EXHIBIT 10.1(6) LICENSE AGREEMENT WITH MAJOR LEAGUE BASEBALL PROPERTIES, INC.
DATED FEBRUARY 26, 2003
Contract No. ML-2329F(rv)
MAJOR LEAGUE BASEBALL PROPERTIES, INC. LICENSE AGREEMENT
THIS LICENSE AGREEMENT is by and between Major League Baseball
Properties, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter
referred to as "Licensor"), on its own behalf and as agent for the Major League
Baseball Clubs (the "Clubs"), Pacific Telesis Group ("PTG"), the Office of the
Commissioner of Baseball (the "BOC") and the American and National Leagues of
Professional Baseball Clubs (the "Leagues") and Fotoball USA, Incorporated, 0000
Xxxxx Xxx, Xxx Xxxxx, XX 00000 (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 (including,
without limitation, the additional miscellaneous terms and conditions contained
in SCHEDULE G hereto), the limited exclusive (as set forth in SCHEDULE G,
EXCLUSIVITY) and the non-exclusive license to utilize certain specified names,
word marks, logos, uniform designs, mascots, images, colors and color
combinations, trade dress, characters, symbols, designs, likenesses and visual
representations associated with and/or related to the various Major League
Baseball-affiliated entities and their products and services, as described in
SCHEDULE A attached hereto (herein such names, word marks, logos, uniform
designs, mascots, images, colors and color combinations, trade dress,
characters, symbols, designs, likenesses and visual representations are
collectively called the "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, Major League Baseball Enterprises, Inc.
("MLBE"), Major League Baseball Properties Canada Inc. ("MLBPC"), Baseball
Television, Inc. d/b/a Major League Baseball International ("MLBI"), MLB
Advanced Media, L.P. ("MLBAM LP"), MLB Advanced Media, Inc. ("MLBAM Inc."), MLB
Media Holdings, Inc. ("MLBMH Inc."), MLB Media Holdings, L.P. ("MLBMH LP") and
MLB Online Services, Inc. ("MLBOS") (MLBAM LP, MLBAM Inc., MLBMH Inc., MLBMH LP
and MLBOS are hereinafter referred to collectively as "MLBAM"), the BOC, the
Leagues, the Clubs or PTG. While the Logos may be used as trademarks subject to
the terms of this 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 (i) presently outstanding
agreements granted by the Clubs and PTG; (ii) the rights of the Clubs, MLBE,
MLBPC, MLBI, MLBAM, PTG, Licensor, and each of their respective affiliates to
distribute (directly or indirectly) products throughout the world (through any
means or medium); and (iii) the grant by Licensor to the Major League Baseball
Players Alumni Association (the "MLBPAA") of worldwide rights to utilize the
word marks "Major League" and "Major League Baseball" as part of the MLBPAA's
name, logos, designs, symbols and other visual representations (the "MLBPAA
Marks"), which include the right to grant to third parties the right to use the
MLBPAA Marks. Further, any exclusivity granted hereunder shall pertain only to
the extent of the items described and, if given, at the price relating thereto,
if specified in this Agreement. Licensor warrants and represents that as the
agent for the Clubs and PTG, pursuant to authority granted by the Clubs and PTG,
it has the full authority to
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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
expire as of the dates specified in SCHEDULE D attached hereto and except as
otherwise provided for sell-off purposes as specified in Paragraph 17 hereof,
unless sooner terminated 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" and together with Advance
Compensation, the "Total 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. No part of any amounts paid or payable hereunder may be
used to offset or apply against any other amount owed by Licensee to Licensor or
to any other Major League Baseball-affiliated entity. In the event of a work
stoppage delaying or interrupting the playing of Major League Baseball games,
the parties agree that this Agreement shall continue in full force and, except
as otherwise provided in writing in this Agreement, Licensee shall not be
entitled to any other form of compensation nor shall Licensor or the Clubs, the
Leagues, the BOC, MLBE, MLBPC, PTG, MLBAM or MLBI, be otherwise liable to
Licensee for any losses incurred by Licensee on account of any such work
stoppage.
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, subject to
SCHEDULE G, LICENSEE AFFILIATES, any of its affiliated, associated or subsidiary
entities (collectively, "Licensee Affiliates"), 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 Total 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.
Notwithstanding the foregoing, with regard to Canadian sales, if authorized
hereunder, Licensee shall pay Percentage Compensation on the price of the
Licensed Product(s) excluding "GST" and any duty and shall submit all statements
and Percentage Compensation payments to such party designated by Licensor and as
required by this Agreement. Licensee shall account separately for all sales of
each Licensed Product (itemized by country and by Licensed Product),
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pursuant to the requirements of Paragraph 5 below. No costs incurred in the
manufacture, sale, distribution, promotion or advertisement of the Licensed
Product(s) shall be deducted from 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 Licensee Affiliate, even if
not billed or billed at less than usual net sales price for such Licensed
Product(s), and shall be based upon the greater of the usual net sales price
sold to the trade by Licensee for (i) such Licensed Product(s), or (ii) if such
Licensed Product(s) have not been so sold, products similar to the Licensed
Product(s). Licensor acknowledges that units of the Licensed Product(s) that are
exported by Licensee to other licensees of Licensor authorized to distribute
such Licensed Product(s) outside the Licensed Territory may, with Licensor's
written approval, be sold without any obligation on Licensee to pay Percentage
Compensation to Licensor on such units.
C. INVOICES: Licensee agrees to pay Licensor all sums due and payable
to Licensor relating to this Agreement. Any late payments in connection with
such invoices shall require Licensee to pay Licensor, in addition to the
invoiced amount due, interest (accruing at the time such obligation was first
owed) at one percent (1%) per month or the highest prime lending rate of Chase
Manhattan Bank, whichever is greater, on the amounts delinquent for the period
of the delinquency, without prejudice to any other rights of Licensor in
connection therewith.
D. MARKETING CONTRIBUTION: Licensee agrees that Licensor shall have
the right in its sole discretion and in a style and manner in which it chooses,
to produce and allow others to produce on its behalf catalogs, sales sheets or
brochures (hereinafter "catalogs") wherein merchandise from licensees of
Licensor shall be displayed. Licensee hereby grants to Licensor the right to
feature the Licensed Product(s) and to use Licensee's trademarks and corporate
identification (including, without limitation, the brand names of the Licensed
Product(s)) in any and all media for purposes of promoting and advertising
either the Licensed Product(s) and/or Licensor, its affiliates, and promotions
for the foregoing, without additional approvals or any compensation.
5. PERIODIC STATEMENTS: Within thirty (30) days after the first day of
the license period, and promptly on the 30th 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, allowable itemized
deductions from gross sales price, and net sales price of the Licensed
Product(s) distributed and/or sold by Licensee or any Licensee Affiliate 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 request of Licensor (but
not more than once per calendar year during the license period), a complete list
of Licensee's customers to whom Licensed Product(s) have been sold and
corresponding information regarding distribution to such accounts. Licensor
agrees that it will not divulge said customer list to any other licensee of
Licensor, to any other competitor licensing organization, or to any competitor
of Licensee, as identified by Licensee, except as required by law. 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 4(C). 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
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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 and Licensee Affiliates to the date of
Licensor's demand. Licensee shall additionally provide, on Licensor's written
request and at Licensee's cost, the audited financial statements for Licensee
and/or any Licensee Affiliate for the requested year(s). All amounts payable
pursuant to this Agreement shall be in U.S. dollars only.
6. BOOKS AND RECORDS:
A. Licensee shall keep, maintain and preserve in its principal place
of business for at least four (4) 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. To
the extent that such records are commingled with other business records of
Licensee, Licensor shall nonetheless be entitled to review all of Licensee's
records. Such records and accounts shall be available for inspection and audit
(and copying at Licensor's expense) at Licensee's principal place of business or
such other Licensee-controlled facility as Licensor shall request at any time or
times during or after the term or terms of this Agreement during reasonable
business hours and upon reasonable notice (not to exceed thirty (30) days) by
Licensor or its representatives. Licensor shall also have the right to inspect
Licensee's plants, warehouses or storage facilities at any reasonable time
without notice, to ensure compliance with this Paragraph and Paragraph 10 below.
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.
B. 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 estop or prevent Licensor from thereafter disputing the accuracy of
any such statement or payment.
C. 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, then Licensee
shall pay Licensor the amount of the deficiency plus interest as calculated
above. To the extent that Licensee does not have all records and management
personnel available during Licensor's scheduled audit and such audit needs to be
rescheduled, the cost of the rescheduled audit will be the responsibility of
Licensee.
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 and PTG 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
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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
(including, without limitation, selecting in its sole discretion, counsel
therefor) 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 Licensor's 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. (i) In the event that a claim is made, or an action or suit is
instituted, against Licensor, MLBE, the Clubs, PTG, the Leagues, BOC, MLBPC,
MLBAM and/or MLBI (each, a "Licensor Indemnitee" and collectively, the "Licensor
Indemnitees"), arising out of or related to:
(a) any actual or alleged unauthorized use of or infringement of any
trademark, service xxxx, copyright, patent, process, method or
device by Licensee in connection with the Licensed Product(s)
covered by this Agreement;
(b) any actual or 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;
(c) any unauthorized use of the Logos or any other names, word
marks, logos, uniform designs, mascots, images, colors and color
combinations, trade dress, characters, symbols, designs,
likenesses and visual representations owned, controlled, or
cleared for use by or on behalf of and/or applied for in or
registered with the U.S. Patent and Trademark Office
(irrespective of the class or nature of goods or services for
which an application has been made or registration issued) by
the Clubs, PTG, BOC, the Leagues, MLBE or Licensor
(collectively, the "MLB Marks");
(d) any breach by Licensee of this Agreement;
(e) any actual or alleged 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;
(f) any agreements or alleged agreements made or entered into by
Licensee to effectuate the terms of this Agreement;
(g) Licensee's distribution methods, practices, or policies relating
to the Licensed Product(s);
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(h) Licensee's promotional, marketing, or advertising activities
involving or related to the Licensed Product(s) or to Licensor
or any of its affiliates; and/or
(i) any actual or alleged physical or emotional injury, wrongful
death, loss of consortium in conjunction with the Licensed
Product(s) covered by this Agreement.
then Licensee shall indemnify, defend and hold each such Licensor Indemnitee and
its respective former or current owners, shareholders, partners, members,
directors, officers, employees, agents, representatives, successors and assigns
harmless from all such actions, claims, suits, damages and costs (including
reasonable attorneys' fees and expenses) and afford Licensor the option to
participate in any such action or to allow Licensee to handle Licensor's defense
(subject to Licensor's approval as to counsel, court filings, discovery,
correspondence, general strategies, and the settlement of the claim, action or
suit). Licensor agrees to give Licensee notice of the commencement of any such
claim or action against any of the Licensor Indemnitees.
(ii) In the event that a claim is made, or an action
or suit is instituted, against Licensee (but not against any Licensor
Indemnitee) relating to the Licensed Product(s), then Licensee shall promptly
notify Licensor in writing of any claims, actions or suits commenced against it
in any forum relating to Licensed Product(s) (irrespective of whether the Logos
are implicated thereby) and shall afford Licensor the option of (a) taking on
the defense of such action on behalf of Licensee or (b) consulting with Licensee
in the defense of such action. Unless such claim, action, or suit involves, as a
litigated issue, the unauthorized use of the MLB Marks (in which case such costs
shall be treated as if incurred in connection with Paragraph 7(C) above),
Licensor shall bear the costs of such participation.
8. INSURANCE: Licensee must obtain, and continuously maintain throughout
the license and sell-off periods, at its own expense, the following insurance
policies worldwide to protect against any claims or suits arising out of any of
the circumstances described in Paragraph 7(C) above:
A. An Insurance Services Office occurrence based Commercial General
Liability Insurance Policy, including contractual liability,
products/completed operations liability and advertising
liability coverage with minimum limits of:
$1,000,000 (one million dollars) Each Occurrence;
$1,000,000 (one million dollars) General Aggregate; and
$1,000,000 (one million dollars) Products/Completed
Operations Aggregate.
B. Errors & Omissions Liability Insurance, with a minimum limit of
$5,000,000 (five million dollars) Each Claim.
C. Umbrella Liability Insurance, in excess of 8(A) above, with
minimum limits of:
$5,000,000 (five million dollars) Each Occurrence; and
$5,000,000 (five million dollars) General Aggregate.
All insurance polices must be issued by an admitted insurance carrier. Licensor,
the BOC, the Leagues, the Clubs, MLBPC, MLBE, MLBI, MLBAM, PTG and their
subsidiary or affiliated companies and its and their directors, officers and
employees must be named as Additional Insureds under the Commercial General
Liability and Umbrella Liability Policies. All of these policies must contain
Cross Liability Endorsements. Further, coverage for the Additional Insureds
shall apply on a primary basis irrespective of any other insurance, whether
collectible or not. All policies shall be endorsed to provide that in the
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event of cancellation, non-renewal or material modification Licensor shall
receive thirty (30) days written notice thereof. Licensee shall furnish Licensor
with certificates of insurance evidencing compliance with all insurance
provisions noted above prior to the commencement of the licensing and annually
prior to the expiration of each required insurance policy.
9. COPYRIGHT AND TRADEMARK NOTICES AND REGISTRATIONS:
A. Licensee further agrees that, unless otherwise directed in writing
by Licensor, in any instance wherein the Logos 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): "Major League
Baseball trademarks and copyrights are used with permission of Major League
Baseball Properties, Inc." Further, all products containing the Logos shall
contain, as Licensor shall direct, a Major League Baseball hologram and/or a
hangtag and label with Licensee's name stating "Genuine Merchandise" and
containing the Major League Baseball silhouetted batter logo and, where
appropriate, the Logos of the collection (e.g. Major League Baseball Cooperstown
Collection or MLB Authentic Collection). All Licensed Product(s) shall display
or otherwise identify Licensee's name either on a permanently affixed label or
such other manner approved in writing by Licensor. 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" (or such other collection name designated by Licensor) 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 xxxx rights (e.g., "(C)", "(R)", "(TM)" or "(SM)"). 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, MLBE, BOC, MLBPC, MLBI, MLBAM, the Clubs, PTG and/or the
Leagues in the MLB Marks.
B. Licensee agrees to advise Licensor of the initial date of the
marketing of each Licensed Product, and upon request, to complete all forms
generated by Licensor (and to supply all documentary information requested
thereby, including, without limitation, the Logos on each Licensed Product (and
any licensed use of any other of the MLB Marks prior thereto), the corresponding
quantity of sales, and identity and location of purchasers at wholesale) and 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 as are
actually required for use in procuring copyright, trademark and/or service xxxx
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 xxxx registrations. Except to the extent set
forth in any schedules attached to this Agreement, Licensor, MLBE, BOC, MLBPC,
MLBI, MLBAM, the Clubs, PTG 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 xxxx registrations for its or their MLB Marks. 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 on
the
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Licensed Product(s) herein (and MLB Marks, if previously applicable) where such
registration is needed and shall assist Licensor in protecting the Logos and MLB
Marks as requested and directed by Licensor.
C. 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:
A. Licensor shall have absolute approval, per Paragraph 30 hereof, of
the Licensed Product(s) and of all packaging at all stages of the development
thereof. In addition, Licensor shall have the right to approve all advertising
and promotional materials relating to the Licensed Product(s), including, but
not limited to, all advertising and promotional materials that use any Logo or
Logos. 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 any Logo or 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. By way of example, but not
limitation, (i) no use of any 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 prior approval and (ii) no press release or public statement
referring or relating to the Licensed Product, Licensor and/or its affiliates
shall be distributed or disseminated 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 4(B). 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 Major League Baseball silhouetted batter logo. 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.
B. 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 and Licensor 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. Licensee acknowledges and
agrees that all submissions required to be given by it to Licensor hereunder
shall be sent to Licensor's Quality Control Department with a copy to Licensee's
contact within Licensor's Licensing Department. Notwithstanding anything to the
contrary contained above, no action (whether written or oral) or inaction by the
Quality Control Department shall be construed as granting any rights (including,
without limitation, authorizing any new or different product) not expressly
stated in this
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Agreement or a fully executed amendment hereto. Licensee acknowledges and agrees
that any Licensed Product(s) not approved pursuant to the terms hereof shall be
unlicensed and unauthorized.
11. DISTRIBUTION:
A. 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. Concurrently with its execution of this Agreement, Licensee will provide
Licensor with the names, addresses, telephone numbers and names of principal
contacts of each individual or entity, other than consumers or entities that
sell directly to consumers, to whom Licensee sells or otherwise provides the
Licensed Product(s) for subsequent sale or distribution (hereinafter referred to
as "Distributor"). This information shall be set out in SCHEDULE G, DISTRIBUTORS
of this Agreement. Licensee shall specify the Licensed Product(s) Distributor
shall sell or distribute. Licensee agrees that at no time during the license
period or sell-off periods shall it sell, directly or indirectly, to any
Distributors not listed in SCHEDULE G, DISTRIBUTORS, or to any individual or
entity affiliated in any manner with any of such Distributors, Licensed
Product(s) for subsequent sale or distribution without prior written approval of
Licensor. In the event Licensee wishes to substitute a Distributor listed in
SCHEDULE G, DISTRIBUTORS or wishes to add to the number of Distributors,
Licensee shall first provide Licensor with the information set out in SCHEDULE
G, DISTRIBUTORS regarding the proposed new Distributors for Licensor's written
approval of such Distributors. Licensee's failure to do so may result in
termination of this Agreement and/or confiscation and seizure of the Licensed
Product(s).
B. Unless otherwise set forth in the Schedules to this Agreement, such
distribution of the Licensed Product(s) shall not be conducted through
freight-on-board sales (wherein Licensee transfers title to and possession of
the Licensed Product(s) to a third party outside the Licensed Territory for
subsequent distribution) or on-line or via the Internet. In the event Licensee
sells or distributes a Licensed Product at a special price directly or
indirectly to itself, including, without limitation, any Licensee Affiliate, or
to any other person, firm or corporation related in any manner to Licensee or
its officers, directors or major stockholders, Licensee shall pay Percentage
Compensation with respect to such sales or distribution based upon the greater
of the highest net sales price offered, or sold to, the trade during the license
period by Licensee for (i) such Licensed Product(s), or (ii) products similar,
in Licensor's judgment, to the Licensed Product(s).
12. GOODWILL: Licensee recognizes the great value of the publicity and
goodwill associated with the MLB Marks and, in such connection, acknowledges
that such goodwill belongs exclusively to Licensor, MLBE, MLBPC, MLBI, MLBAM,
the Clubs, PTG, BOC and/or the Leagues, as the case may be, and that the MLB
Marks 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 represents, warrants
and agrees that:
A. It will not acquire any rights in the Logos as a result of its use
thereof (or the MLB Marks, if used previously by Licensee) and all uses of the
Logos or MLB Marks shall inure to Licensor's benefit;
B. It will not, directly or indirectly, attack the title of Licensor,
MLBE, the Clubs, PTG, BOC and/or the Leagues in and to the MLB Marks or any
copyright, trademark or service xxxx pertaining thereto, nor will it attack the
validity of the license granted hereunder, nor will it use MLB Marks not
licensed hereunder or die Logos in any manner other than as licensed hereunder;
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C. It will not at any time apply for any registration of any
copyright, trademark, service xxxx or other designation which would affect the
ownership of the MLB Marks, or file any document with any governmental authority
or take any action which would affect the ownership of the MLB Marks or aid or
abet anyone in doing so;
D. It will not harm, misuse or bring into disrepute the MLB Marks;
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 and/or any of its affiliates. 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 (in
the form of an executed premium license from Licensor) and the specific
negotiation of a higher Percentage Compensation payment therefore. 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, including, without limitation, the terms and
conditions contained in the Licensee Manual. 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 Product
Safety Commission) which shall have jurisdiction over the Licensed Product(s);
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M. It guarantees that Licensor, MLBAM, Clubs, official Club and/or
Licensor retail stores, Club in-stadium concessionaires and the Clubs belonging
to The National Association of Professional Baseball Leagues d/b/a Minor League
Baseball ("Minor League Baseball Clubs") shall be permitted to purchase the
Licensed Product(s) from Licensee for their retail sale at Licensee's lowest
possible wholesale price 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, MLBAM, Clubs, PTG and Minor League Baseball
Clubs shall be permitted to purchase the Licensed Product(s) from Licensee for
their use, but not resale, at Licensee's lowest possible price, which shall in
no event be greater than its lowest wholesale price. Licensee shall be obligated
to pay Percentage Compensation on all sales pursuant to this Paragraph 13(M),
unless otherwise specified herein;
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. 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 in SCHEDULE F. 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. In
the event Licensee wishes to substitute a Manufacturer 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 Produces). Licensee shall ensure that:
(i) Manufacturer produces no merchandise bearing the MLB Marks
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).
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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 any Major League Baseball-affiliated
entity (including, without limitation, all information contained in the
Schedules attached hereto) which, it acknowledges, it may become privy to during
the term of this Agreement;
S. It has not and will not grant a security interest to or in the
Licensed Product(s) unless and until it notifies Licensor in writing of each
such security interest and otherwise complies with the following conditions:
(i) the grant of rights in the Licensed Product(s) represents a
non-assignable security interest and not a conveyance of
ownership;
(ii) such secured party is a credible financial institution which
maintains at least an A- rating from a nationally recognized
credit rating agency (such as Xxxxx'x or Standard & Poors)
throughout the license period;
(iii) such secured party shall not be entitled to complete
works-in-process or raw materials used to create the Licensed
Product(s); and
(iv) Licensee shall contractually require that if such secured party
wishes to sell the affected Licensed Product(s) upon Licensee's
default of such security agreement, then the secured party
shall first offer Licensor the opportunity to purchase such
inventory at the lesser of Licensee's cost or the lowest
"qualified bid" therefor. For purposes of this Agreement a
"qualified bid" shall be any bona fide, arm's length bid
offered other than by a party (1) who Licensor would not
approve as a purchaser hereunder, or (2) who is related to or
affiliated with Licensee (including, without limitation, a
Licensee Affiliate). In the event Licensor does not exercise
such option to purchase the inventory, Licensee shall obtain
Licensor's written approval of such sale upon at least fifteen
(15) Licensor business days' advance written notice to
Licensor; it being understood that Licensor may grant or deny
approval in its sole discretion:
(a) if approval is denied, Licensor shall be entitled to
order the destruction or return of such Licensed
Product(s) upon the payment to such secured party by
Licensor of the manufacturer's cost of such goods.
(b) if approval is granted, the sale shall be conditioned
upon (1) the payment to Licensor of all Percentage
Compensation due to Licensor on such sales, based on the
terms of this Agreement, within fifteen (15) days from
such sale (and any outstanding obligations owed to
Licensor, if requested by Licensor),
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(2) the secured party's carrying of insurance of the
type required of Licensee in Paragraph 8 hereof poor
to consummating such sale, (3) Licensor's approval
of said Licensed Product(s) pursuant to Paragraph 10
hereof, (4) the manner of the sale (including,
without limitation, Licensed Territory, method of
distribution and license period) complies in all
aspects of this Agreement; and (5) the secured
party's agreement to indemnify Licensor and each of
its affiliates referenced in Paragraph 7(C) hereof
from all claims relating to such sale.
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;
U. With respect to any Licensed Product(s) manufactured outside the
United States (which shall be allowed pursuant to the terms hereunder), (i) 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 or from Licensee's owned and operated warehouses or facilities
wherein Licensee has a physical presence;
V. (i) The name identified in the first unnumbered paragraph of this
Agreement is the corporate name of Licensee, and is reflected as such in all
corporate, legal and governmental filings, (ii) Licensee is duly incorporated in
the United States and has full power and authority to execute and deliver this
Agreement and perform its obligations hereunder; (iii) Licensee has duly
executed and delivered this Agreement; (iv) this Agreement constitutes the
legal, valid and binding obligation of Licensee, enforceable against it in
accordance with the terms hereof; and (v) Licensee's execution, delivery, and
performance of this Agreement does not and will not conflict with, result in the
breach of, or constitute a default under any arrangement or agreement to which
it is a party or by which it is bound;
W. Except as disclosed pursuant to Paragraph 13(S) above, Licensee has
granted to no individual or entity a preference, security interest, or lien in
the Licensed Product(s); and
X. Licensee shall inform Licensor promptly and in writing of any
default by it under an agreement with a secured lender in which the Licensed
Product(s) are implicated and/or any agreement with any affiliate of Licensor.
14. APPROVAL OF MANUFACTURER, ETC.: Nothing contained herein may be
construed so as to imply endorsement of Manufacturer by Licensor, MLBE, BOC,
MLBPC, MLBI, MLBAM, the Leagues, the Clubs or PTG. Licensee shall seek
Licensor's written approval of Manufacturer prior to Licensee's engagement of
Manufacturer. Any approval of Manufacturer granted by Licensor must be in
writing and 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 the MLB Marks. Licensor hereby reserves the right to terminate in its
discretion the engagement of Manufacturer at any time and for any reason.
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.
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15. ACKNOWLEDGEMENT OF RIGHTS:
A. Licensee hereby acknowledges the proprietary nature of all MLB
Marks and acknowledges that all rights, title and interest to MLB Marks belong
to the individual Clubs, PTG, MLBE, the Leagues, BOC and/or Licensor, as the
case may be. Licensee represents that it has not made any unauthorized use of
MLB Marks, including, without limitation, those contained in Licensor's Official
Style Guide, and acknowledges that a license from the Clubs, PTG, MLBE, the
Leagues, BOC and/or Licensor is required in order to use such MLB Marks, and
agrees that it will during or after the license period make no use of any such
MLB Marks, other than as provided in this Agreement, without the prior written
consent of Licensor, MLBE, BOC, PTG or the appropriate individual League or
Club. Any use Licensee has made of the MLB Marks or will make of the Logos has
not conferred 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, PTG, MLBE, the Leagues, BOC and/or Licensor, as
the case may be. Licensee further acknowledges that for purposes of this
Paragraph 15, "use" includes, but is not limited to, trademark, fair,
incidental, descriptive or functional uses.
B. Licensee also acknowledges that it will not manufacture, distribute
or sell any products (other than the Licensed Product(s) or premium products
approved by Licensor), or produce or direct the production of any promotional
item (other than as approved by Licensor), utilizing the primary colors of Club
or Major League Baseball game or event MLB Marks or anything closely similar
thereto in combination with baseball indicia or the geographic designation of a
Club in a manner which is likely to create the impression or actually creates
the impression that such products are associated with such Club or Major League
Baseball game or event; provided, however, that the foregoing limitation
regarding the use of certain colors in combination with the geographic
designation of a Club shall not apply to the extent that another professional or
college sports team or program has the same geographic designation as such Club
and colors identical or closely similar to those of such Club and such use is
consistent with other styles of products currently being sold by Licensee
pursuant to a license with such professional or college sports team.
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: 13(A) through (F), (H)
through (K), (Q), (R) or (T); or
(iv) If Licensee shall undergo a change in majority or controlling
ownership; or
(v) If Licensee's breach of this Agreement is incapable of complete
cure; or
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(vi) If Licensee is in default of any provision of an agreement with
a lender possessing an approved security interest (per
Paragraph 13(S)) in the Licensed Produces); or
(vii) If Licensee shall breach any other existing agreement with
Licensor or any Major League Baseball-affiliated entity and
fails to cure such breach pursuant to the terms thereof.
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, or fails to satisfy any outstanding payment obligation
under any other agreement with Licensor, at which time all such
monies, together with all other monies owed pursuant to
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 in good faith commence the manufacture of
the Licensed Product(s) by the date specified in SCHEDULE G,
MISCELLANEOUS, if applicable, and to distribute and sell each
Licensed Product throughout the Licensed Territory by the date
specified in SCHEDULE G, MISCELLANEOUS, if applicable, 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 other terms of this
Agreement; or
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(viii) If, in the periodic statements furnished pursuant to Paragraph
5 hereof, the amounts owed to Licensor are significantly or
consistently understated.
C. 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 parties 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 EXPIRATION: 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 Licensee may manufacture no
more Licensed Product(s), but, subject to the terms of the following sentence,
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 Percentage Compensation relative thereto; provided, however, that
such Percentage Compensation shall not be applicable against Advance
Compensation or Guaranteed Compensation. Notwithstanding the foregoing, Licensee
shall not manufacture, sell or distribute any Licensed Product(s) (i) after
termination of this Agreement by Licensor or (ii) after expiration and where
Licensee has defaulted and such default involved (a) the failure of Licensee to
cause the appropriate statutory notice of copyright, trademark, service xxxx 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 10 hereof; or (d) the occurrence of an
event of default under the terms of Paragraph 16 hereof. Furthermore, Licensee
shall ensure that the distributors, jobbers and middlemen with whom it deals in
respect of the Licensed Product(s) shall not distribute the Licensed Product(s)
after the expiration of the sell-off period set forth in this Agreement.
Licensor shall have the option to conduct physical inventories before
termination and continuing until the end of the sixty (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.
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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 and all other MLB Marks, artwork
and textual matter in connection with other products, including other products
identical to the Licensed Product(s) contemplated herein. Notwithstanding any
exclusivity granted herein, Licensor reserves the right to use, or license
others to use and/or manufacture, the Logos on identical items as premiums.
Nothing in this Paragraph 19 shall constitute a waiver by Licensee of its patent
rights or a license to Licensee's patent rights. In the event Licensee develops
a patentable design concept (e.g., a unique closure system, stabilizer, footbed,
etc.) and uses it in connection with the Licensed Product(s), such use shall not
confer patent rights to such design concept to Licensor, and Licensee may use
such patented design concept on other products.
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., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
General Counsel. All statements and payments shall be made to Major League
Baseball Properties, Inc. 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 PARTNERSHIP, ETC.: This Agreement does not constitute and shall
not be construed as constituting an agency, partnership or joint venture
relationship between Licensee and Licensor, PTG 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 AND LICENSEE REPRESENTATIONS: Licensee acknowledges
and recognizes: (a) that it has been granted the license described in Paragraph
1 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-logoed 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 he 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.
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25. CONSTRUCTION AND JURISDICTION: The validity, construction, and
enforceability of this Agreement shall be governed by the internal laws of the
State of New York, without giving effect to conflict of laws principles thereof.
The United States District Court for the Southern District of New York and the
Supreme Court of the State of New York, sitting in New York County, shall be the
sole venues for any dispute arising directly or indirectly from the relationship
created or the transactions contemplated by this Agreement. Each of the parties
consents to the jurisdiction and venue of any such court and waives any argument
that any such court does not have jurisdiction over such party or such dispute
or that venue in any such forum is not appropriate or convenient. In the event
that any of the parties commences any action against any other party in another
jurisdiction or venue in respect of any such dispute, such other party shall be
entitled, at its option, to have the action transferred to one of the
jurisdictions and venues described in this Paragraph 25, or if such transfer
cannot be accomplished under applicable law, to have such action dismissed
without prejudice.
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. GRANT OR DENIAL OF APPROVALS: In any instance where any approval is
required under this Agreement (including, without limitation, pursuant to
Paragraphs 7, 10, and 14), Licensee represents, acknowledges and agrees that
such approval shall be granted or withheld in Licensor's sole discretion.
31. SURVIVAL OF PROVISIONS: Paragraphs 2, 6, 7(C), 0, 00, 00(X), (X),
(X), (X), (X), (X), (X), (X), (Q) and (R), 15, 17, 18, 19, 21, 22, 24, 25, 26,
30, 31, and 32 shall survive any termination or expiration of this Agreement.
32. 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. Licensee acknowledges and agrees that Licensor
may, through its counsel or other employees, agents or representatives,
communicate directly with Licensee (including Licensee's business persons)
concerning any potential or existing breach of this Agreement or any other
matter relating to the Logos (other than in the context of actual litigation,
arbitration, or mediation wherein Licensor and Licensee are adverse to one
another) irrespective of whether Licensee's counsel is involved in such
communications. Licensee further acknowledges and agrees that it has reviewed
this Agreement with its counsel and understands and agrees to every provision
contained herein. Licensee
-19-
additionally acknowledges and agrees that no agreement shall confer renewal or
extension rights unless executed by Licensor.
-20-
SCHEDULE A
LOGOS
For purposes of this Agreement, unless otherwise specified, "Logos" shall
mean the below-listed names, word marks, logos, uniform designs, mascots,
images, colors and color combinations, trade dress, characters, symbols,
designs, likenesses and visual representations, each as specified in Licensor's
Official Style Guides or as otherwise specified by Licensor, as of the date that
Licensee begins production of (i) the Licensed Products referred to in SCHEDULE
B or (ii) related advertising or promotional material. Except to the extent
specifically set forth below, Licensee shall have no rights respecting any
proprietary indicia (name, image, or design) of any Club mascot or ballpark.
(1) The following logos and word marks: American and National League
logos and word marks, "Major League" word xxxx, "Major League
Baseball" word xxxx, Major League Baseball silhouetted batter
logos, "MLB" logos and word xxxx, and "What A Game" word xxxx.
(2) The primary, secondary and headwear logos, uniform lettering and
designs, images, colors and color combinations, trade dress,
characters, symbols, designs, likenesses, visual representations,
and word marks, of the following Clubs: Anaheim Angels, Baltimore
Orioles, Boston Red Sox, Chicago White Sox, Cleveland Indians,
Detroit Tigers, Kansas City Royals, Minnesota Twins, New York
Yankees, Oakland Athletics, Seattle Mariners, Tampa Bay Devil
Rays, Texas Rangers, Toronto Blue Jays, Arizona Diamondbacks,
Atlanta Braves, Chicago Cubs, Cincinnati Reds, Colorado Rockies,
Florida Marlins, Houston Astros, Los Angeles Dodgers, Milwaukee
Brewers, Montreal Expos, New York Mets, Philadelphia Phillies,
Pittsburgh Pirates, St. Louis Cardinals, San Diego Padres and San
Francisco Giants.
(3) The following logos and word marks: All-Star Game logos and word
xxxx, All-Star FanFest word xxxx, American and National League
Championship Series logos and word marks, Division Series logos
and word xxxx, Fall Classic logos and word xxxx, FanFest word
xxxx, Home Run Derby logos and word xxxx, Major League Baseball
All-Star FanFest primary and secondary logos and word xxxx,
Midsummer Classic logos and word xxxx, and World Series logos and
word xxxx.
(4) The following logos and word marks: Battle of the Bay logos and
word xxxx, Bay Bridge Series word xxxx, Freeway Series word xxxx,
1-95 Series word xxxx, Second City Series word xxxx, Show-Me
Series word xxxx, and Licensor-created or Licensor-controlled
Subway Series logos and word xxxx.
(5) The following word marks and images: Anaheim Angels: Clutch
(image only) and Scoop (image only), Atlanta Braves: Xxxxx the
Brave (image only) and Rally (image only), Baltimore Orioles: The
Bird (image only), Boston Red Sox: Xxxxx (image only), Cleveland
Indians: Slider (image only), Colorado Rockies: Xxxxxx (image and
word xxxx), Detroit Tigers: Paws (image only), Florida Marlins:
Xxxxx the Xxxxxx (image and word xxxx), Montreal Expos: Youppi!
(image and word xxxx), New York Mets: Mr. Met (image and word
xxxx), Oakland Athletics: Stomper (image only), Philadelphia
Phillies: Xxxxxxx Xxxxxxxx (image and word xxxx), Pittsburgh
Pirates: Pirate Parrot (image and word xxxx), San Diego Padres:
Swinging Friar (image and word xxxx), Seattle Mariners: Mariner
Moose (image only), St. Louis Cardinals: Fredbird (image and word
xxxx), and Tampa Bay Devil Rays/Xxxxxxx (image only).
-21-
(6) The logos, word marks and images of the following ballparks:
Astros Field, Comerica Park, Xxxxxxxx Park, Fenway Park, Xxxxxx
X. Xxxxxxxx Metrodome, Xxxxxxxx Stadium, Xxxxxx Park, Milwaukee
Brewers County Stadium, Olympic Stadium, Pacific Xxxx Park, PNC
Park, SAFECO Field, Xxxx Stadium, Three Rivers Stadium, Xxxxxx
Field, Veterans Stadium, Wrigley Field, and Yankee Stadium.
(7) The logos, word marks and images of the following ballparks:
Xxxxxx Field and Oriole Park at Camden Yards.
-22-
SCHEDULE B
LICENSED PRODUCT(S)
*** ALL LICENSED PRODUCTS SHALL CONFORM TO LICENSOR'S THEN-CURRENT LABELING
REQUIREMENTS. ***
1. Baseballs (other than authentic) made of synthetic white leather,
depicting current Major League Baseball players in uniform,
featuring any of the Logos specified in SCHEDULE A, LOGOS Nos.
1-6, and not designed for actual game play.
2. Baseballs (other than authentic) made of synthetic white leather,
featuring any of the Logos specified in SCHEDULE A, LOGOS Nos.
1-6 printed on the baseballs, and not designed for actual game
play.
3. Sweatbands with color photographs of current Major League
Baseball players in uniform, measuring 3" or 5" in size,
featuring any of the Logos specified in SCHEDULE A, LOGOS Nos.
1-6 pad printed and sewn on the sweatbands, and sold in pairs or
individually.
4. Baseballs (other than authentic) made of synthetic white leather,
featuring any of the Logos specified in SCHEDULE A, LOGOS Nos.
1-6 embossed in full color on the baseballs, and not designed for
actual game play.
5. Baseballs (other than authentic) made of synthetic white leather,
featuring Oriole Park at Camden Yards (subject to Schedule G,
Miscellaneous No. 6), and not designed for actual game play.
6. Baseballs (other than authentic) made of synthetic leather,
featuring Xxxxxx Field (subject to SCHEDULE G, MISCELLANEOUS No.
6), and not designed for actual game play.
7. Baseballs (other than authentic) made of synthetic white leather,
featuring any of the Logos specified in SCHEDULE A, LOGOS Nos.
1-6 printed or embossed on the baseballs, and packaged with a
miniature baseball glove (other than authentic) made of natural
or synthetic leather, neither of which is designed for actual
game play.
8. Baseballs (other than authentic) made of synthetic white leather,
with a printed image of current Major League Baseball players in
uniform, featuring any of the Logos specified in SCHEDULE A,
LOGOS Nos. 1-6, packaged with a miniature glove (other than
authentic) made of natural or synthetic leather, and not designed
for actual game play.
9. Miniature gloves (other than authentic) made of natural or
synthetic leather, and featuring any of the Logos specified in
SCHEDULE A, LOGOS Nos. 1 -6 embossed in the palm.
-23-
10. Baseballs (other than authentic) made of synthetic dual-tone
leather, featuring any of the Logos specified in SCHEDULE A,
LOGOS Nos. 1-6 printed on the baseballs, and not designed for
actual game play.
11. Baseballs (other than authentic) made of synthetic leather in
non-traditional colors, featuring any of the Logos specified in
SCHEDULE A, LOGOS Nos. 1-6 printed on the baseballs, and not
designed for actual game play.
12. Miniature baseballs (other than authentic) made of leather,
measuring 6-1/2" or less in circumference, featuring any of the
Logos specified in SCHEDULE A, LOGOS Nos. 1-6 printed on the
baseballs, and not designed for actual game play.
13. Miniature baseballs (other than authentic) made of leather,
measuring 6-1/2" or less in circumference, featuring any of the
Logos specified in SCHEDULE A, LOGOS Nos. 1-6 printed on the
baseballs, packaged with a miniature glove (other than authentic)
made of leather, and not designed for actual game play.
14. Baseballs (other than authentic) made of synthetic leather,
featuring individual screen printed Minor League Baseball club
logos with the Logos of the Major League Baseball Club affiliated
with such featured Minor League Baseball club, and not designed
for actual game play.
15. Oversized baseballs (other than authentic) made of synthetic
white or dual-color leather, and featuring any of the Logos
specified in SCHEDULE A, LOGOS Nos. 1-6 and the names and
likenesses of current Major League Baseball players.
16. Playground balls made of rubber and featuring any of the Logos
specified in SCHEDULE A, LOGOS Nos. 1-6 and the names and
likenesses of current Major League Baseball players.
17. Children's soft baseballs filled with polyester, made of vinyl,
featuring any of the Logos specified in SCHEDULE A, LOGOS Nos.
1-6 screen printed on the baseballs, and available in various
sizes.
18. Children's soft toy baseball bats filled with polyester, made of
vinyl, featuring any of the Logos specified in SCHEDULE A, LOGOS
Nos. 1-6 screen printed on the bats, and packaged with Licensed
Product No. 17.
19. Sweatbands measuring 5" in size, featuring any of the individual
Logos specified in SCHEDULE A, LOGOS No. 2 on vinyl patches and
sewn on the sweatband, and sold in pairs or individually.
20. Baseballs (other than authentic) made of synthetic leather,
featuring Astros Field, and not designed for actual game play.
21. Baseballs (other than authentic) made of synthetic leather,
featuring Pacific Xxxx Park (subject to SCHEDULE G, MISCELLANEOUS
No. 6), and not designed for actual game play.
22. Baseballs (other than authentic) made of synthetic leather,
featuring Comerica Park (subject to SCHEDULE G, MISCELLANEOUS No.
6), and not designed for actual game play.
-24-
23. Baseballs (other than authentic) made of synthetic leather,
featuring lenticular designs of any of the Logos specified in
SCHEDULE A, LOGOS Nos. 1-2, and not designed for actual game
play.
24. Baseballs (other than authentic) made of synthetic leather,
featuring lenticular designs of the Logos specified in SCHEDULE
A, LOGOS Nos. 1-2 with the names and/or likenesses of current
Major League Baseball players, and not designed for actual game
play.
25. Glow-in-the-dark baseballs (other than authentic) made of
synthetic leather, featuring any of the Logos specified in
SCHEDULE A, LOGOS Nos. 1-5 printed on the baseballs, and not
designed for actual game play.
26. Baseballs (other than authentic) made of synthetic leather,
depicting Xxxxx Xxxxxxx in uniform, featuring Arizona
Diamondbacks Logos, with language or designs commemorating Xxxxx
Xxxxxxx'x 3,000th career strikeout, and not designed for actual
game play.
27. Baseballs (other than authentic) made of synthetic white leather,
featuring printed New York Mets, New York Yankees and MLB Subway
Series Logos in conjunction with MTA subway identifications, to
be distributed by Stadia Tins, Ltd. only, and not designed for
actual game play.
28. Puzzles made of plastic, in the shape and size of baseballs
(other than authentic), and' featuring any of the Logos specified
in SCHEDULE A, LOGOS Nos. 1-6.
29. Miniature bobblehead dolls made of plastic, depicting current
Major League Baseball players in uniform, measuring 4" in size,
featuring any of the Logos specified in SCHEDULE A, LOGOS Nos. 1
-6, and sold in sets of three (3) or more.
30. Miniature bobblehead toppers made of plastic, depicting current
Major League Baseball players in uniform, packaged with pencils,
and each featuring any of the Logos specified in SCHEDULE A,
LOGOS Nos. 1-6.
31. Key chains with a miniature bobble head doll depicting current
Major League Baseball players in uniform, made of plastic, and
featuring any of the Logos specified in SCHEDULE A, LOGOS NOS. 1
-6.
32. Bobblehead dolls made of plastic, depicting current Major League
Baseball players in uniform, measuring 7" in size, featuring any
of the Logos specified in SCHEDULE A, LOGOS Nos. 1-6, and
packaged with baseballs (other than authentic) depicting current
Major League Baseball players in uniform.
33. Non-replica batting helmets made of plastic, featuring any of the
Logos specified in SCHEDULE A, LOGOS Nos. 1-6, not designed for
actual game play, and available in youth one-size-fits-all.
34. Containers in the shape of a miniature batting helmet, made of
plastic, and featuring any of the Logos specified in SCHEDULE A,
LOGOS Nos. 1 -6.
35. Cereal bowls in the shape of a miniature batting helmet, made of
plastic, and featuring any of the Logos specified in SCHEDULE A,
LOGOS Nos. 1-6.
-25-
36. Micro-miniature batting helmets made of plastic, featuring any of
the Logos specified in SCHEDULE A, LOGOS Nos. 1-6, and sold for
vending machines or in sets.
37. Any of Licensed Product Nos. 1-4, 7-13, 15-19, 23-25 and 28-36
featuring either of the Logos specified in SCHEDULE A, LOGOS No.
7 with or without any of the Logos specified in SCHEDULE A, LOGOS
Nos. 1-6.
The right to use the following ballpark names and images are not granted
hereunder: BankOne Ballpark, Xxxxx Stadium, Cinergy Field, Coors Field, Dodger
Stadium, Edison International Field, Enron Field, Network Associates Coliseum,
Pro Player Stadium, Qualcomm Stadium, SkyDome, The Ballpark in Arlington, 3Com
Park, and Tropicana Field.
For purposes of this Agreement, "authentic" baseballs shall mean:
baseballs made of genuine leather featuring the words "Official Ball", and which
are identical in design, including, but not limited to, style, color and Logo
usage and placement, to the baseballs used on-field in Major League Baseball
games, in accordance with the relevant Major League Rules.
For purposes of this Agreement, "authentic" gloves shall mean: gloves
identical in design (including, but not limited to, style, silhouette, color and
Logo usage and placement) and fabrication to gloves used on-field by Major
League Baseball players.
For purposes of this Agreement, "authentic" baseball bats shall mean:
baseball bats made of wood, featuring the Major League Baseball silhouetted
batter logo and individual Club Logos, and marketed under Licensor's MLB
Authentic Collection line of products.
Licensee represents that Licensed Product Nos. 1, 2, 4-8, 10-14, 20-27
and 33 shall include the following warning, or such other language as may be
approved by Licensor, on the outside of the packaging: "Caution: This product is
designed to be used for non-recreational purposes only and is not intended to be
used for actual game play."
Rights to utilize (i) the names, likenesses and/or signatures of any
individuals (including, without limitation, Xxxxx Xxxxxxx and current Major
League Baseball players), and (ii) any copyright, trademark or other property or
identifications belonging to any entity other than those identified in Paragraph
1 and SCHEDULE A of this Agreement (including, without limitation, Metropolitan
Transportation Authority marks and subway identifications (including, without
limitation, the 4 and 7 trains, subway token and Metrocard designs),
Licensee-created language or designs commemorating Xxxxx Xxxxxxx'x 3000th career
strikeout), are not granted under this Agreement. Upon request, Licensee must
present to Licensor written evidence of having obtained the proper authorization
to utilize any such names, likenesses and/or signatures.
Except to the extent specifically set forth above, only Licensor's
then-current Logos shall be featured in the Licensed Products.
-26-
SCHEDULE C
----------
LICENSED TERRITORY
------------------
I. FOR LICENSED PRODUCT NOS. 1-13,15-18 AND 20-37:
-----------------------------------------------
The fifty United States of America, the District of Columbia,
Puerto Rico and U.S. territories and possessions, including U.S.
military bases worldwide.
II. For Licensed Product No. 14:
----------------------------
The fifty United States of America, the District of Columbia and
Canada; provided, however, that Licensed Products bearing the Logos
of the Buffalo Bisons may not be distributed within a 75-mile radius
of Xxxx Tire Park, Buffalo, New York, Licensed Products bearing the
Logos of the Carolina Mudcats may not be distributed within a
100-mile radius of Five County Stadium, Zebulon, North Carolina, and
Licensed Products bearing the Logos of the Toledo Mud Hens may not be
distributed within a 100-mile radius of Xxx Xxxxxxx Stadium, Toledo,
Ohio.
III. For Licensed Product No. 19:
----------------------------
Concession outlets located within the ballparks of the
applicable Club whose Logos are featured only. ,
SCHEDULE D
----------
LICENSE PERIOD
January 1, 2002 - December 31, 2003
SCHEDULE E
----------
COMPENSATION
------------
TOTAL GUARANTEED COMPENSATION: $550,000.00 PAYABLE AS:
(I) NON-RETURNABLE ADVANCE COMPENSATION DUE UPON SIGNING:
April 1, 2002..............................$50,000.00
August 1, 2002............................$100,000.00
(II) REMAINDER OF GUARANTEED COMPENSATION DUE AS FOLLOWS:
November 1,2002...........................$100,000.00
Total 2002 Guarantee.......................$250,000.00
-27-
April 1, 2003.............................$100,000.00
August 1, 2003............................$100,000.00
November 1, 2003..........................$100,000.00
TOTAL 2003 GUARANTEE......................$300,000.00
PERCENTAGE COMPENSATION
-----------------------
FOR LICENSED PRODUCT NOS. 1-4, 7-13, 15-23, 25, 27-28 AND 33-36:
----------------------------------------------------------------
Eleven percent (11%) of net sales (as defined in Paragraph 4(B)).
FOR LICENSED PRODUCT NOS. 5, 6 AND 37:
--------------------------------------
Twelve percent (12%) of net sales.
FOR LICENSED PRODUCT NOS. 14, 24 AND 26:
----------------------------------------
Six percent (6%) of net sales.
FOR LICENSED PRODUCT NOS. 29-32:
--------------------------------
Nine percent (9%) of net sales.
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 Product(s) shall not be applied against Total Guaranteed Compensation.
-28-
SCHEDULE F
----------
MANUFACTURERS
--------------
LICENSEE SHALL LIST BELOW EACH MANUFACTURER (AS DEFINED IN PARAGRAPH 13(O)
UTILIZED IN CONNECTION WITH THE LICENSED PRODUCT(S). LICENSEE ACKNOWLEDGES
THAT IT MAY NOT ALLOW ANY MANUFACTURER TO ACT AS A DISTRIBUTOR OF THE
LICENSED PRODUCT(S).
1) Licensed Product(s): 33 and 36
Name of Manufacturer: Artek Innovations
Address: 00 Xxxxxxx Xxxx, Xxxx Xxxx
Telephone: 000-0000-0000
Principal Contact: Xxxxx Xxxx
Approved by Major League Baseball Properties, Inc.:_______________________
Initials/Title
-29-
2) Licensed Product(s): 1, 2, 4-8, 10-15 and 20-27
Name of Manufacturer: Tayang Sporting Goods
Address: Kaosihay City, Taiwan
Telephone: 000-0000-0000
Principal Contact: Xxxxxxxxx Xxx
Approved by Major League Baseball Properties, Inc.:_______________________
Initials/Title
3) Licensed Product(s): 17 and 18
Name of Manufacturer: Hugo Creation Industrial Ltd.
Address: Kowloon, Hong Kong
Telephone: 000-0000-0000
Principal Contact: X.X. Xx
Approved by Major League Baseball Properties, Inc.:_______________________
Initials/Title
-30-
SCHEDULE G
----------
EXCLUSIVITY
-----------
Provided that Licensee is not in default or breach under this Agreement
between Licensee and Licensor at any time during the license period provided
herein, Licensor acknowledges that, subject to Paragraph 1 and the second
sentence of Paragraph 19 of this Agreement regarding premium items, Licensee
shall be the exclusive retail licensee of Licensor granted rights by Licensor on
behalf of the Clubs to, during the license period, manufacture and distribute
for retail use Licensed Product No. 23 throughout the Licensed Territory.
STRIKE CLAUSE/GAME CANCELLATIONS
--------------------------------
In the event of a players' strike or other labor-related dispute which
results in the cancellation of regular season games for more than twenty-one
(21) consecutive days (the "Cancellation"), Licensee shall have an opportunity
to demonstrate that its sales of Licensed Products have declined as a result
thereof and, if proven to the reasonable satisfaction of Licensor, then Licensor
will not be entitled to its full minimum Guaranteed Compensation payable during
any calendar year during which such Cancellation occurred. Subject to Licensee
demonstrating such adverse effects on its sales of Licensed Products as set
forth above, Licensor and Licensee will negotiate in good faith an appropriate
adjustment of Licensee's financial commitments for any such calendar year.
-31-
PRODUCT CREDIT
--------------
Licensee shall provide to Licensor merchandise credit in the amount of
$10,000 (wholesale value) during 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.
ADVERTISING, MARKETING & PROMOTION
----------------------------------
1. Licensee acknowledges that it is required to promote the Licensed
Products under this Agreement. Accordingly, to satisfy part of that obligation,
by March 1 of each year of the licensed period, Licensee shall pay Licensor the
amount of $2,500 for Licensor's use in connection with Licensor- driven programs
and/or initiatives designed to promote merchandise licensed by Licensor.
2. In addition to the financial commitments specified in Schedule A,
Advertising, Marketing & Promotion No. 1 above, Licensee has agreed to sponsor
or purchase a booth at the Major League Baseball All-Star FanFest ("FanFest")
event conducted during each year of the license period (at a minimum expenditure
of $5,000 each year) and to execute Licensor's standard FanFest Sponsorship
agreement in connection therewith. The extent of Licensee's participation at
FanFest shall be mutually agreed upon by Licensee and Licensor.
MISCELLANEOUS
-------------
1. Notwithstanding anything to the contrary contained in Paragraph 11 of
this Agreement, and subject to Paragraph 10 regarding such materials and copy,
Licensee shall be permitted to distribute the Licensed Product(s) 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 Product(s) outside the Licensed Territory, and
shall include prominent language on the Internet site(s) through which the
Licensed Product(s) are offered that Licensee may not fulfill orders for
delivery of the Licensed Product(s) outside of the Licensed Territory.
2. Licensee represents and warrants that in addition to the periodic
statements Licensee must provide to Licensor pursuant to Paragraph 5 of this
Agreement, Licensee shall provide to Licensor an itemized accounting of all
sales of Licensed Products in Puerto Rico during the license period on a monthly
basis.
3. Notwithstanding anything to the contrary contained in Paragraph 11,
Licensee acknowledges and agrees that Licensee may not sell or offer to sell or
distribute the Licensed Products via mass direct print mail solicitations to
consumers absent the prior written consent of Licensor.
4. Notwithstanding anything to the contrary contained in this Agreement,
Licensee acknowledges and agrees that in all cases where Licensor is not
granting both the image and word xxxx of a particular mascot included in
SCHEDULE A, LOGOS No. 5, Licensee shall not include any aspect of such mascot
(whether image or word xxxx) in the Licensed Products without Licensor's prior
written consent, which shall be determined on a case-by-case basis.
5. Licensee acknowledges that the right to feature Minor League Baseball
club logos on Licensed Product No. 14 is not granted hereunder and has been
granted pursuant to license agreement ML-10199E between Licensee and Licensor
(the "Minor League Agreement"). Licensee further acknowledges and agrees that in
addition to the Percentage Compensation payable by Licensee hereunder on sales
of Licensed Product No. 14, Licensee shall pay percentage compensation of six
percent (6%) of net sales to
-32-
Licensor on sales of such Licensed Product pursuant to the Minor League
Agreement. No Percentage Compensation payable hereunder with respect to the
Licensed Product featuring the Minor League Baseball club logos shall offset or
apply against Percentage Compensation payable on Licensed Product No. 14
pursuant to the Minor League Agreement.
6. Licensee acknowledges and agrees that due to the fact that Licensee is
sending periodic statements to Licensor by the 30th day of every calendar
quarter as per Paragraph 5 of this Agreement instead of by the 15th day (as is
Licensor's standard policy), Licensee may receive notices from Licensor's
Finance Department ("Finance Notices") informing Licensee that its periodic
statements are overdue. The parties hereby acknowledge and agree that such
Finance Notices will not signal a default hereunder (for submission on the 30th
day) unless accompanied by a letter expressly stating actions or inactions
constituting a Licensee default, or such default is expressly communicated by
Licensor to Licensee separate and apart from such Finance Notices.
Notwithstanding anything to the contrary contained in the preceding sentence,
Licensor shall not be deemed to have waived, hindered, or in any manner impaired
its rights or remedies hereunder and under applicable laws in the event of a
Licensee default, including, without limitation, any failure to comply with the
remaining reporting and payment obligations of this Agreement.
7. With respect to Licensed Products featuring the name and/or image of
the ballparks specified in SCHEDULE A, LOGOS Nos. 6 and 7 (the "Ballparks"), and
in addition to all other terms contained in this Agreement, Licensee represents,
warrants and agrees to the following:
a. That it shall limit its use of the Ballparks only to the products
and quantities (if any limitation) defined in SCHEDULE B.
b. That it shall not use the name or images of the Ballparks other
than as authorized hereunder, unless otherwise approved by
Licensor. In the event Licensor approves such additional use,
this Agreement shall be amended in writing to include such
additional use.
c. That, by signing this Agreement, it is contractually obligating
itself to each of Xxxxxx Brewing Company, PNC Bank Corp., Pacific
Telesis Group, and SAFECO Corporation (collectively, the
"Ballpark Entities") to comply with the terms and conditions
contained in this Agreement for use of their respective Ballpark
names and/or images.
d. That it has been or will be supplied with standards for use of
the SAFECO Field name and image and that it shall comply with
such standards.
e. That it is financially and by experience able to meet the
applicable quality standards set forth herein.
f. That it will comply with and be subject to all the terms and
conditions of this Agreement.
g. That it will, within ten (10) days after written notification of
non-compliance, which written notice may emanate from Licensor,
the individual Clubs, or any of the Ballpark Entities,
discontinue (i) manufacturing, selling and/or distributing of any
and all materials, including, without limitation, any goods or
services, that do not comply with this Agreement, and (ii)
applying the Ballpark name and images to any products and
services, and selling or distributing any such products or
services, that in the reasonable and good faith judgment of
Licensor, the individual Clubs, or any of the Ballpark Entities,
do not meet the applicable quality standards.
-33-
h. That it will follow in all respects any graphics guidelines as to
color and format of the Ballpark name and images that shall be
provided to it by Licensor.
i. That any breach by it of these terms and conditions would result
in irreparable injury to Licensor, the individual Clubs, and/or
the Ballpark Entities, for which money damages would not be a
sufficient remedy. Therefore, in addition to any other remedies
that may be available, Licensor, the individual Clubs, and/or the
Ballpark Entities shall be entitled to specific performance and
injunctive or other equitable relief as a remedy for any such
breach, and it waives the requirement for the securing or posting
of a bond in connection with such remedy.
LICENSEE AFFILIATES
-------------------
In connection with Paragraph 4(B) above, Licensee acknowledges and agrees
that it shall not distribute the Licensed Product(s) to or through its Licensee
Affiliates unless such distribution is (i) set forth below and pre-approved in
writing by Licensor and (ii) in compliance with the terms of Paragraph 4(B)
above.
Licensee shall list below each Licensee Affiliate (as defined in
Paragraph 4(B)) to whom Licensee proposes to distribute the Licensed Product(s).
Licensee agrees that at no time during the license or sell-off periods shall it
sell, directly or indirectly, to any of the Licensee Affiliates listed below, or
to any individual or entity affiliated in any manner with any of such Licensee
Affiliates, any Licensed Product(s) for subsequent sale or distribution, without
prior written approval of Licensor.
1) Licensed Product(s):___________________________________________________
Name of Licensee Affiliate:____________________________________________
Address:_______________________________________________________________
Telephone:_____________________________________________________________
Principal Contact:_____________________________________________________
Approved by Major League Baseball Properties, Inc.:____________________
Initials/Title
2) Licensed Product(s):___________________________________________________
Name of Licensee Affiliate:____________________________________________
Address:_______________________________________________________________
Telephone:_____________________________________________________________
Principal Contact:_____________________________________________________
Approved by Major League Baseball Properties, Inc.:____________________
Initials/Title
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3) Licensed Product(s):___________________________________________________
Name of Licensee Affiliate:____________________________________________
Address:_______________________________________________________________
Telephone:_____________________________________________________________
Principal Contact:_____________________________________________________
Approved by Major League Baseball Properties, Inc.:____________________
Initials/Title
DISTRIBUTORS
------------
Licensee shall list below each Distributor (as defined in Paragraph 11)
utilized in connection with the Licensed Product(s). Licensee acknowledges that
it may not allow any Distributor to act as a manufacturer of the Licensed
Product(s).
1) Licensed Product(s): 27
Name of Distributor: Stadia Tins, Ltd.
Address: 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Principal Contact: Xxxxxxxx Xxxxxxx, Xx.
Approved by Major League Baseball Properties, Inc.:________________________
Initials/Title
2) Licensed Product (s):
Name of Distributor:
Address:
Telephone:
Principal Contact:
Approved by Major League Baseball Properties, Inc.:________________________
Initials/Title
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3) Licensed Product (s):___________________________________________________
Name of Distributor:____________________________________________________
Address:________________________________________________________________
Telephone:______________________________________________________________
Principal Contact:______________________________________________________
Approved by Major League Baseball Properties, Inc.:_____________________
Initials/Title
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). Licensee acknowledges and agrees that nothing herein shall be
construed as Licensor's grant, approval, or acceptance of such brand names.
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.
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement:
MAJOR LEAGUE BASEBALL PROPERTIES, INC.,
on its own behalf and as agent for the Major
League Baseball Clubs, Pacific Telesis Group,
the Office of the Commissioner of Baseball and
the American and National Leagues of
Professional Baseball Clubs
BY:______________________________________
TITLE:___________________________________
FOTOBALL USA, INCORPORATED
BY:______________________________________
TITLE:___________________________________
