SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 10-K/A-1
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 1995
Commission File No. 0-16913
THE SCORE BOARD, INC.
(Exact Name of Registrant as specified in its charter)
New Jersey 22-2766077
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1951 Old Cuthbert Road, Cherry Hill, New Jersey 08034
(Address of principal executive offices)
Registrant's telephone number, including area code: (609)354-9000
Securities registered pursuant to Section 12(b) of the Act:
Not Applicable
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Subsection 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]
The aggregate market value, as of April 28, 1995, of voting stock of the
registrant held by non-affiliates was approximately $53,425,093.
The number of outstanding shares of registrant's Common Stock, $.01 par value,
on April 28, 1995 was 11,247,388.
Documents Incorporated By Reference:
None
<PAGE>
THE SCORE BOARD, INC.
INDEX
Item Page
---- ----
PART III 11. Executive Compensation 2
12. Security Ownership of Certain Beneficial
Owners and Management 7
13. Certain Relationships and Related
Transactions 9
PART IV 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 9
<PAGE>
Item 11. Executive Compensation
The following table sets forth certain summary information concerning
the compensation paid to the Company's Chief Executive Officer and other highly
compensated executive officers whose total annual salary and bonus were in
excess of $100,000 (collectively, the "Named Executive Officers") for services
rendered in all capacities to the Company and its subsidiaries for the years
ended January 31, 1995, 1994 and 1993:
Summary Compensation Table
<TABLE>
<CAPTION>
| Long-Term |
| Compensation |
Annual Compensation | Awards |
-----------------------------------------------------|--------------|
Fiscal | |
Name Year | Securities | All Other
and Ended | Underlying | Compen-
Principal January Salary Bonus | Options | sation
Position 31, ($) ($) | (#) | ($)(1)
--------- ------- ------- ------ | ---------- | ---------
<S> <C> <C> <C> <C> <C>
Paul Goldin 1995 172,399 0 | 0 | 12,601
Chief Executive 1994 219,917 0 | 58,000 | 26,894
Officer (2) 1993 204,000 50,000 | 50,000 | 33,384
| |
Kenneth Goldin 1995 375,822 0 | 150,000(3) | 39,499
Chief Executive 1994 190,750 0 | 120,000 | 8,363
Officer 1993 174,000 75,000 | 105,000 | 9,989
| |
Michael A. Berkus 1995 10,385 0 | 50,000(4) | 117,400
Sr. Vice President | |
- Sales & | |
Marketing (4) | |
| |
Michael A. Hoppman 1995 103,608 0 | 10,000 | 8,983
Vice President - 1994 77,423 15,000 | 18,000 | 4,800
Finance 1993 61,502 12,500 | 10,000 | 0
| |
Robert H. Gartlan 1995 117,316 0 | 0 | 196,082
Vice President - 1994 41,667 0 | 0 | 1,200
Ceramics (5) | |
| |
Scott Schnell 1995 143,884 0 | 48,750 | 161,054
Sr. Vice President 1994 92,308 30,000 | 23,000 | 4,800
Operations (6) 1993 80,915 17,500 | 12,000 | 4,200
</TABLE>
-------------
(1) Includes (a) Company contributions under its profit sharing plan for certain
of the Named Executive Officers (Messrs. Paul Goldin $6,045; Kenneth Goldin
$3,621; Hoppman $3,470; and Schnell $4,774); (b) Company payments on behalf
of the Named Executive Officers of certain life insurance premiums (Messrs.
Paul Goldin $6,556; Kenneth Goldin $35,878; Hoppman $713; Gartlan $8,820;
and Schnell $520); (c) consulting fees and related amounts paid to Mr.
Berkus pursuant to his consulting agreement prior to his becoming an officer
of the Company ($117,400); (d) royalties and other payments to Mr. Gartlan
pursuant to his employment agreement and consulting agreement ($182,462);
(e) a moving bonus paid to Mr. Schnell pursuant to his employment agreement
($150,000); and (f) car allowances for certain of the Named Executive
Officers (Messrs. Hoppman $4,800; Gartlan $4,800; and Schnell $5,760). See
Item 11. "Executive Compensation - Employment Agreements, Compensatory
Arrangements."
(2) On May 21, 1994, Paul Goldin passed away. Pursuant to an employment
agreement entered into on March 30, 1994, effective as of January 1, 1994,
Mr. Goldin was to receive an annual salary of $395,000 through December 31,
1996. In accordance with said employment agreement, the Company is required
to pay approximately $900,000 to Mr. Goldin's estate. The liability
outstanding at January 31, 1995 was $738,000.
(3) On June 10, 1994, Kenneth Goldin was conditionally granted an option to
purchase 100,000 shares of the Company's Common Stock at an exercise price
of $8.25 per share pursuant to the Company's 1992 Stock Incentive Plan.
Effective September 30, 1994, the option was cancelled, and Mr. Goldin was
granted an option to purchase 50,000 shares of Common Stock at an exercise
price of $5.00 per share under the plan.
(4) Mr. Berkus joined the Company in September 1994. Prior thereto, Mr. Berkus
provided consulting services to the Company pursuant to a consulting
agreement dated April 11, 1994. Pursuant to the consulting agreement, Mr.
Berkus was granted an option to purchase 10,000 shares of the Company's
Common Stock pursuant to the Company's 1993 Non-Employee Stock Option Plan.
Effective April 17, 1995, the option was cancelled.
(5) As of December 24, 1994, Mr. Gartlan was no longer an officer or employee of
the Company. See Item 11. "Executive Compensation - Employment Agreements,
Compensatory Arrangements" for a description of Mr. Gartlan's separation and
consulting agreement.
(6) As of January 20, 1995, Mr. Schnell was no longer an officer or employee of
the Company. See Item 11. "Executive Compensation - Employment Agreements,
Compensatory Arrangements" for a description of Mr. Schnell's separation and
consulting agreement.
No individual named above received perquisites or non-cash compensation
exceeding the lesser of $50,000 or an amount equal to 10% of such person's
salary and bonus during the fiscal years ended January 31, 1995, 1994 and 1993.
The following table sets forth information concerning individual grants
of stock options made during the fiscal year ended January 31, 1995 to each of
the Named Executive Officers:
Option Grants in Fiscal Year Ended January 31, 1995
<TABLE>
<CAPTION>
Potential
Realizable Value
at Assumed Annual
Rates of Stock
Price Appreciation
Individual Grants for Option Term
---------------------------------------------------------------- --------------------
Percentage
Number of of Total
Securities Options
underlying Granted to Exercise
Options Employees or Base Expira-
Granted in Fiscal Price tion
Name (#) (1) Year ($/Sh) Date 5% ($)(2) 10% ($)(2)
---- --------- ---------- -------- ------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Paul Goldin 0 0.0 N/A N/A N/A N/A
Kenneth Goldin 100,000(3) 23.7 8.25 6/10/99 280,579 636,538
50,000(3) 11.7 5.00 9/30/99 85,024 192,890
Michael A. Berkus 10,000(4) 2.4 9.75 (4) 33,159 75,227
40,000(4) 9.5 4.50 8/16/99 61,217 138,881
Michael A. Hoppman 10,000(5) 2.4 8.88 4/30/99 30,200 68,515
Robert H. Gartlan 0 0.0 N/A N/A N/A N/A
Scott Schnell 48,750(6) 11.6 3.88 1/31/98 40,763 87,785
</TABLE>
- - ----------------
(1) The options granted to Messrs. Goldin, Berkus and Hoppman were granted
under the Company's 1992 Stock Incentive Plan, with exercise prices equal
to the fair market value on the date of grant and a term of five years. The
options granted to Mr. Schnell were granted at an exercise price equal to
the fair market value on the date of grant under the Company's 1993
Non-Employee Stock Option Plan in accordance with his separation and
consulting agreement.
(2) The five percent and ten percent assumed rates of appreciation are mandated
by the rules of the Securities and Exchange Commission and do not represent
the Company's estimate or projection of future stock price or performance.
(3) On June 10, 1994, Mr. Goldin was conditionally granted an option to
purchase 100,000 shares of the Company's Common Stock at a exercise price
of $8.25 per share. Effective September 30, 1994, the option was cancelled,
and Mr. Goldin was granted an option to purchase 50,000 shares of Common
Stock at an exercise price of $5.00 per share. One-half of the option to
purchase 50,000 shares may be exercised commencing October 1, 1995 and May
1, 1996, respectively, provided certain conditions are met.
(4) Effective April 17, 1995, the option to purchase 10,000 shares of Common
Stock was cancelled. One-fourth of the option to purchase 40,000 shares may
be exercised commencing March 1, 1995, September 1, 1995, September 1, 1996
and September 1, 1997, respectively.
(5) The option granted to Mr. Hoppman is subject to adoption by the Company's
shareholders of an amendment to increase the number of shares reserved for
issuance under the 1992 Stock Incentive Plan.
(6) One-half of the option may be exercised commencing July 1, 1995 and June
31, 1996, respectively.
The following table sets forth information concerning each exercise of
stock options during the fiscal year ended January 31, 1995 by each of the Named
Executive Officers and the value of unexercised options held by each of the
Named Executive Officers as of January 31, 1995:
Aggregated Option Exercises in Fiscal Year Ended January 31, 1995
and Fiscal Year End Option Values
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options Options
at FY-End (#) at FY-End ($)
Shares Acquired Value Real- Exercisable/ Exercisable/
Name on Exercise (#) ized (1) ($) Unexercisable Unexercisable (2)
---- --------------- ----------- ------------- ----------------
<S> <C> <C> <C> <C>
Paul Goldin 0 0 96,000/0(3) 0/0
Kenneth Goldin 30,000 295,050 314,750/120,000 75,179/0
Michael A. Berkus 0 0 0/40,000(4) 0/0
Michael A. Hoppman 0 0 28,000/10,000 0/0
Robert H. Gartlan 0 0 0/0 0/0
Scott Schnell 0 0 0/48,750 0/11,944
</TABLE>
- - -------------
(1) This amount represents the market value of underlying securities on the
exercise date minus the exercise price of such options.
(2) This amount represents the market value of the underlying securities
relating to "in-the-money" options at January 31, 1995 minus the exercise
price of such options.
(3) The options are held by the Estate of Paul Goldin.
(4) Does not include options to purchase 10,000 shares cancelled effective April
17, 1995.
Employment Agreements, Compensatory Arrangements
Effective January 1, 1994, the Company entered into a new employment
agreement with Kenneth Goldin which provides for his employment until December
31, 1996. Under this agreement, Mr. Goldin receives an annual base salary of
$375,000 and various benefits, including life and health insurance. In addition,
the agreement provides for an additional two year renewal period at a salary of
not less than $425,000, unless either party provides the other written notice of
its desire not to renew at least sixty (60) days prior to the end of the term.
Prior to his employment by the Company, Mr. Berkus provided consulting
services to the Company pursuant to a consulting agreement dated April 11, 1994.
Under the consulting agreement, Mr. Berkus was paid a $10,000 per month
consulting fee and $2,000 per month for automobile, housing and related
expenses. Pursuant to the consulting agreement, Mr. Berkus had the right to
receive multiple option grants if certain conditions were met. Effective April
17, 1995, all such options were cancelled.
On February 1, 1992, the Company entered into an employment agreement with
Mr. Hoppman. This agreement was most recently amended effective May 1, 1994, and
provides for Mr. Hoppman's employment until April 30, 1996. Under this
agreement, Mr. Hoppman received an annual salary of $82,000 prior to May 1,
1994. He will receive an annual salary of $105,000 and $110,000 for the years
commencing May 1, 1994 and 1995, respectively.
In September 1993, the Company acquired certain assets of Gartlan USA, Inc.
("GUSA") for $793,000 in cash and entered into a three year employment agreement
with the former owner of GUSA, Robert H. Gartlan. Under the employment
agreement, Mr. Gartlan was to receive salaries of $100,000, $120,000 and
$135,000 during the first, second and third years, respectively, as well as a
royalty based on a percentage of sales of porcelain, ceramic and pewter
figurines, plates and similar collectibles (beginning at 4% of net sales and
decreasing to 1.5% of net sales in excess of $7,500,000), a percentage of net
sales of acquired inventory (40% of net sales), and a percentage of net sales of
existing contracts acquired in the purchase of GUSA (20% of net sales). As of
December 24, 1994, Mr. Gartlan was no longer an officer or employee of the
Company. Mr. Gartlan's employment agreement was terminated, and a consulting
agreement was executed pursuant to which Mr. Gartlan will provide certain
consulting services to the Company through September 1996. Under the terms of
the consulting agreement, the Company will pay Mr. Gartlan consulting fees of
$92,308 and $135,000 during the first and second years, respectively, of the
agreement, and will continue to pay Mr. Gartlan the royalty described above.
On February 10, 1995 the Company and Scott Schnell entered into a
separation and consulting agreement pursuant to which Mr. Schnell will provide
consulting services to the Company through January 1996. Under the terms of the
agreement, the Company will pay Mr. Schnell a severance payment in the amount of
$185,000. In addition, all options to purchase shares of the Company's Common
Stock granted to Mr. Schnell pursuant to the Company's 1992 Stock Incentive Plan
were cancelled, and Mr. Schnell was granted an option to purchase 48,750 shares
of the Company's Common Stock at an exercise price of $3.875 per share pursuant
to the Company's 1993 Non-Employee Stock Option Plan.
The Company's employment agreements with Kenneth Goldin and Michael A.
Hoppman contain provisions for payments of salary and benefits following a
change of control (as defined) of the Company. In general, under such
circumstances, each of Messrs. Goldin and Hoppman would be entitled to a cash
bonus equal to a percentage of his annual salary at the time the change occurs
(Mr. Goldin - 100%; Mr. Hoppman - 50%), whether or not he was terminated. In
addition, in the event of involuntary termination (as defined) following a
change of control, each of Messrs. Goldin and Hoppman would be entitled to a
lump sum cash payment equal to a percentage of the then present value of his
remaining contractual salary along with continued life, health and disability
insurance benefits for a stated period.
The agreement with Kenneth Goldin also provides, in the event of voluntary
termination following a change of control, for a lump sum cash payment equal to
50% of the then present value of his remaining contractual salary (but in no
event less than 50% of his annual salary), along with continued life, health and
disability insurance benefits and car allowances for one year.
Director Compensation
The members of the Company's Compensation Committee During fiscal 1995 were
Allan R. Lyons, Fred A. Shabel and Richard C. Yancey. Allan R. Lyons, Fred A.
Shabel and Richard C. Yancey, each an outside director of the Company, were paid
$2,000 for attending committee meetings for fiscal year 1995. Pursuant to the
Company's 1992 Directors Stock Option Plan, in September 1994, Messrs. Lyons,
Shabel and Yancey were each granted 15,000 non-qualified stock options (the
"Options") at an exercise price of $4.50 per share (100% of the fair market
value of the Company's Common Stock on the date of grant), and 15,000
Retainer Options (the "Retainer Options") at an exercise price of $5.40 per
share (120% of the fair market value of the Company's Common Stock on the date
of grant). The Options and Retainer Options all expire upon the earlier of ten
(10) years from their respective date of grant or three months from the date
such person ceases to be a director of the Company. The Options and Retainer
Options became exercisable on March 1, 1995 and September 1, 1994, respectively.
Upon his election as a director of the Company in December 1994, Gerald B.
Shreiber was granted a non-qualified stock option to purchase 30,000 shares
of the Company's Common Stock at an exercise price of $2.625 per share. The
option has a ten year term and will become exercisable on June 8, 1995. During
fiscal 1995, Mr. Yancey received $25,000 from the Company for financial advice
rendered in accordance with the terms of a consulting agreement with the
Company.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of April 28, 1995, information
concerning beneficial ownership of shares of the Company's Common Stock with
respect to (i) each person known to the Company to own 5% or more of the
outstanding shares of Common Stock, (ii) each director of the Company, (iii)
each of the Named Executive Officers and (iv) all directors and executive
officers of the Company as a group.
<TABLE>
<CAPTION>
Shares
Name and Address Beneficially Percent of
of Beneficial Owner Owned(1) Class(2)
- - ------------------- ------------ ----------
<S> <C> <C>
Directors and
Named Executive Officers*
Kenneth Goldin........... 1,560,150(3) 13.9%
Michael A. Berkus........ 11,000(4) **
Michael Hoppman.......... 28,000(5) **
Robert H. Gartlan........ 0 **
Scott Schnell............ 26,075(6) **
Allan R. Lyons........... 188,000(7) 1.7%
Fred A. Shabel........... 65,000(8) **
Gerald B. Shreiber....... 30,000(9) **
Richard C. Yancey........ 130,000(10) 1.2%
Five Percent Shareholders
Carol Goldin............. 1,324,500(11) 11.8%
526 Garwood Drive
Cherry Hill, NJ 08003
T. Rowe Price
Associates, Inc.***.... 1,117,500 9.9%
100 East Pratt Street
Baltimore, MD 21202
All Directors and Executive
Officers as a Group
(15 persons)............ 2,064,955(12) 18.4%
</TABLE>
- - ---------------
* The address for each such person is c/o The Score Board, Inc., 1951 Old
Cuthbert Road, Cherry Hill, New Jersey 08034.
** Less than one percent.
*** This information has been derived from a listing prepared by Jaffoni &
Collins, Inc. reflecting reports on Form 13F, for the period ending
December 31, 1994, filed by T. Rowe Price Associates, Inc.
- - ---------------
(1) Beneficial ownership consists of sole ownership, voting and disposition
rights, unless otherwise indicated.
(2) Except as otherwise noted, does not include (a) 321,800 shares of Common
Stock reserved for issuance pursuant to the Company's 1987 Stock Option
Plan, (b) 937,400 shares of Common Stock reserved for issuance pursuant to
the Company's 1992 Stock Incentive Plan, (c) 370,000 shares of Common Stock
reserved for issuance pursuant to the Company's 1992 Directors Stock Option
Plan, (d) 960,000 shares of Common Stock reserved for issuance under the
Company's 1993 Non-Employee Stock Option Plan, (e) 4,000 shares of Common
Stock issuable upon the exercise of outstanding options other than those
granted under the aforementioned plans, (f) 784,314 shares of Common Stock
reserved for issuance upon conversion of the Company's 9% convertible,
subordinated debentures due September 1, 2002, and (g) 263,852 shares of
Common Stock reserved for issuance upon conversion of the Company's 9%
convertible, subordinated debentures due February 1, 2003.
(3) Includes 314,750 shares of Common Stock issuable upon exercise of currently
exercisable stock options, but does not include 120,000 shares of Common
Stock issuable upon exercise of stock options granted under the 1992 Stock
Incentive Plan, which are not currently exercisable. The number of shares
of Common Stock reported also includes 489,500 shares of Common Stock over
which Carole Goldin has sole investment power as Executrix and beneficiary
of the Estate of Paul Goldin; Kenneth Goldin was appointed as attorney and
proxy to vote said shares as of June 6, 1994, which proxy remained in full
force and effect until May 11, 1995.
(4) Includes 10,000 shares of Common Stock issuable upon exercise of currently
exercisable options, but does not include 55,000 shares of Common Stock
issuable upon exercise of stock options granted under the 1992 Stock
Incentive Plan which are not currently exercisable.
(5) Includes 28,000 shares of Common Stock issuable upon exercise of currently
exercisable options, but does not include 20,000 shares of Common Stock
issuable upon exercise of stock options granted under the 1992 Stock
Incentive Plan which are not currently exercisable.
(6) Includes 24,375 shares of Common Stock exercisable within 60 days from the
date of this Form 10-K/A, but does not include 24,375 shares of Common
Stock issuable upon exercise of stock options granted under the 1993
Non-Employee Stock Option Plan which are not currently exercisable.
(7) Includes 130,500 shares of Common Stock issuable upon exercise of currently
exercisable stock options.
(8) Includes 60,000 shares of Common Stock issuable upon exercise of currently
exercisable stock options granted under the 1992 Directors Stock Option
Plan.
(9) Includes 30,000 shares of Common Stock under an option exercisable within
60 days from the date of this Form 10-K/A.
(10) Includes 90,000 shares of Common Stock issuable upon exercise of currently
exercisable stock options granted under the 1992 Directors Stock Option
Plan.
(11) Paul Goldin passed away on May 21, 1994. Mr. Goldin's wife, Carole Goldin,
is the Executrix and beneficiary of Mr. Goldin's estate. The number of
shares of Common Stock reported includes 739,000 shares of Common Stock
owned directly by Carole Goldin, 489,500 shares of Common Stock owned by
Carole Goldin as Executrix and beneficiary of the Estate of Paul Goldin
(Kenneth Goldin was appointed as attorney and proxy to vote such shares -
see footnote (3) above) and 96,000 shares of Common Stock issuable upon
exercise of currently exercisable options held by the Estate of Paul
Goldin.
(12) Includes 713,375 shares of Common Stock issuable upon exercise of currently
exercisable stock options, but does not include shares of Common Stock
issuable upon exercise of stock options which are not currently
exercisable. The number of shares of Common Stock reported also includes
489,500 shares of Common Stock over which Carole Goldin has sole investment
power, but which Ken Goldin has power to vote (see footnote (3) above).
Item 13. Certain Relationships and Related Transactions
Barry Didinsky, the brother-in-law of Ken Goldin, was paid an
aggregate of $96,391 during the fiscal year ended January 31, 1995 pursuant
to a then existing employment agreement. This amount includes $87,038 paid to
Mr. Didinsky as base salary and $5,103 in commissions paid on net sales of
Company products to certain regional cable outlets.
As of January 1995, Mr. Didinsky was no longer employed by the Company.
In connection with the termination of Mr. Didinsky's employment, the Company and
Mr. Didinsky entered into a separation and consulting agreement dated January
1995, pursuant to which Mr. Didinsky provided certain consulting services to
the Company through March 31, 1995. Under the terms of said agreement, the
Company paid Mr. Didinsky a severance payment in the amount of $24,000. In
addition, all options to purchase shares of the Company's Common Stock granted
to Mr. Didinsky pursuant to the Company's 1992 Stock Incentive Plan were
cancelled, and Mr. Didinsky was granted an option to purchase 7,500 shares of
the Company's Common Stock, at an exercise price of $3.00 per share, pursuant to
the Company's 1993 Non-Employee Stock Option Plan.
In June 1994, the Company received proceeds of approximately $2,000,000
from a key man life insurance policy on the life of Paul Goldin. In accordance
with Mr. Goldin's employment agreement, the Company is required to pay
approximately $900,000 to Mr. Goldin's estate. The amount payable to Mr.
Goldin's estate as of January 31, 1995 was $738,000.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K
(a) (1) The following financial statements are filed as
part of this Report:
(i) Report of Independent Certified Public Accountants;
(ii) Consolidated Balance Sheets as of January 31, 1995 and 1994;
(iii) Consolidated Statements of Operations for the years
ended January 31, 1995, 1994 and 1993;
(iv) Consolidated Statements of Stockholders' Equity for the years
ended January 31, 1995, 1994 and 1993; and
(v) Consolidated Statements of Cash Flow for the years ended
January 31, 1995, 1994 and 1993.
(2) The following financial statement schedules are filed as
part of this report.
Schedule II. Valuation and Qualifying Accounts and Reserves
All other schedules are omitted, as the required information is either
inapplicable or presented in the financial statements or related notes.
(3) The following Exhibits are filed as part of this Report.
3.1 Certificate of Incorporation, including certain amendments thereto
(1)
3.2 Amendment to Certificate of Incorporation, filed on January 14, 1991
(2)
3.3 Amendment to Certificate of Incorporation, filed on October 26, 1993
(15)
3.4 Agreement and Plan of Merger, dated as of March 30, 1994, among The
Score Board, Inc., California Gold, Inc., Catch A Star Collectibles,
Inc., Score Board Retail Corp. and Score Board Sub, Inc. (15)
3.5 By-Laws (15)
3.5 Amendment to By-Laws, dated June 21, 1990 (4)
10.1 Employment Agreement with Paul Goldin* (15)
10.2 Employment Agreement with Kenneth Goldin* (15)
10.3 Employment Agreement with Barry Bookman* (5) and Consulting and
Separation Agreement dated December 29, 1993 (15)
10.4 Employment Agreement with Frederick G. Wasserman* (6) and Amendment
thereto dated August 31, 1993 (15)
10.5 Employment Agreement with Christine Dolce* (7) and Amendment thereto
dated August 31, 1993 (15)
10.6 Employment Agreement with Jane R. Fuerst* (6), and Amendments
thereto, dated October 5, 1992 (13) and August 31, 1993 (15)
10.7 Employment Agreement with Robert Gartlan* (15) and Consulting
Agreement dated December 24, 1994 (18)
10.8 Employment Agreement with Scott Kelly, and Amendment thereto* (15)
10.9 Employment Agreement with Michael Hoppman* (15)
10.10 Employment Agreement with Scott Schnell* (16) and Consulting and
Separation Agreement dated February 10, 1995 (18)
10.11 The Score Board, Inc. 1987 Stock Option Plan, as amended* (2)
10.12 401(k) Plan* (2)
10.13 Computer Equipment Leases with Wasco Funding Corp. (4)
10.14 Lease Agreement with Woodlands Joint Venture for office and
warehouse space at Troon Circle, Austell, Georgia (7), and amendment
thereto, dated June 30, 1992 (13)
10.15 Lease Agreement with Woodlands Joint Venture for warehouse space at
Troon Circle, Austell, Georgia (15)
10.16 Lease Agreement with Cherry Hill Commerce Center for office and
warehouse space at Cuthbert Road, Cherry Hill, New Jersey (5)
10.17 Lease Agreement with Cherry Hill Commerce Center for office and
warehouse space at Cuthbert Road, Cherry Hill, New Jersey (15)
10.18 Lease Agreement with Cherry Hill Commerce Center for office and
warehouse space at Cuthbert Road, Cherry Hill, New Jersey (15)
10.19 License Agreement with Major League Baseball Players Association re:
Classic Game (1) and Amendment thereto dated January 21, 1993 (15)
10.20 License Agreement No. ML-2483B with Major League Baseball
Properties, Inc. (7) and Amendments thereto dated July 10, 1992 and
March 19, 1993 (No. ML-2483C) (15) re: Classic Game, lithographs and
collecting kits
10.21 Letter Agreement between Paramount Pictures, Inc. and Classic Games,
Inc., dated January 2, 1992 (7) and Amendment thereto dated August
3, 1992 re: Star Trek and Star Trek: Next Generation games (15)
10.22 Merchandise License Agreement between Paramount Pictures, and The
Score Board, Inc., dated June 25, 1991, and Amendments thereto dated
October 30, 1991, June 1, 1992, August 13, 1992, August 1, 1993,
September 15, 1993 (15) and November 10, 1994 (18) re: Star Trek
memorabilia
10.23 Letter Agreement between National Football League Properties, Inc.
and The Score Board, Inc., dated January 2, 1992 re: autographed
memorabilia (7)
10.24 License Agreement No. ML-10014 with Major League Baseball
Properties, Inc. re: Minor league teams, dated March 10, 1992 (7)
10.25 License Agreement No. ML-10013A with Major League Baseball
Properties, Inc. re: Minor league teams, dated March 10, 1992 (7)
10.26 License Agreement No. ML-10008 with Major League Baseball
Properties, Inc., dated March 10, 1992 (7) and Amendments thereto
dated October 6, 1992 and October 14, 1993 re: Minor league teams
(15)
10.27 License Agreement No. ML-10015 with Major League Baseball
Properties, Inc. re: Minor league teams, dated March 10, 1992 (7)
10.28 Form of License Agreement with Minor League Teams re: Short Season
Class A Teams, dated May 1991 (7)
10.29 Form of License Agreement with Minor League Teams re: Class A Teams,
dated May 27, 1991 (7)
10.30 Form of License Agreement with Minor League Teams re: Class AA
Alliance Teams, dated May 17, 1991 (7)
10.31 Sales Representation Agreement with Howard Kay, dated August 31,
1992 and amendments thereto, dated July 20, 1993 and November 4,
1993 (15)
10.32 Form of Indenture, dated September 1, 1992, between The Score Board,
Inc. and Bank America Trust Company of New York, as Trustee (8)
10.33 Form of 9% Convertible Subordinated Debenture (8)
10.34 Credit Agreement with Mellon Bank, N.A., dated September 24, 1992
(11), as amended by Amendment No. 1 to Credit Agreement dated July
16, 1993 (15), Amendment No. 2 to Credit Agreement dated October 7,
1994 (16), Standstill Agreement dated December 7, 1994 (16)
Amendment No. 3 to Credit Agreement dated December 30, 1994 (17),
and Amendment No. 4 to Credit Agreement dated May 1, 1995 (17).
10.35 The Score Board, Inc. 1992 Stock Incentive Plan* (11)
10.36 The Score Board, Inc. 1992 Directors Stock Option Plan* (11)
10.37 The Score Board, Inc. 1993 Non-Employee Stock Option Plan* (15)
10.38 Form of Indenture due February 1, 2003, between The Score Board,
Inc. and Bank America Trust Company of New York, as Trustee (12)
10.39 Form of 9% Convertible Subordinated Debenture (12)
10.40 License Agreement No. ML-2483D with Major League Baseball
Properties, Inc. re: autographed and unautographed memorabilia,
dated May 19, 1994 (18)**
10.41 License Agreement with Major League Baseball Players Association re:
autographed and unautographed memorabilia, dated May 16, 1994 (18)**
10.42 Retail License Agreement with NBA Properties, Inc. re: memorabilia,
dated June 20, 1994 (18)**
21.1 Subsidiaries (17)
23.1 Consent of BDO Seidman re: Form S-8 Registration Statement
pertaining to 1987 Stock Option Plan (17)
23.2 Consent of BDO Seidman re: Form S-8 Registration Statement
pertaining to 1992 Stock Incentive Plan and 1992 Directors Stock
Option Plan (17)
23.3 Consent of BDO Seidman re: Form S-3 Registration Statement
pertaining to 1993 Non-Employee Stock Option Plan (17)
- - -----------------
* Management contract or compensentory plan or arrangement required to be
filed as an exhibit to this Annual Report on Form 10-K.
** Confidential treatment has been requested for portions of this document.
(1) Reference is made to the Registrant's report on Form 10-K for the year
ended January 31, 1989, as filed on May 1, 1989, which is hereby
incorporated by reference.
(2) Reference is made to the Registrant's Form S-8 Registration Statement, as
filed on February 5, 1991, which is hereby incorporated by reference.
(3) Reference is hereby made to the Registrant's report on Form 10-K for the
year ended January 31, 1990, as filed on May 1, 1990, which is hereby
incorporated by reference.
(4) Reference is made to the Registrant's Form S-1 Registration Statement (File
No. 33-36741) as filed on September 10, 1990, which is hereby incorporated
by reference.
(5) Reference is made to the Registrant's report on Form 10-K for the year
ended January 31, 1991, as filed on May 1, 1991, which is hereby
incorporated by reference.
(6) Reference is made to the Registrant's report on Form 10-Q, for the quarter
ended October 31, 1991, as filed on December 14, 1991, which is hereby
incorporated by reference.
(7) Reference is hereby made to the Registrant's report on Form 10-K, for the
year ended January 31, 1992, as filed on April 1, 1992, which is hereby
incorporated by reference.
(8) Reference is hereby made to the Registrant's report on Form 8-K, as filed
on August 13, 1992, which is hereby incorporated by reference.
(9) Reference is made to the Registrant's report on Form 10-Q, for the quarter
ended April 30, 1992, as filed on June 15, 1992, which is hereby
incorporated by reference.
(10) Reference is made to the Registrant's report on Form 10-Q, for the quarter
ended July 31, 1992, as filed on September 15, 1992, which is hereby
incorporated by reference.
(11) Reference is made to the Registrant's report on Form 10-Q, for the quarter
ended October 31, 1992, as filed on December 15, 1992, which is hereby
incorporated by reference.
(12) Reference is hereby made to the Registrant's report on Form 8-K, as filed
on January 26, 1993, which is hereby incorporated by reference.
(13) Reference is hereby made to the Registrant's report on Form 10-K for the
year ended January 31, 1993, as filed on May 3, 1993, which is hereby
incorporated by reference.
(14) Reference is hereby made to the Registrant's Form S-3 Registration
Statement, as filed on September 2, 1993, which is hereby incorporated by
reference.
(15) Reference is hereby made to the Registrant's report on Form 10-K, for the
fiscal year ended January 31, 1994, as filed on May 2, 1994, which is
hereby incorporated by reference.
(16) Reference is hereby made to the Registrant's Form 10-Q for the quarter
ended October 31, 1994, as filed on December 15, 1994, which is hereby
incorporated by reference.
(17) Reference is hereby made to the Registrant's report on Form 10-K, for the
fiscal year ended January 31, 1995, as filed on May 16, 1995, which is
hereby incorporated by reference.
(18) Filed herewith.
(b) Reports on Form 8-K during the fourth quarter of the period covered by this
Report: None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized on May 31, 1995.
THE SCORE BOARD, INC.
By: /s/ Kenneth Goldin
--------------------------------------
Kenneth Goldin, Chairman of the Board,
Chief Executive Officer and President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- - ---------- ----- ----
<S> <C> <C>
/s/ Kenneth Goldin Chairman, President, May 31, 1995
- - ------------------------- Chief Executive
Kenneth Goldin Officer and Director
</TABLE>
<PAGE>
THE SCORE BOARD, INC.
EXHIBITS
TO
FORM 10-K/A-1
FOR THE FISCAL YEAR
JANUARY 31, 1995
<PAGE>
EXHIBIT LIST
10.7 Consulting Agreement with Robert H. Gartlan dated December 24,
1994 (18)
10.10 Consulting and Separation Agreement with Scott Schnell dated
February 10, 1995 (18)
10.22 Merchandise License Agreement between Paramount Pictures, and The
Score Board, Inc., dated June 25, 1991, and Amendments thereto dated
October 30, 1991, June 1, 1992, August 13, 1992, August 1, 1993,
September 15, 1993 (15) and November 10, 1994 (18) re: Star Trek
memorabilia
10.40 License Agreement No. ML-2483D with Major League Baseball
Properties, Inc. re: autographed and unautographed memorabilia,
dated May 19, 1994 (18)**
10.41 License Agreement with Major League Baseball Players Association re:
autographed and unautographed memorabilia, dated May 16, 1994 (18)**
10.42 Retail License Agreement with NBA Properties, Inc. re: memorabilia,
dated June 20, 1994 (18)**
- - -----------------
* Management contract or compensentory plan or arrangement required to be
filed as an exhibit to this Annual Report on Form 10-K.
** Confidential treatment has been requested for portions of this document.
(18) Filed herewith.
(b) Reports on Form 8-K during the fourth quarter of the period covered by this
Report: None.
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made this 24th day of
December, 1994, by and among SB Acquisition Corp. ("SBAC"), The Score Board,
Inc. ("Score Board") and Robert H. Gartlan ("Consultant"). SBAC and Score
Board are hereinafter referred to collectively as the "Company."
W I T N E S S E T H :
WHEREAS, Company and Consultant are parties to that certain Employment
Agreement, dated September 29, 1993 (the "Employment Agreement"), and are also
parties to that certain Asset Purchase Agreement, dated September 29, 1993 (the
"Purchase Agreement"), by and among SBAC, Score Board, Gartlan U.S.A., Inc.
("GUSA") and the Shareholder (as defined in the Purchase Agreement); and
WHEREAS, pursuant to the Purchase Agreement, the Company acquired
certain assets from GUSA, including all right, title and interest in and to the
name "Gartlan U.S.A., Inc." "Gartlan" and variants thereof (collectively, the
"Name") in connection with ceramic products; and
WHEREAS, the Company and Consultant wish to terminate the Employment
Agreement and enter into this Consulting Agreement, so that Consultant will
hereafter serve as an independent contractor and not an employee and/or officer
of Score Board; and
WHEREAS, Consultant desires to purchase from the Company, and the
Company desires to sell to Consultant, all rights, title and interest in and to
the Name;
NOW THEREFORE, in consideration of the mutual promises set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Effective Date. This Agreement is effective as of December 24, 1994
(the "Effective Date"). Within fifteen (15) days of the date hereof, Score
Board shall remit to Consultant a check in the amount of $6,000, covering all
accrued vacation pay through the Effective Date; to the extent that Consultant
is owed any other amounts under the Employment Agreement as of the Effective
Date, Consultant hereby relinquishes any and all claims on account thereof
except as set forth in Paragraphs 4 and 5 hereof. Consultant, on his own behalf
and on behalf of GUSA and the Shareholder, hereby releases and discharges: (i
SBAC from any and all obligations, liabilities or claims arising under the
Employment Agreement, including without limitation any and all Claims that any
of them have against Score Board in connection with the Icon barter transaction;
and (ii) Score Board from any and all obligations, liabilities or claims arising
under that certain Guaranty, dated September 29, 1993, by and between
1
<PAGE>
Score Board, GUSA and Consultant, provided that Score Board hereby agrees to
make all payments described herein, including without limitation, the payments
described in Paragraph 5 hereof.
2. Duties of Consultant.
(a) Upon the terms and conditions set forth herein, Score
Board and Consultant agree that Consultant shall act as a consultant to, and
sales representative for, Score Board with respect to the sale of Inventory and
Products (as such terms are defined in the Employment Agreement). Consultant
shall diligently devote reasonable time and effort to:
(i) market the Inventory and Products to existing customers
and to new customers;
(ii) solicit orders for the Inventory and Products; and
(iii) assist, at Score Board's request, in sourcing Products
from order through shipment and coordinating the production of
Products through subcontractors (including the importation of
raw materials and finished products).
(b) Consultant shall not perform any of the consulting
services described in subparagraph 2(a)(iii) unless expressly directed by the
Chief Executive Officer of Score Board to perform such services, and shall have
the right, exercisable in a reasonable manner, to accept or reject any such
consulting services so requested. Consultant will not on his own initiative
determine what consulting services to provide to Score Board pursuant to
subparagraph 2(a)(iii), and represents and warrants to Score Board that he is
not subject to any restrictive covenant or other legal disability which would
prevent him from assuming or performing the duties and responsibilities required
hereunder.
(c) Consultant shall act as a non-exclusive sales
representative for Score Board with respect to the Inventory and Products. The
cost prices of all Inventory and Products shall be as set forth on the "Current
Inventory Value Standard Cost" report attached as Exhibit A hereto. Consultant
may effect sales at prices not less than 15% above such cost prices at his
discretion. Any sale at a price less than 15% above the cost price shall
require the consent of the Chief Executive Officer of Score Board.
(d) In the performance of services hereunder, Consultant will
make himself available at either his offices at One Greentree Center, Suite 201,
Marlton, NJ 08053, at Score Board's offices at 1951 Old Cuthbert Road, Cherry
Hill, New Jersey, or at any location necessary to perform those services
(including but not limited to customer locations, supplier locations, trade
2
<PAGE>
shows and other marketing venues), for a maximum of seventy-five (75) hours per
month during each month of the Term (as hereinafter defined). The hours required
of Consultant may cumulate, but in no event may the Consultant ever be required
to provide during the Term more than one hundred (100) hours of consulting in
any month as a result of the cumulation of hours without his prior written
consent.
(e) Nothing in this Agreement shall prohibit Consultant from
purchasing items from Inventory for his own account at prices to be negotiated
between Consultant and Score Board, provided that no additional compensation
shall be payable under Paragraph 5 of this Agreement with respect to any such
Inventory.
(f) Subject to the limitations set forth in Paragraph 6
hereof, nothing in this Agreement shall prohibit Score Board from advertising,
promoting, selling or otherwise distributing the Inventory and Products in any
and all channels of trade at such prices as Score Board and Consultant may
determine.
3. Term. Unless sooner terminated in accordance with the terms hereof,
Consultant's retention as a consultant hereunder shall commence on the Effective
Date and shall continue until September 29, 1996 (the "Term").
4. Compensation.
(a) In consideration of the services rendered by the
Consultant hereunder during the Term, the Consultant shall be paid a consulting
fee in the amount of $92,308 during the first year of the Term (December 25,
1994 through September 29, 1995) and in the amount of $135,000 during the second
year of the Term (September 30, 1995 through September 29, 1996). Such
compensation shall be paid at such intervals as Score Board generally pays its
employees.
(b) Score Board will continue to make full payment of medical,
dental, disability and life insurance premiums, which policies shall be
maintained in full force during the Term, as such benefits are then currently
paid to Score Board officers. Consultant shall also receive a car allowance in
the amount of $400 per month during each month of the Term. Score Board shall
also continue in effect the insurance on Consultant's life specified in
Paragraph 11 (a) of the Employment Agreement.
(c) Score Board will promptly reimburse Consultant up to $500
per month for reasonable out-of-pocket expenses actually and properly incurred
by Consultant in connection with his services rendered hereunder within two
weeks of presentation of satisfactory documentation therefor. Score Board shall
not be responsible for Consultant's out-of-pocket expenses in excess of $500 in
any given month unless Score Board has given prior written approval therefor.
(d) In the event that Consultant relocates from New Jersey to
California within the first eighteen (18) months of the Term, Score Board shall
reimburse Consultant for all reasonable costs up to $24,500 incurred in
connection with such relocation. Such
3
<PAGE>
expenses may include, without limitation: (i) travel and lodging in connection
with up to two visits to California, of not more than four days per visit, to
seek permanent housing accommodations; (ii) expenses of moving the furniture and
personal property of Consultant and his family to California; and (iii) such
other expenses as may be agreed to in writing by Score Board.
(e) Score Board shall reimburse Consultant for all legal,
financial services and professional consulting fees of Petit & Martin
and Klavans & Associates incurred by Consultant during the negotiation of
this Agreement within two weeks of presentation of satisfactory documentation
therefor, provided that the amount to be reimbursed by Score Board shall not
exceed $30,000.
(f) On or before the fifteenth day following the end of each
of the first twelve calendar months of the Term, Score Board shall pay to
Consultant the sum of $1,666.67, which amount shall be used by Consultant to
defray the cost of hiring an administrative assistant in connection with the
services to be provided hereunder.
5. Additional Compensation. Score Board shall pay to Consultant the
Payments described in Paragraphs 6(a), (b) and (c) of the Employment Agreement
in compliance with Paragraphs 6(e) and (g) thereof, and Consultant shall
continue to have the audit rights described in Paragraph 6(f) of the Employment
Agreement. Notwithstanding the foregoing, Payments required under Paragraph 6(a)
of the Employment Agreement shall relate only to those Products developed and
marketed prior to the date hereof (including, without limitation, ceramic
baseball caps and football helmets and figurines, statues, plates and cards
depicting Troy Aikman, Shaquille O'Neal, Frank Thomas, Dale Earnhardt and
Patrick Ewing), and shall not relate to future Products which may be sold or
marketed by Score Board or its affiliates, except for those future Products for
which Consultant provides consulting services pursuant to Paragraph 2(a)(iii)
for which additional compensation shall be due.
6. Transfer of Name. Score Board hereby sells, assigns, conveys,
transfers and delivers to Consultant all of Score Board's right, title and
interest in and to the Name as of the Effective Date. Consultant hereby grants
Score Board a nonexclusive license to utilize the name "Gartlan" in connection
with the sale of Inventory and currently existing Products and for no other
purpose. Such license shall expire on the earlier to occur of (i) September 29,
1999 or (ii) the sale of the last item of Inventory or currently existing
Product. Any brochures, advertising material or other material bearing the
Gartlan name or logo not currently in use by Score Board shall be subject to the
prior written approval of Consultant, which approval shall not be unreasonably
withheld. Except as so provided, Score Board covenants that subsequent to the
Effective Date it will not use the name "Gartlan", "Gartlan USA" or any names,
logo or commercial symbol confusingly similar to such names.
7. Termination.
4
<PAGE>
(a) Except as set forth in Paragraph 7(b), Consultant's
services and his right to compensation under this Agreement shall be terminated
during the Term (i) upon a determination by the Board of Directors of Score
Board that there is cause (as defined below) for such termination or (ii) by
resolution of the Board of Directors of Score Board in the event that Consultant
is permanently disabled (as defined below), and after written notice from Score
Board given to the Consultant one (1) week before the termination is to be
effective. For purposes hereof, "cause" for termination shall be defined to mean
a material breach by Consultant of the duties imposed upon him by or pursuant to
this Agreement, and "permanently disabled" shall be defined as Consultant's
failure to perform the duties imposed upon him by or pursuant to this Agreement
for a period of 90 consecutive days during any consecutive 365 day period during
the Term.
(b) During the Term, and following the expiration or
termination of this Agreement pursuant to Paragraph 7(a) hereof, Consultant
shall remain bound by the provisions of Paragraphs 7 and 8 of the Employment
Agreement. In the event that Consultant is terminated pursuant to Paragraph
7(a), Score Board shall be obligated to pay to Consultant (i) any compensation
due pursuant to Paragraph 4(a) hereof accrued up to the date of termination,
(ii) any reimbursement or payment of moving expenses which may become due
pursuant to Paragraph 4(d), and (iii) any amounts due or which subsequently
become due pursuant to Paragraph 5 hereof, in the manner and at the times
provided herein.
(c) In the event of Consultant's death, Consultant's services
and his right to compensation under this Agreement shall be terminated, except
that Score Board shall be obligated to pay to Consultant's legal representative
(i) any compensation due pursuant to Paragraph 4(a) hereof accrued up to the
date of termination, (ii) any reimbursement or payment of moving expenses which
may become due pursuant to Paragraph 4(d) and (iii) the proceeds of the
insurance described in Paragraph 10 of the Employment Agreement. Consultant's
legal representative shall remain bound by the provisions of Paragraphs 7 and 8
of the Employment Agreement.
8. Non-Competition. Consultant agrees that, during the Term and
for a period of one year thereafter, notwithstanding an earlier
termination of this Agreement pursuant to Paragraph 7 hereof:
(a) He will not, on his own behalf or on behalf of any other
person, corporation or entity, enter into any contract, agreement
or other arrangement, whether written or oral, with any athlete with whom
Score Board or any of its subsidiaries has a currently existing
agreement or with any athlete with whom Score Board or any of its
subsidiaries enters into an agreement during the Term. Notwithstanding the
foregoing, Score Board agrees that Consultant may at any time enter into a
contract, agreement or other arrangement with any or all of the athletes
listed on Annex A to Schedule 1.4 of the Purchase Agreement. Score Board
further agrees to provide Consultant with written notice of each athlete
with whom it enters into a contract or agreement during the Term.
(b) He will not, directly or indirectly, be employed by,
provide consulting services for, or be connected in any manner with the
ownership, management, operation or control of, Upper Deck Company, Upper Deck
Authenticated, Sports Impressions, Inc. or any of their affiliates.
(c) He will not, directly or indirectly, contact or attempt to
persuade any agents or employees of Score Board or any of its affiliates to
terminate their relationship with Score Board or its affiliates.
9. Samples. Score Board shall provide to Consultant, at no cost to
Consultant, one (1) sample of each Product or item of Inventory. Consultant
shall use such items as displays and samples for marketing purposes or as sales
personnel road samples. Such items shall become the property of Consultant with
no compensation due to either party pursuant to this Agreement.
10. Miscellaneous. (a) Paragraphs 14 through 22 of the Employment
Agreement are incorporated herein by reference, provided that all references to
Employer in said Paragraphs of the Employment Agreement shall mean Score Board,
and all references to Employee shall mean Consultant. Except to the extent that
provisions of the Employment Agreement are expressly incorporated herein by
reference, the Employment Agreement is terminated as of the Effective Date.
(b) Consultant represents and warrants the he has full power and
authority to execute the release and discharge contained in Paragraph 1 of this
Agreement on behalf of GUSA and the Shareholder.
(c) Score Board and Consultant shall both have full access to any
and all membership lists, mailing lists and databases developed in connection
with the promotion of Inventory and Product, including lists and databases
developed in connection with collectors' clubs.
5
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and delivered as of the date first written above.
THE SCORE BOARD, INC.
By:_____/s/ Ken Goldin___________
Ken Goldin
Chief Executive Officer
____/s/ Robert H. Gartlan_____
Robert H. Gartlan
6
SEPARATION AND CONSULTING AGREEMENT
THIS AGREEMENT is entered into this 10th day of February, 1995, by and
between The Score Board, Inc., a New Jersey corporation having its principal
place of business at 1951 Old Cuthbert Road, Cherry Hill, New Jersey 08034
("Score Board"), and Scott Schnell, an individual residing at 1306 Flat Rock
Road, Penn Valley, Pennsylvania 19072 ("Mr. Schnell").
W I T N E S S E T H:
WHEREAS, Score Board engages in the business of manufacturing,
marketing and distributing sports and entertainment memorabilia, trading cards
and other collectibles; and
WHEREAS, Mr. Schnell and Score Board are parties to that certain
Employment Agreement dated August 19, 1994 (the "Employment Agreement"); and
WHEREAS, Mr. Schnell and Score Board have agreed to terminate Mr.
Schnell's relationship as an employee and Senior Vice President of Score Board,
and as an officer and/or director of each of Score Board's subsidiaries to which
positions he has been elected;
NOW, THEREFORE, in consideration of the mutual covenants, promises and
agreements herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which is mutually acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. TERMINATION. By mutual agreement, Mr. Schnell has tendered his
resignation, effective January 20, 1995, as an employee and Senior Vice
President of Score Board, and as an officer and/or director of each of the
subsidiaries of Score Board to which positions he has been elected, and Score
Board has accepted such resignation.
1
<PAGE>
2. SETTLEMENT.
(a) Payments: Score Board shall pay Mr. Schnell an amount
equal to One Hundred Eighty Five Thousand Dollars ($185,000) in accordance with
the Schedule A attached hereto. Score Board and Mr. Schnell agree, based upon
the nature of the claims which have been asserted by Mr. Schnell or which could
be asserted by Mr. Schnell, that said payments are to settle claims to
compensate Mr. Schnell for damages for alleged personal injuries for
tort-related claims which were, or could have been, asserted by Mr. Schnell. Mr.
Schnell and Score Board believe that under prevailing tax laws and regulations,
the foregoing payments are not taxable and therefore agree to issue such
payments without federal or state tax deductions or federal insurance
contribution act (F.I.C.A.) withholding. The parties agree that Score Board will
not issue forms W-2 or 1099, information returns or any other form with respect
to the payments referred to above. In the event that the foregoing payments
result in any additional federal, state or local income taxes for Mr. Schnell
relating to his 1995 federal, state and local income tax returns, Score Board
agrees to pay Mr. Schnell an amount sufficient to fully compensate Mr. Schnell
for such additional taxes (including penalties and interest) within thirty days
after Mr. Schnell notifies Score Board of the assessment of any such taxes.
(b) Outplacement Services: As additional consideration, Score
Board will pay up to $5,000 for out-placement services used by Mr. Schnell
during the period commencing February 1, 1995 and expiring January 31, 1996, for
assistance in securing employment consistent with his position at Score Board.
Such payments shall be made upon receipt by Score Board of appropriate
documentation therefor.
(c) Computer: As additional consideration, ownership of the
laptop computer and printer used by Mr. Schnell during his employment is hereby
transferred to Mr. Schnell.
3. EMPLOYEE STOCK OPTIONS. Set forth below is a summary of options to
purchase shares of Score Board Common Stock which have been granted to Mr.
Schnell during the term of his employment:
2
<PAGE>
STOCK OPTIONS
<TABLE>
<CAPTION>
Date of Grant Number of Shares Exercise Price
- - ------------- ---------------- --------------
<S> <C> <C>
11/18/92 12,000* $ 8.38
05/10/93 10,000* $ 8.13
08/16/93 13,000* $ 9.13
02/02/94 12,500* $15.25
04/06/94 7,500** $ 9.75
04/06/94 7,500*** $ 9.75
</TABLE>
- - --------------------
* Option granted pursuant to The Score Board, Inc. 1992 Stock Option Plan
("the Plan").
** Grant subject to approval of an amendment to the Plan increasing the common
stock authorized for issuance under the Plan.
*** This grant is part of the Classic relocation pool.
All such options which have not been exercised as of the date hereof are hereby
cancelled effective upon execution of this Agreement
4. CONSULTING AGREEMENT.
(a) Term: Upon the terms and conditions set forth herein, Score Board
and Mr. Schnell agree that Mr. Schnell shall act as a consultant to Score Board
for the period commencing February 1, 1995 and expiring January 31, 1996 (the
"Consulting Period").
(b) Services: In the performance of services hereunder, Mr. Schnell
will make himself available at either his offices at 1306 Flat Rock Road, Penn
Valley, Pennsylvania, or at Score Board's offices at 1951 Old Cuthbert Road,
Cherry Hill, New Jersey, for a maximum of five (5) hours per month during each
month of the Consulting Period, provided that Mr. Schnell shall also make
himself available at the request of Score Board for a fee of Fifty Dollars
($50.00) per hour for the taking of depositions and for service as a trial
witness in connection with any pending, threatened or potential litigation,
administrative proceeding or investigation involving Score Board. Mr. Schnell
shall not perform any consulting services for Score Board unless expressly
directed by the Chief Executive Officer of Score Board to perform such services,
and shall have the right, exercisable in a reasonable manner, to accept or
reject any consulting services so requested. Mr. Schnell will not on his own
initiative determine what consulting services to provide to Score Board, and
represents and warrants to Score Board that he is not subject to any restrictive
covenant or other legal disability which would prevent him from assuming
or performing the duties and responsibilities required hereunder.
3
<PAGE>
(c) Consideration:
In exchange for the consulting services provided hereunder,
the parties agree as follows:
(i) BENEFITS DURING THE CONSULTING PERIOD: Score Board will
continue to make full payment of medical, dental, disability and life insurance
premiums, provided that such benefits shall terminate prior to the end of the
Consulting Period as of the date Mr. Schnell obtains full-time employment with
another entity (it being understood that Mr. Schnell will provide Score Board
with prompt notice of said employment). In addition, Score Board will continue
to pay automobile insurance and up to Five Hundred Dollars ($500.00) in
maintenance and repairs in connection with the Acura Legend currently leased by
Mr. Schnell. Such payments shall be made upon receipt of appropriate
documentation therefor.
(ii) EXPENSES: Score Board will promptly reimburse Mr. Schnell
for all reasonable out-of-pocket expenses incurred at Score Board's request in
connection with his services rendered hereunder upon receipt of appropriate
documentation therefor.
(iii) 1993 NON-EMPLOYEE STOCK OPTIONS: Score Board hereby
grants to Mr. Schnell an option to purchase 48,750 shares of Score Board Common
Stock (the "Option") pursuant to its 1993 Non-Employee Stock Option Plan (the
"1993 Plan"), which Option shall be exercisable at $3.875 per share (the closing
price per share of Score Board's Common Stock, as reported by the National
Association of Securities Dealers Automated Quotation System/National Market
System, on January 20, 1995). One-half of the Option (24,375 shares), or any
portion thereof, may be exercised commencing July 1, 1995 and the remaining
one-half of the Option (24,375 shares), or any portion thereof, may be exercised
commencing January 31, 1996. The option shall expire, and no part of it shall be
exercisable after the close of business on January 31, 1998. Simultaneously upon
the execution of this Agreement, the parties shall cause to be executed a stock
option award agreement, as required by the 1993 Plan, a copy of which is
attached hereto as an exhibit and incorporated herein. Subject to any required
action by the shareholders of Score Board, if Score Board is party to any
reorganization involving a merger or consolidation involving a non-affiliated
entity, or an acquisition of all or substantially all of the assets or stock of
Score Board, the Option will become immediately non-forfeitable and exercisable
(to the extent permitted under federal or state securities laws).
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(d) Non-Compete: During the Consulting Period, Mr. Schnell shall not,
directly or indirectly, own, manage, operate, control, be employed by,
participate in, or be connected in any manner with the ownership, management,
operation or control of Signature Rookies or Superior Rookies and shall not
start up a business or, directly or indirectly, own or control any business that
engages in the manufacture, distribution, sale or offering for sale of rookie or
draft pick trading cards or prepaid telephone cards.
5. RELEASE. Mr. Schnell, in consideration of the representations,
covenants and undertakings agreed to by Score Board pursuant to this Agreement,
does hereby irrevocably and unconditionally release and forever discharge (and
covenants not to sue) Score Board, its subsidiaries and affiliates, and all
officers, directors, employees, agents and stockholders of Score Board and its
subsidiaries, for and from any and all claims, debts, obligations, promises,
bonds, controversies, suits, actions, judgments, damages and liabilities, in law
or in equity (collectively "Claims") Mr. Schnell may have for, upon or by reason
of any matter, cause or thing whatsoever, known or unknown, from the beginning
of time to the date of execution of this Agreement, including without limitation
any Claims:
(a) arising out of or relating to a claimed breach of any contract; or
(b) relating to purported employment discrimination or civil rights
violations under any applicable federal, state or local employment
discrimination statute or ordinance, including but not limited to the Federal
Age Discrimination in Employment Act and the equivalent laws of the State of New
Jersey; or
(c) for any matter related to or arising out of the course of his
active employment, including the termination of said employment relationship.
The parties hereto understand and agree that the above release shall
not release or waive any performance obligation of Score Board under this
Agreement.
6. RELEASE BY SCORE BOARD. Score Board, its subsidiaries and
affiliates, and all officers, directors and shareholders of Score Board and its
subsidiaries, do hereby release and forever discharge (and covenant not to sue)
Mr. Schnell for and from any and all Claims Score Board, its subsidiaries and
affiliates, and all officers and directors may have, from the beginning of time
to the date of execution of this Agreement, including Claims relating to Mr.
Schnell's obligations under his Employment Agreement. Notwithstanding the
foregoing, the parties hereto understand and agree that the above
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<PAGE>
release shall not release or waive any performance obligation of Mr. Schnell
under this Agreement.
7. RIGHT TO REVOKE. Mr. Schnell acknowledges that he has been given at
least twenty-one (21) days to consider this Agreement. He further acknowledges
that he may revoke this Agreement within seven (7) days after the date of
signing this Agreement by providing Score Board with written notification by as
set forth herein.
8. DIRECTORS' AND OFFICERS' LIABILITY INSURANCE, ETC.. This entire
Paragraph 8 is subject expressly to the approval of the insurance company
retained by Score Board to maintain Score Board's Directors and Officers'
Liability Insurance.
Score Board agrees to maintain Directors and Officers Liability
Insurance in the amount of $10,000,000 under which Mr. Schnell will continue to
be a named insured until January 31, 1996. Score Board agrees that, with respect
to any lawsuit filed against Score Board after said date relating to acts
undertaken or omissions occurring prior to said date in which Mr. Schnell is a
named defendant or subpoenaed to testify, produce documents or otherwise respond
or make himself available for questioning, Mr. Schnell will be covered by Score
Board's then outstanding Directors and Officers Liability Insurance to the same
amount and under the same terms (including reimbursement of attorneys' fees) as
Score Board's then current executive officers.
9. CONFIDENTIALITY. Mr. Schnell acknowledges and agrees that any and
all knowledge and information obtained during the course of his employment and
during the Consulting Period, including but not limited to all product
information, trade secrets and all sales, pricing, marketing, production,
statistical, financial, licensing, vendor, supplier, customer and personnel data
or information relating to the business or operations of Score Board and its
subsidiaries, is confidential information ("Confidential Information") and shall
be maintained in confidence except to the extent such information is (a)
publicly available or in the public domain or (b) is independently developed by
Mr. Schnell without use of any Confidential Information. Notwithstanding the
foregoing, the Confidential Information may be disclosed by Mr. Schnell to his
counsel and to the extent required by applicable law or court order. Mr. Schnell
also agrees, upon request and with the assistance of Score Board, to immediately
surrender to Score Board all non-public documents and all corporate-sensitive
documents as determined by Score Board. Mr. Schnell also agrees to sign an
affidavit, after such documents have been surrendered to Score Board,
representing to Score Board that no copies of such documents were made
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<PAGE>
or exist. The provisions of this Paragraph 9 governing confidentiality shall
survive termination or expiration of this Agreement or any section thereof.
10. PRESS RELEASE. The language of any press release relating to the
departure of Mr. Schnell shall be mutually agreed to by the parties.
11. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with the laws of the State of New Jersey without reference to any
conflicts of law principles.
12. AMENDMENT. This Agreement may be amended, supplemented or
interpreted at any time, but only by a written instrument executed by all of the
parties hereof.
13. NOTICES. Except as otherwise provided herein, all notices,
requests, demands and other communications shall be in writing and shall be
deemed to have duly been given when delivered by telecopier, overnight courier
or by United States Certified or Registered Mail, postage prepaid, to the
following address (or such other addresses as shall be given in writing by the
parties to one another):
If to Score Board: The Score Board, Inc.
1951 Old Cuthbert Road
Cherry Hill, NJ 08034
Attn: Mr. Ken Goldin
With a copy to: The Score Board, Inc.
1951 Old Cuthbert Road
Cherry Hill, NJ 08034
Attn: Legal Department
If to Mr. Schnell: Mr. Scott Schnell
1306 Flat Rock Road
Penn Valley, Pennsylvania 19072
14 REPRESENTATIONS. Score Board represents that all corporate action
necessary to be taken to authorize the execution and performance of this
Agreement according to its terms has been duly taken, and that this Agreement is
a valid, lawful and binding obligation of Score Board. Mr. Schnell represents
that he has full legal capacity to enter into this Agreement and to bind himself
to the terms hereof. Score Board and Mr. Schnell each represent and acknowledge
that, in executing this Agreement, they did not rely on and have not relied on
any representation or statement not set forth herein.
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15. NON-DISPARAGEMENT; EMPLOYMENT REFERENCE. Score Board and Mr.
Schnell agree not to make any disparaging statements concerning the other, or to
defame the other in any manner. Score Board further agrees that it will provide
Mr. Schnell with an employment reference anytime Score Board is requested to do
so by Mr. Schnell or any prospective employer of Mr. Schnell. Score Board agrees
that such reference will be complimentary of Mr. Schnell's employment record and
his skills.
16. ARBITRATION. Any dispute, controversy or claim arising from or
relating to this Agreement or any breach hereof shall be finally settled by
arbitration. In the event that arbitration is initiated, arbitration meetings
shall be held in Camden County, New Jersey, unless otherwise agreed to by the
parties in writing. Arbitration shall be conducted in accordance with the rules
of the American Arbitration Association.
17. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties concerning the transactions contemplated herein and
supersedes all prior agreements or understandings between the parties hereto. No
oral representation, agreement or understanding made by a party hereto shall be
valid or binding upon such party or any other party hereto.
18. SUCCESSORS AND ASSIGNS. This Agreement is binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns, administrators, executors, personal representation and heirs (including
but not limited to purchasers of stock and/or assets).
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
THE SCORE BOARD, INC.
By: ______/s/ Ken Goldin________________
Ken Goldin
Chief Executive Officer
SCOTT SCHNELL
_____/s/ Scott Schnell______________
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SCHEDULE A
<TABLE>
<CAPTION>
PAYMENT DATE AMOUNT
------------ ------
<S> <C>
February 10, 1995 $70,000
March 10, 1995 $30,000
April 10, 1995 $35,000
May 10, 1995 $10,000
June 10, 1995 $10,000
July 10, 1995 $10,000
August 10, 1995 $10,000
September 10, 1995 $10,000
</TABLE>
10
Exhibit 10.22
PARAMOUNT PICTURES CORPORATION
<PAGE>
PARAMOUNT LICENSING GROUP
- - ---------------------------------------------------------------------------
5555 Melrose Avenue Elizabeth R. Dambriunas
Hollywood, CA 90038-3197 Vice President, Legal
213-956-5187 Merchandising & Licensing
Fax 213-956-1011
as of November 10, 1994
The Score Board, Inc.
1951 Old Cuthbert Rd.
Cherry Hill, NJ 08034
Attn: Mr. Ken Goldin
Re: PARAMOUNT PICTURES CORPORATION/THE SCORE BOARD, INC.
-- STAR TREK
Gentlemen:
Reference is made to the Merchandising License Agreement between Paramount
Pictures Corporation ("Paramount") and The Score Board, Inc. ("Licensee") dated
as of June 25, 1991, and as amended on October 30, 1991, August 13, 1992, June
1, 1993, August 1, 1993, and September 15, 1993 (hereinafter collectively
referred to as the "Agreement").
The parties agree to further amend the Agreement as follows:
1. Property: Without limiting the definition of "Property" as used in the
Prior Agreements, the term "Property" shall hereafter include, solely on a
non-exclusive basis, the television series tentatively entitled "STAR TREK:
VOYAGER".
2. Term: The Term shall be extended for the period of October 1, 1995 to
September 30, 1996 on a non-exclusive basis (the "Extended Term").
3. Grant of Rights: As of the date hereof and continuing until full payment
and receipt by Paramount of all of the amounts referred to in Paragraph 4 below,
and during the Extended Term as referred to in Paragraph 2 above, Licensee's
rights as granted under the Agreement shall be deemed non-exclusive. Upon
Paramount's receipt of all amounts payable pursuant to Paragraph 4 below, those
rights previously granted to Licensee under the Agreement on an exclusive basis
shall once again be deemed exclusive. For purposes of clarification, upon
receipt of the aforesaid payment, Licensee's rights shall be deemed exclusive
such that Paramount shall not license any third party the right to sell items
similar or identical to the Licensed Articles through QVC, Home Shopping Club,
<PAGE>
Scoreboard Amendment
November 10, 1994
Page 2
Value Vision, and Shop At Home cable television networks. In respect of sales of
the Licensed Articles in Canada through QVC, Home Shopping Club, Canadian Home
Shopping Club, Value Vision, and Shop At Home, and for all sales of the Licensed
Articles hereunder through any and all other cable television shopping networks,
direct response television, direct mail/catalog outlets, and retail outlets,
Licensee's rights hereunder shall be non-exclusive.
4. Payment:
(a) Pursuant to the Agreement, By Amendment dated September 15, 1993,
Licensee owed to Paramount a Guarantee of $1,500,000 against Royalties
payable through October 1, 1994. Paramount and Licensee acknowledge that a
balance of $500,000 is past due and owing to Paramount in respect thereof
("Shortfall Amount"). Accordingly, Paramount and Licensee agree that
Licensee shall pay the Shortfall Amount as follows:
(i) $100,000 within seven (7) days of execution hereof;
(ii) $200,000 on or before December 15, 1994;
(iii) $100,000 on or before March 15, 1995; and
(iv) $100,000 on or before June 15, 1995.
(b) In consideration for the additional rights granted to Licensee in
Paragraph 1 above in respect of the "Star Trek: Voyager" television series,
Licensee shall pay to Paramount an additional sum of $100,000 on or before
December 1, 1995, to be applied against Royalties due Paramount under the
Agreement.
(c) Licensee and Paramount acknowledge that simultaneously with the
execution of this Amendment, they are amending the Stock Option Agreement,
to be executed by the parties
<PAGE>
Scoreboard Amendment
November 10, 1994
Page 3
concurrently herewith, in the form as attached hereto as Exhibit "A" and
incorporated herein by this reference.
Except as otherwise modified hereinabove, all other terms and conditions of
the Agreement shall remain in full force and effect and are hereby ratified and
affirmed.
Kindly indicate your agreement with the foregoing by signing in the space
provided below.
Very truly yours,
PARAMOUNT PICTURES CORPORATION
By: /s/ Karen Magid
Its: Karen Magid, Senior V.P. - Legal
Dated: December 2, 1994
AGREED TO AND ACCEPTED:
THE SCORE BOARD, INC.
By: __________/s/ KEN GOLDIN____________
Its: ___________________________________
Dated: _________________________________
Exhibit 10.40
MLBP #2483D
1
<PAGE>
Contract No. ML-2483D
MAJOR LEAGUE BASEBALL PROPERTIES, INC.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT by and between Major League Baseball Properties,
Inc., 350 Park Avenue, New York, NY 10022 (hereinafter referred to as
"Licensor"), as agent for the Major League Baseball Clubs (the "Clubs"), and The
Score Board, 1951 Old Cuthbert Road, Cherry Hill, NJ 08034 (hereinafter referred
to as "Licensee") is made as of the latest date signed by the parties hereto.
THIS WILL CONFIRM OUR AGREEMENT AS FOLLOWS:
1. GRANT OF LICENSE: Licensor grants to Licensee for the term of this
Agreement, subject to the terms and conditions hereinafter contained, the
non-exclusive license to utilize the names, characters, symbols, designs,
likenesses and visual representations described in Schedule A attached hereto
(herein such names, characters, symbols, designs, likenesses and visual
representations are collectively called "Logos"), to be used solely in
connection with the manufacture, distribution, promotion, advertisement and sale
of the article or articles specified in Schedule B attached hereto (herein such
article or articles are called "Licensed Product(s)"). This license does not
constitute and may not be used so as to imply the endorsement of the Licensed
Product(s) or any other product of Licensee by Licensor, the Office of the
Commissioner of Baseball, the American or National League of Professional
Baseball Clubs (hereinafter referred to as the "Leagues") or the Clubs. While
the Logos licensed herein may be used as trademarks subject to the terms of this
License Agreement, the Logos are not licensed herein for use as certification
marks or indications of a particular standard of quality. Any exclusivity
granted hereunder shall be subject to presently outstanding agreements granted
by the Clubs. Further, any exclusivity granted hereunder shall pertain only to
the extent of the items described and, if given, at the price set forth in
Schedule E. Licensor warrants and represents that as the agent for the Clubs,
pursuant to authority granted by the Clubs, it has the full authority to license
the Logos in connection with the manufacture, distribution, promotion,
advertisement and sale of the Licensed Product(s).
2. TERRITORY: Licensee shall be entitled to use the license granted
hereunder only in the territory described in Schedule C attached hereto (herein
such territory is called "Licensed Territory"). Licensee will not make use of or
authorize any use of this license or the Licensed Product(s) outside the
Licensed Territory or distribute or sell the Licensed Product(s) directly or
through others to retailers outside the Licensed Territory.
3. LICENSE PERIOD: The license granted hereunder shall be effective and
terminate as of the dates specified in Schedule D attached hereto, unless sooner
terminated or renewed in accordance with the terms and conditions hereof.
4. PAYMENT: A. Advance and Guaranteed Compensation: Licensee agrees to pay
Licensor the sums specified in Schedule E attached hereto, as advance minimum
compensation (herein called "Advance Compensation") and as guaranteed minimum
compensation (herein called "Guaranteed Compensation"). The Advance Compensation
shall be paid as set forth in Schedule E, and shall apply against Percentage
Compensation as defined below. The Guaranteed Compensation shall be paid as
provided in Schedule E except to the extent that paid Advance Compensation and
annual cumulative payments of Percentage Compensation shall theretofore have
offset all or a portion of the total of such Guaranteed Compensation.
Notwithstanding the foregoing, no part of Percentage Compensation which may be
attributable to premium sales (as defined hereunder) of the Licensed Product(s)
shall serve to offset any part of the Total Guaranteed Compensation specified in
Schedule E. No part of such Advance Compensation and no part of such Guaranteed
Compensation shall be repayable to Licensee in any event, except as is expressly
provided for herein.
B. Percentage Compensation: Licensee agrees to pay Licensor a sum equal to
the percentage specified in Schedule E (or Licensor's prevailing rate, if
greater) of all net sales (as defined below) by Licensee or any of its
affiliated, associated or subsidiary entities of the Licensed Product(s) covered
by this Agreement. (Such percentage of net sales is herein called "Percentage
Compensation.") Percentage Compensation shall be payable concurrently with the
periodic statements required in the following paragraph, except to the extent
offset by Guaranteed Compensation theretofore remitted. The term "net sales"
shall mean gross sales based on the wholesale price to the retail trade less
quantity discounts and actual returns, but no deduction shall be made for
uncollectible accounts, commissions, taxes, discounts other than quantity
discounts, such as cash discounts and discounts attributable to the issuance of
a letter of credit, or any other amount. No costs incurred in the manufacture,
sale, distribution, promotion or advertisement of the Licensed Product(s) shall
be deducted from any Percentage Compensation payable by Licensee. Said
Percentage Compensation shall also be paid by Licensee to Licensor on all
Licensed Product(s) (including, without limitation, any irregulars, seconds,
etc. distributed pursuant to the provisions of Paragraph 10 of this Agreement)
distributed by Licensee or any of its affiliated,
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<PAGE>
associated or subsidiary entities even if not billed or billed at less than
usual net sales price for such Licensed Product(s), and shall be based upon the
usual net sales price for such Licensed Product(s) sold to the trade by
Licensee. Any late payments of Advance Compensation, Guaranteed Compensation or
Percentage Compensation shall require Licensee to pay Licensor, in addition to
the amounts due, interest at one percent (1%) per month or the highest prime
lending rate of Chemical Bank during the period such amounts are delinquent,
whichever is greater, on the amounts delinquent for the period of the
delinquency, without prejudice to any other rights of Licensor in connection
therewith.
C. Catalog Contribution: Licensee agrees that Licensor shall have the right
in its sole discretion and in a style and manner in which it chooses, to print
catalogs, sales sheets or brochures (hereinafter "catalogs") wherein
representative merchandise from licensees of Licensor shall be displayed. In
this regard, Licensee agrees it will purchase from Licensor, at prevailing
rates, a minimum of one page in every catalog published during the term of this
Agreement in order to promote the Licensed Product(s), unless Licensee's
purchase obligation is excused by Licensor in writing. Licensee shall promptly
pay all amounts due upon invoicing and shall timely furnish materials necessary
to the publication of the catalogs. All payments made by Licensee in connection
with the publication of the catalogs shall be in addition to all other payments,
and shall not be credited against Advance Compensation, Guaranteed Compensation
or Percentage Compensation otherwise required hereunder.
5. PERIODIC STATEMENTS: Within thirty (30) days after the first day of the
license period, and promptly on the 15th day of every calendar month thereafter,
Licensee shall furnish to Licensor complete and accurate statements, certified
to be accurate by Licensee, or if a corporation, by an officer of Licensee,
showing the sales volume of each Licensed Product (itemized by Club, for each
applicable Licensed Product), gross sales price, itemized deductions from gross
sales price, and net sales price of the Licensed Product(s) distributed and/or
sold by Licensee during the preceding calendar month, together with any returns
made during the preceding calendar month. Such statements shall be furnished to
Licensor whether or not any of the Licensed Product(s) have been sold, or any
payment is shown to be due Licensor, during the calendar months in which such
statements are due. Licensee shall furnish to Licensor sufficient background
information so as to make such statements intelligible to Licensor, and on an
annual basis, a complete list of Licensee's customers to whom Licensed
Product(s) have been sold. Licensor agrees that it will not divulge said
customer list to any other licensee, to any other competitor licensing
organization, or to any competitor of Licensee. Receipt or acceptance by
Licensor of any of the statements furnished pursuant to this Agreement or of any
sums paid hereunder shall not preclude Licensor from questioning the correctness
thereof at any time, and in the event that any inconsistencies or mistakes are
discovered in such statements or payments, they shall immediately be rectified
and the appropriate payments made by Licensee. Late payment penalties, if any,
shall be made pursuant to Paragraph 4.B. Upon demand of Licensor, Licensee shall
at its own expense, but not more than once in any twelve (12) month period,
furnish to Licensor a detailed statement certified by an independent certified
public accounting firm approved by Licensor showing the sales volume of each
Licensed Product (itemized by Club, for each applicable Licensed Product), gross
sales price, itemized deductions from gross sales price and net sales price of
the Licensed Product(s) covered by this Agreement distributed and/or sold by
Licensee to the date of the Licensor's demand. All amounts payable pursuant to
this Agreement shall be in U.S. dollars only.
6. BOOKS AND RECORDS: Licensee shall keep, maintain and preserve in its
principal place of business for at least two (2) years following termination or
expiration of this Agreement or any renewal thereof, complete and accurate
records and accounts covering all transactions relating to this Agreement and
pertaining to the various items required to be shown on the statements to be
submitted by Licensee, including, without limitation, invoices, correspondence
and banking, financial and other records in Licensee's possession or under its
control. Such records and accounts shall be available for inspection and audit
(and copying at Licensor's expense) at any time or times during or after the
term or terms of this Agreement during reasonable business hours and upon
reasonable notice by Licensor or its representatives. Licensee agrees not to
cause or permit any interference with Licensor or representatives of Licensor in
the performance of their duties of inspection and audit.
The exercise by Licensor, in whole or in part or at any time or times, of
the right to audit records and accounts or of any other right herein granted,
the acceptance by Licensor of any statement or statements or the receipt and
deposit by Licensor of any payment tendered by or on behalf of Licensee shall be
without prejudice to any rights or remedies of Licensor and shall not estop or
prevent Licensor from thereafter disputing the accuracy of any such statement or
payment.
If pursuant to its right hereunder to audit and inspect Licensor causes an
audit and inspection to be instituted which thereafter discloses a deficiency of
three percent (3%) or more between the amount found to be due to Licensor and
the amount actually paid or credited to Licensor, then Licensee shall be
responsible for payment of the entire deficiency, together with interest thereon
at the then current prime rate of Chemical Bank or its successor from the date
such amount became due until the date of payment, and the costs and expenses of
such audit and inspection. If the audit discloses a deficiency of less than
three percent (3%) between the amount found to be due to Licensor and the amount
actually paid or credited to Licensor, and if the amount actually paid or
credited to Licensor plus the deficiency exceeds the Guaranteed Compensation for
the period covered by the deficiency, then Licensee shall pay Licensor the
amount of the deficiency plus interest as calculated above.
7. INDEMNIFICATIONS AND PROTECTIONS: A. Licensor hereby agrees to
indemnify, defend and hold Licensee and its owners, shareholders, directors,
officers, employees, agents, representatives, successors and assigns harmless
from any claims, suits, damages or costs (including reasonable attorneys' fees
and expenses) arising
3
<PAGE>
expenses) arising from (i) challenges to Licensor's authority as agent for and
pursuant to authority granted by the Clubs to license the Logos in connection
with the manufacture, distribution, promotion, advertisement and sale of the
Licensed Product(s) or (ii) assertions to any claim of right or interest in or
to the Logos as authorized and used on the Licensed Products, provided in each
case that Licensee shall give prompt written notice, cooperation and assistance
to Licensor relative to any such claim or suit, and provided further in each
case that Licensor shall have the option to undertake and conduct the defense of
any suit so brought and to engage in settlement thereof at its sole discretion.
B. Licensee shall assist Licensor, to the extent necessary, in the
procurement of any protection or to protect any of Licensor's rights to the
Logos, and Licensor, if it so desires and in its sole discretion, may commence
or prosecute any claims or suits in its own name or in the name of Licensee or
join Licensee as a party thereto. Licensee shall notify Licensor in writing of
any infringements or imitations by others of the Logos of which it is aware.
Licensor shall have the sole right to determine whether or not any action shall
be taken on account of such infringements or imitations. Licensee shall not
institute any suit or take any action on account of any such infringements or
imitations without first obtaining the written consent of Licensor to do so.
Licensee agrees that it is not entitled to share in any proceeds received by
Licensor (by settlement or otherwise) in connection with any formal or informal
action brought by Licensor hereunder.
C. Licensee hereby agrees to indemnify, defend and hold Licensor, the
Clubs, the Leagues and the Office of the Commissioner of Baseball and their
respective owners, shareholders, directors, officers, employees, agents,
representatives, successors and assigns harmless from any claims, suits, damages
and costs (including reasonable attorneys' fees and expenses) arising out of (i)
any unauthorized use of or infringement of any trademark, service mark,
copyright, patent, process, method or device by Licensee in connection with the
Licensed Product(s) covered by this Agreement, (ii) alleged defects or
deficiencies in said Licensed Product(s) or the use thereof, or false
advertising, fraud, misrepresentation or other claims related to the Licensed
Product(s) not involving a claim of right to the Logos, (iii) the unauthorized
use of the Logos or any breach by Licensee of this Agreement, (iv) libel or
slander against, or invasion of the right of privacy, publicity or property of,
or violation or misappropriation of any other right of any third party, and/ or
(v) agreements or alleged agreements made or entered into by Licensee to
effectuate the terms of this Agreement. Licensor shall give Licensee notice of
the making of any claim or the institution of any action hereunder and Licensor
may at its option participate in any action. The indemnifications hereunder
shall survive the expiration or termination of this Agreement.
8. INSURANCE: Licensee agrees to obtain, at its own cost and expense,
comprehensive general liability insurance including product liability insurance
from an insurance company acceptable to Licensor, providing adequate protection
for Licensor, the Clubs, the Leagues, the Office of the Commissioner of Baseball
and Licensee against any claims or suits arising out of any of the circumstances
described in Paragraph 7C above for which insurer is able to provide insurance,
in an amount no less than $3,000,000.00 (three million dollars) per incident or
occurrence, or Licensee's standard insurance policy limits, whichever is
greater, and with a reasonable deductible in relation thereto. Such insurance
shall remain in force at all times during the license period and for a period of
five years thereafter. Within thirty (30) days from the date hereof, Licensee
will submit to Licensor a fully paid policy or certificate of insurance naming
Licensor, the Leagues and the Office of the Commissioner of Baseball as
additional insured parties and requiring that the insurer shall not terminate or
materially modify such policy or certificate of insurance without written notice
to Licensor at least thirty (30) days in advance thereof.
9. COPYRIGHT AND TRADEMARK NOTICES AND REGISTRATIONS: Licensee further
agrees that in any instance wherein the Logos of the Clubs and/or the Leagues
are used, the following general notice shall be included (i.e., on the product,
on a label, on the packaging material or on a separate slip of paper attached to
the product): "The Major League Club insignias depicted on this product are
trademarks which are the exclusive property of the respective Major League Clubs
and may not be reproduced without their written consent." Further, all products
containing the Logos shall contain a hangtag and label with Licensees name
stating "Genuine Merchandise" and containing the Major League Baseball
silhouetted batter logo and, where appropriate, the Major League Baseball
Cooperstown Collection logo or Major League Baseball Authentic Diamond
Collection logo. All Licensed Product(s) shall contain a permanently affixed
label that displays Licensees name. All Licensed Product(s) components which
bear any of the Logos (embroidered emblems, cloth or paper labels, hangtags,
etc.) shall be manufactured in-house by Licensee or shall be obtained only from
one or more suppliers officially authorized by Licensor to produce those
components. All Licensee advertisements displaying the Logos, all retailer
advertisements featuring Licensed Product(s) and of which Licensee has knowledge
or any Licensed Product(s), shall contain the words "Genuine Merchandise" and
the silhouetted batter logo. Licensee shall require those to whom it sells
Licensed Product(s) directly or indirectly to display the words "Genuine
Merchandise" (or such other appropriate notice as directed by Licensor) and the
silhouetted batter logo in all advertisements. All uses of the Logos shall also
include any designations legally required or useful for enforcement of
copyright, trademark or service mark rights (e.g., "(c)," "(R)" or TM").
Licensee shall submit a copy of its specifications for all of the above notices
(including copies of its artwork, layouts or mold blueprints) to Licensor for
its review. Licensor shall have the right to revise the above notice
requirements and to require such other notices as shall be reasonably necessary
to protect the interests of Licensor, the Clubs and/or the Leagues in the
respective Logos. Licensee agrees to advise Licensor of the initial date of the
marketing of each Licensed Product, and upon request, to deliver to Licensor the
required number and type of specimen samples of the Licensed Product, labels or
the like upon which the Logos are used for use in procuring copyright, trademark
and/or service mark registrations in the name of and at the expense of the
person, firm, corporation or other legal entity owning the Logos, in compliance
with any laws relating to copyright, trademark and service mark registrations.
Except to the extent set forth in any schedules attached to this Agreement,
Licensor, the Clubs and/or the Leagues shall be solely responsible for taking
such action as it or they deem appropriate to obtain such copyright, trademark
or service mark registrations for its or their Logos. If it shall be necessary
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for Licensee to be the applicant to effect any such registrations, Licensee
shall and hereby does assign all of its rights in each such application and any
resulting registration to Licensor or any other appropriate owner thereof, and
further agrees to execute all papers necessary to effectuate and/or confirm such
assignments. Licensee shall perform all acts necessary and execute all documents
necessary to effectuate its registration as a user of the Logos where such
registration is needed.
Licensee also agrees that, in any case where it employs the services of
photographers or artists in connection with the production, promotion, marketing
or distribution of the Licensed Product(s), it will require each such
photographer or artist to agree that the photographic or artistic works he or
she produces for Licensee shall be "works made for hire" for the purposes of the
copyright laws, and that to the extent such photographic or artistic works may
not qualify as "works made for hire," the copyright in each such work is
assigned to Licensee.
10. APPROVALS: Licensor shall have absolute approval of the Licensed
Product(s) and of all packaging, advertising and promotional material at all
stages of the development thereof. Licensee agrees to furnish in a timely manner
to Licensor, free of cost, for its written approval as to quality and style,
designs of each Licensed Product and samples of each Licensed Product before its
manufacture, sale, promotion, advertisement or distribution, whichever first
occurs, and samples of all advertising, point-of-sale displays, catalogs, sales
sheets and other items that display or picture the Logos, and no such Licensed
Product or other such materials shall be manufactured, sold, promoted,
advertised or distributed by Licensee without such prior written approval. In
particular, no use of any Logo or Logos shall be made on stationery of Licensee
(specifically including, without limitation, letterhead, envelopes, business
cards, shopping bags, invoices, statements, packing slips, etc.) without
Licensor's express written approval in advance of any such use. In addition, no
irregulars, seconds or other Licensed Products which do not conform in all
material respects to the approved samples may be distributed or sold without the
express written advance consent of Licensor. All such sales, if made, shall bear
Percentage Compensation as set forth in Paragraph 4.B. Subject, in each
instance, to the prior written approval of Licensor, Licensee or its agents may
use textual and/or pictorial matter pertaining to the Logos on such promotional
display and advertising material as may, in its judgment, promote the sale of
the Licensed Product(s). All promotional display and advertising material must
contain and prominently display the official logo of Licensor. Ten samples of
each Licensed Product shall be supplied free of cost to Licensor, and one to
each Club whose Logos are used on such Licensed Product(s). From time to time
subsequent to final approval, a reasonable number of production samples shall
periodically be sent to Licensor free of cost. Such samples shall also be sent
upon any change in design, style or quality, which shall necessitate subsequent
approvals by Licensor. Additional samples shall be supplied to Licensor upon
request at no more than cost. Licensor shall also have the right to inspect
Licensee's plants, warehouses or storage facilities at any reasonable time
without notice.
In the event that any item or matter submitted to Licensor under this
Agreement for approval or consent shall not have been approved or consented to,
disapproved or denied, or commented upon within twenty (20) Licensor business
days after receipt thereof by Licensor (both Account Supervisor and Quality
Control), and Licensor (both Account Supervisor and Quality Control) shall have
received notice from Licensee that comment is overdue by telegram or other
written communication, and Licensor shall not have commented within five (5)
additional Licensor business days of receipt of such notice, any items or
matters so submitted shall be deemed approved and consented to.
In any instance where any matter is required to be submitted to Licensor
for Licensor's approval, that approval shall be granted or withheld in
Licensor's sole discretion.
11. DISTRIBUTION: Licensee shall sell the Licensed Product(s) to jobbers,
wholesalers, distributors or retailers for sale or resale and distribution to
retail stores and merchants for their resale and distribution or directly to the
public. In the event Licensee sells or distributes a Licensed Product at a
special price directly or indirectly to itself, including, without limitation,
any subsidiary of Licensee, or to any other person, firm or corporation related
in any manner to Licensee or its officers, directors or major stockholders,
Licensee shall pay compensation with respect to such sales or distribution based
upon the price generally charged the trade by Licensee.
12. GOODWILL: Licensee recognizes the great value of the publicity and good
will associated with the Logos and, in such connection, acknowledges that such
good will belongs exclusively to Licensor, the Clubs, the Office of the
Commissioner of Baseball and/or the Leagues and that the Logos have acquired a
secondary meaning in the minds of the purchasing public.
13. SPECIFIC UNDERTAKINGS OF LICENSEE: During the license period, each
additional license period if any and thereafter, Licensee agrees that:
A. It will not acquire any rights in the Logos as a result of its use
thereof and all use of the Logos shall inure to Licensor's benefit;
B. It will not, directly or indirectly, attack the title of Licensor, the
Clubs, the Office of the Commissioner of Baseball and/or the Leagues in and to
the Logos or any copyright, trademark or service mark pertaining thereto, nor
will it attack the validity of the license granted hereunder, nor will it use
the Logos in any manner other than as licensed hereunder;
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C. It will not at any time apply for any registration of any copyright,
trademark, service mark or other designation which would affect the ownership of
the Logos, or file any document with any governmental authority or take any
action which would affect the ownership of the Logos or aid or abet anyone in
doing so;
D. It will not harm, misuse or bring into disrepute the Logos;
E. It will manufacture, sell, promote, advertise and distribute the
Licensed Product(s) in a legal and ethical manner and in accordance with the
terms and intent of this Agreement;
F. It will not create any expenses chargeable to Licensor without the prior
written approval of Licensor;
G. It will protect to the best of its ability the right to manufacture,
sell and distribute the Licensed Product(s) hereunder;
H. It will not use the Licensed Product(s) for combination sales, as
self-liquidating or free giveaways or for any similar method of merchandising
without the prior written consent of Licensor and will exercise due care that
its customers likewise will refrain from making such use of the Licensed
Product(s);
I. It will not, without the prior written consent of Licensor, enter into
any sublicense or agency agreement for the manufacture, sale, promotion,
advertisement or distribution of the Licensed Product(s);
J. It will not engage in tying practices, illegal restraints of trade, or
selling practices that exclude any members of the retail trade for any reason
other than poor credit history, known lack of integrity or disregard for the
rights of Licensor or Major League Baseball. Nothing in the preceding sentence
shall be deemed to require Licensee to violate any other term of this Agreement;
K. It will not use, or knowingly permit the use of, the Licensed Product(s)
as a premium, except with the prior written consent of Licensor and the specific
negotiation of a higher royalty payment therefor. For purposes of this
subparagraph and Paragraph 19 below, the term "premium" shall be defined as
including, but not necessarily limited to, free or self-liquidating items
offered to the public in conjunction with the sale or promotion of a product or
service, including traffic building or continuity visits by the
consumer/customer, or any similar scheme or device, the prime intent of which is
to use the Licensed Product(s) in such a way as to promote, publicize and/or
sell the products, services or business image of the third party company or
manufacturer. "Premium" use shall also specifically include distribution of the
Licensed Product(s) for retail sale through distribution channels (including,
without limitation, catalogs) offering earned discounts or "bonus" points based
upon the extent of usage of the offeror's product or service;
L. It will comply with such guidelines and/or requirements as Licensor may
announce from time to time. It will comply with all laws, regulations and
standards relating or pertaining to the manufacture, sale, advertising or use of
the Licensed Product(s) and shall maintain the highest quality and standards,
and shall comply with the requirements of any regulatory agencies (including,
without limitation, the United States Consumer Safety Commission) which shall
have jurisdiction over the Licensed Product(s);
M. It guarantees that Licensor, Clubs, official Club and/or Licensor retail
stores, Club in-stadium concessionaires and the Clubs belonging to The National
Association of Professional Baseball Leagues ("NAPBL Clubs") will obtain the
Licensed Product(s) for retail sale at lowest possible wholesale prices and
shall receive prompt shipments and/or deliveries of the Licensed Product(s),
without regard to the relatively small volume their orders may represent.
Licensor, Clubs and NAPBL Clubs may obtain the Licensed Product(s) for their
use, but not resale, at the manufacturer's lowest possible price, which shall in
no event be greater than its lowest wholesale price;
N. It will furnish to Licensor, upon request of Licensor (which shall be
made only for reasonable cause and no more often than once per year), a list of
all its distributors, sales representatives and jobbers for the Licensed
Product(s), as well as a list of all its "trade names," said list to include the
company name, address, telephone number, territorial representation and key
contact name. Licensor agrees that it will not divulge any information provided
to it under this paragraph to any other competitor licensing organization;
O. Concurrently with its execution of this Agreement, it will provide
Licensor with the names, addresses, telephone numbers and names of principal
contacts of each party (hereinafter referred to as "Manufacturer"), both
domestic and foreign, that Licensee desires or intends to have produce one or
more of the Licensed Products in the event Licensee desires not to be the
manufacturer of such Licensed Product(s). This information shall be set out in
Schedule F of this Agreement and Licensee shall specify the Licensed Product(s)
Manufacturer will produce. In the event Licensee wishes to substitute a
Manufacturer for those listed in Schedule F or wishes to add to the number of
Manufacturers, Licensee shall first provide Licensor with the information set
out in Schedule F regarding the proposed new Manufacturers for Licensor's
written approval of such Manufacturers. Licensee's failure to do so may result
in termination of this Agreement and/or confiscation and seizure of the Licensed
Product(s). Licensee shall ensure that:
(a) Manufacturer produces no merchandise bearing the Logos other than
the Licensed Product(s) described in Schedule F of this Agreement unless
authorized by Licensor,
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(b) Manufacturer produces the Licensed Product(s), only as and when
directed by Licensee and in accordance with the terms herein and in
compliance with all laws, regulations and governmental rules applicable to
the Licensed Product(s) and/or their manufacture;
(c) Manufacturer does not supply the Licensed Product(s) to any
person, firm, corporation or business entity other than Licensee or to such
entities as may be authorized by Licensee and Licensor jointly; and
(d) Manufacturer does not delegate in any manner whatsoever its
obligations with respect to the Licensed Product(s).
Prior to the delivery of the Licensed Product(s) from Manufacturer to Licensee,
Licensee shall submit to Licensor, free of cost, for its written approval as to
quality and style, at least two samples of the Licensed Product(s) produced by
Manufacturer,
P. It will not manufacture or allow the manufacture, or accumulate
inventory, of the Licensed Product(s), at a rate greater than its average rate
during the license period as the end of the license period approaches;
Q. It will not sell the Licensed Product(s) to parties whom it knows or
reasonably should know will resell or distribute such Product(s) outside the
Licensed Territory;
R. It will not disclose any confidential, private, restricted or otherwise
nonpublic information concerning Major League Baseball which, it acknowledges,
it may become privy to during the term of this Agreement;
S. It will not grant to any third person or entity a security interest in
the Licensed Product(s) without Licensor's prior written approval;
T. It has not had and does not have an investment or interest in casinos,
any other form of legalized gambling enterprise, or any activity that Licensor
or any other Major League Baseball related entity has made unauthorized or which
is contrary to official policy of Major League Baseball; and
U. With respect to any Licensed Products manufactured outside the United
States, (i) it will take receipt of goods at U.S. ports of entry, (ii) it will
not allow any entity in the United States, including but not limited to
distributors, wholesalers and retailers, to accept shipment of the Licensed
Products from any non-U.S. manufacturer of such Products, and (iii) it will
distribute such Products to third parties, including but not limited to
distributors, wholesalers and retailers, from Licensee's principal place of
business only.
14. APPROVAL OF MANUFACTURER, ETC.: Nothing contained herein may be
construed so as to imply endorsement of Manufacturer by Licensor, the Office of
the Commissioner of Baseball, the Leagues or the Clubs. Licensee shall seek
Licensor's written approval of Manufacturer prior to Licensee's engagement of
Manufacturer. Any approval of Manufacturer granted by Licensor relates solely to
the manufacturing of the Licensed Product(s) and shall not constitute a grant of
any right, title or interest in or to the Logos. nor to any copyrights, service
marks, trademarks or other property rights associated therewith. Licensor hereby
reserves the right to terminate in its discretion the engagement of Manufacturer
at any time. Additionally, Licensor may confiscate goods or samples imported by
Licensee or shipped by Manufacturer that bear any of the Logos and that have not
been approved by Licensor as to quality.
15. ACKNOWLEDGEMENT OF RIGHTS: Licensee hereby acknowledges the proprietary
nature of all names and logos of the Major League Baseball Clubs, the Leagues,
the Office of the Commissioner of Baseball or Licensor and acknowledges that all
rights, title and interest to such names or logos belong to the individual
Clubs, the Leagues, the Office of the Commissioner of Baseball and/or Licensor,
as the case may be. Licensee represents that it has not made any unauthorized
use of names or logos of the Major League Baseball Clubs, the Leagues, the
Office of the Commissioner of Baseball or Licensor and agrees that it will make
no use of any such names or logos, other than as provided in this Agreement,
without the prior written consent of Licensor, the Office of the Commissioner of
Baseball or the appropriate individual League or Club. Any use Licensee has made
or will make of such names and logos has not conferred or will not confer, as
the case may be, any rights or benefits upon it whatsoever, and any rights
created by such use shall inure to the benefit of the individual Clubs, the
Leagues, the Office of the Commissioner of Baseball and/or Licensor, as the case
may be.
16. TERMINATION: Licensor shall have the right to terminate this Agreement
without prejudice to any other rights which it may have, whether under the
provisions of this Agreement, in law or in equity or otherwise, upon the
occurrence of any one or more of the following events (herein called
"defaults"), and Licensee's failure to cure such default(s) completely within
ten (10) business days from Licensee's receipt of notice from Licensor:
A. If Licensee fails to deliver to Licensor or to maintain in full force
and effect the insurance referred to in Paragraph 8 hereof; or
B. If Licensee fails to make any payment due hereunder on the date due, at
which time all monies which are owed during the current term or renewal referred
to in Schedule E of this Agreement shall become due and payable to Licensor; or
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C. If Licensee fails to deliver any of the statements hereinabove referred
to or to give access to the premises and/or license records pursuant to the
provisions hereof to Licensor's authorized representatives for the purposes
permitted hereunder; or
D. If any governmental agency or court of competent jurisdiction finds that
the Licensed Product(s) are defective in any way, manner or form; or
E. If Licensee is unable to pay its debts when due, or makes any assignment
for the benefit of creditors or an arrangement pursuant to any bankruptcy law,
or files or has filed against it any petition under the bankruptcy or insolvency
laws of any jurisdiction, county or place, or shall have or suffer a receiver or
trustee to be appointed for its business or property, or be adjudicated a
bankrupt or an insolvent. In the event the license granted hereunder is
terminated pursuant to this Paragraph 16(E), neither Licensee nor its receivers,
representatives, trustees, agents, administrators, successors and/or assigns
shall have any right to sell, exploit or otherwise deal with or in the Licensed
Product(s) without the prior written consent of Licensor; or
F. If Licensee does not commence in good faith to manufacture, distribute
and sell each Licensed Product throughout the Licensed Territory within any
twelve (12) month period, but such default and Licensor's resultant right of
termination shall apply only to the specific Licensed Product(s) and/or the
specific territory(ies) which or wherein Licensee fails to meet said
requirements; or
G. If Licensee shall discontinue its business as it is now conducted; or
H. If Licensee shall breach any of the undertakings set forth in Paragraph
13 hereof; or
I. If Licensee shall breach any of the terms of this Agreement; or
J. If, in the periodic statements furnished pursuant to Paragraph 5 hereof,
the amounts owed to Licensor are significantly or consistently understated; or
K. If Licensee shall undergo a change in majority or controlling ownership.
In the event any of these defaults occurs and Licensor desires to exercise
its right of termination under the terms of this Paragraph 16, Licensor shall
give notice of termination in writing to Licensee. Any and all payments then or
later due from Licensee hereunder (including Advance Compensation) shall then
become promptly due and payable in full to Licensor and without set off of any
kind; i.e., no portion of any prior payments made to Licensor shall be repayable
to Licensee. Until payment to Licensor of any monies due it, Licensor shall have
a lien on any units of the Licensed Product(s) not then disposed of by Licensee
and on any monies due Licensee from any jobber, wholesaler, distributor.
sublicensee or other third parties with respect to sales of the Licensed
Product(s). Upon termination or expiration of the term hereof, all rights,
licenses and privileges granted to Licensee hereunder shall automatically revert
to Licensor and Licensee shall execute any and all documents evidencing such
automatic reversion.
17. FINAL STATEMENT UPON TERMINATION OR EXPIRATION: Licensee shall deliver
to Licensor, as soon as practicable, following expiration or termination of this
Agreement, a statement indicating the number and description of the Licensed
Product(s) on hand. Following expiration or termination Licensee may manufacture
no more Licensed Product(s), but may continue to distribute its remaining
inventory for a period not to exceed sixty (60) days, subject to the terms of
Paragraph 13(P) hereof and payment of applicable royalties relative thereto;
provided, however, that such royalties shall not be applicable against Advance
Compensation or Guaranteed Compensation. Notwithstanding the foregoing, Licensee
shall not manufacture, sell or distribute any Licensed Product(s) after the
expiration or termination of this Agreement because of (a) the failure of
Licensee to cause the appropriate statutory notice of copyright, trademark,
service mark or user registration to appear wherever the Logos are used; (b) the
departure of Licensee from the quality and style approved by Licensor under the
terms of Paragraph 10 hereof; (c) the failure of Licensee to obtain the approval
of Licensor under the terms of Paragraph 10 hereof; or (d) the occurrence of an
event of default under the terms of Paragraph 16 hereof. Licensor shall have the
option to conduct physical inventories before termination and continuing until
the end of the 60-day sell-off period in order to ascertain or verify such
inventories and/or statement. Immediately upon expiration of the sell-off
period, Licensee shall furnish Licensor a detailed statement certified by an
officer of Licensee showing the number and description of Licensed Products on
hand in its inventory and shall dispose of such inventory at Licensor's
direction and at Licensee's expense. In the event Licensee refuses to permit
Licensor to conduct such physical inventory, Licensee shall forfeit its right
hereunder to dispose of such inventory. In addition to such forfeiture, Licensor
shall have recourse to all other remedies available to it.
18. INJUNCTION: Licensee acknowledges that its failure to perform any of
the terms or conditions of this Agreement, or its failure upon the expiration or
termination of this Agreement to cease the manufacture of the Licensed
Product(s) and limit their distribution and sale as provided in Paragraph 17
hereof, shall result in immediate and irreparable damage to Licensor. Licensee
also acknowledges that there may be no adequate remedy at law for such failures
and that in the event thereof Licensor shall be entitled to equitable relief in
the nature of an injunction and to all other available relief, at law and/or in
equity.
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19. RESERVATION OF RIGHTS: Licensor retains all rights not expressly and
exclusively conveyed herein, and Licensor may license firms, individuals,
partnerships or corporations to use the Logos, artwork and textual matter in
connection with other products, including other products identical to the
Licensed Product(s) contemplated herein. Licensor reserves the right to use, or
license others to use and/or manufacture, identical items as premiums.
20. PAYMENTS AND NOTICES: All notices and statements provided for herein
shall be in writing, and all notices hereunder are to be sent to Major League
Baseball Properties, Inc., 350 Park Avenue, New York, New York 10022, Attention:
President. All statements and payments shall be made to Major League Baseball
Properties and sent to an address designated by Licensor.
21. WAIVER, MODIFICATION, ETC.: No waiver, modification or cancellation of
any term or condition of this Agreement shall be effective unless executed in
writing by the party charged therewith. No written waiver shall excuse the
performance of any act other than those specifically referred to therein. No
waiver by either party hereto of any breach of this Agreement shall be deemed to
be a waiver of any preceding or succeeding breach of the same or any other
provision hereof. The exercise of any right granted to either party hereunder
shall not operate as a waiver. The normal expiration of the term of this
Agreement shall not relieve either party of its respective obligations accruing
prior thereto, nor impair or prejudice the respective rights of either party
against the other, which rights by their nature survive such expiration.
Licensor makes no warranties or representations to Licensee except those
specifically expressed herein.
22. NO PARTNERSHIP, ETC.: This Agreement does not constitute and shall not
be construed as constituting an agency, partnership or joint venture
relationship between Licensee and Licensor and/or the Clubs. Licensee shall have
no right to obligate or bind Licensor in any manner whatsoever, and nothing
herein contained shall give or is intended to give any rights of any kind to any
third persons.
23. NON-ASSIGNABILITY: Licensee acknowledges and recognizes: (a) that it
has been granted the license described in Paragraph 1 because of its particular
expertise, knowledge, judgement, skill and ability; (b) that it has substantial
and direct responsibilities to perform this Agreement in accordance with all of
the terms contained herein; (c) that Licensor is relying on Licensee's unique
knowledge, experience and capabilities to perform this Agreement in a specific
manner consistent with the high standards of integrity and quality associated
with Major League Baseball as a national sport and with Major League Baseball
licensed merchandise; and (d) that the granting of the license under this
Agreement creates a relationship of confidence and trust between Licensee and
Licensor. This Agreement is personal to Licensee, and Licensee shall not
sublicense or franchise any of its rights hereunder. and neither this Agreement
nor any of the rights of Licensee hereunder shall be sold, transferred or
assigned by Licensee without Licensor's prior written approval and no rights
hereunder shall devolve by operation of law or otherwise upon any assignee,
receiver, liquidator, trustee or other party. Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto, their successors and assigns.
24. PARAGRAPH HEADINGS: Paragraph headings contained in this Agreement are
for convenience only and shall not be considered for any purpose in governing,
limiting, modifying, construing or affecting the provisions of this Agreement
and shall not otherwise be given any legal effect.
25. CONSTRUCTION: This Agreement shall be construed in accordance with the
laws of the State of New York, which shall be the sole jurisdiction for any
disputes.
26. SEVERABILITY: The determination that any provision of this Agreement is
invalid or unenforceable shall not invalidate this Agreement, and the remainder
of this Agreement shall be valid and enforceable to the fullest extent permitted
by law.
27. TIME OF THE ESSENCE: Time is of the essence of all parts of this
Agreement.
28. ACCEPTANCE BY LICENSOR: This instrument, when signed by Licensee or a
duly authorized officer of Licensee if Licensee is a corporation, shall be
deemed an application for a license and not a binding agreement unless and until
signed by a duly authorized officer of Licensor. The receipt and/or deposit by
Licensor of any check or other consideration given by Licensee and/or the
delivery of any material by Licensor to Licensee shall not be deemed an
acceptance by Licensor of this application. The foregoing shall also apply to
any documents relating to renewals or modifications hereof.
29. INTEGRATION: This Agreement, when fully executed, shall represent the
entire understanding between the parties hereto with respect to the subject
matter hereof and supersedes all previous representations, understandings or
agreements, oral or written, between the parties with respect to the subject
matter hereof.
30. MISCELLANEOUS: By signing below, Licensee acknowledges that this
Agreement is for the term specified in Schedule D only and that neither the
existence of this Agreement nor anything contained herein shall impose on
Licensor any obligation to renew or otherwise extend this Agreement after
expiration of the license period.
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SCHEDULE A
LOGOS
The names, characters, symbols, designs, likenesses, visual representations
and such other similar or related identifications (but such similar or related
identifications must be approved in writing by Licensor in advance of use) of
the following noted organizations in connection with the marketing, promotion
and sale of that described in Schedule B hereof: (1) Major League Baseball
Properties, Inc., (2) the American League, (3) the National League, (4) the
following Clubs: Baltimore Orioles, Boston Red Sox, California Angels, Chicago
White Sox, Cleveland Indians, Detroit Tigers, Kansas City Royals, Milwaukee
Brewers, Minnesota Twins, New York Yankees, Oakland Athletics, Seattle Mariners,
Texas Rangers, Toronto Blue Jays, Atlanta Braves, Chicago Cubs, Cincinnati Reds,
Colorado Rockies, Florida Marlins, Houston Astros, Los Angeles Dodgers, Montreal
Expos, New York Mets, Philadelphia Phillies, Pittsburgh Pirates, St. Louis
Cardinals, San Diego Padres, San Francisco Giants, Boston Braves, Brooklyn
Dodgers, Houston Colt .45's, Kansas City Athletics, Los Angeles Angels,
Milwaukee Braves, New York Giants, Philadelphia Athletics, Seattle Pilots, St.
Louis Browns and Washington Senators, (5) All-Star Game and (6) Major League
Baseball Cooperstown Collection.
SCHEDULE B
LICENSED PRODUCT(S)
*** ALL LICENSED PRODUCTS SHALL CONFORM TO LICENSOR'S
THEN-CURRENT LABELING REQUIREMENTS. ***
1. Baseball equipment, including game-used equipment (e.g., bats, balls,
gloves, etc.), featuring the Logos and autographs by current and/or retired
Major League Baseball players.
2. Apparel, including game-used apparel (e.g., jerseys, jackets, pants, caps,
helmets, etc.), produced by other licensees of Licensor and featuring the
Logos and autographs by current and/or retired Major League Baseball
players.
3. Lithographs measuring no smaller than 60 square inches in size, featuring
the artwork and players depicted in Licensed Products Nos. 3 and 4 of
License Agreement No. ML-2389B between Licensor and The Score Board, Inc.
and autographs of one or more of the players depicted in the lithographs,
and sold framed or unframed.
4. Plaques made of wood, featuring photographs, paper trading cards, ceramic
trading cards and ceramic figurines produced by other licensees of Licensor,
depicting current and/or retired Major League Baseball players, and
autographs of one or more of the players depicted on the plaques, and
measuring 5" x 7", 10" x 13", 12" x 15", 16" x 20" or other sizes
pre-approved in writing by Licensor.
5. Framed photographs produced by other licensees of Licensor, depicting
current and/or retired Major League Baseball players, featuring autographs
of one or more of the players depicted in the photographs, and measuring 8"
x 10", 11" x 14", 12" x 16", 16" x 20", 18" x 24" or other sizes
pre-approved in writing by Licensor.
6. Trading cards produced by other licensees of Licensor, depicting current
and/or retired Major League Baseball players, featuring autographs of one or
more of the players depicted in the trading cards, and sold in acrylic
holders and/or frames measuring 8" x 10", 11" x 14", 12" x 16", 16" x 20",
18" x 24" or other sizes pre-approved in writing by Licensor.
7. Unframed photographs produced by other licensees of Licensor, depicting
current and/or retired Major League Baseball players, and featuring
autographs of one or more of the players depicted in the photographs, and
measuring 8" x 10", 11" x 14" or 16" x 20" in size.
8. Framed posters produced by other licensees of Licensor, depicting current
and/or retired Major League Baseball players, made with or without borders,
featuring autographs of one or more of the players depicted in the posters,
and measuring 24 1/2" x 16", 35 1/2" x 24", 20" x 13 1/2" or 38 1/2" x 25".
9. Lithographs measuring no smaller than 60 square inches in size, featuring
the artwork and players depicted in Licensed Products Nos. 3 and 4 of
License Agreement No. ML-2389B between Licensor and The Score Board, Inc.,
and sold framed or unframed,
10. Plaques made of wood, featuring photographs, paper trading cards, ceramic
trading cards and ceramic figurines produced by other licensees of Licensor,
depicting current and/or retired Major League Baseball players, and
measuring 5" x 7", 10" x 13", 12" x 15", 16" x 20" or other sizes
pre-approved in writing by Licensor.
11. Framed photographs produced by other licensees of Licensor, depicting
current and/or retired Major League Baseball players, and measuring 8" x
10", 11" x 14", 12" x 16", 16" x 20", 18" x 24" or other sizes pre-approved
in writing by Licensor.
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12. Trading cards produced by other licensees of Licensor, depicting current
and/or retired Major League Baseball players, and sold in acrylic holders
and/or frames measuring 8" x 10", 11" x 14", 12" x 16", 16" x 20", 18" x 24"
or other sizes pre-approved in writing by Licensor.
13. Unframed photographs produced by other licensees of Licensor, depicting
current and/or retired Major League Baseball players, and measuring 8" x
10", 11" x 14" or 16" x 20" in size.
14. Framed posters produced by other licensees of Licensor, depicting current
and/or retired Major League Baseball players, made with or without borders,
and measuring 24 1/2" x 16", 35 1/2" x 24", 20" x 13 1/2" or 38 1/2" x 25".
Rights to utilize the players' names, likenesses, images and/or autographs
(or facsimiles thereof) are not granted under this Agreement. However, Licensee
must present to Licensor written evidence of having obtained the proper
authorization to utilize the players' names, likenesses, images and/or
autographs.
SCHEDULE C
LICENSED TERRITORY
The fifty United States of America and the District of Columbia.
SCHEDULE D
LICENSE PERIOD
January 1, 1994 - December 31, 1995
SCHEDULE E
COMPENSATION
[*]
______________
*Certain confidential information has been omitted and filed separately with
the Commission.
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SCHEDULE F
MANUFACTURER:
1) Licensed Product(s): ______________________________________________
Name of Manufacturer: _____________________________________________
Address: __________________________________________________________
Telephone: ________________________________________________________
Principal Contact: ________________________________________________
Approved by Major League Baseball Properties, Inc.:
Name/Title __________________________________________________
Date ________________________________________________________
2) Licensed Product(s): ______________________________________________
Name of Manufacturer: _____________________________________________
Address: __________________________________________________________
Telephone: ________________________________________________________
Principal Contact: ________________________________________________
Approved by Major League Baseball Properties, Inc.:
Name/Title __________________________________________________
Date ________________________________________________________
3) Licensed Product(s): ______________________________________________
Name of Manufacturer: _____________________________________________
Address: __________________________________________________________
Telephone: ________________________________________________________
Principal Contact: ________________________________________________
Approved by Major League Baseball Properties, Inc.:
Name/Title __________________________________________________
Date ________________________________________________________
SCHEDULE G
Advertising:
During calendar years 1994 and 1995, Licensee has agreed to purchase at
prevailing rates one full page of advertising in either the All-Star Game
program or the World Series Souvenir Scorebook to promote the Licensed Products
as required under this Agreement.
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Miscellaneous:
Licensee acknowledges that under this Agreement it is obligated to promote
the Licensed Products. Accordingly, Licensee has agreed to participate in each
Major League Baseball All-Star FanFest conducted during the license period and
execute Licensor's standard FanFest Sponsorship agreement in connection
therewith. The extent of Licensee's participation at FanFest shall be mutually
agreed upon by Licensee and Licensor.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement:
MAJOR LEAGUE BASEBALL PROPERTIES, INC., as agent for the 28 Clubs
BY: /s/ Frank Simio V.P.
-------------------------------------
Title
DATE: May 26, 1994
----------------------------------
LICENSEE: THE SCORE BOARD
------------------------------
BY: /s/ Ken Goldin, Exec. V.P.
-------------------------------------
Title
DATE: May 19, 1994
----------------------------------
13
Exhibit 10.41
MLBPA DATED MAY 16, 1994
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LICENSE AGREEMENT
THIS AGREEMENT is made as of the 16th day of May 1994, in New York, New
York, by and between the Major League Baseball Players Association, an
unincorporated association under the laws of the State of New York, with offices
at 12 E. 49th Street, New York, New York 10017 (hereinafter 'MLBPA') and The
Scoreboard, Inc., with offices located at 1951 Old Cuthbert Road, Cherry Hill,
New Jersey 08034 (hereinafter 'Licensee').
WHEREAS, MLBPA is acting on behalf of all of the active baseball players of
the National League and the American League who have entered into a Commercial
Authorization Agreement with the MLBPA (hereinafter 'players'), and who, upon
being polled by the MLBPA, have not indicated they have granted a license for
products which would conflict with the products licensed herein; and
WHEREAS, MLBPA in such capacity has the right to negotiate this Agreement
and to grant rights in and to the logo, name and symbol of MLBPA identified in
Schedule A hereto (the 'Trademarks'), and the names, nicknames, likenesses,
signatures, pictures, playing records, and/or biographical data of each player
described in Schedule A hereto as part of a group (hereinafter 'the Rights');
and
WHEREAS, Licensee desires to use the Rights and/or the Trademarks on or in
association with the manufacture, offering for sale, sale, advertising,
promotion, and distribution of certain products identified in Schedule B (the
'Licensed Products') in the countries identified in Schedule B (the 'Licensed
Territory'); and
WHEREAS, MLBPA is willing to grant Licensee such right to use the Rights
and/or the Trademarks on the Licensed Products in the Licensed Territory in
accordance with the terms and conditions recited herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions herein contained, it is hereby agreed as follows:
1. GRANT.
(a) MLBPA hereby grants to Licensee and Licensee hereby accepts the
non-exclusive, non-transferable, non-assignable license, without the right to
grant sublicenses, to use the Rights and Trademarks solely within the Licensed
Territory on the Licensed Products and/or in association with the manufacture,
offering for sale, sale, advertising, promotion, shipment and distribution of
the Licensed Products to jobbers, wholesalers and distributors for sale,
shipment and distribution to retail stores and merchants and/or to retail stores
and merchants for sale, shipment and distribution direct to the public. Licensee
shall not knowingly permit the Licensed Products to be sold or distributed
outside of the Licensed Territory.
(b) MLBPA makes no representation that it has the authority to grant, nor
does it grant herein, the right to utilize team symbols, insignias or logos, or
the name, symbol, or logo of any other licensee of MLBPA, or reproductions of
any products produced by or for any other licensee of MLBPA. Accordingly, it is
understood by the parties hereto that if any of the foregoing are to be utilized
in connection with the exercise of the license granted hereunder, including
without limitation the likenesses of players utilizing team logos, symbols or
insignias, it will be the responsibility of Licensee to obtain all necessary
permissions for the use of such material.
(c) Unless specifically authorized in advance by MLBPA in writing, Licensee
agrees to utilize with equal prominence the names and likenesses of a minimum of
twenty-eight (28) players on Licensed Products during the initial License Period
(as defined herein) and during each additional License Period, if any, as
provided herein. Licensee must provide the MLBPA with thirty (30) days' written
notice of the names of all players Licensee intends to use on the Licensed
Products prior to manufacture of such Licensed Products, and Licensee may not
use the name or likeness of any player on the Licensed Products without the
prior written consent of MLBPA, which shall not be unreasonably withheld.
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(d) The license granted by MLBPA to Licensee hereunder does not include the
right to, and Licensee shall not in any manner, use (or to purport to grant
others the right to use) the Trademarks or the Rights for the purpose, in whole
or in part, of promoting any service or product other than the Licensed
Products. The license granted by MLBPA to Licensee herein does not include, and
shall not be used by Licensee so as to imply, a testimonial or endorsement of
the Licensed Products or any other product or service by all or any of the
players, or by the MLBPA. In the event Licensee is interested in securing the
personal endorsement of any player, Licensee understands and agrees that such
endorsement will require the personal approval of the individual player involved
and a separate payment to such player, independent of and in addition to all
payments due to the MLBPA pursuant to this Agreement.
(e) Nothing contained in Section 1(d) above shall prevent Licensee from
utilizing the names and/or likenesses of the players in a non-endorsement and/or
non-testimonial manner in connection with the packages, cartons, advertising,
point-of-sale and/or promotional materials for the Licensed Products (the
'Promotional and Packaging Material') or require any separate payment in
connection therewith; provided, however, that unless specifically authorized
otherwise in advance by MLBPA in writing, the names and/or likenesses of a
minimum of eight (8) such players are utilized with equal prominence on the
Promotional and Packaging Material for all Licensed Products during the initial
License Period and during each additional License Period, if any, as provided
herein; and Licensee agrees to rotate the players who are utilized in connection
with such materials so as not to highlight any particular player or group of
players to the exclusion of others.
(f) All rights not expressly granted to Licensee in this Agreement are
specifically reserved to MLBPA.
2. TERM AND OPTIONS.
(a) This Agreement shall be effective and shall continue for the License
Period set forth on Schedule B, unless sooner terminated pursuant to a provision
of this Agreement.
(b) MLBPA hereby grants to Licensee two (2) separately exercisable options
(the 'Options') to extend the term of this Agreement for additional one-year
periods ('Second and Third License Periods,' respectively). In order to exercise
each of the two Options, Licensee must provide MLBPA with written notice of its
intention to exercise each such Option and such written notice must be received
by MLBPA no earlier than one hundred twenty (120) days and no later than ninety
(90) days prior to the expiration of the License Period then in effect. The
attempted exercise of any Option shall be void and of no effect if Licensee (i)
has materially breached or is then in material breach of any of its obligations
under this Agreement, or (ii) fails during any License Period to make Net Sales
sufficient to generate Actual Royalties equal to or greater than the Guaranteed
Minimum Royalties as defined herein, or (iii) fails to make full and timely
royalty payments as provided herein. Licensee's performance in each License
Period shall be pursuant to the same terms and conditions recited in this
Agreement.
3. ROYALTIES.
(a) Licensee agrees to pay MLBPA a royalty at the percentage set forth on
Schedule B based on Net Sales (as defined in Subsection 3(b) below) of the
Licensed Products employing the Rights and/or the Trademarks by Licensee (the
'Actual Royalty'). Such Actual Royalty shall accrue when the Licensed Products
are sold, shipped, distributed, billed and/or paid for, whichever occurs
earlier, to a third party not affiliated with Licensee. For purposes of this
Agreement, 'affiliated' means related in any manner through direct or indirect
ownership or control and includes joint venture arrangements.
(b) 'Net Sales' shall mean gross sales to third parties not affiliated with
Licensee at Licensee's regular wholesale price, less returns actually credited.
No other deductions shall be permitted. For example, there shall be no
deductions made for other discounts, commissions, uncollectible accounts, taxes,
fees, assessments, impositions, payments or expenses of any kind which may be
incurred or paid by Licensee in connection with the royalty payments due to
MLBPA hereunder, or for any costs
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incurred in the manufacture, offering for sale, sale, advertising, promotion,
shipment, distribution and/or exploitation of the Licensed Products.
(c) Actual Royalty payments shall be made by Licensee to MLBPA on all
Licensed Products sold, shipped and/or distributed by Licensee, even if not
billed (such as in the case of introductory offers, samples, promotions and the
like and sales, shipments and/or distributions to individuals and/or companies
which are affiliates or subsidiaries of Licensee), or if billed at less than
Licensee's usual price for such Licensed Products, based upon Licensee's usual
Net Sales price for such Licensed Products sold to third parties not affiliated
with Licensee in the course of Licensee's normal distribution, shipment and
sales activities.
(d) Where the billed price for any Licensed Products is less than the usual
Net Sales price for such Licensed Products sold to third parties not affiliated
with Licensee in the course of Licensee's normal distribution, shipment and
sales activities, the Actual Royalty payment shall be based upon Licensee's
usual Net Sales price.
(e) For each License Period of this Agreement, Licensee agrees to pay MLBPA
a non-refundable guaranteed minimum royalty in the amount(s) and in the manner
set forth on Schedule B (the 'Guaranteed Minimum Royalty'). Such Guaranteed
Minimum Royalty shall be paid in equal quarterly installments as set forth on
Schedule B, with the first such payment due immediately upon execution of this
Agreement. If, upon termination or expiration of this Agreement or any License
Period thereof, the total royalties paid and/or payable by Licensee to MLBPA
during each such License Period is less than the Guaranteed Minimum Royalty,
Licensee shall immediately pay the amount of such difference to MLBPA. Actual
Royalty payments based on Net Sales made during any Term of this Agreement shall
be credited against the Guaranteed Minimum Royalty due for the License Period in
which such Net Sales were made.
4. STATEMENTS AND PAYMENTS.
(a) Licensee shall deliver to MLBPA, at its offices in New York, New York,
or to such other address as MLBPA may direct, on the fifteenth (15th) day
following the end of each calendar quarter during any License Period of this
Agreement, and on the fifteenth (15th) day of the month following termination or
expiration of this Agreement, a complete and accurate statement of its Net Sales
of Licensed Products, differentiated by geographic area and product category,
for the immediately preceding calendar quarter (or portion thereof) (the
'Royalty Period'). Said statement shall be certified as accurate by an officer
of Licensee and shall include information as to the stock number, item
description, quantity shipped, and gross selling price of the Licensed Products
shipped, distributed and/or sold by Licensee during the Royalty Period,
information as to quantity discounts given and returns actually credited,
computation of Net Sales and royalty due, and any other information MLBPA may
from time to time reasonably request. Such statements shall be furnished to
MLBPA whether or not any Licensed Products have been shipped, distributed and/or
sold, and whether or not Actual Royalties have been earned during the Royalty
Period. Statements shall be in a form acceptable to MLBPA and consistent with
Schedule C hereto.
(b) The amount in United States currency shown in Licensee's royalty
statements as being due MLBPA shall be paid simultaneously with the submission
of such statements. In the event that the amount credited for returns during any
Royalty Period exceeds Licensee's royalty obligation to MLBPA for such period,
Licensee may use such amount as a credit against future royalty obligations of
Licensee during the Term of this Agreement. In no event, however, shall the
amount credited for returns during any Royalty Period be used upon termination
or expiration of this Agreement as a credit against past royalty obligations of
or royalty payments made by Licensee. In no circumstances shall MLBPA be
obligated to pay any amount to Licensee upon termination or expiration of this
Agreement on account of credits accrued by Licensee for returns.
(c) Licensee's royalty statements and all amounts payable to MLBPA by
Licensee shall be submitted to:
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Major League Baseball Players Association
12 E. 49th Street
New York, NY 10017
or such other address as the MLBPA may direct.
(d) The receipt and/or acceptance by MLBPA of any of the statements
furnished or royalties paid hereunder to MLBPA (or the cashing of any royalty
checks paid hereunder) shall not preclude MLBPA from questioning the correctness
thereof at any time and, in the event that any inconsistencies or mistakes are
discovered in such statements or payments, they shall immediately be rectified
by Licensee and the appropriate payment shall be made by Licensee.
(e) All payments made hereunder shall be in United States currency drawn on
a United States bank, unless otherwise specifically agreed upon by the parties.
(f) Time is of the essence with respect to all payments to be made
hereunder by Licensee. Interest at a rate of the lesser of one and one-half
percent (1-1/2%) per month or the maximum rate allowed by law, compounded daily,
shall accrue on any amount due MLBPA hereunder from and after the date upon
which the payment is due until the date of receipt of payment.
5. AUDIT.
(a) Licensee agrees to keep accurate books of account and records at its
principal place of business covering all transactions relating to the license
granted herein and pertaining to the items required to be shown in the
Licensee's royalty statements to be submitted pursuant hereto, including without
limitation, invoices, correspondence, banking, financial and other records.
MLBPA and its duly authorized representatives shall have the right, upon
reasonable written notice, at all reasonable hours of the day, to audit
Licensee's books of account and records, and all other documents and material in
the possession or under the control of Licensee, with respect to the subject
matter and the terms of this Agreement and to make copies and extracts thereof.
In the event that any such audit reveals an underpayment by Licensee, Licensee
shall immediately upon demand remit payment to MLBPA in the amount of such
underpayment plus interest calculated at the rate of the lesser of one and
one-half percent (1-1/2%) per month or the maximum rate allowed by law,
compounded daily, calculated from the date such payment(s) were actually due
until the date such payment is actually made. In the event that any such
underpayment is greater than Five Thousand Dollars ($5,000), or two percent (2%)
of the royalties due for the period audited, whichever is less, Licensee shall
reimburse MLBPA for the costs and expenses of such audit.
(b) All books of account and records of Licensee covering all transactions
relating to the license granted herein shall be retained by Licensee for at
least two (2) years after the expiration or termination of this Agreement for
possible inspection by MLBPA.
6. QUALITY, NOTICES, APPROVALS, AND SAMPLES.
(a) The Licensed Products and the Promotional and Packaging Material shall
be of the highest quality in design, material and workmanship so as to be suited
to the best advantage, protection and enhancement of the Trademarks and the
Rights, in no event shall be of lesser quality than the best quality of similar
products and promotional, advertising, and packaging material presently shipped,
distributed, sold and/or used by Licensee in the Licensed Territory, shall be
safe and suitable for their intended purpose, and shall be manufactured, sold
and/or distributed in full conformance with all applicable laws and regulations.
(b) Licensee may not manufacture, use, offer for sale, sell, advertise,
promote, ship and/or distribute any Licensed Products, or any Promotional and
Packaging Material relating to the Licensed Products, until it has received
written approval of same in the manner provided herein from MLBPA. Such approval
shall not be unreasonably withheld. Should MLBPA fail to approve in writing any
of the submissions furnished it by Licensee within fourteen (14) business days
from the date of submission thereof, such failure shall be considered to be a
disapproval thereof.
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(c) Before commencing or authorizing third parties to commence the design
or development of Licensed Products or Promotional and Packaging Material which
have not been previously approved in writing by MLBPA, Licensee shall submit at
its own cost to MLBPA, for approval, a written description of the concept of
such Licensed Product and/or Promotional and Packaging Material, including full
information on the nature and function of the proposed item and a general
description of how the Rights and/or the Trademarks and other material will be
used thereon. Licensee shall next submit at its own cost to MLBPA, for approval,
complete layouts and descriptions of the proposed Licensed Products and/or
Promotional and Packaging Material showing exactly how and where the Rights and
the Trademarks and all other artwork and wording will be used. Thereafter,
Licensee shall submit at its own cost to MLBPA, for approval, pre-production
models or prototype samples of the proposed Licensed Products and/or Promotional
and Packaging Material. Finally, Licensee shall submit at its own cost to MLBPA,
for approval, actual proofs or final pre-production samples of the proposed
Licensed Products and/or Promotional and Packaging Material. Licensee shall not
proceed beyond any of the above stages where approval is required without first
securing the express written approval of MLBPA.
(d) Upon commencement of manufacture, shipment and distribution of the
Licensed Products and/or Promotional and Packaging Material relating to the
Licensed Products after all required approvals have been given by MLBPA,
Licensee shall submit, at its own cost, to MLBPA an additional three (3) sets of
the Licensed Products and two (2) sets of the Promotional and Packaging
Material.
(e) MLBPA may periodically during any License Period of this Agreement
require that Licensee submit to MLBPA, at no cost to MLBPA, up to three (3)
additional sets of the Licensed Products, and the Promotional and Packaging
Material relating to the Licensed Products, for subsequent review of the quality
of and copyright and trademark usage and notice on same and for any other
purpose that MLBPA deems appropriate.
(f) After the required approval has been secured from MLBPA pursuant to
Section 6(c) above, Licensee shall not depart from the specifications, quality
or appearance thereof in any material respect without first obtaining the
express written approval of MLBPA. Licensee shall make submissions to MLBPA and
obtain approvals in the manner required above each time new or revised concept,
layouts, descriptions, artwork, models, prototype samples and/or production
samples are created, developed and/or adopted by and/or for Licensee.
(g) To assure that the provisions of this Agreement are being observed,
Licensee agrees that it will allow MLBPA or its designees to enter Licensee's
premises and/or the premises where the Licensed Products are being manufactured
during regular business hours, and upon reasonable notice, for the purpose of
inspecting the Licensed Products and the Promotional and Packaging Material
relating to the Licensed Products and the facilities in which the Licensed
Products are being packaged.
(h) In order to ensure that the Licensed Products and the Promotional and
Packaging Materials are manufactured, offered for sale, sold, advertised,
promoted, shipped and/or distributed as set forth herein, in the event that the
quality standards and/or trademark and copyright usage and notice requirements
herein referred to are not met, or in the event that said quality standards
and/or trademark and copyright usage and notice requirements are not maintained
throughout the period of manufacture, offering for sale, sale, advertising,
promotion, shipment and/or distribution of any Licensed Products hereunder,
then, in addition to any other rights available to MLBPA under this Agreement or
otherwise, upon receipt of written notice from MLBPA, Licensee shall immediately
discontinue any and all manufacture, offering for sale, sale, advertising,
promotion, shipment and distribution of such Licensed Products and/or
Promotional and Packaging Material in connection with which the said quality
standards and/or trademark and copyright usage and notice requirements have not
been met.
7. ARTWORK.
(a) The form and content of all artwork for use in any media shall be
subject to the express written approval of MLBPA prior to its use by Licensee in
connection with the Licensed Products. If Licensee desires to use artwork
previously approved by MLBPA on a different Licensed Product or on different
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Promotional and Packaging Material, Licensee shall first submit samples of such
proposed use to MLBPA for approval thereof
(b) Except as provided in Section 18(c) of this Agreement, notwithstanding
any rights otherwise granted to Licensee by state or federal trademark or
copyright laws or otherwise, Licensee shall not without express written
permission of MLBPA directly or indirectly use, or authorize others to use, in
any manner whatsoever, any of the artwork or designs or other material involving
the Rights and/or Trademarks, or any reproductions thereof, following the
expiration or termination of this Agreement, notwithstanding their invention or
use by Licensee, and Licensee shall destroy all such artwork and/or designs
and/or other material and furnish to MLBPA satisfactory evidence of their
destruction.
8. OWNERSHIP OF RIGHTS.
(a) It is understood and agreed that MLBPA is the sole and exclusive holder
of all right, title and interest in and to the Rights and/or the Trademarks for
the duration of this Agreement.
(b) Nothing contained in this Agreement shall be construed as an assignment
to Licensee of any right, title and/or interest in or to the Rights and/or to
the Trademarks, it being understood that all right, title and interest relating
thereto are expressly reserved by MLBPA except for the rights being licensed
hereunder.
(c) No license is being granted hereunder as to any products other than the
Licensed Products and only in the Licensed Territory. MLBPA reserves for use as
it may determine all rights of any kind other than the rights herein licensed to
Licensee.
(d) Licensee shall not use the Rights and/or the Trademarks other than as
permitted herein and, in particular, shall not incorporate the Rights and/or the
Trademarks in Licensee's corporate or business name in any manner whatsoever.
Licensee agrees that in using the Rights and Trademarks, it will in no way
represent that it has any rights, title and/or interest in and/or to the Rights
and/or the Trademarks other than those expressly granted under the terms of this
Agreement. Licensee further agrees that it will not use and/or authorize the
use, either during or after the term of this Agreement, of any configuration,
trademark, trade name or other designation confusingly similar to the Rights
and/or any of the Trademarks.
9. GOODWILL AND PROMOTIONAL VALUE.
(a) Licensee recognizes the value of the goodwill associated with the
Rights and/or the Trademarks and acknowledges that the Rights and/or the
Trademarks, and all rights therein and the goodwill pertaining thereto, belong
exclusively to MLBPA. Licensee further recognizes and acknowledges that the
Rights and/or the Trademarks have acquired secondary meaning in the mind of the
public. Licensee agrees that during any License Period of this Agreement, or
thereafter, it will not dispute or attack the title or any rights of MLBPA in
and to the Rights and/or the Trademarks or the validity of the license granted
herein.
(b) Licensee agrees that its use of the Rights and/or the Trademarks shall
inure to the benefit of MLBPA and that Licensee shall not, at any time, acquire
any rights in the Rights and/or the Trademarks by virtue of any use it may make
of the Rights and/or of the Trademarks. Licensee hereby assigns to MLBPA any and
all trademarks and trademark rights in the Trademarks and/or Rights created by
such use, together with the goodwill of the business in connection with which
such trademarks are used.
(c) Licensee acknowledges that MLBPA is entering into this Agreement not
only in consideration of the royalties paid hereunder but also in recognition of
the intrinsic benefit to proper maintenance of the reputation of MLBPA and the
players as a result of the manufacture, offering for sale, sale, advertising,
promotion, shipment and distribution of the Licensed Products by Licensee in
accordance with the provisions of this Agreement. Licensee therefore
acknowledges that its failure to manufacture, offer for sale, sell, advertise,
promote, ship and distribute the Licensed Products in accordance with the
provisions of this Agreement, including without limitation its obligations to
protect and enhance the value of the Trademarks and the Rights, will result in
immediate and irreparable damage to MLBPA in
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connection with promotion of the Rights and/or the Trademarks and/or to its
members, and that there will be no adequate remedy at law for the failure by
Licensee to abide by such provisions of this Agreement. Accordingly, Licensee
agrees that in the event of any breach by Licensee, in addition to all other
remedies available to it hereunder, MLBPA may at its sole option commence an
action in any court having jurisdiction or an arbitration proceeding, and shall
be entitled to injunctive relief against any such breach as well as such other
relief as any arbitrator(s) or court with jurisdiction may deem just and proper.
10. TRADEMARK AND COPYRIGHT PROTECTION.
(a) The license granted herein is conditioned upon Licensee's full and
complete compliance with the provisions of the trademark and copyright laws of
the United States and any foreign country or countries in the Licensed
Territory.
(b) Licensee agrees to permanently affix to all Licensed Products and all
Promotional and Packaging Material the MLBPA logo and appropriate legends,
markings and/or notices as required from time to time by MLBPA, to give
appropriate notice to the consuming public of MLBPA's right, title and interest
therein. Licensee agrees that, unless otherwise specified in writing by MLBPA,
each usage of the Trademarks shall be followed by either the TM or the register
Trademark Notice symbol, as appropriate, and the following legends shall appear
at least once on each Licensed Product and on each piece of Promotional and
Packaging Material:
Copyright or register MLBPA (year-date)
Licensee also shall include on the Licensed Products, and on each piece of
Promotional and Packaging Material, the following notice:
Official Licensee --
Major League Baseball Players Association
(c) Licensee agrees that it will not distribute or sell any Licensed
Products or distribute any Promotional or Packaging Materials which do not carry
notices meeting the requirements of this Agreement.
(d) Licensee shall use no other markings, legends and/or notices on or in
association with the Licensed Products or on or in association with the
Promotional and Packaging Material other than those specified above and such
other markings, legends and/or notices as may from time to time be specified by
MLBPA, without first obtaining MLBPA's express written approval.
(e) MLBPA has the right, but not the obligation, to obtain at its own cost,
appropriate trademark and copyright protection for the Rights and/or the
Trademarks in association with the Licensed Products in any and all countries of
the Licensed Territory, in the name of MLBPA or in the name of any third party
selected by MLBPA.
(f) Licensee shall keep appropriate records (including copies of pertinent
invoices and correspondence), and advise MLBPA, relating to the dates when each
of the Licensed Products is first placed on sale or sold in each country of the
Licensed Territory, and the dates of first use in each country of each different
Trademark and/or of the Rights on the Licensed Products and Promotional and
Packaging Material. If requested to do so by MLBPA, Licensee also agrees to
supply MLBPA with samples, facsimiles or photographs of the trademark usages in
question and other information which will enable MLBPA to complete and obtain
trademark applications or registrations, or to evaluate or oppose any trademark
or design applications, registrations, or uses of third parties.
(g) Licensee agrees that it shall not at any time within the Licensed
Territory or anywhere else in the world apply for any copyright or trademark
protection which would affect MLBPA's ownership of any rights in the Rights
and/or the Trademarks, nor file any document with any governmental authority or
assert directly or indirectly any right or take any other action which could
affect MLBPA's ownership of the Rights and/or the Trademarks, or the publicity
rights of the players, or aid or abet anyone else in doing so.
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(h) Licensee agrees to cooperate in all reasonable respects with MLBPA in
protecting and defending the Rights and/or the Trademarks. In the event that any
claim or problem arises with respect to the protection of the Rights and/or the
Trademarks in the Licensed Territory, Licensee shall promptly advise MLBPA in
writing of the nature and extent of same. MLBPA has no obligation to take any
action whatsoever in the event that any claim or problem arises with respect to
the protection of the Rights and/or the Trademarks.
11. INFRINGEMENTS.
(a) Licensee agrees to assist MLBPA in the enforcement of MLBPA's right in
the Rights and/or the Trademarks but will not be required to incur more than
nominal out-of-pocket expenses. Licensee agrees to notify MLBPA in writing of
any infringements or imitations by third parties of the Rights, the Trademarks,
the Licensed Products and/or the Promotional and Packaging Material which may
come to Licensee's attention. MLBPA shall have sole right to determine whether
or not any action shall be taken on account of any such infringement or
imitation. MLBPA, if it so desires, may commence or prosecute any claims or
suits in its own name or in the name of Licensee, or join Licensee as a party
thereto. Licensee agrees not to contact any third party, not to make any demands
or claims, and not to institute any suit or take any other action on account of
such infringements or imitations without obtaining the prior express written
permission of MLBPA.
(b) With respect to all claims and suits, including suits in which Licensee
is joined as a party, MLBPA shall have the sole right to employ counsel of its
choosing and to direct the handling of the litigation and any settlement
thereof. MLBPA shall be entitled to receive and retain all amounts awarded to
MLBPA as damages, profits or otherwise in connection with such suits.
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12. INDEMNIFICATION
Licensee hereby agrees to defend, indemnify and hold harmless MLBPA, its
members, officers, directors, employees and agents, from and against any all
claims, demands, causes of action and judgments ('Claims') arising out of or in
connection with
(a) Licensee's design, manufacture, distribution, shipment, advertising,
promotion, offering for sale and/or sale of the Licensed Products and/or the
Promotional and Packaging Material, including but not limited to any allegedly
unauthorized use by Licensee of any trademark, copyright, patent, process, idea,
method, device, logo, symbol, insignia, name, term or material other than those
licensed herein, and
(b) any logos, symbols, insignias, names, terms or other material claimed
to be the property of any Major League Baseball club(s) or any other entity
affiliated directly or indirectly with any Major League Baseball club(s), and
(c) any alleged defect(s) of the Licensed Products. With respect to the
foregoing indemnity, Licensee agrees to defend and hold MLBPA and its members
harmless at no cost or expense to MLBPA whatsoever, including, but not limited
to, attorneys' fees and court costs. Under no circumstances shall Licensee have
the right to settle or otherwise compromise any claim without the prior written
consent of MLBPA. MLBPA and its members shall have the right to defend any such
action or proceeding with attorneys of its own selection.
13. INSURANCE.
Licensee shall, throughout the License Period(s) of this Agreement, obtain
and maintain at its own cost and expense from a qualified insurance company
acceptable to MLBPA, comprehensive general liability insurance, the form of
which must be acceptable to MLBPA, naming MLBPA and its members 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 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. The policy shall provide for
twenty (20) days' notice to MLBPA from the insurer by Registered or Certified
Mail, return receipt requested, in the event of any modification, cancellation
or termination. Licensee agrees to furnish MLBPA a certificate of insurance
evidencing same within thirty (30) days after execution of this Agreement, and
in no event shall Licensee manufacture, offer for sale, sell, advertise,
promote, ship and/or distribute the Licensed Products prior to receipt by MLBPA
of such evidence of insurance.
14. EXPLOITATION BY LICENSEE.
(a) Licensee agrees to commence distribution, shipment and sale of all of
the Licensed Products in sufficient quantities to meet the reasonably
anticipated demand therefor throughout the Licensed Territory within six (6)
months after the Effective Date of this Agreement. In the event of Licensee's
failure to comply with this requirement, in addition to all other remedies
available to it, MLBP shall have the option to terminate this Agreement upon
mailing notice of such termination to Licensee.
(b) Licensee agrees that during all License Periods of this Agreement,
Licensee will continue to diligently and continuously distribute, ship and sell
each of the Licensed Products throughout the Licensed Territory and that it will
use its best efforts to make and maintain adequate arrangements for the
distribution, shipment and sale necessary to meet the demand for all such
Licensed Products throughout the Licensed Territory. Licensee further agrees to
exercise all reasonable efforts to advertise and promote the Licensed Products
at its own expense throughout the term of this Agreement as widely as
practicable within the Licensed Territory, to the best advantage and enhancement
of the Trademarks and the Rights.
(c) Licensee will not discriminate against the Licensed Products by
granting commissions/discounts to salesmen, dealers and/or distributors in favor
of Licensee's other products.
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15. PREMIUMS, PROMOTIONS AND SECONDS.
(a) Under no circumstances shall Licensee have any right to sell or
otherwise utilize the Licensed Products as premiums or promotional items. MLBPA
shall have and retain the sole and exclusive right to utilize or license third
parties to utilize any of the rights granted herein in connection with any
premium, giveaway, promotional arrangement or fan club (collectively referred to
as 'Promotional Products'), which retained right may be exercised by MLBPA
concurrently with the rights granted to Licensee hereunder.
(b) Licensee agrees not to offer for sale, sell, ship, advertise, promote,
distribute and/or use for any purpose whatsoever, and/or to permit any third
party to offer for sale, sell, ship, advertise, promote, distribute and/or use
for any purpose whatsoever, any Licensed Products and/or Promotional and
Packaging Material relating to the Licensed Products which are damaged,
defective, seconds or otherwise fail to meet the specifications and/or quality
standards and/or trademark and copyright usage and notice requirements of this
Agreement.
16. ASSIGNABILITY AND SUBLICENSING.
The license granted hereunder is and shall be personal to Licensee and
shall not be assigned by any act of Licensee or by operation of law or otherwise
encumbered. Licensee shall not have the Licensed Products or any portion thereof
manufactured for Licensee by a third party unless Licensee first obtains the
express written approval of MLBPA, and such manufacturer shall have signed an
agreement in the form attached hereto as Schedule D. Licensee shall have no
right to grant any sublicenses without MLBPA's prior express written approval.
Any attempt on the part of Licensee to arrange for manufacture by a third party
or to sublicense (except as provided herein), assign, encumber or alter its
rights under this Agreement by operation of law or otherwise, including without
limitation entry by Licensee into any joint venture arrangement or any material
change in the ownership or key management of Licensee, without reasonable notice
to and written approval by MLBPA shall result in the automatic termination of
this Agreement, and all rights granted hereunder shall immediately revert to
MLBPA.
17. TERMINATION
(a) MLBPA's Right of Termination.
(i) Immediate Right Termination. In addition to the automatic
termination provisions and/or termination rights provided elsewhere in this
Agreement, and notwithstanding any attempts by Licensee to cure defaults,
MLBPA shall have the right immediately to terminate this Agreement by
giving written notice to Licensee if Licensee does any of the following:
a. Manufactures, offers for sale, sells, advertises, promotes,
ships, distributes and/or uses in any way any Licensed Product and/or
Promotional and Packaging Material without having the prior written
approval of MLBPA as provided for in this Agreement;
b. Continues to manufacture, offer for sale, sell, advertise,
promote, ship, distribute and/or use in any way any Licensed Product
and/or Promotional and Packaging Material after receipt of notice from
MLBPA disapproving and/or withdrawing approval of same;
c. Fails to carry on the Licensed Products or Promotional or
Packaging Material the notices specified by MLBPA, as required herein;
d. Becomes subject to any voluntary or involuntary order of any
governmental agency involving the recall of any of the Licensed Products
and/or Promotion and Packaging Material because of safety, health or
other hazards or risks to the public;
e. Directly or indirectly through its controlling shareholders or
any of its officers, directors or employees, takes any action in
connection with the manufacture, offering for sale, sale, advertising,
promotion, shipment and/or distribution of the Licensed Products and/or
the Promotional and Packaging Material which damages or reflects
adversely upon MLBPA, the Rights and/or the Trademarks;
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f. Breaches any of the provisions of this Agreement relating to the
unauthorized assertion of rights in the Rights and/or the Trademarks;
g. Two or more times during a twelve-month period fails to make
timely payment of royalties when due or fails to make timely submission
of royalty statements when due;
h. Uses the Trademarks or the Rights for the purpose, in whole or
in part, of promoting any service or product other than the Licensed
Products without the express prior consent of MLBPA in writing; or
i. Fails to obtain or maintain insurance as required by the
provisions of this Agreement.
(ii) Curable Breaches by Licensee. If Licensee
a. commits a material breach of any other terms of this Agreement,
or
b. files a petition in bankruptcy or is adjudicated a bankrupt or
insolvent, or makes an assignment for the benefit of creditors, or an
arrangement pursuant to any bankruptcy law, or discontinues its
business, or if a receiver is appointed for it or its business and is
not discharged within thirty (30) days, and fails to cure such default
and furnish reasonable proof of its cure to MLBPA within fifteen (15)
days after receiving written notice of breach, MLBPA shall have the
right to terminate this Agreement by giving written notice to Licensee.
(b) Licensee's Right of Termination. If MLBPA commits a material breach of
any of the terms of this Agreement and fails to cure such default and furnish
reasonable proof of its cure to Licensee within fifteen (15) days after
receiving written notice of breach, Licensee shall have the right to terminate
this Agreement by giving written notice to MLBPA.
18. POST-TERMINATION AND EXPIRATION RIGHTS AND OBLIGATIONS.
(a) Except as provided in Section 18(c) below, upon termination of this
Agreement, Licensee and its receivers, representatives, trustees, agents,
administrators, successors and/or permitted assigns shall have no right to
manufacture, offer for sale, sell, ship, advertise, promote and/or distribute
Licensed Products or to use in any way the Rights, the Trademarks, or any
Promotional and Packaging Material relating to the Licensed Products.
(b) Upon termination or expiration of this Agreement, notwithstanding
anything to the contrary herein, all royalties on sales, shipments and/or
distributions theretofore made shall become immediately due and payable and no
Guaranteed Minimum Royalty paid to MLBPA shall be refunded.
(c) Upon expiration of this Agreement, or upon termination of this
Agreement for any reason except those set forth in Section 16 or Section 17(a)
above, subject to the requirements of this Agreement with respect to payment and
reporting of royalties, for a period of sixty (60) days, Licensee may dispose of
all finished Licensed Products which are on hand upon the expiration of the
License Period then in effect, provided that the royalties with respect to that
period are paid and the appropriate statements are furnished for that period.
During such sixty (60) day period, MLBPA itself may use or license the use of
the Rights and/or the Trademarks in any manner at any time anywhere in the world
as MLBPA sees fit.
(d) Subject to Section 18(c) above, after the expiration or termination of
this Agreement, Licensee shall refrain from further use of the Rights and/or the
Trademarks or any further reference to them, either directly or indirectly, in
connection with the manufacture, offering for sale, sale, advertising,
promotion, shipment and/or distribution of Licensee's products. Licensee shall
destroy all artwork, films, transparencies, separations, printing plates, molds
and other materials which reproduce the Licensed Products and/or Promotional and
Packaging Material relating to the Licensed Products, and shall give evidence
satisfactory to MLBPA of their destruction. Licensee shall be responsible to
MLBPA for any damages caused by the unauthorized use by Licensee or by others of
all such materials which are not destroyed pursuant to this Agreement.
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(e) Licensee acknowledges that its failure to cease the manufacture,
offering for sale, sale, advertising, promotion, shipment and/or distribution of
the Licensed Products and/or use in any way of the Promotional and Packaging
Material relating to the Licensed Products at the termination or expiration of
this Agreement will result in immediate and irreparable damage to MLBPA and/or
to the players and to the rights of other licensees of MLBPA. Licensee
acknowledges and admits that there is no adequate remedy at law for failure to
cease such activities and Licensee agrees that in the event of such failure, in
addition to all other remedies available to it hereunder, MLBPA at its sole
option may commence an action in any court having jurisdiction or an arbitration
proceeding, and shall be entitled to equitable relief by way of injunctive
relief and such other relief as any arbitrator(s) or court with jurisdiction may
deem just and proper.
19. FINAL STATEMENT UPON TERMINATION OR EXPIRATION.
Within thirty (30) days after termination or expiration of this Agreement,
as the case may be, Licensee shall deliver to MLBPA a statement indicating the
number and description of the finished Licensed Products which it had on hand as
of the expiration or termination date. MLBPA shall have the option of conducting
a physical inventory at the time of expiration or termination and/or at a later
date in order to ascertain or verify such statement. In the event that Licensee
refuses to permit MLBPA to conduct such physical inventory, Licensee shall
forfeit any rights hereunder to dispose of such inventory. In addition to such
forfeiture, MLBPA shall have recourse to all other remedies available to it.
20. NOTICES.
All notices or other communications required or desired to be sent to
either party shall be in writing and sent by Registered or Certified Mail,
postage prepaid, return receipt requested, or by facsimile or telegram, charges
prepaid. Such notices, including facsimile or telegram, shall be effective on
the date sent, provided that any notice sent by facsimile also shall be sent by
regular mail. The addresses for MLBPA and Licensee shall be as set forth on
Schedule B. Either party may change its address by notice in writing to the
other party.
21. RELATIONSHIP OF THE PARTIES.
This Agreement does not create a partnership or joint venture between the
parties and Licensee shall have no power to obligate or bind MLBPA in any manner
whatsoever.
22. APPLICABLE LAW.
This Agreement is made within the State of New York and shall be construed
in accordance with the laws of the United States and the State of New York.
Licensee hereby expressly waives any right to the benefits of remedial
legislation, if any, of Licensee's home state.
23. REMEDIES.
(a) Except as otherwise provided herein, any dispute or disagreement
between the parties hereto arising out of or relating to this Agreement shall be
settled by final and binding arbitration, in New York City, under the Commercial
Arbitration Rules then obtaining of the American Arbitration Association. The
parties hereto expressly stipulate that the arbitrator(s) shall have full
subpoena power and full powers to fashion appropriate remedies, including
without limitation the power to grant equitable and/or injunctive and/or
declaratory relief. Judgment upon the award may be entered in any court having
jurisdiction.
(b) Licensee recognizes the unique nature of the Rights and the Trademarks,
and the possibility that breaches of this Agreement by Licensee may require
preliminary or extraordinary relief beyond that available in arbitration, and
the possibility that breaches of this Agreement may involve third parties or
witnesses or issues which are beyond the practical jurisdiction of arbitrators.
Accordingly, notwithstanding the provisions of paragraph 23(a), MLBPA (but not
Licensee) may, at its sole and exclusive option, elect to commence an action or
proceeding in any court of competent jurisdiction to enforce this Agreement or
protect the Rights and the Trademarks. MLBPA may also require the
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termination of a previously-commenced arbitration proceeding so as to permit a
dispute between the parties to be resolved in an action or proceeding in a court
of competent jurisdiction, so long as MLBPA has theretofore not waived its right
to do so by taking substantial steps to prosecute or defend the arbitration
proceeding.
24. CAPTIONS.
The captions used in connection with the paragraphs and subparagraphs of
this Agreement are inserted only for purpose of reference. Such captions shall
not be deemed to govern, limit, modify or in any other manner affect the scope,
meaning or intent of the provisions of this Agreement or any part thereof, nor
shall such captions otherwise be given any legal effect.
25. WAIVER.
(a) No waiver by either party of a breach or a default hereunder shall be
deemed a waiver by such party of a subsequent breach or default of a like or
similar nature.
(b) Resort by MLBPA to any remedies referred to in this Agreement or
arising by reason of a breach of this Agreement by Licensee shall not be
construed as a waiver by MLBPA of its right to resort to any and all other legal
and equitable remedies available to MLBPA.
26. SURVIVAL OF THE RIGHTS.
Rights and obligations created by this Agreement and which by necessary
implication continue after its expiration or termination shall survive such
expiration or termination.
27. SEVERABILITY.
In the event that any term or provision of this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
provision, and this Agreement shall be interpreted and construed as if such term
or provision, to the extent the same shall have been held to be invalid, illegal
or unenforceable, had never been contained herein.
28. INTEGRATION.
This Agreement represents the entire understanding between the parties
hereto with respect to the subject matter hereof and supersedes all previous
representations, understandings or agreements, oral or written, between the
parties with respect to the subject matter hereof. This Agreement cannot be
modified except by a written instrument signed by the parties hereto.
By their execution below, the parties hereto have agreed to all of the
terms and conditions of this Agreement.
<TABLE>
<S> <C>
MAJOR LEAGUE BASEBALL THE SCOREBOARD, INC.
PLAYERS ASSOCIATION (LICENSEE)
By: /s/ Donald Fehr By: /s/ Ken Goldin
Date: May 16, 1994 Date: May 12, 1994
</TABLE>
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SCHEDULE A
TRADEMARKS
MLBPA
Major League Baseball Players Association
MLBPA logo
THE RIGHTS
The names, nicknames, likenesses, signatures, pictures, playing records
and/or biographical data of all active baseball players of the National League
and the American League who have entered into a Commercial Agreement with the
MLBPA.
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SCHEDULE B
LICENSED PRODUCTS:
<TABLE>
<S> <C> <C>
1. Baseball Mementos in the following forms, personally autographed by one or more baseball players:
(a) Major League Baseballs, replica bats, replica hats and helmets, batting and fielding gloves, and team
jerseys;
(b) Other items as approved in writing by the MLBPA.
2. Manufactured Mementos in the following forms personally autographed by one or more players or not autographed:
(a) Reproductions of original artwork in non-trading card format in the form of lithographs, framed or
unframed, not smaller than sixty (60) square inches and not larger than nine hundred (900) square inches.
(b) Photographs, ceramic 'trading cards', ceramic plates, ceramic figurines and/or baseballs mounted on
plaques of the following sizes: five inches by seven inches (5' X 7'), ten inches by thirteen inches (10'
X 13'), twelve inches by fifteen inches (12' X 15') and sixteen inches by twenty inches (16' X 20');
(These 'trading cards' will not have a trading card format and will not bear statistics.)
(c) Framed photographs in the following sizes: eight inches by ten inches (8' X 10'), eleven inches by
fourteen inches (11' X 14'), twelve inches by sixteen inches (12' X 16'), sixteen inches by twenty inches
(16' X 20') and eighteen inches by twenty four inches (18' X 24');
(d) Ceramic plates that are not smaller than three and one-quarter inches (3-1/4') and not larger than ten
and one-quarter inches (10-1/4') in diameter;
(e) Ceramic and pewter figurines not smaller than four inches (4') high and not larger than ten inches (10')
high.
(f) MLBPA-licensed trading cards only, in acrylic holders or frames that are: three inches by four and
one-half inches (3' X 4-1/2'), five inches by seven inches (5' X 7'), ten inches by thirteen inches (10'
X 13'), twelve inches by fifteen inches (12' X 15'), and sixteen inches by twenty inches (16' X 20').
(g) Unframed photographs in the following sizes: eight inches by ten inches (8' X 10'), eleven inches by
fourteen inches (11' X 14'), and sixteen inches by twenty inches (16' X 20').
(h) Posters with or without a border that are not smaller than sixty (60) and not larger than nine hundred
(900) square inches.
(i) Ceramic 'trading cards' not smaller than two and one-half inches by three and one-half inches (2-1/2' X
3-1/2') and not larger than three and one-half inches by five inches (3-1/2' X 5'). (These 'trading
cards' will not have a trading card format, will not bear statistics and will not be marketed like a
trading card.)
</TABLE>
LICENSE PERIOD:
First License Period: Execution of this Agreement through December 31,
1995;
Second License Period (If Renewed): January 1, 1996 through December 31,
1996.
Notwithstanding paragraph 2(b), Licensee shall have one (1) separately
exercisable option. All other terms and conditions of paragraph 2(b) shall
remain in full force and effect.
LICENSED TERRITORY:
The United States, its territories, possessions and Canada, Mexico,
Australia, Switzerland, the United Kingdom and Japan.
ADDITIONAL CONDITIONS:
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The International Addendum attached hereto and incorporated herein by
reference shall apply to all sales of Licensed Products outside the United
States.
Licensee understands and agrees that if an original signature or personal
appearance is requested in connection with any Licensed Product, a separate fee
must be paid to the player(s) through Licensor, in addition to the royalties
required hereunder.
Licensee acknowledges and understands that some players may have existing
agreements with manufacturers that may preclude them from signing or being
associated with some of the Licensed Products.
The MLBPA makes no representation that it has the authority to grant nor
does it grant the right to utilize the name, symbol or logo of any company
licensed by MLBPA to produce trading cards and if the foregoing will be used in
connection with any product it is the responsibility of Licensee, (if necessary)
to obtain appropriate permission, for the use of such material.
[*]
Licensee will report all sales of Licensed Products to the MLBPA by
individual player and provide proof of payment directly to players, where
applicable, in the form of copies of canceled checks.
Licensee also represents that there may be some product rights granted in
the above-mentioned agreements that are not granted in this Agreement. Licensee
agrees that if it exercises the right to produce any of these products it will
submit a request for approval to the MLBPA and if approved an amendment to this
Agreement will be required to add this right, which may require an increase in
the Guaranteed Minimum Royalty.
MLBP acknowledges that Licensee has inventory as a result of previous
agreements with Major League players. Licensee acknowledges that these product
are fully royalty-bearing at the rates set forth in this Agreement. Licensee
agrees not to sell, advertise or promote any of these products before receiving
written approval from the MLBPA for the products and any sales materials that
have been produced in connection with them. If any of these products are not
Licensed Products they will be
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reported on a separate royalty reporting form. Licensee represents that it may
be physically impossible to affix the Logo to all of these products already in
inventory and will make best efforts to affix the Logo where possible.
Any agreement between Licensee and a player shall not be in conflict with
rights held by the MLBPA and shall not prohibit the signing of MLBPA licensed
trading cards for insertion into MLBPA licensed trading card sets by MLBPA
licensees or the signing of products free of charge including but not limited to
charitable or gift-giving purposes.
MLBPA agrees to treat confidentially and to use solely for its own internal
purposes all non-public proprietary information furnished to it by Licensee in
connection with this Agreement, including without limitation new product
concepts, marketing plans, inventory runs, royalty reports, customer lists,
artwork, advertising, promotional and publicity materials, and Licensee's
individual contracts with players.
This License Agreement and the contents hereof, including the existing
agreements between Licensee and individual Major League Baseball players,
constitute a confidential business relationship between the parties. Each party
acknowledges that significant damage could be done to the other should the terms
of this Agreement become public knowledge. Both parties agree that they will not
reveal the terms of this Agreement to any third party (excluding employees,
agents, attorneys, accountants and other professionals in their employment, and
other parties to whom they have a legal obligation to disclose) and they will
exercise reasonable precautions to ensure that neither they nor any of the
foregoing persons shall allow the terms of this Agreement to become public
knowledge.
Notwithstanding paragraph 18(c), the period for the sell-off of inventory
shall commence at the expiration or termination of the License Agreement,
whichever occurs first and shall end one (1) year from that date. The period for
the sell-off of inventory already in existence prior to this License Agreement
shall comport with the sell-off period in the individual player agreement to
which the inventory relates. All other terms and conditions listed in paragraph
18(c) shall remain in full force and effect .
Notwithstanding paragraph 3(c), Licensee shall be able to give away free of
charge, and without royalty obligation, not more than Fifty Thousand Dollars
($50,000.00) worth of Licensed Products (as promotional samples) during the
License Period provided that these Licensed Products are accounted for in a
separate royalty statement. All other terms and conditions of paragraph 3(c)
shall remain in full force and effect.
Licensee understands and agrees that any products given away free of charge
or at a reduced price for charitable or fund-raising purposes is fully
royalty-bearing at the established wholesale price and must be accounted for in
a separate royalty statement which includes the name of the charity or fund-
raising organization and its federal tax i.d. number.
ACTUAL ROYALTY
[*]
GUARANTEED MINIMUM ROYALTY
[*]
ADDRESSES FOR NOTICES
Major League Baseball Players Association
12 East 49th Street
New York, NY 10017
Attention: Judy Heeter
The Score Board Inc,
1951 Old Cuthbert Road
Cherry Hill, NJ 08034
Attention: Ken Goldin
Jane Fuerst
Acknowledged and Approved:
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<S> <C>
MAJOR LEAGUE BASEBALL THE SCORE BOARD INC.
PLAYERS ASSOCIATION
By: /s/ Donald Fehr By: /s/ Ken Goldin
Date: May 16, 1994 Date: May 12, 1994
</TABLE>
_____________
*Certain confidential information has been omitted and filed separately with
the Commission.
18
Exhibit 10.42
NBA PROPERTIES, INC.
<PAGE>
NBA Properties, Inc.
LICENSEE: THE SCORE BOARD, INC. RETAIL LICENSE AGREEMENT
ADDRESS: 1951 Old Cuthbert Rd. Type: Non-exclusive
Cherry Hill, NJ 08034 No: 805
THIS RETAIL LICENSE AGREEMENT is entered into by NBA Properties, Inc. ("NBAP"),
with its principal office at 645 Fifth Avenue, New York, New York 10022, and the
Licensee listed above ("SCORE BOARD") with regard to the commercial use of
certain names, logos, symbols, emblems, designs, uniforms or identifications
(the "Marks") of the National Basketball Association (the "NBA") and its Member
Teams (collectively, the "NBA Marks") as well as, on a group basis, the names,
likenesses, photographs, signatures and other identifiable attributes of all
current, active NBA players (the "Player Attributes"). NBAP hereby grants to
SCORE BOARD, and SCORE BOARD hereby accepts, the non-exclusive right to use: (i)
the Marks of the Member Teams and the logo and identification of the NBA, NBA
All-Star Weekend and NBA Playoffs and Finals (collectively, the "Licensed
Marks") solely in connection with the design, manufacture, distribution,
advertisement, promotion and sale of the Licensed Products (described in Section
A) that depict active or retired NBA players who are currently under contract to
SCORE BOARD (or signed by SCORE BOARD during the term hereof) to autograph
merchandise and serve as spokesmen for SCORE BOARD's memorabilia program ("SCORE
BOARD Endorsers") and have not "opted-out" of the NBA "Group License" (as more
fully described below) with respect to the products which SCORE BOARD has
obtained rights hereunder to use the Licensed Marks; and (ii) the Player
Attributes and Licensed Marks in connection with the Licensed Products described
in Section A(4) & (5). No license is granted for the use of the Licensed Marks
or Player Attributes for any purpose other than on the Licensed Products and in
the advertisement and promotion of the Licensed Products in accordance with this
Agreement. The parties agree that the terms of the license are as follows:
A. LICENSED PRODUCTS:
(1) NBA "Official Licensed" game jerseys, basketballs, game photos and
trading cards (purchased by SCORE BOARD, at its sole cost, from existing
NBAP licensees, collectively, "Purchased Product") personally autographed
by SCORE BOARD Endorsers.
(2) Limited edition ceramic plates and ceramic and/or metallic figurines, as
described below, featuring SCORE BOARD Endorsers in their NBA team
uniforms and personally autographed by SCORE BOARD Endorsers: 10-1/4"
plates in single or multiple limited editions (edition sizes are subject
to NBAP approval): and 10" figurines in single or multiple limited
editions (edition sizes are subject to NBAP approval). At no time during
the term hereof shall SCORE BOARD use in the production or marketing of
merchandise in such categories more than 5 different SCORE BOARD
Endorsers in the aggregate.
(3) Open edition ceramic steins and 3-1/2" mini-plates featuring SCORE BOARD
Endorsers in their NBA team uniforms. At no time during the term hereof
shall SCORE BOARD use in the production or marketing of merchandise in
such categories more than 5 different SCORE BOARD Endorsers in the
aggregate.
(4) 2-1/2" x 3-1/4" ceramic cards (featuring Player Attributes); 5" x 7" and
8" x 10" photographs (featuring Player Attributes) mounted on wood
plaques, plexiglas-covered, with engraved name plates; 8" x 10", 11" x
14" and 16" x 20" photographs (featuring Player Attributes) which are
matted and framed, with engraved metal plates. During the 1st Contract
Year, the number of NBA players represented in each of the product lines
under this subparagraph shall be not less than twenty-seven (27); during
the 2nd Contract Year, the number of NBA players represented shall be not
less than thirty-six (36).
(5) Lapel pins featuring the Player Attributes. During 1st Contract Year, the
number of NBA players represented in this product line shall be not less
than fifty (50); during 2nd Contract Year, the number of NBA players
represented shall be not less than seventy-five (75).
B. TERM: June 1, 1994-July 31, 1996
C. TERRITORY: The 50 United States, the District of Columbia and Canada
D. ROYALTY RATES:*
E. MINIMUM GUARANTEES:*
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NBAP LICENSE NO. 805
F. ADVANCE:*
G. ADVERTISING AND PROMOTION: During the term hereof, in addition to royalties
payable to NBAP under this Agreement, SCORE BOARD shall pay NBAP (in addition
to, and simultaneously with, its royalty payments) an amount equal to two
percent (2%) of monthly Net Sales (or the subject reporting period) which
NBAP shall expend directly on consumer directed advertising and promotion of
NBA "Official Licensed Products" in NBAP-controlled media vehicles or on
other NBA advertising or promotional activities as NBAP may determine in its
sole discretion.
AGREED TO AND ACCEPTED, AGREED TO AND ACCEPTED:
subject to the attached NBAP NBA PROPERTIES, INC.:
temms and conditions which the
undersigned has read: By: /s/ Rick Welts
THE SCORE BOARD, INC. Rick Welts, President
By: ___/s/ Ken Goldin_________
Title: ______CEO______________ Dated: _________6/20/94____________
_____________
*Certain confidential information has been omitted and filed separately with the
Commission.
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NBAP LICENSE NO. 805
1. ADDITIONAL DEFINITIONS
For the purposes of this Agreement:
(a) "Contract Year" shall mean a twelve (12) month accounting period
commencing August 1 (unless another commencement date is indicated in
Section B above) and concluding July 31.
(b) "Net Sales" shall mean the dollar amount (including other receivables of
any kind whatsoever) of the gross sales of Licensed Products actually
sold by SCORE BOARD, after deducting any bona-fide credit or adjustment
for returns actually made and volume discounts customarily given to the
trade (such discounts may not exceed two percent (2%) of the gross sales
for the applicable accounting period). In computing Net Sales, no direct
or indirect expenses or costs incurred in connection with paying
royalties due under this Agreement (except for SCORE BOARD's costs of
Purchased Product) or manufacturing, selling, distributing, importing or
advertising (including cooperative and other advertising and promotion
allowances) the Licensed Products shall be deducted, nor shall any
deduction be made for uncollectible accounts, cash discounts, early
payment discounts, discounts relating to advertising, mark-down
allowances or other allowances. Net Sales resulting from sales to any
party directly or indirectly related to or affiliated with SCORE B0ARD
shall be computed based on regular selling prices to the trade. If such
related party or affiliate is a reseller to the trade of the Licensed
Products, the relevant sales price shall be that of such affiliated
party.
(c) "Premium" shall mean anything given free or sold at substantially less
than its usual selling price (but does not include sales made pursuant to
periodic price reductions resulting from "specials," "sales," or volume
pricing discounts) for the purpose of increasing the sale of, or
publicizing, any product or service, or other giveaway or promotional
purpose. Other giveaway or promotional purposes include, but are not
limited to, self-liquidating offers, uses of Licensed Products as sales
force or trade incentives and sales of Licensed Products through
distribution schemes involving earned discounts or "bonus" points based
on the consumers' use of the offeror's product or service.
(d) "Standard Weight" means a garment weight of less than 5.5 oz. in the case
of non-fleece items and less than 10.5 oz. in the case of fleece items.
2. TEAM REPRESENTATION; LIMITATIONS ON LICENSE
Unless otherwise approved by NBAP, each type of Licensed Product must be
manufactured in a version for each Member Team. SCORE BOARD acknowledges that
no license is granted for the use of the NBA silhouetted dribbler logo in
combination with any Mark of the Member Teams (except insofar as the NBA logo
is embodied in the NBA "Official Licensed Product" logo). All designs of the
Licensed Products using the Licensed Marks, including any packages,
containers or tags, shall be used solely in furtherance of this Agreement,
and such designs will not be used in any other respect by SCORE BOARD nor
will SCORE BOARD authorize any third party to use such designs.
Notwithstanding the foregoing, NBAP acknowledges that SCORE BOARD may hold
other licenses pursuant to which SCORE BOARD manufactures, distributes or
sells products similar in design to the Licensed Products and nothing in this
Agreement is intended to prohibit SCORE BOARD's manufacture, distribution or
sale of such products. No license is granted for the use of the Licensed
Marks for any purpose other than upon the Licensed Products and in the
advertisement and promotion of the Licensed Products pursuant to the terms of
this Agreement.
3. STATEMENTS AND PAYMENTS; REPORTING
(a) Statement and Payments: By the fifteenth (15th) day following the end of
each month, SCORE BOARD shall furnish (on forms provided by NBAP) full
and accurate statements broken down by U.S. and Canadian sales, certified
by an officer of SCORE BOARD, showing all information relating to the
calculation of Net Sales in the applicable country for the preceding
month. Simultaneously with the submission of such statement, SCORE BOARD
shall make any royalty payments required under this Agreement. Such
monthly statements shall be furnished whether or not there are any Net
Sales for that month. If SCORE BOARD shall fail to pay any amount due
under this Paragraph, SCORE BOARD shall pay interest on such amount at a
rate equal to the lesser of (i) three percent (3%) per annum over the
highest prime rate (announced by Chemical Bank, New York branch)
prevailing during the period between the date the payment first became
due and the date such payment is actually paid, or (ii) the highest rate
permitted by law during the period between the date the payment first
became due and the date such payment is actually paid. The receipt or
acceptance by NBAP of any of the statements furnished or royalties paid
by SCORE BOARD (including the cashing of any royalty checks) shall not
preclude NBAP from questioning their accuracy at any time or auditing
SCORE BOARD's books and records pursuant to Paragraph 12. All payments
and computations shall be in U.S. dollars, from a U.S. bank, at the spot
rate for the local currency as published in the Wall Street Journal for
the last business day of the royalty reporting period
(b) No Cross Collateralization. Royalty payments shall only be applied
against the minimum payment for the Contract Year in which the royalty
payment accrued (i.e.,
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NBAP LICENSE NO. 805
any short-fall or payment in excess of the Minimum Guarantee in a given
Contract Year may not be off-set or credited against the Minimum
Guarantees for any other Contract Year or any other NBA license held by
SCORE BOARD or permission to distribute Licensed Products outside the
Territory).
4. NON-RESTRICTIVE GRANT; RIGHTS RESERVED
Nothing in this Agreement shall prevent NBAP from granting any other licenses
and rights. All rights not granted in this Agreement are expressly reserved
by NBAP. No right of renewal or option to extend is granted or implied.
5. PREMIUMS
The Licensed Products may only be used as a Premium with the prior written
approval of NBAP in each instance and pursuant to a separate agreement with
NBAP. Nothing in this Agreement shall prohibit SCORE BOARD from marketing the
Licensed Products using creative techniques including, but not limited to,
periodic "specials," "sales," or volume discount prices, as the market may
require, so long as all receipts are accounted for in Net Sales and as
required by this Agreement.
6. GOODWILL
SCORE BOARD recognizes the great value of the goodwill associated with the
NBA Marks and acknowledges that the goodwill attached to the NBA Marks
belongs to NBAP, the NBA and its Member Teams and that such NBA Marks have
secondary meanings in the minds of the public. SCORE BOARD shall not, during
the Term or thereafter, attack the property rights of the Member Teams,
whether severally owned or held in association as the NBA, or NBAP's property
rights, in and to NBA Marks, or attack the validity, legality or
enforceability of this Agreement.
7. PROTECTION OF RIGHTS
(a) Unauthorized Sales: SCORE BOARD shall cooperate to the fullest extent
necessary to assist in the protection of the several and joint rights of
the Member Teams of the NBA and NBAP in and to the Licensed Marks. SCORE
BOARD shall cooperate with NBAP in its anti-piracy enforcement efforts,
including being named by NBAP as a sole or co-complainant in any action
against an infringer. SCORE BOARD agrees to pay to NBAP, and waives all
claims to, all damages or other monetary relief recovered in such action
by reason of a judgment or settlement (other than for reasonable
attorneys fees and expenses incurred at NBAP's request) whether or not
such damages or any part of such damages represent or are intended to
represent injury sustained by SCORE BOARD. The foregoing is not intended
to preclude any action that SCORE BOARD may have with respect to the
infringement of its proprietary rights.
(b) Ownership of Marks: Any copyright, trademark or service mark procured by
SCORE BOARD with respect in and to or involving the Licensed Marks,
derivations or adaptations of the Licensed Marks, or any word, symbol or
design which is similar to the Licensed Marks so as to suggest
association with or sponsorship by the NBA, one of its Member Teams or
any of their affiliates, shall be procured for the benefit of and in
NBAP's name, but at SCORE BOARD's expense, notwithstanding their creation
by SCORE BOARD. SCORE BOARD shall take all necessary steps to secure an
assignment of the copyright from a creator of work that is not
work-for-hire. Any copyright, trademark or service mark affecting the
Licensed Marks already procured or applied for shall be assigned to NBAP.
(c) Notices, Labeling and Records: In every instance where the logo of the
NBA or any of its Member Teams is used, SCORE BOARD shall cause to appear
on or within each Licensed Product sold, by means of a tag, label,
imprint or other appropriate device, the notice "TM" or "(R)" or such
other copyright, trademark or service mark notices (including the form,
location and content of such notices) as NBAP may from time to time
designate. In addition, the following general notice must be included on
a label, the packaging material or on a separate slip of paper packed
with or attached to the Licensed Product:
"The NBA and individual NBA member team identifications
reproduced on this product are trademarks which are the
exclusive property of NBA Properties, Inc. and the respective
member teams and may not be used without the written consent
of NBA Properties, Inc."
SCORE BOARD further agrees that: (i) all Licensed Products shall bear the
NBA "Official Licensed Product" logo on either the article or its
packaging in such place, and in such prominence, as NBAP may designate
from time-to-time, (ii) it shall faithfully comply with and adhere to
NBAP's mandatory hologram "Official Licensed Product" identification
system and Printables Policy (if applicable), or such other
identification systems that NBAP may establish from time to time, and
(iii) unless otherwise agreed by NBAP, it shall not cross-license or
otherwise use other licensed properties with the Licensed Products or
Licensed Marks.
(d) SCORE BOARD Tradenames and Trademarks: SCORE BOARD shall permanently
affix labeling on each Licensed Product or its packaging, indicating its
name, trade name and address so that the public can identify the supplier
of the Licensed Product. SCORE BOARD shall advise NBAP in writing of
SCORE BOARD's tradenames or trademarks used on Licensed Products. SCORE
BOARD may only sell Licensed Products under mutually agreed upon trade
names or trademarks and shall not
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NBAP LICENSE NO. 805
incorporate the Licensed Marks into SCORE BOARD's corporate or business
name or trademark in any manner whatsoever except that SCORE BOARD may,
with NBAP's approval, use the Official Licensed Product logo on its
business stationery and business cards. SCORE BOARD agrees not to use,
whether during or after the Term, any Marks (i) confusingly similar to
the Licensed Marks, or (ii) intended to relate or refer to the Licensed
Marks, the Member Teams or events involving Member Teams.
8. INDEMNIFICATIONS
(a) SCORE BOARD agrees to be solely responsible for, defend, hold harmless
and indemnify NBAP, the NBA and its Member Teams and their respective
directors, governors, officers, employees and agents (collectively "NBA
Parties"), against any claims, demands, causes of action or damages,
including attorneys' fees (collectively, "Claims"), arising out of:(i)
the acts or omissions of SCORE BOARD, (ii) any breach of this Agreement
by SCORE BOARD, or (iii) any defect (whether obvious or hidden and
whether or not present in any sample approved by NBAP) in a Licensed
Product or any packaging or other materials, or arising from personal
injury or any infringement of any rights of any other person by the
manufacture, sale, possession or use of Licensed Products or their
failure to comply with applicable laws, regulations and standards,
provided SCORE BOARD is given immediate written notice of and shall have
the option to undertake and conduct the defense of any such Claim. NBAP
shall in no event be entitled to recover for lost profits. In any
instance to which the foregoing indemnities pertain, NBAP shall cooperate
fully with SCORE BOARD in all respects in connection with any such
defense. NBAP shall not enter into a settlement of such Claim without
SCORE BOARD's written approval. SCORE BOARD will obtain and maintain
product liability insurance providing protection for the NBA Parties
against any Claims arising out of any alleged defects in the Licensed
Products or any use of the Licensed Products, in an amount and providing
coverage satisfactory to NBAP. Such insurance shall be carried by an
insurer with a rating by A.M. Best Co. of A-7 or other rating
satisfactory to NBAP. Such insurance policy shall also provide that NBAP
receive written notice within thirty (30) days prior to the effective
date of the cancellation, non-renewal or any material change in coverage.
Prior to NBAP's execution of this Agreement, SCORE BOARD shall deliver to
NBAP a certificate of such insurance evidencing satisfactory coverage.
Such insurance obligations shall not limit SCORE BOARD's indemnity
obligations, except to the extent that SCORE BOARD's insurance company
actually pays NBAP amounts which SCORE BOARD would otherwise pay NBAP.
(b) NBAP agrees to be solely responsible for, defend, hold harmless and
indemnify SCORE BOARD, its directors, officers, employees and agents
against any Claims arising out of: (i) a claim that the use of the
Licensed Marks as authorized by this Agreement violates or infringes upon
the trademark, copyright or other rights of a third party in or to the
Licensed Marks; (ii) a claim that the use of the Player Attributes (other
than those of SCORE BOARD Endorsers) as authorized in this Agreement
violates the right of publicity, or right of privacy, of any NBA players;
or (iii) any breach of this Agreement by NBAP, provided NBAP is given
immediate written notice of and shall have the option to undertake and
conduct the defense of any such Claim. SCORE BOARD shall in no event be
entitled to recover for lost profits. In any instance to which the
foregoing indemnities pertain, SCORE BOARD shall cooperate fully with
NBAP in all respects in connection with any such defense. SCORE BOARD
shall not enter into a settlement of such Claim without NBAP's written
approval.
9. QUALlTY; APPROVALS; SAMPLES
SCORE BOARD agrees that the Licensed Products shall meet and conform to high
standards of style, quality and appearance. In order to assure NBAP that it
is meeting such standards and other provisions of this Agreement, SCORE BOARD
shall comply with the following:
(a) Pre-Production: Before commercial production of any Licensed Product,
SCORE BOARD shall submit to NBAP all preliminary and proposed final
artwork, three dimensional models (if any), prototypes, mock-ups and
pre-production samples of each Licensed Product, including all styles,
colors and variations, together with its labels, tags, cartons and
containers (including packaging and wrapping materials). All SCORE BOARD
submissions under this Paragraph shall be accompanied by forms supplied
by NBAP, using one form for each submission and filling in all necessary
information. NBAP shall approve or disapprove in writing all submissions,
in its sole discretion, before SCORE BOARD shall manufacture, distribute,
advertise, use or sell such items. Any article submitted and not
disapproved within sixty (60) days after receipt by NBAP shall be deemed
approved. Approval of an article which uses particular artwork does not
imply approval of such artwork with a different article. SCORE BOARD
acknowledges that NBAP's approval of an article does not imply approval
of any non-NBA controlled elements contained in any article. In addition,
SCORE BOARD acknowledges that NBAP may approve some uses of the
Licensed Marks in graphics submitted by SCORE BOARD that do not strictly
conform to the Licensed Marks as registered and that, in some
jurisdictions, NBAP's ability to enforce its trademark rights against a
third party's unauthorized use of such designs may be affected. After
samples of articles have been approved, SCORE BOARD shall not make any
changes without resubmitting the article for NBAP's written approval.
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NBAP LICENSE NO. 805
(b) Production Samples: Before selling or distributing any Licensed Product,
SCORE BOARD shall furnish NBAP with, at no charge, for its permanent use,
two (2) samples of the Licensed Product from the first production run of
each manufacturer of the Licensed Products, including all styles, colors
and variations, together with its labels, tags, cartons and containers
(including packaging and wrapping materials). If such samples do not
conform to all aspects of the Licensed Product as approved or if the
quality of such sample does not meet the requirements of this Paragraph,
NBAP shall notify SCORE BOARD and such article shall be deemed unapproved
and all such articles shall be promptly destroyed. SCORE BOARD shall also
furnish NBAP with any additional samples as may reasonably be required by
NBAP to promote the sale of Official Licensed Products (e.g., for NBAP's
display room, catalogs, mailers and trade shows) or for comparison with
earlier samples. In addition, SCORE BOARD agrees to provide NBAP any
additional samples as may be required for the permanent use of the Member
Teams, not to exceed one (i) sample per Member Team. If NBAP wishes to
purchase further quantities of any Licensed Products, SCORE BOARD shall
sell such Licensed Products to NBAP at the lowest price SCORE BOARD
charges for similar quantities sold to its preferred customers and SCORE
BOARD shall pay royalties on such sales.
(c) Rejections and Non-Compliance: The rights granted under this Agreement do
not permit the sale of "seconds" or "irregulars." All submissions or
samples not approved by NBAP shall promptly be destroyed by SCORE BOARD.
Such destruction shall be attested to in a certificate signed by one of
SCORE BOARD's officers. In the event of SCORE BOARD's unapproved
manufacture, distribution, use or sale of any products or materials
bearing the Licensed Marks, including promotional materials, or the
failure of SCORE BOARD to comply with Paragraphs 7(c) or 11(b), NBAP
shall have the right to: (i) immediately revoke SCORE BOARD's right with
respect to any product(s) licensed under this Agreement, (ii) charge
SCORE BOARD as liquidated damages two thousand dollars ($2,000) for each
instance of non-compliance with this Paragraph, or (iii) confiscate or
order the destruction of such unapproved or non-complying products. Such
right(s) shall be without prejudice to any other rights NBAP may have
under this Agreement or otherwise.
(d) Testing: Both before and after Licensed Products are put on the market,
SCORE BOARD shall follow reasonable and proper procedures for testing the
Licensed Products for compliance with laws, regulations and standards,
and shall permit NBAP (upon reasonable notice) to inspect its and its
authorized manufacturers testing, manufacturing and quality control
records, procedures and facilities and to test or sample Licensed
Products for compliance with this subparagraph and Paragraph 9. Licensed
Products not complying with applicable laws, regulations and standards
shall be deemed unapproved, even if previously approved by NBAP, and
shall not be shipped unless and until they have been brought into full
compliance.
(e) Revocation of Approval: In the event the quality, appearance or style of
any Licensed Product ceases to be acceptable to NBAP, SCORE BOARD uses
the Licensed Marks improperly or in the event that there is an occurrence
or factor connected with any such Licensed Product or SCORE BOARD which,
in the opinion of NBAP, reflects unfavorably upon the professional,
business or personal reputation of NBAP, the NBA or any of its Member
Teams, NBAP shall have the right, in its sole discretion. to withdraw its
approval of such Licensed Product. SCORE BOARD shall cease the use of the
Licensed Marks in connection with the manufacture, sale, distribution,
advertisement or use of such Licensed Product immediately upon notice
from NBAP and such Licensed Product shall immediately be withdrawn from
the market and destroyed. Within ten (10) days after SCORE BOARD's
receipt of such notice, SCORE BOARD shall pay all amounts due NBAP with
respect to such terminated Licensed Product. If there are other Licensed
Products not covered or affected by this subparagraph, this Agreement
shall remain in full force and effect as to such other Licensed Products.
10. PROMOTIONAL MATERIAL
SCORE BOARD agrees that it will not use the Licensed Marks or Player
Attributes or any reproduction of the Licensed Marks in any advertising,
promotion or display material or in any other manner whatsoever without
prior written approval from NBAP. Under no circumstance will "lotteries,"
"games of chance" or any other type of promotion which NBAP believes
reflects unfavorably upon the NBA or its Member Teams be approved. All copy
and material depicting or using the Licensed Marks (including display and
promotional material, catalogs and press releases) shall be submitted for
approval well in advance of production (but in no event less than ten (10)
business days) to allow adequate time for NBAP, in its sole discretion, to
approve, disapprove or comment upon such materials and for any required
changes to be made.
11. DISTRIBUTION; COMPLIANCES
(a) SCORE BOARD shall use its best efforts to manufacture, distribute and
sell, within and throughout the Territory, the Licensed Products in such
manner as may be required to meet competition by reputable manufacturers
of similar articles. If SCORE BOARD desires to have a third party
manufacture or distribute Licensed Products, SCORE BOARD must first
notify NBAP of the name and address of such third party
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NBAP LICENSE NO. 805
and the Licensed Products such third party will be manufacturing or
distributing. NBAP will only grant permission for such manufacture or
distribution pursuant to a consent agreement (on a form supplied by
NBAP) to be entered into by NBAP, SCORE BOARD and such manufacturer or
distributor which will, among other things, require that the third party
manufacturer or distributor be subject to all of the terms and
conditions of this Agreement. In the event that NBAP does not require
the third party to enter into a separate agreement, SCORE BOARD must
provide NBAP with a copy of its agreement with the third party. If any
of SCORE BOARD's authorized manufacturers or distributors uses the
Licensed Marks for any unauthorized purpose. SCORE BOARD shall cooperate
fully and use its best efforts in stopping such unauthorized use. SCORE
BOARD shall make and maintain adequate arrangements for: (i) the
distribution and timely delivery of Licensed Products to retailers
within and throughout the Territory, and (ii) supplying retailers with
all types, sizes and colors of Licensed Products during the final third
of each calendar year for the term of this Agreement. In the event NBAP
advises SCORE BOARD that a special promotional effort is to take place
in an individual store or chain, SCORE BOARD agrees to use its best
efforts to sell the Licensed Products to said store or chain. SCORE
BOARD further agrees to give the Licensed Products wide distribution and
not to sell Licensed Products to any retail outlet within any area to
the exclusion of other retail outlets that may desire to purchase
Licensed Products and whose credit rating and marketing image warrants
such sale.
(b) SCORE BOARD shall stamp on all invoices, and shall require all customers
who resell the Licensed Products and all authorized sublicensees and
distributors to stamp on their invoices, a prominent legend that
indicates that the Licensed Products are for sale only within the
Territory. SCORE BOARD shall periodically, and at the request of NBAP,
inquire of its distributors, agents and customers as to whether they are
observing territorial limits and shall periodically report to NBAP the
results of such inquiries. SCORE BOARD shall notify NBAP of all orders
from, or on behalf of, a customer who SCORE BOARD knows (or has reason
to know after having made reasonable inquiry) is located outside the
Territory or intends to resell the Licensed Products outside the
Territory. If any Licensed Product sold by SCORE BOARD should be
determined by NBAP to have been sold outside the Territory with SCORE
BOARD's knowledge and failure to report same to NBAP, SCORE BOARD shall
compensate NBAP for the injury to its licensing and distribution program
and shall pay all costs and expenses, including attorney's fees,
required to remove such goods from the marketplace. Any such monetary
damages shall be in addition to, and not in lieu of, such other relief
(including injunctive relief) as may be available to NBAP. SCORE BOARD
shall use best efforts to insure that all wholesale purchasers of the
Licensed Products are aware of and comply with the obligation of SCORE
BOARD to adhere to the territorial restrictions of this Agreement by
incorporating within SCORE BOARD's contracts of sale a provision similar
in its essentials to this subparagraph which is a continuing obligation
on the re-sale of the Licensed Products to subsequent wholesale
purchasers and which makes NBAP a third-party beneficiary of such
provision.
(c) In the event SCORE BOARD sells or distributes other licensed merchandise
of a similar grade or quality as the Licensed Products, but which do not
bear any of the Licensed Marks, SCORE BOARD will not discriminate in the
granting of commissions and discounts to salesmen, dealers and
distributors between the Licensed Products and the licensed products of
any third party. SCORE BOARD may not package the Licensed Products in
combination with other products, whether similar or different, without
the prior written approval of NBAP.
(d) SCORE BOARD shall at all times conduct all aspects of its business in a
fair and reasonable manner and in compliance with all applicable laws,
government rules and regulations, court and administrative decrees and
the highest standard of business ethics then prevailing in the industry.
12. RECORDS; AUDITS
SCORE BOARD agrees to keep accurate books of account and records covering
all transactions relating to the license granted In this Agreement. NBAP
and its authorized representatives shall have the right, at all
reasonable hours of the day and upon reasonable prior notice, to examine
and audit such books of account and records and all other documents and
materials in SCORE BOARD's possession or under its control (including
records of SCORE BOARD's parents, subsidiaries and affiliates, if they
are involved in activities which relate to this Agreement) relating to
this Agreement. NBAP shall have free and full access for such purposes
and for the purpose of making extracts and copies. Should an audit by
NBAP establish a deficiency of more than five percent (5%) between the
amount found to be due NBAP and the amount SCORE BOARD actually paid or
reported, the cost of the audit will be paid by SCORE BOARD together with
the amount of the deficiency, plus interest at the then current prime
rate (as announced by Chemical Bank, New York branch) from the date such
amount became due until the date of payment. All such books of account
and records shall be kept available for at least two (2) years after the
termination Of this Agreement, or three (3) years after the end of the
fiscal year to which they relate, whichever is earlier. SCORE BOARD
further agrees, in order to facilitate inspection of its books and
records, that it will designate a symbol or number
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NBAP LICENSE NO. 805
which will be used exclusively in connection with the Licensed Products
on which royalty payments are payable and that duplicates of all billings
to customers with respect to Licensed Products shall be kept for
inspection as provided in this Agreement. SCORE BOARD shall cooperate
with NBAP in developing an electronic data interchange through which NBAP
may access SCORE BOARD's electronic database relating to the manufacture,
distribution and sale of Licensed Products (such as work-in-process,
finished goods on hand, orders received, deliveries made and any other
on-line information relating to the Licensed Products) or developing such
other system as will enable NBAP to obtain such information.
13. EARLY TERMINATION
Without prejudice to any other rights NBAP may have pursuant to this
Agreement or otherwise, NBAP shall have the right to terminate this
Agreement at any time if:
(a) Within four (4) months from the date that this Agreement is executed on
behalf of NBAP, SCORE BOARD shall not have substantially undertaken the
bona-fide distribution and sale of each Licensed Product within and
throughout Territory in accordance with this Agreement.
(b) SCORE BOARD shall on three (3) or more separate occasions fail to timely
remit a royalty payment when due which causes NBAP on three (3) or more
occasions to demand in writing such payment, NBAP shall have the right
to terminate this Agreement, exercisable within thirty (30) days and
upon written notice, without affording SCORE BOARD the right to cure any
subsequent payment default; provided, however, that NBAP shall have the
right to terminate immediately upon SCORE BOARD's failure to make any
other payments when such default continues for a period of ten (10) days
after receipt of written notice of such default.
(c) SCORE BOARD or any guarantor under this Agreement shall be unable to pay
its liabilities when due, or shall make any assignment for the benefit
of creditors, or under any applicable law admits in writing its
inability to meet its obligations when due or commit any other act of
bankruptcy, institute voluntary proceedings in bankruptcy or insolvency
or permit institution of such proceedings against it.
(d) SCORE BOARD shall exhibit a pattern of consistent failure to make timely
delivery of the Licensed Products to its retail accounts.
(e) SCORE BOARD shall fail to perform or shall be in breach of any other
material term or condition of this Agreement and such breach continues
for a period of thirty (30) days after written notice is sent by NBAP.
(f) SCORE BOARD, or any of its authorized manufacturers or distributors
(with SCORE BOARD's knowledge and consent), (i) delivers Licensed
Products outside the Territory, or (ii) sells Licensed Products to a
third party who delivers the Licensed Products outside the Territory,
unless pursuant to a written distribution permission or separate license
agreement with NBAP.
(g) SCORE BOARD sells to any third party that SCORE BOARD knows, or has
reason to know, is altering or modifying the Licensed Products in a
manner which would make the Licensed Product unapprovable under this
Agreement.
14. DISPOSAL OF STOCK
Sixty (60) days before the expiration of this Agreement and ten (10) days
after any termination under Paragraphs 9 or 13, SCORE BOARD will furnish to
NBAP a statement showing the number and description of Licensed Products on
hand or in process of manufacture. After expiration or termination of this
Agreement, SCORE BOARD shall have no further right to manufacture,
advertise, distribute, sell or otherwise deal in any Licensed Products or
use the Licensed Marks or Player Attributes except as provided below. For a
period of ninety (90) days following the expiration (but not after the
termination) of this Agreement, SCORE BOARD may sell-off and deliver
Licensed Products which are on hand or in process at the time of such
expiration (the "Sell-Off Period"), but only in the normal course of
business and at regular selling prices, provided all payments then due are
first made to NBAP and statements and payments with respect to the Sell-Off
Period are made in accordance with this Agreement. NBAP shall have the
option to conduct physical inventories before the expiration of this
Agreement until the end of the Sell-Off Period in order to verify such
inventory and/or statements. In the event SCORE BOARD refuses to permit such
physical inventory, SCORE BOARD shall forfeit its right to dispose of its
inventory. After such Sell-Off Period, all inventory on hand or in process
(including all promotional and packaging materials) will be destroyed.
15. EQUITABLE RELIEF
SCORE BOARD acknowledges that NBAP is entering into this Agreement not only
in consideration of the royalties to be paid, but also for the promotional
value and intrinsic benefit resulting from the manufacture, sale and
promotion of the Licensed Products by SCORE BOARD in the Territory. SCORE
BOARD also agrees that the Licensed Marks and Player Attributes possess a
special, unique and extraordinary character which makes difficult the
assessment of the monetary damage which would be sustained by unauthorized
use of the Licensed Marks or Player Attributes. SCOREBOARD acknowledges
that: (i) its failure to manufacture, sell and promote the Licensed Products
in accordance with this Agreement, including SCORE BOARD's obligation to
maintain and not to detract from the value of the Licensed Marks, and (ii)
the unauthorized use of the Licensed Marks or Player Attributes will cause
immediate and irreparable damage to NBAP and that NBAP would not have an
adequate remedy at law. Therefore, SCORE
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NBAP LICENSE NO. 805
BOARD agrees that during the Term and thereafter, in addition to such other
legal and equitable rights and remedies as shall be available to NBAP,
injunction and other equitable relief would be appropriate in the event of a
breach of this Agreement, without the necessity of proving damages or
furnishing a bond or other security; provided, however, that such remedy
shall not be exclusive of other remedies otherwise available to NBAP.
16. NOTICES
All notices and statements to be given and all payments to be made under
this Agreement shall be given or made at the respective address of the
parties as set forth above, unless notification of a change of address is
given in writing. Any notice of breach or default must be in writing and
sent by express delivery and registered or certified mail, return receipt
requested, properly addressed and stamped. Any written notice shall be
deemed to have been given at the time it is mailed.
17. NO JOINT VENTURE
Nothing in this Agreement shall be construed to place the parties in the
relationship of partners or joint venturers. SCORE BOARD shall have no power
to obligate or bind NBAP to a third party in any manner whatsoever.
18. ARBITRATION OF CERTAIN MATTERS
Any dispute or disagreement between the parties relating solely to the
amount of royalty payments owing under this Agreement shall be settled by
arbitration in New York City under the rules then in effect of the American
Arbitration Association. Judgment upon the award may be entered in any court
having jurisdiction. No other dispute or disagreement between the parties
(including any claim by NBAP that SCORE BOARD is using the Licensed Marks in
a manner not authorized by this Agreement or is otherwise in breach of this
Agreement) shall be settled by arbitration. All decisions by NBAP relating
to disapproval of any Licensed Product or advertising, promotion or display
material shall be final and binding on SCORE BOARD and shall not be subject
to review in any proceeding.
19. USE OF PLAYERS
(a) SCORE BOARD acknowledges and agrees that it shall not use the name or
likeness of any NBA player in such manner as to constitute an
endorsement of any Licensed Product unless SCORE BOARD shall have first
obtained the express written consent of that player. SCORE BOARD further
agrees that in the event any active player other than a SCORE BOARD
Endorser, becomes inactive from NBA or enters into an exclusive license
agreement which conflicts with the rights granted hereunder, SCORE BOARD
shall, within seventy (70) days of receipt of notice from NBAP that a
player has become inactive or has entered into a conflicting exclusive
agreement, cease and/or cause the cessation of the production, sale and
distribution of all Licensed Products using the Player Attributes of the
player for whom NBAP has sent the notice.
(b) SCORE BOARD acknowledges that (i) NBAP has obtained certain rights to
use the likeness of NBA Players including, SCORE BOARD Endorsers, on a
group basis under a certain Group License Agreement with the National
Basketball Player Association, dated July 19, 1986 (as amended) (the
"Group License"), and (ii) SCORE BOARD shall not cause any SCORE BOARD
Endorser to "Opt-out" of the Group License with respect to any product
or service and shall not prevent or otherwise interfere with NBAP's
ability to use any SCORE BOARD Endorser in any NBAP licensing, and to
the extent any agreement with a SCORE BOARD Endorser is "exclusive",
SCORE BOARD agrees not to assert such exclusivity against NBAP or its
licensees.
20. WARRANTIES
(a) NBAP represents and warrants that it has the right and authority to
enter into and perform this Agreement and to grant the rights to the
Licensed Marks and Player Attributes.
(b) SCORE BOARD represents and warrants that: (1) it has the right and
authority to enter into and perform this Agreement, (2) each autographed
item offered for sale under this Agreement shall have been personally
signed by the indicated SCORE BOARD Endorser, and (3) all advertising
and promotional materials shall comply with all applicable laws,
regulations and standards. NBAP's approval of such materials will not
imply a representation or belief that NBAP believes such materials are
sufficient to meet applicable laws, regulations and standards.
(c) SCORE BOARD represents and warrants that during the term of this
Agreement it shall take no action, nor shall it cause any SCORE BOARD
Endorser to take any action, which would limit any existing right NBAP
has under the Group License with respect to the licensing of products
and merchandise.
(d) SCORE BOARD represents and warrants that it has obtained certain
exclusive rights from the SCORE BOARD Endorsers with respect to the
marketing of collectibles incorporating the SCORE BOARD Endorsers' names
and likenesses. With respect to the Licensed Products for which SCORE
BOARD is obtaining Group License rights from NBAP hereunder, SCORE BOARD
agrees that during the term and within the territory of this Agreement,
it shall not assert any such exclusivity against NBAP and its Group
License licensees. During the term and within the territory, SCORE BOARD
further agrees to waive any claims of exclusivity regarding the SCORE
BOARD Endorsers with respect to the following product categories:
stickers; coins and medallions; school supplies; mugs and steins; and
stationery. With respect to the
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NBAP LICENSE NO. 805
product categories not identified herein, NBAP and SCORE BOARD agree to
consult and cooperate on a case by case basis regarding the possible
further waiver of rights SCORE BOARD has and the SCORE BOARD endorsers.
21. SEVERABILITY
In the event any provision of this Agreement is found to be void or
unenforceable, the remaining provisions shall continue in full force and
effect, and the void or unenforceable provision shall be deemed by the
parties as replaced by such substitute provision as shall be prepared by
NBAP in such form and substance as shall be legally valid and as shall
accomplish as near as possible the purpose and intent of the invalid
provision.
22. MISCELLANEOUS
(a) Assignment: This Agreement and any rights granted under this Agreement
are personal to SCORE BOARD and shall not be assigned, sublicensed,
subcontracted or encumbered, directly or indirectly, by law or by
contract, without NBAP's prior written consent. Any transfer of a
controlling interest in SCORE BOARD shall be deemed an assignment
prohibited by the preceding sentence. Any nonconsensual assignment,
sublicense, subcontract or encumbrance of this Agreement shall be
invalid and of no force or effect. Upon any such nonconsensual
assignment, sublicense or encumbrance, this Agreement shall terminate
and all rights granted under this Agreement shall immediately revert to
NBAP.
(b) Waiver: None of the provisions of this Agreement can be waived or
modified except expressly by a writing signed by both parties. There are
no representations, promises, agreements, warranties, covenants or
undertakings other than those contained in this Agreement. No failure on
the part of NBAP to exercise any right under this Agreement shall
operate as a waiver of such right; nor shall any single or partial
exercise of any right preclude any other or further exercise or the
exercise of any other rights.
(c) Governing Law and Jurisdiction: This Agreement shall be construed in
accordance with the laws of the State of New York, without regard to its
principles of conflicts of laws. Any claim arising under this Agreement
(except as provided under Paragraph 18) shall be prosecuted in a court
of competent jurisdiction located within the City of New York, and SCORE
BOARD consents to the jurisdiction of such court and to the service of
process by mail.
(d) Construction: This Agreement, together with any exhibits or attachments,
constitutes the entire agreement and understanding between the parties
and cancels, terminates and supersedes any prior agreement or
understanding relating to the subject matter of this Agreement between
SCORE BOARD and the NBA, any Member Team or NBAP. The headings in this
Agreement are for reference purposes only and shall not affect the
interpretation of this Agreement. This Agreement shall not be binding on
NBAP until signed on its behalf by its president or an officer
designated by the president to sign.
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