FORM: NBPA
U.S./NON-APPAREL
LICENSEE: INNOVO, INC. RETAIL PRODUCT LICENSE AGREEMENT
ADDRESS: ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
THIS RETAIL PRODUCT LICENSE AGREEMENT is entered into by NBA Properties,
Inc. ("NBAP"), with its principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and the licensee listed above ("LICENSEE") with regard
to the commercial use of certain names, logos, symbols, emblems, designs
and uniforms and all identifications, labels, insignia or indicia thereof
( the "Marks") of the national Basketball Association (the "NBA") and its
Member Teams (collectively, the "NBA Marks"). On the terms of this
Agreement and subject to the attached NBAP Standard Terms and Conditions,
NBAP hereby accepts, the non-exclusive (except as otherwise expressly
provided in this Agreement) right and license to use the marks of the
member Teams, the silhouetted dribbler logo (the "NBA Logo") and the
Marks of the NBA, NBA All-Star Weekend and NBA Playoffs and Finals
(collectively, the "Licensed Marks") solely in connection with the
manufacture, distribution, advertisement, promotion and sale of the
products described in Paragraph A below including one or more of the
Licensed Marks ("Licensed Products"). No license or right is granted for
the use of the Licensed Marks for any purpose other than on the Licensed
Products and in the distribution, advertisement, promotion and sale of
the Licensed Products in accordance with this Agreement.
A. LICENSED PRODUCTS:
* insulated and non-insulated vinyl lunch bags and soft-
sided coolers
* cotton canvas tote bags
* nylon, vinyl and/or cotton laundry bags
* shoe bags
* garment bags
* "Cush-N-Carry" seat cushions
B. TERM: As of August 1, 1997 to July 31, 1998 (the "Term").
C. TERRITORY: Licensed Products may only be distributed in the ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ and the District of Columbia, except that product may
be shipped to the in-arena concessionaires of the Toronto Raptors
and Vancouver Grizzlies (the "Territory").
D. ROYALTY RATES: During the Term, LICENSEE shall pay monthly to NBAP
a royalty and advertising and promotion payment (hereinafter
referred to as "royalty") equal to twelve percent (12%) of "Net
Sales" (as defined in Paragraph 1 of the attached NBAP Standard
Terms and Conditions).
E. MINIMUM GUARANTEES: LICENSEE guarantees that its aggregate royalty
payments to NBAP for the Term under this Agreement shall not be
less than forty-six thousand dollars ($46,000).
F. ADVANCES: Upon execution of this Agreement, LICENSEE shall pay to
NBAP the sum of eleven thousand five hundred dollars ($11,500) as an
advance to be credited against LICENSEE's Minimum Guarantee as set
forth above.
G. ADVERTISING AND PROMOTION:
(i) Consistent with NBAP's past practice of creating, undertaking
or supporting advertising and promotion activities with respect
to NBAP-licensed products sold at retail, NBAP shall devote up
to two percent (2%) of Net Sales (from the royalties received
from LICENSEE pursuant to this Agreement) to cover the expenses
incurred by NBAP in connection with such advertising and
promotion activities.
(ii) LICENSEE shall exhibit, at its sole cost and expense, a fair
and representative selection of Licensed Products at the Super
Show and every other trade show where LICENSEE exhibits
licensed products.
H. SELLING PRACTICES: LICENSEE acknowledges NBAP's legitimate and
reasonable interest in protecting the value of the NBA Marks and
maximizing the effectiveness of its advertising, promotion and
distribution efforts by segmenting the classes of trade into which
its licensees sell NBAP-licensed products. Therefore, LICENSEE
shall only sell Licensed Products to a buyer that, to its best
knowledge (i) purchases Licensed Products from LICENSEE solely for
sale directly to the consumer and operates a retail establishment
that supports the high quality and image of NBA officially licensed
products with appropriate merchandising displays, promotion and/or
customer service. LICENSEE acknowledges that a failure to comply
with the selling practices set forth in this Paragraph shall cause
significant harm to NBAP's efforts to effectively and efficiently
distribute NBAP-licensed products.
AGREED TO AND ACCEPTED, subject AGREED TO AND ACCEPTED:
to and incorporating the attached NBAP NBA PROPERTIES, INC.
Standard Terms and Conditions which
the undersigned has read:
INNOVO, INC. By:_____________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President,
Business Affairs
By:________________________
Title:_____________________ Dated:__________________
NBAP STANDARD TERMS AND CONDITIONS
1. ADDITIONAL DEFINITIONS
For the purposes of this Agreement
(a) "Contract Year" shall mean a twelve (12)month accounting period
commencing August 1 and concluding July 31.
(b) "Counterfeit Goods: shall mean and include: (i) goods that
bear any NBA ▇▇▇▇ that has been reproduced and/or affixed
without authorization from NBAp; (ii) goods that bear any NBA
▇▇▇▇ produced by any source in excess of an amount ordered by
an NBAP licensee; and (iii) goods that bear any NBA ▇▇▇▇ that
have been rejected by NBAP or an NBAp licensee and nevertheless
enter the stream of commerce.
(c) "Diverted Goods" shall mean and include any goods produced by
someone acting on behalf of an NBAP licensee, which goods are
not delivered by the producer to such licensee or to a person
designated by such licensee to receive such goods.
(d) "Net Sales" shall mean the total amount of the gross sales of
a Licensed Product by LICENSEE. After deducting any bona-fide
credit or adjustment for returns actually made and volume
discounts actually and customarily given to the trade (such
discounts may not exceed two percent (2%) of the gross sales
for the applicable accounting period). In computing Net Sales,
no direct or indirect expenses or costs incurred in connection
with paying royalties due under this Agreement (including
transferring funds or royalties or converting currency into
U.S. dollars) or manufacturing, selling, distributing,
importing or advertising including cooperative and other
advertising and promotion allowances (the Licensed Products
shall be deducted, nor shall any deduction be made for
uncollectible accounts, cash discounts, early payment
discounts, discounts relating to advertising, ▇▇▇▇-down
allowances or other allowances. Net sales resulting from sales
to any party directly or indirectly related to or affiliated
with LICENSEE (a "Related Transaction") computed based on
regular selling prices to the trade. If such related party or
affiliate is a reseller to the trade of the Licensed Products,
the sales price for purposes of determining Net Sales of a
Related Transaction shall be the higher of the sales price to
the related or affiliated party or the sales price charged to
the trade by such related or affiliated party. If a purchaser
from LICENSEE purchases FOB the manufacturing source or
participates in other arrangements which result in such
purchaser paying less for the Licensed Products than LICENSEE's
regular selling prices to the trade, Net Sales with respect to
any such transaction shall be computed based on the regular
selling prices to the trade.
(e) "Premium" shall mean anything given free or sold at
substantially less than its usual selling price (but does not
include sales made pursuant to periodic price reductions
resulting from"specials," "sales," or volume pricing discounts)
for the purpose of increasing the sale of, or publicizing, any
product or service, or other giveaway or promotional purpose.
Other giveaway or promotional purposes include, but are not
limited to, self-liquidating offers, uses of Licensed Products
as sales force or trade incentives and sales of Licensed
Products through distribution schemes involving earned
discounts or "bonus" points based on the consumer's use of the
offeror's product or service.
2. TEAM REPRESENTATION; LIMITATIONS ON LICENSE
(a) Unless otherwise approved in writing by NBAP, each Licensed
Product must be manufactured and offered for sale on LICENSEE's
standard terms in a version for each Member Team. Unless
otherwise approved in writing by NBAP, the NBA Logo must (i)
only be used in combination with the Marks of one (1) or more
Member Teams (i.e., must be on all Licensed Products), which
must be shown with equal or greater prominence that the NBA
Logo or (ii) may be used by itself.
(b) All designs of the Licensed Products, including any packages,
containers or tags, shall be subject to NBAP's prior written
approval and shall be used solely in furtherance of this
Agreement, and such designs will not be used in any other
respect by LICENSEE nor will LICENSEE authorize any third party
to use such designs except as may be required by NBAP.
Notwithstanding the foregoing, NBAP acknowledges that LICENSEE
may hold other licenses pursuant to which LICENSEE
manufactures, distributes or sells products similar in design
to the Licensed Products and nothing in this Agreement is
intended to prohibit LICENSEE's manufacture, distribution or
sale of such products not bearing or relating to the Licensed
Marks.
3. STATEMENTS AND PAYMENTS; REPORTING
(a) Statement and Payments: By the fifteenth (15th) day following
the end of each month, LICENSEE shall furnish (on forms
provided by or approved by NBAP) full and accurate statements
(on a county-by-country and unit basis, if more than one
country is contained within the definition of the Territory),
certified by an officer of LICENSEE, showing all information
relating to the calculation of Net Sales for the preceding
month. Simultaneously with the submission of such statement,
LICENSEE shall make all monthly royalty payments required under
this Agreement for the preceding month. The minimum amount of
each monthly royalty payment with respect to each Licensed
Product category shall be the amount which, when added to
payments of royalties previously made for the Contract Year
with respect to such Licensed Product category, shall be equal
to one-twelfth (8.34%) of the Minimum Guarantee for such
Licensed Product category for such Contract Year required under
Paragraph E above, multiplied by the number of months then
elapsed. Aggregate royalties paid each Contract Year may
exceed the Minimum Guarantee for such Contract Year. Such
monthly statements shall be furnished and the required payments
made by LICENSEE whether or not there are any Net Sales for
that month. All computations and payments shall be in U.S.
dollars, at the spot rate for the local currency as published
in the Wall Street Journal for the last business day of the
preceding month. If LICENSEE shall fail to timely pay any
amount due under this Paragraph, LICENSEE shall pay interest on
such amount at a rate equal to the lesser of (i) three percent
(3%) per annum over the highest prime rate (announced by
Chemical Bank, New York branch) prevailing during the period
between the date the payment first became due and the date such
payment is actually paid or (ii) the highest rate permitted by
law during the period between the date the payment first became
due and the date such payment is actually paid. The receipt or
acceptance by NBAP of any of the statements furnished or
royalties paid by LICENSEE (including the cashing of any
royalty checks) shall not preclude NBAP from questioning their
accuracy at any time, auditing LICENSEE's books and records
pursuant to Paragraph 12 or claiming any shortfall in royalty
payments or advertising and promotion payments. In order to
assist with NBAP's annual budget process, by April 15 of each
Contract Year, LICENSEE shall deliver a statement detailing
LICENSEE's projections for sales of each Licensed Product for
the following Contract Year, broken down on a quarterly basis.
If LICENSEE fails to comply with reporting requirements
contained in this Paragraph, NBAP may charge LICENSEE, two
thousand U.S. dollars (US $2,000) for each instance of non-
compliance with this Paragraph.
(b) No Cross Collateralization: Any royalty payment for unit of
Licensed Product sold shall only be applied against the Minimum
Guarantee for such Licensed Product for the Contract Year in
which the unit of such Licensed Product was sold (i.e., any
shortfall in, or payment in excess of, the Minimum Guarantee
for a Contract Year may not be offset or credited against the
Minimum Guarantees for any other Contract Year, against any
other Licensed Product or against any other NBA license
(including premium license agreements entered into pursuant to
Paragraph 5 hereof) held by LICENSEE). If Minimum Guarantees
are stated separately for different categories of Licensed
Products royalty payments resulting from Net Sales of a
category of Licensed Product shall be applied only against the
Minimum Guarantee for such category of Licensed Product.
(c) No Withholdings: All payments made by LICENSEE under this
Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any income,
stamp or other taxes, charges, fees deductions or withholdings.
If any such axes, charges, fees, deduction or withholdings are
required to be withheld from any amounts payable to NBAP
hereunder, the amounts so payable shall be increased to the
extent necessary to yield to NBAP the amounts specified in this
Agreement.
4. NON-RESTRICTIVE GRANT; RIGHTS RESERVED
Nothing in this Agreement shall prevent NBAP from granting any other
licenses and rights. All rights not specifically granted in this
Agreement are expressly reserved by NBAP. No right of renewal or
option to extend is granted or implied and LICENSEE shall have no
right to continue manufacturing or selling Licensed Products or to
continue holding itself out as a licensee of NBAP after the
expiration or termination of this Agreement except as provided in
Paragraph 14.
5. PREMIUMS
LICENSEE shall not use, nor allow any third party to use, any
Licensed Product as a Premium without NBAP's prior written
authorization pursuant to a separate agreement with NBAP. In
addition, LICENSEE shall not offer any Premium with the
Licensed Products without the prior written consent of NBAP.
Nothing in this Agreement shall prohibit LICENSEE from
marketing Licensed Products using creative techniques
consistent with industry practice, including, but not limited
to, periodic "specials," "sales," or volume discount prices, so
long as all receipts are accounted for in Net Sales and in
accordance with this Agreement.
6. GOODWILL
LICENSEE recognizes that (i) a portion of the value of the NBA
Marks is attributable to goodwill, (ii) the goodwill attached
to the NBA Marks belongs exclusively to NBAP, the NBA and its
Member Teams and (iii) that such NBA Marks have secondary
meanings in the minds of the public. LICENSEE shall not,
during the Term or thereafter, challenge the property rights of
the Member Teams, whether severally owned or held in
association as the NBA, or NBAP's property rights in and to NBA
Marks.
7. PROTECTION OF RIGHTS
(a) Unauthorized Activities: LICENSEE shall promptly notify
NBAP in writing of any infringements of the Licensed Marks
or the Licensed Products or the sale of any Licensed
Products outside the Territory which may come to
LICENSEE's attention. NBAP shall have the sole right to
determine whether or not any action shall be taken on
account of any such infringement. LICENSEE agrees not to
contact any third party, not to make any demands for
claims and not to institute any suit or action on account
of such infringement or unauthorized
importation/exportation without obtaining the express
prior written permission of NBAP in each instance.
(b) Assistance in Protecting Marks: LICENSEE shall
cooperate to the fullest extent necessary to assist NBAP
in the protection of the rights of NBAP, the NBA and the
Member Teams in and to the Licensed Marks. NBAP shall
reimburse LICENSEE for any reasonable out-of-pocket costs
actually incurred by LICENSEE in providing such
cooperation and assistance. LICENSEE shall cooperate with
NBAP in its enforcement efforts, including being named by
NBAP as a complainant in any action against an infringer.
LICENSEE shall pay to NBAP, and waives all claims to, all
damages or other monetary relief recovered in any such
NBAP-initiated action by reason of a judgment or
settlement (other than for reasonable attorneys' fees and
expenses incurred at NBAP's request) whether or not such
damages or any part of such damages represent or are
intended to represent injury sustained by LICENSEE.
(c) Ownership of Marks: LICENSEE acknowledges that NBAP and/or
the Member Teams are the exclusive owners
of the Licensed Marks. Any intellectual
property rights in the Licensed Marks that
may accrue to LICENSEE shall inure to the
benefit of NBAP and shall be assigned to
NBAP, any upon its request. Any
copyright, trademark, service ▇▇▇▇
procured by LICENSEE with respect to or
involving the licensed Marks, derivations
or adaptations of the Licensed Marks, or
any word, symbol or design which is
similar to the Licensed Marks so as to
suggest association with or sponsorship by
the NBA, one of its Member Teams or any of
their affiliates, shall be procured for
the benefit of and in NBAP's name, but at
LICENSEE's expense, notwithstanding their
creation by LICENSEE. LICENSEE shall take
all necessary steps to secure an
assignment to NBAP to the copyright from a
creator of work that is not work-for-hire.
LICENSEE shall assign, and hereby does
assigned, to NBAP any copyright, trademark
or service ▇▇▇▇ affecting or relating to
the Licensed Marks already procured or
applied for. LICENSEE shall supply NBAP
with any necessary supporting materials
required to obtain copyright or trademark
registrations of any copyrights or
trademarks required to be assigned to NBAP
under this Agreement. Notwithstanding the
above, LICENSEE shall also remain
proprietor in conjunction with NBAP,
during and after the termination of this
Agreement, of any intellectual property
right that LICENSEE acquired in relation
to the licensed trademark.
(d) Notices, Labeling, and Records: NBAP may from time-to-
time designate such copyright, trademark or service ▇▇▇▇
notices (including the form, location and content of such
notices) that LICENSEE shall cause to appear on or within
each Licensed Product sold, by means of a tag, label,
imprint or other appropriate device, in every instance in
which any Licensed ▇▇▇▇ is used. The following general
notice (in the English language and the language of the
country where the Licensed Products will be sold) must be
included on a label, the packaging material or on a
separate slip of paper packed with or attached to the
Licensed Product:
"The NBA and individual NBA member team
identifications reproduced on this product are
trademarks and copyrighted designs, and/or other
forms of intellectual property, that are the
exclusive property of NBA Properties, Inc. and the
respective NBA member teams and may not be used, in
whole or in part, without the written consent of NBA
Properties, Inc."
LICENSEE shall (i) cause all Licensed Products to bear the
NBA "official Licensed Product" logo on either the article
or its packaging in such place, and in such prominence, as
NBAP may designate from time-to-time, (iii) faithfully
comply with and adhere to NBAP's mandatory hologram
"Official Licensed Product" identification system, or such
other shipment tracking, identification and anti-
counterfeiting systems, tags and labels that NBAP may
establish from time-to-time, (iii) unless approved in
writing by NBAP, not cross-license or otherwise use other
licensed properties or other Marks with the Licensed
Products or Licensed Marks and (iv) keep appropriate
records, and advise NBAP, of the date when each of the
Licensed Products is first placed on sale or sold in each
country of the Territory and the date of first use in each
country of each different Licensed ▇▇▇▇ in the Licensed
Products and any promotional or packaging materials.
(e) Recordation and Registered User Applications: With
respect to those countries in which LICENSEE may
distribute and which require applications to register
LICENSEE as a permitted or registered user of the Licensed
Marks, or which require the recordation of this Agreement,
LICENSEE shall execute and deliver to NBAP such
applications, agreements or other documents as may be
necessary. In such event, this Agreement rather than such
agreements will govern any disputes between LICENSEE and
NBAP, and when this Agreement expires or is terminated,
any such other agreement shall also be deemed expired or
terminated.
(f) LICENSEE Trade Names and Trademarks: LICENSEE shall
permanently affix labeling on each Licensed Product or its
packaging, indicating its name, trade name and address so
that the public can identify the supplier of the Licensed
Product. Prior to any distribution or sale of any
Licensed Products, LICENSEE shall advise NBAP in writing
of LICENSEE's trade name or trademarks used on Licensed
Products and the proposed placement of such trade names
and trademarks on the Licensed Products. LICENSEE shall
only sell Licensed Products under mutually agreed upon
trade names or trademarks and with approved copyrighted
designs, shall not incorporate the Licensed Marks into
LICENSEE's corporate or business name or trademark in any
manner whatsoever and shall place its trade names and
trademarks on Licensed Products only as approved in
writing by NBAP prior to such use. As requested by NBAP,
LICENSEE shall supply NBAP, in advance of shipping any
Licensed Products, with at least twelve (12) copies of
each type of its hang tags, labels and other markings of
origin for use in identifying and authenticating Licensed
Products in the marketplace. LICENSEE shall not use,
whether during or after the Term, any Marks: (i) in
connection with the Licensed Marks without NBAP's
authorization, (ii) confusingly-similar to the Licensed
Marks, or (iii) intended to relate or refer to the
Licensed Marks, the Member Teams or events involving the
NBA or the Member Teams.
8. INDEMNIFICATIONS
LICENSEE shall be solely responsible for, and shall
defend, hold harmless and indemnify NBAP, the NBA, its
Member Teams and the National Basketball Players
Association ("NBPA") and their respective affiliates,
owners, directors, governors, officers, employees and
agents (collectively "NBA Parties")against, any claims,
demands, causes of action or damages,including attorneys'
fees (collectively, "Claims"), arising out of: (i) any
act or omission of LICENSEE, (ii) any breach of this
Agreement by LICENSEE, (iii) the manufacture,
distribution, advertisement, promotion, sale, possession
or use of any Licensed Product (including, but not limited
to, claims relating to any defect (whether obvious or
hidden and whether or not present in any sample approved
by NBAP) in a Licensed Product or in any packaging or
other materials (including advertising materials), or to
injuries to persons or property, or to any infringement of
any rights of any other person or entity or to LICENSEE's
failure to comply with applicable laws, regulations and
standards) or (iv) any claim that the use of any design or
other graphic component of any Licensed Product (other
than the Licensed Marks) violates or infringes upon the
trademark, copyright or other intellectual property rights
(including trade dress) of a third party, provided
LICENSEE is given prompt written notice of and shall have
the option to undertake and conduct the defense of any
such Claim. In any instance to which the foregoing
indemnities pertain, NBAP shall cooperate fully with and
assist LICENSEE in all respects in connection with any
such defense. LICENSEE shall reimburse NBAP for all
reasonable out-of-pocket costs actually incurred by NBAP
in connection with such cooperation and assistance. In
any instance to which such indemnities pertain, LICENSEE
shall keep NBAP fully advised of all developments
pertaining to such Claim and shall not enter into a
settlement of such Claim or admit liability or fault
without NBAP's prior written approval. LICENSEE shall
obtain and maintain product liability insurance providing
protection for the NBA Parties against any Claims arising
out of any alleged defects in the Licensed Products or any
use of the Licensed Products, in an amount and providing
coverage satisfactory to NBAP (including the amount of the
deductible). Such insurance shall be carried by an
insurer with a rating by A.M. Best & Co. of A-7 or other
rating satisfactory to NBAP. Such insurance policy shall
also provide that NBAP receive written notice within
thirty (30) days prior to the effective date of the
cancellation, non-renewal or any material change in
coverage. In the event LICENSEE has failed to deliver to
NBAP a certificate of such insurance evidencing
satisfactory coverage prior to NBAP's execution of this
Agreement (or fails to maintain such insurance in
accordance with this Paragraph), NBAP shall have the right
to withdraw its consent to use any or all of the Licensed
Marks and/or terminate this Agreement at any time. Such
insurance obligations shall not limit LICENSEE's indemnity
obligations, except to the extent that LICENSEE's
insurance company actually pays NBAP amounts which
LICENSEE would otherwise be obligated to pay NBAP.
(b) NBAP shall be solely responsible for, and shall defend,
hold harmless and indemnify LICENSEE, it directors,
officers, employees and agents against any Claims arising
out of: (i) a claim that the use of the Licensed Marks
as authorized by this Agreement violates or infringes upon
the trademark, copyright or other intellectual property
rights (including trade dress) of a third party in or to
the Licensed Marks or (ii) any breach of this Agreement by
NBAP, provided NBAP is given prompt written notice of and
shall have the option to undertake and conduct the defense
of any such Claim. In any instance to which the foregoing
indemnities pertain, LICENSEE shall cooperate fully with
and assist NBAP in all respects in connection with any
such defense. NBAP shall reimburse LICENSEE for all
reasonable out-of-pocket expenses actually incurred by
LICENSEE in connection with such cooperation and
assistance. In any instance to which such indemnities
pertain, NBAP shall not enter into a settlement of such
Claim or admit liability or fault without LICENSEE's prior
written approval. NBAP shall have the right within
seventy (70) days of LICENSEE's commencement of production
of Licensed Products bearing such Marks, to advise
LICENSEE that one or more Marks of a Member Team (other
than the team's name or primary logo) are not covered by
this Paragraph 8(b), whereupon any continued use of such
▇▇▇▇ by LICENSEE shall be at LICENSEE's sole risk.
9. QUALITY; APPROVALS; SAMPLES
LICENSEE shall cause the Licensed Products to meet and conform
to high standards of style, quality and appearance. In order
to assure NBAP that it is meeting such standards and other
provisions of this Agreement, LICENSEE shall comply with the
following:
(a) Pre-Production: Before commercial production and
distribution of any product bearing a Licensed ▇▇▇▇,
LICENSEE shall submit to NBAP all preliminary and proposed
final artwork, three dimensional models (if any),
prototypes, mock-ups, and pre-production samples of each
product, including all styles, colors and variations,
together with its labels, tags, cartons and containers
(including packaging and wrapping materials). All
LICENSEE submissions under this Paragraph shall be
accompanied by forms supplied by NBAP, using one (1) form
for each submission and filling in all necessary
information. NBAP shall approve or disapprove in writing
all submissions, in its sole discretion, before LICENSEE
shall be entitled to distribute, advertise, use, produce
commercial quantities of or sell any item relating to any
such submission. Any article actually submitted and not
disapproved within sixty (60) days after receipt by NBAP
shall be deemed approved. Approval of an article which
uses a particular artwork does not imply approval of such
artwork with a different article or of such article with
different artwork. LICENSEE acknowledges that NBAP's
approval of an article does not imply approval of, or
license to use, any non-NBA controlled elements contained
in any article. After a sample of an article has been
approved, LICENSEE shall not make any changes without
resubmitting the modified article for NBAP's written
approval.
(b) Production Samples: Before selling or distributing any
product bearing a Licensed ▇▇▇▇, LICENSEE shall furnish
NBAP with, at no charge, for its permanent use, two (2)
samples of the product from the first production run of
each manufacturer of the Licensed Products, including all
styles, colors and variations, together with its labels,
tags, cartons and containers (including packaging and
wrapping materials). If such samples do not conform to
all aspects of the Licensed Product as approved or if the
quality of any such sample does not meet the requirements
of this ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ shall notify LICENSEE and such
article shall be deemed disapproved and all such articles
shall be promptly destroyed. LICENSEE shall also furnish
NBAP, free of charge, with any additional pieces of
Licensed Product as may reasonable be requested by NBAP to
promote the sale of Official Licensed Products (e.g., for
NBAP's display room, advertisements, catalogs, mailers,
product placement and trade shows) or for comparison with
earlier samples. In addition, LICENSEE shall provide NBAP
with any additional pieces of Licensed Product as may be
required for the permanent use of the Member Teams, not to
exceed one (1) piece per Member Team. If NBAP wishes to
purchase Licensed Products for give-away purposes and not
for resale, LICENSEE shall sell the Licensed Products to
NBAP at LICENSEE's direct manufacturing cost for such
Licensed Products and LICENSEE shall not be required to
pay royalties on such sales to NBAP.
(c) Rejections and Non-Compliance: The rights granted
under this Agreement do not permit the sale of "seconds"
or "irregulars." All submissions or samples not approved
by NBAP shall promptly be destroyed by LICENSEE. LICENSEE
shall advise NBAP regarding the time and place of such
destruction (in sufficient time to arrange for an NBAP
representative to witness such destruction, if NBAP so
desires) and such destruction shall be attested to in a
certificate signed by one of LICENSEE's officers and
submitted to NBAP within fifteen (15) days of the date on
which the sample was not approved. In the event of
LICENSEE's unapproved or unauthorized manufacture,
distribution, use or sale of any products or materials
bearing the Licensed Marks, including promotional
materials, or the failure of LICENSEE to comply with
Paragraphs 7(d), 7(f), 9, 11(c) or 11(e), NBAP shall have
the right to: (i) immediately revoke LICENSEE's rights
with respect to any Licensed Product licensed under this
Agreement, (ii) charge LICENSEE two thousand U.S. dollars
(US $2,000) for each instance (e.g., per unit) of non-
compliance with this Paragraph with respect to any
article, product or material and/or (iii) at LICENSEE's
expense, confiscate or order the destruction of such
unapproved, unauthorized or non-complying products. Such
right(s) shall be without prejudice to any other rights
NBAP may have under this Agreement or otherwise.
(d) Testing: Both before and after Licensed Products are put
on the market, LICENSEE shall follow reasonable and proper
procedures for testing the Licensed Products for
compliance with laws, regulations, standards and
procedures, and shall permit NBAP (upon reasonable notice)
to inspect its and its authorized manufacturer's testing,
manufacturing and quality control records, procedures and
facilities and to test or sample Licensed Products for
compliance with this Paragraph and the other terms and
conditions of this Agreement. Licensed Products found by
NBAP at any time not to comply with applicable laws,
regulations, standards and procedures shall be deemed
disapproved, even if previously approved by NBAP, and
shall not be shipped unless and until LICENSEE can
demonstrate to NBAP's satisfaction that such Licensed
Products have been brought into full compliance.
(e) Revocation of Approval: In the event that: (i) the
quality, appearance or style of any Licensed Product
ceases to be acceptable to NBAP, (ii) LICENSEE uses the
Licensed Marks improperly or violates any term of this
Paragraph 9 or, (iii) NBAP becomes aware of something
relating to any such Licensed Product or LICENSEE which,
in the opinion of NBAP, reflects unfavorably upon the
professional, business or personal reputation of NBAP, the
NBA or any of its Member Teams, then, in any such event,
NBAP shall have the right, in its sole discretion, to
withdraw its approval of such Licensed Product. In the
event of such withdrawal, NBAP shall provide immediate
written notice to LICENSEE and LICENSEE shall cease the
use of the Licensed Marks in connection with the
manufacture, sale, distribution, advertisement or use of
such Licensed Product and such Licensed Product shall
immediately be withdrawn from the market and destroyed;
provided, however, that in the event of a revocation of
approval pursuant to (i) above, NBAP and LICENSEE shall
negotiate in good faith to provide for a reasonable sell-
off period for such Licensed Product and advertising and
promotion amounts. Within ten (10) day after LICENSEE's
receipt of such notice, LICENSEE shall pay all royalties
and Minimum Guarantees due NBAP with respect to the
Licensed Product for which approval has been revoked. If
there are other Licensed Products for which approval has
not been withdrawn under this subparagraph, then this
Agreement shall remain in full force and effect as to such
other Licensed Products. LICENSEE shall notify NBAP in
writing of any Licensed Products deleted from its product
lines.
10. PROMOTIONAL MATERIAL
LICENSEE shall not use the Licensed Marks or any
reproduction of the Licensed Marks in any advertising,
promotion or display material in connection with any
product or in any other manner whatsoever without prior
written approval from NBAP. Under no circumstance will
"lotteries," "games of chance" or any other type of
promotion which NBAP believes reflects unfavorably upon
the NBA or its Member Teams be approved. All advertising
or promotional copy and material depicting or using the
Licensed Marks (including display material, catalogs and
press releases) shall be submitted for approval well in
advance of production (but in no event less than ten (10)
business days prior to the start of commercial production)
to allow adequate time for NBAP, in its sole discretion,
to approve, disapprove or comment upon such materials and
for any required changes to be made. By way of example,
no television or cinema advertising containing any
Licensed ▇▇▇▇ ▇▇▇ be used unless it has been approved in
all stages (i.e., storyboard, production "rough-cut" and
final version). Unless otherwise approved by NBAP, any
NBA game action photographs or footage that LICENSEE uses
in connection with the Licensed Products must be obtained
from NBA Entertainment, Inc. ("NBAE") and shall be subject
to NBAE's search and edit charges and any additional NBAE
licensing fees. Any promotional material submitted that
is not approved or disapproved by NBAP within thirty (30)
days of its receipt by NBAp shall be deemed approved by
NBAP. LICENSEE shall be solely responsible and liable for
any advertising and promotional activities conducted and
shall ensure that all such activities comply with all
applicable laws, regulations and standards in the
Territory.
11. DISTRIBUTION; COMPLIANCE
(a) LICENSEE shall use its best efforts to distribute
and sell, within and throughout the Territory, the
Licensed Products in such manner as may be required
to meet competition by reputable manufacturers of
similar articles. In any ninety (90) day period in
which LICENSEE fails to sell or distribute Licensed
Products in reasonable commercial quantities,
LICENSEE shall be deemed not to have used it best
efforts. LICENSEE shall make and maintain adequate
arrangements for the distribution and timely
delivery of Licensed Products to retailers within
and throughout the Territory. In the event NBAP
advises LICENSEE that a special promotional effort
is to take place in an individual store or chain,
LICENSEE shall use its best efforts to sell the
Licensed Products to said store or chain. In
addition, LICENSEE shall give the Licensed Products
wide distribution in the Territory and shall not,
subject to the provisions set forth in this
Agreement, refrain for any reason from selling
Licensed Products to any retail outlet within the
Territory that may desire to purchase Licensed
Products and whose credit rating and marketing image
warrants such sale.
(b) If LICENSEE desires to have a third party
manufacture or distribute (if permitted under this
Agreement) any Licensed Product, LICENSEE must first
notify NBAP of the name and address of such third
party and of the Licensed Product LICENSEE desires
such a third party to manufacture or distribute.
Attached as Schedule A is a true and complete list
of all third party manufacturers and distributors
(if permitted under this Agreement) currently
authorized by NBAP. NBAP shall have the right, in
its sole discretion, to withhold approval for such
third party manufacture or distribution. If NBAP
grants approval for such third party manufacture or
distribution, it may grant such approval pursuant to
an agreement (on a form supplied by NBAP) to be
entered into prior to such manufacture or
distribution among NBAP, LICENSEE and such
manufacturer or distributor which will, among other
things, require that the third party manufacturer or
distributor be subject to all of the terms and
conditions of this Agreement. If NBAP does not
require the third party to enter into a separate
agreement, LICENSEE must provide NBAP with a copy of
its agreement with the third party, which agreement
must provide that it is subject to this Agreement.
If any of LICENSEE's authorized manufacturers or
distributors uses the Licensed Marks for any
unauthorized purpose, LICENSEE shall be responsible
for, and shall cooperate fully and use its best
efforts in stopping, such unauthorized use. Any
change by LICENSEE from a third party manufacturer
or distributor previously approved by NBAP shall
require approval in accordance with this Paragraph.
(c) LICENSEE understand and acknowledges the meanings of
"Counterfeit Goods" and "Diverted Goods" as set
forth in Paragraph 1 above and LICENSEE shall use
all commercially reasonable means to prevent the
creation of any such goods by it employees, agents,
representatives or any others operating under its
direction, supervision or control and involving the
NBA Marks. Nothing in this Agreement, however,
shall be deemed to restrict LICENSEE with respect to
its obligation to fulfill orders from customers in
accordance with applicable laws.
(d) In the event LICENSEE sells or distributes other
licensed merchandise of a similar grade or quality
as the Licensed Products, but which do not bear any
of the Licensed Marks, LICENSEE will not
discriminate, in a manner which adversely impacts
the Licensed Products, in the granting of
commissions or discounts to salesmen, dealers and
distributors between the Licensed Products and the
licensed products of any third party. LICENSEE may
not package the Licensed Products in combination
with other products, whether similar or different,
without the prior written approval of NBAP. In the
event that NBAP believes in good faith that LICENSEE
has employed selling or reporting methods which
circumvent or reduce the royalty or other payment or
reporting obligations contained in this Agreement,
NBAP may, in addition to any other rights and
remedies it may have, at its option and upon fifteen
(15) days' prior written notice, adjust or establish
the minimum royalty per unit.
(e) LICENSEE shall at all times conduct all aspects of
its business in a fair and reasonable manner and in
compliance with all shipment tracking,
identification and anti-counterfeiting systems and
labels that NBAP may establish from time to time and
all applicable laws, government rules and
regulations, court and administrative decrees and
the highest standard of business ethics then
prevailing in the industry. LICENSEE shall
faithfully comply with and adhere to NBAP's shipping
and distribution policies established from time-to-
time. LICENSEE shall use its commercially
reasonable efforts to ensure that all retailers and
authorized distributors purchasing Licensed Products
comply with NBAP's anti-counterfeiting systems,
labels and shipping and distribution policies
established from time to time.
(f) It shall be LICENSEE's sole responsibility, at its
sole expense, to obtain all approvals (including,
but not limited to, approvals of advertising
materials) of all governmental authorities which may
be necessary in connection with LICENSEE's
performance under this Agreement.
(g) LICENSEE acknowledges that NBAP intends to offer
various NBA and/or Member Team-identified products
for sale in an NBAP-owned "showcase" retail store
("NBA Store"). LICENSEE further acknowledges that
it will receive a variety of tangible and intangible
benefits as a result of having merchandise
manufactured by LICENSEE displayed, sold and
promoted at the NBA Store. Therefore, LICENSEE
shall, in addition to and in consideration for the
license granted under this Agreement and in
consideration of the benefits it will receive from
having merchandise displayed, sold and promoted at
the NBA Store, (i) upon the request of NBAP, perform
contract manufacturing services for NBAP in
connection with the manufacture of products for sale
in the NBA Store on terms as mutually agreed upon by
NBAP and LICENSEE and (ii) offer Licensed Products
to the NBA Store on terms at least as favorable as
those offered to LICENSEE's most preferred high-
volume customers, including price, priority of
delivery, discounts, cooperative or other
advertising and promotional allowances and other
benefits (regardless of volume).
12. RECORDS;AUDITS
LICENSEE shall keep accurate books of account and records
covering all transactions relating to the license granted
in this Agreement (including, but not limited to, sales of
Licensed Products, purchases and uses of NBA hologram hang
tags and compliance with shipment tracking, identification
and anti-counterfeiting systems and labels that NBAP may
establish from time to time). NBAP and its authorized
representatives shall have the right, at all reasonable
hours of the day and upon reasonable prior notice, to
examine and audit such books of account and records and
all other documents and materials in LICENSEE's possession
or under its control (including records of LICENSEE's
parents, subsidiaries, affiliates and third parties, if
they are involved in activities which relate to this
Agreement) relating to this Agreement. NBAP shall have
free and full access for such purposes and for the purpose
of making extracts and copies. Should an audit by NBAP
establish a deficiency between the amount found to be due
NBAP and the amount LICENSEE actually paid or reported,
the LICENSEE shall pay the amount of such deficiency, plus
interest at the then current prime rate (as announced by
Chemical Bank, New York branch) from the date such amount
should have been paid until the date of payment. Should
such audit establish a deficiency of more than five
percent (5%), LICENSEE shall also pay for the cost of the
audit. LICENSEE shall pay such amount within thirty (30)
days. All such books of accounts and records shall be
kept available for at least two (2) years after the
expiration or termination of this Agreement, or three (3)
years after the end of the Contract Year to which they
relate, whichever is earlier. In order to facilitate
inspection of its books and records, LICENSEE shall
designate a symbol or number which will be used
exclusively in connection with the Licensed Products on
which royalty payments are payable and shall maintain for
inspection as provided in this Agreement duplicates of all
▇▇▇▇▇▇▇▇ to customers with respect to Licensed Products.
LICENSEE shall, within ten (10) business days of NBAP's
request (which shall not be made more than four (4) times
per Contract Year), furnish NBAP with a list of LICENSEE's
top twenty-five (25) retail accounts for Licensed Products
(on a country by country basis) and their monthly
purchases of Licensed Products (broken down by unit sales
and in dollar volume by retailer). LICENSEE shall supply
NBAP with true and complete copies of any agreement it has
entered into, or in the future enters into, with any
Member Team or any NBA player. In addition, LICENSEE
shall, on a quarterly basis during the Term, provide NBAP
with copies of either (i) financial information furnished
to the United State Securities and Exchange Commission or
(ii) with all financial statements and other financial
information prepared by LICENSEE for distribution to its
banks or other financial lending institutions to whom it
reports regularly. LICENSEE shall cooperate with NBAP in
developing an electronic data interchange through which
NBAP may access LICENSEE's electronic database relating to
the manufacture, distribution and sale of Licensed
Products (such as work-in-progress, finished goods on
hand, orders received, deliveries made and any other on-
line information relating to the Licensed Products) or
developing such other system as will enable NBAP to obtain
such information or facilitate NBAP's review of LICENSEE's
graphic designs for Licensed Products.
13. EARLY TERMINATION
Without prejudice to any other rights NBAP may have
pursuant to this Agreement or otherwise, NBAP shall have
the right to terminate this Agreement at any time if:
(a) Within three (3) months from the date that this
Agreement is executed on behalf of NBAP, LICENSEE
shall not have begun the bona-fide distribution and
sale of each Licensed Product within and throughout
the Territory in accordance with this Agreement.
(b) LICENSEE shall fail to timely remit a payment when
due and shall fail to cure such non-payment within
thirty (30) days (ten (10) days for a payment
default other than a royalty payment default) of its
receipt of written notice from NBAP; provided,
however, that the LICENSEE shall not have the right
to cure any subsequent payment default.
(c) LICENSEE or any guarantor under this Agreement shall
be unable to pay its liabilities when due, or shall
make any assignment for the benefit of creditors,
or under any applicable law admits in writing its
inability to meet its obligations when due or commit
any other act of bankruptcy, institute voluntary
proceedings in bankruptcy or insolvency or permit
institution of such proceedings against it.
(d) LICENSEE shall exhibit a pattern of frequent failure
to make timely delivery of sufficient quantities of
the Licensed Products to its retail accounts.
(e) LICENSEE (or any entity that controls LICENSEE or is
controlled by LICENSEE) now or in the future holds a
license from NBAP and such license is terminated by
NBAP during the Term.
(f) LICENSEE is in breach of Paragraph 11 (c).
(g) LICENSEE sells to any third party that LICENSEE
knows, or has reason to know, is altering or
modifying the Licensed Products prior to sale to the
ultimate consumer.
(h) LICENSEE shall fail to perform or shall be in breach
of any other term or condition of this Agreement
(other than a payment default). A termination
pursuant to this subparagraph (h) shall take effect
(i) thirty (30) days after written notice of such
failure to perform or breach is sent by NBAP if such
failure to perform or breach can be Completely Cured
(as defined below) and such failure to perform or
breach has not been Completely Cured during such
thirty (30) day period, or (ii) immediately after
written notice of such failure to perform or breach
is sent by NBAP if such failure to perform or breach
cannot be Completely Cured. For purposes of this
subparagraph, "Completely Cured" means that such
failure to perform or breach is cured so that, in
the reasonable judgment of NBAP, such failure to
perform or breach will have had no effect on, or
caused damage to, NBAP.
In addition to NBAP's other rights and remedies, upon
termination of this Agreement under this Paragraph,
LICENSEE shall pay NBAP (within thirty (30) days of such
termination) the Minimum Guarantees for each Licensed
Product through the end of the Agreement, less the
royalties paid to NBAP through the date of termination.
14. DISPOSAL OF STOCK
Sixty (60) days before the expiration of this Agreement
and ten (10) days after any termination under Paragraphs
9 or 13, LICENSEE will furnish to NBAP a certificate
showing the number and description of Licensed Products on
hand or in process of manufacture. After expiration or
termination of this Agreement, LICENSEE shall have no
right to, nor allow any third party to, manufacture,
advertise, distribute, sell, promote or otherwise deal in
any Licensed Products or use the Licensed Marks (and
LICENSEE shall not engage in any such activity) except as
provided below. For a period of ninety (90) days
following the expiration (but not after the termination)
of this Agreement, LICENSEE may sell-off and deliver
Licensed Products which are on hand or in process at the
time of such expiration (the "Sell-Off Period"); provided,
however that (i) the total number of units of each
Licensed Product sold during the Sell-Off Period may not
be greater than one hundred ten percent (110 %) of the
total number of units of such Licensed Product on hand the
same date the preceding Contract Year, (ii) such Licensed
Products may only be sold in accordance with this
Agreement and in the course of business and at regular
selling prices, (iii) all payments then due are first made
to NBAP and (iv) statements and payments with respect to
the Sell-Off Period are made in accordance with this
Agreement. NBAP shall have the option to conduct physical
inventories before the expiration of this Agreement until
the end of the Sell-Off Period in order to verify such
inventory and/or statements. If LICENSEE refuses to
permit such physical inventory, LICENSEE shall forfeit its
right to dispose of Licensed Products under this
Paragraph. After such Sell-Off Period, all inventory on
hand or in process (including all promotional and
packaging materials) will be destroyed. LICENSEE shall
have no sell-off rights in event this Agreement is
terminated the process (including all promotional and
packing materials) will be destroyed.
Any destruction of Licensed Product required pursuant to
this Agreement shall be attested to in a certificate
signed by one of LICENSEE's officers.
15. EQUITABLE RELIEF
LICENSEE acknowledges that NBAP is entering into this
Agreement not only in consideration of the royalties or
other financial consideration to be paid, but also for the
promotional value and intrinsic benefit resulting from the
manufacture, advertisement, distribution, sale and
promotion of the Licensed Products by LICENSEE in the
Territory. LICENSEE acknowledges that the Licensed marks
possess a special, unique and extraordinary character
which makes difficult the assessment of the monetary
damage which NBAP would sustain as a result of the
unauthorized use of the Licensed Marks. LICENSEE further
acknowledges that: (i) its failure to manufacture,
advertise, distribute, sell and promote the Licensed
Products in accordance with this Agreement and (ii) the
unauthorized or unapproved use of Licensed Marks will, in
either case, cause immediate and irreparable damage to
NBAP for which NBAP would not have an adequate remedy at
law. Therefore, LICENSEE agrees that, in the event of a
breach of this Agreement by LICENSEE, in addition to such
other legal and equitable rights and remedies as shall be
available to NBAP, NBAP shall be entitled to injunctive
and other equitable relief, without the necessity of
proving damages or furnishing a bond or other security.
16. NOTICES
All notices and statements to be given and all payments to
be made under this Agreement shall be given or made at the
respective address of the parties as set forth above,
unless notification of a change of address is given in
writing. Any notice of breach or default must be in
writing and sent by facsimile, overnight express delivery,
or registered or certified mail, return receipt requested,
properly addressed and stamped. Any written notice shall
be deemed to have been given at the time it is sent.
17. NO JOINT VENTURE
Nothing in this Agreement shall be construed to place the
parties in the relationship of partners or joint
venturers. Neither party shall have the power to obligate
or bind the other to a third party in any manner
whatsoever.
18. ARBITRATION OF CERTAIN MATTERS
Any dispute or disagreement between the parties relating
solely to the amount of royalty payments owing under this
Agreement shall be settled by arbitration in New York City
under the rules then in effect of the American Arbitration
Association. Judgment upon the award may be entered in
any court having jurisdiction. No other dispute or
disagreement between the parties (including any claim by
NBAP that LICENSEE is using the Licensed Marks in a manner
not authorized by this Agreement or is otherwise in breach
of this Agreement) shall be settled by arbitration. All
decisions by NBAP relating to disapproval of any Licensed
Product or advertising, promotion or display material
shall be final and binding on LICENSEE and shall not be
subject not review in any proceeding.
19. NO USE OF PLAYERS
LICENSEE acknowledges that this Agreement does not grant
to LICENSEE any licenses or rights with respect to the use
of the names, likenesses or other attributes of any NBA
player (collectively "Player Attributes"). The license
granted under this Agreement does not include, and shall
not be used to imply, a testimonial or endorsement of any
Licensed Products by any NBA player. LICENSEE shall not
use Player Attributes without first obtaining written
authorization from the subject player(s). LICENSEE shall
not enter into any agreement with any NBA player or any
other person which would require that player or other
person to wear or use any Licensed Product at any NBA game
(either courtside or in any locker room) or at practice.
20. WARRANTIES
Each party represents and warrants that it has the right
and authority to enter into and perform this Agreement and
NBAP represents and warrants that it has the right to
grant the rights to use the Licensed Marks in accordance
with the terms and conditions of this Agreement. LICENSEE
represents and warrants that the Licensed Products and all
advertising and promotional materials shall comply with
all applicable laws, regulations and standards. NBAP's
approval of such materials will not imply a representation
or belief that NBAP believes such materials are sufficient
to meet applicable laws, regulations and standards, nor
shall it imply that NBAP agrees with or supports any
claims made by LICENSEE in any advertising materials
relating to the Licensed Products. LICENSEE further
represents and warrants that all advertising and
promotional materials and all graphics used on Licensed
Products will not violate the intellectual property rights
of any third party.
21. SEVERABILITY
In the event any provision of this Agreement is found to
be void, invalid or unenforceable as a result of any
judicial or administrative proceeding or decree, this
Agreement shall be construed and enforced as if such
provision were not contained in this Agreement.
22. GOVERNING LAW AND JURISDICTION
This Agreement shall be construed in accordance with the
laws of the State of New York, USA, without regard to its
principles of conflicts of laws. Any claim arising under
this Agreement (except as provided under Paragraph 18)
shall be prosecuted in a federal or state court of
competent jurisdiction located within the City of New
York, USA, and LICENSEE consents to the jurisdiction of
such court and to the service of process by mail.
23. MISCELLANEOUS
(a) Assignment: This Agreement and any rights granted
under this Agreement are personal to LICENSEE and
shall not be assigned, sublicensed, subcontracted or
encumbered, directly or indirectly, by law or by
contract, without NBAP's prior written consent,
which consent may, in NBAP's sole discretion, (i) be
contingent upon a fee payable by LICENSEE or the
transferee, the amount of which shall be determined
by NBAP in its sole discretion, and/or (ii) impose
other terms and conditions upon the assignment,
sublicense or transfer. Any transfer of a
controlling interest in LICENSEE or in any party
which currently controls LICENSEE, directly or
indirectly, shall be deemed an assignment prohibited
by the preceding sentence. Any nonconsensual
assignment, sublicense, subcontract or encumbrance
or this Agreement by LICENSEE shall be invalid and
of no force or effect. Upon any such nonconsensual
assignment, sublicense, subcontract or encumbrance,
this Agreement shall terminate, all payment
obligations of LICENSEE hereunder shall be
accelerated and immediately due and payable, and all
rights granted under this Agreement shall
immediately revert to NBAP.
(b) Waiver: None of the provisions of this Agreement
can be waived or modified except expressly by
writing signed by both parties. There are no
representations, promises, agreements, warranties,
covenants or undertakings by either party other than
those contained in this Agreement. No failure on
the part of NBAP to exercise any right under this
Agreement shall operate as a waiver of such right;
nor shall any single or partial exercise of any
right preclude any other or further exercise or the
exercise of any other rights.
(c) Survival: No expiration or termination of this
Agreement shall relieve LICENSEE of its obligation
to pay NBAP any amounts due to NBAP at the time of
termination, regardless of whether these amounts are
then or thereafter payable. The provisions of
Paragraphs 12 and 23(f) shall survive the expiration
or termination of this Agreement.
(d) Adjustments: NBAP shall have the option to
increase the Royalty Rates and promotion commitment
in the event that, at any time during the Term,
LICENSEE agrees to pay or in fact pays royalty rates
and/or advertising and promotion contributions with
respect to any other licensed sports or
entertainment property in excess of the Royalty Rate
for any Licensed Product. From time to time at
NBAP's request, LICENSEE shall deliver a certificate
to NBAP which sets forth the royalty rates and
advertising and promotion contributions LICENSEE
pays to any other professional sports league or
entertainment property.
(e) Confidentiality: Neither party shall (nor shall
they permit or cause their employees or agents to)
divulge, disseminate or publicize information
relating to this Agreement or the financial or other
terms of this Agreement (including any information
on the specifications or methods of reproduction of
the Licensed Marks) to any third party (other than
their respective attorneys or accountants or in the
case of NBAP, the NBA Board of Governors and the
NBPA), except as may be required by law or to
fulfill the terms of this Agreement.
(f) Research: LICENSEE shall cooperate with NBAP's
reasonable requests for information in connection
with conducting marketing tests, surveys and other
research ("Research"), provided that any proprietary
information so furnished shall be kept strictly
confidential by NBAP. If LICENSEE performs or
causes to be performed any Research primarily
dedicated to evaluating or otherwise assessing a
Licensed Product (or any LICENSEE (non-NBA) product
offering similar to a Licensed Product), then copies
of such Research results shall be promptly provided
to NBAP. As may be reasonable requested by NBAP,
LICENSEE shall provide NBAP (or NBAP's designated
third-party researcher) with any Research and
information that LICENSEE has or obtains regarding
its retail accounts.
(g) Construction: This Agreement has been executed in a
text using the English language, which text shall be
controlling. This Agreement together with any
exhibits or attachments, when fully executed, shall
constitute the entire agreement and understanding
relating to the subject matter of this Agreement
between parties and cancels, terminates, and
supersedes any prior agreement or understanding
relating to the subject matter of this Agreement
between LICENSEE and the NBA, any Member Team or
NBAP. The headings in this Agreement are for
reference purposes only and shall not affect the
interpretation of this Agreement. This Agreement
shall not be binding on NBAP until signed on its
behalf by its President or Senior Vice President,
Business Affairs or such other executive designated
by the President to sign.
Schedule A
Third Party Manufacturers: