, video element, audio element or other item containing an element of the
Licensed Property for a particular limited category of use (e.g., a specific
print advertisement or outdoor billboard campaign), Licensee may continue to use
such artwork, design, logo, slogan, video element, audio element or other item
for such category of use without need to obtain further approval from Licensor,
as

 

- 8 -

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

long as Licensor has approved the overall advertising, marketing or promotional
campaign in which such artwork, design, logo, slogan, video element, audio
element or other item will be used, including the duration and media plan for
such advertising, marketing or promotional campaign. Licensor shall endeavor to
approve “key” artwork and “key” video and audio footage that Licensee is
permitted to use for several specifically designated Licensed Uses without need
to obtain further approval from Licensor.

3.7 All promotion, publicity, marketing and advertising, and signage, with
respect to the Licensed Uses, not otherwise included above, shall also be
submitted to Licensor for approval or disapproval in the sole and absolute, but
good faith, discretion of Licensor.

3.8 Subsequent to final approval of Licensed Products, Licensed Premiums and
Consumables, no fewer than twelve (12) production samples will be sent to
Licensor simultaneously upon distribution to the public. Licensor shall be
entitled to purchase any Licensed Products, Licensed Premiums and Consumables in
any quantity at Licensee’s cost;

3.9 All submissions must be approved at each stage in the sole and absolute, but
good faith, discretion of Licensor, with multiple resubmissions, if necessary,
before moving to the next stage. Licensee understands that it is Licensee’s
responsibility to make all of the above submissions in sufficient time for
Licensee to make all revisions which Licensor in its sole and absolute, but good
faith, discretion may require.

3.10 No Licensed Use and no other material utilizing the Licensed Property shall
be made available or accessible to the public, manufactured, sold, distributed
or promoted by Licensee without prior written approval from Licensor in the sole
and absolute, but good faith, discretion of Licensor.

3.11 All Licensor approvals set forth in this Section 3 shall be in the sole and
absolute, but good faith, discretion of Licensor whether specifically stated as
being so or not. Any Licensed Uses not so approved in writing shall be deemed
unlicensed and shall not be promoted, accessible or available to the public,
manufactured, distributed or sold. Upon any material failure of Licensee to
comply with the requirement set forth in the foregoing sentence, Licensor may,
together with other remedies available to it including, but not limited to,
termination of this Agreement (subject to Licensee’s cure rights set forth in
Section 11.2 below) require such Licensed Uses to be promptly withdrawn from the
market and to be destroyed, such destruction to be attested to in a certificate
signed by an officer of Licensee.

3.12 Any modification of a Licensed Use must be submitted in advance for
Licensor’s written approval as if it were a new Licensed Use. Subject to the
final sentence of the last paragraph of Section 3.6, approval of a Licensed Use
which uses particular artwork or any other approved material or elements does
not imply approval of such artwork or other material or elements for use with a
different Licensed Use or for use bundled or otherwise combined with any other
approved Licensed Use unless specifically approved in writing by Licensor in the
sole and absolute, but good faith, discretion of Licensor.

3.13 Licensed Uses must conform in all respects to the final stage approved by
Licensor. If in Licensor’s reasonable judgment, the quality of a Licensed Use
originally approved has deteriorated in later use or later production runs, or
if a Licensed Use has otherwise been altered, Licensor may, in addition to other
remedies available to it, require that such Licensed Use be promptly terminated,
including but not limited to withdrawal from the market.

 

- 9 -

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

3.14 Licensee shall provide to Licensor a copy of the environmental, health and
safety policies that are provided to all third parties performing work in the
Theme Park, and Licensee shall enforce such policies against all third parties
performing work within the Themed Area. Licensee shall permit Licensor to
inspect all construction activities within the Themed Area and shall promptly
correct any safety violations or deficiencies that Licensor may detect. In
addition, Licensee shall permit Licensor to inspect all locations that are under
the control of Licensee or any of its affiliates at which Licensed Products,
Licensed Premiums and Consumables are being manufactured and/or tested, and
Licensee shall use commercially reasonable efforts to obtain permission for
Licensor to inspect all other locations at which Licensed Products, Licensed
Premiums and Consumables are being manufactured and/or tested (which inspection,
in either case, may include a review by Licensor of testing and manufacturing
payroll records, with respect to the Licensed Uses), and Licensee shall use
commercially reasonable efforts to cause any supplier or manufacturer approved
pursuant to Section 5.2 below to likewise permit Licensor to inspect such
supplier’s or manufacturer’s construction and manufacturing operations, and
testing and manufacturing payroll records, with respect to the Licensed Uses.

3.15 If any changes or modifications are required to be made to any material
submitted to Licensor for its written approval in order to ensure compliance
with Licensor’s specifications or standards of quality, Licensee agrees promptly
to make such changes or modifications, or to withdraw the request for Licensor’s
approval thereof and discontinue development of the item for which approval was
requested.

3.16 To avoid confusion of the public, Licensee agrees not to associate other
characters or properties with the Licensed Property or in connection with the
Licensed Uses or in any promotional, advertising, packaging, or display
materials unless Licensee receives Licensor’s prior written approval, provided
that the name and logo of the Theme Park and/or the Resort may be used with the
Licensed Property and in connection with the Licensed Uses as long as such name
and logo are not touching or otherwise co-mingled with the Licensed Property. It
is understood and agreed that Licensee may include other characters or
properties in promotional materials for the Resort and the Theme Park that also
promote the Themed Area, provided any elements associated with any other
character or properties are not touching or otherwise co-mingled with the
Licensed Property and subject to all of Licensor’s rights of approval set forth
in this Agreement. Furthermore, Licensee agrees not to use the Licensed Property
(or any component thereof) on any business sign, business cards, stationery or
forms, nor as part of the name of Licensee’s business or any division thereof.
Licensee shall not otherwise utilize the Licensed Property to promote Licensee
and/or its related and affiliated companies except as specifically provided
herein to promote the Resort, the Theme Park and the Themed Area.

3.17 Licensor will use commercially reasonable efforts to facilitate
communications between Licensee and the talent that play the leading roles in
(and, if mutually agreed by Licensor and Licensee, other personnel such as the
director(s) and writer(s) of) the feature films “HARRY POTTER AND THE ORDER OF
THE PHOENIX” and/or “HARRY POTTER AND THE HALF-BLOOD PRINCE” ****, provided that
Licensee shall be solely responsible for all costs incurred in connection with
the production of such new film footage, including amounts to be paid to such
personnel and all reuse fees, residuals and other amounts that may be payable
under any guild, union or collective bargaining agreement to which Licensor or
Licensee, or any of their respective affiliates, may be a party, or which may
otherwise affect the Licensed Property. In addition, if desired by Licensee,
Licensor shall use commercially reasonable efforts to facilitate Licensee access
to the sets, props, costumes and other elements of the Movies, for such filming,
to the extent available and upon a mutually agreeable schedule, and at
Licensee’s sole expense.

 

- 10 -

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

3.18 Licensor’s approval of Licensed Uses shall in no way constitute or be
construed as an approval by Licensor of Licensee’s use of any trademark,
copyright, right of publicity and/or other proprietary materials not owned by
Licensor.

3.19 Licensee may be required by Licensor to use certain of Licensor’s
proprietary online systems and/or software (the “Proprietary Systems”) and/or
other electronic file transfer systems in connection with the submission to
Licensor of samples and materials, the receipt of artwork and/or the exchange of
other information or materials pursuant to this Agreement. Subject to the terms
of this Agreement, Licensor hereby grants Licensee a non-exclusive license,
during the Term, to use the Proprietary Systems solely in connection with
Licensee’s performance under this Agreement and in accordance with and subject
to such rules, restrictions, disclaimers and limitations as may be posted on or
provided to Licensee together with the Proprietary Systems. If any Proprietary
Systems and/or any other electronic file transfer system(s) are required and
approved by Licensor for use in connection herewith, Licensee will: (a) utilize
any file encryption password access functionality made available to Licensee;
and (b) maintain a database of all Licensee-authorized users of such system(s).

3.20 Licensor shall have the right to enter and inspect the Theme Park at any
time during normal business hours, in a manner that does not interfere with the
usual operations of the Theme Park, to ascertain adherence to the quality
standards set forth in this Agreement and to insure (a) that any use of the
Licensed Property is in compliance with the use that has been approved by
Licensor, and (b) that such use is being maintained so as to insure that the
quality thereof is not less than that approved. In the event of any
deterioration in the overall quality of the Theme Park below that specified in
Section 3.1 above or any deterioration of a specific approved use, Licensee
shall promptly (in no event later than within ten (10) business days upon
written notice from Licensor) repair or remediate as necessary to rectify any
such deterioration to the satisfaction of Licensor, provided that if such repair
or remediation cannot reasonably be completed within such ten (10) business day
period, Licensee shall commence such repair or remediation within such ten
(10) business day period and thereafter shall at all times prosecute such repair
or remediation with due diligence until such repair or remediation is completed.
Absent such repair or remediation, this Agreement shall terminate subject to the
notice and cure provisions set forth in Section 11.2.

3.21 Licensee shall, no later than July 15, 2007 (and quarterly thereafter
through the opening of the Themed Area as set forth in Section 3.22, and
thereafter annually), submit to Licensor for Licensor’s written approval, a
business plan (the “Business Plan”) setting forth Licensee’s plans with respect
to its activities during the Term in connection with this Agreement. The
Business Plan shall, without limitation, address the following matters, to the
extent that Licensee has, at the time that any particular Business Plan is
required to be submitted, formulated plans with respect to such matters:

(a) Proposed rides and attractions for the Themed Area;

(b) Projected attendance, on a consolidated basis, for the theme parks within
the Resort;

(c) Projected capital expenditures for the Themed Area;

(d) Retail areas at which Licensed Products will be sold, including Wholesale
Price, retail sales and volume or quantities of Licensed Products projected to
be sold;

 

- 11 -

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

(e) Food service facilities within the Themed Area, including without
limitation, all proposed food and beverage to be sold in the Themed Area, the
Wholesale Price of Consumables and Licensed Products that constitute food and
beverages, retail sales and volume or quantities of food and beverage projected
to be sold;

(f) Themed Area theming and signage;

(g) Entertainment within the Themed Area;

(h) Plans for distribution of any Licensed Premiums, including Wholesale Price
and volume or quantities of Licensed Premiums projected to be distributed;

(i) Advertising, promotional and publicity plans and strategies for the Licensed
Uses; and

(j) A summary of Licensee’s staffing plan and staff training program for the
Themed Area including (i) adjustments for level of staffing based upon
variations in demand due to seasonality, special events, weather conditions and
overall tourism trends, and (ii) specifications of the minimum level of
education with respect to the Licensed Property to be provided to each employee
based upon the tasks to be performed by each such employee and the extent to
which each such employee is reasonably expected to interact with guests and/or
receive questions from guests regarding the Licensed Property.

3.22 Licensee shall meet with Licensor at business review meetings (“Business
Reviews”), and at such other mutually convenient times as reasonably requested
by Licensor, to discuss the implementation of the Business Plan and the results
of Licensee’s operation and business relating to this Agreement. Prior to the
opening of the Themed Area, the Business Reviews shall be held quarterly and
shall occur on (or as close as reasonably practical to)
January 15, April 15, July 15 and October 15 of each year (or on such other
dates as the parties hereto may mutually agree). After the opening of the Themed
Area, for the remainder of the Term, the Business Reviews shall be held annually
and shall occur on (or as close as reasonably practical to) January 15 of each
year (or on such other dates as the parties hereto may mutually agree). At the
Business Reviews, Licensee shall present an updated Business Plan for Licensor’s
review and approval. Licensee’s and Licensor’s respective point persons
specified in relationship to Section 3.5 above shall also serve as point persons
for Business Reviews unless Licensee or Licensor shall designate another person
for such purpose. Business Reviews may occur in person, or by audio conference
or video conference, provided that, while the Themed Area is under construction,
the Business Reviews shall occur at the Resort or at such other location as may
be mutually agreed by Licensor and Licensee.

 

4. CONDITIONS, LIMITATIONS AND RESTRICTIONS:

4.1 It is specifically understood and agreed that, except for the Licensed
Property, no television, motion picture, video, cartoon, animation (whether hand
drawn, computer generated or otherwise produced), if any (subject to Section 4.6
below), comic book or literary properties may be used at the Themed Area without
the prior written approval of Licensor in the sole and absolute, but good faith,
discretion of Licensor.

4.2 Use of the Licensed Property is limited to the Licensed Uses and any other
uses that have been approved in writing by Licensor in accordance with the terms
of this Agreement, and all rights in,

 

- 12 -

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

to or associated with any and all other uses are excluded from this license.
Moreover, all uses in, to or associated with the Licensed Property, including
without limitation, the following elements are included in this license only to
the extent specifically approved in writing by Licensor and then only to the
extent rights in and to such uses and elements are owned or controlled by
Licensor and subject to any applicable guild or union agreement, regulations,
restrictions or requirements and to any applicable laws:

(a) film clips (live action or computer generated), stills, sound bites, voices,
music or other audio clips;

(b) the names, likenesses, autographs, signatures, visual representations, audio
recordings or voices of any and all actor(s), author(s), creator(s), director(s)
and/or other individuals represented in, or otherwise attached to or connected
with, the Licensed Property. Elements of or related to the Licensed Property
that are not owned or controlled by Licensor are specifically excluded from the
Licensed Property. Licensor will endeavor in good faith to timely inform
Licensee of the extent of its merchandising or other relevant rights in and to
any of the foregoing uses and elements as requested by Licensee. To the extent
that Licensor does not confirm the existence of its merchandising or other
relevant rights in and to such uses or elements, Licensee may with the approval
of Licensor attempt to itself obtain such rights. If Licensee does obtain such
rights, Licensee shall demonstrate same to Licensor by production of proper
documentation. Any rights clearance or related fees arising from same shall be
at Licensee’s sole expense and shall not offset any other amounts referred to
herein. In the event that Licensee uses any such elements referenced above
without obtaining a specific representation from Licensor that it owns or
controls the specific merchandising or other theme park rights to be exploited,
such use shall be at Licensee’s sole risk and is subject to Licensee’s
indemnification hereinbelow.

Licensor acknowledges that Licensee may use any Clips in the Themed Area, that
are made available by Licensor to Licensee, and Licensor acknowledges that such
usage is intended to promote the Movies from which such Clips originate,
provided that such usage is explicitly tied by means of a specific message to
the viewer, such as an announcement, to encourage attendance, at theatrical
exhibition within the Territory, or viewership via television, cable or
satellite distribution within the Territory, or purchase of DVDs, at the Theme
Park, of the Movies from which such Clip may originate, provided further that
Licensee indemnify and defend Licensor from any and all loss, liability, damage,
cost or expense, arising out of any claims or suits which may be brought or made
against Licensor Related Parties (as defined in Section 9.1(b), below) relating
to Licensee’s use of such materials, pursuant to the procedures set forth in
Section 9.1(b) below.

4.3 Licensor reserves all rights in and to the Licensed Property not expressly
conveyed to Licensee hereunder.

4.4 Licensee specifically understands and agrees that no rights are granted
herein with respect to the Warner Bros. “shield” logo or trademark, or any other
trademark(s), logo(s) or copyrights owned by Licensor other than those
specifically approved hereunder, it being understood that all rights in and to
said intellectual properties are reserved exclusively to Licensor for use by
Licensor and/or licensing as Licensor deems appropriate to third party(s) of its
choice, subject to Licensee’s right of exclusivity set forth in Section 2.1
above.

 

- 13 -

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

4.5 Film, video or sound clips (“Clips”) and stills (“Stills”) from the Movies
may be provided to Licensee by Licensor (or by one of Licensor’s affiliates,
agents or designees) subject to the following terms and conditions.

(a) Licensee shall not make any reproduction of or from the Clips or Stills
whatsoever, in whole or in part, except for use in connection with the Licensed
Uses, and Licensee will not have the right to edit or otherwise alter the Clips
or Stills, or any portion thereof, except as specifically approved in writing by
Licensor (provided that Clips and Stills in which images of guests are to be
incorporated through “green screen” technology and then sold to such guests as
souvenir merchandise, as set forth in Section 1(p)(i)(7), above, may be cropped
or “touched up” to enhance the quality of such merchandise to such guests).

(b) The Clips and Stills as utilized by Licensee in the Licensed Uses must be
submitted by Licensee to Licensor for approval in accordance with Section 3
above.

(c) Licensor will use reasonable commercial efforts to inform Licensee of its
rights to use of the name and likeness of the talent appearing in the Clips and
Stills and to inform Licensee of other relevant information of which it is aware
affecting use and clearance of the Clips and Stills. Except to the extent that
Licensor has informed Licensee in writing of its rights to use the Clips and
Stills (e.g., control of merchandising rights related to the use of the name and
likeness of talent appearing therein), Licensee shall be responsible for and
will obtain all authorizations, consents and releases that may be necessary for
use of the Clips and Stills by Licensee.

(d) Licensee will pay any reuse fees and other compensation as may be required
by applicable collective bargaining agreements (if any), personal services
agreements, or otherwise with respect to the use of any Clips and Stills,
provided that nothing herein shall preclude Licensee from claiming that its
usage of the Clips and Stills is intended to promote the Movies from which such
Clips and Stills originate, provided that such usage is explicitly tied by means
of a specific message to the viewer, such as an announcement to encourage
attendance at theatrical exhibition within the Territory, or viewership via
television, cable or satellite distribution within the Territory, or purchase of
DVDs at the Theme Park, of the Movies from which such Clips and Stills
originate, provided further that Licensee indemnify and defend Licensor from any
and all loss, liability, damage, cost or expense, arising out of any claims or
suits which may be brought or made against Licensor Related Parties relating to
Licensee’s use of such Clips and Stills, pursuant to the procedures set forth in
Section 9.1(b) below.

(e) Any payment made or payable to any third party with respect to the use of
any Clips and Stills, and any Royalties to be paid to Licensor with respect to
Clips and Stills in which images of guests are incorporated through “green
screen” technology and then sold to such guests as souvenir merchandise (as
provided in Sections 6.2(b)), will be in addition to and will not offset any
other amounts required to be paid by Licensee hereunder.

(f) Without limiting the foregoing, if any music is included in the Clips and
Stills as utilized hereunder, Licensee will obtain all necessary composition and
master clearances, including synchronization and performance rights from the
copyright proprietors of such music and such other persons or entities,
including performing rights societies, as may own or control the rights thereto,
and will obtain all necessary master recording licenses required in connection
with any music included in the soundtrack of any Clips and Stills (although
Licensor and Licensee acknowledge that master recording licenses will not be
required if Licensee arranges for the applicable music to be re-recorded,
subject to

 

- 14 -

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

approval or disapproval by Licensor in the sole and absolute but good faith
discretion of Licensor). Licensee’s use of the Clips and Stills will not affect
Licensor’s continued and separate copyright ownership of the Clips and Stills or
the production from which the Clips and Stills were taken, or Licensor’s
continued ownership of the trademarks and any other intellectual property rights
associated with any characters or other elements appearing or embodied in the
Clips and Stills or such production. Licensee will hold any copyrights in trust
for Licensor insofar as the Clips and Stills are concerned (and, upon Licensor’s
request, subject to Section 8.8, the Licensed Uses will bear a specific
copyright notice for the Clips and Stills in a form required by Licensor).
Notwithstanding anything in this Section 4.5(f) to the contrary, however, in the
event that Licensor or any of its affiliates owns any of the rights to any music
included in a Clip or Still that is approved for use pursuant to this Agreement
by Licensor, **** Licensee shall be required to pay any composer, performer or
other third party **** (to the extent that any such composer, performer or other
third party is entitled to be compensated beyond the compensation that may be
provided pursuant to the blanket licenses from the ASCAP, BMI and SESAC
performing rights societies that Licensee holds with respect to the Theme Park).
****. Such good faith consideration shall include whether the music is used as a
featured element and how much music is used, with the final decision being in
the sole and absolute, but good faith, discretion of Licensor.

(g) Licensor shall not charge Licensee its customary clip or still licensing fee
for use by Licensee of a reasonable number of Clips and Stills, provided that
Licensee shall reimburse Licensor for all actual and direct laboratory and other
reproduction charges and all other direct costs and expenses incurred by
Licensor in making the Clips and Stills available. Such reimbursement shall be
made promptly on receipt of Licensor’s invoice therefor.

4.6 It is understood and agreed that the Author has retained certain rights,
including without limitation certain print and audiobook publishing rights and
stage performance rights, relating to the Books (provided that Licensor has the
right to license the Licensed Uses to Licensee as set forth in this Agreement).
All such rights retained by the Author, and animation and non-Author written
sequel rights, are specifically excluded from the grant of rights to Licensee
hereunder, subject to approval by the Author to be sought if at all only by
Licensor. Licensee may not publish, conduct a live reading from, re-enact, or
reproduce extracts from the Books. **** retains the specific right to approve
all Text and Verbiage used by licensees of the Licensed Property, including,
without limitation, Text and Verbiage included on products, product packaging,
rides and attractions, voice recordings, promotional materials, advertising and
signage. Licensee shall comply with Licensor’s procedure for approval of Text
and Verbiage, as set forth in the Brand Guidelines. Upon receipt from Licensee
of a request for Text and Verbiage approval in connection with the Licensed
Uses, Licensor shall diligently endeavor to obtain such approval ****.

4.7 Licensee shall not, without the prior written consent of Licensor, use,
display or promote, at the Themed Area, or in advertising, promotion or
publicity for the Themed Area (or for the Resort or the Theme Park if such
materials refer to the Themed Area, except as specifically set forth in
Section 3.16 above), any logo, trademark, service mark, trade name or other mark
or name except for those associated with the Licensed Property and approved by
Licensor for such use pursuant to Section 3 above, and except for (a) the name
and logo of the Theme Park and/or the Resort, (b) the logos and/or marks of
manufacturers of the following guest convenience items and such other guest
convenience items as may be approved by Licensor on a case by case basis in the
sole and absolute but good faith discretion of Licensor: bottled water,
sunblock, film and batteries, and hand cleaning solutions that are sold in the
Themed Area, as such logos and/or marks appear on the guest convenience items
themselves (except, especially in the case of bottled water, no name or logo
that is associated with candy, confection, soft drinks, or other products
perceived by the public as being high in sugar content, may

 

- 15 -

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

appear prominently on such guest convenience items), (c) at or near points of
sale within the Themed Area, discretely placed logos of credit card companies
whose payment service products are accepted for payment at such points of sale,
and (d) within restrooms within the Themed Area, a discretely placed logo of
Licensee’s soap and cleaning agent provider.

 

5. CONSUMABLES, LICENSED PRODUCTS AND LICENSED PREMIUMS:

5.1 Licensee shall have the right, subject to Licensor’s prior written approval,
in the sole and absolute but good faith discretion of Licensor, to manufacture
(or cause to be manufactured by third party manufacturers) Licensed Products,
Consumables and Licensed Premiums for approved Licensed Uses.

5.2 Licensor shall have the right to approve in writing any and all such
manufacturers referenced in Section 5.1 above (provided that Licensor shall not
unreasonably withhold its approval of any manufacturer that Licensee has
previously used to manufacture merchandise, except for food/beverage
manufacturers, offered for sale or distributed as premiums at the Theme Park or
the Resort), and, subject to Section 6.2, Licensor shall receive Royalties from
Licensee with respect to all such Licensed Products (including food/beverage
items to the extent included within the definition of “Licensed Products”) and
Licensed Premiums as specified in Section 6.2(a). All such manufacturers shall
execute a letter in the form of Exhibit 1 attached hereto (or an agreement that
is, in all material respects, in the form of Licensee’s standard form of
Merchandise Vendor Agreement, as set forth in Exhibit 4 attached hereto).

5.3 Licensee may not sell or distribute at the Themed Area any products other
than the Licensed Products, the Licensed Premiums and Consumables, without the
prior written approval of Licensor in each and every instance, such approval to
be granted or denied in the sole and absolute but good faith discretion of
Licensor. Notwithstanding the foregoing, Licensee may also sell and distribute
at the Themed Area, the guest convenience items referenced in Section 4.7 above,
provided that (a) there shall be no advertising or promotional signage or other
identification bearing the names or logos of the manufacturers of such guest
convenience items within the Themed Area, except as may be set forth on the
guest convenience items themselves, (b) guest convenience items shall not
constitute more than **** of the total merchandise and food/beverage items
offered for sale or distribution within the Themed Area, and (c) no
food/beverage item other than bottled water shall be considered a guest
convenience item unless approved by Licensor in its sole and absolute
discretion. Licensee may not utilize the names or logos of any third parties in
advertising, publicity or promotion for the Themed Area (or for the Resort or
the Theme Park if such materials refer to the Themed Area, except as
specifically set forth in Section 3.16 above), without the prior written
approval of Licensor in each and every instance, such approval to be granted or
denied in the sole and absolute discretion of Licensor. In no event shall
Licensee have the right to utilize the Licensed Property in any manner in
connection with any third party joint promotional use, advertising or
sponsorship arrangements of any kind, including without limitation, any use
which could in any way be construed as a commercial tie-up, without the prior
written approval of Licensor in each and every instance, such approval to be
granted or denied in the sole and absolute discretion of Licensor.

 

- 16 -

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

6. CONSIDERATION:

6.1 Guaranteed Fee.

(a) Initial Term. Licensee shall pay to Licensor a nonrefundable, non-recoupable
fee (the “Guaranteed Fee”) in the amount of **** for the Initial Term, payable
as follows and subject to increases pursuant to Section 6.1(d):

**** payable within fifteen (15) days after the execution of this Agreement;

**** payable on the earlier of (i) the Grand Opening of the Themed Area, or
(ii) July 1, 2009;

**** payable on or before July 1, 2010;

**** payable on or before July 1, 2011;

**** payable on or before July 1, 2012;

**** payable on or before July 1, 2013;

**** payable on or before July 1, 2014;

**** payable on or before July 1, 2015;

**** payable on or before July 1, 2016;

**** payable on or before July 1, 2017; and

**** payable on or before July 1, 2018.

(b) First Renewal Term. In the event Licensee exercises its option to renew this
Agreement for the First Renewal Term, Licensee shall pay to Licensor an
additional Guaranteed Fee amount of ****, payable as follows and subject to
increases pursuant to Section 6.1(d):

**** payable on or before July 1, 2019;

**** payable on or before July 1, 2020;

**** payable on or before July 1, 2021;

**** payable on or before July 1, 2022; and

**** payable on or before July 1, 2023.

(c) Second Renewal Term. In the event Licensee exercises its option to renew
this Agreement for the Second Renewal Term, Licensee shall pay to Licensor an
additional Guaranteed Fee amount of ****, payable as follows and subject to
increases pursuant to Section 6.1(d):

**** payable on or before July 1, 2024;

**** payable on or before July 1, 2025;

**** payable on or before July 1, 2026;

**** payable on or before July 1, 2027; and

**** payable on or before July 1, 2028.

(d) The Guaranteed Fee payments set forth above, commencing with the Guaranteed
Fee payment due on or before July 1, 2012, are subject to increase every three
years, by a percentage

 

- 17 -

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

equal to the percentage increase in the Consumer Price Index (all urban
customers), U.S. City Average, All Items, published by the United States
Department of Labor, Bureau of Labor Statistics, 1982-84 = 100 (or any successor
or replacement index) (the “CPI”), from the month of May 2006 through the month
of May in the year that is the first year of each such three-year period. For
example, the Guaranteed Fee payment due on July 1, 2012 shall be increased by a
percentage equal to the percentage increase in the CPI from May 2006 through May
2012. The Guaranteed Fee payments due on July 1, 2013 and July 1, 2014 shall
likewise be increased by a percentage equal to the percentage increase in the
CPI from May 2006 through May 2012, but the Guaranteed Fee payment due on
July 1, 2015 shall be increased by a percentage equal to the percentage increase
in the CPI from May 2006 through May 2015 (and similarly for the Guaranteed Fee
payments due on July 1, 2016 and July 1, 2017), and so on and so forth.

6.2 Royalties. Licensee shall pay Licensor royalties (“Royalties) as follows:

(a) Licensed Product and Licensed Premium Royalties. Subject to Section 6.2(d),
Licensee shall pay royalties to Licensor with regard to sales of Licensed
Products and Licensed Premiums at the rate of **** of the Wholesale Price. It is
understood and agreed that Licensee shall be entitled to purchase Licensed
Products and Licensed Premiums from other licensees of Licensor and, in such
cases, if the other licensee of Licensor is required to pay a royalty to
Licensor in connection with such sale, Licensee shall have no liability to pay
Licensed Product or Licensed Premium Royalties to Licensor in connection with
the purchase or sale of same. Licensor shall supply Licensee, upon Licensee’s
request, with a list of Licensor’s other licensees that produce Licensed
Products and Licensed Premiums (including a list of the categories of Licensed
Products and Licensed Premiums that such other licensees are authorized to
produce).

(b) Other Royalties. Subject to Section 6.2(c) and Section 6.2(d), for sales of
merchandise other than Licensed Products and Licensed Premiums, such as
photographs taken by Licensee (or by Licensee’s concessionaire) of patrons on
themed rides or in themed areas of the Themed Area, that are based upon, derived
from or include any element of the Licensed Property, as well as Clips and
Stills in which images of guests are incorporated through “green screen”
technology and then sold to such guests as souvenir merchandise, Licensee shall
pay Royalties to Licensor at the rate of ****. No royalties shall be payable to
Licensor in connection with photographs or video or audio recordings that guests
take or record in the Licensed Area on their own.

(c) Consumables. ****.

(d) Park Compilation Merchandise. Subject to Licensor’s approval as provided in
Section 3, Licensee shall have the right to include Licensed Property elements
and photographs, audio recordings, video recordings, and digital images and
recordings of the Themed Area and of rides, attractions, merchandise venues,
food/beverage venues, entertainers and other elements of the Themed Area in
DVD’s, videocassettes, and other merchandise that may be approved on a case by
case basis in the sole and absolute but good faith discretion of Licensor, that
contain a wide variety of the different attractions, characters and other
intellectual properties used at the Theme Park or the Resort (“Park Compilation
Merchandise”). Royalties and Consulting Fees shall be paid to Licensor with
respect to Park Compilation Merchandise, at the rates specified in Sections
6.2(a) and 6.3 for Licensed Products and Licensed Premiums, provided that the
Royalties and Consulting Fees for Park Compilation Merchandise items shall be
equitably apportioned on a pro-rata basis, such that Licensor shall receive a
portion of its usual Royalties and Consulting Fees equal to the proportion that
the Licensed Property elements and photographs, audio recordings, video
recordings, and digital images and recordings of the

 

- 18 -

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

Themed Area and of rides, attractions, merchandise venues, food/beverage venues,
entertainers and other elements of the Themed Area used, depicted, contained in
and/or referenced in such Park Compilation Merchandise item bear to the total
number of all intellectual property elements used, depicted, contained in and/or
referenced in such Park Compilation Merchandise item.

6.3 Consulting Fee. Consistent with its normal business practices, Licensor will
reasonably cooperate with Licensee in making available to Licensee, at
Licensor’s actual out-of-pocket cost, including actual duplication and shipping
costs (but without any markup), information, artwork, Clips, Stills, music,
voice tracks and other relevant materials in order that Licensee can creatively
develop the Themed Area, the Licensed Products, the Licensed Premiums, the
Consumables, and advertising, marketing and promotional materials in connection
therewith. Among other things, Licensor shall supply to Licensee, free of
charge, master artwork and Style Guides with respect to the Licensed Property
(and updates thereof from time to time), to assist Licensee in correctly
depicting the Licensed Property in the Themed Area, the Licensed Products, the
Licensed Premiums, the Consumables, and the advertising, marketing and
promotional materials in connection therewith. Licensor shall also consult with
Licensee in connection with the development of the Themed Area, the Licensed
Products, the Licensed Premiums, the Consumables, and the advertising, marketing
and promotional materials in connection therewith, and, as more specifically set
forth in Section 3, Licensor shall review and shall approve or disapprove all
such items. For all of such services to be provided by Licensor, subject to
Section 6.2(d), Licensee shall pay Licensor a consulting fee of ****.

6.4 Pass Through Amounts. Licensee shall reimburse Licensor, without markup, for
100% of amounts (“Pass Through Amounts”) that Licensor may be required to pay to
third parties for the exercise of the exploitation of any of the rights granted
to Licensee herein (e.g., payment of a participation for use of a performer’s
name and likeness, guild mandated fees, etc.). To the best of Licensor’s
knowledge as of the date hereof, Exhibit 3 attached hereto contains a list of
all third parties who may be due Pass Through Amounts by reason of contract with
Licensor (excluding obligations pursuant to collective bargaining agreements) in
order for Licensee to use the Licensed Property for the Licensed Uses, and the
Pass Through Amounts payable in connection therewith. In the event that, after
the date of this Agreement, Licensor acquires knowledge of any other third
parties to whom Pass Through Amounts may be due by reason of contract with
Licensor (excluding obligations pursuant to collective bargaining agreements) in
order for Licensee to use the Licensed Property for the Licensed Uses, Licensor
will provide prompt written notice thereof to Licensee which notice shall
include the Pass Through Amounts payable in connection therewith.

6.5 Capital Expenditure. Licensee shall spend on the initial capital expenditure
to build out the Themed Area such sums as may be necessary to create a first
class, world class level themed area unsurpassed by any other themed area in any
destination theme park worldwide (at a minimum, equivalent to the quality of the
Theme Park as of the date of this Agreement). Such capital expenditure shall in
no event be less than ****. After the opening of the Themed Area, Licensee shall
continue to expend on the Themed Area such sums as are necessary to maintain the
Themed Area as a first class, world class level themed area unsurpassed by any
other themed area in any destination theme park worldwide (at a minimum,
equivalent to the quality of the Theme Park as of the date of this Agreement)
**** Licensee shall pay particular attention to incorporating within the Themed
Area elements from the final two Movies, and shall implement such elements into
the Themed Area such that elements from the final two Movies are represented in
the Themed Area in a generally similar per-Movie proportion as elements from the
first five Movies. All capital improvements to the Themed Area shall be
developed through a collaborative process between Licensor and Licensee, and
shall be subject to Licensor’s approval as provided in Section 3.

 

- 19 -

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

6.6 No Offset. None of the types of consideration set forth in this Section 6
shall offset against any other type of consideration set forth in this
Section 6. Each is an independent obligation without any recoupment or offset of
any kind. By way of example, and without limiting the generality of the
foregoing, the Licensed Product Royalties payable pursuant to Section 6.2 shall
be in addition to and shall not offset or accrue against the Guaranteed Fee
payable pursuant to Section 6.1.

6.7 **** Likewise, the provisions of this Section 6.7 are inapplicable to any
agreement that may have been entered into by any entity, portfolio company or
fund affiliated with The Blackstone Group (other than Licensee), if such
agreement is not in connection with the Resort or any portion thereof. In
addition, the provisions of this Section 6.7 are inapplicable to the “special
fee” that is paid by Licensee under the Amended and Restated Agreement of
Limited Partnership of Universal City Development Partners, Ltd., as such
agreement may be amended from time to time, and to any amounts that may be
payable by Licensee, or by its successor or assign, under any license agreement
referenced in Section 13.7(a).

 

7. STATEMENTS AND PAYMENTS:

7.1 Periodic Statements. Within thirty (30) days after the end of the first
calendar quarter after the date of this Agreement and promptly on the thirtieth
(30th) day after the end of each calendar quarter thereafter, Licensee will
furnish to Licensor complete and accurate statements, certified as such, in
writing, by an officer or other authorized principal representative of Licensee.
Accompanying each statement will be the indicated payment. Each statement shall
show:

(a) For Guaranteed Fee, Royalties, **** and other calculation purposes:

(i) with respect to all Licensed Products, Licensed Premiums and Consumables
manufactured on behalf of Licensee or that Licensee has purchased royalty-free
from other licensees or designees of Licensor during the preceding calendar
quarter:

(1) the total number of units of each Licensed Product, Licensed Premium and
Consumable manufactured, purchased or received by Licensee during the preceding
calendar quarter;

(2) the country or countries where such Licensed Products, Licensed Premiums and
Consumables were manufactured, purchased and received;

(3) a Description (as such term is defined below) of such Licensed Products,
Licensed Premiums and Consumables;

(4) the Wholesale Price for all such Licensed Products, Licensed Premiums and
Consumables;

 

  (ii) **** but that is not included in Licensed Products, Licensed Premiums or
Consumables (as set forth in Section 6.2(b) above), ****; and

 

  (iii) a calculation of the Royalties and Consulting Fees.

 

- 20 -

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

(b) Such other information as Licensor may reasonably require to verify the
accuracy of the payments accompanying each periodic statement.

7.2 Such statements will be in a format required by Licensor (as may be
periodically revised by Licensor), or such other format as may be proposed by
Licensee and approved by Licensor in the reasonable discretion of Licensor.
Receipt or acceptance by Licensor of any of the statements furnished pursuant to
this Agreement or of any sums paid hereunder will not preclude Licensor from
questioning the correctness thereof at any time within five (5) years after the
end of the calendar year in which such statements were prepared, or such sums
were paid, and in the event that any inconsistencies or mistakes are discovered
in such statements or payments, they will promptly be rectified and the
appropriate payments made by Licensee. For purposes of this Agreement, the term
“Description” means a detailed description of the Licensed Products, Licensed
Premiums and Consumables including the nature of each of the Licensed Products,
any and all names, voices, and likenesses, of either live actors or animated
characters, from the Licensed Property utilized on the Licensed Products,
Licensed Premiums and Consumables and/or any related packaging and/or wrapping
material, and any other components of the Licensed Property utilized on the
Licensed Products, Licensed Premiums and Consumables and/or any related
packaging and/or wrapping material. In the event Licensor is responsible for the
payment of any additional third party participations based on Licensee not
reporting by character name, voice and likeness or by other components of the
Licensed Property as requested by Licensor, Licensee will be responsible for
reimbursing Licensor for the full amount of all such third party claims,
including without limitation, the participation itself, audit and attorneys’
fees (in each case, to the extent actually required to be paid by Licensor to
the third party) and interest. Licensee understands and agrees that the
inclusion of the Description on all statements by Licensee is a material term
and condition of this Agreement.

7.3 Delivery Information for Statements and Payments. Licensee will deliver all
statements and payments to Licensor pursuant to instructions given to Licensee
by Licensor in writing. On all statements and payments required hereunder,
Licensee will reference the contract number(s) set forth on the first page of
this Agreement (and/or such other contract number(s) designated by Licensor in a
written notice to Licensee). Methods for delivery of statements may include
United States mail, express courier service, e-mail, facsimile, or wire
transfer.

7.4 Books and Records; Right to Audit. Licensee shall keep, maintain and
preserve, in Licensee’s principal place of business, complete and accurate
records relating to Licensee’s performance under this Agreement, including,
without limitation, purchase orders, inventory records, invoices,
correspondence, banking and financial and other relevant records, for no less
than five (5) years and six (6) months after the end of the year with respect to
which such records pertain, including any such time period that may occur after
the expiration or termination of the Term. Such records shall be available for
inspection and audit during any such times during reasonable business hours and
upon reasonable notice by Licensor or its nominees. Licensee agrees not to cause
or permit any interference with Licensor or nominees of Licensor in the
performance of their duties, and Licensor agrees that Licensor and its nominees
shall minimize the disruption and interference that they cause to Licensee’s
business operations. During such inspections and audits, Licensor will have the
right to take extracts and/or make copies of Licensee’s records as it deems
necessary. Further, upon Licensor’s request and in connection with any
inspection and audit conducted by Licensor pursuant to this Agreement, Licensee
shall use commercially reasonable efforts to provide Licensor with access to the
records of Licensee’s affiliates, third party distributors, vendors and
customers relating to purchases and sales of Licensed Products, Licensed
Premiums, Consumables and any services provided in connection with the
performance of this Agreement.

 

- 21 -

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

7.5 No Waiver of Rights. The exercise by Licensor in whole or in part, at any
time of the right to audit records and accounts or of any other right herein
granted, or the acceptance by Licensor of any statement or statements or the
receipt and/or deposit by Licensor, of any payment tendered by or on behalf of
Licensee will be without prejudice to any rights or remedies of Licensor and
such acceptance, receipt and/or deposit will not preclude or prevent Licensor
from thereafter disputing the accuracy of any such statement or payment.

7.6 Deficiencies. If pursuant to its right hereunder Licensor causes an audit
and inspection to be instituted which thereafter discloses a deficiency between
the amount found to be due to Licensor and the amount actually received or
credited to Licensor (the “Deficiency”), then, Licensee will, upon Licensor’s
demand, promptly pay the Deficiency, together with interest thereon at a rate
equal to the “prime” rate, as quoted by the Wall Street Journal (New York
Edition) from time to time, plus 3% (or the maximum rate permissible by law, if
less), from the date such Deficiency was due to the date of payment. In
addition, if the Deficiency is more than five percent (5%) of all Royalties paid
by Licensee during the period covered by such audit and inspection, then
Licensee will reimburse Licensor for the reasonable costs and expenses of such
audit and inspection.

7.7 Exchange Rates. All payments of the Guaranteed Fee, Royalties and Consulting
Fee and any other amounts payable to Licensor hereunder will be paid to Licensor
in U.S. Dollars. If applicable, each such payment will be converted to U.S.
Dollars at the applicable exchange rate quoted by the Wall Street Journal (New
York Edition) published as of the date such payment is actually paid to
Licensor; provided, however, that if the amount converted to U.S. Dollars is
less than the stated U.S. Dollar amounts specified in Section 6 due to the
conversion of any payment to Licensor being made after the applicable due date
for such payment or otherwise, Licensee will be solely responsible for any
shortfall and will pay to Licensor the difference in U.S. Dollars (together with
any required interest) when the payment is remitted. Licensee will bear all
costs for such conversion. Further, Licensee will indicate on each statement
related to any converted payment the amount of the payment in the original
currency before conversion, the actual exchange rate used to convert the payment
and the amount of the payment in U.S. Dollars.

 

8. USE, OWNERSHIP AND PROTECTION OF INTELLECTUAL PROPERTY:

8.1 Use and Ownership

(a) Licensee covenants and agrees that, as between Licensee and Licensor,
Licensor retains all right, title, interest and copyright in and to the Licensed
Property.

(b) Licensor and Licensee agree that Licensee’s use of the Licensed Property is
conditional upon Licensor obtaining the rights and goodwill resulting from such
use. Licensee recognizes the value of the publicity and goodwill associated with
the Licensed Property and acknowledges that such goodwill shall inure
exclusively to the benefit of Licensor. Licensee further recognizes and
acknowledges that the Licensed Property has acquired a secondary meaning as
Licensor’s trademarks and/or identifications in the mind of the public. Licensee
further recognizes and acknowledges that a breach by Licensee of any of its
covenants, agreements or undertakings hereunder with respect to the Licensed
Property will cause Licensor irreparable damage, which cannot be readily

 

- 22 -

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

remedied in damages in an action at law, and may, in addition thereto,
constitute an infringement of Licensor’s copyrights, trademarks and/other
proprietary rights in, and to the Licensed Property, thereby entitling Licensor
to equitable remedies and costs.

8.2 Artwork, Copyright and Trademark Notices. Subject to Sections 8.3 and 8.4
below, Licensee further agrees and acknowledges that all intellectual property
rights in any uses of the Licensed Property hereunder, including without
limitation, additional material that uses, exploits or derives from the Licensed
Property, new versions of the Licensed Property, and translations, adaptations,
rearrangements of or other changes in or relating to the Licensed Property
(collectively, the “Licensed Property Developments”), which are created by or
for Licensee, as between Licensor and Licensee, shall be and will remain the
exclusive property of Licensor, and the same shall be and will remain a part of
the Licensed Property, as the case may be, under the terms and conditions of
this Agreement. Notwithstanding the foregoing, the parties agree that the
Licensed Property Developments do not include any elements created by Licensee,
solely or jointly with any third party, or licensed to Licensee from a third
party, that do not use, exploit or derive from the Licensed Property, nor any
intellectual property rights related thereto; for avoidance of doubt, the
Licensed Property Developments do not include the Other Developments.
Accordingly, Licensee agrees that any and all Licensed Property Developments
will be deemed, to the extent possible, a “work made for hire” for Licensor
under the U.S. Copyright Act (or a “commissioned work” or other designated type
of work under any other applicable similar laws of other jurisdictions that
provide that such work is owned by the party that commissions or otherwise
directs another party to create such work). Licensor will be deemed the author
and the exclusive owner of such Licensed Property Developments, and all
copyrights, trademark rights and other intellectual property rights therein (to
the extent any such rights exist), in perpetuity and throughout the universe, in
all media now known and, to the extent permitted under applicable law, any and
all media later devised. To the extent any such Licensed Property Developments
cannot be deemed a “work made for hire” as set forth above, Licensee hereby
assigns to Licensor all right, title and interest in and to such Licensed
Property Developments, including all copyrights, trademark rights and other
intellectual property rights therein (to the extent any such rights exist), in
perpetuity and throughout the universe, and all extensions, renewals and
reversions of the same. Licensee will execute, at Licensor’s request and
expense, all documents and other instruments necessary or desirable to confirm
such assignment. Licensee hereby irrevocably appoints Licensor as Licensee’s
attorney-in-fact for the purpose of executing such documents on Licensee’s
behalf, which appointment is coupled with an interest. If Licensee has any
rights, including without limitation “artist’s rights” or “moral rights,” in
such Licensed Property Developments that cannot be assigned, Licensee hereby
waives any such rights and agrees that it will not seek to enforce such rights
against Licensor in any location and, further, agrees that Licensor will have
the right to revise, condense, abridge, expand, adapt, change, modify, add to,
subtract from, re-title, re-draw, re-color, translate and otherwise modify such
Licensed Property Developments without the consent of Licensee. In the event
that any of the above-referenced rights cannot be assigned or waived, Licensee
hereby grants to Licensor, an exclusive (but not exclusive of Licensee’s rights
under this Agreement), worldwide, irrevocable, perpetual, fully-paid,
royalty-free, freely transferable license to use, reproduce, distribute, create
derivative works of, publicly perform, publicly display and digitally transmit
such Licensed Property Developments for any purpose in any and all media now
known and, to the extent permitted under applicable law, any and all media later
devised (including, without limitation, all paper, canvas, transparencies and
other two dimensional media used to depict drawings, designs, written
information and the like, all metal, plastic, wood and other three dimensional
media used to create sculptures, molds, models and the like, and all cassettes,
computer hard drives, DVDs, CD-ROMs and other electronic storage media used to
store voice-recordings, software programs, digital, optical, numerical, magnetic
data and the like). Licensee reserves no intellectual property rights whatsoever
in or to any such Licensed Property Developments. Licensee acknowledges that
Licensor will have the right,

 

- 23 -

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

without limitation of any other rights and remedies to which Licensor may be
entitled, at law, in equity or otherwise, but subject to Licensee’s cure rights
as set forth below, to terminate this Agreement in the event Licensee asserts
any intellectual property rights (other than those specifically granted pursuant
to this Agreement) in or to such Licensed Property Developments or any of the
other Licensed Property. In no event will Licensor be required to attribute to
Licensee, any of Licensee’s employees or any third party recognition or
otherwise identify any such party as an author, creator or contributor to any
Licensed Property Developments created by Licensee, solely or jointly with
Licensor or any third party, in connection with this Agreement, provided that
Licensee may request, subject to the sole and absolute, but good faith,
discretion of Licensor, on a case by case basis, that Licensee’s and Licensor’s
respective employees, vendors and independent contractors who conceive, create,
design, construct and/or otherwise contribute to the Themed Area receive
appropriate credit for such matters in connection with any applicable trade or
industry awards (e.g., the Themed Entertainment Association awards).

8.3 In no event may any third party commence work on anything to be created in
connection with this Agreement unless Licensee obtains Licensor’s specific
written approval of such third party pursuant to a fully executed Contributor’s
Agreement in the form attached hereto as Exhibit 2 or such other form as may be
required by Licensor (except that Licensee may, without Licensor’s consent, use
designers, manufacturers and vendors of ride and show equipment, engineers and
other technical personnel, general contractors, specialty subcontractors, film
and video producers, special effects developers, and other consultants that
Licensee has used in the past (except in the area of food and beverage where all
such persons or entities are subject to the approval or disapproval of Licensor
in the sole and absolute discretion of Licensor), as long as each such party
signs an appropriate agreement with Licensee based upon a standard form
agreement that has been approved by Licensor (or an agreement that conforms in
all material respects to such approved standard form agreement), under which
such party acknowledges that it has no rights in, or claims upon, the Licensed
Property, the Licensed Property Developments, any Other Developments (other than
any patented or proprietary portion thereof as to which such party owns any
rights that do not use, exploit or derive from the Licensed Property), or any
other item created or work performed by such party under such agreement;
provided, however, that, pursuant to Licensee’s pre-existing agreement with Amec
Structural Devices Limited (together with its successors and assigns, “Amec”),
such entity has the right, under certain circumstances, to license from Licensee
the technology developed pursuant to such agreement for any purpose other than
an amusement ride in the State of Florida containing more than **** (Licensee
represents and warrants that such technology does not constitute a Licensed
Property Development and that Amec has no rights with respect to the Licensed
Property or any Licensed Property Development). Licensor may, however, in the
sole and absolute but good faith discretion of Licensor, require Licensee to
hire specific consultants to advise Licensee with regard to specific uses of the
Licensed Property in connection with the Licensed Uses in order to ensure that
the execution of such Licensed Uses is consistent with Licensor’s requirements,
provided that (i) Licensee, acting in good faith, is able to reach an agreement
with each such consultant as to the compensation to be paid and benefits to be
provided by Licensee to such consultant, (ii) Licensor designates the specific
consultants to be hired by Licensee sufficiently in advance of the time that the
services to be rendered by such consultants are required to be rendered, as set
forth in Licensee’s then-current Licensor approved Business Plan, and (iii) such
consultants are available to render the services required by Licensee in
accordance with the schedule and budget set forth in the then-current Licensor
approved Business Plan. Such consultants shall include **** and may include
others, for example, without limitation, pertaining to the area of food and
beverages to be sold at the Themed Area, scripting of ride narration, ride
design and general theming of the Themed Area. In the case of ****, it is
understood and agreed that Licensee shall pay **** the sum of ****, within
fifteen (15) days after the execution of this Agreement, for consultation with
regard to the design and development of the Themed Area, Licensed Products and
Licensed Premiums, including specifically,

 

- 24 -

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

food and beverages to be sold at the Themed Area, scripting of ride narration,
ride design and general theming of the Themed Area. Licensor and Licensee
understand and agree that, except to the extent stated to the contrary in
Section 3.5, above, under no circumstances will Licensee be required to pay any
additional compensation to **** or ****, it being understood that all other
payments to **** and to **** with respect to the rights granted to Licensee
under this Agreement and with respect to any other consulting services provided
by **** or by **** with respect to this Agreement will be the sole
responsibility of Licensor, unless Licensee, at its sole and absolute
discretion, wishes to engage **** or **** for additional services and comes to
further agreement with either or both of them.

8.4 Reproduction. Without in any manner restricting any of the rights of
Licensor set forth in this Agreement, it is specifically understood and agreed
that Licensor shall have the right to reproduce, and use any reproductions of,
the Licensed Property Developments and anything else developed by Licensee
pursuant to this Agreement, for use at the Themed Area or elsewhere, to the
extent that it uses, exploits or derives from the Licensed Property (such
developments including but not limited to product formulations of food and
beverage, graphics and scripts), in any other theme park or outside of a theme
park, subject only to Licensee’s right of exclusivity set forth in Section 2.1
above. Notwithstanding the preceding sentence, for the avoidance of doubt, the
parties expressly agree that Licensor is not granted, by virtue of this
Agreement, any right to reproduce, or use any reproductions of, any patented
elements, trade secrets, proprietary technology, proprietary methods or other
proprietary items of Licensee or of any third party that may be incorporated or
utilized in conjunction with any Licensed Property Developments or Licensed
Uses, except any portion of the foregoing solely to the extent that such portion
uses, exploits or derives from the Licensed Property (such patented elements,
trade secrets, proprietary technology, proprietary methods and other proprietary
items of Licensee or of any third party that may be incorporated or utilized in
conjunction with any Licensed Property Developments or Licensed Uses, except any
portion of the foregoing solely to the extent that such portion uses, exploits
or derives from the Licensed Property, are collectively referred to herein as
the “Other Developments”). By way of examples, (a) if Licensee develops a
portion of a ride vehicle that contains images of Licensed Property characters,
or that is in the shape of any such character, Licensor will own the
intellectual property rights in, and will have the right to reproduce, and use
any reproductions of, such image or shape, which intellectual property rights
shall be considered to be Licensed Property Developments, but Licensor shall not
own, and shall not have the right to reproduce, or use any reproductions of, any
of the patented elements, trade secrets, proprietary technology, proprietary
methods or other proprietary items used in connection therewith (unless Licensor
otherwise obtains such rights from Licensee or relevant third party), which
patented elements, trade secrets, proprietary technology, proprietary methods
and other proprietary items used in connection therewith shall be considered to
be Other Developments, and (b) if Licensee creates a special effect that depicts
any Licensed Property character, such as a pyrotechnic effect in the shape of a
Licensed Property character or a pyrotechnic effect that embodies a “wizard
magic” element contained within the Licensed Property, Licensor will own the
intellectual property rights in, and will have the right to reproduce, and use
any reproductions of, such character depiction or shape or such “wizard magic”
element, as applicable, which intellectual property rights shall be considered
to be Licensed Property Developments, but Licensor shall not own, and shall not
have the right to reproduce, or use any reproductions of, any of the patented
elements, trade secrets, proprietary technology, proprietary methods or other
proprietary items used in connection therewith (unless Licensor otherwise
obtains such rights from Licensee or relevant third party), which patented
elements, trade secrets, proprietary technology, proprietary methods and other
proprietary items used in connection therewith shall be considered to be Other
Developments.

8.5 If Licensee desires to use depictions of the Licensed Property that vary
from those set forth in the Style Guide(s), Licensee will make a request to
Licensor to such effect, and if such request is

 

- 25 -

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

approved, in the sole and absolute but good faith discretion of Licensor,
Licensor will approve Licensee going forward with development of artwork based
upon the Licensed Property or, if requested by Licensee and approved by
Licensor, prepare and deliver appropriate artwork to Licensee. Where Licensor
furnishes artwork to Licensee at Licensee’s request, Licensee will, within
thirty (30) days of receiving an invoice therefor, pay Licensor for such artwork
at Licensor’s prevailing commercial art rates. Any such fees are in addition to,
and will not be offset by, any Guaranteed Fee or other consideration required
hereunder.

8.6 If Licensor expressly consents, as set forth in Section 8.5 above, to permit
Licensee to develop artwork based upon the Licensed Property, Licensor may
prescribe such conditions as Licensor may elect in its sole and absolute but
good faith discretion. In any event, Licensee shall assign or procure the
assignment in writing of all rights, copyright and otherwise, in and to any
artwork or other material referring to, pertaining, derived from or otherwise
relating to the Licensed Property, including any and all newly created elements
which may be marketed in connection with the Licensed Property and the Licensed
Uses, and it is intended that this provision shall take effect as an assignment
of prospective copyrights in works yet to be created by or for Licensee
referring to, displaying, derived from or otherwise relating to the Licensed
Property. Licensee further undertakes to take all and any steps necessary for
the recordal or registration of the assignment(s) referred to hereinabove. Any
artwork created by or for Licensee pursuant to this Section 8.6 shall constitute
a Licensed Property Development.

8.7 Protection.

(a) Licensee shall assist Licensor and/or Licensor’s designees, at no
out-of-pocket cost to Licensee, as requested by Licensor in obtaining and
maintaining in the name of Licensor any and all available protection of its
rights in and to the Licensed Property. Licensee agrees, at no out-of-pocket
cost to Licensee, to sign documents, give testimony, provide exhibits, provide
facts, give notices and otherwise cooperate with Licensor or any of its
affiliates, agents or representatives in obtaining registrations, assignments,
certificates and the like evidencing the rights of Licensor or its affiliates in
the Licensed Property, including without limitation, any Licensed Uses.

(b) Licensor may, if it so desires, commence or prosecute any actions, claims,
suits or proceedings in respect of infringement of rights in the Licensed
Property and may, if it so desires, join Licensee as a party in such suit
(provided that Licensee shall not incur any out-of-pocket costs in connection
with any such suit, and Licensor shall defend, indemnify and hold harmless
Licensee from and against any and all loss, cost, expense, damage and liability
that Licensee may incur in connection with such suit). Licensee shall notify
Licensor in writing of any activities which Licensee believes to be
infringements or utilization by others of any of the Licensed Property. Licensor
shall have the sole and absolute right to determine whether or not any such
action, claim, suit or proceeding shall be undertaken by Licensor and shall have
absolute discretion in the accommodation or settlement of any controversy
relating thereto. Licensee shall not institute any such action, claim, suit or
proceeding or take any other action with respect to any such infringement or
activity without first obtaining the written consent of Licensor to do so.

(c) As more particularly set forth in Section 8.8, Licensee shall cause to be
imprinted, irremovably and legibly in relation to each Licensed Use of the
Licensed Property (in tangible form), including without limitation, any signage,
printed materials, advertising, Licensed Products and any other use, the
copyright and/or trademark notice(s) (or such other notice as may be approved by
Licensor) including if Licensor so directs specified copyright and trademark
symbols, the name of Licensor affiliate or division that owns the intellectual
property and the year date.

 

- 26 -

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

(d) In no event shall Licensee use, in respect to the Licensed Uses or any other
approved use of the Licensed Property hereunder and/or in relation to any
advertising, promotional, packaging or wrapping material, any copyright or
trademark notices which shall conflict with, be confusing with, or negate, any
notices required hereunder by Licensor. Licensee may, however, in respect to the
Licensed Uses or any other approved use of the Licensed Property hereunder
and/or in relation to any advertising, promotional, packaging or wrapping
material, use Licensee’s house mark (e.g., the Universal Studios globe logo),
the name and logo of the Theme Park and/or the Resort, and Licensee’s own
copyright and trademark notices, as long as (i) none of the foregoing are
touching or otherwise co-mingled with any Licensed Property, (ii) it is clear
that Licensee’s copyright and trademark notices refer only to Licensee’s house
mark, the name and logo of the Theme Park and/or the Resort, and/or other
elements supplied by Licensee, and not to the Licensed Property or any part
thereof, and (iii) it is clear that Licensee is not making any claim of
ownership in or to the Licensed Property or any part thereof. Moreover, Licensor
acknowledges that the Licensed Property may, in Theme Park maps, brochures and
advertising and marketing materials, and in Park Compilation Merchandise, be
used in conjunction with trademarks and copyrighted material of third parties
from whom Licensee licenses intellectual property rights used at the Theme Park,
subject to Licensor’s approval in its sole and absolute, but good faith,
discretion, provided that (i) the Licensed Property shall not touch or be
commingled with such third party trademarks or copyrighted material, and
(ii) proper copyright and trademark notices for the Licensed Property and for
the third party trademarks and/or copyrighted material shall be used in the
Theme Park maps, brochures and advertising and marketing materials, and in the
Park Compilation Merchandise, so that it is clear that Licensor is the owner of
the Licensed Property and that the third party is the owner of the third party
trademarks or copyrighted material.

8.8 Trademark Registration; Copyright and Trademark Notices.

(a) At Licensee’s request, Licensor shall apply to register such trademarks and
service marks relating to the Licensed Property as Licensee may request, in such
countries and categories, and for such products and services, as Licensee shall
request, provided that Licensee shall be solely responsible for the payment of
all fees and expenses, including reasonable attorneys’ fees, incurred by
Licensor in connection with such registrations that are requested by Licensee.
In all such cases, Licensor shall be both the legal and beneficial owner of all
such applications and registrations.

(b) Licensee agrees that when utilizing the Licensed Property or any portion
thereof in any Licensed Product, Licensed Premium, Consumable (including
packaging, wrapping, hangtags and/or sewn-in labels for any such Licensed
Product, Licensed Premium or Consumable), or for any advertising, marketing or
promotional materials, Licensee shall include the following copyright and
trademark notice, or such other copyright or trademark notice of which Licensor
gives notice to Licensee in writing, with respect thereof (the year designation
in each of the following copyright and trademark notices shall change to reflect
the year of manufacture of such Licensed Product, Licensed Premium or
Consumable, or the year of public dissemination of such advertising, marketing
or promotional materials):

For all HARRY POTTER product and sewn-in labels:

™ & © Warner Bros. Entertainment Inc.

(s09)

 

- 27 -

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

For all HARRY POTTER packaging, advertising and promotional materials where
BILLING BLOCK (credits for the film) appears, the following author legal notice
must be included:

™ & © Warner Bros. Entertainment Inc. Harry Potter Publishing Rights © J.K.
Rowling.

(s09)

For all HARRY POTTER packaging, advertising and promotional materials, where NO
BILLING BLOCK (credits for the film) appears, the following author legal notice
must be included:

™ & © Warner Bros. Entertainment Inc. Harry Potter Publishing Rights © JKR.

(s09)

When necessary to avoid confusion, the following extended notices shall be used
instead:

For all HARRY POTTER product and sewn-in labels:

HARRY POTTER, characters, names and related indicia are trademarks of and ©
Warner Bros. Entertainment Inc.

(s09)

For all HARRY POTTER packaging, advertising and promotional materials where
BILLING BLOCK (credits for the film) appears, an author legal notice must be
included:

HARRY POTTER, characters, names and related indicia are trademarks of and ©
Warner Bros. Entertainment Inc. Harry Potter Publishing Rights © J.K. Rowling.

(s09)

For all HARRY POTTER packaging, advertising and promotional materials, where NO
BILLING BLOCK (credits for the film) is used:

HARRY POTTER, characters, names and related indicia are trademarks of and ©
Warner Bros. Entertainment Inc. Harry Potter Publishing Rights © JKR.

(s09)

If there is insufficient space in the Licensed Product, Licensed Premium or
Consumable, or the advertising marketing or promotional material, for the
foregoing copyright and trademark notices, shorter notices may be utilized
subject to the sole and absolute, but good faith, discretion of Licensor.

(c) Except as stated above, and subject to all the terms and conditions of this
Agreement, Licensor and Licensee agree that there are no other copyright or
trademark notices, or other credits for Licensor, presently required in the
Themed Area.

 

9. INDEMNITY & INSURANCE:

9.1 Indemnity.

(a) During the Term, and continuing after the expiration or termination of this
Agreement, Licensor shall indemnify Licensee and its parent companies,
subsidiaries and affiliates, and the officers, directors, employees, agents and
constituent general and limited partners of each of them and all persons
connected with and/or employed by them or any of them (including, without
limitation, Steven Spielberg and any entity in which he owns a controlling
interest), and the successors and assigns of each of the foregoing (the
“Licensee Related Parties”), and shall hold Licensee Related Parties harmless
from any loss, liability, damage, cost or expense, arising out of any claims or
suits which may

 

- 28 -

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

be brought or made against any Licensee Related Party based upon, arising out
of, or otherwise attributable to: (i) any breach or violation of this Agreement
by Licensor, including any breach of Licensor’s warranties or representations as
set forth in Section 10.1 hereof; or (ii) Licensor’s non-compliance with any
applicable federal, state or local laws or with any other applicable
regulations. With respect to the foregoing indemnity, Licensor shall defend and
hold harmless the Licensee Related Parties and each of them at no cost or
expense to them whatsoever, including, without limitation, legal fees and
expenses and court costs. Licensee shall give prompt written notice, and full
cooperation and assistance, to Licensor relative to the conduct and defense of
any such claim or suit, and/or proceedings related thereto, at no out-of-pocket
cost to Licensee. Licensee shall not, however, be entitled to recover for lost
profits. Licensee shall have the right but not the obligation to be represented
in any such action or proceeding with counsel of its own choice, at its sole
cost and expense. In no event will Licensor agree to any settlement of any such
action or proceeding if such settlement involves an admission of guilt,
wrongdoing, intentional misconduct or negligence on the part of any Licensee
Related Party.

(b) During the Term, and continuing after the expiration or termination of this
Agreement, Licensee shall indemnify Licensor and its parent companies,
subsidiaries and affiliates, and the officers, directors, employees, constituent
general and limited partners, and the Author, and agents of each of the
foregoing, including without limitation the Christopher Little Literary Agency,
the publishers of the Books, and all persons connected with and/or employed by
them or any of them, and the successors and assigns of each of the foregoing
(the “Licensor Related Parties”), and shall hold Licensor Related Parties
harmless from any loss, liability, damage, cost or expense, arising out of any
claims or suits which may be brought or made against any Licensor Related Party
based upon, arising out of, or otherwise attributable to: (i) any breach or
violation of this Agreement by Licensee, including any breach of Licensee’s
warranties or representations set forth in Section 10.2 hereof; (ii) any use of
the Licensed Property other than in accordance with the terms and provisions of
this Agreement; (iii) any breach of any duty, failure to perform, or any alleged
defect (whether obvious or hidden) in or use of, any product sold, or in any
ride or attraction, or connected to any other service, at the Themed Area, the
Theme Park or anywhere at the Resort; (iv) any injury to property or persons
(including, without limitation, bodily injury or death) arising out of or in
connection with the Themed Area, the Theme Park, the Resort, or any of
Licensee’s activities or operations relating to the Themed Area, the Theme Park,
or the Resort, including, without limitation, promotion, advertising and
publicity activities; (v) Licensee’s non-compliance with any applicable federal,
state or local laws or with any other applicable regulations; or (vi) any
infringement or breach of any copyright, design, trade name, trade mark, service
mark, patent or other proprietary or equitable right of any person or entity, or
any libel or invasion of the right of privacy, publicity or other proprietary or
equitable right of any person, in connection with the Themed Area, the Theme
Park or the Resort (other than any claim or suit based upon Licensor’s breach of
any of Licensor’s warranties or representations as set forth in Section 10.1
hereof) or; (vi) Licensee’s or Licensee’s agents’ or designees’ construction or
operation of the Themed Area, the Theme Park or the Resort, including without
limitation, any rides or attractions. With respect to the foregoing indemnity,
Licensee shall defend and hold harmless Licensor Related Parties and each of
them at no cost or expense to them whatsoever, including, without limitation,
legal fees and expenses and court costs. Licensor shall give prompt written
notice, and full cooperation and assistance, to Licensee relative to the conduct
and defense of any such claim or suit, and/or proceedings related thereto, at no
out-of-pocket cost to Licensor. Licensor shall not, however, be entitled to
recover for lost profits. Licensor shall have the right but not the obligation
to be represented in any such action or proceeding with counsel of its own
choice, at its sole cost and expense. In no event will Licensee agree to any
settlement of any such action or proceeding if such settlement involves an
admission of guilt, wrongdoing, intentional misconduct or negligence on the part
of any Licensor Related Party.

 

- 29 -

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

9.2 Insurance to be Maintained by Licensee. Without limiting its obligations
hereunder, Licensee shall at its own cost and expense effect and maintain public
risks insurance in respect of anything relating to the Theme Park and product
liability insurance in respect of any products sold or otherwise utilized at or
in connection with the Theme Park. Such insurance shall be:

(a) With an insurer having an A.M. Best rating of at least A VI or a Standard &
Poor’s rating of at least A-;

(b) In amounts no less than **** per occurrence, combined single limits (subject
to reasonable increases over time in accordance with the CPI (as defined in
Section 6.1(d));

(c) In the name of Licensee, and shall name Licensor and any other Licensor
Related Party having an insurable interest, as instructed by Licensor, as
additional insureds; and

(d) Simultaneously with the execution of this Agreement, Licensee undertakes to
submit to Licensor a fully paid policy or certificate of insurance naming
Licensor and each of its affiliates as instructed by Licensor as additional
insured parties and, requiring that the insurer shall not terminate or
materially modify such policy or certificate of insurance without written notice
to Licensor at least twenty (20) days in advance thereof (provided that the
insurer need give Licensor only ten (10) days advance notice of a termination or
material modification due to non-payment of premium). Such insurance shall at
all times be primary and not contributory with any insurance carried by Licensor
or any of its affiliates.

9.3 Insurance to be Maintained by Licensor. Without limiting its obligations
hereunder, Licensor shall at its own cost and expense, effect and maintain
producer’s errors and omissions insurance in respect of the Licensed Property.
Such insurance shall be:

(a) With an insurer having an A.M. Best rating of at least A VI or a Standard &
Poor’s rating of at least A-;

(b) In amounts no less than **** per occurrence (subject to reasonable increases
over time in accordance with the CPI (as defined in Section 6.1(d));

(c) In the name of Licensor, and shall name Licensee and any other Licensee
Related Party having an insurable interest, as instructed by Licensee, as
additional insureds; and

(d) Simultaneously with the execution of this Agreement, Licensor undertakes to
submit to Licensee a fully paid policy or certificate of insurance naming
Licensee and each of its affiliates as instructed by Licensee as additional
insured parties and, requiring that the insurer shall not terminate or
materially modify such policy or certificate of insurance without written notice
to Licensee at least twenty (20) days in advance thereof (provided that the
insurer need give Licensee only ten (10) days advance notice of a termination or
material modification due to non-payment of premium). Such insurance shall at
all times be primary and not contributory with any insurance carried by Licensee
or any of its affiliates.

 

10. REPRESENTATIONS AND WARRANTIES

10.1 Licensor. Licensor represents, warrants and agrees that:

(a) it has, and will have throughout the Term of this Agreement, the right to
license the Licensed Property in accordance with the provisions of this
Agreement;

 

- 30 -

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

(b) the making of this Agreement by Licensor does not and will not violate any
agreement, right or obligation existing between Licensor and any other person,
firm or entity;

(c) Licensor shall maintain its rights in the Licensed Property during the Term;

(d) Licensor has full right, power and authority to enter into this Agreement
and fully perform its obligations hereunder, and this Agreement is a valid and
binding agreement, enforceable against Licensor in accordance with its terms;

(e) Licensor is the owner of each element of the Licensed Property and neither
the Licensed Property nor any element thereof is subject to a current
assignment, transfer, encumbrance, hypothecation or security interest that will
adversely affect Licensee’s ability to exercise the rights granted hereunder;

(f) to the best of Licensor’s knowledge, there are no liens, encumbrances,
claims or litigation pending or threatened regarding any element of the Licensed
Property that will adversely affect Licensee’s ability to exercise the rights
granted hereunder;

(g) the exercise by Licensee of the rights herein granted in the Licensed
Property in accordance with all the terms and conditions of this Agreement will
not violate or infringe the copyright or trademark rights of any person or
entity whatsoever;

(h) to the best of Licensor’s knowledge, provided that Licensee enters into
appropriate agreements with the applicable talent (and, if mutually agreed by
Licensor and Licensee, other personnel such as the director(s) and writer(s)) of
the feature films “HARRY POTTER AND THE ORDER OF THE PHOENIX” and “HARRY POTTER
AND THE HALF-BLOOD PRINCE”, in accordance with Section 3.17, and provided,
further, that Licensee obtains any required synchronization, performance rights
and/or master recording licenses with respect to music from any of the Movies
that is used by Licensee, in accordance with Section 4.5(f), the exercise by
Licensee of the rights herein granted in the Licensed Property, in accordance
with all the terms and conditions of this Agreement, will not violate or
infringe any rights of publicity, rights of privacy, or moral or other personal
rights of any person or entity whatsoever; and

(i) except for any amounts that may be payable under any guild, union or
collective bargaining agreement to which Licensor or Licensee, or any of their
respective affiliates, may be a party, or that are otherwise set forth in
Exhibit 3, Licensor has no knowledge of any third party to whom any amount may
be payable by Licensee in connection with Licensee’s exercise of the rights
granted to Licensee under this Agreement.

10.2 Licensee. Licensee represents, warrants and agrees that:

(a) it will not dispute the title of Licensor in or to the Licensed Property
(including any copyright or trademark therein), nor will it attack the validity
of the license granted hereunder;

(b) it will not disparage or bring into disrepute the Licensed Property,
Licensor or the Author;

 

- 31 -

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

(c) it will not harm or misuse the Licensed Property (including any part
thereof);

(d) it will not use the Licensed Property or any part thereof, in any manner
which is obscene, defamatory, misleading or deceptive or likely to mislead or
deceive;

(e) it will use the Licensed Property only in accordance with the uses approved
by Licensor from time to time and will comply with any conditions or
restrictions attached to such approval (including, without limitation, all
quality standards and specifications of Licensor);

(f) it will comply with the approved Business Plan in all material respects;

(g) it will not incur any expenses chargeable to Licensor; nor cause or allow
any liens or encumbrances to be placed against, or grant any security interest
in, the Licensed Property or in any physical assets that embody the Licensed
Property, including without limitation, Licensee’s inventory of Licensed
Products; provided, however, that Licensee may grant a security interest in the
Copyright License Collateral (as defined in the form of Copyright Security
Agreement in Copyright License attached hereto as Exhibit 7 (the “Copyright
Security Agreement”)) to a financial lending institution or other third party if
approved in advance by Licensor, pursuant to a fully executed Copyright Security
Agreement (Licensor hereby approves JPMorgan Chase Bank, N.A. for purposes
hereof);

(h) it will not enter into any agreement relating to the Licensed Property or
any part thereof, without the prior written consent of Licensor, provided that
Licensor’s consent shall not be required for (i) agreements that Licensee enters
into with manufacturers of Licensed Products, Licensed Premiums and Consumables,
provided that such agreements are, in all material respects, on Licensee’s
standard form of Merchandise Vendor Agreement, in the form of Exhibit 4 attached
hereto (except that Licensor’s approval is always required with regard to food
and beverage), (ii) agreements that Licensee enters into with designers,
manufacturers and vendors of ride and show equipment, engineers and other
technical personnel, general contractors, specialty subcontractors and other
consultants that Licensee has used in the past, as long as each such party signs
an appropriate agreement with Licensee based upon a standard form agreement that
has been previously approved by Licensor (or an agreement that conforms in all
material respects to such approved standard form agreement) under which such
party acknowledges that it has no rights in, or claims upon, the Licensed
Property, any Licensed Property Developments or any Other Developments (other
than any patented or proprietary portion thereof as to which such party owns any
rights that do not use, exploit or derive from the Licensed Property) (except
that Licensor’s approval is always required with regard to food and beverage),
(iii) agreements with advertising agencies, marketing consultants and other
developers of advertising, marketing and promotional materials that utilize the
Licensed Property, as long as each such party signs an appropriate standard form
agreement with Licensee that has been previously approved by Licensor under
which such party acknowledges that it has no rights in, or claims upon, the
Licensed Property or any Licensed Property Developments, and (iv) a copyright
security agreement to be executed by Licensee with respect to its rights under
this Agreement, in the form of Exhibit 7 attached hereto;

(i) all rights granted to it under this Agreement with respect to music are
subject in all respects to the rights (if any) of composers, music publishers
and performing rights associations, and Licensee shall pay any and all
applicable royalties or license fees to any and all such persons arising out of
the exploitation by Licensee of the music rights granted pursuant to this
Agreement, provided that nothing herein negates or affects in any respect the
provisions of Section 6.4 with respect to Pass-Through Amounts;

 

- 32 -

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

(j) it will provide Licensor with the date(s) of first use of the Licensed Uses
including without limitation the Licensed Products, Licensed Premiums and
Consumables;

(k) it will not distribute or sell Consumables outside the Themed Area, it will
not distribute or sell Licensed Premiums outside the Resort, and it will not
distribute or sell Licensed Products outside the Resort (except for the
Resort-themed stores at Orlando International Airport, the liquidation stores in
Orlando at which slow-selling or discontinued Resort merchandise items are sold
and in response to unsolicited requests by mail or telephone directly from
individual members of the public), nor will it distribute or sell Consumables,
Licensed Premiums or Licensed Products to a third party who Licensee knows
intends to, or who Licensee reasonably should suspect intends to, distribute or
sell such Consumables, Licensed Premiums or Licensed Products, as applicable,
outside of the foregoing permitted distribution and sale locations;

(l) it will not use any prison, slave or child labor or any labor that violates
any local labor laws, including, without limitation, any wage laws, hour laws or
laws against discrimination, and, to the best knowledge of Licensee, the working
conditions for all individuals involved in the manufacture, sale and/or
distribution of Licensed Products will be safe, clean, healthy and sanitary;

(m) it shall not send, share with or otherwise disclose any artwork, plans,
designs or other similar materials or works approved for use hereunder to any
third party, including other licensees of Licensor, without the prior written
consent of Licensor (except for third party manufacturers or third party
contributors, or other third parties such as advertising agencies or publicity
consultants, previously approved by Licensor or otherwise permitted by Licensor
to be used by Licensee in accordance with this Agreement);

(n) it will at all times comply with all applicable government laws and
regulations, including but not limited to product safety, food, health, drug,
cosmetic, sanitary or other similar laws, and all voluntary industry standards
relating or pertaining to its obligations hereunder. It shall maintain its
appropriate customary high quality standards as set forth in greater detail in
Section 3.1 above. It shall comply with any regulatory agencies which shall have
jurisdiction over its activities as an operator of theme parks and manufacturer
and/or seller of the Licensed Products, Licensed Premiums, Consumables and all
other Licensed Uses and shall procure and maintain in force any and all
permissions, certifications and/or other authorizations from governmental and/or
other official authorities that may be required in relation thereto. Licensee
shall follow reasonable and proper procedures for testing that all rides,
attractions, and Licensed Products, Licensed Premiums and Consumables comply
with such laws and regulations. Licensee shall permit Licensor or its designees
to inspect testing records and procedures with respect to Licensee’s activities
for compliance. Any Licensed Products, Licensed Premiums, Consumables or
Licensed Uses that do not comply with all applicable laws, regulations and
standards shall automatically be deemed unapproved and promptly removed from the
Theme Park;

(o) it will, upon Licensor’s request, provide to Licensor copies of its 10-K
annual reports and its 10-Q quarterly reports as filed with the U.S. Securities
and Exchange Commission, and such other credit information as Licensor may
request that Licensee is permitted to provide in accordance with and subject to
Regulation FD of the U.S. Securities and Exchange Commission;

(p) it will, pursuant to Licensor’s instructions, execute all necessary
documentation for the recordation of itself as user of the Licensed Property
licensed from Licensor hereunder if

 

- 33 -

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

required by local laws or where Licensor reasonably requests that such
recordation shall be effected. Licensee further agrees that it will at its own
expense cooperate with Licensor in cancellation of any such recordation at the
expiration of this Agreement or upon termination of Licensee’s right to use the
Licensed Property licensed from Licensor hereunder. Licensee hereby appoints
Licensor its attorney-in-fact for such purpose;

(q) it shall obtain such licenses and clearances from, and make any related
payments to, any third parties as may be required, necessary or proper, and
Licensor will assist Licensee in determining any such applicable payments (to
the extent that the necessary information is readily available without cost or
liability to Licensor), concerning, without limitation, the use of any music,
story or plot in connection with the Licensed Property, and shall obtain such
permissions, licenses and clearances as may be required by or from any guild,
union, collective bargaining unit or other talent or labor association or
organization which may have jurisdiction over Licensee’s activities hereunder;
and

(r) it does not intend to charge admissions to particular rides, attractions or
other areas within the Themed Area, and in the event that it does so, it shall
pay Royalties on such uses pursuant to the relevant terms of this Agreement,
including Section 6 above (provided that the foregoing shall not apply to any
“price fixe” or “all you can eat” meal within any venue in the Themed Area for
which a single price is being charged that covers both the admission to such
venue and the meal cost, and the foregoing also does not apply to any “front of
line” pass or other preferred attraction admission pass that may be sold by
Licensee (whether sold as part of or separately from a Theme Park admission
pass) that permits guests to obtain express or preferred admission to
attractions throughout the Theme Park, including those in the Themed Area).

 

11. TERMINATION:

11.1 Defaults. Licensor shall have the right to terminate this Agreement without
prejudice to any rights which it may have, whether pursuant to the provisions of
this Agreement, or otherwise in law, or in equity, or otherwise, upon the
occurrence of or, where applicable, failure to cure, any one or more of the
following events within the time provided for in Section 11.2 (herein called
“defaults”):

(a) Licensee breaches any of its representations and warranties or defaults with
regard to the performance of any of its obligations provided for in this
Agreement in any material respect;

(b) Licensee fails to deliver to Licensor or to maintain in full force and
effect the insurance referred to in Section 9.2 hereof;

(c) Licensee fails to make any payments due hereunder on the date due;

(d) Licensee fails to deliver any of the statements required herein or to give
access to the premises and/or Licensee records pursuant to the provisions hereof
to Licensor’s authorized representatives for the purposes permitted hereunder;

(e) Licensee fails to comply with any laws, regulations or voluntary industry
standards, or if any governmental agency or other body, office or official
vested with appropriate authority makes a finding that any Licensed Products,
Licensed Premiums or Consumables sold by Licensee or theme park rides,
attractions or other facilities at the Theme Park are harmful or defective in
any way, manner or form, or are being manufactured, sold or distributed in
contravention of applicable laws, regulations or standards, or in a manner
likely to cause harm;

 

- 34 -

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

(f) Licensee is unable to pay its debts when due, or shall make any assignment
for the benefit of creditors, or shall file any petition under the bankruptcy or
insolvency laws of any jurisdiction, county or place, or shall have or suffer a
receiver or trustee to be appointed for its business or property, or be
adjudicated a bankrupt or an insolvent;

(g) Licensee uses the Licensed Property in a manner not approved or deemed
approved by Licensor;

(h) Licensee distributes or sells Consumables outside the Themed Area, or
distributes or sells Licensed Premiums outside the Resort, or distributes or
sells Licensed Products outside the Resort (except for the Resort-themed stores
at Orlando International Airport and the liquidation stores in Orlando at which
slow-selling or discontinued Resort merchandise items are sold and in response
to unsolicited requests by mail or telephone directly from individual members of
the public, and except for charitable organizations that have been approved by
Licensor, in advance, on a case by case basis, in the sole and absolute but good
faith discretion of Licensor,), or Licensee distributes or sells Consumables,
Licensed Premiums or Licensed Products to a third party who Licensee knows
intends to, or who Licensee reasonably should suspect intends to, distribute or
sell such Consumables, Licensed Premiums or Licensed Products, as applicable,
outside of the foregoing permitted distribution and sale locations;

(i) A manufacturer of Licensed Products, Licensed Premiums or Consumables sells
such items to parties other than Licensee or engages in conduct, which conduct
if engaged in by Licensee would entitle Licensor to terminate this Agreement;

(j) Except as permitted by Section 13.7 below, Licensee undergoes a Change in
Control;

(k) **** (except to the extent any such delay is caused by a Force Majeure Event
or by a delay on the part of Licensor in granting any material approval
requested by Licensee or in performing any of Licensor’s material obligations
under this Agreement);

(l) Licensee fails to submit the Business Plan on or before the due date
therefor, fails to obtain Licensor’s approval of the Business Plan as required
hereunder, or fails to operate the Themed Area and the Theme Park in accordance
with the terms of the approved Business Plan in all material respects;

(m) Licensee has made a material misrepresentation or has omitted to state a
material fact necessary to make the statements not misleading; or

(n) Licensee fails to notify Licensor of the occurrence of a Triggering Event as
required in Section 6.7 above.

As used herein, a “Change in Control” shall be deemed to occur upon any of the
following:

(A) the sale, lease or transfer, in one or a series of related transactions, of
all or substantially all the assets of Licensee, taken as a whole, to: (i) any
person or group, other than Vivendi

 

- 35 -

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

Universal Entertainment LLLP, a Delaware limited liability limited partnership,
its Affiliates (as defined below) and its successors (collectively, “Vivendi
Universal”), or (ii) any corporation, trust, joint venture, association,
company, partnership or limited liability company in which Vivendi Universal
does not own at least 50% of the outstanding Equity Interest (as defined below);
or

(B) the acquisition of Licensee by any person or group (within the meaning of
Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as
amended, or any successor provision), including any group acting for the purpose
of acquiring, holding or disposing of securities (within the meaning of Rule
13d-5(b)(1) under the Securities Exchange Act of 1934, as amended), other than
Vivendi Universal, in a single transaction or in a related series of
transactions, by way of merger, consolidation or other business combination or
purchase (within the meaning of Rule 13d-3 under the Securities Exchange Act of
1934, as amended, or any successor provision), the result of which, following
the consummation of such transaction, is that Vivendi Universal does not
beneficially own, directly or indirectly, securities of Licensee, or of the
surviving entity, representing at least fifty percent (50%) of the combined
voting power of the Licensee or of the surviving entity.

As used herein, “Affiliate” means any individual or entity that directly or
indirectly controls, is controlled by or is under common control with Vivendi
Universal, where, in this context, “control” means beneficial ownership, within
the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended, or
any successor provision, of at least fifty percent (50%) of the then-outstanding
voting shares or Equity Interests of the individual or entity in question or the
ability to otherwise direct the affairs or operations of the individual or
entity in question.

As used herein, “Equity Interests” of any corporation, trust, joint venture,
association, company, partnership or limited liability company shall mean any
and all shares, interests, rights to purchase, warrants, options, participations
or other equivalents of or interests in (however designated) equity of such
corporation, trust, joint venture, association, company, partnership or limited
liability company, including any preferred stock, any limited or general
partnership interest and any limited liability company membership interest.

11.2 Termination. In the event any of these defaults occur, Licensor shall give
notice of default in writing to Licensee in the manner prescribed in this
Agreement. Licensee shall have ten (10) days from the date of Licensor giving
such notice in which to cure any default under subsection 11.1(c), and thirty
(30) days from the date of Licensee’s receipt of such notice in which to cure
any other default (except that Licensee shall have sixty (60) days to have
dismissed any involuntary bankruptcy case filed against Licensee or any receiver
or trustee that is appointed, without Licensee’s consent, for Licensee’s
business or property); and failing such cure, this Agreement shall thereupon
immediately terminate, and any and all payments of the Guaranteed Fee, Royalties
and Consulting Fees then or later due from Licensee hereunder during the
then-applicable Initial Term, First Renewal Term or Second Renewal Term (as the
case may be) shall then be immediately due and payable in full and no portion of
those payments or prior payments shall be repayable to Licensee.

 

12. EXPIRATION OR TERMINATION CONSEQUENCES:

12.1 Upon expiration or termination of this Agreement or the license granted
hereunder, Licensee shall, subject to Section 12.2, cease all use of the
Licensed Property. Licensee shall: (i) immediately following expiration or
termination of this Agreement, cease operation of all attractions within the
Themed Area until all Licensed Property is removed therefrom (provided that in
no event

 

- 36 -

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

shall the underlying mechanical or control systems of any such attraction be
required to be removed), (ii) remove all signage utilizing any Licensed Property
from the Themed Area and the Theme Park within thirty (30) days following
expiration or termination of this Agreement (other than signage at any venue at
which Licensed Products, Licensed Premiums and/or Consumables continue to be
sold in accordance with Section 12.2, it being agreed that any such signage may
remain in place until the end of the Sell-Off), (iii) remove any and all other
uses of, or references to, Licensed Property from the Themed Area and the Theme
Park, including without limitation, from architecture, equipment, props,
dressings, stages, scenery, entrance gates, character representations, and any
and all uses of the Licensed Property from rides, attractions, stores and any
other themed areas, within ninety (90) days following expiration or termination
of this Agreement (other than any of the foregoing at any venue at which
Licensed Products, Licensed Premiums and/or Consumables continue to be sold in
accordance with Section 12.2, it being agreed that any of the foregoing at any
such venue may remain in place until the end of the Sell-Off); (iv) not print or
cause to be printed any further advertising, marketing, sales or publicity
materials, or park maps or brochures, that contain any Licensed Property, and
cause all such advertising, marketing, sales and publicity materials, and all
such park maps and brochures, that contain any Licensed Property, to be removed
from circulation within one hundred twenty (120) days following expiration or
termination of this Agreement; and (v) cancel, deregister and transfer to
Licensor all company names, business names, domain names or any other similar
uses which include or are based upon the Licensed Property, within thirty
(30) days following expiration or termination of this Agreement (other than any
company names, business names, domain names or similar uses that are used at or
in connection with any venue at which Licensed Products, Licensed Premiums
and/or Consumables continue to be sold in accordance with Section 12.2, it being
agreed that any company names, business names, domain names or similar uses that
are used at or in connection with any such venue may remain in place until the
end of the Sell-Off). Licensor shall have the right to enter upon and inspect
the Theme Park to verify such compliance.

12.2 Licensee shall deliver to Licensor, no later than thirty (30) days
following expiration or termination of this Agreement, a statement indicating
the number and description of Licensed Products, Licensed Premiums and
Consumables on hand together with a description of all advertising and
promotional materials relating thereto. Following expiration or termination,
Licensee shall not continue to manufacture, order or purchase the Licensed
Products, Licensed Premiums or Consumables. However, if Licensee has complied
with all the terms of this Agreement, including, but not limited to, complete
and timely payment of all consideration, then Licensee may continue to
distribute and sell its remaining inventory of Licensed Products, Licensed
Premiums and Consumables, for a period not to exceed one hundred twenty
(120) days following such termination or expiration (the “Sell-Off”), subject to
payment of applicable royalties and fees thereto. In the event this Agreement or
the license granted hereunder is terminated by Licensor for cause, Licensee
shall be deemed to have forfeited its Sell-Off rights hereunder. If Licensee has
any remaining inventory of Licensed Products, Licensed Premiums or Consumables
following expiration of the Sell-Off, Licensee shall, at Licensor’s option,
deliver up to Licensor said remaining inventory or furnish to Licensor an
affidavit attesting to the destruction of said remaining inventory, provided
that Licensee may also donate said remaining inventory to charitable
organizations that have been approved by Licensor, in advance, on a case by case
basis, in the sole and absolute but good faith discretion of Licensor. Licensor
shall have the right to conduct a physical inventory in order to ascertain or
verify such inventory and/or statement. In the event that Licensee refuses to
permit Licensor to conduct such physical inventory, Licensee shall forfeit its
right hereunder to dispose of such inventory. In addition to the forfeiture,
Licensor shall have recourse to all other remedies available to it.

 

- 37 -

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

13. GENERAL AND MISCELLANEOUS:

13.1 Severance If any term or provision of this Agreement is held to be invalid
or unenforceable by any court of competent jurisdiction or any other authority
vested with jurisdiction, such holding shall not affect the validity or
enforceability of any other term or provision hereto and this Agreement shall be
interpreted and construed as if such term or provision, to the extent the same
shall have been held to be invalid, illegal or unenforceable, had never been
contained herein.

13.2 Further Acts and Deeds The parties shall do, execute, acknowledge and
deliver all and every such further acts, agreements, covenants, assignments and
assurances as shall be reasonably required for the purposes and intentions of
this Agreement.

13.3 Amendment This Agreement may only be varied, modified, amended or added to
pursuant to a writing executed by the parties.

13.4 Merger None of the terms or conditions of, or any act, matter or thing done
under or by virtue of or in connection with, this Agreement shall operate as a
merger of any of the rights and remedies of the parties in or under this
Agreement, but such rights and remedies shall at all times continue in full
force and effect.

13.5 Exclusion of Statutory Provisions Unless application is mandatory by law,
no statute, proclamation, order, regulation or moratorium, whether present or
future, shall apply to this Agreement so as to abrogate, extinguish, impair,
diminish, delay or otherwise prejudicially affect any rights, powers, remedies
or discretion of, or accruing hereunder, to the parties or to either of them.

13.6 Waiver Modification, etc. No waiver, modification or cancellation of any
term or condition of this Agreement shall be effective unless executed in
writing by the party charged therewith. No written waiver shall excuse the
performance of any acts other than those specifically referred to therein. The
fact that either party has not previously insisted upon the other party
expressly complying with any provision of this Agreement shall not be deemed to
be a waiver of such first party’s future right to require compliance in respect
thereof, and each party specifically acknowledges and agrees that the prior
forbearance in respect of any act, term or condition shall not prevent the other
party from subsequently requiring full and complete compliance thereafter.

13.7 Assignment, Sublicense, Change in Control. This Agreement shall bind and
inure to the benefit of Licensor, its successors and assigns. This Agreement is
personal to Licensee. Except as provided below, Licensee shall not franchise or
delegate to third parties its rights hereunder, and neither this Agreement nor
any of the rights of Licensee hereunder shall be sold, transferred or assigned
by Licensee without the prior written approval of Licensor in the sole and
absolute but good faith discretion of Licensor (such consent shall not be
conditioned upon the payment of money or other consideration). In the event
Licensee purports to assign this Agreement without obtaining the prior written
approval of Licensor, or except as provided below, any such purported assignment
shall be null and void and of no force or effect. No rights hereunder shall
devolve by operation of law or otherwise upon any receiver, liquidator, trustee
or other party. Any purported sale, transfer, sublicense, delegation or
assignment in violation of the foregoing shall be null and void and of no force
or effect. Likewise, except as set forth below, any Change in Control of
Licensee will result in the automatic termination of this Agreement, unless
Licensor consents to such Change in Control in advance (such consent not to be
conditioned upon the payment of money or other consideration but otherwise in
the sole and absolute but good faith discretion of Licensor).

 

- 38 -

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

Notwithstanding anything in this Agreement to the contrary, Licensor’s consent
to an otherwise prohibited transfer, assignment or Change in Control will not be
required, and a Change in Control will not constitute a default under
Section 11.1(j) or result in termination of this Agreement, if:

(a) either (i) the Theme Park will, following the transfer, assignment or Change
in Control, continue to be managed on a daily basis by NBC Universal, Inc. or
any of its affiliates, for as long as same shall continue to so manage the Theme
Park, or (ii) either (A) if, and for so long as, the name of the Theme Park
will, following the transfer, assignment or Change in Control, continue to
include the word “Universal” or “Universal’s”, then the Theme Park will,
following the transfer, assignment or Change in Control, be operated under a
license agreement from NBC Universal, Inc. or any of its affiliates (an “NBC
Universal License Agreement”) that gives NBC Universal, Inc. or any of its
affiliates the right to control all aspects of the quality of the Theme Park and
the Themed Area, including, without limitation, the Themed Area’s overall
design, architecture and cleanliness, placement of signs and inclusion or
exclusion of specific facilities, by means of provisions that are similar in all
material respects to the provisions set forth in Exhibit 5 attached hereto, or
(B) if, in accordance with Section 13.7(c) and for so long as, the name of the
Theme Park will not, following the transfer, assignment or Change in Control,
continue to include the word “Universal” or “Universal’s”, then (w) the
“Jurassic Park”, (x) “Seuss Landing”, (y) “Marvel Super-Hero Island” and (z) to
the extent that this Agreement does not address a particular aspect of the
operation of the Themed Area, the Themed Area sections of the Theme Park
(collectively, the “Affected Islands”) will, following the transfer, assignment
or Change in Control, be operated under an NBC Universal License Agreement that
gives NBC Universal, Inc. or any of its affiliates the right to control the
quality of the Affected Islands by means of provisions that are similar in all
material respects to the provisions set forth in Exhibit 6 attached hereto (it
being agreed that in no event will any such licensee of NBC Universal be
required to obtain any approval, consent or determination under such NBC
Universal License Agreement if such matter is subject to an approval, consent or
determination under this Agreement, and in the event of any conflict between any
provision of this Agreement and any provision of such NBC Universal License
Agreement, the provision of this Agreement shall prevail);

(b) any of the following conditions is satisfied (it being agreed that Licensee
may select the condition to be satisfied): (i) the third party to which the
transfer or assignment is proposed to be made, or that will acquire ownership
and/or control of Licensee as a result of the Change in Control, has an issuer
credit rating of at least **** issued by Standard & Poor’s Corporation, or a
long-term issuer rating of at least **** issued by Moody’s Investor’s Service,
Inc., (ii) at the time of such transfer, assignment or Change in Control, such
third party delivers to Licensor, at Licensee’s or such third party’s sole cost
and expense, a standby letter of credit issued by a bank that has an issuer
credit rating of at least **** issued by Standard & Poor’s Corporation, or a
long-term issuer rating of at least **** issued by Moody’s Investor’s Service,
Inc., in the amount of the then-remaining amount of the Guaranteed Fee due for
the then-applicable portion of the Term (i.e., Initial Term, First Renewal Term
or Second Renewal Term), which standby letter of credit shall automatically
renew each year for the duration of the then-applicable portion of the Term
(i.e., Initial Term, First Renewal Term or Second Renewal Term), and shall be
reduced by an amount equal to the amount of each Guaranteed Fee payment that is
thereafter made to Licensor, or (iii) ****;

(c) the name of the Theme Park and the Resort will each continue, following the
transfer, assignment or Change in Control, to include either (i) the word
“Universal” or “Universal’s”, (ii) the name of another major recognized theme
park operator or another major established motion picture and television studio,
or (iii) any other name not associated with an Objectionable Business (as
defined in Section 13.7(d) below) if such other name is approved by Licensor,
which approval shall not be unreasonably withheld, delayed or conditioned; and

 

- 39 -

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

(d) to ensure that the third party to which the transfer or assignment is
proposed to be made, or that will acquire ownership and/or control of Licensee
as a result of the Change in Control, is of good character and reputation
appropriate to association with the Licensed Property and family entertainment,
such third party may not be involved, as a primary activity, in businesses
related to sexually oriented products or services, adult entertainment, adult
publishing, firearms or tobacco (collectively, the “Objectionable Businesses”)
and cannot have been found guilty of violating any bank fraud, securities fraud,
wire fraud, money laundering or RICO criminal statute of any jurisdiction within
the United States, provided, however, that (i) any such third party that is a
pension fund, private equity fund or other fund shall not be deemed to be
involved in an Objectionable Business as a primary activity simply because it
has an investment in any Objectionable Business, provided that all such fund’s
investments in Objectionable Businesses do not exceed **** of the fund’s total
investments in the aggregate, (ii) any such third party that produces products
or services that may incidentally relate to, depict or promote Objectionable
Businesses (e.g., a motion picture studio that produces mainstream feature films
that contain occasional adult situations or that occasionally portray firearm or
tobacco usage) shall not, solely by reason of such incidental relation,
depiction or promotion, be deemed to be involved in an Objectionable Business as
a primary activity, and (iii) any such third party shall not be deemed to have
been found guilty of violating any bank fraud, securities fraud, wire fraud,
money laundering or RICO criminal statute of any jurisdiction within the United
States simply because one or more of its directors or officers may have been
found guilty of any such violation.

13.8 Entry The parties hereto hereby irrevocably covenant and agree that the
designees of each shall be granted unfettered entry during normal business hours
to the Themed Area, the Theme Park and the Resort during the Term for the
purpose of checking or ensuring compliance by the other party with its
obligations under this Agreement.

13.9 Costs Each party shall bear its own legal and other costs incurred in
negotiating and documenting this Agreement.

13.10 Construction and Dispute Resolution This Agreement shall be construed in
accordance with the laws of the State of California of the United States of
America without regard to its conflicts of laws provisions. Any and all
controversies, claims or disputes arising out of or related to this Agreement or
the interpretation, performance or breach thereof, including, but not limited
to, alleged violations of state or federal statutory or common law rights or
duties, and the determination of the scope or applicability of this agreement to
arbitrate (“Dispute”), except as set forth in subsections (d) and (e), below,
shall be resolved according to the procedures set forth in subsections (a),
(b) and (c) below, which shall constitute the sole dispute resolution mechanism
hereunder:

(a) Informal Dispute Resolution. Either party may demand, in writing, that each
party’s management representatives, with full authority to settle the Dispute,
and counsel meet at such place as the Parties may agree upon to resolve the
Dispute. Upon receipt of this demand, each party, within thirty (30) days after
the date of such demand (or such longer period as the parties may agree), will
comply and negotiate in good faith to resolve the Dispute. Except for claims for
injunctive relief under Section 13.10(d) or that are not arbitrable under
Section 13.10(e), no third party shall have authority to consider or resolve any
Dispute that is not first the subject of informal dispute resolution pursuant to
this Section 13.10(a).

 

- 40 -

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

(b) Mediation. If the parties do not resolve the Dispute within fifteen
(15) business days of the date of the first meeting between management
representatives, the parties agree to select a date (which shall not be later
than ninety (90) days after the end of such fifteen (15) business day period,
unless otherwise agreed by the parties) to mediate the Dispute at such place as
the parties may agree upon with a mutually agreed upon mediator. If the parties
cannot agree upon the selection of a mediator, a mediator will be chosen from
the existing list of JAMS mediators in Los Angeles, California. The parties
agree to share the cost of any independent mediator engaged to assist the
parties in resolving their differences. The mediator shall be a person familiar
with complex business transactions and litigation in the entertainment industry,
unless the parties agree otherwise in a writing signed by both parties.

(c) Arbitration: In the event that the parties are unable to resolve any Dispute
pursuant to subsection (a) or subsection (b) above, then such Dispute shall be
submitted to final and binding arbitration. The arbitration shall be initiated
and conducted according to either the JAMS Streamlined (for claims under
$250,000) or the JAMS Comprehensive (for claims over $250,000) Arbitration Rules
and Procedures, except as modified herein, including the Optional Appeal
Procedure, at the Los Angeles office of JAMS, or its successor (“JAMS”) in
effect at the time the request for arbitration is made (the “Arbitration
Rules”). The arbitration shall be conducted in Los Angeles County before a
single neutral arbitrator appointed in accordance with the Arbitration Rules.
The arbitrator shall follow California law and the Federal Rules of Evidence in
adjudicating the Dispute, provided, however, that (i) each party shall be
permitted to take one corporate representative deposition, one party witness
deposition, one nonparty witness deposition (by subpoena issued by the
arbitrator(s)), and a deposition of each expert witness disclosed by the other
party, (ii) each deposition shall be limited to seven (7) hours of actual
deposition time, and (iii) the depositions of the nonparty witness and of the
expert witnesses may include duces tecum (document) requests. The arbitrator(s)
shall have the authority to hear and rule upon all discovery motions and, in
connection therewith, to award sanctions as appropriate in accordance with the
then-prevailing California law. The parties waive the right to seek
consequential, special, exemplary and punitive damages, and the arbitrator shall
have no authority to award such damages. The arbitrator will provide a detailed
written statement of decision, which will be part of the arbitration award and
admissible in any judicial proceeding to confirm, correct or vacate the award.
Unless the parties agree otherwise, the neutral arbitrator and the members of
any appeal panel shall be former or retired judges or justices of any California
state or federal court with experience in matters involving the entertainment
industry. The cost of any such arbitration will be borne equally by Licensor and
by Licensee. Each party shall bear its own attorney’s fees incurred in any such
arbitration, and the arbitrator shall have no authority to award any such
attorneys’ fees or arbitration costs to any such party regardless of whether it
is the prevailing party. Except to the extent otherwise required pursuant to the
Arbitration Rules and applicable law, each party will pay the expense of its
witnesses, costs of any record or transcript of the arbitration, and any other
expenses connected with the arbitration that such party might be expected to
incur had the Dispute been subject to resolution in court. If either party
refuses to perform any or all of its obligations under the final arbitration
award (following appeal, if applicable) within thirty (30) days of such award
being rendered, then the other party may enforce the final award in any court of
competent jurisdiction in Los Angeles County. The party seeking enforcement
shall be entitled to an award of all costs, fees and expenses, including
attorneys’ fees, incurred in enforcing the award, to be paid by the party
against whom enforcement is ordered.

(d) Injunctive Relief: Notwithstanding the foregoing, either party shall be
entitled to seek injunctive relief (unless otherwise precluded by any other
provision of this Agreement) in the state and federal courts of Los Angeles
County.

 

- 41 -

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

(e) Other Matters: Any Dispute or portion thereof, or any claim for a particular
form of relief (not otherwise precluded by any other provision of this
Agreement), that may not be arbitrated pursuant to applicable state or federal
law may be heard only in a court of competent jurisdiction in Los Angeles
County. If a party believes in good faith that all or part of a Dispute, or any
claim for relief or remedy sought, is not subject to arbitration under
then-prevailing law, then that party may seek a determination to that effect
from an appropriate court. If the court determines that the matter is not
arbitrable or that the remedy sought is not available in arbitration, then the
specific matter or request for remedy in question shall be resolved by the
court, sitting without a jury, and the parties hereby irrevocably waive their
respective rights to trial by jury of any cause of action, claim, counterclaim
or cross-complaint in any action or other proceeding brought by any party
against any other party with respect to any matter arising out of, or in any way
connected with or related to, this Agreement or any portion thereof, whether
based upon contractual, statutory, tortious or other theories of liability. All
other matters and claims for relief shall be subject to arbitration as set forth
above.

13.11 Number, Gender and Persons: Except to the extent that such an
interpretation is excluded by or is repugnant to the context,

(a) a reference to a party includes its successors and permitted assigns,

(b) the word “person” includes natural persons, partnerships, joint ventures,
corporations, associations, governments and other entities or organizations,

(c) words importing the singular number or plural number include the plural
number and singular number, respectively, and

(d) words importing the one gender shall mean and include the other genders and
each of them.

13.12 Headings: Headings and clause headings in this Agreement have been
inserted for guidance only and shall not be taken into account when this
Agreement is interpreted.

13.13 Notices: Notices that either party is required or may desire to provide to
the other party in connection with this Agreement must be provided in accordance
with this Section, unless specifically indicated otherwise elsewhere in this
Agreement with respect to any particular notices. Notices may be delivered in
writing by either party to the other party by mail (postage prepaid), courier
(by a major commercial rapid delivery courier service), facsimile or e-mail. If
not received sooner, notice by mail will be deemed received seven (7) days after
deposit in the mail, notice by courier service will be deemed received one
(1) day after sending and notice by facsimile or e-mail will be deemed received
as of the date of transmission. All notices delivered to Licensor must be
delivered to the following:

 

 

Warner Bros. Consumer Products Inc.

 

Attention: Senior Vice President, Business & Legal Affairs

 

4000 Warner Boulevard

 

Bldg. 118, 5th Floor

 

Burbank, CA 91522

 

Facsimile: (818) 977-6340

 

E-mail: wbcplegalnotices@warnerbros.com

 

- 42 -

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

All notices delivered to Licensee must be delivered to the following:

 

  

Universal City Development Partners, Ltd.

  

Attention: Senior Vice President and General Counsel

  

1000 Universal Studios Plaza, Bldg. B-5

  

Orlando, FL 32819

  

Facsimile: (407) 363-8219

  

E-Mail: cathy.roth@universalorlando.com

  

 

with a copy to:

  

 

Universal Parks & Resorts

  

Attention: Senior Vice President, Business and Legal Affairs

  

100 Universal City Plaza, Bldg. 1280, 8th Floor

  

Universal City, CA 91608

  

Facsimile: (818) 866-4545

  

E-mail: michael.silver@nbcuni.com

Either party may update the foregoing contract information for the delivery of
notices at any time in a notice to the other party provided in the manner set
forth in this Section. Royalties and other financial statements and all payments
due to Licensor in connection with this Agreement must be delivered to Licensor
in accordance with Section 7. Pre-production submissions, samples and other
materials to be delivered to Licensor in connection with this Agreement must be
delivered to Licensor in accordance with Section 3.

13.14 Confidentiality. The proprietary materials and information of Licensor
supplied to Licensee hereunder, or to which Licensee gains access as the result
of the privileged relationship created by this Agreement, including, but not
limited to, the Style Guide(s), artwork, design elements, character profiles,
unpublished works of authorship, release dates, marketing and promotional
strategies, information about the Author or information obtained directly or
indirectly from the Author by virtue of this Agreement (including without
limitation comments received from the Author on Licensee submissions hereunder),
information about new products, properties and characters and the terms and
conditions of this Agreement, constitute the proprietary and confidential
information of Licensor (the “Licensor Proprietary Information”). Likewise, the
proprietary materials and information of Licensee supplied to Licensor
hereunder, in the Business Plan, the Business Reviews and otherwise (including
all information with respect to the contents of the Themed Area, Licensee’s
sales and marketing strategies, Licensee’s plans for the development, sale and
distribution of merchandise and food/beverage products, Licensee’s capital
improvement plans, Licensee’s financial results with respect to the Theme Park,
attendance and capital expenditure projections, and Licensee’s overall plans
with respect to the Resort and the Theme Park), constitute the proprietary and
confidential information of Licensee (the “Licensee Proprietary Information”);
the Licensor Proprietary Information and the Licensee Proprietary Information
are, collectively, the “Proprietary Information”; the owner of any such
Proprietary Information is referred to herein as the “Disclosing Party”, and the
other party is referred to herein as the “Receiving Party”). The Receiving Party
will hold the Proprietary Information in strict confidence, and will treat such
Proprietary Information with the same degree of care as it accords its own
proprietary information of a similar nature, and in no event will it use less
than reasonable care to protect such Proprietary Information. Without limiting
the foregoing, the Receiving Party:

(a) will store all Proprietary Information in secure environments when not in
use;

 

- 43 -

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

(b) will not remove or modify any burn-in warnings or watermarks included on
physical assets containing any Proprietary Information;

(c) will employ security procedures reasonably intended to prevent any theft or
unauthorized access, copying, exhibition, transmission or removal of Proprietary
Information from the Receiving Party’s facility; and

(d) will maintain at all times a complete and accurate inventory of all
Proprietary Information in the Receiving Party’s possession and a list of all
individuals under the Receiving Party’s supervision or control provided with
access to such Proprietary Information. The Receiving Party acknowledges that
the Proprietary Information is highly confidential and that unauthorized use or
disclosure of such Proprietary Information will result in serious, irreparable
harm for which the Disclosing Party’s remedies at law would be inadequate.

Among other damage, unauthorized use or disclosure of the Licensor Proprietary
Information will:

(i) damage Licensor’s carefully planned marketing strategies;

(ii) reduce interest in the Licensed Property;

(iii) make unique or novel elements of the Licensed Property susceptible to
imitation or copying by competitors, infringers or third parties prior to
Licensor’s release of the information or materials;

(iv) damage Licensor’s proprietary protection in undisclosed or unpublished
information or materials; and

(v) provide unauthorized third parties with materials capable of being used to
create counterfeit and unauthorized merchandise, audio-visual products or other
products.

Among other damage, unauthorized use or disclosure of the Licensee Proprietary
Information will:

(i) damage Licensee’s carefully planned marketing strategies;

(ii) reduce interest in the Resort, the Theme Park and the Themed Area;

(iii) provide a competitive advantage to Licensee’s competitors, who would not
otherwise have a means to obtain advance knowledge of Licensee’s business plans,
strategies, tactics and campaigns and therefore would not be able to formulate
their own business plans, strategies, tactics and campaigns to counteract
Licensee’s business plans, strategies, tactics and campaigns;

(iv) damage Licensee’s proprietary protection in undisclosed or unpublished
information or materials; and

 

- 44 -

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

(v) make unique or novel elements of the Licensed Property Developments and
Other Developments, and other contents of the Themed Area, Licensed Products,
Licensed Premiums, Consumables and advertising, marketing and promotional
materials for the foregoing (or for the Resort or the Theme Park), susceptible
to imitation or copying by competitors, infringers or third parties prior to
Licensor’s release of the information or materials.

Accordingly, the Receiving Party agrees that if any unauthorized use or
disclosure occurs, the Disclosing Party will be entitled, in addition to any
other remedies available to it at law or in equity, to the issuance of
injunctive or other equitable relief. The Receiving Party will promptly notify
the Disclosing Party of any loss or theft of or unauthorized access to any of
the Proprietary Information and will use its best efforts, at the Receiving
Party’s own cost and expense, to recover all lost or stolen materials. If any
such loss or theft of or unauthorized access to any of the Proprietary
Information occurs, the Receiving Party shall be liable for all resulting
damages. Except as expressly approved in writing by the Disclosing Party, the
Receiving Party shall not reproduce or use the Proprietary Information and shall
not discuss, distribute, disseminate or otherwise disclose the Proprietary
Information or the substance or contents thereof, in whole or in part, in its
original form or in any other form, with or to any other person or entity other
than:

(1) the Receiving Party’s employees;

(2) in the case of Licensor Proprietary Information, contributors who have been
approved by Licensor and who have executed a Contributor’s Agreement or an
appropriate standard form agreement with Licensee, that has been approved by
Licensor, under which such contributor acknowledges that it has no rights in, or
claims upon, the Licensed Property or any Licensed Property Developments (as
provided in Section 8.3); and

(3) in the case of Licensor Proprietary Information, third party manufacturers
who been approved by Licensor and who have executed a third party manufacturer’s
agreement or an agreement that, in all material respects, conforms to Licensee’s
standard form of Merchandise Vendor Agreement (as provided in Section 5.2).

All such employees and third parties shall be given access to the Proprietary
Information only as necessary to enable the Receiving Party to perform under
this Agreement.

Notwithstanding anything to the contrary in this Section 13.14, however, nothing
herein shall require the Receiving Party to keep confidential any Proprietary
Information that:

(A) has become part of the public domain through no act or omission of the
Receiving Party;

(B) was lawfully disclosed to the Receiving Party without restriction on
disclosure by a third party who is not and was not subject to an obligation of
confidentiality to the Disclosing Party or otherwise prohibited from
transmitting such Proprietary Information;

 

- 45 -

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

(C) was developed independently by the Receiving Party (and is not based upon,
utilizing or derived from the Licensed Property) prior to August 31, 2005, the
date of Licensee’s first presentation to Licensor with respect to the Themed
Area;

(D) is required to be disclosed by law or regulation, or is necessary to
disclose for financial or securities reporting requirements or in order to
comply with accounting practices or standards (Licensee will notify Licensor as
promptly as possible of any such required or necessary disclosure and shall
redact Proprietary Information that Licensor requests be redacted prior to such
disclosure, except to the extent otherwise required by law); or

(E) is legally compelled (whether by deposition, interrogatory, request for
documents, subpoena, civil investigation, demand, or similar process), to be
disclosed. In such event, the Receiving Party shall promptly notify the
Disclosing Party in writing of such requirement so that the Disclosing Party may
seek a protective order or other appropriate remedy and/or waive compliance with
the provisions hereof. The Receiving Party will use its best efforts, at the
Disclosing Party’s expense, to obtain or assist the Disclosing Party in
obtaining any such protective order. Failing the entry of a protective order or
the receipt of a waiver hereunder, the Receiving Party may disclose, without
liability hereunder, that portion (and only that portion) of the Proprietary
Information that the Receiving Party has been advised by written opinion of
counsel reasonably acceptable to the Disclosing Party that it is legally
compelled to disclose; provided that the Receiving Party agrees to use
commercially reasonable efforts to obtain assurance that confidential treatment
will be accorded such Proprietary Information by the person or persons to whom
it was disclosed.

13.15 No Partnership. This Agreement does not constitute and shall not be
construed to constitute a partnership or joint venture between Licensor and
Licensee. Neither party shall have any right nor authority to obligate or bind
the other party in any manner whatsoever, and nothing herein shall give, or is
intended to give, any rights of any kind to any third persons.

13.16 Bankruptcy Related Provisions.

(a) The parties hereby agree and intend that this Agreement is an executory
contract governed by Section 365 of the U.S. Bankruptcy Code (“Bankruptcy
Code”).

(b) In the event of Licensee’s bankruptcy, the parties intend that any royalties
payable under this Agreement during the bankruptcy period be deemed
administrative claims under the Bankruptcy Code because the parties recognize
and agree that the bankruptcy estate’s enjoyment of this Agreement will
(i) provide a material benefit to the bankruptcy estate during its
reorganization and (ii) deny Licensor the benefit of the exploitation of the
rights through alternate means during the bankruptcy reorganization.

(c) The parties acknowledge and agree that any delay in the decision of the
trustee of the bankruptcy estate to assume or reject the Agreement (the
“Decision Period”) materially harms Licensor by interfering with Licensor’s
ability to alternatively exploit the rights granted under this Agreement during
a Decision Period of uncertain duration. The parties recognize that arranging

 

- 46 -

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

appropriate alternative exploitation would be a time consuming and expensive
process and that it is unreasonable for Licensor to endure a Decision Period of
extended uncertainty. Therefore, the parties agree that the Decision Period
shall not exceed sixty (60) days.

(d) Licensor, in its interest to safeguard its valuable interests (including,
without limitation, its intellectual property rights in the Licensed Property),
has relied on the particular skill and knowledge base of Licensee. Therefore,
the parties acknowledge and agree that in a bankruptcy context this Agreement is
a license of the type described by Section 365(c)(1) of the Bankruptcy Code and
may not be assigned without the prior written consent of the Licensor.

13.17 Entire Agreement This Agreement constitutes the entire Agreement between
the parties concerning the subject matter hereof and cancels and supersedes any
prior understandings and agreements between the parties hereto with respect
thereto. There are no representations, warranties, terms, conditions,
undertakings or collateral agreements, expressed, implied or statutory, between
the parties other than as expressly set forth in this Agreement.

13.18 Acceptance by Licensor This instrument, when signed by Licensee, shall be
deemed an application for license and not a binding agreement unless and until
accepted by Licensor by signature of a duly authorized officer and the delivery
of such a signed copy to Licensee. The receipt and/or deposit by Licensor of any
check or other consideration given by Licensee and/or delivery of any material
by Licensor to Licensee shall not be deemed an acceptance by Licensor of this
application. The foregoing shall apply to any documents relating to renewals or
modifications hereof.

13.19 Execution by Fax and in Counterparts This Agreement may be executed by
facsimile and in any number of counterparts, all of which together will
constitute one instrument.

13.20 Force Majeure Notwithstanding anything to the contrary set forth in this
Agreement, in the event of the occurrence of any event of force majeure (i.e.,
an act of God, hurricane, flood, tsunami, fire, accident, terrorist acts,
earthquake, war, labor dispute, work stoppage and similar matters outside of a
party’s control), which event has the effect of materially interfering with such
party’s ability to develop and/or exploit the rights granted under this
Agreement (“Force Majeure Event”), each Party’s obligations under this Agreement
shall be suspended for the period of time such party is materially affected by
such Force Majeure Event, plus a reasonable period thereafter to resume normal
business activities (such reasonable period thereafter not to exceed two
(2) weeks). In the event that the suspension of either party’s obligations under
this Agreement by reason of any Force Majeure Event exceeds six (6) months, the
other party may, by written notice, terminate this Agreement. In such event,
payments of the Guaranteed Fee, Royalties and Consulting Fees due from Licensee
hereunder **** that would have become due hereunder after the date of
termination of this Agreement, had this Agreement not terminated by reason of
any Force Majeure Event, and no portion of any payments of the Guaranteed Fee,
Royalties and Consulting Fees required to be made by Licensee pursuant to this
sentence, or of any prior payments, shall be repayable to Licensee.

13.21 Interpretation of Language The language in all parts of this Agreement
will be interpreted simply, according to its fair meaning, and not strictly for
or against any party regardless of which party drafted this Agreement.

 

- 47 -

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

The parties hereto have caused this Agreement to be executed by their respective
duly authorized representatives as of the dates set forth below.

 

AGREED and ACCEPTED:     AGREED and ACCEPTED:

UNIVERSAL CITY DEVELOPMENT PARTNERS, LTD.

   

WARNER BROS. CONSUMER PRODUCTS INC.

By:  

 

    By:  

 

  William Davis       Ana M. de Castro   President and Chief Operating Officer  
   

Senior Vice President

Business & Legal Affairs

Date:                            Date:                       

 

- 48 -

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

 

Exhibit 8 – Page 49