For the next few posts I will be breaking down a general Licensing Agreement clause-by-clause and giving brief explanations on what it all means. For the beginning of this series of posts, start at the first one dated Sept 14, 2009 (scroll down).
This is the next clause in a Licensing contract:
13. POST-TERMINATION & EXPIRATION RIGHTS
13.1 If this Agreement is terminated under Section 12, the Licensee and their receivers, representatives, trustees, agents, administrators, successors and/or permitted assigns of the parties shall have no right to manufacture, offer for sale, sell, ship, advertise, promote and/or distribute Licensed Products or to use in any way any Promotional materials.
13.2 Upon termination or expiration of this Agreement notwithstanding anything to the contrary herein, all Royalties owed by Licensee to Licensor on sales, shipments and/or distributions theretofore made shall become due and payable within thirty (30) days. As well, all sales payments owed by Licensor to Licensee shall become due and payable within thirty (30) days.
13.3 After expiration of this Agreement under any provision other than section 12, both parties may dispose of all Licensed Products which are on hand or in the process of manufacture at the time notice of termination is received or upon the expiration of the then in effect Term of this contract, provided that the Royalties and Sales Payments (Section 13.2) with respect to these Licensed Products are paid.
13.4 Within sixty (60) days after termination or expiration of this Agreement, as the case may be, the Licensee shall deliver to the Licensor a statement indicating the number and description of the Licensed Products which it had on hand or in the process of manufacturing as of the expiration or termination date.
—————————————————————–
The clause 13.1 states that if the Agreement is terminated under Section 12, the Licensee and any representatives of both parties shall have no right to manufacture, offer for sale, sell, ship, advertise, promote and/or distribute Licensed Products or to use in any way any Promotional materials.
13.2 then goes further to point out that if the agreement is terminates for other reasons or expires, then all Royalties owed by Licensee to Licensor are due and must be paid within thirty (30) days. As well, all sales payments owed by Licensor to Licensee are due and must be paid within thirty (30) days.
13.3 After expiration of this Agreement under any provision other than section 12, both parties may dispose (sell/give away/destroy) all Licensed Products which are on hand or in the process of manufacture at the the Licensee receives notice of termination or upon the expiration of the contract, provided that the Royalties and Sales Payments are paid.
Then 13.4 requires within sixty (60) days after termination or expiration of this Agreement, the Licensee shall deliver to the Licensor a statement indicating the number and description of the Licensed Products which it had on hand or in the process of manufacturing as of the expiration or termination date.
Regarding clause 13.4, I would now add that the final Royalty Statement include a total sum of all Licensed Products sold, including the amount of all the Royalties paid for record purposes.
====================================================
As most of you know, I am not a lawyer or an accountant and I recommend everyone seek their own legal counsel, accounting and tax advice in all contractual matters.
I provide consulting which is detailed on the ‘services’ page of this website.
Hope this contract breakdown helps you understand the intricacies of a Licensing Agreement. Should you have any questions contact me at info@Playdigm.com – please put ‘Your name & Licensing’ in the subject line of your email.
Thank you.
Sandford Tuey