Xxxxxxxx Xx. XX- 0000X
MAJOR LEAGUE BASEBALL PROPERTIES, INC.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT by and between Major League
Baseball Properties, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, XX
00000 (hereinafter referred to as "Licensor"), as agent for
the Major League Baseball Clubs (the "Clubs"), and FOTOBALL
USA INC., 0000 Xxxxxx Xxxx, Xxx Xxxxx, XX 00000
(hereinafter referred to as "Licensee". This Agreement is
not effective until signed by the parties hereto.
THIS WILL CONFIRM OUR AGREMENT AS FOLLOWS:
1. GRANT OF LICENSE: Licensor grants to Licensee for
the term of this Agreement, subject to the terms and
conditions hereinafter contained, the non-exclusive license
to utilize the names, characters, symbols, designs,
likenesses and visual representations described in Schedule
A attached hereto (herein such names, characters, symbols,
designs, likenesses and visual representations are
collectively called "Logos"), to be used solely in
connection with the manufacture, distribution, promotion,
advertisement and sale of the article or articles specified
in Schedule B attached hereto (herein such article or
articles are called "Licensed Product(s)"). This license
does not constitute and may not be used so as to imply the
endorsement of the Licensed Product(s) or any other product
of Licensee by Licensor, the Office of the Commissioner of
Baseball, the American or National League of Professional
Baseball Clubs (hereinafter referred to as the "Leagues")
or the Clubs. While the Logos licensed herein may be used
as trademarks subject to the terms of this License
Agreement, the Logos are not licensed herein for use as
certification marks or indications of a particular standard
of quality. Any exclusivity granted hereunder shall be
subject to presently outstanding agreements granted by the
Clubs. Further, any exclusivity granted hereunder shall
pertain only to the extent of the items described and, if
given, at the price set forth in Schedule E. Licensor
warrants and represents that as the agent for the Clubs,
pursuant to authority granted by the Clubs, it has the full
authority to license the Logos in connection with the
manufacture, distribution, promotion, advertisement and
sale of the Licensed Product(s).
2. TERRITORY: Licensee shall be entitled to use the
license granted hereunder only in the territory described
in Schedule C attached hereto (herein such territory is
called "Licensed Territory"). Licensee will not make use of
or authorize any use of this license or the Licensed
Product(s) outside the Licensed Territory or distribute or
sell the Licensed Product(s) directly or through others to
retailers outside the Licensed Territory.
3. LICENSE PERIOD: The license granted hereunder
shall be effective and terminate as of the dates specified
in Schedule D attached hereto, unless sooner terminated or
renewed in accordance with the terms and conditions hereof.
4. PAYMENT: A. Advance and Guaranteed Compensation:
Licensee agrees to pay Licensor the sums specified in
Schedule E attached hereto, as advance minimum compensation
(herein called "Advance Compensation") and as guaranteed
minimum compensation (herein called "Guaranteed
Compensation"). The Advance Compensation shall be paid as
set forth in Schedule E, and shall apply against Percentage
Compensation as defined below. The Guaranteed Compensation
shall be paid as provided in Schedule E except to the
extent that paid Advance Compensation and annual cumulative
payments of Percentage Compensation shall theretofore have
offset all or a portion of the total of such Guaranteed
Compensation. Notwithstanding the foregoing, no part of
Percentage Compensation which may be attributable to
premium sales (as defined hereunder) of the Licensed
Product(s) shall serve to offset any part of the Total
Guaranteed Compensation specified in Schedule E. No part of
such Advance Compensation and no part of such Guaranteed
Compensation shall be repayable to Licensee in any event,
except as is expressly provided for herein.
B. Percentage Compensation: Licensee agrees to pay
Licensor a sum equal to the percentage specified in
Schedule E (or Licensor's prevailing rate, if greater) of
all net sales (as defined below) by Licensee or any of its
affiliated, associated or subsidiary entities of the
Licensed Product(s) covered by this Agreement. (Such
percentage of net sales is herein called "Percentage
Compensation.") Percentage Compensation shall be payable
concurrently with the periodic statements required in the
following paragraph, except to the extent offset by
Guaranteed Compensation theretofore remitted. The term "net
sales" shall mean gross sales based on the wholesale price
to the retail trade less quantity discounts and actual
returns, but no deduction shall be made for uncollectible
accounts, commissions, taxes, discounts other than quantity
discounts, such as cash discounts and discounts
attributable to the issuance of a letter of credit, or any
other amount. No costs incurred in the manufacture, sale,
distribution, promotion or advertisement of the Licensed
Product(s) shall be deducted 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 of its affiliated, associated or
subsidiary entities even if not billed or billed at less
than usual net sales price for such Licensed Product(s),
and shall be based upon the usual net sales price for such
Licensed Product(s) sold to the trade by Licensee. Any late
payments of Advance Compensation, Guaranteed Compensation
or Percentage Compensation shall require Licensee to pay
Licensor, in addition to the amounts due, interest at one
percent (1%) per month or the highest prime lending rate of
Chemical Bank during the period such amounts are
delinquent, whichever is greater, on the amounts delinquent
for the period of the delinquency, without prejudice to any
other rights of Licensor in connection therewith.
C. Catalog Contribution: Licensee agrees that Licensor
shall have the right in its sole discretion and in a style
and manner in which it chooses, to print catalogs, sales
sheets or brochures (hereinafter "catalogs") wherein
representative merchandise from licensees of Licensor shall
be displayed.
5. PERIODIC STATEMENTS: Within thirty (30) days after
the first day of the license period, and promptly on the
15th day of every calendar month thereafter, Licensee shall
furnish to Licensor complete and accurate statements,
certified to be accurate by Licensee, or if a corporation,
by an officer of Licensee, showing the sales volume of each
Licensed Product (itemized by Club, for each applicable
Licensed Product), gross sales price, itemized deductions
from gross sales price, and net sales price of the Licensed
Product(s) distributed and/or sold by Licensee during the
preceding calendar month, together with any returns made
during the preceding calendar month. Such statements shall
be furnished to Licensor whether or not any of the Licensed
Product(s) have been sold, or any payment is shown to be
due Licensor, during the calendar months in which such
statements are due. Licensee shall furnish to Licensor
sufficient background information so as to make such
statements intelligible to Licensor, and on an annual
basis, a complete list of Licensee's customers to whom
Licensed Product(s) have been sold. Licensor agrees that it
will not divulge said customer list to any other licensee,
to any other competitor licensing organization, or to any
competitor of Licensee. Receipt or acceptance by Licensor
of any of the statements furnished pursuant to this
Agreement or of any sums paid hereunder shall not preclude
Licensor from questioning the correctness thereof at any
time, and in the event that any inconsistencies or mistakes
are discovered in such statements or payments, they shall
immediately be rectified and the appropriate payments made
by Licensee. Late payment penalties, if any, shall be made
pursuant to Paragraph 4.B. Upon demand of Licensor,
Licensee shall at its own expense, but not more than once
in any twelve (12) month period, furnish to Licensor a
detailed statement certified by an independent certified
public accounting firm approved by Licensor showing the
sales volume of each Licensed Product (itemized by Club,
for each applicable Licensed Product), gross sales price,
itemized deductions from gross sales price and net sales
price of the Licensed Product(s) covered by this Agreement
distributed and/or sold by Licensee to the date of the
Licensor's demand. All amounts payable pursuant to this
Agreement shall be in U.S. dollars only.
6. BOOKS AND RECORDS: Licensee shall keep, maintain
and preserve in its principal place of business for at
least two (2) years following termination or expiration of
this Agreement or any renewal thereof, complete and
accurate records and accounts covering all transactions
relating to this Agreement and pertaining to the various
items required to be shown on the statements to be
submitted by Licensee, including, without limitation,
invoices, correspondence and banking, financial and other
records in Licensee's possession or under its control. Such
records and accounts shall be available for inspection and
audit (and copying at Licensor's expense) at any time or
times during or after the term or terms of this Agreement
during reasonable business hours and upon reasonable notice
by Licensor or its representatives. Licensee agrees not to
cause or permit any interference with Licensor or
representatives of Licensor in the performance of their
duties of inspection and audit.
The exercise by Licensor, in whole or in part or at
any time or times, of the right to audit records and
accounts or of any other right herein granted, the
acceptance by Licensor of any statement or statements or
the receipt and deposit by Licensor of any payment tendered
by or on behalf of Licensee shall be without prejudice to
any rights or remedies of Licensor and shall not estop or
prevent Licensor from thereafter disputing the accuracy of
any such statement or payment.
If pursuant to its right 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 Chemical Bank or its
successor from the date such amount became due until the
date of payment, and the costs and expenses of such audit
and inspection. If the audit discloses a deficiency of less
than three percent (3%) between the amount found to be due
to Licensor and the amount actually paid or credited to
Licensor, and if the amount actually paid or credited to
Licensor plus the deficiency exceeds the Guaranteed
Compensation for the period covered by the deficiency, then
Licensee shall pay Licensor the amount of the deficiency
plus interest as calculated above.
7. INDEMNIFICATIONS AND PROTECTIONS: A. Licensor
hereby agrees to indemnify, defend and hold Licensee and
its owners, shareholders, directors, officers, employees,
agents, representatives, successors and assigns harmless
from any claims, suits, damages or costs (including
reasonable attorneys' fees and expenses) arising from (i)
challenges to Licensor's authority as agent for and
pursuant to authority granted by the Clubs to license the
Logos in connection with the manufacture, distribution,
promotion, advertisement and sale of the Licensed
Product(s) or (ii) assertions to any claim of right or
interest in or to the Logos as authorized and used on the
Licensed Products, provided in each case that Licensee
shall give prompt written notice, cooperation and
assistance to Licensor relative to any such claim or suit,
and provided further in each case that Licensor shall have
the option to undertake and conduct the defense of any suit
so brought and to engage in settlement thereof at its sole
discretion.
B. Licensee shall assist Licensor, to the extent
necessary, in the procurement of any protection or to
protect any of 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. Licensee hereby agrees to indemnify, defend and
hold Licensor, the Clubs, the Leagues and the Office of the
Commissioner of Baseball and their respective owners,
shareholders, directors, officers, employees, agents,
representatives, successors and assigns harmless from any
claims, suits, damages and costs (including reasonable
attorneys' fees and expenses) arising out of (i) any
unauthorized use of or infringement of any trademark,
service xxxx, copyright, patent, process, method or device
by Licensee in connection with the Licensed Product(s)
covered by this Agreement, (ii) alleged defects or
deficiencies in said Licensed Product(s) or the use
thereof, or false advertising, fraud, misrepresentation or
other claims related to the Licensed Product(s) not
involving a claim of right to the Logos, (iii) the
unauthorized use of the Logos or any breach by Licensee of
this Agreement, (iv) libel or slander against, or invasion
of the right of privacy, publicity or property of, or
violation or misappropriation of any other right of any
third party, and/ or (v) agreements or alleged agreements
made or entered into by Licensee to effectuate the terms of
this Agreement. Licensor shall give Licensee notice of the
making of any claim or the institution of any action
hereunder and Licensor may at its option participate in any
action. The indemnifications hereunder shall survive the
expiration or termination of this Agreement.
8. INSURANCE: Licensee agrees to obtain, at its own
cost and expense, comprehensive general liability insurance
including product liability insurance from an insurance
company acceptable to Licensor, providing adequate
protection for Licensor, the Clubs, the Leagues, the Office
of the Commissioner of Baseball and Licensee against any
claims or suits arising out of any of the circumstances
described in Paragraph 7C above for which insurer is able
to provide insurance, in an amount no less than
$5,000,000.00 (five million dollars) per incident or
occurrence, or Licensee's standard insurance policy limits,
whichever is greater, and with a reasonable deductible in
relation thereto. Such insurance shall remain in force at
all times during the license period and for a period of
five years thereafter. Within thirty (30) days from the
date hereof, Licensee will submit to Licensor a fully paid
policy or certificate of insurance naming Licensor, the
Leagues and the Office of the Commissioner of Baseball as
additional insured parties and requiring that the insurer
shall not terminate or materially modify such policy or
certificate of insurance without written notice to Licensor
at least thirty (30) days in advance thereof.
9. COPYRIGHT AND TRADEMARK NOTICES AND REGISTRATIONS:
Licensee further agrees that in any instance wherein the
Logos of the Clubs and/or the Leagues are used, the
following general notice shall be included (i.e., on the
product, on a label, on the packaging material or on a
separate slip of paper attached to the product): "The Major
League Club insignias depicted on this product are
trademarks which are the exclusive property of the
respective Major League Clubs and may not be reproduced
without their written consent." Further, all products
containing the Logos shall contain a hangtag and label with
Licensee's name stating "Genuine Merchandise" and
containing the Major League Baseball silhouetted batter
logo and, where appropriate, the Major League Baseball
Cooperstown Collection logo or Major League Baseball
Authentic Diamond Collection logo. All Licensed Product(s)
shall contain a permanently affixed label that displays
Licensee's name. All Licensed Product(s) components which
bear any of the Logos (embroidered emblems, cloth or paper
labels, hangtags, etc.) shall be manufactured in-house by
Licensee or shall be obtained only from one or more
suppliers officially authorized by Licensor to produce
those components. All Licensee advertisements displaying
the Logos, all retailer advertisements featuring Licensed
Product(s) and of which Licensee has knowledge or any
Licensed Product(s), shall contain the words "Genuine
Merchandise" and the silhouetted batter logo. Licensee
shall require those to whom it sells Licensed Product(s)
directly or indirectly to display the words "Genuine
Merchandise" (or such other appropriate notice as directed
by Licensor) and the silhouetted batter logo in all
advertisements. All uses of the Logos shall also include
any designations legally required or useful for enforcement
of copyright, trademark or service xxxx rights (e.g.,
"(c)," "(R)" or "TM". Licensee shall submit a copy of its
specifications for all of the above notices (including
copies of its artwork, layouts or mold blueprints) to
Licensor for its review. Licensor shall have the right to
revise the above notice requirements and to require such
other notices as shall be reasonably necessary to protect
the interests of Licensor, the Clubs and/or the Leagues in
the respective Logos. Licensee agrees to advise Licensor of
the initial date of the marketing of each Licensed Product,
and upon request, to deliver to Licensor the required
number and type of specimen samples of the Licensed
Product, labels or the like upon which the Logos are used
for use in procuring copyright, trademark and/or service
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, the Clubs and/or the Leagues shall be
solely responsible for taking such action as it or they
deem appropriate to obtain such copyright, trademark or
service xxxx registrations for its or their Logos. If it
shall be necessary for Licensee to be the applicant to
effect any such registrations, Licensee shall and hereby
does assign all of its rights in each such application and
any resulting registration to Licensor or any other
appropriate owner thereof, and further agrees to execute
all papers necessary to effectuate and/or confirm such
assignments. Licensee shall perform all acts necessary and
execute all documents necessary to effectuate its
registration as a user of the Logos where such registration
is needed.
Licensee also agrees that, in any case where it
employs the services of photographers or artists in
connection with the production, promotion, marketing or
distribution of the Licensed Product(s), it will require
each such photographer or artist to agree that the
photographic or artistic works he or she produces for
Licensee shall be "works made for hire" for the purposes of
the copyright laws, and that to the extent such
photographic or artistic works may not qualify as "works
made for hire," the copyright in each such work is assigned
to Licensee.
10. APPOVALS: Licensor shall have absolute approval
of the Licensed product(s) and of all packaging,
advertising and promotional material at all stages of the
development thereof. Licensee agrees to furnish in a timely
manner to Licensor, free of cost, for its written approval
as to quality and style, designs of each Licensed Product
and samples of each Licensed Product before its
manufacture, sale, promotion, advertisement or
distribution, whichever first occurs, and samples of all
advertising, point-of-sale displays, catalogs, sales sheets
and other items that display or picture the Logos, and no
such Licensed Product or other such materials shall be
manufactured, sold, promoted, advertised or distributed by
Licensee without such prior written approval. In
particular, no use of any Logo or Logos shall be made on
stationery of Licensee (specifically including, without
limitation, letterhead, envelopes, business cards, shopping
bags, invoices, statements, packing slips, etc.) without
Licensor's express written approval in advance of any such
use. In addition, no irregulars, seconds or other Licensed
Products 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 official
logo of Licensor. Ten samples of each Licensed Product
shall be supplied free of cost to Licensor, and one to each
Club whose Logos are used on such Licensed Products). From
time to time subsequent to final approval, a reasonable
number of production samples shall periodically be sent to
Licensor free of cost. Such samples shall also be sent upon
any change in design, style or quality, which shall
necessitate subsequent approvals by Licensor. Additional
samples shall be supplied to Licensor upon request at no
more than cost. Licensor shall also have the right to
inspect Licensee's plants, warehouses or storage facilities
at any reasonable time without notice.
In the event that any item or matter submitted to
Licensor under this Agreement for approval or consent shall
not have been approved or consented to, disapproved or
denied, or commented upon within twenty (20) Licensor
business days after receipt thereof by Licensor (both
Licensing Director and Licensed Product Compliance), and
Licensor (both Licensing Director and Licensed Product
Compliance) shall have received notice from Licensee that
comment is overdue by telegram or other written
communication, and Licensor shall not have commented within
five (5) additional Licensor business days of receipt of
such notice, any items or matters so submitted shall be
deemed approved and consented to.
In any instance where any matter is required to be
submitted to Licensor for Licensor's approval, that
approval shall be granted or withheld in Licensor's sole
discretion.
11. DISTRIBUTION: Licensee shall sell the Licensed
Product(s) to jobbers, wholesalers, distributors or
retailers for sale or resale and distribution to retail
stores and merchants for their resale and distribution or
directly to the public. In the event Licensee sells or
distributes a Licensed Product at a special price directly
or indirectly to itself, including, without limitation, any
subsidiary of Licensee, or to any other person, firm or
corporation related in any manner to Licensee or its
officers, directors or major stockholders, Licensee shall
pay compensation with respect to such sales or distribution
based upon the pace generally charged the trade by
Licensee.
12. GOODWILL: Licensee recognizes the great value of
publicity and good will associated with the Logos and, in
such connection, acknowledges that such good will belongs
exclusively to Licensor, the Clubs, the Office of the
Commissioner of Baseball and/or the Leagues and that the
Logos have acquired a secondary meaning in the minds of the
purchasing public.
13. SPECIFIC UNDERTAKINGS OF LICENSEE: During the
license period, each additional license period if any and
thereafter, Licensee agrees that:
A. It will not acquire any rights in the Logos as a
result of its use thereof and all use of the Logos shall
inure to Licensor's benefit;
B. It will not, directly or indirectly, attack the
title of Licensor, the Clubs, the Office of the
Commissioner of Baseball and/or the Leagues in and to the
Logos or any copyright, trademark or service xxxx
pertaining thereto, nor will it attack the validity of the
license granted hereunder, nor will it use the Logos in any
manner other than as licensed hereunder;
C. It will not at any time apply for any registration
of any copyright, trademark, service xxxx or other
designation which would affect the ownership of the Logos,
or file any document with any governmental authority or
take any action which would affect the ownership of the
Logos or aid or abet anyone in doing so; D. It will not
harm, misuse or bring into disrepute the Logos;
D. It will not harm, misuse or bring into disrepute
the Logos;
E. It will manufacture, sell, promote, advertise and
distribute the Licensed Product(s) in a legal and ethical
manner and in accordance with the terms and intent of this
Agreement;
F. It will not create any expenses chargeable to
Licensor without the prior written approval of Licensor;
G. It will protect to the best of its ability the
right to manufacture, sell and distribute the Licensed
Product(s) hereunder;
H. It will not use the Licensed Product(s) for
combination sales, as self-liquidating or free giveaways or
for any similar method of merchandising without the prior
written consent of Licensor and will exercise due care that
its customers likewise will refrain from making such use of
the Licensed Product(s);
I. It will not, without the prior written consent of
Licensor, enter into any sublicense or agency agreement for
the manufacture, sale, promotion, advertisement or
distribution of the Licensed Product(s);
J. It will not engage in tying practices, illegal
restraints of trade, or selling practices that exclude any
members of the retail trade for any reason other than poor
credit history, known lack of integrity or disregard for
the rights of Licensor or Major League Baseball. Nothing in
the preceding sentence shall be deemed to require Licensee
to violate any other term of this Agreement;
K. It will not use, or knowingly permit the use of,
the Licensed Product(s) as a premium, except with the prior
written consent of Licensor and the specific negotiation of
a higher royalty payment therefor. For purposes of this
subparagraph and Paragraph 19 below, the term "premium"
shall be defined as including, but not necessarily limited
to, free or self-liquidating items offered to the public in
conjunction with the sale or promotion of a product or
service, including traffic building or continuity visits by
the consumer/customer, or any similar scheme or device, the
prime intent of which is to use the Licensed Product(s) in
such a way as to promote, publicize and/or sell the
products, services or business image of the third party
company or manufacturer. "Premium" use shall also
specifically include distribution of the Licensed
Product(s) for retail sale through distribution channels
(including, without limitation, catalogs) offering earned
discounts or "bonus" points based upon the extent of usage
of the offeror's product or service;
L. It will comply with such guidelines and/or
requirements as Licensor may announce from time to time. It
will comply with all laws, regulations and standards
relating or pertaining to the manufacture, sale,
advertising or use of the Licensed Product(s) and shall
maintain the highest quality and standards, and shall
comply with the requirements of any regulatory agencies
(including, without limitation, the United States Consumer
Safety Commission) which shall have jurisdiction over the
Licensed Product(s);
M. It guarantees that Licensor, Clubs, official Club
and/or Licensor retail stores, Club in-stadium concession-
aires and the Clubs belonging to The National Association
of Professional Baseball Leagues ("NAPBL Clubs") will
obtain the Licensed Product(s) for retail sale at lowest
possible wholesale prices and shall receive prompt
shipments and/or deliveries of the Licensed Product(s),
without regard to the relatively small volume their orders
may represent. Licensor, Clubs and NAPBL Clubs may obtain
the Licensed Product(s) for their use, but not resale, at
the manufacturer's lowest possible price, which shall in no
event be greater than its lowest wholesale price;
N. It will furnish to Licensor, upon request of
Licensor (which shall be made only for reasonable cause and
no more often than once per year), a list of all its
distributors, sales representatives and jobbers for the
Licensed Product(s), as well as a list of all its "trade
names," said list to include the company name, address,
telephone number, territorial representation and key
contact name. Licensor agrees that it will not divulge any
information provided to it under this paragraph to any
other competitor licensing organization;
O. Concurrently with its execution of this Agreement,
it will provide Licensor with the names, addresses,
telephone numbers and names of principal contacts of each
party (hereinafter referred to as "Manufacturer"), both
domestic and foreign, that Licensee desires or intends to
have produce one or more of the Licensed Products in the
event Licensee desires not to be the manufacturer of such
Licensed Product(s). This information shall be set out in
Schedule F of this Agreement and Licensee shall specify the
Licensed Product(s) Manufacturer will produce. In the event
Licensee wishes to substitute a Manufacturer for those
listed in Schedule F or wishes to add to the number of
Manufacturers, Licensee shall first provide Licensor with
the information set out in Schedule F regarding the
proposed new Manufacturers for Licensor's written approval
of such Manufacturers. Licensee's failure to do so may
result in termination of this Agreement and/or confiscation
and seizure of the Licensed Product(s). Licensee shall
ensure that:
(a) Manufacturer produces no merchandise bearing the
Logos other than the Licensed Product(s) described in
Schedule F of this Agreement unless authorized by Licensor;
(b) 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;
(c) 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
(d) Manufacturer does not delegate in any manner
whatsoever its obligations with respect to the Licensed
Product(s).
Prior to the delivery of the Licensed Product(s) from
Manufacturer to Licensee, Licensee shall submit to
Licensor, free of cost, for its written approval as to
quality and style, at least two samples of the Licensed
Product(s) produced by Manufacturer;
P. It will not manufacture or allow the manufacture,
or accumulate inventory, of the Licensed Product(s), at a
rate greater than its average rate during the license
period as the end of the license period approaches;
Q. It will not sell the Licensed Product(s) to
parties whom it knows or reasonably should know will resell
or distribute such Product(s) outside the Licensed
Territory;
R. It will not disclose any confidential, private,
restricted or otherwise nonpublic information concerning
Major League Baseball which, it acknowledges, it may become
privy to during the term of this Agreement;
S. It will not grant to any third person or entity a
security interest in the Licensed Product(s) without
Licensor's prior written approval;
T. It has not had and does not have an investment or
interest in casinos, any other form of legalized gambling
enterprise, or any activity that Licensor or any other
Major League Baseball related entity has made unauthorized
or which is contrary to official policy of Major League
Baseball; and
U. With respect to any Licensed Products manufactured
outside the United States, (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 Products from any non-U.S. manufacturer of
such Products, and (iii) it will distribute such Products
to third parties, including but not limited to
distributors, wholesalers and retailers, from Licensee's
principal place of business only.
14. APPROVAL OF MANUFACTURER, ETC.: Nothing contained
herein may be construed so as to imply endorsement of
Manufacturer by Licensor, the Office of the Commissioner of
Baseball, the Leagues or the Clubs. Licensee shall seek
Licensor's written approval of Manufacturer prior to
Licensee's engagement of Manufacturer. Any approval of
Manufacturer granted by Licensor relates solely to the
manufacturing of the Licensed Product(s) and shall not
constitute a grant of any right, title or interest in or to
the Logos, nor to any copyrights, service marks, trademarks
or other property rights associated therewith. Licensor
hereby reserves the right to terminate in its discretion
the engagement of Manufacturer at any time. Additionally,
Licensor may confiscate goods or samples imported by
Licensee or shipped by Manufacturer that bear any of the
Logos and that have not been approved by Licensor as to
quality.
15. ACKNOWLEDGEMENT OF RIGHTS: Licensee hereby
acknowledges the proprietary nature of all names and logos
of the Major League Baseball Clubs, the Leagues, the Office
of the Commissioner of Baseball or Licensor and
acknowledges that all rights, title and interest to such
names or logos belong to the individual Clubs, the Leagues,
the Office of the Commissioner of Baseball and/or Licensor,
as the case may be. Licensee represents that it has not
made any unauthorized use of names or logos of the Major
League Baseball Clubs, the Leagues, the Office of the
Commissioner of Baseball or Licensor and agrees that it
will make no use of any such names or logos, other than as
provided in this Agreement, without the prior written
consent of Licensor, the Office of the Commissioner of
Baseball or the appropriate individual League or Club. Any
use Licensee has made or will make of such names and logos
has not 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, the Leagues, the Office of the
Commissioner of Baseball and /or Licensor, as the case may
be.
16. TERMINATION: A. Immediate Termination: Licensor
shall have the right to terminate this Agreement
immediately upon the occurrence of any one or more of the
following events (herein called "defaults"):
(i) If Licensee fails to deliver to Licensor or to
maintain in full force and effect the insurance referred to
in Paragraph 8 hereof; or
(ii) If any governmental agency or court of competent
jurisdiction finds that the Licensed Product(s) are
defective in any way, manner or form; or
(iii) If Licensee shall breach any one of the
following undertakings set forth in Paragraph 13 hereof:
13A through F, H through J, Q, R or T; or
(iv) If Licensee shall undergo a change in majority or
controlling ownership.
B. Termination With Cure Period: Licensor shall have
the right to terminate this Agreement upon the occurrence
of any one or more of the following defaults, and
Licensee's failure to cure such default(s) completely
within ten (10) business days from Licensee's receipt of
notice from Licensor;
(i) If Licensee fails to make any payment due
hereunder on the date due, at which time all monies which
are owed during the current term or renewal referred to in
Schedule E of this Agreement shall become due and payable
to Licensor; or
(ii) If Licensee fails to deliver any of the
statements hereinabove referred to or to give access to the
premises and/or license records pursuant to the provisions
hereof to Licensor's authorized representatives for the
purposes permitted hereunder; or
(iii) If Licensee is unable to pay its debts when
due, or makes any assignment for the benefit of creditors
or an arrangement pursuant to any bankruptcy law, or files
or has filed against it any petition under the bankruptcy
or insolvency laws of any jurisdiction, county or place, or
shall have or suffer a receiver or trustee to be appointed
for its business or properly, or be adjudicated a bankrupt
or an insolvent. In the event the license granted hereunder
is terminated pursuant to this Paragraph 16(B)(iii),
neither Licensee nor its receivers, representatives,
trustees, agents, administrators, successors and/or assigns
shall have any right to sell, exploit or otherwise deal
with or in the Licensed Product(s) without the prior
written consent of Licensor; or
(iv) If Licensee does not commence in good faith to
manufacture, distribute and sell each Licensed Product
throughout the Licensed Territory within any twelve ( 12)
month period, but such default and Licensor's resultant
right of termination shall apply only to the specific
Licensed Product(s) and/or the specific territory(ies)
which or wherein Licensee fails to meet said requirements;
or
(v) If Licensee shall discontinue its business as it is now
conducted; or
(vi) If Licensee shall breach any of the undertakings
set forth in Paragraph 13 hereof, except as otherwise
provided in Paragraph 16(A)(iii) above; or
(vii) If Licensee shall breach any of the terms of this
Agreement; or
(viii) If, in the periodic statements furnished
pursuant to Paragraph 5 hereof, the amounts owed to
Licensor are significantly or consistently understated.
Licensor's right to terminate this Agreement shall be
without prejudice to any other rights which it may have,
whether under the provisions of this Agreement, in law or
in equity or otherwise. In the event any of these defaults
occurs and Licensor desires to exercise its right of
termination under the terms of this Paragraph 16, Licensor
shall give notice of termination in writing to Licensee.
Any and all payments then or later due from Licensee
hereunder (including Advance Compensation) shall then
become promptly due and payable in full to Licensor and
without set off of any kind; i.e., no portion of any prior
payments made to Licensor shall be repayable to Licensee.
Until payment to Licensor of any monies due it, Licensor
shall have a lien on any units of the Licensed Product(s)
not then disposed of by Licensee and on any monies due
Licensee from any jobber, wholesaler, distributor,
sublicensee or other third 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 or
termination Licensee may manufacture no more Licensed
Product(s), but may continue to distribute its remaining
inventory for a period not to exceed sixty (60) days,
subject to the terms of Paragraph 13(P) hereof and payment
of applicable royalties relative thereto; provided,
however, that such royalties shall not be applicable
against Advance Compensation or Guaranteed Compensation.
Notwithstanding the foregoing, Licensee shall not
manufacture, sell or distribute any Licensed Product(s)
after the expiration or termination of this Agreement
because of (a) the failure of Licensee to cause the
appropriate statutory notice of copyright, trademark,
service 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. Licensor shall have the
option to conduct physical inventories before termination
and continuing until the end of the 60 day sell-off period
in order to ascertain or verify such inventories and/or
statement. Immediately upon expiration of the sell-off
period, Licensee shall furnish Licensor a detailed
statement certified by an officer of Licensee showing the
number and description of Licensed Products on hand in its
inventory and shall dispose of such inventory at Licensor's
direction and at Licensee's expense. In the event Licensee
refuses to permit Licensor to conduct such physical
inventory, Licensee shall forfeit its right hereunder to
dispose of such inventory. In addition to such forfeiture,
Licensor shall have recourse to all other remedies
available to it.
18. INJUNCTION: Licensee acknowledges that its
failure to perform any of the terms or conditions of this
Agreement, or its failure upon the expiration or
termination of this Agreement to cease the manufacture of
the Licensed Product(s) and limit their distribution and
sale as provided in Paragraph 17 hereof, shall result in
immediate and irreparable damage to Licensor. Licensee also
acknowledges that there may be no adequate remedy at law
for such failures and that in the event thereof Licensor
shall be entitled to equitable relief in the nature of an
injunction and to all other available relief, at law and/or
in equity.
19. RESERVATION OF RIGHTS: Licensor retains all
rights not expressly and exclusively conveyed herein, and
Licensor may license firms, individuals, partnerships or
corporations to use the Logos, artwork and textual matter
in connection with other products, including other products
identical to the Licensed Product(s) contemplated herein.
Licensor reserves the right to use, or license others to
use and/or manufacture, identical items as premiums.
20. PAYMENTS AND NOTICES: All notices and statements
provided for herein shall be in writing, and all notices
hereunder are to be sent to Major League Baseball
Properties, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: President. All statements and payments
shall be made to Major League Baseball Properties and sent
to an address designated by Licensor.
21. WAIVER, MODIFICATION, ETC.: No waiver,
modification or cancellation of any term or condition of
this Agreement shall be effective unless executed in
writing by the party charged therewith. No written waiver
shall excuse the performance of any act other than those
specifically referred to therein. No waiver by either party
hereto of any breach of this Agreement shall be deemed to
be a waiver of any preceding or succeeding breach of the
same or any other provision hereof. The exercise of any
right granted to either party hereunder shall not operate
as a waiver. The normal expiration of the term of this
Agreement shall not relieve either party of its respective
obligations accruing prior thereto, nor impair or prejudice
the respective rights of either party against the other,
which rights by their nature survive such expiration.
Licensor makes no warranties or representations to Licensee
except those specifically expressed herein.
22. NO 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 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-ASSIGNABILIY: 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 licensed merchandise; and (d) that the
granting of the license under this Agreement creates a
relationship of confidence and trust between Licensee and
Licensor. This Agreement is personal to Licensee, and
Licensee shall not sublicense or franchise any of its
rights hereunder, and neither this Agreement nor any of the
rights of Licensee hereunder shall be sold, transferred or
assigned by Licensee without Licensor's prior written
approval and no rights hereunder shall devolve by operation
of law or otherwise upon any assignee, receiver,
liquidator, trustee or other party. Subject to the
foregoing, this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their
successors and assigns.
24. PARAGRAPH HEADINGS: Paragraph headings contained
in this Agreement are for convenience only and shall not be
considered for any purpose in governing, limiting,
modifying, construing or affecting the provisions of this
Agreement and shall not otherwise be given any legal
effect.
25. CONSTRUCTION: This Agreement shall be construed
in accordance with the laws of the State of New York, which
shall be the sole jurisdiction for any disputes.
26. SEVERABILITY: The determination that any provision
of this Agreement is invalid or unenforceable shall not
invalidate this Agreement, and the remainder of this
Agreement shall be valid and enforceable to the fullest
extent permitted by law.
27. TIME OF THE ESSENCE: Time is of the essence of all
parts of this Agreement.
28. ACCEPTANCE BY LICENSOR: This instrument, when
signed by Licensee or a duly authorized officer of Licensee
if Licensee is a corporation, shall be deemed an
application for a license and not a binding agreement
unless and until signed by a duly authorized officer of
Licensor. The receipt and/or deposit by Licensor of any
check or other consideration given by Licensee and/or the
delivery of any material by Licensor to Licensee shall not
be deemed an acceptance by Licensor of this application.
The foregoing shall also apply to any documents relating to
renewals or modifications hereof.
29. INTEGRATION: This Agreement, when fully executed,
shall represent the entire understanding between the
parties hereto with respect to the subject matter hereof
and supersedes all previous representations, understandings
or agreements, oral or written, between the parties with
respect to the subject matter hereof.
30. SURVIVAL OF PROVISIONS: Paragraphs 2, 6, 7C, 8, 12, 13A,
B, C, D, F, H, I, K, Q and R, 15, 17, 18, 19, 21, 22, 24, 25, 26,
30 and 31 shall survive any termination or expiration of this
Agreement.
31. MISCELLEOUS: By signing below, Licensee acknowledges
that this Agreement is for the term specified in Schedule D only
and that neither the existence of this Agreement nor anything
contained herein shall impose on Licensor any obligation to renew
or otherwise extend this Agreement after expiration of the
license period.
SCHEDULE A
LOGOS
The names, characters, symbols, designs, likenesses, visual
representations and such other similar or related identifications
(but such similar or related identifications must be approved in
writing by Licensor in advance of use) of the following noted
organizations in connection with the marketing, promotion and sale
of that described in Schedule B hereof: (1) Major League Baseball
Properties, Inc., (2) the American League, (3) the National League
and (4) the following Clubs: Arizona Diamondbacks, Tampa Bay Devil
Rays, Baltimore Orioles, Boston Red Sox, California Angels, Chicago
White Sox, Cleveland Indians, Detroit Tigers, Kansas City Royals,
Milwaukee Brewers, Minnesota Twins, New York Yankees, Oakland
Athletics, Seattle Mariners, Texas Rangers, Toronto Blue Jays,
Atlanta Braves, Chicago Cubs, Cincinnati Reds, Colorado Rockies,
Florida Marlins, Houston Astros, Los Angeles Dodgers, Montreal
Expos, New York Mets, Philadelphia Phillies, Pittsburgh Pirates, St.
Louis Cardinals, San Diego Padres and San Francisco Giants and (5)
All-Star Game, Division Series, League Championship Series, World
Series, other names given to such games or events and other names
given to other Major League Baseball playoff games, and (6)
Pittsburgh Pirates/Xxxxxxx Xxxxxxxx, and (7) the following stadia:
Oriole Park at Camden Yards and Xxxxxx Field.
SCHEDULE B
LICENSED PRODUCT(S)
ALL LICENSED PRODUCTS SHALL CONFORM TO LICENSOR'S
THEN-CURRENT LABELING REQUIREMENTS
1. Baseballs made of synthetic white leather, and featuring current
Major League Baseball players in uniform.
2. Baseballs made of synthetic white leather, and featuring printed Club
Logos.
3. Sweatbands featuring color photographs of current Major League Baseball
players in uniform and Logos pad Printed and sewn on band, available in
pairs or individually, in either 3" or 5" sizes.
4. Baseballs made of synthetic white leather, and featuring embossed Logos
in full color.
5. Baseballs made of synthetic white leather, and featuring the Oriole Park
at Camden Yards Logo
6. Baseballs made of synthetic leather, and featuring the Xxxxxx Field
Logo.
7. Baseballs made of synthetic leather, and featuring the Pittsburgh
Pirates/Xxxxxxx Clemente Logo.
8. Baseballs made of synthetic white leather, and featuring printed or
embossed Logos and packaged with a miniature baseball glove made of natural
leather, neither of which is designed for play.
9. Baseballs made of synthetic white leather packaged with a mini-leather
glove, and featuring a printed image of current Major League Baseball
players in uniform.
10. Mini-gloves made of natural or synthetic leather, and featuring
embossed Logos in the palm.
11. Baseballs made of synthetic dual-tone leather, and featuring printed
Logos.
12. Baseballs made of synthetic leather, and featuring screen printed Minor
League baseball club logos and the Logos of the Major League Baseball Clubs
with which such Minor League baseball clubs are affiliated.
13. Baseballs made of synthetic leather in non-traditional colors, and
featuring printed Logos.
14. Mini-leather baseballs, measuring 6 1/2" or less in circumference, and
featuring printed Logos.
15. Mini-leather baseballs, measuring 6 1/2" or less in circumference. and
featuring printed Logos in mini-leather glove.
16. Sweatbands featuring individual Club Logos on vinyl patches and sewn on
band, available in pairs or individually in 5" sizes only.
Other than as noted in Schedule A No. 6 above, and in connection with
Licensed Product No. 7 only, rights to utilize the players' names,
likenesses and/or signatures are not granted under this Agreement. Licensee
must present to Licensor written evidence of having obtained the proper
authorization to utilize the players, names, likenesses and/or signatures.
SCHEDULE C
LICENSED TERRITORY
I. For Licensed Product Nos. 1-11 and 00-00
Xxx xxxxx Xxxxxx Xxxxxx 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. 12
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 North AmeriCare Park, Buffalo, New York, Licensed Products
bearing the Logos of the Carolina Mudcats may not be distributed
within a 100-nile 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. 16
Concession outlets located within the ballparks of the Clubs listed in
Schedule A only.
SCHEDULE D
LICENSE PERIOD
January 1, 1997 - December 31, 1999
SCHEDULE E
COMPENSATION
TOTAL GUARANTEED COMPENSATION: $750.000.00
PAYABLE AS:
(i) NON-RETURNABLE ADYANCE COMPENSATION due upon signing:
$75,000.00
(ii) REMAINDER 0F GUARANTEED COMPENSATION due as follows:
July 1, 1997 $ 75,000.00
October 1, 1997 $ 50,000.00
Total 1997 Guarantee $200,000.00
January 1, 1998 $100,000.00
July 1, 1998 $100,000.00
October 1, 1998 $ 50,000.00
Total 1998 Guarantee $250,000.00
January 1, 1999 $100,000.00
July 1, 1999 $100,000.00
October 1, 1999 $100,000.00
Total 1999 Guarantee $300,000.00
PERCENTAGE COMPENSATION:
For Licensed Product Nos. 1-4, 8-11, and 13-16:
Nine percent (9%.) of net sales as defined in Paragraph 4B.
For Licensed Product Nos. 5 and 6:
Twelve percent (12%) of net sales as defined in Paragraph 4B.
For Licensed Product No. 7:
Fifteen (15%) of net sales as defined in Paragraph 4B.
For Licensed Product NO. 12:
Six (6%) of net sales as defined in Paragraph 4B.
In each of the above cases, Percentage Compensation shall be applied
against Guaranteed Compensation payable in the same calendar year only,
without carryover. Percentage Compensation attributable to premium sales of
the Licensed Products shall not be applied against Total Guaranteed
Compensation.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement:
MAJOR LEAGUE PROPERTIES, INC., as agent for the Clubs
By: /s/ Xxxxx Xxxxxxxx
---------------------------------
Date: April 15, 1997
---------------------------------
LICENSEE: FOTOBALL USA, NC.
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Date: April 3, 1997
---------------------------------
