[Material marked with an asterisk has been
omitted from this document pursuant to a
request for confidential treatment and has
been filed separately with the Securities and
Exchange Commission.]
LICENSE AGREEMENT
THIS AGREEMENT is made as of the 13th day of May, 1998 in New York, New York,
by and between the Major League Baseball Players Association, an
unincorporated association under the laws of the State of New York, with
offices at 12E. 00xx Xxxxxx, XXX XXXX, XXX XXXX 00000 (hereinafter "MLBPA"),
and ALLSTAR ARENA ENTERTAINMENT, INC., a California, corporation, with
offices located at6565 Xxxxxx Xxxx., Xxxxx 000, Xxx Xxxxxxx, XX 00000
(hereinafter "Licensee")
WHEREAS, MLBPA is acting on behalf of all of the active baseball players
of the National League and the American League who have entered into a
Commercial Authorization Agreement with the MLBPA (hereinafter "players"),
and who, upon being polled by the MLBPA, have not indicated they have granted
a license for products which would conflict with the license granted herein,
and
WHEREAS, MLBPA in such capacity has the right to negotiate this Agreement
and to grant rights in and to the logo, name and symbol of MLBPA identified
in Schedule A hereto (the "Trademarks"), and the names, nicknames,
likenesses, signatures, pictures, playing records, and/or biographical data
of each player described in Schedule A hereto as part of a group (hereinafter
"the Rights"); and
WHEREAS, Licensee desires to use the Rights and/or the Trademarks on or
in association with the manufacture, offering for sale, sale, advertising,
promotion, and distribution of certain products identified in Schedule B (the
"Licensed Products") in the countries identified in Schedule B (the "Licensed
Territory"); and
WHEREAS, MLBPA is willing to grant Licensee such right to use the Rights
and/or the Trademarks on the Licensed Products in the Licensed Territory in
accordance with the terms and conditions recited herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions herein contained, it is hereby agreed as follows:
1. GRANT.
(a) MLBPA hereby grants to Licensee and Licensee hereby accepts the
non-exclusive, non-transferable, nonassignable license, without the right to
grant sublicenses, to use the Rights and Trademarks solely within the
Licensed Territory on the Licensed Products and/or in association with the
manufacture, offering for sale, sale, advertising, promotion, shipment and
distribution of the Licensed Products to jobbers, wholesalers and
distributors for sale, shipment and distribution to retail stores and
merchants and/or to retail stores and merchants for sale, shipment and
distribution direct to the public. Licensee shall not knowingly permit the
Licensed Products to be sold or distributed outside of the Licensed Territory.
(b) MLBPA represents and warrants that it has the authority to grant
the rights licensed herein. IVILBPA makes no representation that it has the
authority to grant, nor does it grant herein, the right to utilize team
symbols, insignias or logos, or the name, symbol, or logo of any other
licensee of MLBPA, or reproductions of any products produced by or for any
other licensee of MLBPA. Accordingly, it is understood by the parties hereto
that if any of the foregoing are to be utilized in connection with the
exercise of the license granted hereunder, including without limitation the
likenesses of players utilizing team logos, symbols or insignias, it will be
the responsibility of Licensee to obtain all necessary permissions for the
use of such material.
(c) Unless specifically authorized in advance by MLBPA in writing,
Licensee agrees to utilize with equal prominence the names and likenesses of
a minimum of one hundred (100) players or, at MLBPA's direction, a minimum of
five (5) players per Major League team, on Licensed Products during the
initial License Period (as defined herein) and during each additional License
Period, if any, as provided herein. Licensee must provide the MLBPA with
thirty (30) days' written notice of the names of all players Licensee intends
to use on the Licensed Products prior to manufacture of such Licensed
Products, and Licensee may not use the name or likeness of any player on the
Licensed Products without the prior written consent of MLBPA, which shaii not
be unreasonably withheld.
(d) The license granted by MLBPA to Licensee hereunder does not
include the right to, and Licensee shall not in any manner, use (or purport
to grant others the right to use) the Trademarks or the Rights for the
purpose, in whole or in part of promoting any service or product other than
the Licensed Products. Nor does this license convey the right to feature or
highlight any individual player apart from the group. In the event Licensee
is interested in highlighting any player or in securing the personal
endorsement or services of any player, Licensee understands and agrees that
such will require the personal approval of the individual player involved and
a separate payment to such player, through the MLBPA, independent of and in
addition to all payments due to the MLBPA pursuant to this Agreement.
(e) Nothing contained in Section 1 (d) above shall prevent Licensee
from utilizing the names and/or likenesses of the players in a
non-endorsement and/or non-testimonial manner in connection with the
packages, cartons, advertising, point-of sale and/or promotional materials
for the Licensed Products (the "Promotional and Packaging Material") or
require any separate payment in connection therewith; provided, however, that
unless specifically authorized otherwise in advance by MLBPA in writing, the
names and/or likenesses of a minimum of Six (6) such players are utilized
with equal prominence on the Promotional and Packaging Material for all
Licensed Products during the initial License Period and during each
additional License Period, if any, as provided herein, and Licensee agrees to
rotate the players who are utilized in connection with such materials so as
not to highlight any particular player or group of players to the exclusion
of others.
(f) All rights not expressly granted to Licensee in this Agreement
are specifically reserved to MLBPA.
2. TERM AND OPTIONS.
(a) This Agreement shall be effective and shall continue for the
License Period set forth on Schedule B, unless sooner terminated pursuant to
a provision of this Agreement.
(b) MLBPA hereby grants to Licensee two (2) separately exercisable
options (the "Options") to extend the term of this Agreement for additional
one-year periods ("Second and Third License Periods," respectively). In order
to exercise each of the two Options, Licensee must provide MLBPA with written
notice of its intention to exercise each such Option and such written notice
must be received by MLBPA no earlier than one hundred twenty (120) days and
no later than ninety (90) days prior to the expiration of the License Period
then in effect. The attempted exercise of any Option shall be void and of no
effect if Licensee (1) has breached or is then in breach of any of its
obligations under this Agreement, or (ii) fails during any License Period to
make Net Sales sufficient to generate Actual Royalties equal to or greater
than the Guaranteed Minimum Royalties as defined herein, or (iii) fails to
make full and timely royalty payments as provided herein. Licensee's
performance in each License Period shall be pursuant to the same terms and
conditions recited in this Agreement.
3. ROYALTIES.
(a) Licensee agrees to pay MLBPA a royalty at the percentage set
forth on Schedule B based on Net Sales (as defined in Subsection 3(b) below)
of the Licensed Products employing the Rights and/or the Trademarks by
Licensee (the "Actual Royalty"). Such Actual Royalty shall accrue when the
Licensed Products are sold, shipped, distributed, billed and/or paid for,
whichever occurs earlier, to a third party not affiliated with Licensee. For
purposes of this Agreement, "affiliated" means related in any manner through
direct or indirect ownership or control and includes joint venture
arrangements.
(b) "Net Sales" shall mean gross sales to third parties not
affiliated with Licensee at Licensee's regular wholesale price, less returns
actually credited. No other deductions shall be permitted. For example, there
shall be no deductions made for other discounts, commissions, uncollectible
accounts, taxes, fees, assessments, impositions, payments or expenses of any
kind which may be incurred or paid by Licensee in connection with the royalty
payments due to MLBPA hereunder, or for any costs incurred in the
manufacture, offering for sale, sale, advertising, promotion, shipment,
distribution and/or exploitation of the Licensed Products.
(c) Actual Royalty payments shall be made by Licensee to MLBPA on
all Licensed Products sold, shipped and/or distributed by Licensee, even if
not billed (such as in the case of introductory offers, samples, promotions
and the like and sales, shipments and/or distributions to individuals, and/or
companies which are affiliates or subsidiaries of Licensee), or if billed at
less than Licensee's usual price for such Licensed Products, based upon
Licensee's usual Net Sales price for such Licensed Products sold to third
parties not affiliated with Licensee in the course of Licensee's normal
distribution, shipment and sales activities.
(d) Where the billed price for any Licensed Products is less than the
usual Net Sales price for such Licensed Products sold to third parties not
affiliated with Licensee in the course of Licensee's normal distribution,
shipment and sales activities, the Actual Royalty payment shall be based upon
Licensee's usual Net Sales price.
(e) For each License Period of this Agreement, Licensee agrees to pay
MLBPA a non-refundable guaranteed minimum royalty in the amount(s) and in the
manner set forth on Schedule B (the "Guaranteed Minimum Royalty"). Such
Guaranteed Minimum Royalty shall be paid in equal quarterly installments as
set forth on Schedule B, with the first such payment due immediately upon
execution of this Agreement. If, upon termination or expiration of this
Agreement or any License Period thereof, the total royalties paid and/or
payable by Licensee to MLBPA during each such License Period is less than the
Guaranteed Minimum Royalty, Licensee shall immediately pay the amount of such
difference to MLBPA. Actual Royalty payments based on Net Sales made during
any Term of this Agreement shall be credited against the Guaranteed Minimum
Royalty due for the License Period in which such Net Sales were made.
4. STATEMENTS AND PAYMENT
(a) Licensee shall deliver to MLBPA, at its offices in New York, New
York, or to such other address as MLBPA may direct, on the fifteenth (15th) day
following the end of each calendar quarter during any License Period of this
Agreement, and on the fifteenth (15th) day of the month following termination or
expiration of this Agreement, a complete and accurate statement of its Net Sales
of Licensed Products, differentiated by country and product category, for the
immediately preceding calendar quarter (or portion thereof) (the "Royalty
Period"). Said statement shall be certified as accurate by an officer of
Licensee and shall include
information as to the stock number, item description, quantity shipped, and
gross selling price of the Licensed Products shipped, distributed and/or sold
by Licensee during the Royalty Period, information as to quantity discounts
given and returns actually credited, computation of Net Sales and royalty
due, and any other information MLBPA may from time to time reasonably
request. Such statements shall be furnished to MLBPA whether or not any
Licensed Products have been shipped, distributed and/or sold, and whether or
not Actual Royalties have been earned during the Royalty Period. Statements
shall be in a form acceptable to MLBPA and consistent with Schedule C hereto.
(b) The amount in United States dollars shown in Licensee's royalty
statements as being due MILBPA shall be paid simultaneously with the
submission of such statements. In the event that the amount credited for
returns during any Royalty Period exceeds Licensee's royalty obligation to
MLBPA for such period, Licensee may use such amount as a credit against
future royalty obligations of Licensee during the Term of this Agreement. In
no event, however, shall the amount credited for returns during any Royalty
Period be used upon termination or expiration of this Agreement as a credit
against past royalty obligations of or royalty payments made by Licensee. In
no circumstances shall MLBPA be obligated to pay any amount to Licensee upon
termination or expiration of this Agreement on account of credits accrued by
Licensee for returns.
(c) Licensee's royalty statements and all amounts payable to MLBPA
by Licensee shall be submitted to:
Major League Baseball Players Association
00 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
or such other address as the MLBPA may direct.
(d) The receipt and/or acceptance by MLBPA of any of the statements
furnished or royalties paid hereunder to MLBPA (or the cashing of any royalty
checks paid hereunder) shall not preclude MLBPA 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 by Licensee and the appropriate payment shall be
made by Licensee.
(e) All payments made hereunder shall be in United States dollars
drawn on a United States bank, unless otherwise specifically agreed upon by
the parties.
(f) Time is of the essence with respect to all payments to be made
hereunder by Licensee. Interest at a rate of the lesser of one and one-half
percent (1.5%) per month or the maximum rate allowed by law, compounded
daily, shall accrue on any amount due MLBPA hereunder from and after the date
upon which the payment is due until the date of receipt of payment.
5. AUDIT.
(a) Licensee agrees to keep accurate books of account and records at
its principal place of business covering all transactions relating to the
license granted herein and pertaining to the items required to be shown in
the Licensee's royalty statements to be submitted pursuant hereto, including
without limitation, invoices, correspondence, banking, financial and other
records. MLBPA and its duly authorized representatives shall have the right,
upon reasonable
notice, at all reasonable hours of the day, to audit Licensee's books of
account and records, and all other documents and material in the possession
or under the control of Licensee, with respect to the subject matter and the
terms of this Agreement and to make copies and extracts thereof. In the event
that any such audit reveals an underpayment by Licensee, Licensee shall
immediately upon demand remit payment to MLBPA in the amount of such
underpayment plus interest calculated at the rate of the lesser of one and
one-half percent (1.5%) per month or the maximum rate allowed by law,
compounded daily, calculated from the date such payment(s) were actually due
until the date such payment is actually made. In the event that any such
underpayment is greater than Five Thousand Dollars ($5,000), or two percent
(2%) of the royalties due for the period audited, whichever is less, Licensee
shall reimburse MLBPA for the costs and expenses of such audit.
(b) All books of account and records of Licensee covering all
transactions relating to the license granted herein shall be retained by
Licensee for at least two (2) years after the expiration or termination of
this Agreement for possible inspection by MLBPA.
6. QUALITY, NOTICES, APPROVALS, AND SAMPLE
(a) The Licensed Products and the Promotional and Packaging Material
shall be of high quality in design, material and workmanship so as to be
suited to the favorable advantage, protection and enhancement of the
Trademarks and the Rights, in no event shall be of lesser quality than the
best quality of similar products and promotional, advertising, and packaging
material presently shipped, distributed, sold and/or used by Licensee in the
Licensed Territory, shall be safe and suitable for their intended purpose,
and shall be manufactured, sold and/or distributed in full conformance with
all applicable laws and regulations.
(b) Licensee may not manufacture, use, offer for sale, sell,
advertise, promote, ship and/or distribute any Licensed Products, or any
Promotional and Packaging Material relating to the Licensed Products, until
it has received written approval of same in the manner provided herein from
MLBPA. Such approval shall not be unreasonably withheld. Should MLBPA fail to
approve in writing any of the submissions furnished it by Licensee within
fourteen (14) business days from the date of submission thereof, such failure
shall be considered to be a disapproval thereof.
(C) Before commencing or authorizing third parties to commence the
design or development of Licensed Products or Promotional and Packaging
Material which have not been previously approved in writing by MLBPA,
Licensee shall submit at its own cost to MLBPA, for approval, a written
description of the concept of such Licensed Product and/or Promotional and
Packaging Material, including full information on the nature and function of
the proposed item and a general description of how the Rights and/or the
Trademarks and other material will be used thereon. Licensee shall next
submit at its own cost to MLBPA, for approval, complete layouts and
descriptions of the proposed Licensed Products and/or Promotional and
Packaging Material showing exactly how and where the Rights and the
Trademarks and all other artwork and wording will be used. Thereafter,
Licensee shall submit at its own cost to MLBPA, for approval, pre-production
models or prototype samples of the proposed Licensed Products and/or
Promotional and Packaging Material. Finally, Licensee shall submit at its own
cost to MLBPA, for approval, actual proofs or final pre-production samples of
the proposed Licensed Products and/or Promotional and Packaging Material.
Licensee shall not proceed beyond any of the above stages where approval is
required without first securing the express written approval of MLBPA.
(d) Upon commencement of manufacture, shipment and distribution of
the Licensed Products and/or Promotional and Packaging Material relating to
the Licensed Products after all required approvals have been given by MLBPA,
Licensee shall submit, at its own cost, to MLBPA an additional twelve (12)
sets of the Licensed Products and two (2) sets of the Promotional and
Packaging Material.
(e) MLBPA may periodically during any License Period of this
Agreement require that Licensee submit to MLBPA, at no cost to MLBPA, up to
twelve (12) additional sets of the Licensed Products, and the Promotional and
Packaging Material relating to the Licensed Products, for subsequent review
of the quality of and copyright and trademark usage and notice on same and
for any other purpose that MLBPA deems appropriate.
(f) After the required approval has been secured from MLBPA pursuant
to Section 6(c) above, Licensee shall not depart from the specifications,
quality or appearance thereof in any material respect without first obtaining
the express written approval of MLBPA. Licensee shall make submissions to
MLBPA and obtain approvals in the manner required above each time new or
revised concept, layouts, descriptions, artwork, models, prototype samples
and/or production samples are created, developed and/or adopted by and/or for
Licensee.
(g) Subject to reasonable obligations of confidentiality by MLBPA, to
assure that the provisions of this Agreement are being observed, Licensee
agrees that it will allow MLBPA or its designees to enter Licensee's premises
and/or the premises where the Licensed Products are being manufactured during
regular business hours, and upon reasonable notice, for the purpose of
inspecting the Licensed Products and the Promotional and Packaging Material
relating to the Licensed Products and the facilities in which the Licensed
Products are being packaged.
(h) In order to ensure that the Licensed Products and the Promotional
and Packaging Materials are manufactured, offered for sale, sold, advertised,
promoted, shipped and/or distributed as set forth herein, in the event that
the quality standards and/or trademark and copyright usage and notice
requirements herein referred to are not met, or in the event that said
quality standards and/or trademark and copyright usage and notice
requirements are not maintained throughout the period of manufacture,
offering for sale, sale, advertising, promotion, shipment and/or distribution
of any Licensed Products hereunder, then, in addition to any other rights
available to MLBPA under this Agreement or otherwise, upon receipt of written
notice from MLBPA, Licensee shall immediately discontinue any and all
manufacture, offering for sale, sale, advertising, promotion, shipment and
distribution of such Licensed Products and/or Promotional and Packaging
Material in connection with which the said quality standards and/or trademark
and copyright usage and notice requirements have not been met.
7. ARTWORK.
(a) The form and content of all artwork for use in any media shall be
subject to the express written approval of MLBPA prior to its use by Licensee
in connection with the Licensed Products. If Licensee desires to use artwork
previously approved by MLBPA on a different Licensed Product or on different
Promotional and Packaging Material, Licensee shall first submit samples of
such proposed use to MLBPA for approval thereof.
(b) Except as provided in Section 18(c) of this Agreement,
notwithstanding any rights otherwise granted to Licensee by state or federal
trademark or copyright laws or otherwise, Licensee shall not without express
written permission of MLBPA directly or indirectly use, or authorize others
to use, in any manner whatsoever, any of the artwork or designs or other
material involving the Rights and/or Trademarks, or any reproductions
thereof, following the expiration or termination of this Agreement,
notwithstanding their
invention or use by Licensee, and Licensee shall not be required to destroy
all such artwork and/or designs and/or other material and furnish to MLBPA
satisfactory evidence of their destruction, but Licensee shall be required to
turn over all such artwork and/or designs and/or other material at MLBPA's
request.
8. OWNERSHIP OF RIGHTS.
(a) It is understood and agreed that MLBPA is the sole and exclusive
holder of all right, title and interest in and to the Rights and/or the
Trademarks for the duration of this Agreement.
(b) Nothing contained in this Agreement shall be construed as an
assignment to Licensee of any right, title and/or interest in or to the
Rights and/or the Trademarks, it being understood that all right, title and
interest relating thereto are expressly reserved by MLBPA except for the
rights being licensed hereunder.
(c) No license is being granted hereunder for any purpose or as to
any products, services or material other than the Licensed Products and only
in the Licensed Territory. MLBPA reserves for such use as it may determine
all rights of any kind other than the rights herein licensed to Licensee.
(d) Licensee shall not use the Rights and/or the Trademarks other
than as permitted herein and, in particular, shall not incorporate the Rights
and/or the Trademarks in Licensee's corporate or business name in any manner
whatsoever. Licensee agrees that in using the Rights and Trademarks, it will
in no way represent that it has any rights, title and/or interest in and/or
to the Rights and/or the Trademarks other than those expressly granted under
the terms of this Agreement. Licensee further agrees that it will not use
and/or authorize the use, either during or after the term of this Agreement,
of any configuration, trademark, trade name or other designation confusingly
similar to the Rights and/or any of the Trademarks.
(e) Notwithstanding any rights otherwise granted to Licensee by state
or federal trademark or copyright laws or otherwise, Licensee shall not
without express written permission of MLBPA directly or indirectly use, or
authorize others to use, in any manner whatsoever, any artwork or designs or
other material involving the Rights and/or Trademarks, or any reproductions
thereof following the expiration or termination of this Agreement,
notwithstanding their invention or use by Licensee, and Licensee shall
destroy all such artwork and/or designs and/or other material and furnish to
MLBPA satisfactory evidence of their destruction.
9. GOODWILL AND PROMOTIONAL VALUE.
(a) Licensee recognizes the value of the goodwill associated with the
Rights and/or the Trademarks and acknowledges that the Rights and/or the
Trademarks, and all rights therein and the goodwill pertaining thereto,
belong exclusively to MLBPA. Licensee further recognizes and acknowledges
that the Rights and/or the Trademarks have acquired secondary meaning in the
mind of the public. Licensee agrees that during any License Period of this
Agreement, or thereafter, it will not dispute or attack the title or any
rights of MLBPA in and to the Rights and/or the Trademarks or the validity of
the license granted herein.
(b) Licensee agrees that its use of the Rights and/or the Trademarks
shall inure to the benefit of MLBPA and that Licensee shall not, at any time,
acquire any rights in the Rights and/or the Trademarks by virtue of any use
it may make of the Rights and/or of the Trademarks. Licensee hereby assigns
to MLBPA any and all trademarks and trademark rights in
the Trademarks and/or Rights created by such use, together with the goodwill
of the business in connection with which such Trademarks are used.
(c) Licensee acknowledges that MLBPA is entering into this Agreement
not only in consideration of the royalties paid hereunder but also in
recognition of the intrinsic benefit to proper maintenance of the reputation
of MLBPA and the players as a result of the manufacture, offering for sale,
sale, advertising, promotion, shipment and distribution of the Licensed
Products by Licensee in accordance with the provisions of this Agreement.
Licensee therefore acknowledges that its failure to manufacture, offer for
sale, sell, advertise, promote, ship and distribute the Licensed Products in
accordance with the provisions of this Agreement, including without
limitation its obligations to protect and enhance the value of the Trademarks
and the Rights, will result in immediate and irreparable damage to MLBPA in
connection with promotion of the Rights and/or the Trademarks and/or to its
members, and that there will be no adequate remedy at law for the failure by
Licensee to abide by such provisions of this Agreement. Accordingly, Licensee
agrees that in the event of any breach by Licensee, in addition to all other
remedies available to it hereunder, MLBPA may at its sole option commence an
action in any court having jurisdiction or an arbitration proceeding, and
shall be entitled to seek injunctive relief against any such breach as well
as such other relief as any arbitrator(s) or court with jurisdiction may deem
just and proper.
(d) MLBPA recognizes and acknowledges that Licensee has its' own good
will as well as its' own trademarks, which are similarly reserved.
10. TRADEMARK AND COPYRIGHT PROTECTION
(a) The license granted herein is conditioned upon Licensee's full
and complete compliance with the provisions of the trademark and copyright
laws of the United States and any foreign country or countries in the
Licensed Territory.
(b) Licensee agrees to permanently affix to all Licensed Products and
all Promotional and Packaging Material the MLBPA logo and appropriate
legends, markings and/or notices as required by MLBPA, to give appropriate
notice to the consuming public of MLBPA's right, title and interest therein.
Licensee agrees that, unless otherwise specified in writing by MLBPA, each
usage of the Trademarks shall be followed by either the TM or the 0 Trademark
Notice symbol, as appropriate, and the following legends shall appear at
least once on each Licensed Product and on each piece of Promotional and
Packaging Material:
Copyright or -C- MLBPA
Licensee also shall include on the Licensed Products, and on each piece of
Promotional and Packaging Material, the following notice:
Official Licensee -
Major League Baseball Players Association
(c) Licensee agrees that it will not use, distribute or sell any
Licensed Products or distribute any Promotional or Packaging Materials which
do not carry notices meeting the requirements of this Agreement.
(d) Licensee shall use no other markings, legends and/or notices on
or in association with the Licensed Products or on or in association with the
Promotional and
Packaging Material other than those specified above and such other markings,
legends and/or notices as may be specified by MLBPA, without first obtaining
MLBPA's express written approval with such approval not to be unreasonably
withheld.
(e) MLBPA has the right, but not the obligation, to obtain at its own
cost, appropriate trademark and copyright protection for the Rights and/or
the Trademarks in association with the Licensed Products in any and all
countries of the Licensed Territory, in the name of MLBPA or in the name of
any third party selected by MLBPA.
(f) Licensee shall keep appropriate records (including copies of
pertinent invoices and correspondence), and advise MLBPA, relating to the
dates when each of the Licensed Products is first placed on sale or sold in
each country of the Licensed Territory, and the dates of first use in each
country of each different Trademark and/or of the Rights on the Licensed
Products and Promotional and Packaging Material. If requested to do so by
MLBPA, Licensee also agrees to supply MLBPA with samples, facsimiles or
photographs of the trademark usages in question and other information which
will enable MLBPA to complete and obtain trademark applications or
registrations, or to evaluate or oppose any trademark or design applications,
registrations, or uses of third parties,
(g) Licensee agrees that it shall not at any time within the Licensed
Territory or anywhere else in the world apply for any copyright or trademark
protection which would affect MLBPA's ownership of any rights in the Rights
and/or the Trademarks, nor file any document with any governmental authority
or assert directly or indirectly any right or take any other action which
could affect MLBPA`s ownership of the Rights and/or the Trademarks, or the
publicity rights of the players, or knowingly aid or abet anyone else in
doing so.
(h) Licensee agrees to cooperate in all reasonable respects with
MLBPA in protecting and defending the Rights and/or the Trademarks. In the
event Licensee becomes aware of any claim or problem arising with respect to
the protection of the Rights and/or the Trademarks in the Licensed Territory,
Licensee shall promptly advise MLBPA in writing of the nature and extent of
same. MLBPA has no obligation to take any action whatsoever in the event that
any claim or problem arises with respect to the protection of the Rights
and/or the Trademarks.
11. INFRINGEMENTS.
(a) Licensee agrees to cooperate with MLBPA in the enforcement of
MLBPA's right in the Rights and/or the Trademarks. Licensee agrees to notify
MLBPA in writing of any infringements or imitations by third parties of the
Rights, the Trademarks, the Licensed Products and/or the Promotional and
Packaging Material which may come to Licensee's attention. MLBPA shall have
sole right to determine whether or not any action shall betaken on account of
any such infringement or imitation. MLBPA, if it so desires, 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; provided, however, that Licensee shall not
be required to incur more than nominal out-of-pocket expense as a consequence
of being joined as a party by MLBPA. Licensee agrees not to contact any
third party, not to make any demands or claims, and not to institute any suit
or take any other action on account of such infringements or imitations
without obtaining the prior express written permission of MLBPA.
(b) With respect to all claims and suits involving the Rights and/or
the Trademarks, including suits in which Licensee is joined as a party, MLBPA
shall have the sole right to employ counsel of its choosing and to direct the
handling of the litigation and any
settlement thereof. MLBPA shall be entitled to receive and retain all amounts
awarded to MLBPA as damages, profits or otherwise in connection with such
suits.
12. INDEMNIFICATION
Licensee hereby agrees to defend, indemnify and hold harmless MLBPA,
its members, officers, directors, employees and agents, from and against any
and all claims, demands, causes of action and judgments ("Claims") arising
out of or in connection with
(a) Licensee's design, manufacture, distribution, shipment,
advertising, promotion, offering for sale and/or sale of the Licensed
Products and/or the Promotional and Packaging Material, including but not
limited to any allegedly unauthorized use by Licensee of any trademark,
copyright, patent, process, idea, method, device, logo, symbol, insignia,
name, term or material other than those licensed herein, and
(b) Licensee's use of any logos, symbols, insignias, names, terms or
other material claimed to be the property of any Major League Baseball
club(s) or any other entity affiliated directly or indirectly with any Major
League Baseball club(s), and
(c) any alleged defect(s) of the Licensed Products.
With respect to the foregoing indemnity, Licensee agrees to defend and hold
MLBPA and its members harmless at no cost or expense to MLBPA whatsoever,
including, but not limited to, attorneys' fees and court costs. Under no
circumstances shall Licensee have the right to settle or otherwise compromise
any claim without the prior written consent of MLBPA. MLBPA and its members
shall have the right to defend themselves in any such action or proceeding
with attorneys of MLBPA's selection.
13. INSURANCE.
Licensee shall, throughout the License Period(s) of this Agreement,
obtain and maintain at its own cost and expense from a qualified insurance
company acceptable to MLBPA, or self-insurance as authorized by law,
comprehensive general liability insurance, the form of which must be
acceptable to MLBPA, naming MLBPA and its members as an additional insured.
Such policy shall provide protection against any and all claims, demands and
causes of action arising out of any defect or failure to perform, alleged or
otherwise, of the Licensed Products or any material used in connection
therewith or any use thereof. The amount of coverage shall be a minimum of
Two Million Dollars ($2,000,000) combined single limit. The policy shall
provide for twenty (20) days' notice to MLBPA from the insurer by Registered
or Certified Mail, return receipt requested, in the event of any
modification, cancellation or termination. Licensee agrees to furnish MLBPA a
certificate of insurance evidencing same within thirty (30) days after
execution of this Agreement, and in no event shall Licensee manufacture,
offer for sale, sell, advertise, promote, ship and/or distribute the Licensed
Products prior to receipt by MLBPA of such evidence of insurance.
14. EXPLOITATION BY LICENSE.
(a) Licensee agrees to commence distribution, shipment and sale of
all of the Licensed Products in sufficient quantities to meet the reasonably
anticipated demand therefor throughout the Licensed Territory within six (6)
months after the Effective Date of this Agreement. In the event of Licensee's
failure to comply with this requirement, in addition to all other remedies
available to it, MLBPA shall have the option to terminate this Agreement upon
mailing notice of such termination to Licensee.
(b) Licensee agrees that during all License Periods of this
Agreement, Licensee will continue to diligently and continuously distribute,
ship and sell each of the Licensed Products throughout the Licensed Territory
and that it will use its best efforts to make and maintain adequate
arrangements for the distribution, shipment and sale necessary to meet the
demand for all such Licensed Products throughout the Licensed Territory.
Licensee further agrees to exercise all reasonable efforts to advertise and
promote the Licensed Products at its own expense throughout the term of this
Agreement as widely as practicable within the Licensed Territory, to the best
advantage and enhancement of the Trademarks and the Rights.
(c) Licensee will not discriminate against the Licensed Products by
granting commissions/discounts to salesmen, dealers and/or distributors in
favor of Licensee's other similar products.
15. PREMIUMS, PROMOTIONS AND SECONDS.
(a) Under no circumstances shall Licensee have any right to sell or
otherwise utilize the Licensed Products as premiums or promotional items.
MLBPA shall have and retain the sole and exclusive right to utilize or
license third parties to utilize any of the rights granted herein in
connection with any premium, giveaway, mail order, fund raising, promotional
arrangement or fan club (collectively referred to as "Promotional Products"),
which retained right may be exercised by MLBPA concurrently with the rights
granted to Licensee hereunder.
(b) Licensee agrees not to offer for sale, sell, ship, advertise,
promote, distribute and/or use for any purpose whatsoever, and/or to permit
any third party to offer for sale, sell, ship, advertise, promote, distribute
and/or use for any purpose whatsoever, any Licensed Products and/or
Promotional and Packaging Material relating to the Licensed Products which
are damaged, defective, seconds or otherwise fail to meet the specifications
and/or quality standards and/or trademark and copyright usage and notice
requirements of this Agreement.
16. ASSIGNABILITY AND SUBLICENSING.
The license granted hereunder is and shall be personal to Licensee
and shall not be assigned by any act of Licensee or by operation of law or
otherwise encumbered. Licensee shall not have the Licensed Products or any
portion thereof manufactured for Licensee by a third party unless Licensee
first obtains the express written approval of MLBPA, and such manufacturer
shall have signed an agreement in the form attached hereto as Schedule D.
Licensee shall have no right to grant any sublicenses without MLBPA's prior
express written approval. Any attempt on the part of Licensee to arrange for
manufacture by a third party or to sublicense (except as provided herein),
assign, encumber or alter its rights under this Agreement by operation of law
or otherwise, including without limitation entry by Licensee into any joint
venture arrangement or any material change in the ownership or key management
of Licensee, without reasonable notice to and written approval by MLBPA shall
result in the automatic termination of this Agreement, and all rights granted
hereunder shall immediately revert to MLBPA.
17. TERMINATION.
(a) MLBPA's Right of Termination.
(i) IMMEDIATE RIGHT OF TERMINATION. In addition to the
automatic termination provisions and/or termination rights provided elsewhere
in this Agreement, and notwithstanding any attempts by Licensee to cure
defaults, MLBPA shall have the right
immediately to terminate this Agreement by giving written notice to Licensee
if Licensee does any of the following:
a. Manufactures, offers for sale, sells, advertises,
promotes, ships, distributes and/or uses in any way any Licensed Product
and/or Promotional and Packaging Material without having the prior written
approval of MLBPA as provided for in this Agreement;
b. Continues to manufacture, offer for sale, sell, advertise,
promote, ship, distribute and/or use in any way any Licensed Product and/or
Promotional and Packaging Material after receipt of notice from MLBPA
disapproving same;
c. Fails to carry on the Licensed Products or Promotional or
Packaging Material the notices specified by MLBPA, as required herein;
d. Becomes subject to any voluntary or involuntary order of
any governmental agency involving the recall of any of the Licensed Products
and/or Promotion and Packaging Material because of safety, health or other
hazards or risks to the public;
e. Directly or indirectly through its controlling
shareholders or any of its officers, directors or employees, takes any action
in connection with the manufacture, offering for sale, sale, advertising,
promotion, shipment and/or distribution of the Licensed Products and/or the
Promotional and Packaging Material which damages or reflects adversely upon
MLBPA, the Rights and/or the Trademarks;
f. Breaches any of the provisions of this Agreement relating
to the unauthorized assertion of rights in the Rights and/or the Trademarks;
g. Two or more times during a twelve-month period fails to
make timely payment of royalties when due or fails to make timely submission
of royalty statements when due;
h. Uses the Trademarks or the Rights for the purpose, in
whole or in part, of promoting any service or product other than the Licensed
Products without the express prior consent of MLBPA in writing; or
i. Fails to obtain or maintain insurance as required by the
provisions of this Agreement.
(ii) Curable Breaches by Licensee. If Licensee
a. commits a material breach of any other terms
of this Agreement, or
b. files a petition in bankruptcy or is
adjudicated a bankrupt or insolvent, or makes an assignment for the benefit
of creditors, or an arrangement pursuant to any bankruptcy law, or
discontinues its business, or if a receiver is appointed for it or its
business and is not discharged within thirty (30) days, and fails to cure
such default and furnish reasonable proof of its cure to MLBPA within fifteen
(15) days after receiving written notice of breach, MLBPA shall have the
right to terminate this Agreement by giving written notice to Licensee.
(b) LICENSEE'S RIGHT OF TERMINATION. If MLBPA commits a material
breach of any of the terms of this Agreement and fails to cure such default
and furnish reasonable proof of its
cure to Licensee within fifteen (15) days after receiving written notice of
breach, Licensee shall have the right to terminate this Agreement by giving
written notice to MLBPA.
18. POST-TERMINATION AND EXPIRATION RIGHTS AND OBLIGATION.
(a) Except as provided in Section 18(c) below, upon termination of
this Agreement, Licensee and its receivers, representatives, trustees,
agents, administrators, successors and/or permitted assigns shall have no
right to manufacture, offer for sale, sell, ship, advertise, promote and/or
distribute Licensed Products or to use in any way the Rights, the Trademarks,
or any Promotional and Packaging Material relating to the Licensed Products.
(b) Upon expiration of this Agreement or termination by MLBPA,
notwithstanding anything to the contrary herein, all royalties on sales,
shipments and/or distributions theretofore made shall become immediately due
and payable and no Guaranteed Minimum Royalty paid to MLBPA shall be refunded.
(c) Upon expiration of this Agreement, or upon termination of this
Agreement for any reason except those set forth in Section 16 or Section
17(a) above, subject to the requirements of this Agreement with respect to
payment and reporting of royalties, for a period of ninety (90) days,
Licensee may dispose of all finished Licensed Products which are on hand upon
the expiration of the License Period then in effect, provided that the
royalties with respect to that period are paid and the appropriate statements
are furnished for that period. During such ninety (90) day period, MLBPA
itself may use or license the use of the Rights and/or the Trademarks in any
manner at any time anywhere in the world as MLBPA sees fit.
(d) Subject to Section 18(c) above, after the expiration or
termination of this Agreement, Licensee shall refrain from further use of the
Rights and/or the Trademarks or any further reference to them, either
directly or indirectly, in connection with the manufacture, offering for
sale, sale, advertising, promotion, shipment and/or distribution of
Licensee's products. Licensee shall destroy all artwork, films,
transparencies, separations, printing plates, molds and other materials which
reproduce the Licensed Products and/or Promotional and Packaging Material
relating to the Licensed Products, and shall give evidence satisfactory to
MLBPA of their destruction. Licensee shall be responsible to MLBPA for any
damages caused by the unauthorized use by Licensee or by others of all such
materials which are not destroyed pursuant to this Agreement.
(e) Licensee acknowledges that its failure to cease the manufacture,
offering for sale, sale, advertising, promotion, shipment and/or distribution
of the Licensed Products and/or use in any way of the Promotional and
Packaging Material relating to the Licensed Products at the termination or
expiration of this Agreement will result in immediate and irreparable damage
to MLBPA and/or to the players and to the rights of other licensees of MLBPA
Licensee acknowledges and admits that there is no adequate remedy at law for
failure to cease such activities and Licensee agrees that in the event of
such failure, in addition to all other remedies available to it hereunder,
MLBPA at its sole option may commence an action in any court having
jurisdiction or an arbitration proceeding, and shall be entitled to equitable
relief by way of injunctive relief and such other relief as any arbitrators
or court with jurisdiction may deem just and proper.
19. FINAL STATEMENT UPON TERMINATION OR EXPIRATION
Within thirty (30) days after termination or expiration of this
Agreement, as the case may be, Licensee shall deliver to MLBPA a statement
indicating the number and description
of the finished Licensed Products which it had on hand as of the expiration
or termination date. MLBPA shall have the option upon prior written notice to
Licensee of conducting a physical inventory at the time of expiration or
termination and/or at a later date in order to ascertain or verify such
statement. In the event that Licensee refuses to permit MLBPA to conduct such
physical inventory, Licensee shall forfeit any rights hereunder to dispose of
such inventory. In addition to such forfeiture, MLBPA shall have recourse to
all other remedies available to it.
20. NOTICES.
All notices or other communications required or desired to be sent to
either party shall be in writing and sent by Registered or Certified Mail,
postage prepaid, return receipt requested, or by facsimile or telegram,
charges prepaid. Such notices, including facsimile or telegram, shall be
effective on the date sent, provided that any notice sent by facsimile also
shall be sent by regular mail. The addresses for MLBPA and Licensee shall be
as set forth on Schedule B. Either party may change its address by notice in
writing to the other party.
21. RELATIONSHIP OF THE PARTIE5.
This Agreement does not create a partnership or joint venture between
the parties and neither party shall have any power to obligate or bind the
other in any manner whatsoever.
22. APPLICABLE LAW.
This Agreement is made within the State of New York and shall be
construed in accordance with the laws of the United States and the State of
New York. Licensee hereby expressly waives any right to the benefits of
remedial legislation, if any, of Licensee's home state.
23. REMEDIES.
(a) Except as otherwise provided herein, any dispute or disagreement
between the parties hereto arising out of or relating to this Agreement shall
be settled by final and binding arbitration, in New York City, under the
Commercial Arbitration Rules then obtaining of the American Arbitration
Association. The parties hereto expressly stipulate that the arbitrator(s)
shall have full subpoena power and full powers to fashion appropriate
remedies, including without limitation the power to grant equitable and/or
injunctive and/or declaratory relief. Judgment upon the award may be entered
in any court having jurisdiction.
(b) Licensee recognizes the unique nature of the Rights and the
Trademarks, and the possibility that breaches of this Agreement by Licensee
may require preliminary or extraordinary relief beyond that available in
arbitration, and the possibility that breaches of this Agreement may involve
third parties or witnesses or issues which are beyond the practical
jurisdiction of arbitrators Accordingly, notwithstanding the provisions of
paragraph 23(a), MLBPA ~but not Licensee) may, at its sole and exclusive
option, elect as an alternative to arbitration to commence an action or
proceeding in any court of competent jurisdiction to enforce this Agreement
or protect the Rights and the Trademarks. MLBPA may also require the
termination of a previously-commenced arbitration proceeding so as to permit
a dispute between the parties to be resolved in an action or proceeding in a
court of competent jurisdiction, so long as MLBPA has theretofore not waived
its right to do so by taking substantial steps to prosecute or defend the
arbitration proceeding
24. CAPTIONS.
The captions used in connection with the paragraphs and subparagraphs
of this Agreement are inserted only for purpose of reference. Such captions
shall not be deemed to govern, limit, modify or in any other manner affect
the scope, meaning or intent of the provisions of this Agreement or any part
thereof, nor shall such captions otherwise be given any legal effect.
25. WAIVER.
(a) No waiver by either party of a breach or a default hereunder
shall be deemed a waiver by such party of a subsequent breach or default of a
like or similar nature.
(b) Resort by either party to any remedies referred to in this
Agreement or arising by reason of a breach of this Agreement by the other
party shall not be construed as a waiver by such party of its right to resort
to any and all other legal and equitable remedies available to it.
26. SURVIVAL OF THE RIGHTS.
Any rights and obligations created by this Agreement and which by
necessary implication continue after its expiration or termination shall
survive such expiration or termination.
27. SEVERABILITY.
In the event that any term or provision of this Agreement shall for
any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
term or provision, and this Agreement shall be interpreted and construed as
if such term or provision, to the extent the same shall have been held to be
invalid illegal or unenforceable, had never been contained herein.
28. INTEGRATIQN.
This Agreement represents 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. This Agreement
cannot be modified except by a written instrument signed by the parties hereto
By their execution below, the parties hereto have agreed to all of the terms
and conditions of this Agreement.
MAJOR LEAGUE BASEBALL ALLSTAR ARENA ENTERTAINMENT, INC.
PLAYERS ASSOCIATION
By: /s/ Xxxxxx Xxx By: /s/ Xxxxxx Xxxxxx
Date: 5-18-98 Date: 5/12/98
SCHEDULE A
TRADEMARKS
MLBPA
Major League Baseball Players Association
MLB Players Choice Logo
THE RIGHTS
The names, nicknames, likenesses, signatures, pictures, playing records
and/or biographical data of all active baseball players of the National League
and the American League who have entered into a Commercial Agreement with the
MLBPA.
SCHEDULE B
LICENSED PRODUCTS
Comic books featuring animated cartoon super-heroes based on Major League
Baseball Players, such comic books to be not smaller than six inches by ten
inches (6" X 10") and not larger than nine inches by twelve inches (9" X 12").
LICENSE PERIOD
First License Period: January 1, 1998 to December 31, 1998;
Second License Period: (If Renewed): January 1, 1999 to December 31, 1999;
Third License Period (If Renewed): January 1, 2000 to December 31, 2000.
LICENSED TERRITORY:
The United States, its territories and possessions and Canada.
ADDITIONAL CONDITIONS
The International Addendum attached hereto and incorporated herein shall
apply to all sales of Licensee with respect to the Licensed Products outside
the United States.
During the First License Period, Licensee will produce and simultaneously
market at least three (3) different comic books. Each book will feature a
minimum of four (4) different Major League baseball players for a total of at
least twelve (12) different Major League baseball players during the First
License Period. During each subsequent License Period, if any, Licensee will
produce and simultaneously market at least four (4) different comic books
each featuring a minimum of four (4) different Major League baseball players
for a total of al least sixteen (16) different Major League baseball players
during each License Period. Licensee understands and agrees that it must
market the Licensed Products as a group.
MLBPA agrees to consider in good faith any ancillary products Licensee may
propose. Licensee understands and agrees that any ancillary products to be
developed in connection with Licensed Products must be approved in concept in
writing and in advance by the MLBPA and will be Subject to the then-current
terms and policies of MLBPA's licensing program. If MLBPA approves ally such
ancillary products, Licensee agrees to first contact existing MLBPA licensees
in an effort to employ their services in connection with the manufacture and
marketing of such ancillary products before contacting other parties who are
not licensed by MLBPA.
[Material marked with an asterisk has been
omitted from this document pursuant to a
request for confidential treatment and has
been filed separately with the Securities and
Exchange Commission.]
Licensee understands and agrees that the content and graphic renderings in
connection with the Licensed Products will only be of a "positive and
wholesome" nature and convey positive messages and ideas for children. The
terms "positive and wholesome" will be determined jointly by MLBPA and
Licensee. In the event of a disagreement, the MLBPA's determination will
prevail.
MLBPA agrees to consider in good faith any television and/or ancillary
projects in connection with the Licensed Products that Licensee may propose.
Licensee Understands and agrees that ML13PA shall have the right to
participate in any discussions or negotiations with any third parties about
any television or film projects in connection With the Licensed Products and
any Such television and film projects in connection with the Licensed
Products are subject to the express written approval of the MLBPA. No right
to include the Rights or the Trademarks in any Such project is granted or
implied by this Agreement.
MLBPA, if it so chooses, will have the opportunity to promote itself, its
players, charities, web sites, and/or events with a full page in each issue
of the comic books at no charge to MLBPA. Although the MLBPA is not obligated
to do so, it is the current intention of MLBPA to develop a national
advertising and/or promotional program featuring the Rights and/or Trademarks
and to Consult with Licensee about the development of such program. Licensee
agrees that MLBPA shall have the right, at its discretion and in a manner and
style of its choice, to print catalogues, brochures, advertisements or other
promotional materials wherein representative merchandise from Licensee and
other Licensees of MLBPA shall be displayed. In this regard, Licensee shall
share in the cost of such materials and without credit against the Guaranteed
Minimum Royalty required herein. Licensee shall share in the cost of such
materials at least once during the initial License Period and each License
Period thereafter (if any), by forwarding payment to MLBPA within ten (10)
days after receiving all invoice therefore in an amount not to exceed Five
Thousand Dollars ($5,000.00).
ACTUAL ROYALTY
** Percent (*)
GUARANTEED MINIMUM ROYALTY
First License Period:
* Dollars (*) to be paid upon execution of this Agreement by Licensee;
Second License Period (If Renewed): * Dollars (*) to be paid as follows:
* due on or before January 15, 1999;
* due on or before April 15, 1999
* due on or before July 15, 1999;
* due on or before October 15, 1999;
Third License Period: (If Renewed) * Dollars (*) to be paid as follows:
* due on or before January 15, 2000;
* due on or before April 15, 2000;
* due on or before July 15, 2000;
* due on or before October 15, 2000.
ADDRESSES FOR NOTICES
Major League Baseball Players Association
00 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
AllStar Arena Entertainment, Inc.
0000 Xxxxxx Xxxx. Xxxxx 000
Xxx Xxxxxxx, XX 00000
Att: F. R. Licht
Acknowledged and Approved:
MAJOR LEAGUE BASEBALL ALLSTAR ARENA
PLAYERS ASSOCIATION ENTERTAINMENT, INC.
By: /s/Xxxxxx Xxx By: /s/Xxxxxx Xxxxxx
Date: 05/18/98 Date: 05/12/98
