XXXXX WORLD LICENSE AGREEMENT
----- ----- ------- ---------
THIS AGREEMENT is entered into as of this 28th day of May 2004,
by and between XXXXXX X. Xxxxx, and individual having an office at 000 Xxxxx
Xxxxxx, Xxx Xxxx, X.X. 00000 "Licensor" and SOBE LIFE, LLC, having an office at
000 Xxxx Xxxxxx Xxxxx, Xxx X 00000 "Licensee"). Licensor and Licensee are
sometimes referred to individually as a "party" or collectively, as the
"parties."
STATEMENT OF FACTS
(i) Licensor has filed a trademark application with the Patent
and Trademark Office for the trademark "Xxxxx World" (the
"Property). Licensor has the power and authority to grant to
Licensee the right and license to use the Property solely in
connection with the identification and promotion of the "Xxxxx
Magazine" (as herein defined) in the United States of America
(the "Licensed Territory").
(ii) Licensee and Xxxxx World Publications LLC, an affiliate of
Licensor, are parties to a certain Publishing Agreement dated as
of May 28,2004, as amended by First Amendment to Publishing
Agreement dated as of May 28, 2004 and Second Amendment to
Publishing Agreement dated the date hereof (collectively, the
"Publisbing Agreement") pursuant to which Licensee will publish
a life style magazine (the "Xxxxx Magazine") entitled "Xxxxx
World."
(iii) Licensee desires to obtain from Licensor an exclusive
license to use the Property as the name of the Xxxxx Magazine
and to sell and promote the Xxxxx Magazine in the Licensed
Territory. Both Licensee and Licensor have agreed to the terms
and conditions upon which Licensee shall publish, distribute and
sell the Xxxxx Magazine. In consideration of the promises and
agreements set forth herein, the parties, each intending to be
legally bound hereby, do promise and agree to the terms herein
contained.
1. LICENSE
A. Licensor hereby grants to Licensee for the Term (as herein
defined) the exclusive right and license to use the Property
solely in connection with the identification of the Xxxxx
Magazine and its promotion, disiribution and sale in the
Licensed Territory. Licensee agrees to use the Property as the
exclusive identification of the Xxxxx Magazine.
B. Licensee may not grant any sublicenses to any third party
without the prior express written consent of Licensor, which
consent Licensor may withhold for any reason or for no reason.
C. Nothing in this Agreement shall be construed or interpreted as
precluding Licensor from granting any other license or licenses
or other rights for use of the Property on or for any other
products or with respect to any services, merchandise or in any
other manner whatsoever, except for the rights granted to
Licensee herein.
2. TERM This Agreement shall be effective as of the date hereof and
shall expire on April 30, 2009, or such sooner date as the
Publishing Agreement shall terminate (the "Term").
3. COMPENSATION
A. In consideration for the license granted hereunder, Licensee
agrees to pay to Licenser during the Term of this Agreement a
royalty (the "Royalty") in the amount of:
(i) $120,000.00 for each of the fall (October) 2005 and winter
(December) 2005 issues of the Magazine; and
(ii) $135,000.00 for each issue of the Xxxxx Magazine thereafter
published, regardless of the frequency of publication.
(iii) The applicable Royalty shall be paid to Licensor within ten (10)
days following each date of publication.
B. A Royalty obligation shall accrue to Licenser upon the
publication of each issue of the Xxxxx Magazine regardless of
the time of collection by Licensee of the sales of the
applicable issue of the Xxxxx Magazine.
C. All payments due hereunder shall be made in U.S. currency drawn
on a U.S. bank, unless otherwise specified between the parties.
Late payments shall incur an interest charge at the rate of one
and one-half percent (1-1/2%) per month from the date such
payments were originally due to the actual date of payment.
4. RECORD INSPECTION AND AUDIT
A. Licensor shall have the right upon reasonable notice, to
inspect Licensee's original books and ("Records") and all other
documents and material in Licensee's possession or control with
respect to the subject matter of this Agreement. Licensor shall
have free and full access to the Records for such purposes and
may make copies thereof.
B. In the event that such inspection reveals a discrepancy in the
amount of Royalty owed Licenser from what was actually paid,
Licensee shall pay such discrepancy, plus interest, calculated
at the rate of one and one-half percent (1-1/2%) per month. In
the event that such discrepancy is in excess of Five Thousand
U.S. Dollars ($5,000) or 5% of the amount due to Licensor,
whichever is greater, Licensee shall also reimburse Licensor for
the cost of such inspection.
2
C. All books and records relative to Licensee's obligations
hereunder shall be maintained and kept accessible and available
to Licenser for inspection in New York State for at least three
(3) years after termination of this Agreement.
S. COVENANTS, REPRESENTATIONS AND WARRANTIES
A. Licenser represents and warrants that it has the right and power
to grant the license granted herein, and that there are no other
agreements with any other party in conflict with such grant
B. Licenser further represents and warrants that the Property as
submitted to Licensee does not infringe any valid rights of any
third party.
C. Licensee represents and warrants that it will utilize its best
efforts to promote, market, sell and distribute the Xxxxx
Magazine within the Licensed Territory and that it will use its
best efforts to make and maintain adequate arrangements for the
distribution, shipment and sale necessary to meet the demand
therefor.
D. Licensee shall be solely responsible for the manufacture,
production, sale, and distribution of the Xxxxx Magazine and
will bear all costs associated therewith.
E. Licensee understands and agrees that it shall not sell or
distribute the Xxxxx Magazine at discount prices without the
express prior written consent of Licensor.
F. Licensee covenants and represents that the quality of the Xxxxx
Magazine shall at all times equal or exceed the "Xxxxx Standard"
(as herein defined).
6. XXXXX STANDARD; OUALITY CONTROL
A. Licensee acknowledges and agrees that (i) Xxxxxx X. Xxxxx is a
world-renowned builder and developer of luxury residential real
estate, hotels and casinos among other things; (ii) he has
become world renowned as the star of the television show, "The
Apprentice," and he enjoys the highest reputation in each. of
these fields; and (iii) he is the owner of the trademark "XXXXX"
in various classifications for many first quality products and
services. In recognition of the foregoing and as a material
inducement for Licensor's execution of this Agreement, Licensee
covenants and agrees with Licenser:
(a) to design, develop, market, distribute and sell the Xxxxx
Magazine with the level of quality and luxury associated with
the finest premier, first-class lifestyle magazines (the "Xxxxx
Standard")
3
B. At Licensor's request, each issue of the Xxxxx Magazine, as well
as all promotional and packaging relative thereto, shall include
all appropriate legal notices as required by Licenser.
C. Licenser shall have the right to review and approve each issue
of the Xxxxx Magazine and all promotional materials related
thereto to confirm its compliance with the Xxxxx Standard, at
least ten (10) days prior to its publication. Licensee shall
promptly cure any deficiencies which Licensor may find in any
such issue.
D. It is further understood and agreed that once Licenser has
approved an issue of the Xxxxx Magazine, Licensee shall not
change or alter such issue in any material respect without
Licensor's prior express written ccrnsent.
E. If the quality of any issue of the Xxxxx Magazine falls below a
production-run quality, as previously approved by Licensor, or
in the event that trademark, patent and copyright usage and
notice requirements are not maintained, Licensee shall use its
best efforts to restore such quality and/or notices. In the
event that Licensee has not taken appropriate steps to restore
same within ten (10) days after notification by Licenser,
Licensor shall have the right to terminate this Agreement.
F. Licensee shall submit to Licensor an additional ten (10) sets of
samples of each issue of the Xxxxx Magazine.
G. Licensee shall be strictly prohibited from utilizing the
Property on or in connection with any products or services,
except as expressly provided herein.
H. Upon request, Licensee agrees to provide Licensor with a list of
all manufacturing and packaging facilities producing the Xxxxx
Magazine.
I. Licensee agrees to permit Licensor or to obtain permission for
Licenser or its representatives to inspect the facilities where
the Xxxxx Magazine is being produced.
J. Licensee agrees that any Xxxxx Magazines manufactured by it or
for it shall not utilize child labor or permit working
conditions which could adversely affect the reputation of
Licensor.
7. NOTICES Any notice required to be given under this Agreement
shall be in writing and delivered personally to the other party
at the above stated address, or mailed by certified, registered,
or express mail, return receipt requested, or by a
nationally-recognized overnight courier service. A copy of each
notice to Licenser shall similarly and concurrently be sent to
Xxxxxxx X. Xxxxxxx, General Counsel, The Xxxxx Organization, 000
Xxxxx Xxxxxx, 00xx xxxxx, Xxx Xxxx, XX 00000. Either party may
change the address to which notice is to be sent by written
notice to the other
4
(4) The Publishing Agreement is terminated for any reason.
B. Additional rights of Termination. This Agreement may be
terminated by Licensor upon thirty (30) days written notice to
Licensee, provided that within the thirty (30) day period
Licensee fails to cure the breach to Licensor's complete
satisfaction, if Licensee does any of the following:
(1) Fails to comply with quality conirol standards of this
Agreement;
(2) Manufactures, offers for sale, sells, advertises, promotes
or distributes the Xxxxx Magazine without having the prior
approval of Licenser; or continues to manufacture, offer for
sale, sell, advertise, promote or distribute the Xxxxx
Magazine after receipt of notice from Licenser disapproving
and/or withdrawing approval of same;
(3) It or its controlling shareholders or any of its officers,
directors or employees take any actions in connection with
the manufacture, offering for sale, sale, advertising
promotion, and/or distribution of the Xxxxx Magazine which
damages or reflects adversely upon Xxxxxx X. Xxxxx (or
Licensor if not Xxxxxx X. Xxxxx) or the Property;
(4) Fails to obtain or maintain liability insurance as required
by the provisions of this Agreement;
(5) Breaches any of the provisions of this Agreement relating to
the unauthorized assertion of rights in the Property or any
trademark included therein; or
(6) Violates any of its other obligations under this Agreement.
10. POST TERMINATION JUGRTS
A. Not less than thirty (30) days prior to the expiration of this
Agreement or immediately upon termination thereof, Licensee
shall provide Licensor with a complete schedule of all inventory
of Xxxxx Magazine then on-hand (the "Inventory"). Licensor shall
have the right upon termination and its receipt of the Inventory
schedule to purchase at Licensee's costs, any or all inventory
on hand. Licensee's cost shall be defined as the actual
out-of-pocket cost of manufacture of the Inventory plus freight
charges, if any, therefor. If Licensor does not buy the
Inventory as aforesaid, Licensee shall then be entitled, for an
additional period of thirty (30) days and on a nonexciusive
basis, to continue to sell such Inventory, unless this Agreement
was terminated by Licensor due to a breach of Licensee's duty to
comply with the quality control, recall or legal notice marking
requirements. Such sales shall be made subject to all of the
provisions of this Agreement.
6
B. Upon the expiration or termination of this Agreement, all of the
rights of Licensee under this Agreement shall forthwith
terminate and immediately revert to Licenser and Licensee shall,
except as provided in subparagraph A above, immediately
discontinue all use of the Property and the like, at no cost
whatsoever to Licensor.
C. Upon termination of this Agreement for any reasons whatsoever,
Licensee agrees to immediately return to Licensor all material
relating to the Properly including, but not limited to, all
artwork, color separations, prototypes, and the like, at no cost
whatsoever to Licenser.
11. INFRINGEMENTS
A. Licensor shall have the right, in its sole discretion, to
prosecute lawsuits against third persons for infringement of the
Property. If Licensor does not institute an infringement suit
within sixty (60) days after Licensee's written request that it
do so, Licensee may institute and prosecute such lawsuit at its
expense.
B. Any lawsuit shall be prosecuted solely at the expense of the
party bringing suit and all sums recovered shall be retained by
the party bringing suit unless otherwise agreed.
C. Both during the Term of this Agreement and at any time
thereafter, the parties agree to fully cooperate with the other
party in the prosecution of any such suit. The party bringing
suit shall reimburse the other party for the reasonable expenses
incurred as a result of such cooperation.
12. INDEMNITY
A. Licensee agrees to defend, indemnify, and bold Licensor (and
Xxxxxx X. Xxxxx, if not Licensor), its officers, directors,
agents, and employees harmless against all costs, expenses, and
losses including reasonable attorney fees and costs) resulting
directly or indirectly from claims of third parties against
Licensee or Licensor, based on the use of the Property, or the
manufacture, sale and distribution of the Xxxxx Magazine
including, but not limited to, actions founded on product
liability or other tort claims. Licensor agrees to give Licensee
prompt notice of any claim or occurrence, of which it has
notice, and shall cooperate reasonably at the expense of
Licensor in the defense or handling of such claim or occurrence.
B. If during the term of this agreement any trademark infringement
action, proceeding or claim, or threat of such action,
proceeding or claim, based solely on the use of the Property for
which registration has issued is instituted against Licensee,
Liccnsor hereby agrees, subject to the other provisions of this
Section 12B, to defend and indemnify Licensee, from and against
any and all such causes of action and reasonable out-of-pocket
7
expenses, including, without limitation, interest, penalties,
attorney and third party fees which may be suffered,
incurred or paid by Licensee. Licensee agrees to cooperate with
Licensor in the defense of such action and to take no actions
of any kind regarding such claim without the express prior
written consent of Licensor. Licensor shall have the sole and
absolute right to settle any such action and to negotiate and
determine the settlement terms. Licensee shall take all steps
reasonably recommended by Licensor or its counsel to mitigate
its damages incurred, including the removal of the Xxxxx
Magazine from distribution and discontinuance of any use of the
Property, if required by Licensor. The remedy provided in this
paragraph shall be the sole and entire remedy of Licensee, and
Licensor shall not be responsible for any other damages of any
kind, including special or consequential damages or projected
lost sales or profit of Licensee or other expenditures of
Licensee. Licensee shall promptly notify Licensor of any marks
used by third parties that may be confusingly similar or
otherwise damaging to the Property, but shall take not other
action of any kind with respect thereto, except by express prior
written authorization of Licensor.
13. INSURANCE Licensee shall, throughout the Term, obtain and
maintain at its own cost and expense from a qualified
insurance company with a Xxxxx'x or Best's rating of A or
better, general liability and product liability insurance in the
amount of ten million ($10,000,000) dollars combined
single-limit coverage. Licensee agrees that Licensor (and Xxxxxx
X. Xxxxx, if not Licensor) shall be named as an additional
insured with respect to Licensee's aforesaid liability insurance
policies at no cost to Licensor or Xxxxxx X. Xxxxx and that such
policies shall provide that they may not be cancelled without at
least thirty (30) days' prior written notice to Licensor.
Licensee shall, on the date hereof and annually thereafter,
provide to Licensor, certificates of insurance evidencing such
coverage, together with a statement by Licensee that, to the
best knowledge of Licensee, said insurance is in full force and
effect and the premiums therefor have been paid.
14. CONFIDENTIALITY Neither party shall disclose to a third party or
use any confidential or proprietary information received from
the other (including but not limited to financial and sales
data, marketing plans, royalty rates and fees or product
development ideas), unless expressly authorized by this
Agreement. Each party shall take all reasonable steps to
minimize the risk of disclosure of such information, including
without limitation ensuring that only employees, attorneys and
accountants, whose duties require them to possess such
information or materials have access thereto, exercising at
least the same degree of care that such party uses for such
party's own confidential information, and providing proper and
secure storage for the information.
8
15. JURISDICTION AND DISPUTES This Agreement shall be governed in
accordance with the laws of the State of New York. All disputes
under this Agreement shall be resolved by the courts of the
State of New York, amid the parties hereby consent to the
jurisdiction of such courts, agree to accept service of process
by registered mail (return receipt requested) or recognized
overnight courier service and waive any jurisdictional or venue
defenses otherwise available.
16. AGREEMENT BINDING ON SUCCESSORS This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, and
their heirs, administrators, successors, and permitted assigns.
17. ASSIGNABILITY The License granted hereunder is personal to
Licensee and shall not be assigned by any act of Licensee or by
operation of law without Licenser's express written consent
which may be withheld in Licenser's sole discretion. A violation
of this paragraph shall constitute a material breach hereunder.
18. WAIVER No waiver by either party of any default shall be deemed
as a waiver of any prior or subsequent default of the same or
other provisions of this Agreement.
19. SEVERABILITY If any provision hereof is held invalid or
unenforceable by a court of competent jurisdiction, such
invalidity shall not affect the validity or operation of any
other provision and such invalid provision shall be deemed to be
severed from the Agreement.
20. INDEPENDENT CONTRACTORS This Agreement does not, and shall not
be deemed to, make Licensor or Licensee the agent, legal
representative, or partner of the other for any purpose
whatsoever, and neither Licenser nor Licensee shall have the
right or authority to assume or to create any obligation or
responsibility whatsoever, express or implied, on behalf of or
in the name of the other party, or to bind the other party in
any respect whatsoever.
21. NO JOINT VENTURE Nothing contained herein shall constitute this
arrangement to be employment, a joint venture, or a partnership.
Licensee shall have no power to obligate or bind Licensor in any
manner whatsoever.
22. INTEGRATION This Agreement constitutes the entire understanding
of the parties, and revokes and supersedes all prior agreements
and understandings between the parties (other than the
Publishing Agreement) with respect to the subject matter hereof,
and is intended as a final expression of their Agreement. It
shall not be modified or amended except in writing signed by the
parties hereto and specifically referring to this Agreement.
This Agreement shall take precedence over any other
9
documents which may be in conflict therewith.
[Signatures follow on the next page.]
10
BY THEIR EXECUTION BELOW, the parties have agreed to all of the terms and
conditions of this Agreement.
LICENSEE
SOBE LIFE, LLC
By: Xxxxxxx Xxxxxxxx
---------------------------------------
Xxxxxxx Xxxxxxxx, Managiug Member
LICENSOR
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Xxxxxx X. Xxxxx, President
11
