EXHIBIT 10.14
ENDORSEMENT AGREEMENT
THIS ENDORSEMENT AGREEMENT (this "Agreement"), made and entered into as
of May 31, 1999, by and between FAMOUS FIXINS, INC., 000 Xxxx 00xx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 ("Company") and PEY DIRT, INC. ("Pey
Dirt").
WITNESSETH
WHEREAS, Company desires to obtain the right to use the name, likeness
and endorsement of Xxxxxx Xxxxxxx (hereinafter called "Xxxxxxx") in
connection with the advertisement, promotion and sale of Company's "Products"
(hereinafter defined); and
WHEREAS, Xxxxxxx has granted such rights to Pey Dirt together with the
right to sublicense such rights.
NOW, THEREFORE, for and in consideration of the premises and of the
mutual promises and conditions herein contained, the parties do hereby agree
as follows:
1. Definitions. As used herein, the following terms shall be
defined as set forth below:
(a) "Contract Period" shall mean that period of time commencing as of
May 31, 1999 and concluding May 31, 2000.
(b) "Contract Territory" shall mean the states of Indianapolis and
Tennessee and Company's e-commerce site.
(c) "Contract Year Quarter" shall mean each 3 consecutive month
period occurring during any Contract Year ("Contract Year" meaning any twelve
month period herein commencing as of June 1) (so that, by way of example, the
first Contract Year Quarter of the first Contract Year commences as of June
1, 1999, the second commences on September 1, 1999, etc.).
(d) "Endorsed Products" shall mean all Products of Company which have
the Xxxxxxx Identification (defined below) highlighted as a part thereof (in
the Products' name or otherwise) or which are shipped in containers or
packages bearing the Xxxxxxx Identification.
(e) "Xxxxxxx Identification" shall mean any words or symbols or
photographic or graphic representations or combinations thereof which
identify Xxxxxxx such as, for example, the name and likeness of Xxxxxxx.
(f) "Premium Program" shall mean any traffic builder, third party
tie-in program or other program involving the use of a premium and shall
include any program primarily designed to attract the consumer to purchase a
product or service other than Endorsed Products themselves.
(g) "Products" shall mean cold breakfast cereals.
2. Grant of Endorsement Rights. (a) Pey Dirt grants to Company the
exclusive right and license to use Xxxxxxx Identification within the Contract
Territory during the Contract Period in connection with the advertisement and
promotion by Company of Products in television, radio, print and point of
purchase. Pey Dirt also grants to Company, subject to all of the terms and
conditions herein, the non-exclusive right to use the Xxxxxxx Identification
in connection with certain merchandise that may be featured on the back panel
of the Endorsed Products packaging, said merchandise to be subject to Pey
Dirt's sole and exclusive discretion and approval. Notwithstanding anything
herein to the contrary, it is specifically agreed that the Xxxxxxx
Identification cannot be used, in whole or in part, in connection with (i)
Premium Programs and/or (ii) any multi-media use except for Company's e-
commerce site. Pey Dirt expressly agrees that the right to use Xxxxxxx
Identification will not be granted to anyone other than Company for use
within the Contract Territory during the Contract Period in connection with
the advertisement, promotion and sale of Products. Anything herein to the
contrary notwithstanding, Company shall not have the right to distribute
photographs of Xxxxxxx which are larger than 5" x 7".
(b) Company agrees that during the Contract Period it will use its
best efforts actively and aggressively to (i) promote the sale of all
Endorsed Products in the Contract Territory, and (ii) prevent the sale of any
Endorsed Products outside the Contract Territory. Failure of Company to
comply with the provisions of this Section 2(b) shall entitle Pey Dirt to
revoke this license immediately (notwithstanding any other provision in this
Agreement to the contrary).
(c) Pey Dirt has the right to terminate this Agreement immediately if
Company's Endorsed Products are not being distributed in the Contract
Territory to a significant number of stores by October 1, 1999.
3. Approvals. Company agrees that no use whatsoever of Xxxxxxx
Identification nor any item used in connection with Xxxxxxx Identification
(including, without limitation, advertising) will be made hereunder unless
and until the same has been approved by Pey Dirt. Pey Dirt agrees that any
material, advertising or otherwise, submitted for approval as provided herein
may be deemed by Company to have been approved hereunder if the same is not
disapproved in writing within fourteen (14) days after receipt thereof.
Pey Dirt agrees that any material submitted hereunder will not be
unreasonably disapproved and, if it is disapproved, that Company will be
advised of the specific grounds therefor. Company agrees to protect,
indemnify and save harmless Pey Dirt and Xxxxxxx, or either of them, from and
against any and all expenses, damages, claims, suits, actions, judgments and
costs whatsoever, arising out of, or in any way connected with, any
advertising material furnished by, or on behalf of, Company.
4. Remuneration. (a) Within thirty (30) days following the
conclusion of each Contract Year Quarter, Company shall deliver to Pey Dirt
an itemized statement setting forth the total shipments of Endorsed Products
during said Contract Year Quarter and, at the same time, shall pay to Pey
Dirt a royalty with respect to such shipments as hereinafter provided. Such
royalties shall be based upon the actual invoice price of such shipments,
exclusive only of shipping charges and sales taxes, and shall be at the rate
of [_____]% of the total of said invoice prices with a minimum invoice price
of $[_____] per box.
(b) In addition to the royalty payments set forth above, Company
agrees to grant Pey Dirt an option to purchase an aggregate of [_____] shares
of Company's publicly traded and registered stock (the "Shares") at an
exercise price of $[_____] per share (the "Option"), which Option shall vest
and become unrestricted when the SEC declares Company's registration
statement effective (anticipated to be no later than November 30, 1999) and
shall be exercisable until June 30, 2004. As further inducement to Pey Dirt
to enter into this Agreement, Company and Pey Dirt will enter into that
certain Option Agreement dated as of the date of this Agreement, which shall
govern all aspects of the Option.
(c) Further, Pey Dirt will be entitled to [___________] percent
([___]%) of all gross profits (i.e., gross revenues less only Company's
actual out-of-pocket costs of obtaining the raw merchandise) generated from
merchandise related to the Endorsed Products and/or the Xxxxxxx
Identification, said merchandise to be advertised exclusively on the back
panel of each box of Endorsed Products. Except for the advertising of
merchandise related to the Endorsed Products and/or the Xxxxxxx
Identification, no other use of the back panel of each box of Endorsed
Products is permitted without Pey Dirt's prior written consent. It is agreed
that all such merchandise must be mutually approved in all respects by the
parties hereto, including, without limitation, the style, design and cost
thereof.
(d) In addition to and separate from any other remuneration
hereunder, if Company uses any performance or service of Xxxxxxx hereunder in
any way that is subject to the jurisdiction of any applicable artists' union,
guild or other organization (including, without limitation, SAG and AFTRA),
either during or after the Contract Period, Company shall pay directly to
such organization all minimum payments or fees (for benefit plans or
otherwise) required to be made with respect to Xxxxxxx'x performance or
services.
(e) If, at any time during the Contract Period, Company shall enter
into any agreement (the terms of what are significantly the same as the terms
hereof) in connection with the production and sale of Company's products
using the name, likeness, photographic representation or signature of any
other National Football League quarterback (active or retired), which
agreement provides for the payment to such individual of remuneration in
excess of that set forth herein, then Company agrees it will immediately so
notify Pey Dirt and, at the same time, shall, retroactive to the effective
date of such other agreement, increase the rate of remuneration paid to Pey
Dirt hereunder up to the highest then-current rate paid by Company to any
such National Football League quarterback (active or retired) for a regional
endorsement deal.
5. Notices and Submissions. Pey Dirt hereby designates
International Merchandising Corporation, IMG Center, Suite 100, 0000 Xxxx 0xx
Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attn.: Xxxxx Xxxxxxx, as Pey Dirt's authorized
agent for all purposes hereunder. All notices, submissions and/or requests
for approval to be made, obtained or delivered by Company to Pey Dirt
pursuant to this Agreement shall be delivered to said address free of all
charges such as, for example, shipping charges and customs charges. In the
event that any such charges are paid by Pey Dirt or by Pey Dirt's authorized
agent, Company agrees to make prompt reimbursement.
6. Payments; Books and Records. (a) Pey Dirt may elect to have
payments made by check, wire transfer or bank transfer. Unless such election
has been made in writing, all payments shall be made by check drawn to the
order of "Pey Dirt, Inc." and delivered to IMG, Xxxxx 000, 0000 Xxxx 0xx
Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attn.: Xxxxx Xxxxxxx. Past due payments
hereunder shall bear interest at the rate of (i) one and one-half percent
(1-1/2%) per month, or (ii) the maximum interest rate permissible under
law, whichever is less.
(b) Company agrees that it will keep accurate and complete records
and books of account showing all Endorsed Products shipped by it and the
price thereof. Pey Dirt, or its representatives, shall, upon two weeks'
written notice, have the right at all reasonable times (prior to the
expiration of two (2) years after the termination of the Contract Period) to
inspect and make copies of the books and records of Company insofar as they
shall relate to the computation of royalties to be paid to Pey Dirt hereunder
and the shipment of Endorsed Products pursuant to this Agreement. In the
event that any such inspections show an underreporting and underpayment in
excess of five percent (5%) for any twelve (12) month period, then Company
shall pay the cost of such examination.
7. Labels/Packaging. (a) It is understood that each of the Endorsed
Products shipped by Company or its container or the packaging therefor shall
have affixed thereto a label or other permanent identification which includes
Xxxxxxx Identification.
(b) It is hereby agreed that the back panel of the Endorsed Products'
packaging will feature ad copy or offers as determined by Pey Dirt and its
agent, subject to Company's right to reasonably reject such materials only if
such materials are clearly offensive to a majority of the populace. Any and
all revenues generated by such ad copy or offers shall be disbursed in
accordance with Section 4(c) above. Further, the side panel of the Endorsed
Products packaging shall feature a charity or other entity of Xxxxxxx'x sole
choice. All packaging costs shall be Company's sole responsibility.
8. Trademarks. Should Company, at any time or times during the
Contract Period, desire to register a trademark or trademarks which include
Xxxxxxx Identification, or which relate in any manner to Xxxxxxx, and/or to
register Company as a user thereof, Pey Dirt shall execute any and all
documents which the parties reasonably believe to be necessary or desirable
for registration or protection of such trademark or trademarks in the name of
Xxxxxxx. All costs related to any such trademarks shall be borne by Company,
and ownership of any such trademarks shall rest solely in the name of Pey
Dirt or its designee. Upon registration of any such trademark, Pey Dirt
shall grant to Company a license for the use of such registered trademark on
or in connection with the advertisement, promotion and sale of Endorsed
Products, which license shall be coextensive and coterminous with the rights
granted thereunder with respect to Xxxxxxx Identification and shall require
no increase in the payments set forth but shall contain such additional
provisions as Pey Dirt reasonably believes are necessary for the protection
of such trademark registered in the name of Xxxxxxx or Pey Dirt. Company
agrees that it will not file, during the Contract Period or thereafter, any
application for trademark registration or otherwise obtain or attempt to
obtain ownership of any trademark or trade name within the Contract Territory
or in any other country of the world which consists of Xxxxxxx Identification
or any xxxx, design or logo intended to make reference to Xxxxxxx or to
identify products endorsed by Xxxxxxx. In the event that, prior to the
Contract Period, Company has filed one or more applications for registration
of any such trademark, or otherwise has obtained any rights to such
trademark, Company agrees to cause such applications and/or trademarks to be
assigned and transferred to Pey Dirt forthwith.
9. Products for the Use of Pey Dirt. During the Contract Period,
Company shall supply Pey Dirt and/or its agent with such amounts of Endorsed
Products as Pey Dirt and/or its agent may reasonably request. Company agrees
to pay all charges in connection with the delivery of Endorsed Products to
Pey Dirt and/or Pey Dirt's agent, including shipping charges, air freight
charges and customs charges. Company agrees to reimburse Pey Dirt's
authorized agent for all such expenses incurred by it in connection with the
transfer of Endorsed Products to Pey Dirt and/or Pey Dirt's agent.
10. Services of Xxxxxxx. If Company desires to utilize the services
of Xxxxxxx as a model in connection with photographs or drawings for
advertising or for personal appearances, Pey Dirt agrees, at the reasonable
request of Company and upon adequate notice, to provide the services of
Xxxxxxx at a time and place reasonably convenient to the schedule of Xxxxxxx.
Company agrees that it will reimburse Pey Dirt for reasonable travel
(including first class air fare), lodging, ground transportation and meal
expenses incurred by Xxxxxxx and one traveling companion designated by
Xxxxxxx. Company further agrees it will reimburse Pey Dirt's authorized
agent for reasonable travel (including air fare), lodging and meal expenses
incurred in providing one representative to accompany Xxxxxxx. Company
understands that if services are requested hereunder, such services may be
coordinated with similar services for others entitled to the use of Xxxxxxx
Identification in other connections. Company further understands that such
services may be required not more than once during the Contract Period for up
to one (1) hour. In the event that Company elects to use the services of
Xxxxxxx in connection with television advertising, Company shall make all
required union scale and union pension and welfare payments. Company further
understands that failure to utilize services of Xxxxxxx pursuant to this
section shall not result in any reduction in payments to Pey Dirt hereunder,
nor may the obligation to provide services be carried past the Contract
Period. The obligations of Pey Dirt to provide the services of Xxxxxxx
hereunder are subject to the condition that payments to Pey Dirt are current
and up to date.
11. Force Majeure. If, at any time during this Agreement, Pey Dirt
or Xxxxxxx is prevented from or hampered or interrupted or interfered with in
any manner whatever in fully performing its/his duties hereunder, by reason
of any present or future statute, law, ordinance, regulation, order, judgment
or decree, whether legislative, executive or judicial (whether or not valid),
act of God, earthquake, fire, flood, epidemic, accident, explosion, casualty,
lockout, boycott, strike, labor controversy (including but not limited to
threat of lockout, boycott or strike), riot, civil disturbance, war or armed
conflict (whether or not there has been an official declaration of war or
official statement as to the existence of a state of war), invasion,
occupation, intervention of military forces, act of public enemy, embargo,
delay of a common carrier, inability without default on Company's part to
obtain sufficient material, labor, transportation, power or other essential
commodity required in the conduct of its business; or by reason of any cause
beyond his reasonable control; or by reason of any other cause of any similar
nature (all of the foregoing being herein referred to as an "event of force
majeure"), then Pey Dirt's/Xxxxxxx'x obligations hereunder shall be suspended
as often as any such event of force majeure occurs and during such periods of
time as such events of force majeure exist and such non-performance shall not
be deemed to be a breach of this Agreement.
12. Default. (a) If either party at any time during the Contract
Period shall (i) fail to make any payment of any sum of money herein
specified to be made, or (ii) fail to observe or perform any of the
covenants, agreements or obligations hereunder (other than the payment of
money), the non-defaulting party may terminate this Agreement as follows: as
to subparagraph (i) if such payment is not made within ten (10) days after
the defaulting party shall have received written notice of such failure to
make payment, or as to subparagraph (ii) if such default is not cured within
thirty (30) days after the defaulting party shall have received written
notice specifying in reasonable detail the nature of such default. In order
to be a sufficient notice hereunder, any such written notice shall specify in
detail each item of default and shall specify the provision of this Agreement
which applies to each item of default, and shall specify in detail the action
the defaulting party must take in order to cure each such item of default.
The termination rights set forth in this section shall not constitute the
exclusive remedy of the nondefaulting party hereunder, however, and if
default is made by either party hereunder, the other may resort to such other
remedies as said party would have been entitled to if this section had
been omitted from this Agreement. Termination under the provisions of this
section shall be without prejudice to any rights or claims which the
terminating party may otherwise have against the defaulting party.
(b) Notwithstanding anything herein to the contrary, the cure periods
set forth in subparagraphs (a)(i) and (a)(ii) above only apply to Company's
first default under this Agreement. Accordingly, Pey Dirt may, after
Company's first default has occurred under either subparagraph (a)(i) or
subparagraph (a)(ii) above and has been cured, thereafter immediately
terminate this Agreement upon any further defaults by Company hereunder
without providing Company an opportunity to cure any additional defaults.
13. Termination. From and after the termination of the Contract
Period all of the rights of Company to the use of Xxxxxxx Identification
shall cease absolutely and Company shall not thereafter use or refer to
Xxxxxxx Identification in advertising or promotion in any manner whatsoever,
it being understood by Company that Xxxxxxx Identification may be used at any
time by others in connection with the advertisement and promotion of Products
the shipment of which is completed after the termination of the Contract
Period. It is further agreed that following termination of the Contract
Period, Company shall not advertise, promote, distribute or sell any item
whatsoever in connection with the use of any name, figure, design, logo,
trademark or trade name similar to or suggestive of Xxxxxxx Identification.
14. Inventory of Endorsed Products on Termination/Expiration. Any
Endorsed Products that may have been manufactured by or for Company prior to
the termination or expiration of the Contract Period may be sold by Company
during the ninety (90) day period next following the date of termination or
expiration; provided, however, that Company shall have no such rights unless
(a) Company is not in default of any of its obligations hereunder on the date
of termination or expiration, (b) within fifteen (15) days after the date of
termination or expiration, Company shall furnish to Pey Dirt a written
statement of the number and description of Endorsed Products actually in
stock on the date of termination or expiration, (c) the quantity of Endorsed
Products in stock on the date of termination or expiration is not in excess
of a reasonable inventory based upon Company's selling requirements of
Endorsed Products during the Contract Period, (d) Company shall continue to
pay to Pey Dirt with respect to such sales a royalty at the rates specified
herein, and (e) royalties payable pursuant to this section shall be paid
within thirty (30) days following the end of each calendar month with respect
to shipments made during such month.
15. Collegiate/National Football League Trademarks. Nothing contained
herein shall be construed to convey to Company any rights to use the
trademarks, logos or uniform of the University of Tennessee, the Indianapolis
Colts, the National Football League or any other professional or amateur
football association (including any member clubs or teams of such
association) in conjunction with the rights granted hereunder. All rights to
the use of such trademarks, logos or team identification must be acquired
from the University of Tennessee, the Indianapolis Colts, the National
Football League, or any other appropriate rights holder.
16. Indemnity. Company agrees to protect, indemnify and save
harmless Pey Dirt, Pey Dirt's agent and Xxxxxxx, or any of them, from and
against any and all expenses, damages, claims, suits, actions, judgments and
costs whatsoever, including reasonable attorneys' fees, arising out of, or in
any way connected with, this Agreement, Company's default hereunder, the
negligence, actions, errors or omissions of Company or any claim or action
for personal injury, death or otherwise involving alleged defects in
Company's Products, provided that Company shall be given notice of any such
action or claim. Company agrees to provide and maintain, at its own expense,
general liability insurance and product liability insurance with limits no
less than $3,000,000 and within thirty (30) days from the date hereof,
Company will submit to Pey Dirt a fully paid policy or certificate of
insurance naming Pey Dirt, Pey Dirt's agent and Xxxxxxx as additional insured
parties, requiring that the insurer shall not terminate or materially modify
such without written notice to Pey Dirt at least twenty (20) days in advance
thereof.
17. Waiver. The failure of either party at any time or times to
demand strict performance by the other of any of the terms, covenants or
conditions set forth herein shall not be construed as a continuing waiver or
relinquishment thereof and each may at any time demand strict and complete
performance by the other of said terms, covenants and conditions.
18. Bankruptcy. If Company shall become bankrupt or insolvent, or if
Company's business shall be placed in the hands of a Receiver, Assignee or
Trustee, whether by voluntary act of Company r otherwise, the Contract
Period shall, at the option of Pey Dirt, immediately terminate.
19. Assignment. This Agreement shall bind and inure to the benefit of
Pey Dirt and the successors and assigns of Pey Dirt. Nothing herein shall
prevent Pey Dirt from assigning the monetary benefits of this Agreement as it
may so desire. Further, inasmuch as it is recognized that Pey Dirt is the
representative of Xxxxxxx, Pey Dirt may at any time assign this Agreement to
Xxxxxxx and, in such event, Pey Dirt shall have no further obligation or
liability in connection herewith and Pey Dirt's position vis-a-vis Company in
connection herewith shall be in all respects the same as if Pey Dirt had
signed this Agreement as agent rather than as principal from the beginning.
The rights granted Company hereunder shall be used only by it and shall not,
without the prior written consent of Pey Dirt, be transferred or assigned to
any other. In the event of the merger or consolidation of Company with any
other entity, Pey Dirt shall have the right to terminate the Contract Period
by so notifying Company in writing on or before sixty (60) days after Pey Dirt
has received notice of such merger or consolidation.
20. Arbitration. In the event a dispute arises under this agreement
which cannot be resolved, such dispute shall be submitted to arbitration and
resolved by a single arbitrator (who shall be a lawyer) in accordance with
the Commercial Arbitration Rules of the American Arbitration Association then
in effect. All such arbitration shall take place at the office of the
American Arbitration Association located in Nashville, Tennessee. Each party
is entitled to depose one (1) fact witness and any expert witness designated
by the other party, and to conduct such other discovery as the arbitrator
deems appropriate. The award or decision rendered by the arbitrator shall be
final, binding and conclusive and judgment may be entered upon such award by
any court.
21. Significance of Headings. Section headings contained herein are
solely for the purpose of aiding in speedy location of subject matter and are
not in any sense to be given weight in the construction of this Agreement.
Accordingly, in case of any question with respect to the construction of this
Agreement, it is to be construed as though such section headings had been
omitted.
22. Entire Agreement. This writing constitutes the entire agreement
between the parties hereto and may not be changed or modified except by a
writing signed by the party or parties to be charged thereby.
23. Governing Law. This Agreement shall be governed and construed
according to the law of Tennessee.
24. Reservation of Rights. All rights not herein specifically
granted to Company shall remain the property of Pey Dirt to be used in any
manner Pey Dirt deems appropriate. Company understands that Pey Dirt has
reserved to itself the right to authorize others to use Pey Dirt
Identification within the Contract Territory and during the Contract Period
in connection with all tangible and intangible items and services other than
Products themselves.
25. No Joint Venture. This Agreement does not constitute and shall
not be construed as constituting a partnership or joint venture between Turn
2 and Company. Neither party shall have any right to obligate or bind the
other party in any manner whatsoever, and nothing herein contained shall
give, or is intended to give, any rights of any kind to any third person.
26. Authorization. The execution, delivery and performance of this
Agreement by Company and by Pey Dirt has been duly authorized and approved by
the Board of Directors of Company and by the Board of Directors of Pey Dirt
and constitutes a valid and binding obligation of Company and of Pey Dirt
enforceable in accordance with its terms.
27. Execution and Delivery . This instrument shall not be considered
to be an agreement or contract nor shall it create any obligation whatsoever
on the part of Pey Dirt and Company, or either of them, unless and until it
has been personally signed by a representative of Pey Dirt and by a
representative of Company and delivery has been made of a fully signed
original. Acceptance of the offer made herein is expressly limited to the
terms of the offer.
28. Liability. In no event (including, but not limited to, Xxxxxxx'x
or Pey Dirt's default hereunder) shall Xxxxxxx or Pey Dirt be liable to
Company (or any entity claiming through Company) for any amount in excess of
the amounts of royalties actually received by Pey Dirt hereunder, excluding
the reimbursement of expenses. Under no circumstances xxxx Xxxxxxx or Pey
Dirt, on the one hand, or Company, on the other hand, be liable to the other
or any other entity for any special, consequential, indirect, exemplary
and/or punitive damages, or for loss of good will or business profits.
IN WITNESS WHEREOF, the par-ties hereto have caused this Agreement to
be executed as of the date first above written.
FAMOUS FIXINS, INC. PEY DIRT, INC.
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxx Xxxxxxx
--------------------- ------------------------
Xxxxx Xxxxx Xxxxxx Xxxxxxx
President President
