EXHIBIT 10.21
LICENSE AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the 21st day of September
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 JAE
Endorsements Inc. ("Licensor"), for the personal services of Xxxx Xxxxx
(Talent).
WHEREAS, Licensee manufactures celebrity food products and has been
granted the exclusive right to the use of the name and likeness of Xxxx Xxxxx
on and in connection with the development, manufacture, distribution,
promotion, and sale of a limited edition cereal product endorsed by Licensor
("the Product").
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 Xxxx 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 Product. Additionally, the Company
will produce and sell related merchandise, specifically t-shirts,
sweatshirts, and hats ("Licensed Goods"). This License shall be effective
Worldwide beginning on the date first written above and continuing until
December 31, 2000, (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, 2001.
2. Licensee's Obligations. Licensee shall undertake to use its best
efforts to develop, manufacture, distribute, promote, and sell the Product
and Licensed Goods, 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. Licensee shall provide 1000 flat cereal boxes to Licensor
to be used at his discretion.
3. Licensor's Obligation. Licensor will personally autograph 25
flat cereal boxes for Licensee to use as promotional giveaways, not to be
used for resale.
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
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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 this Agreement, Licensee shall pay Licensor a licensee fee via
cashier's check or wire transfer (the "Licensing Fee") in an amount equal to
ten percent (10%), approximately $.25 per unit, of all monies received
by Licensee as revenue derived from the sale of the Products ("Gross
Receipts" less slotting fee). Licensor will also receive fifty percent
(50%) 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 200,000 shares of the
Company's unregistered common stock at the purchase price of $.25 per share
(the "exercise price"). An additional 25,000 will be in the name of Xxxx
Xxxxxxxx. All warrants granted herein shall have an expiration date of five
(5) years from the date of the signing of this Agreement. If License Term is
automatically extended as defined in paragraph 1, Licensor will be entitled
to an additional 50,000 warrants using the same terms as defined above. An
additional 5,000 will be in the name of Xxxx Xxxxxxxx. Licensor will
receive piggyback registration rights on the Company's next registration
statement to be filed with the SEC. All cash 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 end of each quarter. 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 all 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. In
the event that such inspections show an unreporting and underpayment in
excess of ten percent (10%) for any twelve month period then Company shall
pay the cost of such examination
7. Insurance. Licensee maintains $8,000,000 in product liability
insurance, which cover all products produced by Licensee bearing Xxxx Xxxxx'x
name and likeness. Licensee will supply evidence of product liability
insurance on a timely basis (i.e. Certificate of Insurance) and shall name
Xxxx Xxxxx as additional insured's. Additionally, Licensee will maintain a
$20,000,000 umbrella policy naming Xxxx Xxxxx as an additional insured.
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 in the License Term, regardless of cure.
9. Licensee 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) Xxxx Xxxxx becomes the subject of public dispute or scandal
that materially and adversely affects Xxxx Xxxxx'x image. Injury(ies) or
illness of said Licensor shall not in any way effect the validity of this
Agreement. If this Agreement shall be terminated for any reason or expire as
herein provided, Licensee
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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 gross negligence or intentional
wrongful acts of its officers, directors, employees, or representatives.
Licensee agrees to indemnify and hold harmless Licensor and Talent from any
and all third party claims, actions, suits, demands, loses, damages and all
costs and expenses including, but not limited to reasonable attorney fees
which Licensee may hereafter incur in connection with, or arising out of
Licensor's or Talent's good faith performance of its obligations undertaken
herein, except for negligent acts or intentional misconduct of Licensor of
Talent, provided that Company shall be given prompt notice thereof.
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 a
substantial portion of Licensee's stock or assets.
12. Notices. Any notice to be 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 Xxxx Xxxxx, c/o Xxxx Xxxxxxxx, 0000
X Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxx Xxxxx, 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 set 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,
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distribute, promote, or sell the Products, then Licensee may, upon notice to
Licensor, terminate this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement in New
York, New York, on this day and year first above written.
LICENSEE: FAMOUS FIXINS, INC.
By: /s/ Xxxxx Xxxxx
----------------------------
Xxxxx Xxxxx, President
LICENSOR: JAE ENDORESEMENTS, INC.
By: /s/ Xxxx Xxxxx
----------------------------
Xxxx Xxxxx, President
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