EXHIBIT 10.17
Contract No. ML-3858
MAJOR LEAGIUE BASEBALL PROPERTIES, INC.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT by and between Major League Baseball Properties,
Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter referred to as
"Licensor"), as agent for the Major League Baseball Clubs (the "Clubs"), and
Famous Fixins, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter
referred to as "Licensee"). This Agreement is not effective until signed by
the parties hereto.
THIS WILL CONFIRM OUR AGREEMENT AS FOLLOWS:
1. GRANT OF LICENSE: Licensor grants to Licensee for the term of
this Agreement, subject to the terms and conditions hereinafter contained,
the non-exclusive license to utilize the names, character, symbols, designs,
likenesses and visual representations described in Schedule A attached hereto
(herein such names, characters, symbols,' designs, likenesses and visual
representations are collectively called "Logos"), to be used solely in
connection with the manufacture, distribution, promotion, advertisement and
sale of the article or articles specified in Schedule B attached hereto
(herein such article or articles are called "Licensed Product(s)"). This
license does not constitute and may not be used so as to imply the
endorsement of the Licensed Product(s) or any other product of Licensee by
Licensor, the Office of the Commissioner of Baseball, the American or
National Leagues of Professional Baseball Clubs (hereinafter referred to as
the "Leagues") or the Clubs. While the Logos licensed herein may be used as
trademarks subject to the terms of this License Agreement, the Logos are not
licensed herein for use as certification marks or indications of a particular
standard of quality. Any exclusivity granted hereunder shall be subject to
presently outstanding agreements granted by the Clubs. Further, any
exclusivity granted hereunder shall pertain only to the extent of the items
described and, if given, at the price set forth in Schedule E. Licensor
warrants and represents that as the agent for the Clubs, pursuant to
authority granted by the Clubs, it has the full authority to license the
Logos in connection with the manufacture, distribution, promotion,
advertisement and sale of the Licensed Product(s).
2. TERRITORY: Licensee shall be entitled to use the license
granted hereunder only in the territory described in Schedule C attached
hereto (herein such territory is called "Licensed Territory"). Licensee will
not make use of or authorize any use of this license or the Licensed
Product(s) outside the Licensed Territory or distribute or sell the Licensed
Product(s) directly or through others to retailers outside the Licensed
Territory.
3. LICENSE PERIOD: The license granted hereunder shall be
effective and terminate as of the dates specified in Schedule D attached
hereto, unless sooner terminated or renewed in accordance with the terms and
conditions hereof.
4. PAYMENT: A. Advance and Guaranteed Compensation: Licensee
agrees to pay Licensor the sums specified in Schedule E attached hereto, as
advance minimum compensation (herein called "Advance Compensation") and as
guaranteed minimum compensation (herein called "Guaranteed Compensation").
The Advance Compensation shall be paid as set forth in Schedule E, and shall
apply against Percentage Compensation as defined below. The Guaranteed
Compensation shall be paid as provided in Schedule E except to the extent
that paid Advance Compensation and annual cumulative payments of Percentage
Compensation shall theretofore have offset all or a portion of the total of
such Guaranteed Compensation. Notwithstanding the foregoing, no part of
Percentage Compensation which may be attributable to premium sales (as
defined hereunder) of the Licensed Product(s) shall serve to offset any part
of the Total Guaranteed Compensation specified in Schedule E. No part of such
Advance Compensation and no part of such Guaranteed Compensation shall be
repayable to Licensee in any event, except as is expressly provided for
herein.
B. Percentage Compensation: Licensee agrees to pay Licensor
a sum equal to the percentage specified in Schedule E (or Licensor's
prevailing rate, if greater) of all net sales (as defined below) by Licensee
or any of its affiliated, associated or subsidiary entities of the Licensed
Product(s) covered by this Agreement. (Such percentage of net sales is herein
called "Percentage Compensation.") Percentage Compensation shall be payable
concurrently with the periodic statements required in the following
paragraph, except to the extent offset by Guaranteed Compensation theretofore
remitted. The term "net sales" shall mean gross sales based on the wholesale
price to the retail trade less quantity discounts and actual returns, but no
deduction shall be made for uncollectible accounts, commissions, taxes,
discounts other than quantity discounts, such as cash discounts and discounts
attributable to the issuance of a letter of credit, or any other amount. No
costs incurred in the manufacture, sale, distribution, promotion or
advertisement of the Licensed Product(s) shall be deducted in any Percentage
Compensation payable by Licensee. Said Percentage Compensation shall also be
paid by Licensee to Licensor on all Licensed Product(s) (including, without
limitation, any irregulars, seconds, etc. distributed pursuant to the
provisions of Paragraph 10 of this Agreement) distributed by Licensee or any
of its affiliated, associated or subsidiary entities even if not billed or
billed at less than usual net sales price for such Licensed Product(s), and
shall be based upon the usual net sales price for such Licensed Product(s)
sold to the trade by Licensee. Any late payments of Advance Compensation,
Guaranteed Compensation or Percentage Compensation shall require Licensee to
pay Licensor, in addition to the amounts due, interest at one percent (1%)
per month or the highest prime lending rate of Chase Manhattan Bank during
the period such amounts are delinquent, whichever is greater, on the amounts
delinquent for the period of the delinquency, without prejudice to any other
rights of Licensor in connection therewith.
C. Catalog Contribution: Licensee agrees that Licensor shall
have the right in its sole discretion and in a style and manner in which it
chooses, to print catalogs, sales sheets or brochures (hereinafter
"catalogs") wherein representative merchandise from licensees of Licensor
shall be displayed.
5. PERIODIC STATEMENTS: Within thirty (30) days after the first
day of the license period, and promptly on the 15th day of every calendar
month thereafter, Licensee shall furnish to Licensor complete and accurate
statements, certified to be accurate by Licensee, or if a corporation, by an
officer of Licensee, showing the sales volume of each Licensed Product
(itemized by Club, for each applicable Licensed Product), gross sales price,
itemized deductions from gross sales price, and net sales price of the
Licensed Product(s) distributed and/or sold by Licensee during the preceding
calendar month, together with any returns made during the preceding calendar
month. Such statements shall be furnished to Licensor whether or not any of
the Licensed Product(s) have been sold, or any payment is shown to be due
Licensor, during the calendar months in which such statements are due.
Licensee shall furnish to Licensor sufficient background information so as to
make such statements intelligible to Licensor, and on an annual basis, a
complete list of Licensee's customers to whom Licensed Product(s) have been
sold. Licensor agrees that it will not divulge said customer list to any
other licensee, to any other competitor licensing organization, or to any
competitor of Licensee. Receipt or acceptance by Licensor of any of the
statements furnished pursuant to this Agreement or of any sums paid hereunder
shall not preclude Licensor from questioning the correctness thereof at any
time, and in the event that any inconsistencies or mistakes are discovered in
such statements or payments, they shall immediately be rectified and the
appropriate payments made by Licensee. Late payment penalties, if any, shall
be made pursuant to Paragraph 4B. Upon demand of Licensor, Licensee shall at
its own expense, but not more than once in any twelve (12) month period,
furnish to Licensor a detailed statement certified by an independent
certified public accounting firm approved by Licensor showing the sales
volume of each Licensed Product (itemized by Club, for each applicable
Licensed Product), gross sales price, itemized deductions from gross sales
price and net sales price of the Licensed Product(s) covered by this
Agreement distributed and/or sold by Licensee to the date of the Licensor's
demand. All amounts payable pursuant to this Agreement shall be in U.S.
dollars only.
6. BOOKS AND RECORDS: Licensee shall keep, maintain and preserve
in its principal place of business for at least two (2) years following
termination or expiration of this Agreement or any renewal thereof, complete
and accurate records and accounts covering all transactions relating to this
Agreement and pertaining to the various items required to be shown on the
statements to be submitted by Licensee, including, without limitation,
invoices, correspondence and banking, financial and other records in
Licensee's possession or under its control. Such records and accounts shall
be available for inspection and audit (and copying at Licensor's expense) at
any time or times during or after the term or terms of this Agreement during
reasonable business hours and upon reasonable notice by Licensor or its
representatives. Licensee agrees not to cause or permit any interference
with Licensor or representatives of Licensor in the performance of their
duties of inspection and audit.
The exercise by Licensor, in whole or in part or at any time or times,
of the right to audit records and accounts or of any other right herein
granted, the acceptance by Licensor of any statement or statements or the
receipt and deposit by Licensor of any payment tendered by or on behalf of
Licensee shall be without prejudice to any rights or remedies of Licensor and
shall not stop or prevent Licensor from thereafter disputing the accuracy of
any such statement or payment.
If pursuant to its rights hereunder to audit and inspect Licensor
causes an audit and inspection to be instituted which thereafter discloses a
deficiency of three percent (3%) or more between the amount found to be due
to Licensor and the amount actually paid or credited to Licensor, then
Licensee shall be responsible for payment of the entire deficiency, together
with interest thereon at the then current prime rate of Chase Manhattan Bank
or its successor from the date such amount became due until the date of
payment, and the costs and expenses of such audit and inspection. If the
audit discloses a deficiency of less than three percent (3%) between the
amount found to be due to Licensor and the amount actually paid or credited to
Licensor, and if the amount actually paid or credited to Licensor plus the
deficiency exceeds the Guaranteed Compensation for the period covered by the
deficiency, then Licensee shall pay Licensor the amount of the deficiency
plus interest as calculated above.
7. INDEMNIFICATIONS AND PROTECTIONS: A. Licensor hereby agrees to
indemnify, defend and hold Licensee and its owners, shareholders, directors,
officers, employees, agents, representatives, successors and assigns harmless
from any claims, suits, damages or costs (including reasonable attorneys'
fees and expenses) arising from (i) challenges to Licensor's authority as
agent for and pursuant to authority granted by the Clubs to license the Logos
in connection with the manufacture, distribution, promotion, advertisement
and sale of the Licensed Product(s) or (ii) assertions to any claim of right
or interest in or to the Logos as authorized and used on the Licensed
Product(s), provided in each case that Licensee shall give prompt written
notice, cooperation and assistance to Licensor relative to any such claim or
suit, and provided further in each case that Licensor shall have the option
to undertake and conduct the defense of any suit so brought and to engage in
settlement thereof at its sole discretion.
B. Licensee shall assist Licensor, to the extent necessary,
in the procurement of any protection or to protect any of Licensees rights to
the Logos, and Licensor, if it so desires and in its sole discretion, may
commence or prosecute any claims or suits in its own name or in the name of
Licensee or join Licensee as a party thereto. Licensee shall notify Licensor
in writing of any infringements or imitations by others of the Logos of which
it is aware. Licensor shall have the sole right to determine whether or not
any action shall be taken on account of such infringements or imitations.
Licensee shall not institute any suit or take any action on account of any
such infringements or imitations without first obtaining the written consent
of Licensor to do so. Licensee agrees that it is not entitled to share in
any proceeds received by Licensor (by settlement or otherwise) in connection
with any formal or informal action brought by Licensor hereunder.
C. Licensee hereby agrees to indemnify, defend and hold
Licensor, the Clubs, the Leagues and the Office of the Commissioner of
Baseball and their respective owners, shareholders, directors, officers,
employees, agents, representatives, successors and assigns harmless from any
claims, suits, damages and costs (including reasonable attorneys' fees and
expenses) arising out of (i) any unauthorized use of or infringement of any
trademark, service ▇▇▇▇, copyright, patent, process, method or device by
Licensee in connection with the Licensed Product(s) covered by this
Agreement, (ii) alleged defects or deficiencies in said Licensed Product(s)
or the use thereof, or false advertising, fraud, misrepresentation or other
claims related to the Licensed Product(s) not involving a claim of right to
the Logos, (iii) the unauthorized use of the Logos or any breach by Licensee
of this Agreement, (iv) libel or slander against, or invasion of the right of
privacy, publicity or property of, or violation or misappropriation of any
other right of any third party, and/or (v) agreements or alleged agreements
made or entered into by Licensee to effectuate the terms of this Agreement.
Licensor shall give Licensee notice of the making of any claim or the
institution of any action hereunder and Licensor may at its option
participate in any action. The indemnifications hereunder shall survive the
expiration or termination of this Agreement.
8. INSURANCE: Licensee agrees to obtain, at its own cost and
expense, comprehensive general liability insurance including product
liability insurance from an insurance company acceptable to Licensor,
providing adequate protection for Licensor, the Clubs, the Leagues, the
Office of the Commissioner of Baseball and Licensee against any claims suits
arising out of any of the circumstances described in Paragraph 7C above for
which insurer is able to provide insurance, in an amount no less than
$5,000,000.00 (five million dollars) per incident or occurrence, or
Licensee's standard insurance policy limits, whichever is greater, and with a
reasonable deductible in relation thereto. Such insurance shall remain in
force at all times during the license period and for a period of five years
thereafter. Within thirty (30) days from the date hereof, Licensee will
submit to Licensor a fully paid policy or certificate of insurance naming
Licensor, the Leagues and the Office of the Commissioner of Baseball as
additional insured parties and requiring that the insurer shall not terminate
or materially modify such policy or certificate of insurance without written
notice to Licensor at least thirty (30) days in advance thereof.
9. COPYMGHT AND TRADEMARK NOTICES AND REGISTRATIONS: Licensee
further agrees that in any instance wherein the Logos of the Clubs and/or the
Leagues are used, the following general notice shall be included (i.e., on
the product, on a label, on the packaging material or on a separate slip of
paper attached to the product): "The Major League Club insignias depicted on
this product are trademarks which are the exclusive property of the
respective Major League Clubs and may not be reproduced without their written
consent." Further, all products containing the Logos shall contain a hangtag
and label with Licensee's name stating "Genuine Merchandise" and containing
the Major League Baseball silhouetted batter logo and, where appropriate, the
Major League Baseball Cooperstown Collection logo or Major League Baseball
Authentic Diamond Collection logo. All Licensed Product(s) shall contain a
permanently affixed label that displays Licensee's name. All Licensed
Product(s) components which bear any of the Logos (embroidered emblems, cloth
or paper labels, hangtags, etc.) shall be manufactured in-house by Licensee
or shall be obtained only from one or more suppliers officially authorized by
Licensor to produce those components. All Licensee advertisements displaying
the Logos, all retailer advertisements featuring Licensed Product(s) and of
which Licensee has knowledge or any Licensed Product(s), shall contain the
words "Genuine Merchandise" and the silhouetted batter logo. Licensee shall
require those to whom it sells Licensed Product(s) directly or indirectly to
display the words "Genuine Merchandise" (or such other appropriate notice as
directed by Licensor) and the silhouetted batter logo in all advertisements.
All uses of the Logos shall also include any designations legally required or
useful for enforcement of copyright, trademark or service ▇▇▇▇ rights (e.g.,
"C", "R" or "TM"). Licensee shall submit a copy of its specifications for
all of the above notices (including copies of its artwork, layouts or mold
blueprints) to Licensor for its review. Licensor shall have the right to
revise the above notice requirements and to require such other notices as
shall be reasonably necessary to protect the interests of Licensor, the Clubs
and/or the Leagues in the respective Logos. Licensee agrees to advise
Licensor of the initial date of the marketing of each Licensed Product, and
upon request, to deliver to Licensor the required number and type of specimen
samples of the Licensed Product, labels or the like upon which the Logos are
used for use in procuring copyright, trademark and/or service ▇▇▇▇
registrations in the name of and at the expense of the person, firm,
corporation or other legal entity owning the Logos, in compliance with any
laws relating to copyright, trademark and service ▇▇▇▇ registrations. Except
to the extent set forth in any schedules attached to this Agreement, Licensor,
the Clubs and/or the Leagues shall be solely responsible for taking
such action as it or they deem appropriate to obtain such copyright,
trademark or service ▇▇▇▇ registrations for its or their Logos. If it shall
be necessary for Licensee to be the applicant to effect any such registrations,
Licensee shall and hereby does assign all of its rights in
each such application and any resulting registration to Licensor or any other
appropriate owner thereof, and further agrees to execute all papers necessary
to effectuate and/or confirm such assignments. Licensee shall perform all
acts necessary and execute all documents necessary to effectuate its
registration as a user of the Logos where such registration is needed.
Licensee also agrees that, in any case where it employs the services of
photographers or artists in connection with the production, promotion,
marketing or distribution of the Licensed Product(s), it will require each
such photographer or artist to agree that the photographic or artistic works
he or she produces for Licensee shall be "works made for hire" for the
purposes of the copyright laws, and that to the extent such photographic or
artistic works may not qualify as "works made for hire," the copyright in
each such work is assigned to Licensee.
10. APPROVALS: Licensor shall have absolute approval of the
Licensed Product(s) and of all packaging, advertising and promotional
material at all stages of the development thereof. Licensee agrees to
furnish in a timely manner to Licensor, free of cost, for its written
approval as to quality and style, designs of each Licensed Product and
samples of each Licensed Product before its manufacture, sale, promotion,
advertisement or distribution, whichever first occurs, and samples of all
advertising, point-of-sale displays, catalogs, sales sheets and other items
that display or picture the Logos, and no such Licensed Product or other such
materials shall be manufactured, sold, promoted, advertised or distributed by
Licensee without such prior written approval. In particular, no use of any
Logo or Logos shall be made on stationery of Licensee (specifically
including, without limitation, letterhead, envelopes, business cards,
shopping bags, invoices, statements, packing slips, etc.) without Licensor's
express written approval in advance of any such use. In addition, no
irregulars, seconds or other Licensed Product(s) which do not conform in all
material respects to the approved samples may be distributed or sold without
the express written advance consent of Licensor. All such sales, if made,
shall bear Percentage Compensation as set forth in Paragraph 4B. Subject, in
each instance, to the prior written approval of Licensor, Licensee or its
agents may use textual and/or pictorial matter pertaining to the Logos on
such promotional display and advertising material as may, in its judgment,
promote the sale of the Licensed Product(s). All promotional display and
advertising material must contain and prominently display the official logo
of Licensor. Ten samples of each Licensed Product shall be supplied free of
cost to Licensor, and one to each Club whose Logos are used on such Licensed
Product(s). From time to time subsequent to final approval, a reasonable
number of production samples shall periodically be sent to Licensor free of
cost. Such samples shall also be sent upon any change in design, style or
quality, which shall necessitate subsequent approvals by Licensor.
Additional samples shall be supplied to Licensor upon request at no more than
cost. Licensor shall also have the right to inspect Licensee's plants,
warehouses or storage facilities at any reasonable time without notice.
In the event that any item or matter submitted to Licensor under this
Agreement for approval or consent shall not have been approved or consented
to, disapproved or denied, or commented upon within twenty (20) Licensor
business days after receipt thereof by Licensor (both Licensing Director and
Licensed Product Compliance), and Licensor (both Licensing Director and
Licensed Product Compliance) shall have received notice from Licensee that
comment is overdue by telegram or other written communication, and Licensor
shall not have commented within five (5) additional Licensor business days of
receipt of such notice, any items or matters so submitted shall be deemed
approved and consented to.
In any instance where any matter is required to be submitted to
Licensor for Licensor's approval, that approval shall be granted or withheld
in Licensor's sole discretion.
11. DISTRIBUTION: Licensee shall sell the Licensed Product(s) to
jobbers, wholesalers, distributors or retailers for sale or resale and
distribution to retail stores and merchants for their resale and distribution
or directly to the public. In the event Licensee sells or distributes a
Licensed Product at a special price directly or indirectly to itself,
including, without limitation, any subsidiary of Licensee, or to any other
person, firm or corporation related in any manner to Licensee or its
officers, directors or major stockholders, Licensee shall pay compensation
with respect to such sales or distribution based upon the price generally
charged the trade by Licensee.
12. GOODWILL: Licensee recognizes the great value of the publicity
and good will associated with the Logos and, in such connection, acknowledges
that such good will belongs exclusively to Licensor, the Clubs, the Office of
the Commissioner of Baseball and/or the Leagues and that the Logos have
acquired a secondary meaning in the minds of the purchasing public.
13. SPECIFIC UNDERTAKINGS OF LICENSEE: During the license period,
each additional license period, if any and thereafter, Licensee agrees that:
A. It will not acquire any rights in the Logos as a result
of its use thereof and all use of the Logos shall inure to Licensor's
benefit;
B. It will not, directly or indirectly, attack the title of
Licensor, the Clubs, the Office of the Commissioner of Baseball and/or the
Leagues in and to the Logos or any copyright, trademark or service ▇▇▇▇
pertaining thereto, nor will it attack the validity of the license granted
hereunder, nor will it use the Logos in any manner other than as licensed
hereunder;
C. It will not at any time apply for any registration of any
copyright, trademark, service ▇▇▇▇ or other designation which would affect
the ownership of the Logos, or file any document with any governmental
authority or take any action which would affect the ownership of the Logos or
aid or abet anyone in doing so;
D. It will not harm, misuse or bring into disrepute the
Logos;
E. It will manufacture, sell, promote, advertise and
distribute the Licensed Product(s) in a legal and ethical manner and in
accordance with the terms and intent of this Agreement;
F. It will not create any expenses chargeable to Licensor
without the prior written approval of Licensor;
G. It will protect to the best of its ability the right to
manufacture, sell and distribute the Licensed Product(s) hereunder;
H. It will not use the Licensed Product(s) for combination
sales, as self-liquidating or free giveaways or for any similar method of
merchandising without the prior written consent of Licensor and will exercise
due care that its customers likewise will refrain from making such use of the
Licensed Product(s);
I. It will not, without the prior written consent of
Licensor, enter into any sublicense or agency agreement for the manufacture,
sale, promotion, advertisement or distribution of the Licensed Product(s);
J. It will not engage in tying practices, illegal restraints
of trade, or selling practices that exclude any members of the retail trade
for any reason other than poor credit history, known lack of integrity or
disregard for the rights of Licensor or Major League Baseball. Nothing in
the preceding sentence shall be deemed to require Licensee to violate any
other term of this Agreement;
K. It will not use, or knowingly permit the use of, the
Licensed Product(s) as a premium, except with the prior written consent of
Licensor and the specific negotiation of a higher royalty payment therefor.
For purposes of this subparagraph and Paragraph 19 below, the term "premium"
shall be defined as including, but not necessarily limited to, free or self-
liquidating items offered to the public in conjunction with the sale or
promotion of a product or service, including traffic building or continuity
visits by the consumer/customer, or any similar scheme or device, the prime
intent of which is to use the Licensed Product(s) in such a way as to
promote, publicize and/or sell the products, services or business image of
the third party company or manufacturer. "Premium" use shall also
specifically include distribution of the Licensed Product(s) for retail sale
through distribution channels (including, without limitation, catalogs)
offering earned discounts or "bonus" points based upon the extent of usage of
the offeror's product or service;
L. It will comply with such guidelines and/or requirements
as Licensor may announce from time to time. It will comply with all laws,
regulations and standards relating or pertaining to the manufacture, sale,
advertising or use of the Licensed Product(s) and shall maintain the highest
quality and standards, and shall comply with the requirements of any
regulatory agencies (including, without limitation, the United States
Consumer Safety Commission) which shall have jurisdiction over the Licensed
Product(s);
M. It guarantees that Licensor, Clubs, official Club and/or
Licensor retail stores, Club in-stadium concessionaires and the Clubs
belonging to The National Association of Professional Baseball Leagues
("NAPBL Clubs") will obtain the Licensed Product(s) for retail sale at lowest
possible wholesale prices and shall receive prompt shipments and/or
deliveries of the Licensed Product(s), without regard to the relatively small
volume their orders may represent. Licensor, Clubs and NAPBL Clubs may
obtain the Licensed Product(s) for their use, but not resale, at the
manufacturer's lowest possible price, which shall in no event be greater than
its lowest wholesale price;
N. It will furnish to Licensor, upon request of Licensor
(which shall be made only for reasonable cause and no more often than once
per year), a list of all its distributors, sales representatives and jobbers
for the Licensed Product(s), as well as a list of all its "trade names," said
list to include the company name, address, telephone number, territorial
representation and key contact name. Licensor agrees that it will not
divulge any information provided to it under this paragraph to any other
competitor licensing organization;
O. Concurrently with its execution of this Agreement, it
will provide Licensor with the names, addresses, telephone numbers and names
of principal contacts of each party (hereinafter referred to as
"Manufacturer"), both domestic and foreign, that Licensee desires or intends
to have produce one or more of the Licensed Product(s) in the event Licensee
desires not to be the manufacturer of such Licensed Product(s). This
information shall be set out in Schedule F of this Agreement and Licensee
shall specify the Licensed Product(s) Manufacturer will produce. In the
event Licensee wishes to substitute a Manufacturer for those listed in
Schedule F or wishes to add to the number of Manufacturers, Licensee shall
first provide Licensor with the information set out in Schedule F regarding
the proposed new Manufacturers for Licensor's written approval of such
Manufacturers. Licensee's failure to do so may result in termination of this
Agreement and/or confiscation and seizure of the Licensed Product(s).
Licensee shall ensure that:
(i) Manufacturer produces no merchandise bearing the Logos
other than the Licensed Product(s) described in Schedule F of this Agreement
unless authorized by Licensor;
(ii) Manufacturer produces the Licensed Product(s) only as and
when directed by Licensee and in accordance with the terms herein and in
compliance with all laws, regulations and governmental rules applicable to
the Licensed Product(s) and/or their manufacture;
(iii) Manufacturer does not supply the Licensed Product(s) to
any person, firm, corporation or business entity other than Licensee or to
such entities as may be authorized by Licensee and Licensor jointly; and
(iv) Manufacturer does not delegate in any manner whatsoever
its obligations with respect to the Licensed Product(s).
Prior to the delivery of the Licensed Product(s) from Manufacturer to
Licensee, Licensee shall submit to Licensor, free of cost, for its written
approval as to quality and style, at least two samples of the Licensed
Product(s) produced by Manufacturer;
P. It will not manufacture or allow the manufacture, or
accumulate inventory, of the Licensed Product(s), at a rate greater than its
average rate during the license period as the end of the license period
approaches;
Q. It will not sell the Licensed Product(s) to parties whom
it knows or reasonably should know will resell or distribute such Licensed
Product(s) outside the Licensed Territory;
R. It will not disclose any confidential, private,
restricted or otherwise nonpublic information concerning Major League
Baseball which, it acknowledges, it may become privy to during the term of
this Agreement;
S. It will not grant to any third person or entity a
security interest in the Licensed Product(s) without Licensor's prior written
approval.
T. It has not had and does not have an investment or
interest in casinos, any other form of legalized gambling enterprise, or any
activity that Licensor or any other Major League Baseball related entity has
made unauthorized or which is contrary to official policy of Major League
Baseball; and
U. With respect to any Licensed Product(s) manufactured
outside the United States, it will take receipt of goods at U.S. ports of
entry, (ii) it will not allow any entity in the United States, including but
not limited to distributors, wholesalers and retailers, to accept shipment of
the Licensed Product(s) from any non-U.S. manufacturer of such Licensed
Product(s), and (iii) it will distribute such Licensed Product(s) to third
parties, including but not limited to distributors, wholesalers and
retailers, from Licensee's principal place of business only.
14. APPROVAL OF MANUFACTURER, ETC.: Nothing contained herein may
be construed so as to imply endorsement of Manufacturer by Licensor, the
Office of the Commissioner of Baseball, the Leagues or the Clubs. Licensee
shall seek Licensor's written approval of Manufacturer prior to Licensee's
engagement of Manufacturer. Any approval of Manufacturer granted by Licensor
relates solely to the manufacturing of the Licensed Product(s) and shall not
constitute a grant of any right, title or interest in or to the Logos, nor to
any copyrights, service marks, trademarks or other property rights associated
therewith. Licensor hereby reserves the right to terminate in its discretion
the engagement of Manufacturer at any time. Additionally, Licensor may
confiscate goods or samples imported by Licensee or shipped by Manufacturer
that bear any of the Logos and that have not been approved by Licensor as to
quality.
15. ACKNOWLEDGEMENT OF RIGHTS: Licensee hereby acknowledges the
proprietary nature of all names and logos of the Major League Baseball Clubs,
the Leagues, the Office of the Commissioner of Baseball or Licensor and
acknowledges that all rights, title and interest to such names or logos
belong to the individual Clubs, the Leagues, the Office of the Commissioner
of Baseball and/or Licensor, as the case may be. Licensee represents that it
has not made any unauthorized use of names or logos of the Major League
Baseball Clubs, the Leagues, the Office of the Commissioner of Baseball or
Licensor and agrees that it will make no use of any such names or logos,
other than as provided in this Agreement, without the prior written consent
of Licensor, the Office of the Commissioner of Baseball or the appropriate
individual League or Club. Any use Licensee has made or will make of such
names and logos has not created or will not confer, as the case may be, any
rights or benefits upon it whatsoever, and any rights created by such use
shall inure to the benefit of the individual Clubs, the Leagues, the Office
of the Commissioner of Baseball and/or Licensor, as the case may be.
16. TERMINATION: A. Immediate Termination: Licensor shall have the
right to terminate this Agreement immediately upon the occurrence of any one
or more of the following events (herein called "defaults"):
(i) If Licensee fails to deliver to Licensor or to maintain in
full force and effect the insurance referred to in Paragraph 8 hereof; or
(ii) If any governmental agency or court of competent
jurisdiction finds that the Licensed Product(s) are defective in any way,
manner or form; or
(iii) If Licensee shall breach any one of the following
undertakings set forth in Paragraph 13 hereof: 13A through F, H through J,
Q, R or T; or
(iv) If Licensee shall undergo a change in majority or
controlling ownership.
B. Termination With Cure Period: Licensor shall have the
right to terminate this Agreement upon the occurrence of any one or more of
the following defaults, and Licensee's failure to cure such default(s)
completely within ten (10) business days from Licensee's receipt of notice
from Licensor:
(i) If Licensee fails to make any payment due hereunder on
the date due, at which time all monies which are owed during the current term
or renewal referred to in Schedule E of this Agreement shall become due and
payable to Licensor; or
(ii) If Licensee fails to deliver any of the statements
hereinabove referred to or to give access to the premises and/or license
records pursuant to the provisions hereof to Licensor's authorized
representatives for the purposes permitted hereunder; or
(iii) If Licensee is unable to pay its debts when due, or makes
any assignment for the benefit of creditors or an arrangement pursuant to any
bankruptcy law, or files or has filed against it any petition under the
bankruptcy or insolvency laws of any jurisdiction, county or place, or shall
have or suffer a receiver or trustee to be appointed for its business or
property, or be adjudicated a bankrupt or an insolvent. In the event the
license granted hereunder is terminated pursuant to this Paragraph
16(B)(iii), neither Licensee nor its receivers, representatives, trustees,
agents, administrators, successors and/or assigns shall have any right to
sell, exploit or otherwise deal with or in the Licensed Product(s) without
the prior written consent of Licensor; or
(iv) If Licensee does not commence in good faith to
manufacture, distribute and sell each Licensed Product throughout the
Licensed Territory within any twelve (12) month period, but such default and
Licensor's resultant right of termination shall apply only to the specific
Licensed Product(s) and/or the specific territory(ies) which or wherein
Licensee fails to meet said requirements; or
(v) If Licensee shall discontinue its business as it is now
conducted; or
(vi) If Licensee shall breach any of the undertakings set
forth in Paragraph 13 hereof, except as otherwise provided in Paragraph
16(A)(iii) above; or
(vii) If Licensee shall breach any of the terms of this
Agreement; or
(viii) If, in the periodic statements furnished pursuant to
Paragraph 5 hereof, the amounts owed to Licensor are significantly or
consistently understated.
Licensor's right to terminate this Agreement shall be without prejudice
to any other rights which it may have, whether under the provisions of this
Agreement, in law or in equity or otherwise. In the event any of these
defaults occurs and Licensor desires to exercise its right of termination
under the terms of this Paragraph 16, Licensor shall give notice of
termination in writing to Licensee. Any and all payments then or later due
from Licensee hereunder (including Advance Compensation) shall then become
promptly due and payable in full to Licensor and without set off of any kind;
i.e., no portion of any prior payments made to Licensor shall be repayable to
Licensee. Until payment to Licensor of any monies due it, Licensor shall
have a lien on any units of the Licensed Product(s) not then disposed of by
Licensee and on any monies due Licensee from any jobber, wholesaler,
distributor, sublicensee or other third par-ties with respect to sales of the
Licensed Product(s). Upon termination or expiration of the term hereof, all
rights, licenses and privileges granted to Licensee hereunder shall
automatically revert to Licensor and Licensee shall execute any and all
documents evidencing such automatic reversion.
17. FINAL STATEMENT UPON TERMINATION OR EXIIRATION: Licensee shall
deliver to Licensor, as soon as practicable, following expiration or
termination of this Agreement, a statement indicating the number and
description of the Licensed Product(s) on hand. Following expiration or
termination Licensee may manufacture no more Licensed Product(s), but may
continue to distribute its remaining inventory for a period not to exceed
sixty (60) days, subject to the terms of Paragraph 13(P) hereof and payment
of applicable royalties relative thereto; provided, however, that such
royalties shall not be applicable against Advance Compensation or Guaranteed
Compensation. Notwithstanding the foregoing, Licensee shall not manufacture,
sell or distribute any Licensed Product(s) after the expiration or
termination of this Agreement because of (a) the failure of Licensee to cause
the appropriate statutory notice of copyright, trademark, service ▇▇▇▇ or
user registration to appear wherever the Logos are used; (b) the departure of
Licensee from the quality and style approved by Licensor under the terms of
Paragraph 10 hereof, (c) the failure of Licensee to obtain the approval of
Licensor under the terms of Paragraph 1O hereof; or (d) the occurrence of an
event of default under the terms of Paragraph 16 hereof. Licensor shall have
the option to conduct physical inventories before termination and continuing
until the end of the 60-day sell-off period in order to ascertain or verify
such inventories and/or statement. Immediately upon expiration of the sell-
off period, Licensee shall furnish Licensor a detailed statement certified by
an officer of Licensee showing the number and description of Licensed
Product(s) on hand in its inventory and shall dispose of such inventory at
Licensor's direction and at Licensee's expense. In the event Licensee
refuses to permit Licensor to conduct such physical inventory, Licensee shall
forfeit its right hereunder to dispose of such inventory. In addition to
such forfeiture, Licensor shall have recourse to all other remedies available
to it.
18. INJUNCTION: Licensee acknowledges that its failure to perform
any of the terms or conditions of this Agreement, or its failure upon the
expiration or termination of this Agreement to cease the manufacture of the
Licensed Product(s) and limit their distribution and sale as provided in
Paragraph 17 hereof, shall result in immediate and irreparable damage to
Licensor. Licensee also acknowledges that there may be no adequate remedy at
law for such failures and that in the event thereof Licensor shall be
entitled to equitable relief in the nature of an injunction and to all other
available relief, at law and/or in equity.
19. RESERVATION OF RIGHTS: Licensor retains all rights not
expressly and exclusively conveyed herein, and Licensor may license firms,
individuals, partnerships or corporations to use the Logos, artwork and
textual matter in connection with other products, including other products
identical to the Licensed Product(s) contemplated herein. Licensor reserves
the right to use, or license others to use and/or manufacture, identical
items as premiums.
20. PAYMENTS AND NOTICES: All notices and statements provided for
herein shall be in writing, and all notices hereunder are to be sent to Major
League Baseball Properties, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Vice President. All statements and payments shall be made to
Major League Baseball Properties and sent to an address designated by
Licensor.
21. WAIVER, MODIFICATION, ETC.: No waiver, modification or
cancellation of any term or condition of this Agreement shall be effective
unless executed in writing by the party charged therewith. No written waiver
shall excuse the performance of any act other than those specifically
referred to therein. No waiver by either party hereto of any breach of this
Agreement shall be deemed to be a waiver of any preceding or succeeding
breach of the same or any other provision hereof. The exercise of any right
granted to either party hereunder shall not operate as a waiver. The normal
expiration of the term of this Agreement shall not relieve either party of
its respective obligations accruing prior thereto, nor impair or prejudice
the respective rights of either party against the other, which rights by
their nature survive such expiration. Licensor makes no warranties or
representations to Licensee except those specifically expressed herein.
22. NO PARTNERSHIEP, ETC.: This Agreement does not constitute and
shall not be construed as constituting an agency, partnership or joint venture
relationship between Licensee and Licensor and/or the Clubs. Licensee shall
have no right to obligate or bind Licensor in any manner whatsoever, and
nothing herein contained shall give or is intended to give any rights of any
kind to any third persons.
23. NON-ASSIGNABILITY: Licensee acknowledges and recognizes: (a)
that it has been granted the license described in Paragraph I because of its
particular expertise, knowledge, judgement, skill and ability; (b) that it
has substantial and direct responsibilities to perform this Agreement in
accordance with all of the terms contained herein; (c) that Licensor is
relying on Licensee's unique knowledge, experience and capabilities to
perform this Agreement in a specific manner consistent with the high
standards of integrity and quality associated with Major League Baseball as a
national sport and with Major League Baseball licensed merchandise; and (d)
that the granting of the license under this Agreement creates a relationship
of confidence and trust between Licensee and Licensor. This Agreement is
personal to Licensee, and Licensee shall not sublicense or franchise any of
its rights hereunder, and neither this Agreement nor any of the rights of
Licensee hereunder shall be sold, transferred or assigned by Licensee without
Licensor's prior written approval and no rights hereunder shall devolve by
operation of law or otherwise upon any assignee, receiver, liquidator,
trustee or other party. Subject to the foregoing, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, their
successors and assigns.
24. PARAGRAPH HEADINGS: Paragraph headings contained in this
Agreement are for convenience only and shall not be considered for any
purpose in governing, limiting, modifying, construing or affecting the
provisions of this Agreement and shall not otherwise be given any legal
effect.
25. CONSTRUCTION: This Agreement shall be construed in accordance
with the laws of the State of New York, which shall be the sole jurisdiction
for any disputes.
26. SEVERABILITY: The determination that any provision of this
Agreement is invalid or unenforceable shall not invalidate this Agreement,
and the remainder of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
27. TIME OF THE ESSENCE: Time is of the essence of all parts of
this Agreement.
28. ACCEPTANCE BY LICENSOR: This instrument, when signed by
Licensee or a duly authorized officer of Licensee if Licensee is a
corporation, shall be deemed an application for a license and not a binding
agreement unless and until signed by a duly authorized officer of Licensor.
The receipt and/or deposit by Licensor of any check or other consideration
given by Licensee and/or the delivery of any material by Licensor to Licensee
shall not be deemed an acceptance by Licensor of this application. The
foregoing shall also apply to any documents relating to renewals or
modifications hereof.
29. INTEGRATION: This Agreement, when fully executed, shall
represent the entire understanding between the parties hereto with respect to
the subject matter hereof and supersedes all previous representations,
understandings or agreements, oral or written, between the parties with
respect to the subject matter hereof.
30. SURVIVAL OF PROVISIONS: Paragraphs 2,6, 7C, 8,12,13A, ▇, ▇, ▇,
▇, ▇, ▇, ▇, ▇ ▇▇▇ ▇, ▇▇, 17, 18, 19, 21, 22, 24, 25, 26, 30 and 31 shall
survive any termination or expiration of this Agreement.
31. MISCELLANEOUS: By signing below, Licensee acknowledges that
this Agreement is for the term specified in Schedule D only and that neither
the existence of this Agreement nor anything contained herein shall impose on
Licensor any obligation to renew or otherwise extend this Agreement after
expiration of the license period.
SCHEDULE A
LOGOS
The names, word marks, logos, uniform designs, colors and color
combinations, trade dress, characters, symbols, designs, likenesses, visual
representations and such other similar or related identifications (but such
similar or related identifications must be approved in writing by Licensor in
advance of use) of the following noted organizations, events, programs and
product lines in connection with the marketing, promotion and sale of that
described in Schedule B hereof; (1) Major League Baseball Properties, Inc.,
(2) Baltimore Orioles, (3) Chicago Cubs, (3) Houston Astros, (4) San
Francisco Giants, and (5) Seattle Mariners.
SCHEDULE B
LICENSED PRODUCT(S)
***ALL LICENSED PRODUCTS SHALL CONFORM TO LICENSOR'S
THEN-CURRENT LABELING REQUIREMENTS. ***
1 . Cereal boxes referred to by Licensee as "Classic O's,"
measuring 14 oz. in size, and featuring ▇▇▇ ▇▇▇▇▇▇, ▇▇. in a uniform bearing
the Logos of the Baltimore Orioles.
2. Cereal boxes referred to by Licensee as "Houston Astr-O's,"
measuring 14 oz. in size, featuring ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇
▇▇▇▇▇▇▇▇ in uniforms bearing the Logos of the Houston Astros, and packaged
with limited edition baseball trading cards (limited to 1,999 units produced)
in random boxes.
3. Cereal boxes measuring 14 oz. in size, featuring ▇▇▇▇▇ ▇▇▇▇▇ in
a uniform bearing the Logos of the San Francisco Giants, and packaged with
limited edition baseball trading cards (limited to 700 units produced) in
random boxes.
4. Cereal boxes measuring 14 oz. in size, featuring ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
in a uniform bearing the Logos of the Seattle Mariners, and packaged with
limited edition baseball trading cards (limited to 356 units produced) in
random boxes.
5. Cereal boxes referred to by Licensee as "Slammin' Sammy's
Cereal," measuring 14 oz. in size, featuring ▇▇▇▇▇ ▇▇▇▇ in a uniform bearing
the Logos of the Chicago Cubs, and packaged with limited edition baseball
trading cards (limited to 66 units produced) in random boxes.
Rights to utilize (i) the names, likenesses and/or signatures of any
individuals (including, without limitation, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇), (ii)
any copyright, trademark or other property or identifications belonging to
any entity other than those identified in Paragraph 1 and Schedule A, Logos
of this Agreement (including, without limitation, "Classic O's," "Houston
Astr-O's" and "Slammin' Sammy's Cereal"), or (iii) any ▇▇▇▇, symbol, artwork,
language or text not listed in Schedule A, Logos above (including, without
limitation, jewel event or commemorative Logos), are not granted under this
Agreement. In the case of (i) above, Licensee must present to Licensor
written evidence of having obtained the proper authorization to utilize any
such names, likenesses and/or signatures.
SCHEDULE C
LICENSED TERRITORY
For Licensed Product No. 1:
The States of Maryland, Virginia, North Carolina, South Carolina,
and Florida, the City of Philadelphia, PA, and the District of Columbia.
For Licensed Product No. 2:
The States of Texas, Florida and the City of New Orleans, LA.
For Licensed Product No. 3:
The State of Arizona and California (Northern region only).
For Licensed Product No. 4:
The State of Washington and the City of Miami, FL.
For Licensed Product No. 5:
The United States of America.
SCHEDULE D
LICENSE PERIOD
For Licensed Product No. 1:
April 1, 1999 -December 31, 1999
For Licensed Product Nos. 2-4:
May 15, 1999 - December 31, 1999
For Licensed Product No. 5:
May 15, 1999 - April 30, 2000
SCHEDULE E
COMPENSATION
TOTAL GUARANTEED COMPENSATION: $125,000.00
PAYABLE AS:
(i) NON-RETURNABLE ADVANCE COMPENSATION due upon signing:
N/A
(ii) REMAINDER OF GUARANTEED COMPENSATION due as follows:
December 31, 1999 $100,000.00
Total 1999 Guarantee $100,000.00
April 30, 2000 $25,000.00
Total 2000 Guarantee $25,000.00
PERCENTAGE COMPENSATION
For Licensed Product No. 1:
One percent (1%) of net sales as defined in Paragraph 4B, or
$0.025 8 per unit sold, whichever is greater.
For Licensed Product Nos. 2-4:
Two percent (2%) of net sales as defined in Paragraph 4B.
For Licensed Product No. 5:
Two and one-half percent (2.5%) of net sales as defined in
Paragraph 4B, or $0.0645 per unit sold, whichever is greater.
In each of the above cases, Percentage Compensation shall be applied
against Guaranteed Compensation payable in the same calendar year only,
without carryover. Percentage Compensation attributable to premium sales of
the Licensed Products shall not be applied against Total Guaranteed
Compensation.
SCHEDULE F
MANUFACTURERS
Licensee agrees that at no time during the license or sell-off periods
shall it sell, directly or indirectly, to any of the Manufacturers listed
below, or to any individual or entity affiliated in any manner with any of
such Manufacturers, any Licensed Product(s) for subsequent sale or
distribution, without prior written approval of Licensor.
1) Licensed Product(s):
Name of Manufacturer:
Address:
Telephone:
Principal Contact:
Approved by Major League Baseball Properties, Inc.:
Initials/Title
2) Licensed Product(s):
Name of Manufacturer:
Address:
Telephone:
Principal Contact:
Approved by Major League Baseball Properties, Inc.:
Initials/Title
3) Licensed Product(s):
Name of Manufacturer:
Address:
Telephone:
Principal Contact:
Approved by Major League Baseball Properties, Inc.:
Initials/Title
SCHEDULE G
PRODUCT CREDIT
1. Licensee shall provide to Licensor merchandise credit in the
form of two (2) cases of each Licensed Product during each year of the
license period. Licensee shall ship at Licensee's expense and at Licensor's
direction such merchandise as Licensor shall request from time to time under
this merchandise credit.
2. Licensee acknowledges that it shall give good faith
consideration to donating the Licensed Products for charitable causes upon
Licensor's request.
MISCELLANEOUS
1. Licensee shall be permitted to distribute the Licensed Products
via the Internet; provided, however, that Licensee shall not distribute,
sell, or otherwise distribute or allow for the sale or distribution of,
directly or through others, the Licensed Products outside the Licensed
Territory, and shall include prominent language on the Internet site(s)
through which the Licensed Products are offered that Licensee may not fulfill
orders for delivery of the Licensed Products outside of the Licensed
Territory.
2. Except as otherwise directed by Licensor, Licensee shall comply
with the following guidelines regarding the Licensed Products:
(a) the Club's primary Logo must be featured in a prominent
manner on the front of each Licensed Product (apart from as depicted in a
uniform).
(b) the words "MAJOR LEAGUE BASEBALL TRADEMARKS AND
COPYRIGHTS ARE USED WITH PERMISSION OF MAJOR LEAGUE BASEBALL PROPERTIES,
INC." must be included on all packaging and display materials.
3. Licensee acknowledges and agrees that in no event shall the
baseball trading cards packaged with Licensed Product Nos. 2-5 be sold or
distributed separately.
4. Licensee acknowledges that it must comply with all provisions
of this Agreement, including, but not limited to, Paragraph 10 with regard to
approval of the cereal boxes and baseball trading cards for the Licensed
Products.
BRAND NAMES
Concurrently with its execution of this Agreement, Licensee will list
below the brand names that Licensee desires or intends to use on the Licensed
Product(s).
1) Licensed Product(s) Nos.:
Brand Name(s):
2) Licensed Product(s) Nos.:
Brand Name(s):
3) Licensed Product(s) Nos.:
Brand Name(s):
In the event Licensee wishes to substitute a brand name for those
listed above or wishes to add to the number of brand names, Licensee shall
first obtain Licensor's written approval of such brand names.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement:
MAJOR LEAGUE BASEBALL PROPERTIES, INC.,
as agent for the Major League Baseball Clubs
BY:____________________________
TITLE:_________________________
FAMOUS FIXINS, INC.
BY:____________________________
TITLE:_________________________