the Frog, and RAPUNZEL from Disney Tangled, but only depictions of such characters, and accompanying Design Elements, as may be designated by Disney.
Characters from the DISNEY PRINCESS PALACE PETS franchise but only such characters and depictions of such characters, and accompanying artwork, designs and/or other elements, as may be designated by Disney in a style guide(s) or otherwise.
Characters from the animated television series SOFIA THE FIRST , but only such characters and depictions of such characters, and accompanying artwork, designs, and/or other elements, as may be designated by Disney in a style guide(s) or otherwise.
4. Product Categories and Products :
Disney Merchandise Code Category Description Product Description 63110202 Art Prints Art Prints 63140305 Basic Stickers Basic Stickers 63010502 Boxes Boxes 63130705 Coloring & Drawing Sets Coloring & Drawing Sets 63130301 Coloring/Drawing Sets Coloring/Drawing Sets 63110301 Maps / Globes Maps / Globes 63140103 Scrapbook Accessories Scrapbook Accessories 63140202 Scrapbook Albums Scrapbook Albums 63140102 Scrapbook Paper Scrapbook Paper Sand/Glitter Sets, Mould & Pait Magnets Sets, Plaster Photo Frames 63130101 Stationery Arts & Crafts Sets, Origami, Canvas, Canvas Sets, Magnets 63130601 Stencils Stencils Stick & Lift / Static Stickers (Reusable, Stick & Lift / Static Stickers 63140303 Non-Window And Wall) (Reusable, Non-Window And Wall) 63140201 Sticker Albums Sticker Albums 63110108 Unframed Posters Unframed Posters
5. Royalty rates:
Royalty In Rate Royalty Out Rate Property (% of Net Invoiced Billings) (% of Net Invoiced Billings) All Properties except Cars 2, Planes & 14.00% 19.80% Planes: Fire & Rescue Cars 2, Planes & Planes: Fire & Rescue 15.00% 21.30%
Royalty Payment Period : Quarterly during the Term of this Schedule, and during the sell-off period, if granted.
6. Advance and Guarantee payment(s), which are recoupable but non-refundable, and due date(s) (if any) during the Term of this Schedule:
Coverage Period Guarantee Guarantee Due Advance Payment Schedule From To Amount Date Amount Due Date Amount 15/04/2014 € 17,500.00 01/04/2014 31/03/2015 € 35,000.00 15/04/2015 € 35,000.00 15/07/2014 € 17,500.00
2 AN GRO PLUS Ltd /Agreement No: 100-1452565
7. Marketing Date : Planes: Fire and Rescue - No earlier than six (6) weeks prior to the film release date in each territory
8. Samples : 3 items Per Stock Keeping Unit (“SKU”) of each Product to be sent to the following address:
Disney: The Walt Disney Company Limited Address : 3 Queen Caroline Street, Hammersmith, London W6 9PE, United Kingdom Attention: Dorota Biala-Antoniak
9. Authorised Customers :
"Retailers " mean independent and chain retail outlets whose primary activity is selling merchandise which have storefronts and business licenses, and where customers walk into the physical store locations. The following do not qualify as Retailers or as authorised sales outlets for Products under this Agreement under any circumstances: swap meets, flea markets, street peddlers, unauthorised kiosks, or the like.
“Etailers ” mean internet-based retailers that sell merchandise to consumers and have few or no physical store locations. Any internet sales (through Etailers or Licensee’s website) permitted under this Agreement are subject to and must comply with the eCommerce Guidelines as set forth on DisneyConsumerProducts.com. For new licensees, a copy of the eCommerce Guidelines will be provided in hard copy form, upon request.
“Catalogues ” mean mail order catalogues that sell merchandise to consumers.
"Wholesaler " means a seller of merchandise to Retailers or Etailers, not consumers, and includes the term "distributor".
“Consumers ” means a purchaser of a Product for personal use rather than resale.
10. Promotion Commitment: 2% of Net Invoiced Billings in the Territory
11. Sell-Off Period: 3 months (if granted)
12. Address for Notices :
Licensee : AN GRO PLUS Ltd Address : 21 Kosmicheskaya Str., 61145, Ukraine Attention : Managing Director
Disney: The Walt Disney Company Limited Address : 3 Queen Caroline Street, Hammersmith, London, W6 9PE, England Fax : +44 (0) 208 222 1087 Attention : Contract Management Centre
13. Legal notices/Special provisions:
The word Disney or the letter D in the Disney signature script together or alone may not be featured on the exterior of a Product which features any Disney Character Artwork on its exterior except that the word Disney in the Disney signature script may be featured on the exterior of such a Product but only as part of a relevant film title relating to the featured Disney Character Artwork as may be designated by Disney. “Disney Character Artwork” means the image of a character from one of the Properties and/or the name of a character from one of the Properties and the title of any film listed in the Properties but does not include
3 AN GRO PLUS Ltd /Agreement No: 100-1452565
generic terms for groups of characters (as an example and without limitation the term “Princess”).
General Disney Copyright Notice
Without limiting the provisions of Paragraph 11 of the Agreement, and if any other special copyright provision is not applicable under this Paragraph, the Products and PA Materials shall display a copyright notice as follows: © Disney
For Products using the DISNEY ●PIXAR CARS 2 Property:
Licensee agrees to comply with the most current Style Guide for all Properties posted on DisneyConsumerProducts.com or as otherwise provided by Disney.
1) Copyright notices : © Disney/Pixar
(i) When using the DISNEY ●PIXAR CARS 2 characters or backgrounds identified below (if licensed hereunder), Licensee agrees to include the following long form trademark and/or copyright notices on Products and PA Materials bearing artwork from the applicable DISNEY ●PIXAR CARS 2 character(s) or background(s). However, where it is impracticable to use the long form notice because space is extremely limited (e.g., on a hang tag or neck label), Licensee agrees to use the appropriate short form notices identified in the chart below:
Character Name Long Form Legal Notice Short Form Notice Restrictions Acer AMC and Pacer are trademarks Pacer™ of Chrysler LLC. Alberto FIAT is a trademark of FIAT FIAT™ Only character’s first (Francesco fan) S.p.A. name is approved. Any last name will need to be approved. Alex Carvill FIAT is a trademark of FIAT FIAT™ (WGP security van) S.p.A. Alex Vandel The trademarks OPEL and OPEL and ZAFIRA are ZAFIRA are registered registered TM of Opel trademarks of Opel Eisenach Eisenach or affiliates. GmbH/GM UK Ltd. Alfredo IVECO is a trademark of IVECO® No use of the medical (Italian ambulance) IVECO SpA symbol alone/disembodied from the ambulance. Alloy Hemberger The trademarks OPEL and OPEL and CORSA are CORSA are registered registered TM of Opel trademarks of Opel Eisenach Eisenach or affiliates. GmbH/GM UK Ltd. Austin Littleton If “Mini” or “Cooper” is If “Mini” or “Cooper” is (Nigel’s crew chief) visible, then use: visible, then use:
MINI/COOPER is a trademark MINI™, COOPER™ of BMW AG. Becky Wheelin MINI is a trademark of BMW MINI™ AG.
4 AN GRO PLUS Ltd /Agreement No: 100-1452565
If “Cooper” is also visible, If “Cooper” is also visible, then use: then use: MINI™, COOPER™ MINI/COOPER is a trademark of BMW AG. Benny “The Butcher” AMC and Pacer are trademarks Pacer™ Pacer of Chrysler LLC. Big Bentley Bentley is a trademark of Bentley™ Bentley Motors Limited. Bindo Maserati logos and model Maserati™ designations are trademarks of Maserati S.p.A. and are used under license. Bob Moter The trademarks OPEL and OPEL and CORSA are CORSA are registered registered TM of Opel trademarks of Opel Eisenach Eisenach or affiliates. GmbH/GM UK Ltd. Bob Whitewall FIAT is a trademark of FIAT FIAT™ S.p.A. Brent Mustangburger Mustang is a trademark of Ford Mustang™ If “RSN” is shown on Motor Company. side of car, then the words “Racing Sports Network” must also be included. Brett Wornwagen Volkswagen trademarks, design ©Volkswagen AG patents and copyrights are used with the approval of the owner Volkswagen AG. Cadillac Range Background inspired by the background Cadillac Ranch by Ant Farm (Lord, Michels and Marquez) © 1974. [ Note: must be the same size as“©Disney/ Pixar” notice ] Car-Car dancers Mazda Miata is a trademark of Mazda Miata™ Mazda Motor Corporation. Carateka No use on or in (background Japan connection with arcade cube) or video/console games. Carla Veloso’s other The trademarks OPEL and OPEL and CORSA are race fan CORSA are registered registered TM of Opel trademarks of Opel Eisenach Eisenach or affiliates. GmbH/GM UK Ltd. Carlo Maserati Maserati logos and model Maserati™ designations are trademarks of Maserati S.p.A. and are used under license. Cartney Brakin If “ Hudson Hornet ” is visible, If “ Hudson Hornet ” is “Lightning McQueen” (Lightning McQueen’s then use: visible, then use: should always be used Superfan) as a unitary mark. Hudson Hornet is a trademark Hudson Hornet™ “McQueen” may never of Chrysler LLC. be used alone. Chauncy Fares ©TM 2012 LTI LTD trading as ©TM 2012 LTI LTD
5 AN GRO PLUS Ltd /Agreement No: 100-1452565
(London taxi cab) the London Taxi Company. Corporal Josh Coolant Land Rover is a trademark of Land Rover™ Land Rover. If “Range Rover” also is If “Range Rover” is also visible, then use: visible, then use: Range Rover™, Range Rover and Land Rover Land Rover™ are trademarks of Land Rover. Cruz Besouro Volkswagen trademarks, design ©Volkswagen AG (Carla’s crew chief) patents and copyrights are used with the approval of the owner Volkswagen AG. Darrell Cartrip Monte Carlo is a trademark of Monte Carlo™ General Motors. Darrell Waltrip marks used by permission of Darrell Waltrip Motor Sports. Denise Beam No use of the term “D. (Carla Veloso’s race Ream” in connection fan; background with musical character) performances or recorded music. Doc Hudson Hudson Hornet is a trademark Hudson Hornet™ No use in connection of Chrysler LLC. with jewellery, watches, cosmetics or personal care products. Don Crumlin AMC and Gremlin are Gremlin™ trademarks of Chrysler LLC. Doug Speedcheck Mondeo is a trademark of Ford Mondeo™ (London police car) Motor Company. Easter Buggy Volkswagen trademarks, design ©Volkswagen AG (from Easter-themed patents and copyrights are used CARS book ) with the approval of the owner Volkswagen AG. Fabrizio No use of “Namir” name. Note: Licensee must contact the category manager prior to commencing development on Products with this character. Fernando Alonso No merchandise use. (Spanish racer) Ferrari F430 and/or No publishing or Ferrari Elements merchandise use. In addition, may not be used with any CARS umbrella programs that contain any CARS 2 elements or characters. Fillmore Volkswagen trademarks, design ©Volkswagen AG Fillmore must include
6 AN GRO PLUS Ltd /Agreement No: 100-1452565
patents and copyrights are used the “VW in a circle” with the approval of the owner logo in front and may Volkswagen AG. not include any other variation of the VW logo (e.g., peace sign within the circle). Flash Character name (Swedish racer) available for use in U.S. only. Use approved character bio only. Flo No use in connection with jewellery, cosmetics or personal care products.
Flo’s approved character bio must be used in its entirety, and “MOTORAMA” may not be used outside of that context.
“Flo’s V8 Café” may not be used in connection with restaurants, food or beverages. Franca FIAT is a trademark of FIAT FIAT™ S.p.A. Francesca FIAT is a trademark of FIAT FIAT™ S.p.A. Francesco Bernoulli No use in connection (#1 racer) with watches. Frank Clutchenson FIAT is a trademark of FIAT FIAT™ (Francesco’s race fan) S.p.A. Fred Pacer AMC and Pacer are trademarks Pacer™ of Chrysler LLC. Frosty Winterbumper Character name (Australian racer) available for use in U.S. only. Use approved character bio only. Grem AMC and Gremlin are Gremlin™ No use in connection trademarks of Chrysler LLC. with skateboards. Guido No publishing or merchandise use of Guido with Ferrari flags/ logos. In addition, Guido with Ferrari flags/logos may not be used with any CARS umbrella program that contains any CARS 2 elements or characters. Harumi No use except in
7 AN GRO PLUS Ltd /Agreement No: 100-1452565
(Import Groupie B) connection with toys and die-cast cars. Hudson Hornet Piston Hudson Hornet is a trademark Hudson Hornet™ Cup of Chrysler LLC. Ichigo No use in connection (Import Groupie C) with apparel, toys (except die cast vehicles), games, electronics, decorations, or related products. Italian police car FIAT is a trademark of FIAT FIAT™ (Polizia) S.p.A. Italian rescue No use of the medical helicopter (unnamed symbol background character) alone/disembodied from the rescue helicopter. J. Curby Gremlin AMC and Gremlin are Gremlin™ trademarks of Chrysler LLC. Japanese police car Majesta is a trademark of Majesta™ Toyota. Jeff Gorvette Corvette is a trademark of Corvette™ Products using the “Jeff (#24 racer) General Motors. Gorvette ” character with the number “24” and/or the “Jeff Gorvette” signature may not be sold at any NASCAR tracks or events, including parking lots and other areas customarily used to conduct and support an event at the race track. (See “No Track or Trackside Distribution Channels” section below.) Also, no publishing or merchandise use of any stylised “24” except as it appears on the Jeff Gorvette character. Josh Haullander Ape is a trademark of Piaggio. Ape™ Kabuto No use in connection with helmets, glasses, visors, goggles, sunglasses, musical instruments, or related
products. No use of “Mach” model name in connection with this character. Kimberly Rims Mazda Miata is a trademark of Mazda Miata™ Mazda Motor Corporation.
8 AN GRO PLUS Ltd /Agreement No: 100-1452565
Lee Racé Peugeot is a trademark of Peugeot™ (scientist with beaker) Peugeot. Lewis Hamilton No use of “LH” “Lewis Hamilton” name and signature may only be used when character is alone and NOT with other characters. Note: Character (without name and signature) may be used with other characters. Lightning McQueen If “ Hudson Hornet ” is visible, If “Hudson Hornet ” is “Lightning McQueen” then use: visible, then use: should always be used as a unitary mark. Hudson Hornet is a trademark Hudson Hornet™ “McQueen” may never of Chrysler LLC. be used alone.
If “Sarge’s Surplus Hut” If “Sarge’s Surplus Hut” sticker is identifiable, then use: sticker is identifiable, character may not be “Sarge’s rank insignia design used in connection with used with the approval of the any sweep stakes, lottery, U.S. Army” game of chance or any similar promotional sales device, scheme, or program. Lightyear Blimp Blimp character should not be called anything other than Lightyear Blimp. Lizzie Model T is a trademark of Ford Model T™ Motor Company. Long Ge Character’s name in (Chinese racer) Chinese characters must always be accompanied by the name “LONG GE” and may not be used alone. Luigi FIAT is a trademark of FIAT FIAT™ No use in connection S.p.A. with frozen desserts.
No publishing or merchandise use of Luigi with Ferrari flags/ logos. In addition, Luigi with Ferrari flags/logos may not be used with any CARS umbrella program that contains any CARS 2 elements or characters. Mack Mack is a trademark of Mack Mack™ No use in connection Trucks, Inc. with cosmetics or
9 AN GRO PLUS Ltd /Agreement No: 100-1452565
personal care products; however, use is OK in connection paper towels, facial tissue, diapers, pull-ups and baby wipes. Mama Bernoulli No use in connection with watches. Mama Topolino Topolino is a trademark of Topolino™ FIAT S.p.A. Mark Wheelsen Ford and Mondeo are Mondeo™ (London police car) trademarks of Ford Motor Company. Mary Escocar Peugeot is a trademark of Peugeot™ (casino vendor ) Peugeot. Maserati fountain Maserati logos and model Maserati ™ designations are trademarks of Maserati S.p.A. and are used under license. Maurice Wheelks © Disney/Pixar. Land Rover is © Disney/Pixar, Use approved character a trademark of Land Rover. Land Rover™ bio only. Mel Dorado El Dorado is a trademark of El Dorado™ General Motors. Mia / Tia Mazda Miata is a trademark of Mazda Miata™ Mazda Motor Corporation. Mike Lorengine Range Rover and Land Rover Range Rover™, are trademarks of Land Rover. Land Rover™ Military Truck Land Rover is a trademark of Land Rover™ Land Rover. If “Range Rover” is also If “Range Rover” is also visible, then use: visible, then use: Range Rover™, Range Rover and Land Rover Land Rover™ are trademarks of Land Rover.
Nate Stanchion MINI is a trademark of BMW MINI™ (Allinol scientist) AG. If “Cooper” is also visible, If “Cooper” is also visible, then use: then use: MINI™, COOPER™ MINI/COOPER is a trademark of BMW AG.
Petey Pacer AMC and Pacer are trademarks Pacer™ of Chrysler LLC. Petro Cartalina The trademarks OPEL and OPEL and CORSA are (Miguel Camino’s CORSA are registered registered TM of Opel crew chief) trademarks of Opel Eisenach Eisenach or affiliates. GmbH/GM UK Ltd. Professor Z This character should only be called “Professor Z” (no other iteration of this
10 AN GRO PLUS Ltd /Agreement No: 100-1452565
character’s name is approved). Queen’s security Range Rover and Land Rover Range Rover™, guards are trademarks of Land Rover. Land Rover™ Ramone Chevrolet Impala is a Chevrolet™ No use in connection trademark of General Motors. with jewellery or watches. Red May not be referred to as “Big Red Car” or “Big Red.” RIP Clutchgoneski No publishing or (#10 racer) merchandise use of term “F6000 Racer” (use of revised description “Formula 6000 Racer ” is OK). Roger Hackney ©TM 2012 LTI LTD trading as ©TM 2012 LTI LTD (London taxi cab) the London Taxi Company. Sajan Karia BMW is a trademark of BMW BMW™ (background AG. cameraman) Sal Machiani Ape is a trademark of Piaggio. Ape™ Sally Porsche is a trademark of Porsche™ No use in connection Porsche. with computer or video games or computer or video accessories. Sarge Jeep® and the Jeep® grille Jeep® No use of the sergeant design are registered major rank insignia in trademarks of Chrysler LLC. connection with any sweepstakes, lottery, If Sarge’s badge is used, then game of chance or any use: “Sarge’s rank insignia similar promotional design used with the approval sales device, scheme, or of the U.S. Army” program. Sgt. Highgear Land Rover is a trademark of Land Rover™ (Queen’s guard) Land Rover. Sharon Caravan Volkswagen trademarks, design ©Volkswagen AG patents and copyrights are used with the approval of the owner Volkswagen AG. Sheriff Mercury is a trademark of Ford Mercury™ Motor Company. Sir Boot Berry Range Rover and Land Rover Range Rover™, (Buckingham Palace are trademarks of Land Rover. Land Rover™ dignitary) Sir Harley Gassup Tatra is a trademark of Tatra™ TATRA, a.s. Suki No use in connection (Import Groupie A) with personal care products, jewellery, apparel, glasses, dolls, beverages, foods, or related products. Taia Decotura If Francesco Bernoulli’s
11 AN GRO PLUS Ltd /Agreement No: 100-1452565
(“Tire Talky” truck) name appears on side of truck, please see entry for “Francesco Bernoulli” and note watches restriction. Tarmac – Passenger No merchandise use of Stair Truck image with “STUTT” on (background character) side. Tony Trihull No merchandise use. Limited/background use in publishing products only. Towin’ Eoin IVECO is a trademark of IVECO® (WGP tow truck) IVECO SpA Trike Feldman Ape is a trademark of Piaggio. Ape™ (street vendor pitty) Tubbs Pacer AMC and Pacer are trademarks Pacer™ of Chrysler LLC. Tyler Gremlin AMC and Gremlin are Gremlin™ trademarks of Chrysler LLC. Uncle Topolino Topolino is a trademark of Topolino™ FIAT S.p.A. Uncle Topolino’s Topolino is a trademark of Topolino™ Band FIAT S.p.A. Victor H. This character should only be called “Victor H.” (no other iteration of this character’s name is approved for use). WGP Safety Car Maserati logos and model Maserati™ (Maserati w/in-house designations are trademarks of deco) Maserati S.p.A. and are used under license.
The chart above represents known third-party legal notices and character product restrictions to date. For the avoidance of doubt, references to products in the “Restrictions” column above do not constitute or imply a license with respect to any Product Categories that are not specifically licensed under the License Agreement. Additional notices and restrictions may be added as they become known. For Products and PA Materials using the DISNEY ●PIXAR CARS 2 Property, Licensee is responsible for checking the most up-to-date Style Guide (including Legal pages) on the DisneyConsumerProducts.com website.
(ii) Where multiple and varying characters are used in a product line, and it is impracticable to separately apply copyright and/or trademark notices, it would be preferable to use the following long form general IP notice on Products and PA Materials:
“Disney/Pixar elements © Disney/Pixar; rights in underlying vehicles are the property of the following third parties, as applicable: Bentley is a trademark of Bentley Motors Limited; BMW and MINI are trademarks of BMW AG; AMC, Gremlin, Hudson Hornet and Pacer are trademarks of Chrysler LLC; Jeep® and the Jeep® grille design are registered trademarks of Chrysler
12 AN GRO PLUS Ltd /Agreement No: 100-1452565
LLC; Darrell Waltrip marks used by permission of Darrell Waltrip Motor Sports; FIAT, Panda and Topolino are trademarks of FIAT S.p.A.; Ford, Mercury, Model T, Mondeo and Mustang are trademarks of Ford Motor Company; Chevrolet Impala, Corvette, El Dorado and Monte Carlo are trademarks of General Motors; IVECO is a trademark of IVECO SpA; Range Rover and Land Rover are trademarks of Land Rover; ©TM 2012 LTI LTD trading as the London Taxi Company; Mack is a trademark of Mack Trucks, Inc.; Maserati logos and model designations are trademarks of Maserati S.p.A. and are used under license; Mazda Miata is a trademark of Mazda Motor Corporation; The trademarks OPEL, VAUXHALL, ASTRA, CORSA, MERIVA and ZAFIRA are registered trademarks of Opel Eisenach GmbH/GM UK Ltd; Peugeot is a trademark of Peugeot; Ape is a trademark of Piaggio; Carrera and Porsche are trademarks of Porsche; Tatra is a trademark of TATRA, a.s.; Majesta is a trademark of Toyota; Sarge’s rank insignia design used with the approval of the U.S. Army; Volkswagen trademarks, design patents and copyrights are used with the approval of the owner Volkswagen AG; Background inspired by the Cadillac Ranch by Ant Farm (Lord, Michels and Marquez) © 1974.”
(iii) Where multiple and varying characters are used in a product line, where it is impracticable to separately apply copyright and/or trademark notices, and where space limitations prevent the inclusion of the long form general IP notice above, use the following short form general IP notice on Products and PA Materials:
“©Disney/Pixar; rights in underlying vehicles are the property of third parties, as applicable: AMC™; Ape™; Bentley™; BMW™; Carrera™; Chevrolet™; Corvette™; El Dorado™; FIAT™; Gremlin™; Hudson Hornet™; IVECO®; Jeep®; Land Rover™; ©TM 2012 LTI LTD; Mack™; Majesta™; Maserati™; Mazda Miata™; Mercury™; MINI™; Model T™; Ford, Mondeo™; Monte Carlo™; Mustang™; Pacer™; Panda™; OPEL, VAUXHALL, ASTRA, CORSA, MERIVA and ZAFIRA are registered TM of Opel Eisenach or affiliates; Peugeot™; Porsche™; Range Rover™; Tatra™; Topolino™; ©Volkswagen AG.”
(b) Special Provisions:
For Products using the DISNEY ●PIXAR CARS 2 Property, Licensee is responsible for checking the most up-to-date Style Guide (including Legal pages) on the DisneyConsumerProducts.com website. Currently, the requirements include the following:
(i) The CARS 2 title logo also must be accompanied by, and in close proximity to, both character artwork and the branding “Disney●Pixar” on all advertising and promotional material, and all packaging, including hang tags (if applicable), unless otherwise directed during the approval process.
(ii) Character names may not be used alone on product. If character names are used, they must always appear with character art and the film logo, accompanied by the branding set forth above.
(c) No Track or Trackside Distribution Channels:
For the avoidance of doubt, Products using the “Jeff Gorvette” character with the number “24” and/or the “Jeff Gorvette” signature in connection with the CARS 2
13 AN GRO PLUS Ltd /Agreement No: 100-1452565
Property shall not be sold at any Track or Trackside Distribution Channels, as those terms are defined herein. “Track” means all NASCAR National Series race tracks and the contiguous surrounding areas owned and controlled by the entity that owns the race track, including, but not limited to, parking lots and other areas that are customarily used to conduct and support an event at the race track. “Trackside Distribution Channel” is property owned, leased or controlled by and located at a Track only while that property is being used during or in connection with a NASCAR National Series event.
For products using the DISNEY PLANES: FIRE & RESCUE property:
(a) Copyright notice : © Disney
(b) Special Provisions :
Licensee and Disney recognise that the Property is presently under development, and certain special provisions may need to be added to this Schedule, and/or certain provisions hereof may need to be revised, based on the specific terms and conditions as may be applicable to the Property when determined. Said provisions will not change any of the business terms set forth on this Schedule. Licensee and Disney hereby agree to the addition of such special provisions to this Schedule, to be automatically incorporated herein by written notice from Disney to Licensee.
14 AN GRO PLUS Ltd /Agreement No: 100-1452565
LICENSE AGREEMENT № 100-1452565
This License Agreement, including all Schedules and Attachments, (this “Agreement”) is entered into as of ______by and between The Walt Disney Company Limited (“Disney”), 3 Queen Caroline Street, Hammersmith, London W6 9PE, United Kingdom , and AN GRO PLUS Ltd (“Licensee”), 21 Kosmicheskaya Str., 61145, Ukraine. At the time of execution of this Agreement, there is one (1) Schedule attached. Disney and Licensee agree as follows:
1. LICENSED MATERIAL
The material licensed under this Agreement (“Licensed Material”) is comprised of Creative Works and Trademarks as defined below:
1.1 “Creative Works” consists of depictions of characters and such accompanying artwork as may be designated by Disney from the properties specified in any Schedule to this Agreement (“Properties”).
1.2 “Trademarks” (which is deemed to read “Trade Marks”, if applicable) consists of the words, names, designs, logos, brands, symbols, devices, trade dress, alone or in any combination thereof, pertaining to the Properties, including the name “Disney”, but only as specifically designated by Disney, and subject to any special restrictions as to usage as may be identified by Disney. Unless otherwise specified in a Schedule, the “Disney” brand name and logo may only be used together with character artwork on Products.
2. PRODUCT CATEGORIES
The term “Product” or “Products shall mean those items of merchandise using Licensed Material which are specifically identified on a Schedule to this Agreement and which fall within a Product Category and which are designed, created, manufactured, sourced and/or sold by Licensee pursuant to the terms and conditions of this Agreement. The term “Product Categories” shall mean those merchandise categories, if any, which are specifically identified on a Schedule to this Agreement.
3. TERM
The “Term” of this Agreement is the period commencing at the start of the earliest period stated on a Schedule, and ending upon the expiration of the Agreement at the end of the latest period stated on a Schedule, or upon the earlier termination of this Agreement. The “Effective Date” on any Schedule is the date when Licensee may begin exercising its rights thereunder. The “End Date” on any Schedule is the date by which Products shall no longer be manufactured, distributed or sold thereunder, subject to any sell-off permitted under this Agreement.
4. TERRITORY
In respect of the rights granted under an applicable schedule the "Territory" shall mean the countries, regions or other geographic designations specified on such applicable Schedule and the “ Passive Sales Territory ” shall mean the Territory plus, if the Territory includes any area within the European Economic Area, the remainder of the European Economic Area. The Territory of any Agreement shall not include any country prohibited by U.S. Government trade restrictions or other applicable Laws. Disney shall have the right at any time to withdraw any country in which it determines it is not in the interests of Disney to conduct business (including without limitation for reasons of intellectual property protection and enforcement, concerns for political or human rights, or environmental protection). If a
15 AN GRO PLUS Ltd /Agreement No: 100-1452565
country becomes prohibited due to trade restrictions by the U.S. Government or other applicable Laws, the prohibition shall be automatic as of the effective date of the trade restriction or other Law without need of any notice from Disney. It is Licensee’s responsibility to monitor any such changes. If a country becomes prohibited due to Disney’s determination, Disney shall provide reasonable notice to Licensee of the prohibition. Disney may provide such notice through the DCP Website.
5. GRANT OF RIGHTS
5.1 Disney grants to Licensee a non-exclusive license, at Licensee’s sole expense, to use the Licensed Material to design, create, manufacture, source, and sell the Products to Authorised Customers as specified in this Agreement or applicable Schedule, during the Term and in the Territory, in accordance with the terms of this Agreement. Licensee recognises, acknowledges and agrees that Disney and Disney Enterprises, Inc. (“DEI”) each expressly reserve all of their intellectual property rights with respect to activities outside of the Territory and Licensee’s infringement of any such rights or its active encouragement of or active involvement in infringement of such rights shall constitute a material breach of this Agreement. Accordingly Licensee will refrain from direct acts of exploitation or encouraging third parties from engaging in such acts outside of the Territory. Further Licensee may not sell or otherwise distribute any of the Products to any party if Licensee knows or in the exercise of prudent business judgment should know that such sale(s) ultimately will result in the exporting of Products for resale to end-users outside of the Passive Sales Territory. For the avoidance of doubt (i) Licensee may make use of a manufacturing facility or third party Manufacturer located outside of the Territory for which it has received permission from Disney in accordance with paragraph 9 and (ii) the Licensee may fulfil unsolicited orders for Products received from customers outside of the Territory but within the Passive Sales Territory provided that the order is for delivery or resale within the Passive Sales Territory.
5.2 Disney further grants to Licensee a non-exclusive license to reproduce the Licensed Material on containers, packaging and display material for the Products, and in advertising for the Products in accordance with the terms of this Agreement.
5.3 Unless Disney consents in writing (such consent not to be unreasonably withheld), Licensee shall not (i) sell or otherwise provide Products for use as premiums, promotions, give-aways, fund-raisers, or prizes in contests or sweepstakes, (ii) sell Products by or use direct mail and marketing methods to sell Products or to sell Products to third parties that sell by or use direct marketing methods (other than those expressly permitted in paragraph 6.4 of this Agreement) and door-to-door solicitation, concession sales, vending machines, swap meets, flea markets, street peddlers or unapproved marketing methods or home shopping television programmes. Licensee shall not use the Products or Licensed Material in connection with any manner of television, radio, motion picture, moving image clip, webcast, internet broadcast, sound and/or visual recording or transmission device or media, or anything in the nature of the foregoing, now known or hereafter devised, without Disney’s prior written consent.
5.4 Licensee hereby grants permission to Disney to receive, review and use point-of-sale (“POS”) information about Licensee’s sales of Products under this Agreement, including the POS information for the ultimate Retailer of the Products. Such POS information may include retail sales, retail sell through information, inventory and order information regarding Licensee’s sales of Products to such Authorised Customers (including sales to Consumers by the ultimate Retailer) subject to Disney obtaining the consent of such Authorised Customer to receive its POS information.
16 AN GRO PLUS Ltd /Agreement No: 100-1452565
This POS information will not be identified as raw data specific to Licensee outside of Disney. Licensee agrees to notify Authorised Customers that Disney has Licensee’s permission to receive, review and use the POS information relating to Licensee, and to promptly confirm such permission whenever requested by a an Authorised Customer. Licensee agrees to provide to Disney EAN numbers for each Product prior to the marketing of each Product so that Disney may obtain POS information by EAN number. Licensee agrees to promptly confirm to Retailers Disney’s permission to receive information regarding EAN numbers.
5.5 Without limiting the generality of the term “non-exclusive” as used in Paragraph 5.1, nothing contained in this Agreement shall impair, restrict or limit in any manner whatsoever the right or ability and freedom of Disney, its Affiliates and/or Disney Authorised Entities, on their own or through a license: (i) to develop, produce, source, manufacture, promote, market, advertise, sell, distribute and/or promotionally give away merchandise similar or identical to the Products or items within the Product Categories and (ii) to conduct tie in and cross promotions and advertising with third parties in connection with the Properties which promotions may involve merchandise similar or identical to the Products or items within the Product Categories. As used in this Agreement “Disney Authorised Entities” means theme parks, live entertainment productions, retail stores, catalogues, websites or other facilities or venues that transact business with customers or consumers, including without limitation, The Disney Stores, DisneyShopping.com and/or The Disney Catalogue, that are owned, co-owned and/or operated by Disney or any Disney Affiliates, and/or operated by any third party, whether by way of license, joint venture, franchise, ownership (in whole or in part) or otherwise. As used in this Agreement, “Affiliate” shall mean, with regard to either party, any corporation or other entity that directly or indirectly controls, is controlled by, or is under common control with the party. "Control" of an entity shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies of such entity, whether through ownership of voting securities, by contract or otherwise.
5.6 Licensee agrees to conduct all of its activities relating to this Agreement, and represents and warrants that all such activities will be conducted, in accordance with any and all applicable Laws. “Laws” means applicable laws, rules, and regulations, including without limitation, local and national laws, rules and regulations, directives, treaties, voluntary industry standards (if any), and other legal obligations pertaining to this Agreement and/or to any of Licensee's activities under this Agreement, including without limitation, those applicable to any tax, consumer and/or product safety, data privacy and the privacy and protection of personally identifiable information, the protection of minors, employees, and the environment, the United States Foreign Corrupt Practices Act of 1977 and any amendments thereto (and any local or foreign equivalent), the UK Bribery Act 2010, and the manufacture, pricing, sale, or distribution of the Products. Licensee further agrees to enter into and comply with the provisions of relevant third party patent licenses and timely pay all royalties or other fees due for any and all patent technologies used in or in connection with the Products (e.g. MP3 royalties) if any, and to provide Disney with documentation of such timely payments on a calendar quarterly basis. Nothing in this Agreement shall be deemed to imply any restriction on Licensee’s freedom to sell the Products at such prices as Licensee shall determine.
5.7 In the course of dealing with Disney, Licensee will necessarily supply to Disney business contact information some of which may qualify as personal data, such as staff contact details, of which Licensee is the Data Controller as defined in EC Directive 95/46 and Licensee hereby authorises Disney:
17 AN GRO PLUS Ltd /Agreement No: 100-1452565
5.7.1 to use and retain in various systems or databases any such information in the course of exercising its rights and fulfilling its obligations as licensor under this Agreement.
5.7.2 to disclose any such information to any of Disney’s Affiliates, agents or third party service providers for the purpose of carrying out technical, logistical or other functions on behalf of Disney; and
5.7.3 to transfer and process such information globally with any of Disney’s Affiliates, agents or third party service providers as aforesaid in accordance with Disney’s obligations as a Data Controller as defined in EC Directive 95/46;
and Licensee warrants that Licensee has obtained all necessary consents to enable Disney to use, disclose, process and transfer such information as aforesaid, and has informed its staff or contractors of such use and transfers.
5.8 All rights not expressly licensed to Licensee herein are reserved to Disney and DEI.
6. DISTRIBUTION
6.1 Licensee agrees to actively sell the Products only in the Territory as provided in the Agreement or the relevant Schedule. Upon Disney’s request, Licensee agrees to give Disney written notice of the first ship date for each Product. Nothing in this Agreement precludes Licensee from selling Products to Disney or to any of Disney’s Affiliates, or to Licensee’s or Disney’s employees, subject to the payment of Royalties on such sales save that no Royalties shall be payable on such sales where Licensee has notified Disney in advance of such sales and obtained Disney’s written confirmation that no Royalties shall be payable on such sales.
6.2 Licensee shall not actively sell, advertise or promote any Product(s) in, or for resale in, any Quick Service Restaurant (“ QSR ”). QSR means a location, establishment or facility whose primary activity is the sale of value-priced meals prepared on premises, sold at a counter or window, and intended for immediate consumption on premises or for carry-out or home delivery and which (A) is part of a national chain with twenty (20) or more locations, establishments or facilities in any one country within the Territory and (B) is operated and/or marketed to the public under the same brand name as the chain or the other locations, establishments or facilities within the chain, as identified by visible signage and/or logo (such as, by way of example, McDonald’s , Wendy’s, Burger King , Subway , Pizza Hut, KFC , and Taco Bell ). Licensee also shall not actively sell the Products to any theme parks not owned, in whole or in part, or licensed by Disney or any Affiliate of Disney.
6.3 Licensee agrees to actively market the Products and actively exercise the license granted to it hereunder. Licensee agrees that, by the Marketing Date applicable to a particular Product or, if such a date is not specified, by six (6) months from the commencement of the Term of the applicable Schedule or the date of any applicable amendment, such Product shall be available for purchase in commercial quantities by the public. In any case in which such sales have not taken place or when the Product is not then and thereafter available for purchase in commercial quantities by the public, Disney, without obligation to Licensee other than to give Licensee written notice, may invoke Disney's remedies under Paragraph 16, withdraw such Product from the list of Products licensed in this Agreement, or withdraw such Property from the applicable Schedule. Upon such withdrawal: (i) Licensee shall immediately cease any and all uses of and activities in respect of such withdrawn Property or
18 AN GRO PLUS Ltd /Agreement No: 100-1452565
Product; (ii) all rights granted to Licensee with respect there to shall revert to Disney; and (iii) Disney shall be entitled to retain all monies paid to Disney with respect thereto.
6.4 Products approved by Disney may be displayed and advertised and sold to customers located within the Passive Sales Territory on Disney-controlled on-line venues, on Licensee’s own on-line venue, and on retailer’s on-line venues subject to Disney's applicable policies and e-commerce guidelines; however, Licensee must obtain Disney’s prior written approval of all creative and editorial elements of such uses, on its own on-line venue in accordance with the provisions of Paragraph 8 of this Agreement.
7. ROYALTIES, REPORTING AND GUARANTEES
7.1 Royalties
Licensee agrees to pay the following royalties on its Net Invoiced Billings (as defined below) of the Products (the “Royalties”) to Disney:
7.1.1 Licensee agrees to pay to Disney Royalties in an amount equal to the percentage of Licensee’s Net Invoiced Billings for Products specified on the Schedule for In Sales and Out Sales respectively.
7.1.2 Where the sale is of Products located within the Passive Sales Territory at the time of sale it shall be classified as an In Sale.
7.1.3 Where the sale is of Products located outside of the Passive Sales Territory at the time of sale then except as provided in paragraph 7.1.4: “In Sales” are sales where the price paid by the customer of the Licensee for the Products is inclusive of carriage or freight charges to and within the Passive Sales Territory and may also be inclusive of other charges; and “Out Sales” are sales of Products where the price paid by the customer of the Licensee for the Products does not include carriage or freight charges to and within the Passive Sales Territory.
7.1.4 All sales of Products shipped to a customer outside the Passive Sales Territory pursuant to a distribution permission shall bear a Royalty at the rate for Out Sales. In addition, where the sale is of Products located outside of the Passive Sales Territory at the time of sale and the sale is made on a CFR basis as defined in INCO Terms 2000 then such sale shall also be classified as an Out Sale.
7.2 "Net Invoiced Billings", which is the basis upon which Royalties are calculated under this Agreement, means the actual invoiced billings (i.e., sales quantity multiplied by Licensee’s selling price) for Products sold, less Allowable Deductions. Net Invoiced Billings do not include sales taxes, or any applicable goods and services tax or other value added tax (collectively, “VAT”)
7.2.1 “ Allowable Deductions” mean volume discounts, defined as a lower selling price given solely in exchange for the purchase of Products over a specified volume level, and customary discounts, which are attributable to sales of Products and separately identified by SKU of Product on a line by line basis on the sales invoices or credit notes, provided that volume discounts are never deductible if they represent deductions specifically not allowed in paragraph 7.2.2
19 AN GRO PLUS Ltd /Agreement No: 100-1452565
7.2.2 No other discounts or allowances are permitted under this Agreement. By way of illustration and not limitation, Allowable Deductions does not include: cash discounts granted as terms of payment; year end rebates; early payment discounts; allowances or discounts relating to advertising; mark down allowances; new store allowances; logistical discounts, defective goods allowances or allowances taken by customers in lieu of returning goods; shrinkage allowances, costs and expenses incurred, and allowances or discounts voluntarily given, in connection with manufacturing, importing, selling or advertising Products; listing/slotting fees or allowances; retailer partnership agreements; promotion allowances; freight costs incorporated in the selling price; and uncollectible accounts. Other discounts or allowances in the nature of, or similar to, the foregoing examples likewise are not Allowable Deductions.
7.2.3 Returns are not deducted from Net Invoiced Billings. Royalties reported on sales of Products returned to Licensee for credit or refund and on which a refund has been made or credit memo issued may be credited against Royalties due. The credit shall be taken in the Royalty Payment Period in which the refund is given or credit memo issued. Unused credits may be carried forward, but in no event shall Licensee be entitled to a refund of Royalties.
7.3 Royalties paid to Disney on sales of Products to Licensee’s Affiliates shall not be less than the Royalties paid to Disney on sales of such Products to non-affiliated entities, regardless of the Net Invoiced Billing amount charged by Licensee to such Affiliates. Further, if such Affiliate is a reseller of the Products, the sale to such Affiliate shall not be counted as a sale for Royalty calculation purposes but rather, the relevant sale for Royalty calculation purposes shall be that of such Affiliate to its customers. In the event of sales to Licensee’s Affiliates which sell directly to final customers (“Owned Retailers”), then unless a specific rate for Retail Sales is specified in an applicable Schedule Royalties shall not be calculated on sales of such Owned Retailers to final customers but rather, the relevant sales for Royalty calculation purposes shall be Licensee’s sales or sales of Licensee’s Affiliates to such Owned Retailers, provided however, that Royalties paid to Disney on sales of Products to Owned Retailers shall not be less than Royalties paid to Disney on sales of Products to non-Owned Retailers;
7.4 No Royalties are payable on the mere manufacture of Products.
7.5 Unless Disney notifies Licensee in writing to the contrary Licensee shall report sales of Products to Disney’s licensees or Disney’s Affiliates’ licensees on Licensee’s statement but Licensee will not be required to pay Disney Royalties on such sales, so long as Licensee has obtained Disney’s written confirmation that the purchasing licensees are licensed to sell the Products and Licensee has obtained and retained written confirmation from the purchasing licensee that it will pay or has paid Disney or Disney’s Affiliate royalties on the purchases or resales of such Products. Where Licensee purchases Products from Disney’s licensees or Disney’s Affiliates licensees then Licensee shall pay Royalties on its resales of such Products unless it can provide confirmation from its supplier that Licensee has bought such Products on a royalty inclusive basis and that its supplier has paid or will pay Disney or Disney’s Affiliate the relevant royalties on such Products.
20 AN GRO PLUS Ltd /Agreement No: 100-1452565
7.6 Licensee is responsible for any applicable tax on the manufacture, distribution or sale of the Products by Licensee, or any VAT, and no payments to Disney under this Agreement shall be reduced by any VAT.
7.7 Reporting
7.7.1 Licensee shall furnish to Disney by the 15th day after each Royalty Payment Period, a full and accurate statement for each country, on statement forms Disney designates for Licensee’s use, showing all information and level of detail requested by such forms separately for each Property licensed hereunder and including but not limited to, data reported by Product, with stock number and name, any corresponding Disney merchandise code, product approval number and retail destination reference number, invoice quantities and prices, the Royalties payable, quantities, country of sale, Net Invoiced Billings and applicable Royalty rate(s) of Products invoiced during the preceding Royalty Payment Period reported in the currency invoiced to customers and the quantities and invoice value of defective Products returned for credit or refund in such period. The current statement form which may be changed from time to time is attached hereto as Attachment 3 and shall be referred to as the Royalty Statement Form. A Royalty Statement Form is due even if no sales occurred during the period covered by the statement. Licensee agrees to pay Disney all amounts due on or by the fifteenth (15 th ) day after Disney sends a Royalty invoice to Licensee. The Royalty invoice shall indicate the amount, if any, by which cumulative Royalties due as of that date and earned during a Guarantee period exceed the cumulative amount of Advances and Royalties already invoiced by Disney as of that date for the same Guarantee period and Property or group of Properties, plus VAT, if any, and other applicable taxes due thereon. Licensee shall bear any costs associated with the transfer of such payments to Disney.
7.7.2 Licensee’s statements shall identify for each Product the character(s) or other Licensed Material used on each such Product.
7.8 Statements and Payments
7.8.1 All payments are to be made in Euros. The Euro is the currency of EU member states for the time being participating in economic and monetary union under the Treaty on the Functioning of the European Union. In the event an exchange rate is necessary, Licensee shall use the official buying rate of exchange as published by Oanda (www.oanda.com), on the last business day of the applicable calendar quarter, and Licensee shall identify such exchange rate on the Royalty reporting forms. In the event that there is no published exchange rate for a particular currency on such date, then the last exchange rate for such currency published by Oanda (www.oanda.com) shall be used.
7.8.2 Licensee’s payments, including all Royalties , shall be wire transferred to JP Morgan Chase Bank, 125 London Wall, London, EC2Y 5AJ, The Walt Disney Company, Sort Code: 609242, Account Number: 24794501 (SWIFT code: CHASGB2L, IBAN No: GB60CHAS60924224794501) or delivered to such address as Disney designates. Currently, Disney designates the following address for delivery of payments: Disney Consumer Products, (M/C 2832), 3 Queen Caroline Street, Hammersmith, London, W6 9PE, England. If Licensee forwards postal payments by cheque, including
21 AN GRO PLUS Ltd /Agreement No: 100-1452565
Royalties, Licensee shall send the corresponding statement to the foregoing designated delivery address.
7.8.3 Acceptance of any payment from Licensee, whether by wire transfer or otherwise, is not a waiver of any rights on the part of Disney.
7.8.4 On a quarterly basis, or at any time upon request by Disney, Licensee shall provide Disney with information regarding buying plans as well as sell- through projections of Products for the upcoming quarters (“Forecasts”). These Forecasts shall be made by Property, by country (if applicable) and in the local currency, by quarterly periods, by store or regions, by consumer segments, size ranges and subcategories of Products (e.g., sleepwear, footwear, headwear, etc.). Licensee’s Forecasts shall be made on forms which Disney provides, or in a form or delivery medium as required by Disney (including, for example, electronic transmission).
7.8.5 Any amounts due from Licensee to Disney under this agreement which are paid after the due date shall bear interest at the rate of 10% per annum from the due date (or the maximum permissible by law if less than 10%) compounded annually. To the extent that any amounts due from Licensee to Disney are not paid, Licensee authorises Disney to offset amounts due against any sums, which Disney or any Affiliate of Disney may owe to Licensee or any Affiliate of Licensee.
7.8.6 If the Term of the Agreement (or any applicable Schedule or sell-off period) ends on a date which is not the last day of a calendar quarter, Licensee’s statement and Royalties shall be due within fifteen (15) days after the end of the Term, Schedule or sell-off period, as applicable.
7.8.7.1 Licensee and Disney agree that Disney’s copyrighted material constitutes literary, artistic, musical, dramatic, cultural, or scientific works as such terms may be used in the relevant international income tax treaties for purposes of determining any applicable withholding taxes attributable to the Royalties. If in any country in the Territory a withholding tax is imposed on the payment of Royalties from Licensee to Disney, Licensee shall be permitted to deduct from such payment the appropriate amount of withholding taxes so imposed, provided:
a) Licensee properly and timely remits any taxes withheld in the name of Disney, along with all required documentation, to the appropriate governmental agency or agencies; and
b) Contemporaneously with any payment of Royalties, or as soon thereafter as the particular government involved makes the necessary documents available, Licensee shall provide to Disney all withholding tax receipts or other similar official government certifications evidencing all taxes withheld from payments due under this Agreement and the proper and timely remittance of those taxes to the government in the name of Disney; and
c) Licensee cooperates with Disney and provides Disney with any other information or documentation reasonably requested by Disney from time to time to enable Disney to adequately support any foreign tax credit Disney claims which is attributable to taxes withheld by Licensee from payments due to Disney; and
22 AN GRO PLUS Ltd /Agreement No: 100-1452565
d) Licensee agrees that to the extent the relevant income tax treaties provide for an exemption from or a reduced rate of withholding for taxes with respect to any payment, consideration, or remuneration for the use of, or the right to use, copyrights of literary, artistic, musical, dramatic, cultural, or scientific works (as such terms are used in the relevant income tax treaties), Licensee may apply only such exemption or reduced rate of withholding in deducting taxes from any Royalties paid by Licensee to Disney which are attributable to the use of copyrighted material pursuant to this Agreement.
7.8.7.2 In addition to any and all legal and equitable rights and remedies available to Disney, Licensee shall indemnify Disney for any disallowed foreign tax credits, including any interest and penalties associated with such disallowed foreign tax credits, attributable to Licensee’s failure to timely provide the documentation required hereunder and otherwise comply with the provisions of this Paragraph 7.8.7; without limiting the foregoing, if Licensee fails to timely provide tax receipts and other documentation required hereunder, any amount withheld by Licensee shall be deemed to be wrongfully withheld, and said amount shall be due and payable immediately to Disney, including interest as provided in Paragraph 7.8.5, accruing on the amount from the date such amount was wrongfully withheld until the date the payment is received by Disney.
7.8.7.3 Licensee’s obligations under the provisions of this Paragraph 7.8,7 shall survive termination, cancellation or expiration of this Agreement.
7.9 Advances and Guarantees
7.9.1 “Advance” means the non-refundable sum(s), not reduced by any VAT, stated in each Schedule, payable by the indicated date(s), as an advance on Royalties to accrue in the period(s) stated in the applicable Schedule.
7.9.2 Royalties accruing during any sell-off period or extension of the Term (of the Agreement or applicable Schedule), shall not be offset against the Advance. Royalties accruing during any extension of the Term or renewal option, if any (of the Agreement or applicable Schedule) shall be offset only against an advance paid with respect to such extended term or renewal period. Licensee may not offset against any Advance any Royalties accruing on (1) sales to Disney or to any of Disney's Affiliates, (2) sales outside the Territory or (3) sales to any Disney Authorised Entity.
7.9.3 Licensee guarantees to pay to Disney as minimum Royalties on Licensee’s Net Invoiced Billings of Products in the Territory, during the specified Guarantee periods (the “Guarantee(s)”), the sum specified in the applicable Schedule(s).
7.9.4 With Licensee’s statement for each calendar quarter ending on a specified Guarantee period, or upon termination if the Agreement is terminated prior to the end of the Term, Licensee shall pay Disney the amount, if any, by which cumulative Royalties paid with respect to Net Invoiced Billings in the Territory during each of the Guarantee periods during the Term fall short of the cumulative amount of the Guarantee for all such Guarantee periods during the Term.
23 AN GRO PLUS Ltd /Agreement No: 100-1452565
7.9.5 In no event shall Royalties paid with respect to Net Invoiced Billings during the sell-off period, if any is granted hereunder, apply towards meeting the Guarantee. In no event shall Royalties paid with respect to sales during any Guarantee period be applicable towards meeting the Guarantee for any other Guarantee period. Licensee may not offset against any Guarantee any Royalties accruing on (1) sales to Disney or to any of Disney's Affiliates, (2) sales outside the Territory or (3) sales to Disney Authorised Entities.
7.10 From time to time, upon request by Disney, Licensee shall furnish to Disney’s Credit Department, no later than seven (7) days after receipt of such request, such financial reports, including balance sheets, statements of income and cash flows, as Disney in its absolute discretion deems necessary to evaluate Licensee’s ongoing creditworthiness and ability to perform this Agreement.
7.11 In the event Licensee shall be unable, because of governmental restrictions or any applicable foreign currency controls, to remit to Disney any sums of money due to Disney hereunder, other than withholding taxes, which are covered by Paragraph 7.8.7 Licensee shall notify Disney and await instruction as to disposition of Disney’s share. Licensee specifically acknowledges and agrees that any and all sums of money and other things of value accruing and owing to Disney hereunder, so long as the same or any part thereof remains in Licensee’s possession or under Licensee’s control, shall (subject to any instructions given by Disney as to the disposition thereof) be deemed trust funds held by Licensee as trustee for Disney and be subject to and governed by all the obligations, duties and incidents of the trust relationship.
8. APPROVALS
8.1 Concepts
Before commercial production of any Product, Licensee shall submit for Disney’s review and written approval, all concepts, all preliminary and proposed final artwork, and all 3-dimensional models which are to appear on or in any stock keeping unit (“SKU”) of such Product. Disney may approve or disapprove such concepts, artwork and models in its absolute discretion, and any SKU not approved in writing shall be deemed disapproved and unlicensed and shall not be manufactured or sold. If approved, Licensee may proceed to the pre-production phase.
8.2 Pre-Production Samples
Licensee shall submit to Disney for Disney’s written approval a pre-production sample of each SKU of each Product. Disney may approve or disapprove such pre- production sample in its absolute discretion, and any SKU not approved in writing shall be deemed disapproved and unlicensed and shall not be manufactured or sold. If approved, Licensee may proceed to the production phase.
8.3 Production Samples
Before selling a Product to any customer, Licensee agrees to furnish to Disney for Disney’s approval of all aspects of the Product in question, from the first production run of each supplier of each of the Products, the number of samples specified on the applicable Schedule of each different style and artwork design of each Product with packaging (the “Samples”), which shall conform to the approved concepts, artwork, models and pre-production sample. Licensee also agrees to furnish Disney with a passing test report(s) which verifies compliance of the Product to applicable Laws and, if applicable, to Disney’s requirements under the Disney Product Guidelines for
24 AN GRO PLUS Ltd /Agreement No: 100-1452565
the respective country or countries of distribution. Disney may disapprove such production Sample or test report based on incomplete testing or unacceptable quality of the artwork or the Product as manufactured, as determined by Disney in its absolute discretion. Any SKU not approved by Disney in writing shall be deemed disapproved and unlicensed and shall not be manufactured or sold. Production Samples of Products for which Disney has approved a pre-production Sample shall be deemed approved, unless within 20 days of Disney’s receipt of such production Sample Disney notifies Licensee to the contrary. In the event that Licensee distributes any Product without furnishing the production Samples to Disney and Disney subsequently disapproves such production sample or where such production Sample has otherwise been disapproved by Disney in accordance with this Paragraph then Licensee shall take all necessary steps to recall such Products in accordance with Disney’s instructions but at Licensee’s expense. No modification of an approved production Sample shall be made without Disney’s prior written approval. No test runs, seconds or irregulars may be sold without Disney’s prior written approval and, unless approved for sale by Disney, Licensee must destroy all such test runs, seconds or irregulars.
8.4 Packaging, Promotional Materials and Advertising
8.4.1 Before any use, Licensee shall submit for Disney’s review and approval any containers, packaging, display material, labels (if applicable), hang tags (if applicable), promotional material, catalogues, website pages or references, and all advertising, including, but not limited to, television advertising public statements or messages, texts, tweets, blogs and/or SMS messages and press releases (“PA Material”). Licensee shall, at its sole expense, obtain all necessary approvals and clearances in connection with any advertising. If Disney has supplied a film clip or other footage, Licensee shall not modify the clip or footage and shall return it to Disney immediately after use.
8.4.2 THE FOLLOWING SUB-SUBPARAGRAPHS i to ix SHALL ONLY APPLY TO LICENSEE IF IT IS BEING LICENSED IN RESPECT OF ANY APPAREL & FASHION ACCESSORIES PRODUCTS OR IN RESPECT OF PRODUCTS FOR WHICH DISNEY MANDATES THE USE OF HOLOGRAMS
i. Disney has designed specific Creative Works including character artwork logo(s) and other designs to be used by all licensees on labels and hangtags. Disney will supply Licensee with reproduction artwork, and Licensee agrees to use such artwork and/or logo(s) on the labels and hangtags of the Products, which Licensee will have printed and attached to each Product at Licensee’s cost.
ii. Disney recommends that Licensee sources labels and hang tags from the pre-approved manufacturers listed in Attachment 4. However, Licensee may use another manufacturer for the required labels and hang tags if that manufacturer is able to manufacture labels and hang tags of equivalent quality and can meet Disney’s quality brand standards for manufacturers of labels and hang tags.
iii. Disney has designed a multi-level and multi-layer holographic sticker with a Disney character image in the centre and which is produced with Disney’s or Disney’s Affiliate’s authorisation (“Hologram”) which is to be used by all licensees producing certain types of Products. If Disney instructs Licensee that Holograms must be used
25 AN GRO PLUS Ltd /Agreement No: 100-1452565
on Products then Licensee agrees to use such Hologram in accordance with Disney’s guidelines on labelling provided to Licensee by Disney from time to time. The cost of the Holograms, if required, and the cost of affixing the Holograms to the Labels shall be borne by the Licensee;
iv. Licensee shall purchase or obtain Holograms only from one of the manufacturers listed in Attachment 4;
v. The labels, and, if required Holograms, must be permanently affixed to the Products in accordance with Disney’s guidelines on labelling provided to Licensee by Disney from time to time;
vi. When Licensee submits the Product for approval to Disney in accordance with Paragraph 8, the label, hangtag and if required Hologram, must be affixed as indicated in the latest Disney guidelines on labelling provided to Licensee prior to submission of the Product;
vii. Licensee shall receive Disney’s written approval if the label and/or hangtag, including any Hologram, has been approved. If so approved, Licensee shall permanently affix labels and, if necessary, Holograms to the Products in accordance with the latest Disney guidelines on labelling and record the serial numbers of any Holograms used.
viii. Licensee warrants that it shall provide a safe and secure of storage for Holograms and maintain a full inventory of Hologram stock.
ix. Licensee shall report the serial numbers of Holograms each quarter on the current Hologram statement form which may be changed from time to time and shall be referred to as the Hologram Statement Form.
8.4.3 Custom Coding Programs. Licensee shall, at its own expense, comply with and adhere to any Disney identification system, custom coding program or such other promotional, coupon, cross-promotional, shipment tracking, identification, and/or tags and labelling requirements established by Disney from time to time, which may include the obligation to use unique product coding (e.g., unique codes similar to randomly generated codes on hangtags of Club Penguin products for use on clubpenguin.com, scratch off SMS codes, etc.), product authentication hang tags, or stickers, which must at all times comply with specific criteria determined by Disney or, at Licensee’s own expense, to purchase such unique codes, hang tags or stickers from a third party designated by Disney from time to time, and to affix such codes, hang tags or stickers on each Product before sale or distribution. Licensee shall use commercially reasonable efforts to ensure that all Authorised Customers purchasing Products comply with Disney’s coding programs, and tags and labelling requirements established from time to time.
8.5 Timing
Disney shall respond to all requests for approvals under this Agreement as quickly as reasonably possible. To be valid, any approval pursuant to this Paragraph 8 must be in writing or be granted through Disney’s online product approval system. Disney may grant or deny any approvals required under this Paragraph 8 in its unrestricted
26 AN GRO PLUS Ltd /Agreement No: 100-1452565
discretion. Licensee shall use Disney-designated forms for use in requesting approvals.
8.6 Third Party Approvals
The likenesses and product application of the characters used on or in connection with the Products are subject to any third party approvals Disney deems necessary to obtain. Disney may act as the liaison with such third parties during the approval process, or in some cases may direct Licensee to contact a third party directly.
8.7 Online Product Approvals and Other Services
8.7.1 If Licensee is supplied with a password to gain access to any Disney Computer System, including without limitation, Disney’s online artwork catalogue and online product approval system, Licensee agrees to maintain the confidentiality of the password and any information or materials obtained from Disney. Licensee further acknowledges and agrees that Disney may monitor Licensee’s use of the password, and Licensee agrees to provide all required legal notifications to its employees regarding same, as well as to comply with all privacy and other Laws applicable in these circumstances. If any of Licensee’s employees who have access to any Disney Computer System leave the Licensee’s employment, Licensee shall promptly inform Disney of same and immediately disable such employee’s email address from any and all access to any Disney Computer System.
8.7.2 In the event Licensee is provided direct remote access to any Disney computer system, computers, networks, related communications circuits and associated software programs (collectively, “Disney Computer System”) by any method, Licensee must comply with all of the security requirements described in the Computer System Security and Remote Access Requirements posted on DisneyConsumerProducts.com (“Requirements”), as such Requirements may be amended by Disney from time to time. Licensee shall only access Disney Computer Systems for the limited purpose of fulfilling its obligations as described in this Agreement. Such access shall be limited to that period of time necessary for Licensee to accomplish such purpose under the Agreement. Licensee acknowledges that Disney retains the right to terminate access to any Disney Computer System at any time, in its sole discretion without any liability. Any violation of the Requirements or unauthorised use of or access to a Disney Computer System by Licensee’s employees, authorised subcontractors or representatives shall constitute a breach of the Agreement. For new licensees, a copy of the Requirements will be provided in hard copy form, upon request.
8.8 Licensee Name and Address on Products
8.8.1 Licensee represents, warrants and covenants that it shall place its name, trade name (or Licensee's trademark which Licensee has advised Disney in writing that Licensee is using) and address (at least city and country) on permanently affixed labelling on each Product and, if the Product is sold to the public in packaging or a container, on such packaging or a container so that the public can identify the supplier of the Product. On soft goods "permanently affixed" shall mean sewn on. Licensee shall ensure that the Products comply with all labelling requirements imposed by any applicable Customs Agency (e.g., country of origin) or other governmental agency, as well as the labelling
27 AN GRO PLUS Ltd /Agreement No: 100-1452565
requirements as set out under Directive 2009/48/EC on the safety of toys (the ‘TSD’), where applicable.
8.8.2 Licensee shall advise Disney in writing of all trade names or trademarks Licensee wishes to use on Products being produced under this Agreement. Licensee may sell the Products only under trade names or trademarks approved by Disney.
8.8.3 Licensee agrees not to use any Licensed Material on any business sign, business cards, stationery or forms (except as licensed), or as the name of Licensee’s business or any division, unless otherwise agreed by Disney in writing.
9. MANUFACTURING/SOURCING
9.1 For the purposes of this Agreement, the following terms shall have the meaning ascribed to them below, whether used in the singular or plural form
i) “Code” means (i) the Code of Conduct for Manufacturers adopted by The Walt Disney Company and its Affiliates (“TWDC’s Code”), posted on the DCP Website and included in Attachment 1, (ii) Licensee’s own labour standards for Facilities if such standards are substantially equivalent to TWDC’s Code and the use of such standards are approved by Disney, or (iii) another set of labour standards mutually agreed upon in writing by Disney and Licensee.
ii) “Facility” or “Manufacturer” means any of Licensee’s own or third-party manufacturers, vendors, factories, farms, suppliers and other facilities (as well as any sub-manufacturers, vendors, factories, farms, suppliers and other facilities), that Licensee intends to use to design, produce, process, finish, assemble, or package Products, components of Products, PA Materials, or other items related to the Products that incorporate any Licensed Material, or that assemble a final product including one or more Products.
iii) “FAMA Application” means a Facility and Merchandise Authorisation Application as posted on the DCP Website and included in Attachment 2, which Licensee must complete and submit to Disney for each Facility.
iv) “ILS Audit” means a labour standards inspection and/or audit of a Facility used to assess whether the Facility complies with the ILS Minimum Compliance Standard, the Code, and any applicable Laws.
v) “ILS Minimum Compliance Standard” means the minimally acceptable level of compliance with the Code as evidenced by (i) the absence of any (a) child labour, (b) involuntary labour, (c) coercion and/or harassment, (d) discrimination, (e) serious health and safety workplace violations, or (f) interference with freedom of association and (g) non-permitted subcontracting to home workers and (ii) providing all information necessary to assess compliance with the Code and applicable Laws (e.g., complete and accurate records, and access to Facility personnel and premises).
vi) “ILS Program” means The Walt Disney Company’s policies, procedures, and requirements with respect to international labour standards (“ILS”). The ILS Program is described in Paragraph 9.2 and in the ILS Program Manual. Disney reserves the right to modify the ILS Program from time to time and
28 AN GRO PLUS Ltd /Agreement No: 100-1452565
shall provide reasonable notice to Licensee of any material modification thereof. Disney may provide such notice through the DCP Website.
vii) “ILS Program Manual” means the document containing details of the ILS Program. The ILS Program Manual is posted on the DCP Website and incorporated herein by this reference as though set forth in full. Disney reserves the right to modify the ILS Program Manual from time to time and shall provide reasonable notice, to Licensee of any material modification thereof. Disney may provide such notice through the DCP Website.
viii) “Permitted Sourcing Countries” means those countries specified by Disney in or from which Licensee may manufacture or source Products, PA Materials, and components thereof (including blank items). The list of Permitted Sourcing Countries, as may be updated by Disney from time to time, is posted on the DCP Website and included in Attachment 5. Disney may establish additional requirements as a condition to conducting any of the foregoing activities in certain Permitted Sourcing Countries. Licensee may not manufacture or source Products, PA Materials, or components thereof (including blank items), from any country other than a Permitted Sourcing Country. Disney may make adjustments to the list of Permitted Sourcing Countries from time to time based upon (i) U.S. Government trade restrictions or other applicable Laws, and/or (ii) Disney's determination not to permit the sourcing or manufacturing of Products, PA Materials, or components thereof (including blank items), based upon, without limitation, reasons of intellectual property protection and enforcement, concerns for political or human rights, or environmental protection. If a Permitted Sourcing Country becomes subject to trade restrictions by the U.S. Government or other applicable Laws, such country shall be deemed automatically removed from the list of Permitted Sourcing Countries as of the effective date of the trade restriction or other Law without need of any notice from Disney. It is Licensee’s responsibility to monitor any such changes. If a Permitted Sourcing Country is removed from the list of Permitted Sourcing Countries due to Disney’s determination, Disney shall provide reasonable notice to Licensee of such change. Disney may provide such notice through the DCP Website.
ix) “Prohibited Persons” means (i) those Persons with whom Licensees may not conduct business due to U.S. Government or other applicable Laws, and (ii) those additional Persons with whom Licensee is prohibited or restricted by Disney from engaging in any activities under this Agreement (including without limitation for reasons of intellectual property protection and enforcement, concerns for political or human rights, or environmental protection). Information regarding the list of Prohibited Persons, as may be amended by Disney from time to time, is posted on the DCP Website and included in Attachment 5. If a Person becomes prohibited due to trade restrictions by the U.S. Government or other applicable Laws, the prohibition shall be automatic as of the effective date of the trade restriction or other Law without need of any notice from Disney. It is Licensee’s responsibility to monitor any such changes. If a Person becomes prohibited due to Disney’s determination, Disney shall provide reasonable notice to Licensee of such prohibition. Disney may provide such notice through the DCP Website.
29 AN GRO PLUS Ltd /Agreement No: 100-1452565
9.2 ILS Program
i) Disclosure of Facilities and Initial Consent to Use. Licensee shall disclose each Facility to Disney, and Disney’s written consent to use each Facility is required prior to the commencement of production of Products or PA Materials in such Facility. Licensee shall disclose a Facility, and request Disney’s consent to use such Facility, by providing to Disney a completed FAMA Application for each Facility. Prior to determining whether or not to grant its consent to use a Facility, Disney may require (i) Licensee to provide a pre-production ILS Audit of the Facility demonstrating the Facility’s compliance with at least the ILS Minimum Compliance Standard and/or (ii) Licensee and/or the Facility to comply with any conditions applicable to the Permitted Sourcing Country in which the Facility is located. Disney may withhold its consent prior to the commencement of production for any Facility which, inter alia, (a) Disney reasonably believes does not comply with the ILS Minimum Compliance Standard, (b) Disney reasonably believes an ILS Audit was obtained through fraud, bribery, or other improper influence, (c) is not located in a Permitted Sourcing Country, (d) constitutes or involves a Prohibited Person, (e) has not shown continuous improvement towards full compliance with the Code, according to information contained in the ILS Program database, or (f) does not comply with any conditions applicable to the Permitted Sourcing Country in which the Facility is located (or with which Licensee does not comply if such conditions apply to the Licensee). Disney shall evidence its consent to the use of a Facility by providing Licensee with a signed FAMA Application. Licensee shall not commence production of any Products or PA Materials at a Facility until Licensee receives the signed FAMA Application for such Facility from Disney. Disney shall incur no liability hereunder for any failure or reasonable delay in providing Licensee with a signed FAMA Application. Licensee shall promptly (but no later than within thirty (30) days) notify Disney in writing when Licensee ceases to use a Facility for any reason or does not plan to use such Facility within a twelve (12) month period, and shall provide Disney with an updated list of active Facilities at any time upon request from Disney.
ii) Compliance with ILS Minimum Compliance Standard and the Code. Licensee shall use only Facilities that comply with at least the ILS Minimum Compliance Standard (except during a period of remediation in accordance with 9.2(vi) below), and shall ensure that such Facilities fully comply with the Code to the extent it is commercially reasonable. Licensee shall distribute the Code to all of its Facilities. The Code and the ILS Minimum Compliance Standard shall not be interpreted to require Licensee or its Facilities to violate any applicable Law.
iii) ILS Audits by Disney. Disney and/or its designated representatives shall have the right, at Disney’s expense and without prior notice to Licensee or the Facility, to conduct ILS Audits of any Facility to confirm compliance with the ILS Minimum Compliance Standard, the Code, and applicable Laws. Such ILS Audits may be conducted prior to and as a condition of Licensee’s use of a Facility as set forth in Paragraph 9.2(i) above, or at any time up to the date that Licensee notifies Disney that Licensee has ceased to use such Facility. Except when Disney or its designated representative conducts unannounced ILS Audits, Disney shall endeavour to coordinate with Licensee in scheduling any ILS Audits. It is Licensee’s responsibility to obtain the Facility’s agreement to provide Disney with full access to the
30 AN GRO PLUS Ltd /Agreement No: 100-1452565
Facility for ILS Audits. Licensee shall promptly reimburse Disney for the reasonable cost of an ILS Audit (currently US$1,500, but subject to change) performed or attempted to be performed by Disney and/or its designated representatives when any Facility fails to meet the ILS Minimum Compliance Standard, fails to remediate a previously cited failure(s) of the ILS Minimum Compliance Standard within the time designated by Disney, or refuses to grant full access to a Facility. The amount Licensee reimburses Disney shall not be pro-rated in the event the Facility is also used by other licensees or vendors of Disney.
iv) ILS Audits from Licensee. Upon Disney’s request, Licensee shall provide Disney, at Licensee’s expense, with ILS Audit reports for designated Facilities demonstrating compliance with at least the ILS Minimum Compliance Standard. Disney may require Licensee to submit such ILS Audit reports prior to, and as a pre-condition of, the use of a Facility and/or at any time prior to the date Licensee notifies Disney that Licensee has ceased to use such Facility. All ILS Audits shall (i) be in a format and conducted pursuant to a methodology acceptable to Disney, (ii) be conducted by Licensee or obtained from third parties acceptable to Disney and (iii) be conducted and provided within the time periods designated by Disney. Licensee agrees to comply with all applicable privacy and data protection Laws with regard to its monitoring activities of Facilities and to the submission of information to Disney regarding Facilities and the ILS Audit reports of such Facilities, including without limitation, Laws pertaining to protection of personally identifiable information and the protection of minors. The provision of an ILS Audit report by Licensee hereunder with respect to any Facility, regardless of the determination made by Disney with respect to such ILS Audit, shall not limit Disney’s right, as set forth above, to conduct or otherwise obtain its own ILS Audit of such Facility.
v) Determinations. The determination of whether an ILS Audit indicates compliance with the ILS Minimum Compliance Standard, the Code or applicable Laws shall be a matter within Disney’s absolute discretion. Disney may reject any ILS Audit (and thereby withhold or revoke authorisation to use a Facility) if Disney reasonably believes that the ILS Audit was obtained or undermined through fraud, bribery, actual or threats of physical violence or other improper influence.
vi) Remediation. As a condition to Licensee’s continued use of a Facility that does not comply with the ILS Minimum Compliance Standard, Licensee shall, at no cost or expense to Disney, take appropriate and prompt steps to require the Facility to remediate all instances of Facility non-compliance with the ILS Minimum Compliance Standard within the time periods designated by the ILS Program and to provide Disney with an ILS Audit report or other evidence, satisfactory to Disney, of remediation of such Facility non- compliance.
vii) Cessation of Facility Use. Disney may revoke any previous Facility authorisation if (i) Disney determines from an ILS Audit or otherwise that the Facility does not comply with the ILS Minimum Compliance Standard and such failure(s) is not remedied pursuant to Paragraph (vi) above, (ii) Disney reasonably believes that an ILS Audit was obtained through fraud, bribery, or other improper influence, (iii) Licensee fails to conduct and/or provide to Disney any ILS Audit as required hereunder, (iv) the country in which a Facility is located is no longer a Permitted Sourcing Country, (v) the Facility
31 AN GRO PLUS Ltd /Agreement No: 100-1452565
constitutes or involves a Prohibited Person, (vi) the Facility and/or Licensee does not comply or continue to comply with any conditions applicable to the particular Permitted Sourcing Country in which the Facility is located, or (vii) the Facility uses the Licensed Material or any other intellectual property owned, co-owned or licensed by Disney, its Affiliates or its/their licensors for any unauthorised purpose and does not halt such unauthorised activities within the time designated by Disney. If Disney revokes a Facility authorisation, then Licensee shall not use or shall cease using such Facility for Products promptly, not to exceed thirty (30) days from Disney’s written notice to Licensee, or as otherwise required by Law. If Licensee ceases to use a third party Facility for any other reason, upon Disney’s request Licensee shall disclose to Disney in reasonable detail any information known to Licensee relating to such Facility’s failure to comply with the ILS Minimum Compliance Standard, the Code, and/or applicable Law.
viii) Material Breaches. Failure to comply with the ILS Program shall constitute a material breach of the License Agreement. In addition to, and without waiving any other rights or remedies available to Disney, upon discovery of each instance of the following failures by Licensee with respect to each and every Facility, Disney may assess Licensee an appropriate fee up to US $5,000 per failure to defray Disney’s costs and/or fund other efforts of the ILS Program, and in the event that Disney does assess Licensee then Licensee shall immediately pay Disney the assessed amount: (i) failure to disclose to Disney a Facility through a FAMA Application prior to production of Product or PA Materials at such Facility, (ii) commencing production of Product or PA Materials at a Facility prior to obtaining Disney’s initial consent to use such Facility as evidenced by a FAMA Application signed by Disney, (iii) failure to conduct an ILS Audit and provide to Disney any ILS Audit report as required hereunder, (iv) use of a Facility in a country that is not a Permitted Sourcing Country, (v) failure to comply with any conditions applicable to the Permitted Sourcing Country in which a Facility is located, and/or (vi) failure to cease using a Facility pursuant to Paragraph 9.2(vii) above. Disney may direct Licensee not to sell or distribute Product and PA Materials produced in breach of a License Agreement, or to destroy or donate such Product and PA Materials. In addition, if Licensee’s action(s) or inaction(s) cause(s) Disney to be subject to any penalty or expense, Licensee shall fully reimburse Disney for such costs. Acceptance or waiver of payments under any of the foregoing payments sub- paragraphs shall not affect any other rights or remedies available to Disney, including without limitation, termination of a License Agreement, indemnification, and/or Disney’s right to require strict compliance by Licensee with the terms and conditions of the applicable License Agreement thereafter.
ix) Disclosure of ILS Audits and Facilities. Notwithstanding anything to the contrary in this Agreement:
(a) Disney may disclose ILS Audits to third parties (including other licensees and vendors of Disney using the same Facility and non- governmental organisations) (collectively, “Third Parties”) but may not reference the identity of Licensee in such disclosure without the prior written consent of Licensee;
32 AN GRO PLUS Ltd /Agreement No: 100-1452565
(b) Licensee may disclose ILS Audits to Third Parties but may not reference Disney, the Licensed Material, Products or PA Materials in such disclosure without the prior written consent of Disney;
(c) Disney may disclose publicly, as part of its ILS Program, the names and addresses of all Facilities;
(d) As part of its anti-piracy efforts, and/or to facilitate shipping, Disney may communicate with, and provide information to, customs and law enforcement officials globally and/or other Third Parties that may assist with such efforts in order to identify authorised users of intellectual properties owned or controlled by Disney or its Affiliates, including the identification of Licensees, the Facilities, authorised shippers, and other information found in the FAMA Application; and
(e) Disney may disclose the information identified in subparagraph (ix) (d) above as Disney may deem necessary to enforce its contract rights and/or protect its intellectual property rights.
x) Permitted Sourcing Countries and Prohibited Persons. Licensee may not use any Facility that involves a Prohibited Person. Licensee shall only use Facilities in Permitted Sourcing Countries (subject to any applicable conditions). Please refer to the Permitted Sourcing Countries and Prohibited Persons document which is attached hereto and posted on the DCP Website.
9.3 Product Integrity Provisions
9.3.1 Compliance with Laws and Product Guidelines
With regard to product quality and safety, Licensee covenants that each Product, and each component of each Product, (1) shall be of good quality and free of defects in design, materials and workmanship; (2) shall comply with (a) all applicable Laws and the relevant country or countries of distribution, (b) all requirements set forth in the applicable Disney Product Guidelines ("PG's") for the relevant country or countries of distribution, and (c) all applicable "Licensee Requirements" set forth in the PG's; and (3) shall conform to the Samples approved by Disney. To access the applicable PG's and "Licensee Requirements", which may be updated from time to time, log on to DisneyConsumerProducts.com.
9.3.1.1 Testing
1. Both before and after Licensee puts Products on the market, Licensee shall follow reasonable and proper procedures for testing that Products comply with all applicable Laws, PG's and "Licensee Requirements", including, without limitation, using accredited independent third-party testing agencies designated or otherwise approved by Disney, and providing passing testing reports to Disney as described more fully below. Licensee also shall permit Disney's designees to inspect testing and quality control records and procedures, and to test the Products for compliance with applicable Laws, PG's and "Licensee Requirements"; however, Disney shall not be required to conduct any such testing. Licensee agrees to promptly reimburse Disney for the actual costs of such
33 AN GRO PLUS Ltd /Agreement No: 100-1452565
testing if the Product does not pass the test. Licensee also shall give due consideration to any recommendations by Disney that Products exceed the requirements of applicable Laws, PG's or "Licensee Requirements"; provided however, that, as between Licensee and Disney, Licensee is responsible for compliance by the Products with all applicable Laws, PG's and "Licensee Requirements". Products not manufactured or packaged in accordance with applicable Laws, PG's and "Licensee Requirements" shall be deemed unapproved, even if previously approved by Disney, and shall not be shipped unless and until they have been brought into full compliance.
2. No later than thirty (30) days following the shipment of any Products, Licensee shall submit passing test reports to Disney for such Products for all countries of distribution. Licensee need not generally re-submit passing test reports for subsequent shipments of the same Products from the same production runs to the same countries of distribution. However, Licensee must re-test and submit new passing test reports if there are changes in the production run of any SKU (including, without limitation, any change in materials, components, manufacturing processes or manufacturing facilities), the countries of distribution, or if any significant time elapses between production runs of the same Product. Licensee’s test reports must include (a) Licensee’s name (b) Product name, (c) Product number (e.g., SKU, UPC, style number), and (d) a digital photo of the Product. Licensee shall submit all test reports via email to: [email protected].
9.3.1.2 Recalls
Without limiting the foregoing, Licensee represents warrants and covenants that all Products comply, and shall comply fully with all applicable Laws, including, without limitation, any applicable consumer and/or product safety laws and policies of any applicable consumer product safety commissions or agencies and other governmental authorities, and all voluntary industry standards (including, without limitation, the General Product Safety Directive, the Directive on Equipment with Voltage Limits and the TSD, and shall be safe for children of all ages (unless properly otherwise notified on the Article or the PA Material that the Product is unsuitable for children of a certain age) (all of those Acts, regulations, policies, standards and requirements being referred to collectively as “Safety Requirements”). Once the Product has been made available for sale Licensee immediately shall notify Disney if Licensee obtains information reasonably supporting the conclusion that a Product may fail to comply with one or more Safety Requirements or may contain a defect that could create a risk of injury to the public and thereafter shall provide Disney with timely information regarding further developments. If Disney reasonably determines from information supplied by Licensee or from any other source that such a defect or failure to comply exists, and if Disney reasonably so directs, then Licensee, at its expense if required by the
34 AN GRO PLUS Ltd /Agreement No: 100-1452565
applicable Laws of the country in which the risk arises , and Disney's reasonable directions, shall notify any consumer product safety commission or other governmental agency specified by Disney of such defect or failure to comply and shall take such further actions as the consumer product safety commissions, other governmental agency shall direct or that Disney shall reasonably direct, including, without limitation, notifying the public of such failure or defect, recalling the Product from Authorised Customers, retailers and consumers, repairing or replacing the Product and refunding sums paid and expenses incurred by Authorised Customers, retailers, consumers and others by reason of the recall (all such actions being referred to collectively as the “Recall Campaign”). Licensee shall provide Disney with contemporaneous copies of correspondence and communications related to the foregoing. Licensee shall provide Disney with any/all draft notices pertaining to recall press releases and recall posters for Disney comments and approval prior to release. In the event that Disney reasonably concludes that Licensee does not have the necessary resources and capabilities to run a specific Recall Campaign (or an element of such Recall Campaign) in an efficient or effective or legally compliant manner, then Licensee agrees that, upon receipt of written notice from Disney, Licensee shall appoint and pay a suitable third party with the requisite capabilities and resources to manage such Recall Campaign (or such element of such Recall Campaign) on behalf of Licensee. Whether Disney or Licensee notifies the consumer product safety commissions or other governmental agency of such defect or failure, all reasonable expenses paid or incurred by Disney by reason of or in connection with such notification, including, without limitation, all Recall Campaign expenses, shall be promptly reimbursed by Licensee to Disney. The obligations of Licensee under this Paragraph are in addition to and not in limitation of other obligations, representations, warranties and indemnities of Licensee.
9.3.1.3 Customer Complaints
Licensee shall, in connection with its duty to use the Licensed Material so as to promote the continuing goodwill thereof, give immediate attention and take necessary action to satisfy all legitimate customer complaints brought against Licensee in connection with the Products or PA Material. Licensee shall give Disney immediate notice of all complaints that might materially affect the good standing of the Licensed Material or the reputation of Disney, including any complaints that might result in legal action between Disney and any third party, and cooperate with Disney upon request to achieve reasonable solutions that preserve the goodwill and reputation of Disney and the Licensed Material.
9.3.1.4 Product Liability Claims
Without limiting the foregoing, Licensee shall give Disney written notice, within seven (7) days, of (i) any product liability claims made or suits filed with respect to any Product, (ii) any investigations or directives regarding the Products issued by any consumer product safety commission or other international, national or European local consumer safety agency, and (iii) any and all notices or other
35 AN GRO PLUS Ltd /Agreement No: 100-1452565
correspondence or communications sent by Licensee to, or received by Licensee from, any consumer product safety commission or other consumer safety agency regarding the Products within seven (7) days of Licensee’s receipt or promulgation of the claim, suit, investigation, directive, or notice.
9.3.1.5 Without limiting the foregoing, Licensee shall comply with all applicable Laws relating to the proper affixing of CE marking to the Products and their packaging, EC Declarations of conformity and the establishment and holding of all relevant technical documentation.
9.3.2 Without limiting the foregoing and where the Products in question meet the definition of toys under the TSD, the Licensee agrees that it is the ‘manufacturer’ for the purposes of the TSD and is therefore responsible for all manufacturer obligations as set out under the TSD. These obligations include, but are not limited to responsibility for ensuring compliance with the TSD’s essential and particular safety requirements for toys, drawing up the required technical documentation in accordance with the TSD, carrying out or having carried out the applicable conformity assessment procedures, ensuring that procedures are in place for the conformity of series production and toy marking and toy labelling in accordance with the TSD.
10. MARKETING DATE
Licensee agrees that Products shall be available for purchase by the public through Authorised Customers by the Marketing Date stated in the applicable Schedule but no earlier than the restriction stated in the applicable Schedule.
11. OWNERSHIP IN LICENSED MATERIAL; NEW MATERIAL; LEGAL NOTICE
11.1 Licensee acknowledges and agrees that (i) all proprietary rights in and to the Licensed Material and the Design Elements (as defined below), including any intellectual property rights pertaining thereto, are exclusively owned by and reserved to Disney, or its licensors, and/or its or their designees (“Disney or its Designee”), (ii) Licensee’s use of the Licensed Material shall inure to the benefit of Disney or its Designee, (iii) Licensee shall only make use of the Licensed Material as specified in this Agreement, and (iv) Licensee will not assert any proprietary rights in the Licensed Material and Design Elements; however, in the event that Licensee is deemed to have any rights in the Licensed Material and Design Elements, Licensee hereby assigns to Disney or its Designee all of Licensee’s right, title and interest throughout the Universe in perpetuity or for the full duration of the relevant intellectual property right and any renewal or extension thereof in the Licensed Material and Design Elements.
11.2 "Design Elements" means the style, design, size, shape, colour, trade dress, appearance and comparable aesthetic features of the Products, that are based on, embody, contain, feature, display or express, directly or indirectly, in whole or in part, by direct reference or by inference (e.g., by shape or outline, or by material used, but without specific features), or designated as part of the design program to accompany, any of the Licensed Material, or the theme, look or feel of any of the Licensed Material. Nothing in this Agreement is intended to give Disney any rights whatsoever to any trademark, copyright, design, trade secret, manufacturing process, technology, proprietary technique or patent owned by Licensee, or used by Licensee under license in connection with the Products or otherwise, which is not derived or
36 AN GRO PLUS Ltd /Agreement No: 100-1452565
adapted from the Licensed Material, or other materials owned/co-owned or licensed by Disney, its Affiliates (or its or their licensors, if applicable).
11.3 “New Material” means any material objects containing, consisting of, or to the extent that they incorporate the Licensed Material and/or any Design Elements, or other adaptations, compilations, collective works, derivative works, or variations of the Licensed Material and/or any Design Elements, present or future created by or for Licensee or any of Licensee’s Affiliates. All such New Material shall be considered, and shall be included in the definition of "Licensed Material" under this Agreement.
11.3.1 Licensee acknowledges and agrees that it does not own and shall not claim any rights in any New Material. Licensee acknowledges and agrees that to the greatest extent permitted by applicable copyright laws any and all such New Material are commissioned works and DEI is the commissioning party for and owner of all rights in, the New Material, and that all intellectual property rights in the New Material shall vest ab initio in DEI.
11.3.2 In the event any right, title or interest in the New Material created by Licensee do not vest ab initio in DEI and remain vested in Licensee, Licensee hereby assigns absolutely all such rights, title and interests throughout the Universe and in perpetuity or for the full duration of the relevant intellectual property right and any renewal or extension thereof to DEI and undertakes not to exercise any moral rights in any work comprising or contained in any such New Material.
11.3.3 In the event that any right, title or interest in any New Material created by Licensee is not transferred to DEI by operation of assignment, Licensee hereby grants to DEI an exclusive, Universe-wide, paid-up, royalty-free and irrevocable license in perpetuity or for the full duration of the relevant intellectual property rights and any renewal or extension thereof to use, exploit and sublicense all New Material and related intellectual property rights, whether or not copyrightable or patentable or protectable under applicable Law. Licensee undertakes not to exercise any moral rights in any work comprising or contained in any such New Material.
11.4 If any third party makes or has made any contribution to the creation of any New Material, such contribution shall be deemed a commissioned work owned by DEI ab initio . Licensee shall require such commissioned party to enter into an agreement assigning ownership to or providing for ownership by DEI of all rights in the contribution (in terms equivalent to those set out in Paragraph 11.3 above). During the Term and thereafter, Licensee shall promptly execute and provide to Disney such documents and take such actions as Disney reasonably requests or as is necessary or appropriate under applicable law to vest fully any of the foregoing rights in Disney or its Designee. Licensee further represents, warrants and covenants that any such New Material is original to Licensee or such third party and does not and will not violate the rights of any other person or entity; this covenant regarding originality shall not extend to any materials Disney supplies to Licensee, but does apply to all materials Licensee or Licensee’s third party contractors may add.
11.5 All Products, packaging and advertising materials, and other matter containing Licensed Material shall bear a properly located permanently affixed copyright and/or trademark notice as Disney specifies to Licensee in writing. Licensee shall comply with such instructions as to form, location and content of the notice as Disney may give from time to time. If an improper copyright or trademark notice appears on, or if a proper copyright or trademark notice is omitted from, any Product or other matter
37 AN GRO PLUS Ltd /Agreement No: 100-1452565
containing Licensed Material, Licensee agrees at Licensee’s expense to correct immediately the error on all such Products or other matter in process of manufacture or in distribution.
11.6 Without limiting the foregoing, if Licensee for any reason is found to have obtained any interest in the Trademarks (or in any trademark incorporating a Trademark or any Creative Works, as well as any future trademark rights created by other use on or in association with the Products), Licensee hereby assigns those rights to Disney, together with the goodwill attaching to that part of the business in connection with which such trademarks are used. Disney hereby accepts such assignment.
11.7 To the extent that Disney provides instruction as to the form, location and content of a trademark notice, then Licensee shall use that notice on all Products, packaging and advertising materials, and other matter containing Trademarks.
11.8 Licensee shall reasonably assist Disney in the prosecution, assertion or defence of Disney’s rights in the Licensed Material, and shall provide, at reasonable cost to be borne by Disney, any evidence, documents and testimony in connection therewith. Disney or its Designee shall have the right, but not any obligation, to enforce intellectual property rights with respect to the Licensed Material. Licensee shall not attempt to assert any such rights directly, but may notify Disney of any suspected infringements.
11.9 Disney may withdraw from the scope of this Agreement any Licensed Material or Products the use or sale of which under this Agreement would, in Disney’s good faith judgment, infringe or reasonably be claimed to infringe or violate the rights of a third party. In such case, Disney’s obligation to Licensee shall be limited to the purchase at cost (which is defined as only cost of manufacture, cost of carriage, insurance and related duty costs excluding overheads) of such Products using such Licensed Material which cannot be sold. In the case of any withdrawal under the preceding sentence, the Advances and Guarantees shall be adjusted to correspond to the time remaining in the Term of the affected Schedule(s), or the number of Products remaining under such Schedule(s), at the date of withdrawal. This Paragraph 11.9 does not supersede the parties’ indemnity obligations for third party claims under Paragraph 15. In addition, if Licensee knew or reasonably should have known that its use of the Licensed Material or other conduct would infringe a third party’s rights (or reasonably be claimed to infringe or violate a third party’s rights), Disney shall be under no obligation to purchase any Products or adjust any Advance or Guarantee; rather, at Disney’s option, Licensee shall destroy such Products, providing a certificate signed by an officer of Licensee attesting to such destruction, and Disney shall retain all rights and remedies under the Agreement.
12. RECORDS; AUDITS
12.1 Licensee agrees to keep accurate records of all transactions relating to this Agreement, including, without limitation, shipments to Licensee of Products from Manufacturers, inventory records, records of sales and shipments by Licensee, sales records to customers and records of returns, and to preserve such records for the lesser of seven (7) years or two (2) years after the expiration or termination of this Agreement. Disney, or its representatives, shall have the right from time to time, during the Term and for two (2) years after expiration or termination of the Agreement, during Licensee’s normal business hours, to examine, copy and make extracts from all such records and any other records and to inspect physical stocks of Products which Disney reasonably deems appropriate to verify the accuracy of Licensee’s statements hereunder, or to confirm Licensee’s performance hereunder. In
38 AN GRO PLUS Ltd /Agreement No: 100-1452565
the event that such audit reveals a shortfall, Licensee shall promptly make the corresponding payment to Disney, including interest for late payment. In the event of unreported Royalties (including without limitation those discovered during any audit) interest will be payable from the date on which such Royalties should have been paid had they been reported correctly. Disney’s acceptance of statements or payments does not preclude Disney from a subsequent challenge of the statement’s or payment’s accuracy. If in an audit of Licensee’s records it is determined that there is a shortfall of 5% or more in Royalties reported for any calendar quarter, in addition to making the outstanding payments, Licensee shall reimburse Disney for the out-of- pocket costs of the audit, including the cost of outside auditors, or, if used, employee auditors (in the case of employee auditors, the cost is calculated at €150per hour per person for travel time during normal working hours and actual working time).
12.2 If Licensee fails to: (i) keep and/or provide adequate records for one or more Royalty Payment Periods; or (ii) permit Disney or its representatives to exercise its audit rights under paragraph 12.1, Disney shall be entitled to assess that the Royalties owed to Disney for such Royalty Payment Period(s) at an amount, determined in Disney's reasonable discretion, which may be up to but will not exceed the highest Royalties owed to Disney in a Royalty Payment Period for which Licensee has kept adequate records; if Licensee has failed to keep adequate records for any Royalty Payment Period whatsoever, Disney shall be permitted to assume and Licensee shall pay a reasonable amount of Royalties that Licensee will owe to Disney, based on the records Licensee has kept and other reasonable assumptions Disney deems appropriate.
12.3 Licensee shall not use the Licensed Material or any other material proprietary to Disney or DEI in any way other than as authorised in this Agreement (or as is licensed in any other written contract signed by both Disney or an Affiliate of Disney and Licensee as may be in effect between such parties). Unlicensed uses include, but are not limited to, uses of the Licensed Material other than that licensed hereunder on the Products, production or sale of items of merchandise incorporating the Licensed Material other than the Products licensed hereunder, the production or sale of Products which have not been approved under this Agreement, or the selling of Products outside the Passive Sales Territory. Licensee agrees that it is extremely difficult to fix actual damages which may proximately arise from any unlicensed distribution or sale of Products or items bearing Licensed Material. Licensee agrees that in respect of any such unauthorised use of the Licensed Material or of the use of any other copyright material proprietary of Disney, DEI (or its licensors, if applicable) without written authorisation from Disney, Licensee shall immediately pay an amount equal to twice the Royalties calculated on the Out Sales rate that would have been payable to Disney had such use been licensed hereunder. Such amount shall be payable as liquidated damages, without prejudice to Disney’s other rights and remedies, including without limitation, the right to seek injunctive relief. The payment of such amount by Licensee and its acceptance by Disney shall not mean that such unlicensed use is thereby licensed by Disney nor shall it mean that any future unlicensed use by Licensee is licensed or otherwise permitted by Disney. No such payments shall apply against any Advance or Guarantee.
13. INSURANCE
Licensee shall maintain at Licensee’s cost in full force and effect at all times while this Agreement is in effect and for three years thereafter commercial general liability insurance on a per occurrence form, including broad form coverage for contractual liability, property damage, product liability, product recall insurance, death and personal injury liability, waiving subrogation, with minimum limits of no less than the equivalent of two million
39 AN GRO PLUS Ltd /Agreement No: 100-1452565
United States Dollars (US$2,000,000) per occurrence and either (1) naming as additional insureds the Disney Indemnified Entities, or (2) containing an indemnity to principal clause with respect to the Disney Indemnified Entities. Such insurance shall protect Licensee and the Disney Indemnified Entities from claims arising out of or in connection with the performance of this Agreement or out of or in connection with any negligent act or omission of Licensee, its officers, directors, agents, subcontractors or employees. All insurance shall be primary and not contributory with respect to any other available insurance to Disney or the Disney Indemnified Entities. Licensee shall deliver to Disney a certificate or certificates of insurance evidencing satisfactory coverage and indicating that Disney shall receive written notification of cancellation, non-renewal or of any material change in coverage at least 30 days prior to the effective date thereof. Compliance herewith in no way limits Licensee’s indemnity obligations, except to the extent that Licensee’s insurance company actually pays Disney amounts which Licensee would otherwise be obligated to pay Disney.
14. PROMOTION COMMITMENT
14.1 Licensee agrees to carry out the Promotion Commitment on advertising and promotion activity for the Products in the Territory. The advertising and promotion activities required to promote the sale of the Products shall include one or more of the following activities:
- point of purchase displays (not including packaging or other individual product costs) Featuring the Disney, Marvel, Lucasfilm or Star Wars Brand - print media advertising Featuring the Disney, Marvel, Lucasfilm or Star Wars Brand - non-print media advertising Featuring the Disney, Marvel, Lucasfilm or Star Wars Brand - measurable public relations programs dedicated to the Products, the Properties or Marvel - the provision of samples to Disney for the use by Disney in presentations to Licensees (such as road-shows, EXPO’s and Franchise Pitches) - contests and games approved in advance in writing by Disney - trade shows, catalogue or trade activities, fashion shows approved in advance in writing by Disney - participation in group promotions organised by Disney - other activities as agreed in advance in writing with Disney
All PA Material is subject to the approval provisions of this Agreement, including Paragraph 8.
14.2 For purposes of determining Licensee’s satisfaction of the Promotion Commitment, consumer advertising and merchandising costs associated with the above-listed activities for the Products, but not including packaging or other individual product costs, will be counted toward the Promotion Commitment requirement; but any advertising discounts given in connection with cooperative advertising shall not count in the Promotion Commitment calculation. In addition for tradeshows and trade activities, employee salaries, travel and entertainment will not be counted towards Promotion Commitment. Where Licensee promotes the sale of other products together with the Products using the same advertising or promotional activities only the proportion of the costs of such activities equivalent to the proportion of the activities relating to the Products shall be counted towards the Promotion Commitment.
14.3 Within thirty (30) days of the end of each Royalty Payment Period during the Term of the agreement, Licensee shall provide Disney with a statement describing the
40 AN GRO PLUS Ltd /Agreement No: 100-1452565
Promotion Commitment funds spent and consumer exposure provided or obtained, together with a description of the manner in which such funds were spent during that Royalty Payment Period and a forecast of the Licensee’s spending of Promotion Commitment funds in each of the next four Royalty Payment Periods during the remainder of the Term, all of which information shall be broken down by country within the Territory, and provided in such detail as Disney may specify from time to time. Amounts spent in excess of the Promotion Commitment during any Royalty Payment Period may be credited against the Promotion Commitment for any other Royalty Payment Period occurring in the same twelve month period during the Term of the Agreement. If in any Royalty Payment Period Licensee has not satisfied the Promotion Commitment, Licensee (i) may carry forward such shortfall into the next succeeding Royalty Payment Period (other than in the case of a shortfall in the final Royalty Payment Period, in which case no carry forwards shall be permitted), or (ii) shall pay Disney the amount of such shortfall as liquidated damages; provided, however, no shortfall (or fraction thereof) may be carried forward more than twelve months. Licensee acknowledges that its expenditure of the Promotion Commitment increases the value of the business from which Disney benefits as licensor. Licensee and Disney agree that it is impracticable and extremely difficult to fix the actual damages that may proximately result from Licensee’s failure to fulfil its obligation, and Licensee’s liability for failure to do so shall, for each Royalty Payment Period, be limited to and fixed at an amount equal to the shortfall between the amount Licensee actually spent on the Promotion Commitment during such Royalty Payment Period as reported to Disney and the amount required to be expended. Such cumulative amount shall be considered liquidated damages and not a penalty.
14.4 “Promotion Commitment” means the expenditures required under the Schedule to support Licensee’s sales and marketing of the specified Products. “Featuring the Disney, Marvel, Lucasfilm or Star Wars Brand” means a prominent display of the Disney, Marvel, Lucasfilm or Star Wars logo in a form approved by Disney, or in a case where, due to the identity of the Property or Properties being featured in the relevant promotional activity, use of the Disney, Marvel, Lucasfilm or Star Wars logo is not appropriate, the prominent display of such other logo as is approved by Disney.
15. WARRANTY AND INDEMNITY
15.1 Licensee
Licensee warrants to Disney that it will conduct its activities under this Agreement in accordance with all applicable Laws. Licensee shall defend and indemnify Disney and its licensors as applicable, and its and their Affiliates, successors and the officers, directors, employees and agents of each of them (“Disney Indemnified Entities”) against and hold them harmless from any and all claims, actions, liabilities, losses, expenses of any nature (including without limitation reasonable attorneys’ fees), and costs arising out of any third party claim in respect of any actual or alleged breach by Licensee of any agreement representation, warranty or covenant made in this Agreement, or otherwise arising out of Licensee’s activities or omissions under this Agreement, including but not limited to claims of product liability and/or claims arising out of Licensee’s failure to obtain the full assignment of rights from third parties as described in Paragraph 11 or any permission described in paragraph 20, provided that:
15.1.1 Disney shall notify Licensee as soon as reasonably practicable of any such claim against any of the Disney Indemnified Entities of which it becomes aware.
41 AN GRO PLUS Ltd /Agreement No: 100-1452565
15.1.2 Licensee’s choice of counsel must be acceptable to Disney and the relevant Disney Indemnified Entity and not in conflict with any interest of any of the Disney Indemnified Entities, though Disney’s and the relevant Disney Indemnified Entity’s acceptance shall not be unreasonably withheld. Licensee shall have control of the defence of any claims or actions provided that Licensee shall consult in a meaningful way with Disney and the relevant Disney Indemnified Entity in respect of the defence of any claim, and further provided that Licensee shall obtain Disney’s and the relevant Disney Indemnified Entity’s consent prior to making any admissions, entering into any settlement or compromise, or otherwise taking any steps that would prejudice the interests of Disney Indemnified Entities (such consent not to be unreasonably withheld). The relevant Disney Indemnified Entity shall not make any admission of liability, agreement or compromise with any person, body or authority in relation to any third party claim described in Paragraph 15.1 without prior consultation with and consent of Licensee, which consent shall not be unreasonably withheld or delayed.
15.1.3 The relevant Disney Indemnified Entity shall at Licensee’s reasonable expense provide all reasonable assistance in defending any action or claim.
15.2 Disney
Disney shall defend, indemnify against and hold Licensee harmless from any and all claims, actions, liabilities, losses, expenses of any nature (including reasonable attorneys’ fees), and costs arising out of any third party claim that Licensee’s use of any representation of the Licensed Material approved in accordance with this Agreement infringes the copyright rights of any third party, or any right granted by Disney to a third party. Disney shall not be liable for any claim for indemnity hereunder which arises out of Licensee’s failure to obtain the full assignment of rights as referenced in Paragraphs 11 or any permission described in paragraph 20, or wherein Licensee had actual knowledge that its use of the Licensed Material or other conduct would infringe or violate a third party’s rights.
15.2.1 Disney gives no warranty or indemnity with respect to any liability or expense arising from any claim that use of the Licensed Material on or in connection with the Products or any PA Material infringes any trademark right of any third party, or otherwise constitutes unfair competition by reason of any prior rights acquired by such third party, except where such prior rights have been acquired from Disney. Licensee has the responsibility to carry out such investigations as Licensee may deem appropriate to establish that Product and PA Material manufactured or created under this Agreement, including any use made of the Licensed Material, do not infringe such right of any third party, and Disney shall not be liable to Licensee if such infringement occurs.
15.2.2 If, as a result of a claim for which Disney indemnifies Licensee herein, Licensee is prevented from selling Products containing any such representation of the Licensed Material approved in accordance with this Agreement, Disney’s obligation to Licensee in respect of the unsalable Products is limited to the purchase at cost (which is defined as only cost of manufacture, cost of carriage, insurance and related duty costs excluding overheads) of such Products using such Licensed Material that cannot be sold.
15.2.3 Any indemnities given in Paragraph 15.2 will apply, provided that:
42 AN GRO PLUS Ltd /Agreement No: 100-1452565
a) Licensee shall notify Disney as soon as reasonably practicable of any such claim against Licensee of which it becomes aware.
b) Disney’s choice of counsel must be acceptable to Licensee and not in conflict with any interest of Licensee, though Licensee’s acceptance shall not be unreasonably withheld. Disney shall have control of the defence of any claims or actions provided that Disney shall consult in a meaningful way with Licensee in respect of the defence of any claim, and further provided that Disney shall obtain Licensee’s consent prior to making any admission or entering into any settlement or compromise (such consent not to be unreasonably withheld). Licensee shall not make any admission of liability, agreement or compromise with any person, body or authority in relation to any third party claim described in Paragraph 15.2 without prior consultation with and agreement of Disney, which agreement shall not be unreasonably withheld or delayed.
c) Licensee shall at Disney’s reasonable expense provide all reasonable assistance in defending any action or claim.
15.3 Neither party shall be liable to the other party for any lost profits or other consequential damages sustained by, or awarded against, the party seeking indemnification in respect of a third party claim. For avoidance of doubt, any claim by Disney for any due but unpaid Advance, Guarantee or Royalties from Licensee shall not be considered a claim for lost profits.
15.4 No other obligation for indemnity, whether equitable or otherwise, exists between the parties except as specified in this Paragraph 15.
16. TERMINATION
16.1 Either party may terminate this Agreement at any time by giving the other party written notice thereof if the other party breaches a material term of this Agreement, and if any such breach is not corrected within fifteen days after the non-breaching party sends the breaching party written notice thereof. The foregoing shall be without prejudice to any other rights or remedies available to the parties.
16.2 Disney shall have the right at any time to terminate this Agreement immediately upon giving Licensee written notice if one or more of the following events occur (provided, however, that with respect to clause 16.2.6 below such termination shall occur automatically and immediately without the need for any notice):
16.2.1 Licensee manufactures, sells or delivers, without Disney's written authorisation or other legal entitlement, any merchandise other than the Products licensed and approved in accordance with this Agreement containing representations of the Licensed Material, or other material proprietary to Disney or its Designee;
16.2.2 Licensee delivers Products outside the Passive Sales Territory or knowingly sells Products to a third party when Licensee knows or should know in the exercise of prudent business judgment that such sales ultimately will result in delivery outside the Passive Sales Territory, unless pursuant to a written distribution permission or separate written license agreement with Disney or any of Disney's Affiliates;
43 AN GRO PLUS Ltd /Agreement No: 100-1452565
16.2.3 Licensee commits a material breach, that violates the same material provision of this Agreement as a breach of which Disney previously gave Licensee written notice;
16.2.4 Licensee breaches any material term of any other agreement between the parties, and Disney terminates such agreement for cause;
16.2.5 Licensee breaches any surviving obligation under any other expired or terminated agreement between the parties;
16.2.6 Licensee shall generally not pay its debts as such debts become due, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against Licensee seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up, reorganisation, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganisation or relief of debtors, or seeking the entry of any order for relief or the appointment of a receiver, trustee or other similar official for all or for any substantial part of its property or assets;
16.2.7 Licensee is not permitted or is unable to operate Licensee's business in the usual manner, or is not permitted or is unable to provide Disney with assurance satisfactory to Disney that Licensee will so operate Licensee's business, as debtor in possession or its equivalent;
16.2.8 Any event shall occur or condition shall exist under any agreement or instrument relating to institutional indebtedness or financial obligations owed by Licensee, including the failure to pay principal or interest, and such event or condition shall continue after any applicable grace period specified in such agreement or instrument, and the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such indebtedness or obligations or otherwise cause, or to permit the holder thereof to cause, such indebtedness or obligations to mature;
16.2.9 Licensee, due to material changes in its financial position, or for other reasons, is unable to meet Licensee's obligations under this Agreement, or is unable to provide Disney with assurance satisfactory to Disney that Licensee will be able to meet such obligations;
16.2.10 Licensee breaches any material term of this Agreement and the breach is not reasonably capable of being cured.
16.2.11 Licensee opposes or seeks to cancel or challenge, in any forum, any intellectual property ownership, application or registration of Disney or of any of Disney’s Affiliates.
16.2.12 Licensee commits a material breach of its manufacturer obligations as set out under the TSD, in the event that the Products include toys as defined in the TSD.
16.2.13 Licensee breaches any provision of the ILS Program.
16.3 In the event that Disney terminates this Agreement pursuant to this Paragraph 16, Licensee hereby waives any claim for injunctive relief to contest Disney’s
44 AN GRO PLUS Ltd /Agreement No: 100-1452565
determination that a termination event has occurred or to otherwise affect Disney’s full and absolute control of the Licensed Material and Licensee hereby waives any right to any such determination; provided however, Licensee may bring an action for damages, but prior to and during any such action, Disney shall have full and absolute control over the Licensed Material.
16.4 If Licensee has breached the Agreement by selling Products outside of the Passive Sales Territory or beyond any sell-off period granted by Disney hereunder, then, in addition to and without waiving any other rights or remedies available to Disney, then since the parties agree that it is very difficult to fix actual damages which may proximately arise from such a breach the Licensee agrees that it shall immediately pay double Royalties at the Out Sales Rate on such sales to Disney as liquidated damages. Such payment shall be made immediately upon discovery of any such unauthorised sales but shall not constitute an implied license for such sales or permit any further sales. Acceptance of such payment shall not affect any other rights or remedies available to Disney hereunder, including but not limited to, termination of the Agreement, or Disney’s right to require strict compliance by Licensee with all of the terms and conditions of the Agreement thereafter..
17. RIGHTS AND OBLIGATIONS UPON TERMINATION
17.1 Upon the expiration or termination of this Agreement, the license herein granted to Licensee shall cease, Disney shall be entitled to retain all Royalties and other things of value paid or delivered to Disney, and any unpaid balance of any and all Royalties due, together with the unpaid portion of any Guarantee instalments applicable to the remaining Term shall become immediately due and payable.
17.2 Licensee agrees that from the expiration or termination of this Agreement, Licensee shall neither manufacture Products nor cause Products to be manufactured.
17.3 Licensee shall, at no cost to Disney, transfer title to any and all tooling, moulds, plates, labels or other items used to reproduce the Licensed Material to Disney by execution of this Agreement (if such items are in Licensee's ownership as of the date of execution) or if such items are not in existence or not in Licensee's ownership as of the date of execution, immediately after Licensee acquires title to such items. If Licensee fails to transfer title to such items, Licensee hereby appoints Disney its attorney-in-fact to execute the transfer document(s). Upon termination or expiration of the Agreement Licensee also shall, at Disney's option, either transfer physical possession of such items to Disney or its designee or destroy or efface such items, and shall cause all of its Manufacturers to transfer physical possession of such items to Disney or its designee or destroy or efface such items, and return all artwork, clips or other items containing the Licensed Material to Disney. If Disney requires the transfer of physical possession of the items, Licensee shall be paid an amount equal to the original direct cost of the tooling, moulds or plates, less a reasonable amount for wear and tear, as determined by Disney in its commercially reasonable discretion. Licensee shall upon request by Disney provide a certificate signed by an officer of Licensee attesting to the complete destruction, effacement, transfer or return of such items or artwork as relevant.
17.4 If Licensee has any unsold Products in inventory on the expiration or earlier termination of the Agreement, Licensee shall provide Disney with a full statement of the kinds and numbers of such unsold Products and any additional information reasonably requested by Disney. If Licensee has fully complied with the terms of the Agreement, then subject to Disney’s prior written consent Licensee shall have the right for a limited period as detailed in the applicable Schedule from such expiration
45 AN GRO PLUS Ltd /Agreement No: 100-1452565
or earlier termination date to sell off such Products as authorised under Paragraph 6. Licensee shall furnish Disney with statements covering such sales and pay all Royalties in respect of such sales in accordance with Paragraph 7.9. After this sell- off period, Licensee shall cease selling Products and shall destroy any unsold Products remaining at the end of the sell-off period (and such destruction shall be attested to in a certificate signed by an officer of Licensee).
17.5 Notwithstanding any provision to the contrary, in the case of termination under Paragraphs 16.2.6 through 16.2.9, to protect the value of the Products and to avoid any disparagement of the Licensed Material and Products that could occur as a result of the circumstances of termination, Disney shall have the option, in Disney's absolute discretion, to purchase or to have one or more of its designees purchase any or all unsold Products in Licensee's inventory on the termination date at 20% over Licensee's direct cost of goods for such Products (not including overhead).
18. NON-ASSIGNABILITY
18.1 This Agreement, and the license granted to Licensee, are personal to Licensee, who was specifically chosen by Disney to be licensed because of Licensee’s and certain employees’ particular expertise and ability to design, produce and sell the Products in ways that maximise the value of the Products, and to otherwise perform the Agreement. Licensee shall not voluntarily or by operation of law assign, sub-license, transfer, encumber or otherwise dispose of all or any part of Licensee's interest in this Agreement (including, but not limited to, any encumbrance of the Products) without Disney's prior written consent, to be granted or withheld in Disney's absolute discretion. Any attempted assignment, sub-license, transfer, encumbrance or other disposal without such consent shall be void and shall constitute a material default and breach of this Agreement. "Transfer" within the meaning of this Paragraph 18 shall include any merger or consolidation involving Licensee or any directly or indirectly controlling Affiliate(s) of Licensee (“Controlling Affiliate”); any sale or transfer of all or substantially all of Licensee's or its Controlling Affiliate(s)’ assets; any transfer of Licensee's rights, obligations, or both, under this Agreement, to a division, business segment or other entity different from the one specifically referenced on page 1 of this Agreement (or any sale or attempted sale of Products under a trademark or trade name of such division, business segment or other entity); any public offering, or series of public offerings, whereby a cumulative total of thirty-three and one-third percent (33 1/3%) or more of the voting stock of Licensee or its Controlling Affiliate(s) is offered for purchase; and any acquisition, or series of acquisitions, by any person or entity, or group of related persons or entities, of a cumulative total of thirty-three and one-third percent (33-1/3%) or more of the voting stock of Licensee or its Controlling Affiliate(s), or the right to vote such percentage (or, if Licensee is a partnership, resulting in the transfer of thirty-three and one-third percent (33-1/3%) or more of the profit and loss participation in Licensee, or the occurrence of any of the foregoing with respect to any general partner of Licensee; or, if Licensee is a legal entity other than a corporation or partnership, resulting in the transfer of thirty-three and one-third percent (33-1/3%) or more of the control of Licensee, or the occurrence of any of the foregoing with respect to any manager or administrator of the legal entity).
18.2 Licensee shall provide Disney with at least thirty (30) days’ prior written notice of any desired assignment of this Agreement or other Transfer (as defined in Paragraph 18.1). At the time Licensee gives such notice, Licensee shall provide Disney with the information and documentation necessary to evaluate the contemplated transaction. Disney shall have the absolute discretion as to whether to consent to any assignment of this Agreement or other Transfer. Disney’s consent (if given) shall be subject to
46 AN GRO PLUS Ltd /Agreement No: 100-1452565
such terms and conditions as Disney deems appropriate, including but not limited to, payment of a transfer fee if the Agreement adds value to the Transfer transaction, or if the Transfer presents potential business risk or cost to Disney, as determined in Disney’s absolute discretion. The amount of the transfer fee shall be determined by Disney based upon the circumstances of the particular assignment or Transfer, taking into account such factors as the estimated value of the license being assigned or otherwise transferred; the risk of business interruption or loss of quality, production or control Disney may suffer as a result of the assignment or other Transfer; the identity, reputation, creditworthiness, financial condition and business capabilities of the proposed assignee or other entity involved in the Transfer; and Disney's internal costs related to the assignment or other Transfer; provided, however, in no event shall a transfer fee be in an amount less than an amount equal to the greater of (i) the actual Royalties earned in the twelve (12) month period preceding the notice of the proposed assignment (including, if less than 12 months of the Term has elapsed at the date of Transfer, royalties earned under a previous license agreement concerning equivalent products); (ii) the amount of reasonably estimated or forecasted Royalties for the twelve (12) calendar months succeeding the effective date of the proposed Transfer; or (iii) the Guarantee for this Agreement pro-rated for the same period. The foregoing transfer fee shall not apply if this Agreement is assigned to one of Licensee's Affiliates as part of a corporate reorganisation exclusively among some or all of the entities existing in Licensee's corporate structure as of the date of this Agreement; provided, however, that Licensee must give Disney written notice of such assignment and a description of the reorganisation, and must obtain Disney’s written consent as described above. The provisions of this Paragraph 18 shall supersede any conflicting provisions on this subject in any merchandise license agreement previously entered into between the parties for this Territory.
18.3 Licensee acknowledges that it has read and understands the Transfer Fee Policy set forth on DisneyConsumerProducts.com, which governs transfer fee procedures under this Agreement and is incorporated by this reference. For new licensees, a copy of the Transfer Fee Policy will be provided in hard copy form, upon request.
18.4 Licensee may, upon Disney’s prior written consent, sublicense Licensee's rights, obligations, or both, under this Agreement, to any of Licensee's Affiliates, provided that each such Affiliate agrees to be bound by all of the terms and conditions of this Agreement, and further provided that Licensee and each such Affiliate provide Disney with satisfactory documentation of such agreement(s), guarantee(s), and indemnification upon Disney’s request, and in a form satisfactory to Disney. Licensee represents, warrants and irrevocably and unconditionally guarantees that any and all Affiliates sublicensed will observe and perform all of Licensee's obligations under this Agreement, including, but not limited to, the provisions governing approvals, and compliance with approved samples, applicable Laws, indemnification and all other provisions, and that they otherwise will adhere strictly to all of the terms hereof and act in accordance with Licensee's obligations. Any involvement of an Affiliate in the activities related to this Agreement shall be deemed carried on pursuant to such a sublicense and thus covered by such guarantee; however, unless Licensee has obtained Disney’s consent to sublicense an Affiliate in each instance, such Affiliate shall be deemed to be included in the term “Licensee” for all purposes under this Agreement, and Disney may treat such unapproved involvement of the Affiliate as a breach of the Agreement.
19. CONFIDENTIALITY
Licensee agrees to keep the terms and conditions of this Agreement confidential, and not to disclose such terms and conditions to any third party, without obtaining Disney’s prior written
47 AN GRO PLUS Ltd /Agreement No: 100-1452565
consent; provided, however, that this Agreement may be disclosed on a need-to-know basis to Licensee’s attorneys and accountants who agree to be bound by this confidentiality provision, or as otherwise necessary for the enforcement of this Agreement, or as required by law or applicable court order. Licensee may have access to confidential information about Disney’s business operations, ideas, or information concerning works in progress, artwork, plots, characters, technology or other artistic creations, and/or consumer products and packaged food items of every nature and description of Disney, its Affiliates and/or licensors which information may not be accessible or known to the general public. Licensee agrees not to use or disclose such information to any third party without obtaining Disney’s prior written consent. The obligations of confidentiality contained in this paragraph shall not apply to information which: (i) is in the public domain; or (ii) comes into the public domain other than due to a fault on the part of Licensee and/or its Affiliates; or (iii) which is received by Licensee from a third party who did not receive it in confidence.
20. MUSIC AND OTHER RIGHTS
Except as specifically designated by Disney with respect to likeness, neither musical compositions, musical recordings, nor any name, voice, or likeness of any human performer associated with the Properties are licensed under this Agreement. In the event that Licensee wishes to use such materials in connection with the Products and/or the advertising thereof and Disney approves such use, Licensee will be solely responsible for securing any and all permissions (e.g., from the appropriate music publisher or collection society, or from the applicable actor for use of name, voice or likeness) and making any and all payments (separate from the Royalties payable to Disney hereunder) required in connection with Licensee’s use thereof before manufacturing any Product or engaging in any activities hereunder utilising same, even in cases where Disney has provided such materials to Licensee. Disney may act as the liaison between Licensee and any applicable rights holders in connection with Licensee’s license of such rights, or in some cases may direct Licensee to contact a rights holder directly.
21. NOTICES
All notices which either party is required or may desire to serve upon the other party shall be in writing, addressed to the party to be served at the address set forth in the Schedule. Such notice shall be deemed served upon personal delivery or five (5) business days after the date of mailing or two (2) business days after the date sent by overnight courier, or upon the following business day if sent by fax provided a successful transmission report is generated as applicable; provided, however, that Disney shall be deemed to have been served with a notice of a request for approval of materials under this Agreement only upon Disney's actual receipt of the request and of any required accompanying materials.
22. SURVIVAL OF OBLIGATIONS
The respective obligations of the parties under this Agreement, which by their nature would continue beyond the termination, cancellation or expiration of this Agreement, including, but not limited to, indemnification, insurance, payment of Royalties, audits, and Paragraphs 17 and 19, shall survive the Agreement’s termination, cancellation or expiration.
23. EQUITABLE RELIEF
Licensee acknowledges Disney will suffer material and irreparable damage if Licensee breaches or threatens to breach this Agreement, including if Licensee continues to manufacture, offer for sale, sell, advertise, promote or distribute the Products upon the expiration or termination of the Term of this Agreement, or of any applicable Schedule, and Disney will have no adequate remedy at law because it will be difficult or impossible to
48 AN GRO PLUS Ltd /Agreement No: 100-1452565
establish the full and precise monetary value of such damage. Licensee agrees that, in addition to any and all other remedies available to Disney, Disney shall have the right to have any such activity by Licensee restrained by equitable relief, including, but not limited to, a temporary restraining order, a preliminary injunction, a permanent injunction, or such other alternative relief as may be appropriate, without the necessity of Disney posting any bond.
24. PRESERVATION OF DISNEY’S GOODWILL
The rights and powers retained by Disney, as well as the obligations of and limitations on Licensee, are necessary to protect the Licensed Material, including all intellectual property rights associated therewith, and, specifically, to conserve the goodwill and good name, of the Disney Entities. Therefore Licensee shall not allow the same to become involved in matters that will, or could, detract from or impugn the public acceptance and popularity thereof, or impair their legal status. Licensee also shall refrain from any action or inaction that would reduce or negatively affect the goodwill of the Disney Entities or associated with the Licensed Material. Without limitation, Licensee acknowledges that such prohibited conduct includes the production, marketing, advertising, sale or use of any Products: (i) in any manner or environment that is inconsistent with the family values associated with the Licensed Material or the Disney Entities; (ii) in any manner or environment that disparages the Products or the Disney Entities; (iii) in any manner that does not make clear that the Licensed Material is owned or co-owned by or licensed to the Disney Entities (iv) as gifts or promotional material in order to promote third party products, services or any commercial establishment; and (v) in a manner or environment or at quantity levels significantly above prior practice suggesting that the Products are second-rate, low-quality, low-value, unwanted or counterfeit products, and at prices below cost or so far below prior sales practices as to suggest that the Products are second-rate, low-quality, low-value, unwanted or counterfeit products (without prejudice to Licensee’s absolute discretion to sell Products at such legal prices as it may determine). In addition Licensee recognises and acknowledges the vital importance to Disney and DEI of the characters and other proprietary material which they own or create, and the association of the Disney name with them. In order to prevent the denigration of products bearing the Licensed Material and the value of their association with the Disney name, and in order to ensure the dedication of Licensee’s best efforts to preserve and maintain that value, Licensee agrees that it will not produce, market, advertise or sell items of merchandise embodying or bearing any artwork or other representation that Disney determines, in its reasonable discretion, is confusingly similar to the Licensed Material or other proprietary material owned or co-owned by or licensed to the Disney Entities as to suggest association with or sponsorship by any of the Disney Entities. In addition, Licensee shall not use or co-mingle with the Licensed Material or Products, and shall use commercially reasonable efforts to keep others from using or co-mingling with the Licensed Material and Products, any other characters or properties (and related intellectual property), whether owned by Licensee or a third party in a manner which suggests association with or sponsorship by any of the Disney Entities. “Disney Entities” shall mean DEI, its Affiliates and/or the licensors (if any) of each.
25. MODIFICATIONS OR EXTENSIONS OF THIS AGREEMENT
Except as otherwise provided in this Agreement, this Agreement can be extended or modified only by a writing signed by authorised representatives of both parties; provided, however, that uncontroversial amendments such as the addition of Products, and the addition of Properties shall be effective if Disney sends notice to Licensee specifying the amendment and stating that the amendment shall be effective unless Licensee objects within ten (10) days of the date of the notice; if Licensee fails to object within the ten (10) day period, the amendment shall be incorporated into the Agreement as of the effective date of the amendment.
49 AN GRO PLUS Ltd /Agreement No: 100-1452565
26. GENERAL
The terms of this Agreement are severable and the invalidity or unenforceability of any term of this Agreement shall not affect the validity or enforceability of any other term. This Agreement does not provide for a joint venture, partnership, agency, or employment relationship between the parties, or any other relationship than that of licensor and licensee. This Agreement contains the entire agreement between the parties concerning the subject matter hereof and supersedes any pre-existing or contemporaneous agreement and any oral or written communications between the parties. Nothing in this Agreement excludes any liability one party may owe to the other in respect of any fraudulent misrepresentation. Except as provided in paragraph 25, any modification or waiver hereof must be in writing and signed by both parties. The paragraph headings used in this Agreement are for convenience only and are not intended to have substantive meaning or effect. When necessary, for appropriate meaning, a plural shall be deemed to be singular and the singular shall be deemed to be plural.
This Agreement shall be governed and interpreted according to the laws of Poland. Any legal actions pertaining to this Agreement commenced by Disney shall be subject to the non- exclusive jurisdiction of the courts of Poland and the parties agree to submit to the jurisdiction of the courts of Poland. Any legal actions pertaining to this Agreement commenced by Licensee shall be subject to the exclusive jurisdiction of the courts of Poland.
50 AN GRO PLUS Ltd /Agreement No: 100-1452565
ATTACHMENT 1
Code of Conduct for Manufacturers
At The Walt Disney Company, we are committed to:
• a standard of excellence in every aspect of our business and in every corner of the world; • ethical and responsible conduct in all of our operations; • respect for the rights of all individuals; and • respect for the environment.
We expect these same commitments to be shared by all manufacturers of Disney merchandise. At a minimum , we require that all manufacturers of Disney merchandise meet the following standards:
Child Labour Manufacturers will not use child labour.
The term “child” refers to a person younger than 15 (or 14 where local law allows) or, if higher, the local legal minimum age for employment or the age for completing compulsory education.
Manufacturers employing young persons who do not fall within the definition of “children” will also comply with any laws and regulations applicable to such persons.
Involuntary Labour Manufacturers will not use any forced or involuntary labour, whether prison, bonded, indentured or otherwise. Coercion and Harassment Manufacturers will treat each employee with dignity and respect, and will not use corporal punishment, threats of violence or other forms of physical, sexual, psychological or verbal harassment or abuse.
Non-discrimination Manufacturers will not discriminate in hiring and employment practices, including salary, benefits, advancement, discipline, termination or retirement, on the basis of race, religion, age, nationality, social or ethnic origin, sexual orientation, gender, political opinion or disability.
Association Manufacturers will respect the rights of employees to associate, organise and bargain collectively in a lawful and peaceful manner, without penalty or interference.
Health and Safety Manufacturers will provide employees with a safe and healthy workplace in compliance with all applicable laws and regulations, ensuring at a minimum reasonable access to potable water and sanitary facilities; fire safety; and adequate lighting and ventilation.
Manufacturers will also ensure that the same standards of health and safety are applied in any housing that they provide for employees.
Compensation We expect manufacturers to recognise that wages are essential to meeting employees’ basic needs. Manufacturers will, at a minimum, comply with all applicable wage and hour laws and regulations, including those relating to minimum wages, overtime, maximum hours, piece rates and other elements
52 AN GRO PLUS Ltd /Agreement No: 100-1452565 ATTACHMENT 1
of compensation, and provide legally mandated benefits. Except in extraordinary business circumstances, manufacturers will not require employees to work more than the lesser of (a) 48 hours per week and 12 hours overtime or (b) the limits on regular and overtime hours allowed by local law or, where local law does not limit the hours of work, the regular work week plus 12 hours overtime. In addition, except in extraordinary business circumstances, employees will be entitled to at least one day off in every seven-day period.
Manufacturers will compensate employees for overtime hours at such premium rate as is legally required or, if there is no legally prescribed premium rate, at a rate at least equal to the regular hourly compensation rate.
Where local industry standards are higher than applicable legal requirements, we expect manufacturers to meet the higher standards. Protection of the Environment Manufacturers will comply with all applicable environmental laws and regulations.
Other Laws Manufacturers will comply with all applicable laws and regulations, including those pertaining to the manufacture, pricing, sale and distribution of merchandise.
All references to “applicable laws and regulations” in this Code of Conduct include local and national codes, rules and regulations as well as applicable treaties and voluntary industry standards.
Subcontracting Manufacturers will not use subcontractors for the manufacture of Disney merchandise or components thereof without Disney’s express written consent, and only after the subcontractor has entered into a written commitment with Disney to comply with this Code of Conduct. Monitoring and Compliance Manufacturers will authorise Disney and its designated agents (including third parties) to engage in monitoring activities to confirm compliance with this Code of Conduct, including unannounced on-site inspections of manufacturing facilities and employer-provided housing; reviews of books and records relating to employment matters; and private interviews with employees. Manufacturers will maintain on site all documentation that may be needed to demonstrate compliance with this Code of Conduct.
Publication Manufacturers will take appropriate steps to ensure that the provisions of this Code of Conduct are communicated to employees, including the prominent posting of a copy of this Code of Conduct, in the local language and in a place readily accessible to employees, at all times.
53 AN GRO PLUS Ltd /Agreement No: 100-1452565 ATTACHMENT 2
FACILITY AND MERCHANDISE AUTHORISATION APPLICATION INSTRUCTIONS
Attached is the Facility and Merchandise Authorisation (“FAMA”) Application that must be completed for each Facility (as described below).
• Please make as many copies of the attached FAMA Application as necessary so that you can complete a FAMA Application for each Facility.
• Once the FAMA Application is completed for each Facility, please send the completed application, together with any required supporting documentation, to your designated Disney Representative.
Social Compliance Group Phone: +44 (0) 208 222 1000 The Walt Disney Company Limited Fax: +44 (0) 208 222 3606 3 Queen Caroline Street E-mail: [email protected] Hammersmith London, W69 PE United Kingdom
• Disney will review the information and determine whether each Facility will be authorised to produce Disney-branded products.
• PRODUCTION OF DISNEY-BRANDED PRODUCTS MAY NOT BEGIN AT A FACILITY UNLESS AND UNTIL YOU RECEIVE A SIGNED FAMA APPLICATION FROM DISNEY.
• You also may present the signed FAMA to Customs officials to facilitate the importation of goods if the Facility is outside the territory where the goods are to be sold.
Definition of “Facility” : any of Licensee’s own or third-party manufacturers, vendors, factories, farms, suppliers, and other facilities (as well as any sub-manufacturers, vendors, factories, farms, suppliers and other facilities) that design, produce, process, finish, assemble, or package products, components, or materials, or any other item related to the products, components or materials, containing, incorporating or applying any Disney intellectual property (i.e., any names, marks, logos, characters, artwork, or other proprietary material owned or controlled by The Walt Disney Company or any of its affiliated companies), all of which are hereby referred to as Disney-branded products.
Exclusions: At this time, production facilities that do not need to be declared, and for which no FAMA Application is required, include (i) facilities that produce blank or generic products, components or materials that DO NOT contain, incorporate or involve the application of any Disney intellectual property (such as blank or generic cardboard boxes, plastic wrap, or plain buttons) and (ii) raw materials, fabric mills or processors of generic commodity items such as cotton, metal and paper that DO NOT contain, incorporate or involve the application of any Disney intellectual property. Unless involved in the actual production or manufacture of Disney-branded products, DO NOT list agents, business offices or showrooms as a Facility. The Shipper and/or Importer of Record is strictly the party who transports the goods; if the name is different from that of the Licensee/Vendor or Facility, please so indicate on the FAMA Application.
Incomplete or illegible forms will be returned to you for resubmission. Please make copies of these forms and use the copies to submit your information. Maintain the original in your files for future use.
54 AN GRO PLUS Ltd /Agreement No: 100-1452565 ATTACHMENT 2
FACILITY & MERCHANDISE AUTHORISATION REQUEST (Factory Application)
A LICENSEE / VENDOR DETAILS LICENSEE / VENDOR NAME: CONTRACT NUMBER(S) (as shown on your contractual agreement): Address: Contact Name: Contact Email: Telephone Number: Fax Number:
B MANUFACTURING FACILITY (FACTORY) DETAILS FACTORY NAME (place Where Disney products are Factory Telephone made) : Number:
FACTORY ADDRESS (NOT office location or postal Factory Fax box number): Number: Street: Factory Contact
Name: Province City: Job Title: : Mobile Phone Postal Code: Country: Number: Other names by which this factory is known: Email:
Is this Factory owned by the
Licensee/Vendor? (check box) Yes No
C PRODUCT DETAILS PRODUCTS MANUFACTURED IN THIS FACTORY: (as per your contractual agreement, e.g. t-shirts, magazines, toys, pencils, books, labels, cups, biscuits, packaging, etc.)
Property (character), brand or logo appearing on 12. Territory where the products may be sold: (please products: (e.g. Mickey Mouse, Captain America, Winnie list, as per your contractual agreement) The Pooh)
D (Optional) SHIPPER / IMPORTER Name and address of shipper/importer:
E PROMOTIONS* Total Number/quantity Disney Business Unit of units: running the promotion: Estimated Production Start date End date Contact name of person Period: in Disney Business Unit:
55 AN GRO PLUS Ltd /Agreement No: 100-1452565 ATTACHMENT 2
Sections A, B and C must be completed in full. Section D is optional. Section E* is only to be filled in if you have a Promotions contract with Disney
Please complete this form and return this to your ILS representative: NAME Emai Tel: Fax: : l:
56 AN GRO PLUS Ltd /Agreement No: 100-1452565 ATTACHMENT 3
ROYALTY STATEMENT FORM
Licensee Name: TOTALS Contract Number: Net sales: Despatch Period From: Net Royalty : Despatch Period To: Total Contract :
Destinatio EAN/UP Disney Character Licensee SKU Distributio Invoice Gross Returns Net Unit Net Royalty Net Conversio Total n Country C Number Merchandis Descriptio Catalogue descriptio n Channel Currency Quantity Quantity Price Sales Rate Royalty n Rate Contract e Code n Code n Code
57 AN GRO PLUS Ltd /Agreement No: 100-1452565 ATTACHMENT 4
List of authorised Hologram manufacturers
1) Avery Dennison UK Ltd
(European Sales Office) Unit 1, Thomas Road Tel: +44 (0) 1628 859 500 Wooburn Green Fax: +44 (0) 1628 859 599 Bucks HP10 0PE E-mail: [email protected] United Kingdom
Contact details for orders in Asia: Contact details for orders in Europe:
Tel: +852-2400 4127 Tel: +90 212 489 3120 x128 Fax:+852-2307 4522/2785 1255 Fax:+90 212 489 3144
Tel: +852 2400 4131 Avery Dennison Etiket Ticaret Ltd Sti Fax:+852 2785 1255/2307 4522 Baglar Mah. Yalcin Kores Cad No. 22 A Blok 34540 Avery Dennison Gunesli, Bagcilar 9/F, Sun Ping Ind. Building, Istanbul 916 - 922 Cheung Sha Wan Road, Turkey Kowloon, Hong Kong
List of authorised Label manufacturers
1) Avery Dennison UK Ltd – details as above
Licensee may also use any other label or hangtag manufacturer who is able to manufacture labels and hangtags of equivalent quality and can meet Disney’s quality brand standards for labels and hangtags and has been confirmed in writing by Disney to be authorised.
58 AN GRO PLUS Ltd /Agreement No: 100-1452565 ATTACHMENT 5
PERMITTED/NON-PERMITTED SOURCING COUNTRIES AND PROHIBITED PERSONS
A. Prohibited Sourcing Countries
See attached list. From time to time, Disney may establish conditions (for all or certain licensees on a permanent or temporary basis) as a condition to the use of Facilities in certain Permitted Sourcing Countries. Please refer to the ILS Program Manual and/or contact your Disney ILS representative for details. If Licensee plans to use new Facilities or Facilities in a new country, it is important that the Licensee checks with a Disney ILS representative for the latest issues regarding that country or Facility.
B. Prohibited Persons
For more information, please refer to the following websites:
http://www.treas.gov/offices/enforcement/ofac/sdn/ http://www.bis.doc.gov/ComplianceAndEnforcement/ListsToCheck.htm
C. Non-Permitted Sourcing Countries:
All countries not currently on the list of Permitted Sourcing Countries may not be used to manufacture or source Products, PA Materials and components thereof (including blank items). This includes all countries under trade restriction by the U.S. Government or other applicable Laws with respect to the Products. The current list of countries subject to trade restriction by the U.S. Government or other applicable Laws is:
Burma North Korea Cuba Sudan Iran Syria
In addition, if any country is listed on the Permitted Sourcing Countries list becomes subject to trade restriction by the U.S. Government or other applicable Laws with respect to the Products, then such country shall no longer be a Permitted Sourcing Country. For more information about trade sanctioned countries, please refer to the following websites:
http://www.treas.gov/offices/enforcement/ofac/programs/index.shtml http://www.access.gpo.gov/bis/ear/ear_data.html http://www.bis.doc.gov/complianceandenforcement/index.htm
Note: Lists are subject to change. It is Licensee’s responsibility to monitor any changes to the information set forth above. In the event that a country or Person becomes subject to trade restrictions by the U.S. Government or other applicable Laws with respect to the Products, the prohibition shall be automatic as of the effective date of the trade restriction or other Law without need of any notice from Disney.
59 AN GRO PLUS Ltd /Agreement No: 100-1452565 ATTACHMENT 5
Permitted Sourcing Countries GROUP 1 (PERMITTED WITHOUT ILS AUDITS – 71 COUNTRIES/TERRITORIES) AMERICAN SAMOA CYPRUS JERSEY, CHANNEL QATAR ISLANDS ANDORRA CZECH REPUBLIC KOREA, SOUTH RÉUNION ANGUILLA DENMARK LATVIA SAN MARINO ANTIGUA AND DOMINICA LIECHTENSTEIN SINGAPORE BARBUDA ARUBA ESTONIA LITHUANIA SLOVAK REPUBLIC AUSTRALIA FINLAND LUXEMBOURG SLOVENIA AUSTRIA FRANCE MACAO SPAIN BAHAMAS FRENCH GUIANA MALTA ST. KITTS AND NEVIS BARBADOS GERMANY MARTINIQUE ST. LUCIA BELGIUM GREENLAND MAURITIUS ST. VINCENT AND THE GRENADINES BERMUDA GUAM MONACO SWEDEN BOTSWANA HONG KONG NETHERLANDS SWITZERLAND BRUNEI HUNGARY NETHERLANDS TAIWAN ANTILLES CANADA ICELAND NEW ZEALAND UNITED KINGDOM CAPE VERDE IRELAND NORWAY UNITED STATES CAYMAN ISLANDS ISRAEL POLAND URUGUAY CHILE ITALY PORTUGAL VIRGIN ISLANDS (U.S.) COSTA RICA JAPAN PUERTO RICO
GROUP 2 (PERMITTED WITH ILS AUDITS, 101 COUNTRIES/TERRITORIES) ALBANIA GHANA MARSHALL ISLANDS SÃO TOMÉ AND PRINCIPE ARGENTINA GREECE MEXICO SAUDI ARABIA ARMENIA GRENADA MICRONESIA SENEGAL BAHRAIN GUATEMALA MOLDOVA SERBIA BELIZE GUYANA MONGOLIA SEYCHELLES BENIN HAITI * MONTENEGRO SIERRA LEONE BHUTAN HONDURAS MOROCCO SOLOMON ISLANDS BOLIVIA INDIA MOZAMBIQUE SOUTH AFRICA BOSNIA AND INDONESIA NAMIBIA SRI LANKA HERZEGOVINA BRAZIL JAMAICA NAURU SURINAME BULGARIA JORDAN NEW CALEDONIA SWAZILAND BURKINA FASO KAZAKHSTAN NICARAGUA TANZANIA CAMBODIA * KENYA NIGER THAILAND CHINA KIRIBATI NIUE TONGA COLOMBIA KOSOVO OMAN TRINIDAD AND TOBAGO COOK ISLANDS KUWAIT PALAU TUNISIA CROATIA LEBANON PANAMA TURKEY DJIBOUTI LESOTHO PAPUA NEW GUINEA TUVALU DOMINICAN LIBERIA PARAGUAY UGANDA REPUBLIC EGYPT MACEDONIA PERU UKRAINE EL SALVADOR MADAGASCAR PHILIPPINES UNITED ARAB EMIRATES FIJI MALAWI ROMANIA VANUATU
60 AN GRO PLUS Ltd /Agreement No: 100-1452565 ATTACHMENT 5
GABON MALAYSIA RUSSIAN VIETNAM FEDERATION GAMBIA MALDIVES RWANDA WEST BANK AND GAZA GEORGIA MALI SAMOA ZAMBIA
*Only facilities participating in the Better Work or Better Factories Cambodia programs are eligible
61 AN GRO PLUS Ltd /Agreement No: 100-1452565