EXHIBIT 10.17
POPEYE LICENSE
THIS AGREEMENT made this 1st day of January 1981 by and between
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KING FEATURES SYNDICATE,
Division of THE HEARST CORPORATION,
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
("King Features")
A
N
D
POPEYES FAMOUS FRIED CHICKEN, INC.
A Louisiana corporation,
0000 Xxxxx Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
("PFFC")
The following when executed by the parties hereto shall set forth their
agreement with respect to the use by PFFC of certain of the characters contained
in the cartoon strip entitled POPEYE, their names, pictures, likenesses, images,
symbols, caricatures, cartoons and signatures in connection with PFFC's business
as specifically described below on the following terms and conditions:
1. King Features grants to PFFC the sole and exclusive right in the
countries listed on the attached Schedule A for the term of this agreement to
reproduce and use, subject to the terms and conditions of this agreement, the
names, pictures, portraits, photographs, likenesses, images, symbols,
caricatures, cartoons and signatures of any of the characters of the POPEYE
cartoon strip listed in Schedule B (hereinafter collectively referred to as
"Cartoon") for the purpose of PFFC's business and trade only
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and the advertising thereof, as hereinafter defined and set forth. Moreover,
King Features agrees that each country outside of the United States and not
presently on Schedule A will be automatically added to the schedule when King
Features' presently existing licenses therein for hamburgers or restaurant
services are terminated or not renewed.
2. King Features hereby agrees not to object to PFFC's use and
registration of the xxxx POPEYES in connection with its business and trade in
any of the countries covered by the agreement during the term of this agreement.
Moreover, to effect the intent of this paragraph, King Features agrees to assign
to PFFC, subject to paragraph 19 hereof, or surrender for cancellation or
withdraw any trademark or service xxxx application or registration which it owns
and which is cited as a bar by any governmental authority to the registration of
POPEYES by PFFC pursuant to this paragraph in any country covered by this
agreement.
3. PFFC's business and trade is hereby described as the operation
and supply and franchising the operation of restaurants under the name POPEYES
specializing in the sale of food items such as fried chicken, french fries and
other prepared or packaged foods or food ingredients. The foregoing shall not
apply to the reproduction of any of the copyrighted designs or the features
licensed hereunder.
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4. In consideration of paragraphs 1 and 2 above, PFFC agrees to
account for and pay to King Features in United States currency a royalty of
one-half of one percent (1/2 of 1%) of gross sales in the countries covered by
this agreement on the first cumulative gross sales of One Hundred Million
Dollars ($100,000,000.00), and thereafter a royalty of three-eighths of one
percent (3/8 of 1%) of gross sales in such countries for so long as the United
States copyright in the original Popeye cartoon character is subsisting. As
used herein, "gross sales" means the gross sales of the POPEYES restaurant
units of PFFC, its subsidiaries and its franchisees and/or licensees.
5. Any and all monies due hereunder, pursuant to paragraph 4 hereof
shall be due and payable to King Features in New York, New York in United States
currency at the then prevailing rates of exchange in New York within ninety (90)
days following the completion of the first year ending December 31, 1981
covering all gross sales accruing during said year and thereafter within ninety
(90) days following the completion of each six (6) month period (January 1
through June 30 and July 1 through December 31) commencing as of January 1, 1982
and covering all gross sales during the said six (6) month period. Such payments
shall be made without any deduction for a tax, assessment or levy, or any cost
of exchange or expense of transmitting said funds. PFFC assumes the sole
responsibility of procuring such permits for the
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export of funds as may be required in the countries in which PFFC is licensed
hereunder. To the extent that it is impossible to make such payments due to the
"blocking" of funds by governmental rule, regulation or order, such blocked
funds shall be deposited to the credit of King Features in such depository as
King Features designates subject to such governmental rule, regulation or order.
Any payments which are not made by PFFC on or before the 90th day following the
completion of the applicable period as indicated above shall bear interest per
annum from the completion of such applicable period at the lower of the
following rates: (i) the prevailing prime rate of interest charged by
Manufacturers Hanover Trust Company in New York on the day following the
completion of the applicable period or, (ii) at the highest rate of interest
which may be charged under the laws of New York. This provision for the payment
of interest on late payments shall not act as a waiver of the right to terminate
this license under paragraph 6.
6. PFFC agrees to keep accurate and complete records on total gross
sales of all of its POPEYES operations in the countries covered by this
agreement and to open up all such books and records which reflect gross sales
for the inspection of King Features or its agents or designees at any time and
from time to time during regular business hours, whenever such inspection is
requested by King Features. King Features shall have the right to make copies of
such books and records.
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Further, PFFC agrees to render to King Features verified written statements of
such operations no later than forty-five (45) days following the completion of
each six (6) month period this agreement is in effect commencing as of July 1,
1981.
It is further agreed that if PFFC fails to make any such payments or to
render any such statements, as aforesaid, or if PFFC otherwise violates any of
the material terms of this agreement, and such default in performance or
violation of the agreement is not cured within sixty (60) days after written
notice thereof is given to PFFC, then King Features shall have the right to
treat each such failure or violation as a material breach of this agreement
entitling it to all rights and remedies allowable by law for such breach,
including, without limitation, the right to terminate this agreement at any time
after such breach and to retain whatever monies have theretofore been paid
hereunder by PFFC to King Features.
Further, PFFC agrees to cause its franchisees and/or licensees
to keep accurate and complete books and records of their total gross sales.
PFFC's franchise agreements shall provide for a right of inspection of such
books and records by PFFC or its representative. On request of King Features,
PFFC shall appoint King Features as its representative to inspect such books,
records and documents reflecting the franchisee's total gross sales in the
countries covered by this agreement. If such franchisee
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and/or licensees should refuse to comply with the said instructions or any of
them, PFFC agrees to institute and prosecute diligently and in good faith such
action or proceeding as may be necessary to compel compliance with the said
instructions.
7. The term of this agreement shall be for a five (5) year period
commencing as of January 1, 1981 and shall be automatically renewed thereafter
from year to year provided that all of the terms and conditions to be performed
by PFFC hereunder have been met and that PFFC is not in breach of or default of
this agreement. However, PFFC shall have the right not to renew this agreement
if it gives written notice thereof to King Features at least ninety (90) days
prior to the end of the then subsisting term.
8. All decisions relating to PFFC's business as described hereunder
and the operation thereof shall be, except as otherwise provided herein, within
PFFC's sole power and discretion.
PFFC is aware of the high reputation that the Cartoon and
characters enjoy and PFFC agrees that the quality of services, products and
facilities provided by it and its franchisees and/or licensees hereunder shall
accord with and maintain the high reputation, and that said Cartoon characters
will not in any way be used by it or its franchisees in any way that will
disparage the POPEYE cartoon or the characters thereof.
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9. King Features shall make available to PFFC without cost at
PFFC's request existing original drawings, color separations or other mechanical
aspects of the Cartoon for PFFC's use hereunder. PFFC will return all of the
foregoing to King Features in good condition upon request. Further, King
Features shall furnish such cooperation and assistance to PFFC, at PFFC's
request, as King Features is able with respect to the use of said artwork and
Cartoon hereunder in PFFC's business.
10. As a material condition of this agreement, PFFC will properly
affix to each reproduction of the Cartoon or any part thereof licensed hereunder
such due notice of copyright in the name of King Features Syndicate, Inc. (or
any such other name as is furnished therefor in writing by King Features to
PFFC), as is provided by the Universal Copyright Convention and the laws of the
particular country in which the reproduction is utilized, published or
exhibited, such as "(C) by King Features Syndicate, Inc." and including in such
notice as part thereof the proper year or years. PFFC agrees to duly execute and
deliver to King Features, upon demand, all instruments which shall be necessary
or proper more fully to effectuate the end and purpose of this clause. King
Features agrees that in any derivative work permitted under this agreement
wherein PFFC has reproduced the Cartoon or any part thereof PFFC shall as far as
King Features is concerned have the exclusive right to make use of such work
after all reproductions of the Cartoon or any part thereof have been removed
from such work.
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11. King Features shall have the continuing right to approve
artistic and literary materials displaying the Cartoon characters and name
thereof licensed herein, and the manner of their use hereunder before said use.
Such approval shall be in its sole discretion, shall be in writing, and shall
not be unreasonably withheld. However, if King Features fails to approve or
disapprove of any such materials within fifteen (15) days of its receipt
thereof, its approval thereof shall be conclusively presumed.
12. Upon the happening of any one of the following events, King
Features shall have the option to terminate this agreement forthwith: (a) the
filing by PFFC of a petition in bankruptcy; (b) the filing against PFFC of a
petition of bankruptcy and the failure of PFFC to take affirmative action within
sixty (60) days to have such a petition dismissed; (c) the making by PFFC of a
general assignment for the benefit of its creditors; (d) the involuntary
appointment of a receiver or trustee of all or substantially all of PFFC's
assets and the failure by PFFC to take affirmative action within sixty (60) days
to have such appointment dismissed; (e) the application for relief by PFFC under
any insolvency law; (f) the liquidation, in whole or in part, of PFFC's
business.
13. The rights herein granted are personal to PFFC and may not, in
whole or in part, be transferred or assigned without King Features' prior
written consent, which consent will not be unreasonably withheld. King Features
agrees, however, that PFFC has the right to sublicense its rights hereunder to
its individual POPEYE franchisees provided that said franchisees are also bound
by the same quality obligations imposed on PFFC hereunder. Additionally, PFFC
shall have the right to offer its stock publicly. Notwithstanding the
foregoing, nothing in this paragraph shall relieve PFFC of its obligations under
this agreement.
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14. Except as otherwise provided herein, King Features warrants and
represents that it has not heretofore granted nor will it hereafter grant any
rights inconsistent with or in direct conflict with those granted hereunder.
King Features further warrants and represents that it is the copyright
proprietor of the Popeye character or controls the rights of the copyright
proprietor thereof in the United States. In the event any countries listed in
Schedule A shall not extend to King Features copyright protection for the Popeye
character, notwithstanding King Features' ownership or control of the United
States copyright in the Popeye character, such non-extension of copyright
protection shall not affect the obligation to pay royalties as set forth in
paragraph 4 hereof.
In the event of any claim made against PFFC's right to use the Cartoon
in accordance in accordance with this agreement in any country listed added to,
Schedule A, King Features agrees to assist PFFC in defense of the claim at King
Features' expense, and PFFC shall have the right to withhold and to apply
royalties due King Features from that country to the extent required to defray
the costs and expenses of defending against such adverse claims.
If PFFC gives written notice to King Features that the royalties from
the country or countries involved in the adverse claims are insufficient to
defray PFFC's costs and expenses of defending against such claims, King Features
shall at its option, either (1) undertake to defend against the adverse claims
at its expense, or (2) delete the country from Schedule A, or (3) if the claim
involves a licensed character other than POPEYE, delete said character from
Schedule B as it relates to the country in
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issue. King Features will give written notice to PFFC of its option election
within fifteen (15) days of its receipt of PFFC's aforesaid notice. If King
Features elects option (1), PFFC agrees to render its assistance to King
Features in such defense. The terms of this paragraph shall apply only to claims
adverse to rights expressly granted by King Features, and shall not apply to use
of the Cartoon names as service marks or trademarks by PFFC, the right to such
usage not having been granted herein.
15. PFFC acknowledges that the rights granted hereunder are of a
special, unique and extraordinary nature and that the breach of this agreement
will cause irreparable damage incapable of adequate compensation by damages in
an action at law and accordingly, King Features shall be entitled to and PFFC
consents to injunctive or other equitable relief to prevent or cure any breach
or threatened breach of this agreement by PFFC.
16. PFFC agrees to indemnify and hold King Features and its
respective successors and assigns, harmless from and against all loss,
liability, damage and expense (including reasonable attorneys' fees) arising out
of any claims, demands, actions or suits resulting from PFFC's operation
hereunder and in connection with the supply, operation of or franchising of
POPEYES restaurants.
PFFC warrants, represents and agrees that it will exercise its best
efforts to insure that all food or other materials sold or supplied by it and
its franchises and/or licensees and in connection with which the cartoons are
used will at all times be of good merchantable quality, fit for human
consumption, free from
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any deleterious or injurious ingredients or substances and shall be manufactured
in strict adherence to all applicable laws.
17. Nothing herein contained shall be deemed to create a
partnership, joint venture or other similar relationship between the parties.
18. PFFC shall have no right to use the Cartoon or any part thereof
or equivalent thereto except to the extent expressly permitted hereunder. In
this connection, it is understood that PFFC shall have no right hereunder to
reproduce, use or sell or cause to be sold reproductions of the Cartoon, or any
part thereof, either alone or in combination with any product or thing offered
for sale or resale, except as specifically authorized in paragraphs 1 and 2
hereof with respect to the described operation of the restaurant business only.
Upon termination of this agreement, PFFC agrees that it will not in any way or
manner in connection with the sale of any product, service or thing, use or
cause to be used, directly or indirectly, the Cartoon or any part, name or
element thereof as licensed hereunder. However, nothing hereunder shall be
construed to require PFFC's discontinuance of the POPEYES xxxx for its
restaurant services or food products after this agreement is terminated.
19. Subject to paragraph 2, any and all rights in and to the said
Cartoon and characters not expressly granted to PFFC herein are reserved to King
Features and any one or more of these said rights may be exercised or enjoyed by
King Features, directly or indirectly, at any all and times including but not
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limited to the use of the Cartoon on foods, food ingredients and utensils
intended for sale to the general public through outlets other than restaurants.
In no circumstance shall King Features retain any right during the term of this
license or thereafter to use or to authorize others to use POPEYES as a service
xxxx or trademark in connection with restaurant services or chicken products of
any kind.
20. Any and all rights and remedies reserved by or to King Features
herein shall be cumulative and shall not exclude any other right or remedy
legally or equitably available. King Features' failure to insist upon the
strict performance of any of the covenants or terms hereof to be performed by
PFFC shall not be construed as a waiver of such covenants or terms.
21. All notices required or desired to be given hereunder shall be
by registered mail or telegram to the parties hereto at their addresses herein
set forth or as such may be from time to time supplied in writing. Notices
given by registered mail shall be deemed given on actual receipt by the
addressee and those by telegram on the date delivered to the addressee by the
telegraph office.
22. PFFC agrees to pay any and all sales, use or other excise taxes,
including interest and penalties, which may be now or hereafter imposed or
levied on the transfer or use of artwork or material hereunder or upon any of
the rights herein licensed or the exercise thereof. However, none of the
foregoing
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taxes shall be deemed to mean or include those imposed or levied on King
Features in the nature of a corporate income tax.
23. This agreement sets forth the entire understanding of the
parties and may not be modified or waived, in whole or in part, except in
writing signed by the party against whom such modification or waiver is sought
to be enforced. There are no warranties, representations or promises other than
those herein expressly set forth. This agreement shall be construed in
accordance with and governed by the internal laws of the State of New York,
United States of America.
24. This agreement shall be binding upon and inure to the benefit of
King Features and its successors and assigns.
THE HEARST CORPORATION
KING FEATURES SYNDICATE DIVISION
BY: /s/
---------------------------------
POPEYES FAMOUS FRIED CHICKEN, INC.
BY: /s/ Xxxxx X.Xxxxxxxx
---------------------------------
Xxxxx X. Xxxxxxxx, President
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To induce The Hearst Corporation to enter into the foregoing agreement
X. Xxxxxxxx Enterprises, Inc. guarantees the performance by its subsidiary
Popeyes Famous Fried Chicken, Inc. of all the terms and conditions which are to
be performed by Popeyes Famous Fried Chicken, Inc. under the said agreement
X. XXXXXXXX ENTERPRISES, INC.
BY: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Xxxxx X. Xxxxxxxx, President
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SCHEDULE A
Afghanistan Guyana Paraguay
Albania Haiti Peru
Algeria Honduras Philippines
Andorra Poland
Angola Hungary Portugal
Argentina Iceland Qatar
Australia India Romania
Austria Indonesia Rwanda
Bahamas Iran Saint Lucia
Bahrain Iraq Saint Xxxxxxx & Grenadines
Bangladesh Ireland San Marino
Barbados Israel Sao Tome & Principe
Belgium Saudi Arabia
Belize Ivory Coast Senegal
Benin Jamaica Seychelles
Bhutan Japan Sierra Leone
Bolivia Jordan Singapore
Botswana Kampuchea Solomon Islands
Brazil Kenya Somalia
Bulgaria Kiribati South Africa
Burma Korea (North) Soviet Union
Burundi Korea (South) Xxxxx
Xxxxxxxx Xxxxxx Xxx Xxxxx
Cameroon Laos Sudan
Cape Verde Lebanon Suriname
Central African Republic Lesotho Swaziland
Chad Liberia
Chile Libya Switzerland
China Liechtenstein Syria
Colombia Luxembourg Taiwan
Comoros Madagascar Tanzania
Congo Malawi Thailand
Costa Rica Malaysia Togo
Cuba Maldives Tonga
Cyprus Mali Trinidad & Tobago
Czechoslovakia Malta Tunisia
Denmark Mauritania Turkey
Djibouti Mauritius Tuvalu
Dominica Mexico Uganda
Dominican Republic Monaco United Arab Emirates
Ecuador Mongolia United Kingdom
Egypt Morocco Upper Volta
El Salvador Mozambique Uruguay
Equatorial Guinea Namibia Vanuatu
Ethiopia Nauru Vatican City
Fiji Nepal Venezuela
Finland Netherlands Vietnam
Gabon New Zealand Western Sahara
Gambia Nicaragua Western Samoa
East Germany Niger Yemen (Aden)
West Germany Nigeria Yemen (Sanaa)
Ghana Norway Yugoslavia
Greece Oman Zaire
Grenada Pakistan Zambia
Guatemala Panama Zimbabwe
Guinea Papua New Guinea
Guinea-Bissau
SCHEDULE B
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POPEYE NANA OYL
OLIVE OYL KING BLOZO
SWEE'PEA XXXXXX THE JEEP
XXXXXX XXXXXXX
SEA HAG WIFFLE HEN
DUFUS XXXXXX
XXX GRAVY SALTY
MARS MAN WIMPY
(Use of the name Wimpy or variations thereof may subject PFFC to legal
liability for which King Features shall not be responsible, nor shall the
provision of paragraph 14 apply).
King Features shall add character (s) to Schedule B if such characters meet all
of the following three conditions: (i) the character is considered, in the
sole opinion of King Features, a regular character of the POPEYE cartoon strip
and can be licensed as provided for herein: (ii) King Features is the sole
owner of the copyright to the character in the United States of America and
(iii) King Features is not obligated in its sole opinion to share any royalties
produced under this license with any person or entity.
