EXHIBIT 10.11
CONFIDENTIAL TREATMENT REQEUSTED BY FAMOUS FIXINS, INC.
Confidential treatment has been requested for certain confidential portions
of this exhibit pursuant to Rule 24(b)(2) under the Exchange Act. In
accordance with Rule 24(b)(2), these confidential portions have been omitted
from this exhibit and filed separately with the Commission.
LICENSE AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the 7th day of May 1999, by
and between Famous Fixins, Inc. ("Licensee"), a corporation organized under
the laws of the State of New York, having its principal place of business at
000 Xxxx 00xx xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000, and Killer Bee, Inc.
("Licensor"), a California corporation.
WHEREAS, Licensee manufactures celebrity food products and has been
granted the exclusive right to the use of the name and likeness of Xx. Xxxxx
X. Xxxxx on and in connection with the development, manufacture,
distribution, promotion, and sale of a line of limited edition cereal
products endorsed by Licensor ("the Products").
NOW THEREFORE, in consideration of the mutual promises and undertakings
contained herein, and for other good and valuable consideration the receipt
of which is hereby acknowledged, the parties agree as follows:
1. Grant of License. Licensor hereby grants Licensee the right to
use the name, photograph, characterization, likeness, voice, image, and
biographical data of Xx. Xxxxx X. Xxxxx, and the trademarks, logos, copyrights
and all other authorized material owned or controlled by the Licensor (the
"Licensed Subject Matter") in connection with the development, manufacture,
distribution, promotion, and sale of the Products, more specifically, cereal
and related merchandise ("the License"). This License shall be effective
Worldwide beginning on the date first written above and continuing until
December 31, 1999, (the "License Term"), unless terminated in accordance with
the terms and conditions of Paragraphs 8 or 9 of this Agreement. If sales of
the Products reach 1,000,000 boxes, the License Term shall be automatically
extended, and shall end on December 31, 2000.
2. Licensee's Obligations. Licensee shall undertake to use its best
efforts to develop, manufacture, distribute, promote, and sell the Products,
more specifically, cereal and related merchandise, provided however, that
Licensee shall have the right to determine: (a) the type and quantity of
Products developed and manufactured; (b) the markets in which the Products
are distributed and sold; (c) the manner of distribution and sale of the
Products; and (d) the volume and nature of advertising for the Products.
Licensee shall submit for Licensor's approval the type of cereal, the name of
cereal, the packaging design, advertising material, and all other materials
to be used in connection with the Products subject to the sole and absolute
approval of Licensor which shall not be unreasonably delayed or withheld.
Licensee shall pay all costs and expenses in connection with the development,
promotion, manufacturing, packaging, shipping, distribution, sales and
promotion of the Products. Licensee shall handle all fulfillment (including
all check, money order and credit card transactions) and tracking
responsibilities from the sale of other related merchandise from the back
panel or elsewhere on the packaging or promotional materials of the Products.
All rights, titles, and interests in and to the Products, their formulae and
secret ingredients, and their packaging and labeling shall be, and they are
specifically and entirely, reserved to Licensee and may be fully exploited
without regard to the extent to which such rights may be competitive with
this Agreement or the rights granted hereunder.
3. Licensor's Obligation. Licensor shall provide Xx. Xxxxx X. Xxxxx
who shall supply the Licensed Subject Matter for a one-hour photo shoot and a
press conference appearance in San Francisco, California (the photoshoot and
press conference to be scheduled at a time when Xx. Xxxxx X. Xxxxx is
available given his baseball and family schedule), which will last no longer
than one hour. Any additional participation is at the sole discretion of
Licensor. Licensor shall further furnish Licensee with sufficient information
about Xx. Xxxxx X. Xxxxx' schedule to allow Licensee to adequately plan its
promotions and sales programs. Any and all publicity regarding the Products
shall be issued only by Licensee. Licensor shall not be shown in uniform
without the express written consent of MLB.
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4. Quality Assurance. Licensee agrees that all use of the Licensed
Subject Matter shall be only upon the Products manufactured by or for
Licensee in accordance with quality standards approved by Licensor prior to
the commencement of manufacturing of the Products. Licensee shall submit for
Licensor's sole and absolute approval the type of cereal, the name of cereal,
the packaging design, advertising material, and all other materials to be
used in connection with the Products subject to the sole and absolute
approval of Licensor which shall not be unreasonably delayed or withheld.
5. Compensation. As full and complete compensation to Licensor for
entering into and performing the terms and conditions of the Agreement, and
provided that Licensor completely performs his obligations hereunder,
Licensee shall pay Licensor a license fee via cashier's check or wire
transfer (the "Licensing Fee") in an amount equal to ***** percent
(*****%) of all monies received by Licensee as revenue derived from the sale
of the Products ("Gross Receipts" less up to a one-time $50,000 slotting
fee). Licensor will also receive ***** percent (*****%) of net proceeds
(net of expenses actually paid at arm's length to independent third parties)
from the sale of all related merchandise (subject to Licensor's sole and
absolute approval) from the back panel and other promotional materials. In
addition, as further consideration for this Agreement, Licensor will receive
a warrant to purchase ***** shares of the Licensor's unregistered common
stock at the purchase price of $***** per share (the "exercise price") with an
expiration date of five (5) years from the date hereof upon the signing of
this Agreement, and Licensor's foundation shall receive a like warrant
($*****) for ***** shares upon signing of this Agreement. If License Term
is automatically extended as defined in paragraph 1, Licensor will be entitled
to an additional ***** warrants using the same terms as defined above.
All sums which become due to Endorser shall be paid in strict accordance with
wire instructions of Licensor, or if none are given, by check made payable to
Licensor delivered on or before its due date. Any checks made payable to
Licensor shall be mailed to Licensor in care of Bank of America, 000 Xxxxxx
Xxx, Xxxxx 000, Xxxx Xxxx, Xxxxxxxxxx 00000, Attn: Manager. All
compensation under this Agreement shall be paid to Licensor on a quarterly
basis.
6. Accounting. Licensee shall render a detailed accounting to
Licensor 28 days after the payment of each invoice is received. Each
accounting shall show both period and cumulative Gross Receipts for the
Products and shall be accompanied by the payment in full then due to the
Licensor. Licensor, or Licensor's representative shall have the right at
reasonable times and on reasonable notice to inspect and make copies of the
Licensee books and records of Licensee, at Licensor's expense, in so far as
they relate to the computation of royalties to be paid to Licensor thereunder
and the shipment of endorsed products and related merchandise pursuant to
this Agreement. If the audit or inspection reveals underpayment of 5% or
more, Licensee shall reimburse Licensor for the reasonable costs of the audit
or inspection.
7. Insurance. Licensee maintains $8,000,000 in product liability
insurance, which cover all products produced by Licensee hearing Xx. Xxxxx X.
Xxxxx' name and likeness. Licensee will supply evidence of product liability
insurance on a timely basis (i.e. Certificate of Insurance) and shall name
Licensor and Xx. Xxxxx X. Xxxxx as additional insureds.
8. Licensor Termination. Licensor may terminate this Agreement upon
forty-five (45) days written notice if (a) Licensee breaches a material term
of this Agreement and fails to remedy said breach within thirty (30) days of
its receipt of written notice of the breach; (b) Licensee becomes insolvent
or files a petition in bankruptcy; (c) Licensee permanently discontinues
production and distribution of the Products; or (d) Licensee breaches a
material term of this Agreement two or more times in the License Term,
regardless of cure.
9. License Termination. Licensee may terminate this agreement upon
forty-five (45) days written notice if (a) Licensor breaches a material term
of this Agreement and fails to remedy said breach within thirty (30) days of
his receipt of written notice of the breach; (b) Licensor becomes insolvent
or files a petition in bankruptcy; (c) Licensee determines, in its sole and
absolute discretion, to discontinue production and distribution of the
Products; (d) Xx. Xxxxx X. Xxxxx becomes the subject of public dispute or
scandal that materially and adversely affects Xx. Xxxxx X.
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***** Omitted pursuant to a request for confidential treatment and filed
separately with the Commission.
Bonds' image. Injury(ies) or illness of said Licensor shall not in any way
affect the validity of this Agreement. If this Agreement shall be terminated
for any reason or expire as herein provided, Licensee nevertheless may
continue to exercise its rights under this Agreement for 60 days from the date
of termination or expiration for the sole purpose of disposing of its
inventory of Products on hand and in the process of manufacture, including
Products returned to Licensee's inventory after termination or expiration.
Licensor shall be duly compensated in accordance with the terms of this
Agreement for any and all such sales of inventory after the termination or
expiration.
10. Indemnification. The parties hereto shall indemnify, defend,
protect, and save and hold each other harmless from and against any and all
actions, claims, suits, losses, judgements, penalties, liabilities, damages,
costs and expenses, including, without limitation, reasonable attorney's fees
and court costs, of whatever kind and nature imposed on, incurred by, or
asserted, made, brought, or made against each other arising out of a party's
breach of any of its representations, warranties, or obligations made
pursuant to this Agreement, or through the negligence or intentional wrongful
acts of its officers, directors, employees, or representatives.
11. Assignment. Neither Licensor nor Licensee shall assign this
Agreement without the prior written consent of the other party, except that
Licensee shall have the right to assign this Agreement to any wholly owned
subsidiary, or to any person, firm, or corporation owning or acquiring at
least 80% of Licensee's stock or assets.
12. Notices. Any notice to be given hereunder shall be made in
writing and shall be sent by certified U.S. mail, return receipt requested,
postage paid. All notices to Licensor shall be sent to Xxxxxxx Xxxxxxx at
0000 Xxxxxxx Xxxxx Xxxx, Xxx Xxxxx, XX 00000, with copies to Xxxx Xxxxx, 0000
Xxxxxx Xxx, #00, Xxx Xxxxxxx, XX 00000. All notices to Licensee shall be
sent to Xxxxx Xxxxx, c/o Famous Fixins, 000 Xxxx 00xx Xx., Xxxxx 0000, Xxx
Xxxx, XX 00000.
13. Relationship of the Parties. Nothing in this Agreement shall be
construed to (a) give either party the power to direct or control the day to
day activities of the other; (b) constitute the parties as partners, joint
ventures, co-owners, or otherwise as participants in a joint and common
undertaking; or (c) constitute Licensor, its agents, or employees as the
agents or employees of Licensee or to grant them any power or authority to
act for, bind or otherwise create any obligation on behalf of Licensee for
any purposes whatsoever.
14. Governing Law and Jurisdiction. This Agreement shall be construed
and enforced in the County of New York in accordance with the laws of the
State of New York. In the event of any action, suit, or proceeding
concerning, arising out of, or based upon this Agreement brought by either
party against each other, the prevailing party shall be entitled to recover
from the other its reasonable attorney's fees in connection therewith in
addition to the costs of such action, suit or proceeding.
15. Entire Agreement. This Agreement sets forth the entire
understanding of the parties with respect to its subject matter. No waiver,
modification, or addition to this agreement shall be valid unless reduced to
writing and signing by both parties. If any provision of this Agreement shall
be held void, voidable, invalid, or inoperative, no other provision of this
Agreement shall be affected as a result thereof, and, accordingly, the
remaining provisions of this Agreement shall remain in full force and effect
as though such void, voidable, invalid, or inoperative provision had not been
contained therein. Notwithstanding the foregoing, in the event any provision
is held void, voidable, invalid, or inoperative and impairs Licensee's right
to manufacture, distribute, promote, or sell the Products, then Licensee may,
upon notice to Licensor, terminate this Agreement.
16. Trademark. Licensee covenants not to infringe on anyone's
intellectual property rights in the production or sale of the Products.
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17. Confidentiality. Each party to this Agreement covenants and
agrees that, both during the License Term and at all times thereafter, it
will not: (a) use or disclose to any person or entity any Confidential
Information of the other party, (b) in any other way publicly or privately
disseminate any Confidential Information, and (c) help anyone else to do any
of these things, unless required to do so by law. "Confidential Information"
means any and all information disclosed by one party to the other that is not
generally known to the public. Except with the prior written consent of each
and every party to this Agreement in each instance, a party will not
disclose, reveal, make public, or make generally known the financial aspects
of this Agreement. As exceptions to the foregoing, the parties may reveal
such financial information to their respective agents, business manager,
family members, accountants, and attorneys; provided, however, the parties
shall impose a written requirement of strict confidentiality upon their
agents, accountants, and attorneys for the benefit of each of the parties.
In addition, the parties shall be entitled to reveal this Agreement to the
U.S. Internal Revenue Service, to the state or local Departments of Revenue
where parties file their tax returns, and as required by law or by order of a
court of competent jurisdiction.
18. Arbitration. All questions and disputes with respect to the
rights and obligations of the parties arising under the terms of this
Agreement shall be resolved by arbitration. Either party shall have the
right to submit the propriety of a dispute to binding confidential
arbitration. Each party shall bear its own expenses incurred in connection
with any such arbitration and one-half of the arbitration fees; provided,
however, the arbitrator is hereby authorized to award reasonable attorneys'
fees and costs to the prevailing party. The venue of the arbitration shall
be New York, New York, and the arbitrator shall apply the substantive law of
the State of New York. Any and all hearings shall be conducted in New York,
New York. The parties agree to use their best efforts to schedule any such
hearings outside of the Major League Baseball season.
The party desiring arbitration shall serve notice upon the other party,
together with designation of the first party's representative. If the person
designated by the first party is acceptable to the second party as an
arbitrator, the second party shall so notify the first party within ten days
and such representative shall serve as the sole arbitrator. If the person so
designated is not acceptable to the second party, then the second party shall
designate his/her or its own representative in a notice to the first party
within the same ten-day period. The two representatives so named, if such is
the case, shall within ten days thereafter appoint an arbitrator, and the
arbitrator shall then proceed forthwith to hear and unilaterally determine
the matter. If either party fails, within the time allowed herein, to
appoint its representative, the representative named by the other party shall
act as the sole arbitrator and unilaterally decide the matter. If the two
representatives are unable to agree upon an arbitrator within the ten days
allowed herein, either party may at any time apply to the presiding judge of
any court of competent jurisdiction for the appointment of an arbitrator, and
the arbitrator shall proceed forthwith to hear and unilaterally determine the
matter. In all events the arbitrator shall be a licensed attorney at law in
the State of New York with a minimum of ten years' experience in handling
matters of the kind which are represented by this Agreement. The arbitrator
shall be entitled to reasonable compensation at his or her usual professional
rates. Except as otherwise provided herein, the arbitration shall be
conducted in accordance with the rules of the American Arbitration
Association, but without regard to any portions thereof which require
administration by such association.
The powers of the arbitrator shall be limited as set forth herein. The
arbitrator shall make an award in writing that is consistent with the terms
of this Agreement, and that includes a reasoned decision. In no event shall
the demand for arbitration be made after the date when institution of legal
or equitable proceedings based on such claim, dispute, or other matter(s) in
question would be barred by the applicable statute of limitations, and the
arbitrator shall reject any claim that is not based upon a timely filed
demand.
19. Charity. "50% of the net proceeds to Xx. Xxxxx will be donated to
Bay Area charities including the Link N' Learn Program conducted in the San
Francisco Bay Area by The Bonds Family Foundation. Link N' Learn will
establish on-site learning centers at 8 public schools and 5 community centers
in four Bay Area communities. These sites will use intensive personalized
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tutoring techniques and interactive instructional technology to increase
parental involvement and to achieve measurable grade-level academic
improvement among children in the K-4th grades in the four Bay Area
communities." Licensee agrees to put the foregoing statement on the cereal
box and all advertising, promotional and public relations information issued
in connection with the Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement in New
York, New York, on the day and year first above written.
LICENSEE: FAMOUS FIXINS, INC.
By: /s/ Xxxxx Xxxxx
----------------------------
Xxxxx Xxxxx, President
LICENSOR: KILLER BEE, INC.
By: /s/ Xxxxx Xxxxx
----------------------------
Xxxxx Xxxxx, President
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