Now, with full control over Marvel-branded toys produced for sale in 2006, Marvel will be in a better position to effect a smooth transition to Hasbro in areas such as toy development, manufacturing, shipping, and retail space.

As a result of this early termination, Marvel will record a one-time cash charge of $13 million - $16 million in the fourth quarter of 2005 related to the early termination and reimbursed research and development expenses. The charge is not reflected in Marvel's financial guidance for 2005, last provided on 9 November, 2005.

Marvel chairman Morton Handel said, "While Marvel will own any inventory produced for 2006, our policy of predominantly manufacturing to order should help mitigate our inventory risk. Commencing in 2007, a wide range of toy and game categories - including action figures, role play and preschool toys, board games and puzzles - will be produced by our new licensee, Hasbro. We are very excited by the business prospects we see in teaming with an industry leader."

The combined percentage royalty and fees to be received by Marvel from Hasbro will be generally lower than those paid by Toy Biz Worldwide, but Marvel believes that Hasbro's worldwide marketing, promotion and distribution strength should enhance the Marvel brand and Marvel-branded toy sales.

In conjunction with the signing of the Hasbro license agreement, Marvel will receive a non-refundable advance of $100 million. There will be no immediate revenue recognition related to the advance payment.