[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.]
R-247
LICENSE AGREEMENT
THIS LICENSE AGREEMENT made as of the 1st day of July, 1999 BETWEEN:
ULTIMATE SPORTS ENTERTAINMENT INC., a corporation
incorporated under the laws of California with offices
at 0000 Xxxxxxxx Xxxx., Xxxxx 000, Xxxxx Xxxxxx, XX,
00000 (the "Licensee")
OF THE FIRST PART
- and -
THE NATIONAL HOCKEY LEAGUE PLAYERS' ASSOCIATION, an
unincorporated association with offices at 000 Xxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx, X0X 0X0, (the
"Licensor")
OF THE SECOND PART
WITNESSETH:
WHEREAS, the Licensor is the owner of certain proprietary rights in and
to the property described in Schedule "A" attached hereto (the "Property");
WHEREAS, the Licensor has a group licensing program under which it
licenses the use of the Property in furtherance of its efforts to promote its
members and the game of hockey;
WHEREAS, the Licensee desires to use the Property on or in association
with the manufacture, packaging, offering for sale, sale, advertising,
promotion, shipment and distribution (the "Exploitation") of certain products
identified in Schedule "C" attached hereto (the "Licensed Products") in the
territory identified in Schedule "D" attached hereto (the "Licensed
Territory");
AND WHEREAS, the Licensor is willing to grant the Licensee such right to
use the Property on or in association with the Exploitation of 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:
2
1. INTERPRETATION
This Agreement shall be interpreted in accordance with the following:
(a) words denoting the singular shall include the plural and vice versa
and words denoting any gender shall include all genders;
(b) references to dollars, unless otherwise specifically indicated, shall
be references to U.S. Dollars;
(c) the word "including" shall mean, "including without limitation" and
the word "includes" shall mean "includes without limitation";
(d) the expression "arm's length" shall have the meaning ascribed thereto
in the Income Tax Act (Canada);
(e) the expression "business day" shall mean any day other than Saturday
and Sunday on which the Canadian chartered banks are open for business in
Toronto, Ontario; and
(f) the term "Agreement" shall mean this agreement and all schedules
attached hereto.
2. REPRESENTATIONS OF LICENSOR
(a) The Licensor represents that it has been duly appointed and is acting
on behalf of all active hockey players (the "Players") of the National
Hockey League ("NHL") who have entered into a Group Licensing Authorization
Agreement with the Licensor, and that in such capacity it has the right to
negotiate this Agreement and the right to grant the rights described
herein.
(b) The Licensor further represents that the Licensor has not entered
into, granted or become subject to, and will not enter into, grant or
become subject to, any agreement, right or obligation which will prevent
the Licensee from exercising the rights granted to the Licensee herein.
(c) The Licensor makes no warranties or representations other than those
expressly made herein.
3. REPRESENTATIONS OF LICENSEE
(a) The Licensee represents that it is a corporation duly incorporated and
organized and validly subsisting under the laws of its jurisdiction of
incorporation, that it has full corporate power and authority to carry on
its business as now conducted and that it has obtained all material
authorizations required in respect of its operations.
3
(b) The Licensee further represents that it has full corporate power and
authority and full right to enter into and perform its obligations under
this Agreement.
(c) The Licensee further represents that the consummation of the
transactions herein contemplated and the compliance with the terms,
conditions and provisions of this Agreement will not conflict with, or
result in a breach of, or constitute a default under any of the terms,
conditions or provisions of the certificates of incorporation, constating
documents or by-laws of the Licensee or any material agreement or
instrument to which the Licensee is party or by which it is bound.
(d) The Licensee further represents that all software, embedded microchips
and other processing capabilities utilized by or in connection with the
business or financial operations of the Licensee are able to correctly
recognize, interpret, store, transmit, receive and manipulate data on and
involving all calendar dates and otherwise handle the transition from the
year 1999 to the year 2000, and without causing any abnormal results or
scenarios in relation to dates during and after the year 2000.
(e) The Licensee further represents that the Licensee has not entered
into, granted or become subject to, and will not enter into, grant or
become subject to, any agreement, right or obligation which will prevent
the Licensee from performing its obligations herein.
4. GRANT
(a) Subject to the terms and conditions hereof, the Licensor hereby grants
to the Licensee a non-exclusive, non-transferable, non-assignable license,
without the right to grant sub-licenses, to use the Property solely on or
in association with the Exploitation of the Licensed Products and solely
within the Licensed Territory (the "License").
(b) The rights, licenses and privileges granted by the Licensor hereunder
shall not constitute or be used by the Licensee as a personal endorsement
by all or any of the Players or by the Licensor, of any Licensed Product or
any other product or service. In the event that the Licensee is interested
in securing a Player's personal endorsement, using a Player in a manner
that will focus on or highlight the Player or securing a Player for a photo
shoot or other appearance, it is understood and acknowledged that such
endorsement, highlighting or appearance will require the personal approval
of the Player involved and a separate payment directly to him, independent
of, and in addition to, all payments due to the Licensor under the terms of
this Agreement.
(c) With respect to any current Player or former NHL player with whom the
Licensee wishes to enter into an endorsement, spokesperson,
4
highlighting, appearance or promotional agreement, the Licensee agrees as
follows:
(i) The Licensee shall first contact the Licensor with its request
to engage the endorsement, spokesperson, highlighting,
appearance or promotional services of any particular active
Player (or a Player who has been under contract, but has not
yet announced his retirement). The Licensee will allow the
Licensor sufficient time to contact the Player to see if he is
available to provide the requested services. The Licensee
agrees not to contact the Player without the consent of the
Licensor.
If the Player agrees to make his services available, the
Licensee will be permitted to enter into an endorsement,
spokesperson, highlighting, appearance or promotional agreement
with him, provided that any such agreement which purports to be
exclusive (in whole or in part) shall be deemed to include the
following terms and conditions:
"Exclusive shall mean that the Player shall refrain from
granting to any other manufacturer or distributor of similar
products the endorsement, as a spokesman, of the Player for use
in advertising and/or promotion of such similar products. The
parties acknowledge and agree that the Player's name and
likeness may appear on the products of NHLPA licensees, that
they will continue to do so, and that no such grant of rights
with respect to any other product shall constitute a breach of
this Agreement."
The Licensee agrees that any agreements which it has entered
into with Players prior to the date of this Agreement shall be
deemed to include the above-noted language so that any Players
who have agreements with the Licensee are free to participate
in all group licenses of the Licensor.
Notwithstanding anything herein to the contrary, the Licensee
agrees that it will not use any current NHL player as a
spokesman or for the endorsement or promotion of the Licensed
Products unless such player forms part of the group included in
this Agreement.
The Licensee shall notify the Licensor prior to concluding any
such agreement with any Player and shall provide a copy of the
agreement to the Licensor within five days of its execution.
(ii) The Licensor acknowledges and agrees that the Licensee may
enter into agreements with former NHL players on an exclusive
5
basis as to endorsement, spokesperson, highlighting or
promotion rights. The Licensee acknowledges and agrees that if
any such former NHL player re-enters the NHL to again become an
active Player, the Licensee shall be bound, with respect to
such Player, to the provisions of sub-paragraph (i) above.
The Licensee shall provide a copy of any such agreement with
any former NHL player to the Licensor within five (5) days of
its execution.
(d) Nothing contained in sub-paragraph (b) above shall prevent the
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 Materials") or
require any separate payment in connection therewith, provided that, unless
specifically authorized in advance by the Licensor 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 Materials for all
Licensed Products during the entire Term of this Agreement; and the
Licensee agrees to rotate the Players who are so utilized in connection
with such materials so as not to highlight any particular Player or group
of Players to the exclusion of others. Notwithstanding the foregoing, the
Licensee agrees that, at the request of the Licensor, it will refrain from
utilizing the names and/or likenesses of any particular Player(s) on any
Promotional and Packaging Materials.
(e) The Licensee agrees and acknowledges that any Player may elect to be
excluded from all or any part of this Agreement.
(f) The Licensee agrees that it will not enter into any agreement relating
to any Licensed Products with any NHL player who does not form part of the
group included in this Agreement.
(g) The Licensee agrees that it will not enter into any agreement with any
third party with respect to any markings, designs or other indicia
generally associated in the minds of the public with any particular Player
which would preclude the Player from being depicted in or on any NHLPA
licensed products or promotional materials in the manner in which the
public has become accustomed to seeing him.
(h) The Licensor makes no representation that it has the authority to
grant nor does it grant herein, the right to utilize league symbols,
insignias or logos or the NHL team emblem or uniform which a Player wears
as a hockey player for his NHL team. Accordingly, it is understood by the
parties hereto that if likenesses of Players depicting any such team or
league material are to be utilized in the exercise of this License, it will
be the
[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.]
6
responsibility of the Licensee to obtain permission for the use of such
material.
(i) All rights not expressly granted to the Licensee in this Agreement are
specifically reserved to the Licensor.
5. TERM
(a) The term of this Agreement (the "Term") shall extend from the date
first written above to June 30, 2001 unless earlier terminated in
accordance with the provisions hereof. All references herein to the words
"annual", "year" or any other similar term shall be references to the
twelve (12) month period from July 1 to the following June 30 unless the
context in which any such terms are used otherwise requires.
(b) The Licensee acknowledges that except as expressly provided herein,
there is no right to renew this Agreement, and no options to extend this
Agreement have been granted or are implied hereunder.
6. ROYALTY PAYMENT
(a) The Licensee agrees to pay the Licensor a royalty ("Royalty") of *
percent (*) based on Net Sales (as defined herein) of Licensed Products by
the Licensee. Such Royalties shall accrue when the Licensed Products are
sold, shipped, distributed, billed or paid for, whichever occurs earliest.
(b) Royalty payments shall be made by the Licensee to the Licensor on all
Licensed Products sold, shipped or distributed by the Licensee, even if not
billed or if billed at a discount. Royalty payments to be made in respect
of Licensed Products sold, shipped or distributed but not billed or if
billed at a discount (such as in the case of introductory offers, samples,
promotions and the like, or in the case of sales, shipments or
distributions to individuals or companies which are affiliated or
associated with or subsidiaries of the Licensee), shall be based upon the
Licensee's then usual wholesale price (the "Usual Wholesale Price") for
such Licensed Products sold to arm's length third parties in the course of
the Licensee's normal sales, shipment and distribution activities.
(c) Where the billed price for any Licensed Products is less than the
Usual Wholesale Price for such Licensed Products, the Royalty payments
shall be based upon the Usual Wholesale Price.
(d) The Licensee further agrees to pay the Licensor a non-refundable,
minimum guaranteed annual royalty of * Dollars (* U.S.) for its use of
the rights licensed hereunder during the Term (the "Guaranteed Minimum
Royalty"). The Guaranteed Minimum Royalty shall be paid as follows:
[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.]
7
(i) * Dollars (* U.S.) upon execution of this Agreement; an
additional * Dollars (* U.S.) by September 15, 1999; an
additional * Dollars (* U.S.) by December 15, 1999; and an
additional * Dollars (* U.S.) by April 15, 2000; and
(ii) An additional * Dollars (* U.S.) by July 15, 2000; an
additional * Dollars (* U.S.) by September 15, 2000; an
additional * Dollars (* U.S.) by December 15, 2000; and an
additional * Dollars (* U.S.) by April 15, 2001
(e) The Guaranteed Minimum Royalty payments shall be paid by the Licensee
as specified above, whether or not the Licensee uses the rights licensed
hereunder, and no part of such guaranteed payments shall be repayable to
the Licensee except as specifically recited herein.
(f) Royalty payments based on Net Sales (as adjusted in accordance
herewith) made during any year of this Agreement shall be credited against
the Guaranteed Minimum Royalty due for the year in which such sales were
made. In no event shall any Royalties received in excess of the Guaranteed
Minimum Royalty for the year in which such Net Sales were made be used as a
credit against past or future Royalty obligations of the Licensee nor shall
any such excess be applied against the Guaranteed Minimum Royalty for any
other year of this Agreement.
(g) "Net Sales" shall mean gross sales of all Licensed Products, adjusted
in accordance with sub-paragraphs 6(b) and 6(c) hereof, less only returns
actually credited. No deductions shall be made for cash or other
discounts, for commissions, for uncollectible accounts, for taxes, fees,
assessments, impositions, payments or expenses of any kind which may be
incurred or paid by the Licensee in connection with the Royalty payments
due to the Licensor hereunder or in connection with a transfer of funds or
Royalties or with the conversion of any currency into any other currency,
or for any costs incurred in the use of the Property or the Exploitation of
the Licensed Products. If any tax is imposed on the Licensor by any country
with respect to Royalties payable to the Licensor, the Licensee shall
compute and pay the Royalties due to the Licensor hereunder on the basis of
the gross amount involved before the deduction of any such taxes. If the
Licensee is required to withhold from any Royalty payment due to the
Licensor an amount representing taxes or other levies imposed pursuant to
the laws of any country, the Licensee shall nevertheless have the
obligation to pay the entire gross amount of the Royalty without regard to
the amount of such tax or other levy. All taxes and other levies of any
kind whatsoever resulting from this Agreement shall be
8
the responsibility of the Licensee and shall be paid by the Licensee at
the time and in the manner required by the relevant legislation.
(i) The Licensee represents to the Licensor that it is not a resident of
Canada and has not registered in Canada for purposes of the Federal Goods
and Services Tax.
7. MARKETING COMMITMENT/PRODUCT CREDIT
(a) The Licensee also agrees to provide and deliver free of charge to the
Licensor Licensed Products valued at a minimum of Five Thousand Dollars
($5,000.00 U.S.) wholesale during each year of the Term. Delivery of the
Licensed Products shall be made within thirty (30) days after a written
request for delivery has been made by the Licensor to the Licensee.
8. FORECASTS, STATEMENTS AND PAYMENTS
(a) Upon execution of this Agreement, and by each January 1 and July 1
thereafter, the Licensee shall provide to the Licensor a business plan
covering the remainder of the contract year broken down by quarter,
outlining the following:
(i) the gross and net sales projections for each Licensed Product,
broken down by country in the Licensed Territory;
(ii) a schedule of planned promotional and marketing campaigns
together with the media to be used; and
(iii) a list of the Licensed Products and, if applicable, the
particular designs proposed to be offered.
(b) The Licensee shall deliver to the Licensor, by the 15th day after the
end of each calendar quarter during the entire Term of this Agreement, and
thereafter in accordance with paragraph 21 hereof, a complete and accurate
statement (the "Royalty Statement") in the form attached hereto as Schedule
"F", certified to be accurate by an officer of the Licensee, showing the
number, description and gross sales (as adjusted in accordance herewith) of
the Licensed Products distributed, shipped or sold by the Licensee during
the preceding calendar month ("Royalty Period") together with any returns
actually credited and made during such Royalty Period. Such Royalty
Statements shall be furnished to the Licensor whether or not any of the
Licensed Products have been distributed, shipped or sold during the Royalty
Period for which such Royalty Statement is due. The Licensee shall pay to
the Licensor on or before the 15th day of each calendar quarter during the
entire Term of this Agreement, all Royalties earned under the terms hereof
for the most recent Royalty Period. If so instructed by the Licensor, all
payments of Royalties and/or other amounts to be made hereunder shall be
9
made by wire transfer in accordance with the written instructions given by
the Licensor from time to time. The receipt or acceptance by the Licensor
of any Royalty Statement or of any Royalty paid hereunder (or the
depositing of any Royalty or other amount paid hereunder) shall not
preclude the Licensor from questioning the correctness thereof at any time,
and in the event that any inconsistencies or mistakes are discovered in
connection therewith, they shall immediately be rectified and the
appropriate payment made by the Licensee to the Licensor.
(c) Time is of the essence with respect to all payments to be made
hereunder by the Licensee. Any amounts payable hereunder not paid in full
on their due date shall accrue interest daily from the relevant due date
until the date payment is received at the rate of 1 1/2% per month (18% per
annum).
(d) All payments made hereunder with respect to Licensed Products sold,
shipped or distributed to or within the United States shall be in United
States currency. All payments made hereunder with respect to Licensed
Products sold, shipped or distributed to or within any country other than
the United States shall be calculated in accordance with sub-paragraph (e)
and shall be paid in United States currency.
(e) If the Licensed Territory includes countries other than the United
States, the Royalty Statement shall be broken down by country and all Net
Sales amounts shall be stated in the currency of the country where such
sales were made, followed by the equivalent amount of such Net Sales in
United States currency, followed by the exchange rate applied. The Licensor
reserves the right to dispute the appropriateness of the exchange rate
applied. Any dispute that cannot be resolved by agreement between the
parties shall be settled by reference to the exchange rate that would have
been applied by the Chase Manhattan Bank in New York, N.Y., to exchange
such foreign currency into United States dollars.
(f) All transactions under this Agreement, including without limitation,
all payments of Royalties and all notices, reports, royalty statements,
approvals and other communications, shall be with or made payable in the
name of the Licensor, or its designated assigns, if applicable.
10
9. BOOKS AND RECORDS/AUDIT
(a) The Licensee agrees to keep accurate books of account and records at
its principal place of business covering all transactions relating to the
license being granted herein. The Licensor or any duly authorized
representative shall have the right, at all reasonable hours of any
business day, to audit the Licensee's books of account and records and all
other documents and material in the possession or under the control of the
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 the Licensee, the Licensee shall immediately
remit payment to the Licensor in the amount of such underpayment together
with interest thereon calculated at the same rate and in the same manner as
this Agreement provides for interest to be calculated on overdue royalties.
Further, in the event that any such underpayment is greater than the lesser
of Five Thousand Dollars ($5,000.00) or two percent (2%) of the Royalties
due for any Royalty Period, the Licensee shall reimburse the Licensor for
the costs and expenses related to or associated with its audit.
(b) Upon demand by the Licensor, but not more than once each year, the
Licensee shall, at its own cost, furnish the Licensor with a statement,
prepared by an independent certified public or chartered accountant of the
Licensee's choice and approved by the Licensor, which approval shall not be
unreasonably withheld, setting forth the number of Licensed Products
manufactured during the time period extending from the date of any previous
statement (or in the case of the first statement, the date of the
commencement of this Agreement) up to and including the date of the
statement and also setting forth the pricing information for all Licensed
Products (including the number and description of the Licensed Products)
shipped, distributed and sold by the Licensee during the aforementioned
time period.
(c) All books of account and records of the Licensee covering all
transactions relating to the Licensee shall be retained by the Licensee for
at least six (6) years after the expiration or termination of this
Agreement, as the case may be, for possible inspection by the Licensor.
10. QUALITY, NOTICES, APPROVALS, AND SAMPLES
(a) A list of Players whose names, likenesses, pictures, photographs,
facsimiles, signatures, descriptions, playing records and/or biographical
sketches (the "Personality Rights") are to be included in the Property for
purposes of this Agreement shall be established and may be modified in the
following manner:
(i) The Licensee and the Licensor shall agree upon a list of
Players' names immediately after the execution of this
Agreement.
11
Subject to subparagraph (ii), the Licensee shall be entitled
to use the Personality Rights of each Player included on the
list for the length of the Term as long as he is an active
Player.
(ii) The Licensor may notify the Licensee from time to time of any
Players whose Personality Rights are to be added to or excluded
from the Property for purposes of this Agreement.
(b) The quality of the Licensed Products as well as the quality of all
Promotional and Packaging Material shall be at least as high as the best
quality of similar products and promotional, advertising and packaging
material presently shipped, distributed, sold or used by the Licensee in
the Licensed Territory and shall be in full conformance with all applicable
laws and regulations.
(c) Before commencing or authorizing third parties to commence the design
or development of any Licensed Products or any Promotional and Packaging
Material which have not been previously approved in writing by the
Licensor, the Licensee shall submit at its own cost to the Licensor, for
approval, a description of the concept of the same, including full
information on the nature and function of the proposed item and a general
description of how the Property and other material will be used thereon.
The Licensee shall next submit at its own cost to the Licensor, for
approval, complete layouts and descriptions of the proposed Licensed
Products and Promotional and Packaging Material showing exactly how and
where the Property and all other artwork and wording will be used.
Thereafter, the Licensee shall submit at its own cost to the Licensor, for
approval, pre-production proofs or prototype samples of the proposed
Licensed Products and Promotional and Packaging Material. Finally, the
Licensee shall submit at its own cost to the Licensor, for approval, actual
production samples of the proposed Licensed Products and Promotional and
Packaging Material (the "Production Samples"). The Licensee shall not
proceed beyond any of the above stages where approval is required without
first securing the prior express written approval of the Licensor. The
Licensee may not Exploit any Licensed Product nor use any Promotional and
Packaging Material until it has received final written approval of same in
the manner provided herein from the Licensor. All approvals required
hereunder may be granted or withheld as the Licensor, in its sole
discretion, may determine. Should the Licensor fail to approve in writing
any of the submissions furnished to it by the Licensee within seven (7)
days from the date of submission thereof, such failure shall be deemed to
be a notice of disapproval thereof.
(d) The Licensee agrees that all Licensed Products and all Promotional and
Packaging Material shall contain appropriate legends, markings and notices
as required from time to time by the Licensor, in order to give appropriate
notice to the consuming public of the Licensor's right, title and interest
therein and thereto. The Licensee agrees that, unless otherwise
12
expressly approved in writing by the Licensor, each usage of the trademarks
set forth in Schedule "B" (the "Trademarks") shall be followed by either
the TM or the R Trademark Notice symbol, as directed by the Licensor.
Additionally, the Licensee shall place or cause to be placed the following
legend at least once on each Licensed Product and on each piece of
Promotional and Packaging Material:
"National Hockey League Players' Association, NHLPA and NHLPA Logo are
Trademarks of the NHLPA and are used, under license, by Ultimate
Sports Entertainment Inc."
(e) The Licensee shall further imprint or cause to be imprinted on every
Licensed Product and on each piece of Promotional and Packaging Material
the logo of the Licensor, as illustrated in Schedule "E" of this Agreement
followed by "-C- NHLPA", and also the following:
"Officially Licensed Product of the National Hockey League Players'
Association".
(f) Where patent protection is either pending or has been granted for any
portion of the Property, the Licensed Products or the Promotional and
Packaging Material, the Licensee shall further include the appropriate
patent notice on all Licensed Products and on all pieces of Promotional and
Packaging Material.
(g) The Licensee shall use no markings, legends 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 or such
other markings, legends or notices as may from time to time be specified by
the Licensor, without first obtaining the Licensor's prior express written
approval in the manner provided herein.
(h) Upon commencement of manufacture, shipment and distribution of the
Licensed Products and Promotional and Packaging Material after all required
approvals have been given by the Licensor, the Licensee shall submit, at
its own cost, thirty (30) final versions of each of the Licensed Products
and of the Promotional and Packaging Material to the Licensor.
(i) The Licensor may, from time to time during the Term of this Agreement,
require that the Licensee submit to the Licensor, at no cost to the
Licensor, up to ten (10) additional final versions of each of the Licensed
Products and Promotional and Packaging Material for subsequent review of
the quality thereof and the appropriateness of the copyright, patent and
trademark usage and notice thereon, and for any other purpose that the
Licensor, in its sole discretion, deems appropriate.
13
(j) After the required approval of the Production Samples has been
secured, the Licensee shall not depart therefrom in any respect without
first obtaining the express prior written approval of the Licensor. The
Licensee shall make submissions to the Licensor and obtain approvals in the
manner required above each time new or revised concepts, layouts,
descriptions, artwork, models, prototype samples or Production Samples are
created, developed or adopted by or for the Licensee. It is acknowledged
that the Licensor is approving of the use of the Property, the Licensed
Products and the Promotional and Packaging Material as part of its overall
licensing program and may in its discretion refuse to consent to any change
or modification to a Licensed Product or to the Promotional and Packaging
Material even if such change or modification improves the quality or
standard of the Licensed Product or the Promotional and Packaging Material.
(k) In submitting any Licensed Products, artwork, models, prototype
samples, Production Samples or other items to the Licensor for approval or
otherwise (collectively, the "Submitted Products"), the Licensee shall
engage directly and for its own account, all packagers, shippers,
expeditors, customs brokers and others so that no amounts are charged to
the Licensor in connection with any such submissions. If any amounts are
charged to the Licensor, the Licensor, if it so chooses, may pay the
amounts charged and render an account to the Licensee who shall forthwith
pay all such amounts together with interest thereon calculated at the same
rate and in the same manner as this Agreement provides for interest to be
calculated on overdue royalties.
(l) The Licensor may use and/or distribute any or all of the Submitted
Products for any purpose that the Licensor, in its sole discretion, deems
appropriate and the Licensor may advertise and promote such use or
distribution of the Submitted Products in any manner the Licensor, in its
sole discretion, so chooses.
(m) To assure that the provisions of this Agreement are being observed,
the Licensee agrees that it will allow the Licensor or its designates to
enter the Licensee's premises or the premises where the Licensed Products
or the Promotional and Packaging Materials are being manufactured and in
which Licensed Products are being packaged during regular business hours
and upon not less than two (2) business days notice, for the purpose of
inspecting the Licensed Products and the Promotional and Packaging Material
and the facilities in which the Licensed Products and Promotional and
Packaging Material are being manufactured and in which the Licensed
Products are being packaged.
(n) In the event that the quality standards or trademark, patent and
copyright usage and notice requirements hereinabove referred to are not met
or maintained in respect of the use of the Property or the Promotional and
Packaging Material, or throughout the various stages of Exploitation of any
14
Licensed Products hereunder, then, upon receipt of written notice from the
Licensor, the Licensee shall immediately discontinue the use of the
Property and the Promotional and Packaging Material, and any and all of
those stages of Exploitation of the Licensed Products in connection with
which the said quality standards or trademark, patent and copyright usage
and notice requirements have not been met.
11. OWNERSHIP OF RIGHTS
(a) It is understood and agreed that the Licensor is the sole and
exclusive owner of all right, title and interest in and to the Property.
(b) Nothing contained in this Agreement shall be construed as an
assignment to the Licensee of any right, title or interest in and to the
Property or any part thereof, it being understood that all right, title and
interest relating thereto are expressly reserved by the Licensor except for
the rights that are expressly licensed hereunder.
(c) No license as to the use of any property or as to any products other
than with respect to the use of the Property, the Exploitation of the
Licensed Products and the use of the Promotional and Packaging Material,
and only in the Licensed Territory, is being granted hereunder and the
Licensor reserves for its own use, all rights of any kind whether now known
or subsequently discovered other than the rights herein licensed to the
Licensee. The Licensee recognizes that the Licensor may already have
entered into, and may in the future enter into, license agreements with
respect to the Property for products which fall into the same general
product category as one or more of the Licensed Products and which may be
similar to one or more of the Licensed Products in terms of use, function,
or otherwise, and the Licensee hereby expressly concedes that the existence
of said licenses does not and shall not constitute a breach of this
Agreement by the Licensor.
(d) The Licensee shall not use the Licensor's name or the Property other
than as permitted hereunder and, in particular, shall not incorporate the
Licensor's name or the Property in the Licensee's corporate or business
name in any manner whatsoever. The Licensee agrees that in using the
Property, it will in no way represent that it has any rights, title or
interest in or to the Property other than those expressly granted herein.
The Licensee further agrees that it will not use or authorize the use of,
either during or after the Term of this Agreement, any configuration,
trademark, trade name or other designation confusingly similar to the
Licensor's name or the Property.
12. GOODWILL AND PROMOTIONAL VALUE
(a) The Licensee recognizes the value of the goodwill associated with the
Property and acknowledges that the Property and all rights therein and the
goodwill pertaining thereto, belong exclusively to the Licensor. The
Licensee
15
further recognizes and acknowledges that the Property has acquired
secondary meaning in the mind of the public. The Licensee agrees that
during the Term of this Agreement and thereafter, it will not attack the
title of any rights of the Licensor in and to the Property or the validity
of the license being granted herein nor will it express publicly any views,
opinions or statements with respect to the Property or the Licensor that
would run contrary to the preservation of such goodwill and promotional
value.
(b) The Licensee agrees that its use of the Property shall enure to the
benefit of the Licensor and that the Licensee shall not, at any time,
acquire any rights in or to the Property by virtue of any use it may make
of the Property.
(c) The Licensee acknowledges that the Licensor is entering into this
Agreement not only in consideration of the Royalties to be paid hereunder
but also for the promotional value to be secured by the Licensor as a
result of the use of the Property and the Exploitation of the Licensed
Products by the Licensee. Accordingly, the Licensee acknowledges that its
failure to use the Property or to Exploit the Licensed Products in
accordance with the provisions of this Agreement or to fulfill the
Licensee's obligations under the provisions hereof will result in immediate
and irreparable damage to the Licensor in connection with the promotion of
the Property and that the Licensor will have no adequate remedy at law for
the failure by the Licensee to abide by such provisions of this Agreement.
Accordingly, the Licensee agrees that in the event of any such breach by
the Licensee, the Licensor, in addition to all other remedies available to
it hereunder, shall be entitled to injunctive relief against any such
breach as well as such other relief as any court with jurisdiction may deem
just and proper.
16
13. TRADEMARK, PATENT, AND COPYRIGHT PROTECTION
(a) The License granted hereunder is conditioned upon the Licensee's full
and complete compliance with the applicable provisions of the trademark,
patent, copyright and other intellectual property laws of Canada, the
United States and the foreign country or countries in the Licensed
Territory. The Licensee agrees to keep records of and advise the Licensor
in writing when each of the Licensed Products is first sold in each country
in the Licensed Territory.
(b) The Licensor has the right, but not the obligation, to obtain at its
own cost, appropriate trademark, patent, copyright and other intellectual
property protection for the Property.
(c) The Licensee shall cooperate with the Licensor in protecting and
defending the Property. In the event that any claim or problem arises with
respect to the protection of the Property, the Licensee shall promptly
advise the Licensor in writing of the nature and extent of same. The
Licensor has no obligation to take any action whatsoever in the event that
any claim or problem arises with respect to the protection of the Property.
The Licensor shall have the election, however, to proceed with counsel of
its own choice. Alternatively, the Licensor may, at the Licensor's own
expense, have the Licensee proceed on its behalf with respect to any such
claim or problem, provided, however, that the Licensor's prior express
written permission shall be obtained by the Licensee prior to incurring any
costs chargeable to the Licensor in connection therewith.
(d) The Licensee agrees that it shall not at any time apply for any
copyright, trademark, patent or other intellectual property protection
which would affect the Licensor's ownership of the Property or any rights
therein or thereto nor file any document with any governmental authority or
take any other action which could potentially affect the Licensor's
ownership of the Property, or its rights therein, or aid or abet anyone
else in doing so.
14. INFRINGMENTS
(a) The Licensee agrees to assist the Licensor in the enforcement of any
rights of the Licensor in and to the Property. The Licensor, if it so
desires, may commence or prosecute any claims or suits in its own name or
in the name of the Licensee or join the Licensee as a party thereto. In all
cases, the Licensor shall have the sole right to employ counsel of its
choosing and to direct the handling of the litigation and any settlement
thereof. The Licensee agrees to notify the Licensor in writing of any
infringements or imitations by third parties of the Property, the Licensed
Products or the Promotional and Packaging Material which may come to the
Licensee's attention. The Licensor shall have the sole right to determine
whether or not any action shall be taken on account of any such
infringement or imitation. The Licensee
17
agrees not to contact the third party, not to make any demands or claims,
not to institute any suit nor take any other action on account of any such
infringements or imitations without first obtaining the prior express
written permission of the Licensor, which permission shall not be
unreasonably withheld. All costs and expenses, including attorneys' fees
and disbursements, incurred in connection with any suit instituted by the
Licensee without the consent of the Licensor shall be borne solely by the
Licensee.
(b) The Licensor shall be entitled to receive and retain all amounts
awarded as damages, profits or otherwise in connection with any suit or
claim under this paragraph.
15. INDEMNIFICATION
(a) The Licensee hereby agrees to be solely responsible for, defend, hold
harmless, exonerate and indemnify the Licensor and its directors, officers,
employees, agents and other representatives from and against any claims,
demands, cause of action, suits, losses, damages and expenses in connection
therewith (including reasonable attorney's fees and disbursements) directly
or indirectly arising out of, or resulting from:
(i) any acts or omissions of the Licensee in connection with either
the exercise of its rights hereunder or the Exploitation of the
Licensed Products;
(ii) breach of any provision in this Agreement by the Licensee;
(iii) the use of any team symbol, name, insignia, logo or xxxx;
(iv) allegations of unauthorized use of any patent, process, idea,
method, material or device by the Licensee relating to the
Licensee's use of the Property, design or Exploitation of the
Licensed Products or use of the Promotional and Packaging
Material; or
(v) any alleged defect in the Licensed Products or Promotional and
Packaging Material or of any other product or service of the
Licensee.
(b) The Licensee shall be given prompt written notice of and shall have
the right to undertake and conduct the defence of any such claim, demand,
suit or cause of action. The Licensee shall have the right to defend any
such claim, demand, suit or cause of action with attorneys of its own
selection, such attorneys not to be selected without the prior written
approval of the Licensor, which approval shall not be unreasonably
withheld. Should the Licensee decide not to defend such claim, demand,
suit or cause of action, the
18
Licensor shall have the right to defend the claim, demand, suit or cause
of action with attorneys of its own selection. In any instance to which
the foregoing indemnities pertain, the Licensee shall keep the Licensor
fully advised of all developments and shall not enter into a settlement of
any such claim or action without the Licensor's prior written approval,
which shall not be unreasonably withheld.
(c) The Licensor hereby agrees to be solely responsible for, defend, hold
harmless, exonerate and indemnify the Licensee, its directors, officers,
employees, agents and other representatives from and against any losses,
damages and expenses (including reasonable attorney's fees and
disbursements) arising out of, or resulting from:
(i) a judgment resulting from a claim that the use of the Property
as authorized in this Agreement violates or infringes upon the
trademark, copyright or other rights of a third party in or to
the Property; or
(ii) a breach of this Agreement by the Licensor.
(d) The Licensor shall be given prompt written notice of and shall have
the right to undertake and conduct the defence of any such claim, demand,
suit or cause of action. The Licensor shall have the right to defend any
such claim, demand, suit or cause of action with attorneys of its own
selection, such attorneys not to be selected without the prior written
approval of the Licensee, which approval shall not be unreasonably
withheld. Should the Licensor decide not to defend such claim, demand,
suit or cause of action, the Licensee shall have the right to defend the
claim, demand, suit or cause of action with attorneys of it own selection.
In any instance to which the foregoing indemnities pertain, the Licensor
shall keep the Licensee fully advised of all developments and shall not
enter into a settlement of any such claim or action without the Licensee's
prior written approval, which shall not be unreasonably withheld.
16. INSURANCE
(a) The Licensee shall, throughout the Term of this Agreement, obtain and
maintain at its own cost and expense from a qualified insurance company
acceptable to the Licensor acting reasonably, standard Product Liability
Insurance, the form of which must be acceptable to the Licensor, naming the
Licensor as an additional named insured. Such policy shall provide
protection against any and all claims, demands and causes of action arising
out of any defects or failure to perform, alleged or otherwise, of the
Licensed Products, the Promotional and Packaging Materials 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, with no deductible amount, for each single occurrence for bodily
injury and for property damage.
19
The policy shall provide for a minimum of ten (10) days prior written
notice to the Licensor from the insurer by registered or certified mail,
return receipt requested, in the event of any proposed modification,
cancellation or termination. The Licensee agrees to furnish the Licensor
with a certified copy of a certificate of insurance (the "Product
Liability Certificate") evidencing same within thirty (30) days after
execution of this Agreement and in no event shall the Licensee Exploit
the Licensed Products prior to receipt by the Licensor of the Product
Liability Certificate.
(b) The Licensee shall, throughout the Term of this Agreement, obtain and
maintain at its own cost and expense from a qualified insurance company
acceptable to the Licensor acting reasonably, standard Advertiser's
Liability Insurance, the form of which must be acceptable to the Licensor,
naming Licensor as an additional named insured. The amount and coverage
shall be a minimum of Two Million Dollars ($2,000,000) with no deductible
amount. The policy shall provide for a minimum of ten (10) days prior
written notice to the Licensor from the insurer by registered or certified
mail, return receipt requested, in the event of any proposed modification,
cancellation or termination. The Licensee agrees to furnish the Licensor
with a certified copy of a certificate of insurance (the "Advertiser's
Liability Certificate") evidencing same within thirty (30) days after the
date of execution of this Agreement and in no event shall the Licensee
Exploit the Licensed Products prior to the receipt by the Licensor of the
Advertiser's Liability Certificate.
17. EXPLOITATION BY THE LICENSEE
(a) The Licensee agrees to commence distribution, shipment and retail sale
of all of the Licensed Products in commercially reasonable quantities in
each of the countries within the Licensed Territory by December 1, 1999.
The Exploitation of all Licensed Products shall at all times be conducted
in accordance with all applicable laws.
(b) The Licensee further agrees that during the entire Term of this
Agreement, the Licensee will continue to diligently and continuously
distribute, ship and sell all 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. The Licensee further agrees to exercise all reasonable
efforts to advertise and promote the Licensed Products at its own expense
throughout the Term as widely as practicable within the Licensed Territory
to the best advantage and enhancement of the Property.
(c) The Licensee agrees that the Licensed Products will be sold, shipped
and distributed outright, at a competitive price that does not exceed the
price generally and customarily charged in the particular trade, and not on
an approval, consignment, or sale or return basis. The Licensee will not
20
discriminate against the Licensed Products by granting commissions or
discounts to salesmen, dealers or distributors in favour of the Licensee's
other products. The Licensee agrees that the Licensed Products will only be
sold to retail stores and merchants for sale, shipment and distribution
direct to the public, or to jobbers, wholesalers and distributors for sale,
shipment and distribution to retail stores and merchants. If any Licensed
Products are sold for the Licensee by an agent, distributor or other third
party, the agreement between the third party and the Licensee must require,
and the Licensee must ensure, that the third party complies with all of the
provisions of this Agreement as though the third party were the Licensee.
(d) Unless specifically authorized in advance by the Licensor in writing,
the Licensee shall make available for purchase Licensed Products featuring
the names and likenesses of a minimum of twenty (20) different Players on
the Licensed Products during each year of this Agreement with no less than
four (4) different Players being featured in each Licensed Product.
18. PREMIUMS, PROMOTIONS AND SECONDS
(a) The Licensee shall not utilize or license third parties to utilize any
of the Licensed Products in connection with any premium, giveaway, mail
order, sales at arenas, promotional arrangement or fan club without the
prior written approval of the Licensor.
(b) The Licensee agrees not to offer for sale, sell, ship, advertise,
promote, distribute or use for any purpose whatsoever or to permit any
third party to offer for sale, sell, ship, advertise, promote, distribute
or use for any purpose whatsoever any Licensed Product or Promotional and
Packaging Material relating to the Licensed Products which is (i) damaged,
defective, seconds or otherwise fails to meet the specifications and
quality standards or trademark, patent, copyright and other intellectual
property usage and notice requirements of this Agreement (collectively, the
"Damaged Products"), or (ii) to be sold as a package with, tied to or in
conjunction with any other products or services. Disposition of Damaged
Products shall be conducted in a manner to be agreed upon by the Licensor
and the Licensee, both acting in good faith.
19. ASSIGNABILITY AND SUBLICENSING
(a) The License granted hereunder is and shall be personal to the Licensee
and shall not be assigned in whole or in part by any act of the Licensee or
by operation of law or otherwise encumbered. This License shall be subject
to immediate termination by the Licensor upon the occurrence of a change of
control of the Licensee without the prior written approval of the Licensor
having been first obtained. The Licensee shall not have the Licensed
Products manufactured for the Licensee by a third party nor grant any
sublicense unless the Licensee first obtains the Licensor's prior written
approval and such manufacturer shall have signed an agreement in the form
21
attached hereto as Schedule "G". Any attempt on the part of Licensee to
arrange for manufacture by a third party or to sublicense or assign to
third parties its rights in whole or in part under this Agreement without
the prior written approval of the Licensor shall constitute a material
breach of this Agreement and shall result in the right of the Licensor to
immediately terminate this Agreement at its option.
(b) The Licensor shall have the right to assign its rights and obligations
under this Agreement without the approval of the Licensee.
20. TERMINATION
The following termination rights are in addition to the termination
rights provided elsewhere in this Agreement:
(a) IMMEDIATE RIGHT OF TERMINATION - The Licensor shall have the right to
immediately terminate this Agreement by giving written notice to the
Licensee if the Licensee does any of the following:
(i) Uses any Property, Exploits in any way any Licensed Product or
uses Promotional and Packaging Material without having the
prior written approval of the Licensor as provided for by the
provisions of this Agreement or continues to use any Property,
Exploit in any way any Licensed Product or use Promotional and
Packaging Material after receipt of notice or deemed notice
from the Licensor disapproving or withdrawing approval of same;
(ii) Becomes subject to any voluntary or involuntary order of any
governmental agency involving the recall of any of the Licensed
Products or Promotional and Packaging Material because of
safety, health, environmental or other hazards or risks to the
public;
(iii) It or its controlling shareholders or any of their officers,
directors or employees take any actions in connection with the
use of the Property, the Exploitation of the Licensed Products
or the use of the Promotional and Packaging Material which in
the reasonable opinion of the Licensor, damages or reflects
adversely upon the Licensor or the Property;
(iv) Breaches any of the provisions of this Agreement relating to
the unauthorized assertion of rights in and to the Property;
(v) Two or more times during a twelve month period fails to make
timely payment of Royalties or Guaranteed Minimum Royalties
when due or fails to make timely submissions of Royalty
Statements when due;
22
(vi) Breaches any of the provisions of this Agreement prohibiting
the Licensee from directly or indirectly arranging for the
manufacture by third parties, permitting a change of control of
the Licensee, or assigning, transferring, sublicensing or
otherwise encumbering this Agreement or any of its rights or
obligations hereunder;
(vii) Fails to obtain or maintain product liability or advertising
insurance as required by the provisions of this Agreement; or
(viii) Files a petition in bankruptcy or is adjudicated a bankrupt, or
if a petition in bankruptcy is filed against the Licensee or if
the Licensee becomes insolvent, or makes an assignment for the
benefit of its creditors or an arrangement pursuant to any
bankruptcy laws, or if Licensee discontinues its business, or
if a receiver is appointed for it or its business. In the event
of such termination, neither Licensee nor its receivers,
representatives, trustees, agents, administrators, successors
or assigns shall have any right to sell, exploit or in any way
deal with the Property, the rights granted hereunder or with
any Licensed Product or Promotional and Packaging Material.
(b) IMMEDIATE RIGHT TO TERMINATE A PORTION OF THE AGREEMENT - The Licensor
shall have the right to immediately terminate the portion(s) of this
Agreement relating to any Licensed Product(s) and any country or countries
in the Licensed Territory in connection with which the Licensee, for any
reason, fails to commence sale, shipment and distribution of any such
Licensed Product(s) in any such country or countries in accordance with the
terms of this Agreement.
(c) RIGHT TO TERMINATE ON NOTICE - Without limiting the applicability of
paragraphs 20(a) or 20(b), on occurrence of one of the following events,
this Agreement may be terminated upon thirty (30) days written notice,
provided that during the thirty (30) day period the defaulting party fails
to cure the breach:
(i) The Licensor shall have the right to terminate the portion(s)
of this Agreement relating to any Licensed Product(s) and any
country or countries in the Licensed Territory if the Licensee,
for any reason, after the commencement of Exploitation of such
Licensed Product(s) in such country or countries, fails to
continue to Exploit such Licensed Product(s) in commercially
acceptable quantities in such country or countries for two
consecutive Royalty Periods.
23
(ii) The Licensor shall have the right to terminate this Agreement
if the Licensee violates any of its obligations under this
Agreement including, without limitation, its payment
obligations.
(iii) Either party shall have the right to terminate this Agreement
in the event that the other party commits a material breach of
any other provision of this Agreement.
21. POST-TERMINATION AND EXPIRATION RIGHTS AND OBLIGATIONS
(a) If this Agreement is terminated under paragraph 20(a), (c)(ii) or
(c)(iii), the Licensee and its creditors, receivers, representatives,
trustees, agents, administrators, successors and permitted assigns of the
Licensee shall have no right to use the Property, Exploit the Licensed
Products or use in any way any Promotional and Packaging Material relating
to the Licensed Products. Upon any such termination, the Licensee shall
forthwith deliver all Licensed Products remaining on hand to the Licensor.
The Licensor may dispose of such Licensed Products at its discretion.
(b) Upon termination or expiration of this Agreement, as the case may be,
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 the Licensor
shall be refunded. The obligation to pay outstanding Guaranteed Minimum
Royalties shall not be extinguished by any termination or expiration of
this Agreement. In the event of the termination of this Agreement by the
Licensor under paragraph 20(a), (c)(ii) or (c)(iii), the Licensee shall
immediately pay to the Licensor as liquidated damages all Guaranteed
Minimum Royalties agreed to be paid hereunder to the end of the Term.
(c) After termination or expiration of this Agreement, as the case may be,
under any provision other than paragraph 20(a), (b) or (c), the Licensee
shall immediately cease to manufacture the Licensed Products, provided that
the Licensee may dispose of or liquidate the Licensed Products which are on
hand at the time notice of termination is received or upon the expiration
of the Term for a period of ninety (90) days after notice of termination or
such expiration, as the case may be, and further provided that the
Royalties with respect to that period are paid, and the appropriate
statements with respect to that period are furnished, in accordance with
the provisions hereof. Amounts paid as Guaranteed Minimum Royalties during
the Term of this Agreement shall not be used to reduce any Royalties that
may become payable on sales of Licensed Products during this 90-day period.
During such ninety (90) day period, the Licensor may itself use or license
the use of the Property in any manner and at any time anywhere in the
world, as the Licensor sees fit. Any Licensed Products remaining on hand
at the end of the
24
90-day sell-off period shall be sent forthwith to the Licensor. The
Licensor may dispose of such Licensed Products at its discretion.
(d) After the expiration or termination of this Agreement, all rights
granted to the Licensee shall forthwith revert to the Licensor who shall be
free to license others to use the Property in connection with the
Exploitation of the Licensed Products and the use of the Promotional and
Packaging Material, and the Licensee shall refrain from further use of the
Property or any further reference to it, either directly or indirectly, in
connection with any use of any of the Licensed Products. The Licensee shall
further turn over to the Licensor all artwork, films, transparencies,
separations, printing plates, screens, molds and other materials and
devices (collectively the "Reproduction Materials and Devices") which
reproduce the Licensed Products and the Promotional and Packaging Material,
or shall give the Licensor satisfactory evidence or assurance that such
materials and devices will no longer be used to reproduce the Licensed
Products or Promotional and Packaging Material. The Licensee shall be
responsible to the Licensor for any damages caused by the unauthorized use
by the Licensee or by others of the Reproduction Materials and Devices.
(e) The Licensee acknowledges that its failure to cease the use of the
Property, the Exploitation of the Licensed Products and the 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 the Licensor and to the rights of any subsequent
licensee of the Licensor. The Licensee acknowledges and admits that there
is not an adequate remedy at law for failure to cease such activities and
the Licensee agrees that in the event of such failure, the Licensor shall
be entitled to equitable relief by way of injunctive relief and such other
relief as any court with jurisdiction may deem just and proper.
22. FINAL STATEMENT UPON TERMINATION OR EXPIRATION
Within fifteen (15) days after termination or expiration of this
Agreement, as the case may be, the Licensee shall deliver to the Licensor a
statement (the "Inventory Statement") indicating the number and description
of the Licensed Products which it had on hand or in the process of
manufacturing as of the expiration or termination date. The Licensor shall
have the option of conducting a physical inventory during normal business
hours at the time of expiration or termination or at a later date in order
to ascertain or verify the Inventory Statement. In the event that the
Licensee refuses to permit the Licensor to conduct such physical inventory,
the Licensee shall forfeit its rights hereunder to dispose of such
inventory. In addition to such forfeiture, the Licensor shall have recourse
to all other remedies available to it.
25
23. RECITALS
The parties hereto acknowledge and agree that the recitals contained
in this Agreement are true and correct as of the date first above written.
24. NOTICES
All notices or other communications or deliveries 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, by prepaid
courier, or by facsimile charges prepaid to the following addresses:
If to the Licensor: NHLPA
000 Xxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX X0X 0X0
Attention: Xxx Xxxxxx
Telecopier No. (000) 000-0000
If to the Licensee: Ultimate Sports Entertainment Inc.
0000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Xxxx Xxxxx
Telecopier No. (000) 000-0000
Either party may change such address by notice in writing to the other
party.
25. RELATIONSHIP OF THE PARTIES
This Agreement does not create a partnership or joint venture between
the parties and the Licensee shall have no power to obligate or bind the
Licensor in any manner whatsoever.
26. APPLICABLE LAW AND DISPUTES
(a) Choice of Law. This Agreement shall be governed by the laws of
Ontario, Canada. It is further agreed that all disputes, controversies or
differences whatsoever arising under, in connection with, or incidental to
the business relationship of which this Agreement is a part shall be
governed exclusively by the laws of the Province of Ontario and the laws of
Canada applicable therein except to the extent forbidden by the public
policy of the Licensee's home province or state; Licensee hereby expressly
waives any other benefit, use or right to which it might otherwise be
entitled under the laws of any province, state or nation other than the
Province of Ontario and Canada.
(b) Choice of Forum.
26
(i) It is hereby agreed by and between the parties to this
Agreement that, subject to the exception set forth in
subparagraph (ii) hereof, all disputes, controversies or
differences whatsoever arising under, in connection with, or
incident to this Agreement or the business relationship of
which this Agreement is a part shall be litigated, if at all,
exclusively in and before a court located in the Province of
Ontario, Canada, and in no other court of any other province,
state or nation. Further, Licensee hereby attorns to the
jurisdiction and judgment of the courts of the Province of
Ontario, Canada, and agrees that any judgment or other ruling
issued by an Ontario court shall be enforceable in any other
jurisdiction in which the Licensee may be found or may have
assets.
(ii) The Licensor may bring suit against the Licensee in a forum
other than Ontario, Canada provided that: (A) such suit is
solely for an injunction to enforce the terms and conditions of
this Agreement and is not for damages; (B) such suit is brought
against the Licensee in a Canadian province or territory, or in
an American state or district, in which the Licensee is doing
business; and (C) the Licensee is not a resident of Ontario
and/or would not otherwise be directly subject to an injunction
issued by an Ontario court.
27. 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 hereof nor shall such captions otherwise be given any legal effect.
28. 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 hereto 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 the non-breaching party of its
right to resort to any and all other legal and equitable remedies available
to such party. Further, failure on the part of either party to resort to
any remedies referred to herein shall not be construed as a waiver of any
other rights and remedies to which such party is entitled, whether under
the terms of this Agreement or otherwise.
27
29. SURVIVAL OF THE RIGHTS
Notwithstanding anything to the contrary contained herein, such
obligations which remain executory after the termination hereof by
expiration of the Term of this Agreement, or otherwise, shall remain in
full force and effect until discharged by performance and such rights as
pertain thereto shall remain in force until their expiration.
30. 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 that same shall have been held to
be invalid, illegal or unenforceable, had never been contained herein.
31. TIME OF THE ESSENCE
Time is of the essence with respect to all aspects of this Agreement.
Extension, waiver or variation of any provision of this Agreement shall not
be deemed to affect this provision and there shall be no implied waiver of
this provision.
32. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which, taken together, shall
constitute one and the same instrument.
33. ENTIRE AGREEMENT
This Agreement represents the entire understanding between the parties
hereto with respect to the subject matter hereof and this Agreement
supersedes all previous representations, understanding or agreements, oral
or written, between the parties with respect to the subject matter hereof
and cannot be modified except by a written instrument signed by the parties
hereto.
28
By their execution below, the parties hereto have agreed to all of the
terms and conditions of this Agreement.
ULTIMATE SPORTS ENTERTAINMENT INC.
per: /s/ Xxxxxxxxx X. Xxxxx
------------------------------
Xxxx Xxxxx
NATIONAL HOCKEY LEAGUE PLAYERS'
ASSOCIATION
per: /s/Xxx Xxxxxx
------------------------------
Xxx Xxxxxx
Senior Director
Business Affairs and Licensing
SCHEDULE A
DESCRIPTION OF THE PROPERTY
The trademarks of the Licensor as set forth in Schedule "B" and the names,
nicknames, likenesses, pictures, photographs, facsimiles, signatures,
descriptions, playing records, voices, biographical sketches and other
indicia and identifying characteristics and marks of all Players who have
executed a Group Licensing Authorization Agreement.
SCHEDULE B
LIST OF TRADEMARKS
1. National Hockey League Players' Association
2. NHLPA
3. Logo of NHLPA
SCHEDULE C
LIST OF LICENSED PRODUCTS
Hockey only comic book type publication featuring at least four (4) different
Players in each publication.
SCHEDULE D
LICENSED TERRITORY
Worldwide
SCHEDULE E
LOGO OF LICENSOR
SCHEDULE F - PAGE 1
ROYALTY REPORT FOR THE NATIONAL HOCKEY LEAGUE PLAYERS' ASSOCIATION
Licensee: Date Prepared: Prepared By:
------------------------- ----------------- ------------------
Address: Period Covered: Signature:
------------------------- ----------------- ------------------
Contract Term: Print Name:
------------------------- ----------------- ------------------
MONTH ROYALTY DUE ROYALTY DUE ROYALTY DUE TOTAL ROYALTY MINIMUM TOTAL PAID ROYALTY DUE
98/99 PRODUCT 99/00 PRODUCT 00/01 PRODUCT DUE GUARANTEE
----------- ------------- ------------- ------------- ------------- --------- ---------- -----------
July
August
September
October
November
December
January
February
March
April
May
June
TOTALS:
SCHEDULE F - PAGE 2
ROYALTY REPORT FOR THE NATIONAL HOCKEY LEAGUE PLAYERS' ASSOCIATION
TOTALS
Licensee: Date Prepared: Prepared By:
------------------------- ----------------- ------------------
Address: Period Covered: Signature:
------------------------- ----------------- ------------------
Contract Term: Print Name:
------------------------- ----------------- ------------------
MONTH GROSS SALES DISCOUNTS RETURNS NET SALES
---------- ----------- --------- ------- ---------
July
August
September
October
November
December
January
February
March
April
May
June
TOTALS:
SCHEDULE F - PAGE 3
ROYALTY REPORT FOR THE NATIONAL HOCKEY LEAGUE PLAYERS' ASSOCIATION
Licensee: Date Prepared: Prepared By:
------------------------- ----------------- ------------------
Address: Period Covered: Signature:
------------------------- ----------------- ------------------
Contract Term: Print Name:
------------------------- ----------------- ------------------
ITEM DESCRIPTION STOCK WHOLESALE QUANTITY GROSS LESS LESS NET SALES ROYALTY ROYALTY DATE
98/99 PRODUCT NUMBER PRICE PER SHIPPED SALES RETURNS PERMITTED RATE
UNIT DISCOUNTS
---------------- ------ --------- -------- ----- ------- --------- --------- ------- ------------
TOTALS:
SCHEDULE G
MANUFACTURER'S AGREEMENT
Licensee: Ultimate Sports Entertainment Inc.
Licensed Territory: Worldwide
Licensed Products: Hockey only comic book type publication featuring at least
four (4) different Players in each publication
The undersigned understands that the National Hockey League Players'
Association ("NHLPA") has authorized the above-named Licensee to manufacture
the above named Licensed Products utilizing certain names, logos, symbols,
likenesses, signatures, pictures, descriptions, playing records and
biographical sketches which are the property of NHLPA ("the Rights"). In
order to induce NHLPA to consent to the manufacture of the Licensed Products
by the undersigned, the undersigned agrees that, without the prior written
consent of NHLPA in each instance, it will not manufacture the Licensed
Products for anyone but the Licensee; that it will not sell the Licensed
Products to anyone but the Licensee; that it will not knowingly manufacture
the Licensed Products for distribution in any territory other than the
above-named Licensed Territory; that it will not (unless NHLPA otherwise
consents in advance in writing) manufacture any other merchandise utilizing
any aspect of the Rights; that it will permit such representatives as NHLPA
may from time to time designate to inspect the activities of the undersigned
in relation to its manufacture of the Licensed Products; and that whenever
the Licensee ceases to require the undersigned to manufacture the Licensed
Products, the undersigned will return to the Licensee any molds, plates,
engravings, screens, or other devices used to reproduce any of the Rights, or
at the direction of the Licensee will give satisfactory evidence or assurance
to the Licensor that such devices will no longer be used to reproduce the
Licensed Products. NHLPA shall be entitled to invoke any remedy permitted by
law for violation of this agreement by the undersigned.
[NAME OF MANUFACTURER]:
By:
----------------------------
Title:
-------------------------
