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[PORTIONS OF THIS EXHIBIT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
EXHIBIT 10.67
INTERNATIONAL DISTRIBUTION AGREEMENT
This International Distribution Agreement ("Agreement") dated as of January 8,
2009 (the "Effective Date"), is by and between Cirtran Beverage Corp., a Utah
corporation located at 4125 South 6000 West, West Valley City, UT 84128, USA
(the "Company") and Tobacco Holding Group Sh.p.k, an Albanian Company with its
notice address at Rruga Kavajes, Ish Kombinati, Ushqimor, Tirane, Albania (the
"Distributor").
The Company is engaged in the business of advertising, marketing, distributing,
and selling the Playboy brand products listed in the attached Schedule 1, as it
may be amended from time to time (the "Products"). The Company's licensors, Play
Beverages, LLC, and Playboy Enterprises International, Inc. ("Playboy
International") have entered into a Product License Agreement (the "License
Agreement") dated as of November 1, 2006, pursuant to which Playboy
International has licensed the use of the Playboy name on the Products. A copy
of the License Agreement is attached as Exhibit "A". The License Agreement was
later amended on December 19, 2008 listing Albania as a licensed territory upon
receipt of confirmation of local counsel, the Company will request immediately
from Playboy International the confirmation once this agreement is executed and
it is a condition precedent to the obligations of both parties hereunder that
such confirmation take place. The Company and Distributor desire that the
Distributor act as the exclusive seller and distributor of the Products in the
Territory as defined below.
The parties agree as follows:
1. APPOINTMENT.
1.1 Appointment. The Company hereby appoints the Distributor as its
exclusive distributor for the Products in the Territory, having the exclusive
right to sell and distribute the Products in the Territory. Distributor
acknowledges that Playboy International has retained certain rights to
distribute Products to United States military bases and possessions in the
Territory.
1.2 Trademarks. The Company hereby grants to the Distributor the
nonexclusive, nonassignable, nontransferable right to use the Company's
trademarks, trade names and trade dress described in the attached Schedule 3
(the "Trademarks") solely in connection with the distribution, marketing, and
sale of the Products in the Territory. The Trademarks will remain the sole and
exclusive property of the Company or its licensors.
1.3 Initial Non-cancellable Purchase Order. As a condition precedent to
the effectiveness of this Agreement, upon execution of this Agreement
Distributor shall place with the Company a non-cancellable purchase order and
pay immediately for XXXXXX cases of Product. The Distributor must prepay for
this order in advance at the same time the order is issued via wire transfer.
The Distributor must accept, for the first 6 months from the date of this
agreement, the same product formula and packaging sold in the USA.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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1.4 Localization. Company will consider in good faith requests from
Distributor to change the formula, taste, color or form factor of the Products
to better match local tastes in the Territory. In Company's discretion, such
localized Products may be in addition to, or in replacement of, the initial
Products. Distributor will be responsible for translating Product labels to
local language(s). All translations will be subject to approval by the Company.
Distributor will provide the Company with any label information required by law
in the Territory. Distributor shall be responsible to obtain all governmental
licenses, approvals, permits and approvals for the importation and distribution
of the Products in the Territory.
2. EFFECTIVE AND TERMINATION DATES.
2.1 Term. This Agreement shall be effective as of the Effective Date
and shall remain in force for five years (the "Term"), unless terminated prior
thereto as provided herein. This Agreement will automatically renew for
successive renewal Terms of five years each if at the end of the then current
Term (i) Distributor is not in default hereunder, (ii) Distributor has satisfied
the Minimum Sales Requirement described in paragraph 2.4 for each year of the
then-current Term, (iii) the parties have agreed upon the Minimum Sales
Projections for the renewal term, and (iv) Distributor has not notified the
Company that it does not intend to renew the Term, which notice must be given at
least 90 days prior to the expiration of the then-current Term. The Company will
use its best efforts to extend the License Agreement for the full Term of this
Agreement.
2.2 Termination by Mutual Consent. This Agreement may be terminated at
any time by mutual consent of the parties in writing effective as provided
herein.
2.3 Termination upon Default. This Agreement may be terminated by the
Company upon a default under Paragraph 5.2 hereof.
2.4 Termination for Under-Performance.
(a) The Parties have agreed on the Minimum Sales Projections for
each of the five years in the initial Term, which is attached hereto as Schedule
7. The Parties may in their discretion, but are under no obligation to, revise
the Minimum Sales Projections during the Term to reflect market conditions. Any
such revision must be in a writing signed by both Parties.
(b) If actual sales for a twelve month period ending on an
anniversary of the Effective Date are less than 80% of the Minimum Sales
Projection for that year (the "Minimum Sales Requirement"), then the Company may
terminate this Agreement upon sixty (60) days prior written notice to
Distributor; provided that such notice is given within ninety (90) days after
the end of the relevant twelve month period.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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(c) It is a condition to any renewal of this Agreement that the
Parties agree in writing on new Minimum Sales Projections for each year of the
renewal Term. The Parties will consider, among other things, the saturation of
the Products in the Territory and the overall growth rate of the product
class(es) which includes the Products throughout the Territory. The Parties'
agreement to new Minimum Sales Projections shall be in writing signed by both
Parties and must be agreed upon no later than thirty (30) days prior to the
expiration of the then-current term unless the Parties mutually agree to extend
such deadline.
3. DISTRIBUTOR'S OBLIGATIONS.
The Distributor will develop and maintain a market for the Products in
the Territory and meet the sales and distribution goals on Schedule 4, which
shall be updated at least annually, and to do the following:
3.1 Territory Development. Within the first year after the Effective
Date, Distributor shall have commercially launched the Products fully in all its
channels in each country in the Territory. For purposes of this Agreement, if an
approved sub-distributor has been appointed for the country, a full commercial
launch means that the Products are being distributed to at least 70% of the
accounts of the sub-distributor. If Distributor has not appointed an approved
sub-distributor for the country, a full commercial launch means that the
Products are being distributed to at least as many outlets as would equal 70% of
the accounts serviced by the largest beverage distributor in that country;
provided that at the request of Distributor, made not more than four months
after the Effective Date, the Company will consider in good faith alternative
definitions for commercial launch in specified countries.
3.2 Compliance with License Agreement. Distributor shall conduct all of
its activities hereunder in full compliance with the License Agreement.
Distributor shall fully and promptly comply with any requests of the Company for
information or reports which the Company may need in order to comply with the
reporting requirements of the License Agreement.
3.3 Sub-Distributors. Distributor may appoint qualified
sub-distributors with exclusive or non-exclusive rights within specified
countries or areas within the Territory. The appointment of any sub-distributor
is subject to the prior written approval of the Company and Playboy
International, which approval may be withheld in their sole discretion. All
sub-distributors must agree in writing to comply with this Agreement, the
License Agreement and such other restrictions as may be reasonably imposed by
the Company or Playboy International. Distributor shall be fully responsible to
the Company and Playboy International for any violation of this Agreement or the
License Agreement by its sub-distributors. Any refundable initial fees or
payments obtained by Distributor from a sub-distributor shall be subject to
return or surrender in the same manner as the return or surrender of the
Security Deposit pursuant to Paragraph ___ below. Distributor may obtain
non-refundable initial fees or payments only with the express written consent of
the Company, which consent may be withheld in the Company's discretion.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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3.4 Purchase from Company. Distributor must purchase all Product from
the Company or its designated subcontractor. Distributor will have no right to
manufacture, or to cause third parties to manufacture, the Products. Company
will control the manufacture of the Product either at Company's own facilities
or those of subcontractors, located inside or outside of the Territory, in
Company's discretion. All orders for Products will be placed with Company even
if a subcontractor is used for manufacture.
3.5 Distribution. Distributor will supply Products purchased from the
Company, or its designated subcontractor, to customers in the Territory.
Distributor will not distribute, cause to be distributed or assist in the
distribution of the Products outside the Territory or other than as specified by
the Company nor will Distributor distribute, cause to be distributed or assist
in the distribution of any product or item not specifically requested by the
Company that bears any or all of the Trademarks during or at any time after the
distribution of the Products pursuant to this Agreement. Distributor will not
engage in transshipping or otherwise violate the scope of the Territory defined
herein. Nothing contained herein shall be construed to grant Distributor any
right to manufacture Products or to purchase Products from any person other than
the Company or its designated subcontractors.
3.6 Review of Reports and Inspection. Distributor will keep and
maintain accurate and detailed books and records of its activities under this
Agreement. Upon reasonable notice, Distributor will allow the Company and
Playboy International to review Distributor's books and records, including any
depletion or other reports applicable to the Products, and shall have the right
to make extracts therefrom or copies in order to ensure Distributor's compliance
with this Agreement. Within 10 days of a request from the Company or Playboy,
Distributor will supply a statement detailing Distributor's accounts for the
Products. Upon reasonable notice, Distributor will allow the inspection by the
Company and Playboy International of the portions of the Distributor's
facilities used in connection with the storage and distribution of the Products.
3.7 Marketing. Distributor will develop and execute marketing programs
as initially set forth on Schedule 4 hereto, which shall be updated at least
semi-annually. Distributor has agreed that the initial marketing budget for the
initial launching stage should be set at $XXXXXX but never less than $XXXXXX.
Distributor will assist the Company in brand growth and support volume case
requirements with introductory and promotional case allowances as Distributor
and the Company may agree.
3.8 Handling Business. Distributor will maintain a business
organization and equipment necessary to function efficiently and effectively in
the sale and distribution of Products. Distributor will maintain all state,
federal and local licenses and permits necessary for it to perform under this
Agreement and will keep such licenses and permits current.
3.9 Quality Control. Distributor will ensure that only products of
merchantable quality are sold. Unmerchantable product is defined to be Product
that is spoiled, putrid or foul, does not conform to the Company's manufacturing
specifications for such Product, or has sustained damage to its primary or
secondary packaging and is no longer commercially marketable. The Company shall
replace, at its own expense, all unmerchantable Products, including
transportation costs of delivering replacement Product to Distributor, other
than Product which has been spoiled by mishandling by Distributor.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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3.10 Confidentiality. During and after the term of this Agreement,
Distributor will maintain the confidentiality of all documents, confidential
information, trade secrets, marketing and operating methods, and data of the
Company relating to the Products and the business of Company ("Trade Secrets")
and refrain from using and disclosing Trade Secrets for personal gain, or for
any other purpose not in furtherance of or incidental to the obligations of the
Distributor hereunder, except with the Company's written consent.
3.11 Report Law Suits or Claims. Distributor will notify the Company
promptly after becoming aware of any actual or potential claim or suit against
the Company, the Distributor, or any customer of Products that alleges that a
patent, trade name, copyright, or trademark of a third person will be infringed
by reason of the sale or use in the Territory of the Products or any promotional
materials of the Company or the Distributor with respect to the Products.
3.12 Infringement. Distributor will notify the Company promptly after
becoming aware of the any infringement of any of the Trademarks, and will assist
the Company (at the Company's expense) in any action or proceedings that the
Company or its licensors may institute as the result of such infringement.
Distributor will not make, cause others to make, or assist others in making, any
claim whatsoever to any or all of the Trademarks or any trademark, designation,
name, phrase, design or symbol similar thereto in connection with the
manufacture, advertising, promotion, sale or distribution of merchandise.
3.13 Storage and Handling Standards. Distributor will comply with
regulatory standards for storage, transportation and handling of Products and
will provide access to its warehouse for the Company to inspect inventory.
3.14 Use of Trade Name or Trademarks. Distributor will refrain from
removing the Trademarks from Products and from using the Trademarks on any other
product except the Products. Distributor will refrain from using the Trademarks
in the Distributor's corporate or business names without the Company's prior
approval, or in any case, in any manner inconsistent with the rights of the
Company and its licensors in the Trademarks.
3.15 Notice Requirements. Distributor will provide the Company with
written notice by certified mail of any event that the Distributor alleges
constitutes a default under Paragraph 5.2 of this Agreement, including without
limitation:
(a) A description of each act or omission relevant to the default;
(b) The dates of each act or omission relevant to the default; and
(c) (If the default is susceptible to cure) the steps the
Distributor believes are necessary to cure the default.
3.16 Distribution in Territory. As described in the License Agreement,
if Distributor distributes Products in member states of the European Union
("EU"), right or obligations created or imposed by this Agreement may not be
exercised or enforced in a manner contrary to Community Law. Distributor will
not solicit orders from outside the Territory nor engage in any commercial or
promotional activities with respect to the Products outside the Territory, the
right of any purchaser of the Products within the Territory to export the
Products purchase to other member states of the EU staying unaffected.
Limitation of the exercise of rights or the enforcement of obligations due to
Community Law or the provisions of this Agreement shall not affect the validity
or enforceability of any other rights and obligations under this Agreement.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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3.17 E-Commerce Web Site. Any advertisement, promotion, sale or
distribution of the Products via an "E-Commerce Web Site" shall be subject to
the terms and conditions of the E-Commerce Guidelines set forth on Schedule 5
hereto. In the event Distributor fails to adhere to any of the terms and
conditions of the E-Commerce Guidelines, such failure shall be deemed a default
under this Agreement.
3.18 Non-Circumvention. Except with the Company's prior written
consent, during the period ending two years after termination or expiration of
this Agreement, Distributor shall not manufacture, market or distribute any
non-alcoholic beverages identified by the Trademarks (or marks confusingly
similar to the Trademarks) other than the Products purchased from the Company.
By way of clarification, this restriction shall apply even if the Distributor or
the seller of such beverages is licensed to use the Trademarks by Playboy
International or its licensees other than the Company. Distributor shall cause
any sub-distributors to agree to this restriction.
4. COMPANY'S OBLIGATIONS.
4.1 Sale of Products. The Company will sell the Products to the
Distributor under the terms of this Agreement, and the Company will take all
necessary steps to ensure that no other person sells or distributes Products in
the Territory in derogation of Distributor's exclusivity.
4.2 Shipping. The Company will make prompt shipments in accordance with
the Distributor's purchase orders for Products.
4.3 Notice Requirements. The Company will provide the Distributor with
written notice of any event Company alleges constitutes a default under
Paragraph 5.2 of this Agreement, including without limitation:
(a) A description of each act or omission relevant to the default;
(b) The dates of each act or omission relevant to the default; and
(c) (If the default is susceptible to cure) the steps the Company
believes are necessary to cure the default.
Such notice is a condition to termination of this Agreement for
Distributor's default, but failure to give such notice promptly after the event
will not be deemed a waiver of that or any subsequent default.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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4.4 Company Responses. The Company will respond promptly in writing to
the Distributor upon any notification pursuant to Paragraph 3.12 hereof of a
claim or suit against the Company, the Distributor, or any customer for
Products.
4.5 Quality and Production. The Company will assure that all Products
are of merchantable quality. The Company will be responsible for producing,
bottling, packaging and labeling the Products as required by the laws of the
country of origin and the laws of the Territory of which it is aware.
Distributor will notify the Company of any labeling requirements of which it is
aware specifically required in the Territory.
4.6 Promotional Materials. Company will provide camera ready copy and
images for advertising and promotional materials. It will be Distributor's
obligation to translate or otherwise localize the materials, to comply with
local laws and regulations and to reproduce and distribute the materials. All
promotional materials, whether localization of Company materials or created by
Distributor, must be approved by the Company prior to use.
4.7 Promotional Product. As a special introductory promotion to help
Distributor in the initial stages of introducing the Product in the Territory,
for every XXXXXX of Product purchased and paid for, the Company will provide
XXXXXX of Product to Distributor for no additional cost other than shipping and
customs. This introductory promotion will only apply to purchases during the
first 12 months from the Effective Date. The promotional product will not count
towards Distributor's Minimum Sales Requirement. Distributor agrees to pass on
this introductory promotion to its sub-distributors to help promote and market
the Products and upon the request of the Company Distributor will provide proof
that the sub-distributors received the benefit of the promotion.
5. DEFAULTS.
5.1 Deprivation of Products. To the extent that the Company may be
substantially deprived of Products for reasons beyond its control, the Company
will be excused from failure to perform according to the terms of this Agreement
for so long as such deprivation continues.
5.2 Default Defined. The following will be defaults:
(a) A breach by this Agreement by Distributor or any
sub-distributor (including but not limited to the failure to pay for Product
when due) upon written notice from the Company or Playboy International.
(b) Distributor is insolvent or shall make or agree to make an
assignment for the benefit of creditors or an arrangement pursuant to any
bankruptcy law; Distributor has given an assignment for the benefit of
Distributor's creditors; involuntary or voluntary proceedings in bankruptcy are
instituted against or by Distributor that are not dismissed within 90 days, or
Distributor is adjudicated a bankrupt; a receiver or trustee is appointed for
Distributor, or any interest in its business, unless vacated within 90 days.
(c) The abandonment by either party of its business by the
discontinuation of normal service to its customers for a period of 45
consecutive days.
(d) A determination by a court of competent jurisdiction that one
party made a material misrepresentation or false statement or materially misled
the other in order to procure a benefit or right from the other party.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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5.3 Remedies.
(a) If the Distributor defaults, as described in Paragraph 5.2,
the Company may at its option exercise any one or more of the following
remedies:
(i) terminate this Agreement, effective immediately,
provided that the notice required by Paragraph 4.3 has been given;
(ii) declare all indebtedness of the Distributor to it
immediately due and payable, and repossess all the Products in the possession of
the Distributor for which the Distributor is indebted to it;
(iii) establish terms of cash in advance of delivery on
Products thereafter delivered to the Distributor; or
(iv) exercise any other legal remedies available to it.
(b) If the Company defaults, as described in Paragraph 5.2, the
Distributor may at its option
(i) terminate this Agreement, provided that the notice
required by Paragraph 3.15 has been given and the Company has failed to cure the
default within sixty days or such longer cure period as was provided n the
notice; or
(ii) exercise any other legal remedies available to it.
5.4 Effect of Termination. Termination of this Agreement, other than
termination resulting from Distributor's default or termination upon expiration
of the Term, will not affect the obligation of the Company to make delivery on
orders accepted by it prior to the effective date of the termination, subject to
the terms and conditions provided in this Agreement.
5.5 The Distributor's Obligations Upon Termination. Upon Termination of
this Agreement, the Distributor will immediately
(a) return to the Company (at the Company's expense) or upon the
Company's request destroy, all advertising, promotional and sales materials in
the Distributor's possession that were furnished by the Company without charge
(including without limitation brochures, catalogs, price books, photographs,
designs, drawings, and engineering and other data);
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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(b) provide to the Company and Playboy International within 10
days of the date of Termination with a statement setting forth the number of
Products on hand and a listing of all of Distributor's accounts for the
Products.
(c) immediately cease all use of the Trademarks; and
(d) at its earliest opportunity remove the Trademarks from the
Distributor's vehicles and any of the Distributor's products, letterhead,
business cards, or other promotional materials of any kind.
6. TERMS OF SALE OF PRODUCTS.
The Company will sell the Products to the Distributor under the
following terms and conditions:
6.1 Price. The prices the Company will charge the Distributor as of the
Effective Date of this Agreement are set forth in the attached Schedule 6. The
Company reserves the right to change its prices for the Products at any time by
giving the Distributor at least 45 days prior written notice of any price
increase. Unless otherwise expressly and unambiguously stated on Schedule 6, all
pricing is FOB the warehouse or factory of the Company or its subcontractor.
6.2 Delivery. The Company will arrange and pay for transportation of
Products to the closest deep sea port in the Territory. Title to Products and
risk of loss pass to Distributor when the Products have been shipped from the
warehouse or factory of the Company or its subcontractor. Company will pay for
proper insurance premium to cover the risk of damage or loss until its arrival
to the port described herein.
6.3 Purchase Orders. The Distributor's orders for Products, and the
Company's acceptances thereof, whether oral, written, or otherwise, will be
subject to the terms and conditions of this Agreement. Any term or condition in
such purchase orders or acceptances in conflict with this Agreement will be null
and void.
6.4 Payment. All payments shall be in United States Dollars unless the
use of another currency is unambiguously set forth on Schedule 6. The
Distributor will pay for each shipment in cleared funds by electronic funds
transfer (or as otherwise agreed to by the Company in writing) received by the
Company as follows: one-half (1/2) with order and the balance (after application
of the per case credit, if any) upon shipment by the Company or its
subcontractor; provided that the bill of lading will not be released until
payment in full has been received. Alternatively, Distributor shall provide the
Company with an irrevocable unconditional letter of credit drawn on a bank
acceptable to the Company (which shall be a U.S. bank or the letter of credit
shall be payable at U.S. branches or correspondents of the issuing bank). The
letter of credit shall be for not less than the full amount of the purchase
order and may be drawn (i) as to one-half upon presentation of the purchase
order, and (ii) and the balance upon shipment by the Company or its
subcontractor; provided that the bill of lading will not be released until
payment in full has been received. If cleared funds are not timely received by
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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the Company for any invoice, Distributor shall pay a late charge of 1.5% (or the
maximum amount allowed by law, whichever is lower) of the price set forth on the
invoice for each 30-day period, or part thereof, that such invoice shall remain
unpaid. The Company may, from time to time, in its sole discretion, set forth
credit limits applicable to Distributor's purchases. Following review of
Distributor's financial information, the Company may in its sole discretion
specify other payment terms in writing. If, in the Company's judgment,
Distributor should not be granted or continue to receive credit, whether because
of an arrearage in its payment or otherwise, then the Company shall have the
unqualified right, without prior notice, to reduce or withdraw entirely
Distributor's credit limit (if any) or only to sell to Distributor on a cash on
order basis. The Company reserves the right at any time in its sole discretion
to demand immediate payment of any account whether due or not. There shall be no
right of set-off by Distributor.
6.5 Claims. Any claims for shortages, damaged Products, or
discrepancies in any shipment must be sent to the Company no later than 10 days
after the arrival of the shipment at the Distributor's facility. The Company
will issue the Distributor credit for such claims within 15 days of receipt of
claim.
7. INDEMNIFICATION AND INSURANCE.
7.1 Indemnification by the Company. The Company will indemnify, defend,
and hold harmless the Distributor from and against any and all third party
losses, expenses, damages, claims, suits, demands, and causes of action
(including without limitation the reasonable fees and expenses of attorneys,
court costs, and other litigation and dispute resolution costs) arising from or
relating to any injuries to or death of persons, or any damage to property,
occurring as a result of or in any way arising out of sales, production,
defects, or storage of the Products (including their bottling or packaging) by
the Company.
The Distributor will give the Company prompt written notice of any
matter for which it claims indemnification, and the Company may, if it elects,
defend or settle such claim or suit at its own expense using counsel of its
choosing (but any such settlement that does not provide for the giving of an
unconditional release to the Distributor will be subject to the approval of the
Distributor, in its sole discretion), and the Distributor will give Company
cooperation and any and all available information and assistance in connection
with the defense of such claim or suit, to the extent it is able without
incurring additional cost.
7.2 Company's Insurance. The Company will maintain primary and excess
products liability coverage totaling at least US$2,000,000 per occurrence, on an
occurrence (not claims-made) basis, and containing a Vendor's Liability
Endorsement applicable to the Distributor, its affiliated companies, and all
customers requesting such coverage through the Distributor.
7.3 Insurance. The Distributor and the Company will each maintain
Comprehensive General Liability insurance with bodily injury and property damage
limits of not less than US$2,000,000 per occurrence, and an endorsement
providing contractual liability coverage. Distributor's policy will name the
Company as an additional insured. Within 45 days of the effective date of this
Agreement, each party will provide an original certificate of insurance
containing such terms, and thereafter will provide each certificate of renewal
within 10 days of the effective date of renewal. Each such certificate will
contain an endorsement stating that the insurance company will give the other
party at least 10 days' prior written notice in the event of cancellation,
nonrenewal, or material change to the terms of such liability policy.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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8. INTELLECTUAL PROPERTY INFRINGEMENT.
8.1 The Company will indemnify, defend, and hold harmless the
Distributor from and against any and all losses, expenses, damages, claims,
suits, demands, and causes of action (including without limitation reasonable
fees and expenses of attorneys, court costs, and other litigation and dispute
resolution costs) arising from or relating to any actual or claimed infringement
of any patent, trademark, copyright, or other intellectual property or
proprietary rights by reason of the Products or any advertising or promotional
materials created or supplied by the Company.
8.2 Company Options. In the event of any infringement or claimed
infringement of any patent, trademark, copyright, or other intellectual property
or proprietary rights by reason of the Products or any advertising or
promotional materials created or supplied by the Company, the Company, at its
option and expense may
(a) secure for the Distributor the right to continue selling or
distributing the Products, either by obtaining a license for such continued sale
or distribution or by other appropriate means;
(b) replace the Products with noninfringing products or parts
thereof;
(c) modify the Products so as to render them noninfringing; or
(d) remove the Products from premises of Distributor, refund cost
paid by Distributor for such Products and, unless some of the Products are
noninfringing, terminate this Agreement.
9. MISCELLANEOUS.
9.1 Third Party Beneficiary. Playboy International and Play Beverages,
LLC are each an intended third-party beneficiary of this Agreement.
9.2 Force Majeure. Fires, floods, wars, acts of war, strikes, lockouts,
labor disputes, accidents to machinery, delays or defaults of common carriers,
orders, decrees or judgments of any court, or any other contingency beyond the
control of the Company or the Distributor, whether related or unrelated, or
similar or dissimilar to any of the foregoing, will be sufficient excuse for any
resulting delay or failure in the performance by either party hereto of its
respective obligations under the Agreement, but such performance will be excused
only as long as the force majeure continues.
9.3 No Assignments. Neither party may assign any of its rights or
delegate any of its obligations under this Agreement without the prior written
consent of the other, in its sole discretion, and any attempt to do so will be
void and will be a material breach of this Agreement.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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9.4 Relationship of Parties. The relationship between the parties is
that of independent contracting parties, as buyer and seller of goods, and not
that of partners, joint ventures, or principal and agent. Neither party has or
will hold itself out as having the authority to bind or act in the name of or on
behalf of the other.
9.5 Notices. All notices hereunder shall be sufficiently given for all
purposes hereunder if in writing and delivered personally, sent by document
[overnight] [expedited] delivery service or, to the extent receipt is confirmed,
faxed to the appropriate address or number set forth below.
If to Distributor: If to the Company:
Tobacco Holding Group Sh.p.k. Iehab Hawatmeh
Rruga Kavajes, Ish Kombinati c/o CirTran Beverage Corp.
Ushqimor, Tirane, Albania 4125 South 6000 West
Attn: Lirim Fezollari West Valley City, Utah 84128
Telephone: + 355 4 263089 Telephone: +(801) 963-5112
Fax: + 355 4 254977 Fax: +(801) 963-5180
If to Playboy International: Copy to Cirtran's Attorney
Playboy Enterprises International, Inc. Paul H. Shaphren
730 Fifth Avenue Callister Nebeker & McCullough
New York, NY 10019 2180 S. 1300 East, Suite 600
Attn: Sarah Haney Salt Lake City, Utah 84106
Telephone: +(212) 261 5000 Telephone: +(801) 530-7411
Facsimile: +(212) 957 2950 Fax: +(801) 746-8607
9.6 Binding on Successors. This Agreement will bind and inure to the
benefit of the parties and their respective legal representatives, successors,
and permitted assigns, but nothing in this Agreement will confer any rights or
remedies on any person or entity other than the foregoing.
9.7 Reasonable Discretion. If any provision of the Agreement grants the
Company the right of approval or requires the Company's consent, such discretion
or consent will be subject to the standard of reasonableness.
9.8 Enforcement. Failure of either party to enforce at any time any
right or remedy it may have under this Agreement will be not be a waiver of such
provisions or rights, and will not preclude or prejudice such party from
thereafter exercising the same or any other right or remedy it may have under
this Agreement.
9.9 Governing Law. This Agreement will be governed by and interpreted
and construed in accordance with the internal laws of the State of Utah, U.S.A.
without reference to principles of conflicts or choice of law. All disputes and
matters arising under, out of, in connection with or relating to this Agreement
shall be brought only in a court of competent jurisdiction in the State of Utah
and the parties submit to the exclusive jurisdiction of such courts.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
12
9.10 Severability. If any provision of this Agreement is held invalid,
for any reason by a court, government agency, body or tribunal, the remaining
provisions will be unaffected and will remain in effect.
9.11 Amendment. No change, modification, or alteration to this
Agreement, or to the distribution relationship evidenced hereby will be
effective unless set forth in writing and approved by Playboy International and
signed by the parties.
9.12 Entire Agreement. This Agreement supersedes all previous and
contemporaneous agreements and understandings between the parties and is
intended as the complete and exclusive statement of the terms of their
understanding and agreement with respect to the subject matter hereof. There are
no representations, oral or written, upon which the Company or the Distributor
has relied as an inducement to enter into this Agreement, other than those set
forth herein.
9.13 Confidentiality. Distributor may identify itself as a distributor
of the Product in the Territory. The Distributor agrees that this Agreement and
the other business terms hereof are confidential and proprietary information of
the Company. The Distributor shall not disclose the terms of this Agreement,
other than disclosure to its accountants, attorneys or other agents or
representatives with a need to know. Notwithstanding the above, a party may
disclose the terms of this Agreement and its terms to the extent required by
law.
9.14 Product Recall. If any Products are recalled by Company, the
Distributor will use its best efforts to obtain the return of any unsold
recalled Products and will follow the Company's direction to destroy, return to
the Company or otherwise dispose of the recalled Product within 15 days of
receipt of Company's recall notice. The Company will repurchase the recalled
Product from Distributor at the Distributor's cost.
9.15 Construction. The language used in this Agreement is the language
chosen by the parties to express their mutual intent, and no rule of strict
construction will be applied against either party.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.
COMPANY: DISTRIBUTOR:
CIRTRAN BEVERAGE CORP. Tobacco Holding Group Sh.p.k.
By: _____________________ By: _______________________
Name: Iehab J. Hawatmeh Name: Lirim Fezollari
Title: Chairman Title: Managing Director
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
13
SCHEDULE 1 - PRODUCTS
---------------------
The following products, individually, have been authorized to Distributor by
this Agreement:
NAMES OF PRODUCTS
-----------------
Playboy(R) Energy Drink - 250ml aluminum cans
Playboy(R) Energy Drink Low Sugar - 250ml aluminum cans
The Distributor will be given 30 days to accept or reject all future products
and line extensions which the Company elects to distribute in the Territory. If
Distributor does not accept any future product or line extension, the Company
has the right to assign those products to an additional distributor in the
Territory. The Company may reformulate any of the Products or flavors or
discontinue them, so long as all flavors are not discontinued.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
14
SCHEDULE 2
----------
Territory: The Distributor has the exclusive right to sell and distribute the
Products in all cities and towns in the following countries, subject to any
government restrictions. Distributor's exclusivity does not extend to United
States military bases located within the Territory. Distributor shall have no
right to export Products from the Territory or to sell the Products for export.
Albania
Company grants the Distributor a 10 day first right of refusal to add Kosovo and
FYR Macedonia as additional Territories once Company receives offers for
Distribution from third party Distributors.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
15
SCHEDULE 3 - TRADEMARKS
-----------------------
The Distributor may use the following in accordance with Paragraph 1.2:
All trademarks, trade names, trade dress and images licensed to the Company from
Playboy Enterprises International, Inc., existing or future, applicable to the
Products, including "PLAYBOY".
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
16
SCHEDULE 4 -DISTRIBUTION GOALS AND PROMOTIONAL TERMS
----------------------------------------------------
DISTRIBUTION GOALS:
See Minimum Sales Requirements
PROMOTIONS, POINT OF SALE MATERIALS, SAMPLES AND SERVICES:
Distributor, at its own cost and expense, will advertise and promote the
Products in the Territory. All advertising and promotional materials, including
point of sale and give-away items, must be approved by the Company prior to use.
Distributor shall spend not less than XXXXXX% of sales by Distributor and its
sub-distributors on advertising each year.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
17
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE 5 - E-COMMERCE GUIDELINES
----------------------------------
The following terms used in the Agreement shall have the meanings set forth
below:
"E-Commerce Web Site" is defined as promoting, offering, providing or selling
the Products using or via communications involving the TCP/IP Protocol or any
TCP/IP Successor.
"TCP/IP Protocol (Transmission Control Protocol/Internet Protocol)" is defined
as the two-layered program that is the basic communication language or protocol
of publicly accessible computer networks such as the Internet and private
computer networks such as intranets and extranets.
"TCP/IP Successors" is defined as programs, languages, protocols or other
technical means that are being developed or that have yet to be developed that
are intended to supplement, supersede or replace TCP/IP or its use for
communications on computer networks.
The following guidelines shall apply:
18
SCHEDULE 6 - DISTRIBUTOR PRICES
-------------------------------
Current distributor prices as of 01/07/2009:
Per case of 24 cans CIF (Cost, Insurance and Freight) of both
Playboy(R) Energy Drink Regular and Sugar Free- 250ml aluminum cans
US $XXXXXX - After discount of XXXXXX% for first 12 months from the
Effective Date
US $XXXXXX - After 12 months from Effective Date
The Company will arrange and pay for transportation of Products to the
closest deep sea port in the Territory.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
19
Schedule 7. Minimum Sales Projections in Cases (24 cans)
--------------------------------------------------------
Contract Year Territory
First year XXXXXX
Second Year XXXXXX
Third Year XXXXXX
Fourth Year XXXXXX
Fifth Year XXXXXX
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
20
EXHIBIT A
PRODUCT LICENSE AGREEMENT
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
21
[PORTIONS OF THIS EXHIBIT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
INDEX TO PLAY BEVERAGES, LLC
PRODUCT LICENSE AGREEMENT
-------------------------
THE SCHEDULE
PARAGRAPH PAGE NO.
--------- -------
1. GRANT OF LICENSE
a. Grant 6 - 9
b. Term 9 - 10
c. License Year and License Quarter 10
d. Territory 10
e. Minimum Net Sales 10 - 11
2. COVENANTS OF LICENSEE
a. Use 11 - 12
b. Best Efforts
(i) Maintaining Goodwill 12
(ii) Distribution Channels 12
c. Royalties
(i) Guaranteed Royalties 12 - 13
(ii) Earned Royalties 13
(iii) Interest 13
(iv) Letter of Credit 13
d. Statements and Payments 13 - 14
e. Records and Audit 14 - 15
f. Expenses of Conducting Examinations 15
g. Product Quality 15
h. Approval of Products and the Materials 15 - 17
i. Title and Protection and Preservation
of the Playboy Properties 17 - 18
j. Right to Subcontract, Licensee Financial Statements
and Lists of Sources and Accounts 18 - 19
k. Inventory 19
l. Playboy Properties and Non-Competitive Brands 19 - 20
m. Indemnification and Product
Liability Insurance 20 - 21
n. Advertising Expenditures, Advertising Plans and
Public Relations 21 - 22
3. ADDITIONAL COVENANTS OF THE PARTIES
a. Reservation of Rights 22
b. Certain Sales 22
4. TITLE AND PROTECTION
a. Indemnification by Licensor 22 - 23
b. Enforcement 23
5. RELATIONSHIP BETWEEN THE PARTIES
a. No Joint Venture 23
b. Assignment 23 - 24
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
22
[PORTIONS OF THIS EXHIBIT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
INDEX TO PLAY BEVERAGES, LLC
PRODUCT LICENSE AGREEMENT
-------------------------
(Continued)
6. SUBLICENSING 24
7. DEFAULTS AND RIGHTS OF TERMINATION
a. Defaults and Right to Cure 24
b. Bankruptcy or Assignment for
Creditors, Business Discontinuance 24 - 25
c. Loss of Trademark Rights 25
d. Qualified Auditor's Report 25
e. Cross-Default 25
8. EXPIRATION OR TERMINATION
a. Effect of Expiration or Termination 25
b. Reserved Rights 25
c. Continued Sales After Expiration
or Termination 25 - 26
d. Inventory After Expiration or Termination 26
e. Equitable Relief and Legal Fees 26 - 27
f. Termination Fee 27
9. NOTICES
a. Effectiveness 27
b. Address Change 28
10. CONFIDENTIAL INFORMATION 28
11. SEVERABILITY 28
12. CONSENTS AND APPROVALS 28
13. APPLICABLE LAW 28
14. NO BROKER 29
15. CONSTRUCTION 29
16. SURVIVABILITY 29
17. RIGHTS CUMULATIVE 29
18. ENTIRE AGREEMENT 29
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
23
THE SCHEDULE referred to in the Agreement made as of November 1, 2006.
S.1. LICENSOR: PLAYBOY ENTERPRISES INTERNATIONAL, INC.
680 North Lake Shore Drive
Chicago, IL 60611
S.2. LICENSEE: PLAY BEVERAGES, LLC
c/o Goldring, Hertz and Lichtenstein
450 Roxbury, 8th Floor
Beverly Hills, CA 90210
Contact: Mr. Ken Hertz
Telephone: 310 248 3107
Email: ken@ghlh.com
S.3. THE TRADEMARKS:
PLAYBOY and RABBIT HEAD DESIGN (as depicted in Exhibit A
attached hereto and made a part hereof).
THE IMAGES:
Certain images from Licensor's art and photo archives, which
are approved in advance in writing by Licensor on a
case-by-case basis. Although Licensee may submit to Licensor
its request to use certain images, the specific images to be
added to the Agreement will be granted in Licensor's sole
discretion, based on appropriateness for the Products,
Licensor's current strategic or business plan and availability
of rights.
S.4. THE TYPE OF LICENSE:
Exclusive, except as set forth in Paragraph S.5. below and
Paragraph 1.a.(iii) of the Agreement.
S.5. THE USE OF THE PLAYBOY PROPERTIES:
Design, manufacture, advertise, promote, sell and distribute
the Products (either directly itself or through distributors)
to or through: (i) Playboy-branded retail stores, which rights
shall be non-exclusive and subject to the provisions of
Paragraph 1.a.(iii)(c) and Paragraph 1.a.(iv) of the
Agreement, mass retail stores, supermarkets, convenient
stores, wholesale retail outlets such as Costco, discount
beverage outlets and specialty stores (i.e. physical stores)
located in the Territory (which may or may not have their own
"E-Commerce Web Site" (as such term is defined in Paragraph
1.a.(iii) of the Agreement)); (ii) non-Playboy branded
catalogs; (iii) "E-tailers" (as such term is hereinafter
defined) which will promote the availability of the Products
via such E-tailers' E-commerce Web Sites and which will
fulfill orders for the Products placed through such E-commerce
Web Sites to, and only to, those addresses located in the
Territory; and (iv) an E-commerce Web Site owned or controlled
by either Licensee or any such distributor which will promote
the availability of the Products via such E-commerce Web Site
and which will fulfill orders for the Products placed through
such E-commerce Web Site to, and only to, those addresses
located in the Territory. "E-tailers" shall mean any entity
engaged in the promotion and sale of the Products whose
primary means of promotion, sale or distribution of the
Products is via an E-commerce Web Site. All rights granted
under the License shall be subject to the terms and conditions
of the E-commerce Guidelines attached hereto as Exhibit B and
made a part hereof. In the event Licensee, or any affiliated
or third-party distributor of Licensee's, fails to adhere to
the terms and conditions of the E-commerce Guidelines,
Licensor may deem such failure to be an incurable default
under the terms and conditions of the Agreement. Licensee may
not sell and distribute the Products to or through duty-free
outlets as duty-free avenues of distribution are not included
in the definition of such physical stores.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
24
S.6. THE PRODUCTS:
Non-alcoholic energy drinks and water. Additional products may
be added as Products under this Paragraph S.6. only upon
Licensor's prior written approval and subject to the
provisions of an amendment to this Agreement signed by both
Licensee and Licensor.
S.7. THE TERRITORY:
Australia, Benelux, Brazil, Canada, Chile, China, Denmark,
France, Germany, Greece, Hong Kong, Ireland, Israel, Italy,
Japan, Korea, Lebanon, Mexico, New Zealand, Norway, Peru,
Philippines, Portugal, Russia, South Africa, Spain, Sweden,
Switzerland, Taiwan, Thailand, United Arab Emirates, United
Kingdom and the United States and the United States'
territories and possessions; provided, however, that only
Products bearing the RABBIT HEAD DESIGN Trademark may be
advertised, promoted, sold and/or distributed in Chile and
Japan.
S.8. THE COMMENCEMENT DATE:
November 1, 2006
S.9. THE EXPIRATION DATE:
March 31, 2012; subject to the Renewal Term in Paragraph
1.b.(ii) and the termination provisions set forth in the
Agreement.
S.10. THE MINIMUM NET SALES:
License Year Amount
------------ ------
LY 1 (11/01/06 - 03/31/08) XXXXXXXXXXX
LY 2 (04/01/08 - 03/31/09) XXXXXXXXXXX
LY 3 (04/01/09 - 03/31/10) XXXXXXXXXXX
LY 4 (04/01/10 - 03/31/11) XXXXXXXXXXX
LY 5 (04/01/11 - 03/31/12) XXXXXXXXXXX
S.11. GUARANTEED ROYALTIES:
License Year Amount
------------ ------
LY 1 (11/01/06 - 03/31/08) XXXXXXXXXXX
LY 2 (04/01/08 - 03/31/09) XXXXXXXXXXX
LY 3 (04/01/09 - 03/31/10) XXXXXXXXXXX
LY 4 (04/01/10 - 03/31/11) XXXXXXXXXXX
LY 5 (04/01/11 - 03/31/12) XXXXXXXXXXX
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
25
S.12. EARNED ROYALTIES:
XXXXXXXXXXX of "Net Sales" (as defined in Paragraph 2.d.(ii)
and subject to the provisions of Paragraph 3.b.(ii)) of the
Products. XXXXXXXXXXX.
S.13. THE ADDRESS WHERE BOOKS KEPT: See Paragraph S.2. above.
S.14. EUROPEAN UNION:
a. Within member states of the European Community (the
"EU"), rights or obligations created or imposed by the
License and this Agreement may not be exercised or
enforced in a manner contrary to EU Law.
b. Licensee may not solicit orders from outside the
Territory nor engage in any commercial or promotional
activities with respect to the Products outside the
Territory, the right of any purchaser of the Products
within the Territory to export the Product purchased
to other member states of the EU staying unaffected.
c. Limitation of the exercise of rights or the
enforcement of obligations due to EU Law or the
provisions of the foregoing subparagraphs shall not
affect the validity or enforceability of any other
rights and obligations under this Agreement.
PLAY BEVERAGES, LLC PLAYBOY ENTERPRISES
(LICENSEE) INTERNATIONAL, INC.
(LICENSOR)
By: By:
------------------------- ----------------------------
Title: Title:
------------------------- ----------------------------
Date: Date:
------------------------- ----------------------------
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
26
LICENSE AGREEMENT
-----------------
This Agreement is made as of November 1, 2006, by and between the
corporation described in Paragraph S.1. of the Schedule attached hereto and made
a part hereof (hereinafter referred to as "Licensor") and the corporation
described in Paragraph S.2. of the Schedule (hereinafter referred to as
"Licensee").
RECITALS
WHEREAS, Licensor has certain rights in and to the trademark PLAYBOY
and other trademarks identified in Paragraph S.3. of the Schedule and as
depicted in Exhibit A (hereinafter collectively referred to as the "Trademarks")
and to certain images from Licensor's photo or art archives (the "Images"). The
Trademarks and Images may sometimes be collectively referred to as the "Playboy
Properties;"
WHEREAS, Licensee recognizes that the Playboy Properties have been
widely used in, on, for or in connection with:
a. an internationally distributed magazine (PLAYBOY) and related
publications and printed materials published by Licensor or its
subsidiaries, affiliates or licensees;
b. advertising, promotion, publicity, broadcasting, telecasting
and related uses in diverse businesses by Licensor or its subsidiaries
or affiliates; and
c. the manufacture, advertising, promotion, sale and distribution
worldwide of a broad range of consumer products, including, but not
limited to, jewelry, clothing, footwear, leather goods, audio and
visual recordings, and personal health and home articles and
accessories;
WHEREAS, the parties hereto desire that Licensor grant to Licensee a
license to use the Playboy Properties in the design, manufacture, advertising,
promotion, sale and distribution of the "Products" (as defined in Paragraph
1.a.(i) hereof);
NOW, THEREFORE, in consideration of the mutual promises herein
contained, it is mutually agreed as follows:
1. GRANT OF LICENSE.
a. Grant:
(i) Upon and subject to the terms and conditions
hereinafter set forth, Licensor hereby grants to Licensee, and
Licensee hereby accepts, the right, license and privilege
specified in Paragraph S.4. of the Schedule to use the Playboy
Properties in connection with, and only with, the use specified in
Paragraph S.5. of the Schedule on and in connection with
specifically designated and approved articles of merchandise
specified in Paragraph S.6. of the Schedule (hereinafter
collectively referred to as the "Products") in the territory
specified in Paragraph S.7. of the Schedule (hereinafter referred
to as the "Territory"). Such right, license and privilege is
hereinafter referred to as the "License." It is understood and
agreed that while the manufacture of the Products may take place
outside the Territory, none of the Products may be advertised,
promoted, sold or distributed outside the Territory by Licensee
except as set forth in Paragraph S.14. of the Schedule attached
hereto.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
27
(ii) Nothing contained in this Agreement shall prevent
Licensor (on behalf of itself and its subsidiaries and affiliated
companies) from doing any or all of the following: (a) using or
granting one or more others the right or license to use the
Playboy Properties on or in connection with the Products in any
area of the world other than the Territory or in the Territory
through duty free outlets or on or in connection with any services
or goods other than the Products in any or all area(s) of the
world including the Territory; and/or (b) manufacturing or having
manufactured in the Territory the Products for sale outside the
Territory.
(iii) Anything in this Agreement to the contrary
notwithstanding, Licensor (on behalf of itself and its subsidiary
and affiliated companies) reserves: (a) the right to produce or
have produced the Products to be used in the Territory
specifically for promotional and advertising purposes and not for
sale; (b) the right to produce or have produced any or all of the
Products for the advertisement, promotion, sale and distribution,
in the Territory, through direct marketing channels or sales
(including, but not limited to, direct mail, catalog houses, home
shopping programs, infomercials and the like), premium sales,
incentive sales, home party plans or through any other means now
known or hereafter available; (c) the right to produce or have
produced by any third party the Products or similar products to be
advertised, sold and distributed through a Playboy-branded retail
store located in the Territory; or (d) the right to produce or
have produced any or all of the Products for the advertisement,
promotion, sale and distribution in the Territory of any or all of
the Products in the Territory, via any E-commerce Web Site or via
"Mobile Commerce," which shall mean transactions conducted by
Licensee on one or more mobile telecommunications networks
exclusively within the Territory and exclusively via the language
of each country of the Territory in "Mobile Device" presentations
associated with the Playboy Properties. "Mobile Device" means a
mobile, wireless device existing as of the Commencement Date or
developed thereafter that (i) is intended to be mobile and not
commonly used at a fixed location; and (ii) is capable of
receiving voice, data, and/or video communications. The definition
of "Mobile Device" includes, without limitation, personal digital
assistants (PDAs), pagers, mobile phones and other devices
receiving communications via wireless fidelity (wi-fi) network
and, for the avoidance of doubt, excludes all non-mobile
television devices or other devices that function as a receiver or
set-top box for a television-type broadcast or other signal, fixed
display device or fixed monitor. "E-Commerce Web Site" shall mean
promoting, offering, providing or selling the Products using or
via communications involving the TCP/IP Protocol or any TCP/IP
Successors. "TCP/IP Protocol" (which stands for Transmission
Control Protocol/Internet Protocol) shall mean the two-layered
program that is the basic communication language or protocol of
publicly accessible computer networks such as the Internet and
private computer networks such as intranets and extranets. "TCP/IP
Successors" shall mean programs, languages, protocols or other
technical means that are being developed or that have yet to be
developed which are intended to supplement, supersede or replace
TCP/IP or its use for communications on computer networks. Any
Products advertised, promoted, sold or distributed by Licensor or
its subsidiary or affiliated companies for the purposes set forth
in subparagraphs (b), (c) and (d) above shall be obtained only
from Licensee at the lowest prices offered to other purchasers of
the Products ordering similar quantities; provided, however, that
in the event Licensee cannot fulfill Licensor's orders (or the
orders of Licensor's subsidiary or affiliated companies) for the
Products at such low prices or in the quantities or within the
time frames needed, Licensor (or its subsidiary or affiliated
companies) may seek fulfillment of the relevant orders through one
or more third parties without liability or obligation to Licensee.
(iv) Licensee acknowledges that there are a number of
authorized Playboy-branded stores in various countries around the
world. In the event the licensees for any such Playboy-branded
stores wish to purchase any of the Products from Licensee or its
distributors for sale through the Playboy-branded stores, Licensee
may fulfill such orders subject to the provisions of this
Paragraph 1.a.(iv). While fulfillment of such orders may consist
of Licensee or its distributors shipping the Products outside of
the Territory, such shipments of the Products to such authorized
Playboy-branded stores outside of the Territory will not be a
violation of the Territory restrictions set forth in this
Agreement; provided, however, that (a) Licensee may not solicit
such orders outside of the Territory; (b) Licensee must report
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
28
such sales separately on the "Statements;" (c) Licensee will
include such sales in the calculation of "Net Sales" for the
purpose of computing "Minimum Net Sales" and "Earned Royalties;"
and (d) Licensee must notify Licensor in advance in writing of any
such order and must obtain Licensor's prior written approval to
fulfill such orders. Further, in the event Playboy has opened or
opens, itself or through a third party, a Playboy-branded store in
the Territory, the licensee for such Playboy-branded store in the
Territory may source the Products or similar products through any
third party anywhere in the world and sell such Products or
similar products through such Playboy-branded store in the
Territory and such sourcing and selling will not be a violation of
the License.
(v) Anything in this Agreement to the contrary
notwithstanding, Licensee shall have no right through the License
to open or operate a free-standing retail store using the Playboy
Properties or any of Licensor's other intellectual property on or
in connection with such store or the signage for such store.
(vi) XXXXXXXXXXX
b. Term:
(i) The term of the License and this Agreement (hereinafter
referred to as the "Term") shall commence on the date specified in
Paragraph S.8. of the Schedule (hereinafter referred to as the
"Commencement Date") and shall expire at midnight, Chicago time,
on the date specified in Paragraph S.9. of the Schedule
(hereinafter referred to as the "Expiration Date"), unless sooner
terminated by operation of law or as provided in this Agreement.
(ii) On the conditions that: (a) Licensee shall be in full
compliance with all of the terms and conditions of this Agreement,
including the timely payment of all amounts required under this
Agreement; (b) the Minimum Net Sales have been met or exceeded for
each License Year of this Agreement; (c) Licensor has provided,
not later than February 1, 2012, its written approval for the
Agreement to renew as set forth in this Paragraph 1.b.(ii), then
this Agreement will renew for five (5) additional License Years
commencing on April 1, 2012 and ending at midnight, Chicago time,
on March 31, 2017 on the same terms and conditions of this
Agreement except that (y) the Minimum Net Sales for each License
Year of the "Renewal Term" will be XXXXXXXXXXX; and (z) the
Guaranteed Royalties for each License Year of the "Renewal Term"
will be XXXXXXXXXXX. Anything in this Agreement to the contrary
notwithstanding, in the event that Licensee becomes non-compliant
with the terms and conditions of this Agreement after its receipt
of Licensor's notice approving the renewal of this Agreement as
set forth in this Paragraph 1.a.(ii), or in the event that
Licensor does not provide its written approval as set forth above,
then this Agreement will not be renewed as set forth in this
Paragraph 1.a.(ii) and Licensor shall be free to pursue such
licensing opportunities without obligation or liability to
Licensee. For ease of reference, such five-year renewal term will
be referred to herein as the "Renewal Term" but all the terms and
conditions applicable to "Term" shall be deemed applicable to the
Renewal Term except to the extent that the terms and conditions of
the Renewal Term shall differ from the terms and conditions of
this Agreement, in which case the terms and conditions of the
renewal of this Agreement shall control as to the Renewal Term.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
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29
(iii) On the conditions that: (a) Licensee shall be in full
compliance with all of the terms and conditions of this Agreement,
including the timely payment of all amounts required under this
Agreement; (b) the Minimum Net Sales have been met or exceeded for
each License Year of this Agreement; (c) Licensor has provided,
not later than February 1, 2017, its written approval for the
Agreement to renew as set forth in this Paragraph 1.b.(ii), then
this Agreement will renew for five (5) additional License Years
commencing on April 1, 2017 and ending at midnight, Chicago time,
on March 31, 2022 on the same terms and conditions of this
Agreement except that (x) there will be no conditional automatic
renewal following March 31, 2022; (y) the Minimum Net Sales for
each License Year of the "Second Renewal Term" will be the greater
of XXXXXXXXXXX or the amount of the Net Sales actually achieved in
License Year 10; and (z) the Guaranteed Royalties for each License
Year of the "Second Renewal Term" will be the greater of
XXXXXXXXXXX or the amount of the Guaranteed Royalty plus the
amount of the Earned Royalty due and payable in License Year 10.
Anything in this Agreement to the contrary notwithstanding, in the
event that Licensee becomes non-compliant with the terms and
conditions of this Agreement after its receipt of Licensor's
notice approving the renewal of this Agreement as set forth in
this Paragraph 1.a.(iii), or in the event that Licensor does not
provide its written approval as set forth above, then this
Agreement will not be renewed as set forth in this Paragraph
1.a.(iii) and Licensor shall be free to pursue such licensing
opportunities without obligation or liability to Licensee. For
ease of reference, such five-year renewal term will be referred to
herein as the "Second Renewal Term" but all the terms and
conditions applicable to "Term" shall be deemed applicable to the
Second Renewal Term except to the extent that the terms and
conditions of the Second Renewal Term shall differ from the terms
and conditions of this Agreement, in which case the terms and
conditions of the renewal of this Agreement shall control as to
the Second Renewal Term.
c. License Year and License Quarter:
(i) For all purposes under this Agreement, a "License Year"
shall be each twelve (12) consecutive calendar month period
commencing on each April 1st of the Term and ending at midnight,
Chicago time, on each following March 31st of the Term, except
that the first License Year will be the seventeen (17) consecutive
calendar months commencing on the Commencement Date and ending at
midnight, Chicago time, on March 31, 2008. If the expiration or
termination of the License and this Agreement is effective other
than at the end of any such seventeen (17) or twelve (12) month
period, then the final period of less than seventeen (17) or
twelve (12) months ending on the effective date of such expiration
or termination shall be deemed to be a License Year.
(ii) For all purposes under this Agreement, a "License
Quarter" shall be the first five (5) consecutive calendar months
of the first License Year and each succeeding three (3) month
period of the first License Year and each License Year thereafter,
and if the expiration or termination of the License and this
Agreement is effective other than at the end of a License Year,
then the final period of less than five (5) or three (3) months
ending on the effective date of such expiration or termination
shall be deemed to be a License Quarter.
d. Territory: The License shall extend only to the Territory, and
the use by Licensee of the Playboy Properties shall be confined to the
Territory. Licensor shall have the right, but not the obligation, to
terminate this Agreement by deeming any sales or distribution of the
Products or use of the Playboy Properties by Licensee outside of the
Territory to be an incurable default under this Agreement. Such sales
of the Products or use of the Playboy Properties shall include any
sales of the Products in the Territory for resale outside of the
Territory. Within member states of the EU, however, Paragraph S.14. of
the Schedule attached hereto is applicable. Licensee shall be free at
all times during the Term to submit to Licensor a proposal to add
additional countries to the Territory, but Licensor shall be under no
obligation to agree to such proposal. In the event Licensor receives a
bona fide offer to sell and distribute the Products to any country
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
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30
outside of the Territory and Licensor, in its sole discretion elects to
accept such offer, it will first notify Licensee that Licensor desires
to pursue such offer. Licensee must notify Licensor, within five (5)
business days of receipt of Licensor's notice, of its decision whether
or not to pursue negotiations with Licensor for such rights. In the
event Licensee decides, in its sole discretion, not to pursue such
negotiations with Licensor, Licensor may pursue such opportunity
without obligation or liability to Licensee. In the event Licensee
decides, in its sole discretion, to pursue such opportunity, Licensor
will negotiate in good faith with Licensee for such rights. If, within
thirty (30) days after Licensor's receipt of Licensee's decision to
enter into such negotiations, Licensor and Licensee have not concluded
an agreement, it will be conclusively presumed that the parties cannot
reach an agreement and Licensor will be free to pursue such
opportunities without obligation or liability to Licensee.
e. Minimum Net Sales: Notwithstanding anything in this Agreement
to the contrary, if Licensee's "Net Sales" (as defined in Paragraph
2.d.(ii) hereof) in any License Year are less than those specified in
Paragraph S.10. of the Schedule for such License Year (hereinafter
referred to as the "Minimum Net Sales"), then Licensor shall have the
right to either: (i) declare the License to be non-exclusive, thereby
giving Licensor the rights to design, manufacture, advertise, promote,
sell and distribute the Products in competition with Licensee or
otherwise grant any or all of such rights to one or more other parties;
or (ii) terminate the License and this Agreement by deeming the failure
to attain the Minimum Net Sales to be an incurable default under this
Agreement. Such declaration or termination: (a) shall be immediately
effective upon the receipt by Licensee of written notice from Licensor
which shall be sent no later than forty-five (45) days after Licensor's
receipt of the "Statement" (as defined in Paragraph 2.d.(i) hereof) for
the end of each License Year and which evidences such shortfall; and
(b) shall have no effect upon the amounts due and payable to Licensor
for periods prior to or after such declaration or termination.
2. COVENANTS OF LICENSEE.
a. Use:
(i) Subject to Licensor's prior approval as hereinafter
required, Licensee shall commence bona fide commercial sales of
the Products as soon as practicable after the Commencement Date,
but in no event later than April 1, 2007. If Licensee fails to
commence such sales by such date, Licensor may treat such failure
as a default under this Agreement. In the event during any License
Year, Licensee has not on a regular and ongoing basis: (y) sold
and distributed one or more of the Products within all categories
of the Products under Paragraph S.6. of the Schedule; or (z) sold
and distributed the Products in all countries of the Territory,
then Licensor shall have the right to delete, from the Schedule
upon not less than thirty (30) days' prior written notice to
Licensee, any Products which, any Product category from which, or
any country to which Licensee has not so sold and distributed. In
the event that all Products are deleted from the Schedule or all
countries are deleted from the Territory, then the License and
this Agreement will automatically terminate due to an incurable
default. For purposes of clarification, the sales discussed in
this Paragraph 2.a.(i) are bona fide commercial sales, which are
volume sales to the distribution channels listed in Paragraph S.5.
of the Schedule for sale or distribution to consumers and will
specifically exclude sample sales to distributors or wholesalers.
(ii) Licensee shall not cause or authorize any use of the
Playboy Properties in any area of the world outside the Territory
and shall not knowingly manufacture, sell or otherwise deal with
or distribute any of the Products on behalf of or to any
individual or entity that Licensee believes or has reason to
believe intends or intend or is or are likely to sell, deal with
or distribute any of the Products in any way outside the
Territory. Within member states of the EU, however, Paragraph
S.14. of the Schedule attached hereto is applicable. Licensee
shall ensure that all of its distributors, whether affiliated or
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31
third-party, to which Licensee sells or through which Licensee
otherwise moves any Products are aware of all Territory
restrictions on the use of the Playboy Properties and the
distribution of the Products and shall obtain an executed
"Distributor Contract" (as defined in Paragraph 2.j.(ii) hereof)
from all of its third-party distributors as set forth in Paragraph
2.j.(ii) hereof. Licensee shall immediately notify Licensor should
Licensee become aware that any of its distributors, whether
third-party or affiliated, have distributed or dealt with the
Playboy Properties or Products in any way outside the Territory.
(iii) Licensee warrants and represents that it has and will
continue to have throughout the Term and the "Sell-Off Period" (as
defined in Paragraph 8.c. hereof) the legal right and authority to
enter into this Agreement and to assume and perform its duties and
obligations hereunder and that there is or are no, and Licensee
shall not enter into during the Term and the Sell-Off Period any,
contract, agreement or understanding with any individual or entity
which would in any way restrict or prevent Licensee from the
performance of its duties and obligations under this Agreement.
(iv) Licensee shall be responsible for obtaining, at its
own expense, any and all licenses, permits and approvals
(including governmental and all other licenses, permits and
approvals) necessary for Licensee to: (a) design, manufacture,
advertise, promote, sell and distribute the Products; (b) pay
"Guaranteed Royalties" (as defined in Paragraph 2.c.(i) hereof),
"Earned Royalties" (as defined in Paragraph 2.c.(ii) hereof) and
taxes; and (c) fulfill any and all other duties and obligations
and exercise the rights of Licensee under this Agreement. In the
event Licensee is unable, for any reason, to obtain prior to the
Commencement Date or maintain throughout the Term all of such
licenses, permits or approvals, then Licensor shall have the right
to either (i) delete from the Territory any country in which
Licensee has not obtained or maintained all necessary licenses,
permits, patents, approvals or permissions; or (ii) terminate the
License and this Agreement by deeming the failure to obtain the
necessary licenses, permits, patents, approvals or permissions to
be an incurable default under this Agreement. Licensee warrants
and represents that the Products are safe for the use for which
they are being marketed, sold or distributed and have been tested
and approved by the FDA and/or the relevant governing bodies.
(v) Licensee will take all necessary actions to ensure that
all aspects of its obligations in connection with this Agreement
comply with all applicable federal and state and local laws, rules
and regulations, including, without limitation, the CAN-SPAM Act
of 2003. Licensee will not create, initiate, transmit or otherwise
participate in the creation, initiation or transmission of any
unsolicited bulk email in connection with the Products. In
addition, Licensee will comply with all applicable state and
federal laws governing privacy, technology, software and trade
secrets.
b. Best Efforts:
(i) Maintaining Goodwill: Licensee recognizes that the
Trademarks are associated with Licensor on a worldwide basis and,
therefore, Licensee shall, throughout the Term and the Sell-Off
Period, constantly use its commercially reasonable efforts in the
advertising, promoting, selling, distributing and in all other
dealing with or disposal of the Products to protect the good name
and goodwill associated with the Trademarks and Licensor, and to
obtain the greatest Net Sales throughout the entire Territory and
the entire Term and the Sell-Off Period. Should Licensee take any
action which negatively affects or impacts the good name, goodwill
or reputation of Licensor, Licensor may deem such to be an
incurable default by Licensee under this Agreement.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
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32
(ii) Distribution Channels: Licensee acknowledges and
agrees that the sale of the Products in certain types of stores or
through certain types of web sites can negatively affect the
reputation and the value of the Playboy Properties, as some types
of stores or web sites are perceived by the public as having lower
quality products than other types of stores regardless of whether
the products or their prices are the same. Licensee agrees that it
will sell and distribute the Products only to those stores or web
sites that are generally perceived by the public as good quality
stores or web sites by virtue of their reputations for quality
products and by their providing certain service amenities
associated with good quality stores, which may include without
limitation the availability of any or all of the following:
customer service desks; knowledgeable, regular, full-time service
representatives; and provision for the return of products.
Licensee and Licensor agree that warehouse outlets, deep discount
chains and other similar channels are generally perceived by the
public as having lower quality products and will therefore not be
considered acceptable channels of sale and distribution of the
Products under this Agreement. Licensor and Licensee agree to
reasonably attempt to settle all differences of opinion as to
whether or not a specific store or chain of stores is an
acceptable channel for the sale and distribution of the Products,
but Licensor's decisions in this matter shall govern and control.
Licensee shall be responsible for and shall assume and pay for all
costs and expenses related to Licensee's design, manufacture,
advertising, promotion, sale and distribution of the Products.
c. Royalties:
(i) Guaranteed Royalties: XXXXXXXXXXX
Under no circumstances whatsoever will Licensor return to
Licensee all or any part(s) of Guaranteed Royalties, except as
provided in Paragraph 8.b. hereof.
(ii) XXXXXXXXXXX
(iii) XXXXXXXXXXX
(iv) Letter of Credit: If, during any License Year,
Licensee fails to make any timely payment of any amounts due under
this Agreement, Licensor will have the right to require Licensee
to deliver to Licensor an Irrevocable Stand-By Letter of Credit
(the "Letter of Credit") in favor of Licensor confirmed and
advised through a U.S. bank designated by Licensor and on terms
and in the form and content as directed by Licensor in the amount
of any and all unpaid and payable amounts for the remainder of
that License Year. Licensee will have ten (10) days from the date
of Licensor's demand for a Letter of Credit within which to comply
with such requirement. Additionally, Licensee will deliver to
Licensor a new Letter of Credit for each subsequent License Year
in the amount of all Guaranteed Royalties due for that License
Year. Licensor must receive the new Letter of Credit not less than
thirty (30) days before the start of each such subsequent License
Year. Licensor will have the right, at any time, to draw upon such
Letter of Credit if Licensee fails to make any payments as
provided for under this Agreement. All costs and expenses
associated with such Letter of Credit, including, but not limited
to, opening, amending and drawing fees, will be borne by Licensee.
Licensee's failure to provide Licensor with a Letter of Credit as
herein above provided shall be an incurable default under this
Agreement.
d. Statements and Payments:
(i) Within forty-five (45) days after each License Quarter
and the conclusion of the Sell-Off Period, or within ten (10) days
after the date of Licensor's written request, Licensee shall
furnish to Licensor or its designee a complete and accurate
statement in a format acceptable to Licensor and certified to be
true by the Chief Financial Officer of Licensee (hereinafter
referred to as the "Statement") showing for such License Quarter
and the License Year through such period or for the Sell-Off
Period: (a) a listing of Licensee's accounts and the accounts of
Licensee's affiliated and third-party distributors in the
Territory and the units and description of all of the Products
sold and distributed to each such account or otherwise disposed of
by Licensee or by Licensee's affiliated and third-party
distributors; (b) the computations of Net Sales (as hereinafter
defined) on all such sales; (c) the computation of the Earned
Royalties and the amount of Earned Royalties due and payable; and
(d) the advertising and promotion expenditures made by Licensee
pursuant to Paragraph 2.n. hereof and the details of all such
expenditures, supported by copies of vouchers and copies of all
advertising for or relating to the period covered by such
Statement. When, during any License Year, the amount of Guaranteed
Royalties for such License Year has been exceeded by the amount
calculated according to Paragraph S.12. of the Schedule for such
License Year, Licensee shall commence payment of Earned Royalties.
Licensee shall pay all accrued and unpaid Earned Royalties by
remittance accompanying each of the Statements.
(ii) As used in this Agreement, the term "Net Sales" means
the invoice price charged by Licensee for the Products less (x)
refunds, credits and allowances actually made or allowed to
customers for returned Products; (y) customary trade discounts
(including anticipations) afforded to and actually taken by
customers against payment for the Products; and (z) taxes assessed
on sales (only where applicable).
(iii) Licensee will not sell the Products in a way which
would cause serious harm to Licensor and Licensor's business
activities, particularly the goodwill and image of the Trademarks.
(iv) If Licensee sells any of the Products to any
individual or entity that is directly or indirectly owned or
controlled by Licensee or is under common ownership with Licensee,
in whole or in part, the invoice price used to compute Net Sales
hereunder shall be the invoice price that would have been charged
to an unrelated purchaser in an arm's-length transaction for such
Products.
(v) (a) Payments Licensee is required to make by the terms
of this Agreement shall be made by wire transfer in United States
Dollars through a bank specified by Licensor. Any and all costs
associated with the wire transfer payments shall be borne by
Licensee. No deduction shall be made for income or other taxes
without Licensor's written permission, unless Licensee is
compelled to do so by law; in which case Licensee shall provide
Licensor with evidence that such tax has been paid in the proper
amount. Licensee shall give due notice to Licensor of any such
proposed deductions. Licensee shall make no further deductions
without prior approval from Licensor based on satisfactory
documentation presented by Licensee to Licensor. In the event
payments in the manner provided in this Paragraph 2.d. shall
become impossible or illegal by reason of the action of
governmental authority, then, at Licensor's option, this Agreement
may be terminated; and whether or not Licensor exercises such
option, while such restrictions remain in effect, all payments due
Licensor shall be made to an account in the Territory, or
elsewhere where permitted by law, to be designated by Licensor.
(b) In determining the proper rate of exchange to be
applied to the payments due hereunder, it is agreed that:
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
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33
(1) Licensee shall calculate Earned Royalties on a
calendar month basis in local currency (with each such
month considered to be a separate accounting period for the
purpose of computing Earned Royalties);
(2) Licensee shall compute a conversion rate of each
such monthly totally into United States currency utilizing
the mid-range rates as quoted by Reuters and other sources
as published in the Wall Street Journal on the last
business day of each relevant calendar month; and
(3) The converted amounts (in U.S. currency) shall
be added together on a cumulative basis and will be
reflected in the statement required under Paragraph 2.d.
hereof.
e. Records and Audit: Licensee shall: (i) keep accurate books of
account and records (including but not limited to utilization of
consecutively numbered invoices which reconcile to each Statement and
Licensee's general ledger) covering all transactions relating to or
arising out of the License and this Agreement (which books and records
shall be maintained separately from Licensee's documentation relating
to other items manufactured or sold by Licensee); and (ii) permit
Licensor or its nominees, employees, agents or representatives to have
full access to such books and records in order to inspect such books
and records at all reasonable hours of the day, to conduct an
examination of and to copy (at Licensor's expense), all such books and
records. Licensee shall maintain in good order and condition all such
books and records for a period of two (2) years after the expiration or
termination of the License and this Agreement or, in the event of a
dispute between the parties hereto, until such dispute is resolved,
whichever date is later, and such books and records shall be kept at
the address stated in Paragraph S.13. of the Schedule, except as such
address may be changed from time to time in accordance with Paragraph
9.b. hereof. Receipt or acceptance by Licensor of any Statement
furnished pursuant hereto or any sums paid by Licensee hereunder shall
not preclude Licensor from questioning the correctness thereof at any
time, and if one or more inconsistencies or mistakes are discovered by
Licensor in such Statement, it or they shall be rectified in an amended
Statement received by Licensor no later than ten (10) days after the
date of receipt by Licensee of notice of that which should be
rectified.
f. Expenses of Conducting Examinations: If any inspection or
examination referred to in Paragraph 2.e. above discloses, or Licensor
or Licensee otherwise discovers, an underpayment of Earned Royalties,
the amount of such underpayment shall be paid by Licensee to Licensor
no later than thirty (30) days after receipt of notice or knowledge
thereof by Licensee. XXXXXXXXXXX If such inspection or examination by a
third-party auditor: (i) discloses or Licensor or Licensee otherwise
discovers an overpayment of Earned Royalties (or, pursuant to Paragraph
8.b. hereof, an overpayment of Guaranteed Royalties), the amount of
such overpayment shall be credited against future payment of any or all
of the Guaranteed Royalties and Earned Royalties or, in the event of
the expiration or termination of the License and this Agreement and
there is or are no such future XXXXXXXXXXX
g. Product Quality: Licensee hereby warrants and agrees that the
Products designed, manufactured, advertised, promoted, sold or
distributed under this Agreement shall bear the Playboy Properties
faithfully produced and shall meet the high standards of quality,
workmanship, material, design, size, color and style established by
Licensor from time to time and in accordance with the terms and
conditions of this Agreement. Licensee will not knowingly or
negligently cause or authorize any or all of the Products not
conforming to this Agreement to be sold or distributed, as doing so may
adversely affect Licensor's goodwill in the Trademarks and any such
non-conforming Products shall be destroyed at Licensee's expense. All
of the Products shall conform to and comply with, in all respects, all
federal, state and local laws, rules and regulations governing the
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34
design, quality, labeling and safety of such Products. Licensee shall
not cause, condone or authorize: (i) the use of any substandard or
offensive materials in or in connection with any of the Products; (ii)
any violation of any federal, state or local law or regulation,
including, but not limited to, provisions thereof imposing advertising
standards or requiring trade or content description of the Products; or
(iii) the use of the Playboy Properties or any other word, device or
symbol associated in any way with any or all of Licensor and its
subsidiaries and affiliates in connection with any product or activity
that is not the subject of the License and this Agreement.
h. Approval of Products and the Materials:
(i) Licensee understands and agrees that each of the
Products and any other items bearing the Playboy Properties or
intended for use in connection with the Products (hereinafter
collectively referred to as the "Materials") must be approved in
advance by Licensor. The Materials include, but are not limited
to, photography, cartons, containers, labels, wrappers, packages
and other inner and outer packaging materials, fixtures, displays,
artwork and printing, advertising, sales, marketing and
promotional materials. Licensee shall, at its own expense, submit
to Licensor or its designee for written approval, samples of each
of the Products and the Materials at each stage of development
thereof, which shall include, but not be limited to: (a) an
initial sketch or photograph; (b) a sample prototype or equivalent
acceptable to Licensor; and (c) two final production-quality
samples of that which will be mass produced or manufactured.
Licensee must obtain Licensor's written approval of each stage of
development before proceeding to the next stage, and in no event
shall Licensee commence or permit the mass manufacture,
advertising, promotion, sale or distribution of any of the
Products or the Materials unless and until Licensee has received
Licensor's written approval of the samples provided pursuant to
(c) of this Paragraph 2.h.(i). In the event Licensor fails to
provide its approval or disapproval of any or all things submitted
to Licensor pursuant to this Paragraph 2.h.(i) within fourteen
(14) days of Licensor's receipt thereof, Licensee may send written
notice to Licensor advising no response was received. If Licensor
does not respond within five (5) days of Licensor's receipt
thereof, then Licensor shall be deemed to have given disapproval.
(ii) To ensure that each of the Products and the Materials
are constantly maintained per season, per License Year in
conformance with the samples previously approved for such season
in such License Year pursuant to Paragraph 2.h.(i) above, Licensee
shall, within fourteen (14) days of receipt of a request from
Licensor, send or cause to be sent to Licensor at Licensee's
expense: (a) such actual samples requested by Licensor of the
Products and the Materials Licensee is using, manufacturing,
selling, distributing or otherwise disposing of; and (b) a listing
or revised listing of each location where any of the Products and
the Materials or either thereof are designed, manufactured, stored
or otherwise dealt with, except to the extent such listing or
revised listing duplicates currently accurate information provided
pursuant to Paragraph 2.j.(iii) hereof. Licensor and its nominees,
employees, agents and representatives shall have the right to
enter upon and inspect, at all reasonable hours of the day, any
and all such location(s) and to take, without payment, such
samples of any of the Products and the Materials as Licensor
reasonably requires for the purposes of such inspection.
(iii) If any of the Products or Materials sent or taken
pursuant to Paragraph 2.h.(ii) above or that otherwise come to the
attention of Licensor does or do not conform in Licensor's
reasonable discretion to the previously approved samples for the
relevant season in the relevant License Year, Licensor shall so
notify Licensee, in writing, specifying in what respect such of
the Products or Materials is or are unacceptable. Immediately upon
receipt of such notice, Licensee shall suspend all manufacture,
sale and distribution of and shall obtain back from Licensee's
accounts all such Products and Materials and shall not resume the
manufacture, sale or distribution thereof unless and until
Licensee has made all necessary changes to the satisfaction of
Licensor and has received Licensor's written reapproval of each of
such Products and Materials.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
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35
(iv) Except as otherwise specifically provided in this
Agreement, all of the Products and the Materials that are not
approved by Licensor or that are determined by Licensor to be
non-conforming or unacceptable shall not be sold, distributed or
otherwise dealt with by Licensee. All such Products and Materials
shall be destroyed by Licensee with, if Licensor so requests, an
appropriate certificate of destruction furnished to Licensor.
(v) Except as provided in Paragraph 2.h.(iv) above, any and
all sales, distribution or use by Licensee of unapproved,
non-conforming or unacceptable Products or Materials shall not
only constitute an incurable default under the terms of this
Agreement, but such Products or Materials also shall be considered
unlicensed and an infringement of Licensor's proprietary rights,
and Licensor shall have the right to bring legal action against
Licensee for any and all remedies available to Licensor in
addition to the remedies available under this Agreement.
(vi) Licensee may engage, employ or utilize artists,
designers or other third parties (collectively, the "Designers")
to develop Products and/or Materials. Licensee shall obtain a
written assignment, and shall supply Licensor with a copy of each
such assignment, from any Designer in favor of Licensor under
which all of such Designer's right, title and interest, including,
but not limited to, all rights of copyright and trademark, in and
to such Designer's work product is transferred and conveyed to
Licensor to the maximum extent permitted by applicable law so that
Licensor will be the sole owner of all rights therein.
i. Title and Protection and Preservation of Playboy Properties:
-----------------------------------------------------------
(i) Licensee hereby acknowledges each of the following: the
great value of the goodwill associated with the Trademarks; the
worldwide recognition thereof; that the proprietary rights therein
and goodwill associated therewith are solely owned by and belong
to Licensor; that the Trademarks and other related words, devices,
designs and symbols are inherently distinctive or have secondary
meaning firmly associated in the mind of the general public with
Licensor, its subsidiaries and affiliates and its or their
activities; and that all additional goodwill associated with the
Trademarks created through the use of such Trademarks by Licensee
shall inure to the sole benefit of Licensor. During and after the
Term, Licensee shall not:
(a) attack or question the validity of, or assist
any individual or entity in attacking or questioning, the
title or any rights of or claimed by Licensor, its
subsidiaries and affiliates and their respective licensees
and sublicensees in and to the Playboy Properties or any
other trademarks, copyrights or such other intellectual or
intangible property associated or connected with any or all
of Licensor, its subsidiaries and affiliates, their
publications, published material, activities, licensees and
sublicensees. Within the EU-member states the obligation
not to attack the validity is restricted to not challenging
Licensor's ownership of the Playboy Properties;
(b) directly or indirectly seek for itself, or
assist any third party or parties to use or acquire, any
rights, proprietary or otherwise, in any patent, trademark,
copyright or such other intellectual or intangible property
so associated or connected, without the prior written
approval of Licensor;
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
36
(c) in any way seek to avoid Licensee's duties or
obligations under this Agreement because of the assertion
or allegation by any individual(s), entity or entities that
any or all of the Playboy Properties are invalid or by
reason of any contest concerning the rights of or claimed
by Licensor; or
(d) file or prosecute one or more trademark
applications regarding Licensee's use of the Playboy
Properties, unless first requested to do so in writing by
Licensor. (Licensee will cooperate with Licensor in
connection with any and all such filings.)
(ii) Licensee shall:
(a) use the Playboy Properties as permitted under
this Agreement in each jurisdiction strictly in accordance
with the legal requirements in such jurisdiction. At
Licensor's request, Licensee shall cooperate fully with
Licensor in preparing and causing to be recorded in every
jurisdiction designated by Licensor registered user
agreements and all other documents or filings which may be
necessary or desirable to evidence, protect and implement
the rights of or claimed by Licensor pursuant to this
Agreement. In the event of any ambiguities between any
registered user agreement or other similar document or
filing and this Agreement, the terms and conditions of this
Agreement shall govern and control. Upon expiration or
termination of this Agreement for any reason whatsoever,
Licensee shall execute and file any and all documents, as
required and directed by Licensor and at Licensee's
expense, terminating any and all registered user agreements
or other filings. Licensee hereby authorizes and empowers
Licensor to terminate all registered user or other filings
on Licensee's behalf and in Licensee's name. Licensor shall
be responsible for the costs and expenses associated with
such recordation and de-recordation; provided, however,
that Licensor shall not be responsible for paying fees or
expenses incurred, if any, by Licensee for Licensee's
review, comment, approval and or signing any documents
required to effect such recordation and/or de-recordation;
(b) affix or imprint irremovably and legibly on each
of the Products and on or within all of the Materials such
Playboy Properties, trademark notices, copyright notices,
legends and Licensor's official hologram as Licensor
directs;
(c) manufacture, sell, distribute or otherwise deal
with the Materials solely in connection with the Products
(except for any or all of the Materials which do not bear
one or more of the Playboy Properties or otherwise are not
associated with any or all of the Products by virtue of,
but not limited to, such things as design, color or
content); and
(d) not cause or grant permission to any third party
or parties to acquire any copyright or other proprietary
right in connection with any word, device, design or symbol
used by Licensee in connection with any of the Products or
the Materials.
(iii) Licensee hereby assigns, transfers and conveys to
Licensor, to the maximum extent permitted by applicable law, all
of Licensee's right, title and interest in all copyrightable
matter created by Licensee under or in connection with this
Agreement so that Licensor shall be the sole owner of all
copyrights therein.
(iv) Anything in this Agreement to the contrary
notwithstanding, Licensor shall have no right, title or interest
in or to any of Licensee's trademarks, copyrights or tradenames.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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j. Right to Subcontract, Licensee Financial Statements and Lists
of Sources and Accounts:
(i) Licensee may subcontract the manufacture of any or all
component parts of any or all of the Products bearing the Playboy
Properties pursuant to this Agreement, provided: (x) Licensee
notifies Licensor in advance of any intended
supplier/subcontractor and obtains Licensor's prior written
approval of such supplier/subcontractor; (y) Licensee obtains from
each such supplier/subcontractor an executed written agreement in
the form attached hereto and made a part hereof as Exhibit D; and
(z) furnishes a copy of each such executed agreement to Licensor.
(ii) Licensee may subcontract with a third-party
distributor for the distribution of the Products in the Territory
pursuant to this Agreement, provided: (x) Licensee notifies
Licensor in advance of any intended third-party distributor and
obtains Licensor's prior written approval of any such third-party
distributor; (y) Licensee obtains from each Licensor-approved
third-party distributor an executed written agreement (the
"Distributor Contract") attached hereto and made a part hereof as
Exhibit E; and (z) furnishes a copy of each Distributor Contract
to Licensor. For purposes of this Paragraph 2.j.(ii), third-party
distributors shall not include any distribution entity which is
wholly-owned or controlled by Licensee. However, nothing contained
in this Paragraph 2.j.(ii) shall be construed to relieve Licensee
of its obligation and responsibility to ensure that its
distributors, whether third-party or wholly-owned, perform their
duties in accordance with the terms and conditions of this
Agreement, (including, but not limited to, the E-commerce
Guidelines) and the Distributor Contract, including, but not
limited to approved distribution channels and Territory
restrictions. Licensee shall be responsible to Licensor for any
violations by its distributors, whether third-party or affiliated,
of the terms and conditions of this Agreement or the Distributor
Contract. In the event of any such violation, Licensor shall have
the right, but not the obligation, to require Licensee to: (i)
immediately terminate, upon receipt of written notice from
Licensor, the Distributor Contract with such distributor; and (ii)
immediately and permanently cease supplying any or all of the
Products to such distributor. In the event Licensee fails to
terminate the Distributor Contract with such distributor
immediately upon Licensee's receipt of Licensor's notice or fails
to cease supplying any or all of the Products to such distributor,
Licensor shall have the option, but not the obligation to
terminate the License and this Agreement, immediately upon receipt
by Licensee of written notice, by deeming any such failure to be
an incurable default by Licensee under this Agreement. In
addition, Licensee shall be responsible for obtaining from each of
its distributors, whether third-party or affiliated, a complete
listing of each such distributor's inventory of the Products on
hand at the time of termination or expiration of this Agreement
and upon the expiration or termination of the "Sell-Off Period"
(if any) and supplying a copy to Licensor of such inventory
listing within the time frames set forth in Paragraph 8.d. hereof.
(iii) With the Statement submitted at the end of each
License Year pursuant to Paragraph 2.d.(i) hereof and at any other
time so requested by Licensor during the Term and the Sell-Off
Period, Licensee shall provide Licensor with: (a) copies of
Licensee's most recent audited financial statements (including
without limitation footnotes) and annual reports, 10-K's, balance
sheets or other similar documents that indicate Licensee's
financial status; and (b) an updated list of the names and
addresses of all manufacturing sources, subcontractors,
distributors, suppliers, dealers, wholesalers, retailers, accounts
and others which have been engaged in the design, manufacture,
advertising, promotion, sale, distribution or other dealings with
any or all of the Products and the Materials during the Term and
the Sell-Off Period or either thereof. Such list shall, if so
requested by Licensor, contain the full specification of all
designs, utility models, patents or trademarks that may be
involved, directly or indirectly, in the manufacture, production
or distribution of any or all of the Products and the Materials.
Licensee shall obtain the consent of any and all relevant third
parties for such disclosure.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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k. Inventory: Insofar as reasonable, Licensee shall at all times
during the Term be able to fulfill all orders for the Products promptly
and yet not have an excessive inventory on hand at the time of the
expiration or termination of the License. Within forty-five (45) days
after each License Year or within ten (10) days of receipt of a request
from Licensor, Licensee will furnish Licensor with a complete and
accurate statement (the "Inventory Statement") signed by the Chief
Financial Officer of Licensee, setting forth in detail the quantities
and description of each of the Products in work in process and finished
goods inventories of the Products and the locations thereof.
l. Playboy Properties and Non-Competitive Brands:
(i) Licensee shall not use, cause or authorize to be used
any word, device, design, slogan or symbol confusingly similar to
any or all of the Playboy Properties. During the Term and the
Sell-Off Period, any or all of the following shall not be used on
or in connection with the Products or the Materials without
Licensor's prior written consent: (a) permutations of any or all
of the Playboy Properties; (b) secondary marks; or (c) new words,
devices, designs, slogans or symbols. Upon such authorization by
Licensor and use by Licensee, each such permutation, secondary
mark, word, device, design, slogan and symbol shall be the
property of Licensor and shall be included as one of the Playboy
Properties subject to this Agreement. Should Licensee create or
develop any advertising, promotion, packaging or trade dress
unique to the Products, all such advertising, promotion, packaging
or trade dress shall be the property of Licensor and shall not be
used by Licensee on or in connection with any other product or
merchandise during and after the Term. No later than ten (10) days
after expiration or termination of this Agreement or at any other
time Licensor so requests, Licensee will assign to Licensor,
without charge, all of Licensee's right, title and interest
(including without limitation all copyrights) in and to such
advertising, promotion, packaging or trade dress and shall
cooperate fully with Licensor in preparing and recording whatever
documentation may be necessary or desirable or requested by
Licensor to effect such assignment.
(ii) Without Licensor's prior written consent, Licensee
shall not design, manufacture, advertise, promote, distribute,
sell or deal with in any way in the Territory any product or
material that is or are in Licensor's reasonable judgment
competitive with or confusingly similar to any or all of the
Products and the Materials.
(iii) Licensee shall not use color combinations, designs,
styles, logo treatments, graphics or packaging unique to any or
all of the Products on or in connection with any other product,
and Licensee, without charge, will assign to Licensor ownership of
all rights, including, but not limited to, all rights of copyright
and trademark, that Licensee has acquired or may acquire in such
color combinations, designs or styles no later than ten (10) days
after expiration or termination of this Agreement or at any other
time Licensor so requests.
(iv) Licensee shall not during the Term of this Agreement
enter into any retail business or business arrangement involving
retail identified with or by the names or trademarks of any men's
lifestyle publications, products or services, including but not
limited to XXXXXXXXXXX. In the event Licensee commences any such
dealing with any such publications, whether directly or
indirectly, or in the event the publishers or any substantial
holder of the interest in any such publication or in any men's
sophisticate publication such as XXXXXXXXXXX acquires or otherwise
comes to hold any financial or equity interest in Licensee,
Licensor shall have the right to terminate this Agreement as the
result of an incurable default.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
39
m. Indemnification and Product Liability Insurance:
Licensee shall:
(i) indemnify, defend and hold harmless Licensor, its
subsidiaries and affiliates, their respective shareholders,
licensees and franchisees and the agents, officers, directors and
employees of each (hereinafter collectively referred to as
"Indemnitees") from all costs, claims, suits, losses, damages and
expenses (including without limitation reasonable attorneys'
fees), provided prompt notice of each such claim or suit which
comes to the attention of Licensor is given to Licensee by
Licensor arising out of or in connection with: (a) the design,
manufacture, advertising, promotion, sale or distribution of or
any other dealing whatsoever with the Products or Materials; (b)
any alleged action or failure to act whatsoever by Licensee; (c)
any alleged defect in any or all of the Products; (d) any alleged
non-conformity to or non-compliance with any law pertaining to the
design, quality, safety, advertising, promotion or marketing of
any or all of the Products and the Materials; (e) any sales or
distribution by Licensee of the Products to a State, particularly
an EU-member State not belonging to the Territory, where a third
party owns the registrations for trademarks that are confusingly
similar to the Trademarks; or (f) any breach by Licensee of any of
its representations or warranties hereunder. In no event, however,
will such indemnification include incidental or consequential
damages, including, but not limited to compensation or
reimbursement for loss of prospective profits, anticipated sales
or other losses occasioned by termination of this Agreement or any
other reason(s). Licensee shall have the option to settle or to
undertake and conduct the defense of any such claim or suit.
Licensee shall have sole and exclusive control over such defense,
and Licensee's decisions with respect thereto shall govern and
control. Licensor expressly covenants that no discussions by
Licensor whatsoever with claimant or litigant, no compromise or
settlement by Licensor of any claim or suit and no negotiations by
Licensor with respect to any compromise or settlement shall be
had, made or entered into without the prior written approval of
Licensee;
(ii) obtain and maintain, at Licensee's own expense,
product liability insurance satisfactory to Licensor in the
minimum amount of XXXXXXXXXXX of primary and umbrella coverage
from one or more insurance companies, each with a Best's rating of
"A" (or better), and qualified to transact business in the
Territory (each such insurance policy shall name each of the
Indemnitees as additional insureds by reason of the indemnity
contained in Paragraph 2.m.(i) above and shall evidence the
insurer's agreement that such insurance shall not be amended,
canceled, terminated or permitted to lapse without thirty (30)
days' prior written notice to Licensor), and provide Licensor with
a certificate of such insurance upon execution of this Agreement
by Licensee and on each anniversary date of the grant or issuance
of each such policy during the Term and the Sell-Off Period
evidencing that each such policy has not been altered with respect
to the Indemnitees in any way whatsoever nor permitted to lapse
for any reason, and evidencing the payment of premium of each such
policy; and
(iii) cause each such policy to be in full force and effect
prior to the commencement of any design, manufacture, advertising,
promotion, sale, distribution or dealing with any or all of the
Products whatsoever. Failure by Licensee to obtain the required
insurance prior to such commencement or failure by Licensee to
adequately maintain such insurance during the Term and the
Sell-Off Period shall be an incurable default by Licensee under
this Agreement.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
40
n. Advertising Expenditures, Advertising Plans and Public
Relations:
(i) In addition to all other amounts or payments due from
Licensee under this Agreement, and not to be credited to or offset
against any Guaranteed Royalties or Earned Royalties, Licensee
agrees to expend within each License Year for advertising and
promotion of the Products in trade and consumer media or either
thereof (including without limitation displays, fixtures and
point-of-sale materials, newspapers, magazines, television and
radio, but specifically excluding trade shows) and for
contribution to Licensor's advertising and promotion pool (as set
forth below) not less than XXXXXXXXXXX of Net Sales for such
License Year. If the Statement for the last License Quarter of a
License Year shows XXXXXXXXXXX of Licensee's Net Sales has not
been spent as set forth in this Paragraph 2.n.(i), then for the
first License Year only the amount of such shortfall shall be
added to the XXXXXXXXXXX due to be spent during the second License
Year. In the event the Statement for any License Year beyond
License Year 1 shows that the total percentage of Net Sales
(which, for the second License Year, shall be XXXXXXXXXXX plus the
amount of any shortfall from the first License Year) have not been
reached, the difference between the amount actually spent and the
amount required to be spent must be remitted to Licensor along
with such Statement for use in Licensor's advertising and
promotion pool with such Statement.
(ii) Licensee must submit to Licensor, for Licensor's
approval, its advertising/promotional plan and marketing plan for
the Products for each ensuing calendar year. Such plans must be
submitted not later than October 1st of each calendar year. In the
event Licensor, in its reasonable discretion, does not approve of
any such plan, Licensee must submit a revised plan or plans to
Licensor, for its approval, within not more than fifteen (15) days
following Licensee's receipt of Licensor's notice of disapproval
and Licensee must incorporate revisions into the plan or plans
that address Licensor's concerns or reasons for disapproval.
(iii) Within ten (10) days following the end of each
calendar quarter during the Term, Licensee will submit to
Licensor, a list of all upcoming public relations efforts
regarding the Products (the "PR"), which may include, but will not
be limited to, interviews, press releases and press events. In the
event Licensee wishes to sanction or schedule any PR after the
submission to Licensor of such monthly list, Licensee will
immediately notify Licensor of such additional PR. Licensee must
obtain Licensor's prior written approval prior to any PR effort
taking place. In the event any PR consists of interviews, all
talking points for same must be approved in advance in writing by
Licensor. In the event Licensor, in its sole discretion, wishes to
participate in any PR Licensor will so notify Licensee. In the
event Licensor fails to provide its approval or disapproval of any
or all things submitted to Licensor pursuant to this Paragraph
2.n.(iii) within fourteen (14) days of Licensor's receipt thereof,
Licensor shall be deemed to have disapproved of such things. In
the event Licensor disapproves any PR, Licensee will cancel such
disapproved PR. Failure by Licensee to cancel any disapproved PR
or engaging in any PR that has not been submitted to Licensor in
advance for approval shall be an incurable default by Licensee
under this Agreement.
3. ADDITIONAL COVENANTS OF THE PARTIES.
a. Reservation of Rights: All rights not expressly and
specifically granted herein to Licensee are reserved by Licensor.
b. Certain Sales:
(i) In the event Licensor during the Term chooses to
exercise some or all of Licensor's rights pursuant to Paragraph
1.a.(iii) hereof, Licensee, if requested to do so by Licensor,
will sell to Licensor and its licensee(s) or either thereof any or
all of the Products at the best prices and terms given to other
customers of the Products ordering substantially the same
quantities of similar merchandise from Licensee.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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(ii) In the event of any such sale of the Products by
Licensee to Licensor, Licensee shall ship or deliver such Products
either directly to Licensor or, as Licensor may direct, to any
other individual(s), entity or entities. Any or all such sales of
the Products by Licensee to Licensor shall be at the prices
described in Paragraph 3.b.(i) above. Licensee will include such
sale(s) in the computation of Net Sales for the purpose of
computing Earned Royalties and Minimum Net Sales. Licensee shall
bill Licensor and its licensee(s) or either thereof in accordance
with Licensee's normal billing procedures for all such Products
shipped or delivered.
4. TITLE AND PROTECTION.
a. Indemnification by Licensor: Licensor represents and warrants
that: (i) it is the owner of the Trademarks; (ii) it has all necessary
rights to the Images for the purposes set forth in this Agreement;
(iii) the Trademarks are valid in the Territory; and (iv) the
Trademarks are, to the best of Licensor's knowledge, free from any
claim by any third party that would unreasonably interfere with the
rights granted to Licensee under this Agreement. Licensor shall
indemnify, defend and hold harmless Licensee, its subsidiaries and
affiliates, their respective shareholders, licensees and franchisees
and the agents, officers, directors and employees of each against and
from all costs, claims, suits, losses, damages and expenses, including,
without limitation reasonable attorneys' fees (provided prompt notice
of each such claim or suit which comes to the attention of Licensee is
given to Licensor by Licensee) arising out of or in connection with the
authorized use of the Playboy Properties on or in connection with the
Products by Licensee in the Territory, but in no event shall such
indemnification include incidental or consequential damages, including,
but not limited to compensation or reimbursement for loss of
prospective profits, anticipated sales or other losses occasioned by
termination of this Agreement or any other reason(s). Licensor shall
have the option to settle or to undertake and conduct the defense of
any such claim or suit. Licensor shall have sole and exclusive control
over such defense, and Licensor's decisions with respect thereto shall
govern and control. Licensee expressly covenants that no discussions by
Licensee whatsoever with claimant or litigant, no compromise or
settlement by Licensee of any claim or suit and no negotiations by
Licensee with respect to any compromise or settlement shall be had,
made or entered into without the prior written approval of Licensor.
b. Enforcement: Licensee shall promptly notify Licensor in writing
of each actual, suspected or apparent infringement or imitation of the
Playboy Properties or the Materials that comes to the attention of
Licensee. Licensor shall take such action in regard to such
infringement or imitation as Licensor, in its sole and absolute
judgment, deems to be appropriate. Licensor shall, in its sole and
absolute discretion, decide whether to assert any claim or undertake or
conduct any suit with respect to such infringement or imitation, but
Licensee shall, upon receipt of notice from Licensor and pursuant to
Licensor's instructions, on behalf of Licensor, assert any such claim
or handle, undertake and conduct any such suit at Licensor's expense in
the name of Licensor or Licensee or in both names as Licensor may
direct. Licensee expressly covenants that no discussions whatsoever
with the infringing or imitating party or parties, no compromise or
settlement of any such claim or suit and no negotiations with respect
to any compromise or settlement of any such claim or suit shall be had,
made or entered into without the prior written approval of Licensor.
XXXXXXXXXXX Under no circumstances may Licensee enforce Licensor's
rights to the Playboy Properties without Licensor's prior written
approval and in no event may Licensee take any action on account of any
such infringements without Licensor's prior written approval.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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5. RELATIONSHIP BETWEEN THE PARTIES.
a. No Joint Venture: Nothing herein contained shall be construed
to place the parties hereto in the relationship of partners or joint
venturers, and Licensee shall have no power to obligate or bind
Licensor or its subsidiaries or affiliates in any manner whatsoever.
Licensor will have no fiduciary duty or fiduciary obligation to
Licensee under this Agreement.
b. Assignment:
(i) Licensor, in entering into this Agreement, is relying
entirely upon Licensee's skills, reputation and personnel,
including without limitation its officers, managers, directors and
shareholders. This Agreement and all rights, duties and
obligations hereunder are personal to Licensee and shall not,
without the prior written consent of Licensor (which may be given
or withheld Licensor's reasonable discretion), be assigned,
delegated, sold, transferred, leased, mortgaged or otherwise
encumbered by Licensee or by operation of law. Any attempt to do
so without such consent shall be void and have no force or effect
whatsoever and shall constitute a default under this Agreement. If
Licensor in its reasonable discretion believes that any change in
any or all of the officers, managers, directors and shareholders
of Licensee has, will or could materially interfere with or
materially and adversely affect Licensee's performance hereunder
or the relationship between the parties hereto, Licensor may deem
such change to be a default under this Agreement and shall so
notify Licensee. In the event of any default pursuant to the
provisions of this Paragraph 5.b.(i), Licensee will have the
option to reverse such change to the reasonable satisfaction of
Licensor within not more than ten (10) days of the date of
Licensor's written notice of such default. Licensee must provide
to Licensor within such 10-day period evidence of such reversal.
If such change is not so reversed, Licensor shall have the right
to deem the Agreement to be terminated on such 10th day. The
consent of Licensor to any such assignment, delegation, sale,
transfer, lease, mortgage, other encumbrance or change shall not
be deemed to be consent to any subsequent assignment, delegation,
sale, transfer, lease, mortgage, other encumbrance or change.
(ii) Licensor may assign this Agreement or assign or
delegate any or all of its rights, duties and obligations under
this Agreement to any of its parents, subsidiaries or affiliates
or to any individual or entity.
6. SUBLICENSING. Licensee may not, without the prior written approval
of Licensor, whose discretion shall be final and absolute, enter into any
sublicense agreement or grant any sublicense for any or all of the rights or
obligations of Licensee under the License or this Agreement. The consent of
Licensor to any sublicense agreement or sublicense shall not be deemed to be a
consent to any subsequent sublicense agreement or sublicense.
7. DEFAULTS AND RIGHTS OF TERMINATION.
a. Defaults and Right to Cure:
(i) Except as otherwise provided in this Agreement, if
Licensee fails to make any timely payments under the terms of this
Agreement, Licensor shall have the right and option, but not the
duty, to terminate the License and this Agreement upon not less
than ten (10) days' prior written notice, but no neglect or
failure to serve such notice shall be deemed to be a waiver of any
such violation or default. Such termination shall become effective
unless such violation or default described in such notice shall be
completely remedied to the satisfaction of Licensor within such
ten (10) day period. Upon such termination, Licensee shall
immediately pay all amounts owed under this Agreement.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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(ii) Except as otherwise provided in this Agreement and,
specifically, Paragraph 7.a.(i) above, if Licensee shall violate
any of the terms or conditions hereof or default on any of its
duties, obligations or warranties hereunder, Licensor shall have
the right and option, but not the duty, to terminate the License
and this Agreement upon not less than thirty (30) days' prior
written notice, but no neglect or failure to serve such notice
shall be deemed to be a waiver of any such violation or default.
Such termination shall become effective unless such violation or
default described in such notice shall be completely remedied to
the satisfaction of Licensor within such thirty (30) day period.
Upon such termination, Licensee shall immediately pay all amounts
owed under this Agreement.
(iii) Notwithstanding the provisions of Paragraph 7.a.(i)
above, if such violation or default: (a) is of a kind that a
remedy or cure cannot effectively restore the prior circumstances;
or (b) is described in this Agreement as an incurable default,
then the License and this Agreement shall terminate upon receipt
by Licensee of written notice thereof without any period of remedy
or cure whatsoever. The termination of the License and this
Agreement shall be without prejudice to any rights that Licensor
otherwise has against Licensee under this Agreement or under law.
b. Bankruptcy or Assignment for Creditors, Business
Discontinuance: If: (i) Licensee files a petition in bankruptcy or is
adjudicated a bankrupt; (ii) a petition in bankruptcy is filed against
Licensee; (iii) Licensee shall become insolvent or shall make or agree
to make an assignment for the benefit of creditors or an arrangement
pursuant to any bankruptcy law; (iv) Licensee discontinues business;
(v) Licensee receives a qualified opinion from its independent auditor
regarding Licensee's financial statements or an opinion stating that
Licensee's financial situation raises substantial doubt about
Licensee's ability to continue as a going concern (or the equivalent of
such an opinion); or (vi) a receiver shall be appointed for Licensee,
the License and this Agreement shall automatically terminate without
the necessity of any notice whatsoever. If the License and this
Agreement are so terminated, any and all of Licensee and its receivers,
representatives, trustees, agents, administrators, successors and
assigns shall have no right to sell or in any way deal with any of the
Playboy Properties, Products or the Materials, except with the special
prior written consent and under the instructions of Licensor that it or
they shall be obligated to follow.
c. Loss of Trademark Rights: If Licensee's right to use any or all
of the Trademarks is adjudged illegal, invalid or restricted and either
(i) such adjudication has become final and non-appealable; (ii)
Licensor in its sole discretion chooses not to appeal therefrom; or
(iii) if a settlement agreement is entered into by Licensor that
prohibits or restricts Licensor's or Licensee's right(s) to use the
Trademarks, the License and this Agreement shall automatically
terminate without the necessity of any notice whatsoever as of the date
(x) such adjudication becomes final and non-appealable; (y) Licensor
makes such choice; or (z) the execution and delivery of such settlement
agreement.
d. Qualified Auditor's Report: If Licensee receives a qualified
opinion from its independent auditor regarding Licensee's financial
statements or an opinion stating that the Licensee's financial
situation raises substantial doubt about Licensee's ability to continue
as a going concern (or the equivalent of such an opinion), the receipt
of such opinion shall be considered an incurable default and the
License and this Agreement shall automatically terminate without the
necessity of any notice whatsoever.
e. Cross-Default: In addition to, and without derogating from any
other rights Licensor may have hereunder or under any other agreement
between Licensor and Licensee, or otherwise, any breach or default by
Licensee (or its successors or assigns) of any other agreement
(collectively, the "Other Agreements"), between Licensor (or any
affiliate or assignee of Licensor) and Licensee (or its successors or
assigns) may also be deemed by Licensor to be a breach or default by
Licensee under this Agreement, and any breach or default by Licensee
(or its successors or assigns) under this Agreement may also be deemed
to be a breach or default by Licensee (or its successors or assigns) of
any or all Other Agreements, and Licensor (or the applicable affiliate
or assignee of Licensor) shall be entitled to exercise any and all of
its rights and remedies under the applicable agreements with respect
thereto as if such breach or default occurred under such agreements.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
44
8. EXPIRATION OR TERMINATION.
a. Effect of Expiration or Termination: Upon and after the
expiration or termination of the License and this Agreement, all rights
granted to Licensee under this Agreement shall immediately revert to
Licensor. Licensee will refrain from any further use of the Playboy
Properties or any further reference to anything similar to the Playboy
Properties (including, but not limited to, words, devices, designs and
symbols) or in any way associated with any or all of the Products,
Licensor and its subsidiaries or affiliates, except with the prior
written consent of Licensor or as expressly provided in Paragraph 8.c.
hereof.
b. Reserved Rights: The expiration or termination of the License
and this Agreement shall not: (i) relieve Licensor or Licensee,
respectively, of any obligations incurred prior or subsequent to such
expiration or termination; or (ii) impair or prejudice any of the
rights of Licensor or Licensee, respectively, accruing prior or
subsequent thereto as provided in this Agreement. Upon termination of
the License and this Agreement pursuant to Paragraph 7.c. hereof,
Guaranteed Royalties for the then current License Year shall be
prorated based on the ratio that the number of days in such License
Year prior to termination bears to the number of days in the License
Year had the License and this Agreement not been terminated. Earned
Royalties due for such License Year shall be the excess of Earned
Royalties over such prorated Guaranteed Royalties. Any overpayment of
Guaranteed Royalties or overpayment or underpayment of Earned Royalties
based on such proration shall be immediately adjusted by the parties
hereto.
c. Continued Sales After Expiration or Termination: Provided that
Licensee is not in arrears in the payment of any amounts due to
Licensor and that Licensee is in compliance with all of the terms and
conditions of this Agreement, then upon the expiration of the License
and this Agreement, or if this Agreement is terminated pursuant to any
paragraph of this Agreement prior to the Expiration Date and then only
upon Licensor's prior written approval (which may be withheld at
Licensor's discretion), and except as provided in Paragraph 8.d.
hereof, Licensee may, for a period of one hundred and twenty (120) days
after the Expiration Date or notice of termination together with
Licensor's written consent (the "Sell-Off Period"), sell through
Licensee's existing, recognized network of distributors or accounts all
of the Products that have been approved by Licensor and that are in
process or on hand on the Expiration Date or at the time such notice of
termination together with Licensor's approval of such Sell-Off Period
is received. In such event, Licensee shall pay Earned Royalties and
furnish Statements with respect to the Sell-Off Period in accordance
with the terms and conditions of this Agreement as though the License
and this Agreement were still in effect. It is expressly understood and
agreed by Licensee that the Sell-Off Period shall be: (i)
non-exclusive; and (ii) considered a separate accounting period for the
purpose of computing Earned Royalties due to Licensor for sales during
such Period. Sales during the Sell-Off Period shall not be applied
against any Guaranteed Royalties due or payable prior to the Sell-Off
Period.
d. Inventory After Expiration or Termination:
(i) Licensee shall furnish to Licensor an Inventory
Statement:
(a) not more than thirty (30) days after the
expiration of this Agreement;
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
45
(b) not more than thirty (30) days after the
expiration of the Sell-Off Period (if any); and
(c) not more than ten (10) days after: (i) receipt
by Licensee of notice of termination of this Agreement or
the Sell-Off Period (if any); or (ii) the happening of any
event that terminates the License and this Agreement where
no such notice is required.
(ii) Not more than ten (10) days after the expiration or
termination of this Agreement or the Sell-Off Period (if any),
Licensee must supply Licensor with a certificate of destruction
for all Materials, including, but not limited to, holograms,
labels, hang tags, buttons, boxes, zippers, decals, advertising
material, and equipment capable of recreating the Playboy
Properties, including, but not limited to: molds, tools, dies and
printing screens.
(iii) Upon the expiration or termination (for any reason)
of this Agreement during the Term or the Sell-Off Period (if any),
Licensor reserves the right to purchase all remaining inventory at
Licensee's direct variable manufacturing cost, however, if
Licensor chooses not to purchase such inventory, it shall be
promptly destroyed by Licensee unless otherwise agreed between
Licensee and Licensor. Licensor shall inform Licensee of its
decision within fifteen (15) days after Licensor's receipt of the
Inventory Statement from Licensee.
(iv) Should Licensor choose not to purchase Licensee's
inventory as provided under Paragraph 8.d.(iii) above, Licensee,
within ten (10) days after Licensor's notice, shall provide
Licensor with a certificate of destruction for all inventory of
the Product on hand or in process.
(v) Licensor and its agents shall have the right to conduct
physical inspections to ascertain Licensee's compliance with this
Paragraph 8.d. Any refusal by Licensee to submit to such
inspection shall forfeit Licensee's right to a Sell-Off Period,
and Licensor shall retain all other legal equitable rights it has
in the circumstances, which rights are hereby specifically
reserved.
e. Equitable Relief and Legal Fees:
(i) Subject to Paragraph 8.c. hereof, Licensee hereby
acknowledges that its failure to cease the design, manufacture,
advertising, promotion, sale or distribution of the Products and
the Materials upon the expiration or termination of this Agreement
will result in irreparable harm to Licensor and its business
interests for which there is no adequate remedy at law.
Accordingly, in the event of such failure or in the event of any
violation or default by Licensee under this Agreement (after
giving effect to the provisions of Paragraph 7.a.(i) hereof),
Licensor shall be entitled to equitable relief without the
necessity of posting bond by way of any temporary and permanent
injunctions and such other relief as any court of competent
jurisdiction may deem just and proper. In this regard, Licensee
hereby consents to the judgment of temporary and permanent
injunctions in favor of Licensor in order to give effect to this
Paragraph 8.e.(i).
(ii) In the event either party hereto files any action
against the other to enforce any of the provisions of this
Agreement or to secure or protect such party's rights under this
Agreement, such party shall be entitled to recover, in any
judgment in its favor entered therein, the attorneys' fees and
litigation expenses of such party, together with such court costs
and damages as are provided by law.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
46
f. XXXXXXXXXXX
9. NOTICES.
a. Effectiveness: Unless otherwise expressly indicated in this
Agreement, each notice, request, approval, consent, payment and
Statement (hereinafter referred to as a "Submission") specifically
provided for in this Agreement shall be in writing and shall be
considered effective or received the earliest of: (i) five (5) days
after the date when such Submission is mailed by certified or
registered mail with postage prepaid to the party hereto at the address
set forth below; (ii) two (2) business days after the date when such
Submission is sent by overnight courier service addressed to such party
at such address or the date indicated as received on the overnight
courier service confirmation receipt, whichever is earlier; (iii),
except for payments, when such Submission is sent by email addressed to
such party at such email address and the sender thereof requests and
receives written confirmation from such party that such Submission has
been received and is legible; or (iv) when such Submission is actually
received by such party at such address:
To Licensor: Address: 730 Fifth Avenue
New York, NY 10019
Attention: Sarah Haney
Facsimile: 212 957 2950
Telephone: 212 261 5000
With a copy to: Address: 680 North Lake Shore Drive
Chicago, IL 60611
Attention: General Counsel
Facsimile: 312 266 2042
Telephone: 312 751 8000
To Licensee: The address specified in Paragraph
S.2. of the Schedule
Attention: Ken Hertz
Email: ken@ghlh.com
Telephone: 310 248 3107
b. Address Change: Notwithstanding the provisions of Paragraph
9.a. hereof, each party hereto may give written notice to the other
party of some other address to which Submissions shall be sent, in
which event such Submissions to such party subsequently shall be sent
to such address.
10. CONFIDENTIAL INFORMATION. Any party hereto (the "Disclosing Party")
may from time to time during the Term of this Agreement, make available to other
party (the "Receiving Party"), certain materials and information, all of which
is non-public, confidential or proprietary to the Disclosing Party (collectively
the "Proprietary Material"). Neither party hereto shall disclose the Disclosing
Party's Proprietary Material to third-parties or use the Disclosing Party's
Proprietary Material for any purpose other than in connection with the Receiving
Party's duties and obligations as set forth in this Agreement. The Receiving
Party will ensure that the Disclosing Party's Proprietary Material will be kept
confidential by the Receiving Party and its directors, officers, employees,
agents, distributors, designers and supplier/subcontractors (collectively the
"Representatives"), and that all such Representatives shall be made aware of the
confidential nature of the Proprietary Material. In the event the Receiving
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
47
Party is requested or required (by oral question, interrogatories, subpoena,
civil investigative demand or similar process) to disclose any of the Disclosing
Party's Proprietary Material, the Receiving Party will promptly notify the
Disclosing Party of such request or requirement and cooperate with the
Disclosing Party so that the Disclosing Party may seek an appropriate protective
order or otherwise seek appropriate protection of the Proprietary Material. In
the event that such protection is not obtained or that the Disclosing Party
waives compliance, the Receiving Party shall furnish only that portion of the
Disclosing Party's Proprietary Material which the Receiving Party is advised by
written opinion of counsel is legally required to be furnished. Attached hereto
as Exhibit F and made a part hereof is a list (which may be amended from time to
time) of Proprietary Material which each party has supplied to the other, but
such list is not intended to preclude any other material or information of a
non-public, confidential or proprietary nature which may be provided to the
Receiving Party by the Disclosing Party verbally or otherwise. Within ten (10)
days from: (a) the expiration or effective date of termination of this
Agreement; or (b) the date of the Disclosing Party's prior written request, the
Receiving Party will return to the Disclosing Party, or destroy at the
Disclosing Party's request, all of the Disclosing Party's Proprietary Material
and all copies of such Proprietary Material produced, or any notes, analysis or
other materials prepared or produced, by the Receiving Party or its
Representatives.
Unless mandated by law or a governmental agency or as otherwise
required in connection with financial statement disclosure, Licensee will keep
all terms and conditions of this Agreement confidential both during and after
the Term of the Agreement.
11. SEVERABILITY. Each provision of this Agreement shall be severable.
If, for any reason, any provision herein is finally determined to be invalid and
contrary to, or in conflict with, any existing or future law or regulation by a
court or agency having valid jurisdiction, such determination shall not impair
the operation or affect the remaining provisions of this Agreement, and such
remaining provisions will continue to be given full force and effect and bind
the parties hereto. The parties to this Agreement agree to replace unvalid or
unenforceable provisions by a valid and enforceable provision which carries out
to the maximum possible extent the original economic intent of the parties.
12. CONSENTS AND APPROVALS. If Licensor fails or refuses to grant to
Licensee any request, consent or approval, Licensor may, but shall not be
required to, give the reason therefor, but Licensor shall not be liable for any
events or circumstances that arise as a result of such failure or refusal.
13. APPLICABLE LAW. This Agreement shall be governed by and interpreted
under the laws of the State of Illinois without regard to its conflicts of laws
provisions. Licensee hereby submits to personal jurisdiction in Cook County,
Illinois. The parties hereto agree that any and all disputes arising out of or
relating in any way to this Agreement shall be litigated only in courts sitting
in Cook County, Illinois. Licensor shall have the option, however, to instead
file lawsuit at Licensee's domicile which will then be litigated in the courts
competent for that domicile.
14. NO BROKER. Licensee warrants and represents that Licensee used no
broker in connection with the execution and delivery of this Agreement.
15. CONSTRUCTION. The headings used herein are for convenience only and
shall not be deemed to define, limit or construe the contents of any provision
of this Agreement. The wording of this Agreement will be deemed to be the
wording chosen by the parties hereto to express their mutual intent, and no rule
of strict construction will be applied against any such party. Time is the
essence of this Agreement. The Recitals and the Additional Terms and Conditions
(contained in Exhibit G which is attached hereto) shall be deemed to be part of
this Agreement. This Agreement may be executed in separate counterparts, each of
which is deemed to be an original, and all of which taken together constitute
one and the same agreement.
16. SURVIVABILITY. The expiration or termination of the License and
this Agreement shall not affect those provisions hereof that are meant to
survive such termination or expiration.
17. RIGHTS CUMULATIVE. The respective rights and remedies of the
parties hereto, whether herein specified or otherwise, shall be cumulative, and
the exercise of one or more of them shall not preclude the exercise of any or
all other rights and remedies each such party has hereunder or by law.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
48
18. ENTIRE AGREEMENT. This Agreement (with the Schedule and Exhibits A
through G) represents the entire understanding of the parties hereto. None of
the terms of this Agreement can be waived or modified except by an express
agreement in writing signed by the parties hereto. There are no representations,
promises, warranties, covenants or undertakings other than those contained in
this Agreement. No custom or practice of the parties hereto at variance with the
terms hereof shall constitute a waiver of Licensor's right to demand exact
compliance with any of the terms herein at any time. The failure of either party
hereto to enforce, or the delay by either party hereto in enforcing, any or all
of its rights under this Agreement shall not be deemed as constituting a waiver
or a modification thereof, and either party hereto may, within the time provided
by applicable law, commence appropriate proceedings to enforce any or all of
such rights. Except as expressly provided in this Agreement, no individual or
entity other than Licensee and Licensor shall be deemed to have acquired any
rights by reason of anything contained in this Agreement.
This Agreement will become null and void, and Licensor will have no
further obligation to enter into this Agreement with Licensee if Licensee has
not executed this Agreement and returned it to Licensor so that Licensor
receives the executed Agreement by December 29, 2006.
IN WITNESS WHEREOF, the parties hereto, intending this Agreement to be
effective as of the Commencement Date, have caused this Agreement to be executed
by the duly authorized representative of each.
PLAY BEVERAGES, LLC PLAYBOY ENTERPRISES
(LICENSEE) INTERNATIONAL, INC.
(LICENSOR)
By: By:
--------------------- ------------------------------
Title: Title:
--------------------- ------------------------------
Date: Date:
--------------------- ------------------------------
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
49
EXHIBIT A
ATTACHED TO AND MADE A PART OF
THE PRODUCT LICENSE AGREEMENT BETWEEN
PLAYBOY ENTERPRISES INTERNATIONAL, INC.
AND
PLAY BEVERAGES, LLC
DATED AS OF NOVEMBER 1, 2006
THE PLAYBOY PROPERTIES*
-----------------------
* Any revisions to the above list and depictions will be granted only
upon Licensor's receipt of a fully-signed amendment to this Exhibit A.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
50
EXHIBIT B
ATTACHED TO AND MADE A PART OF
THE PRODUCT LICENSE AGREEMENT BETWEEN
PLAYBOY ENTERPRISES INTERNATIONAL, INC.
AND
PLAY BEVERAGES, LLC
DATED AS OF NOVEMBER 1, 2006
E-COMMERCE GUIDELINES
---------------------
1. Licensee's E-commerce Web Site: Licensee may advertise and offer the
availability of the Products on its own E-commerce Web Site and may
accept orders for the Products placed through its own E-commerce Web
Site subject to the following provisions:
a. Licensee's E-commerce Web Site must, include a link to
www.playboystore.com (or any other URL as Licensor may direct from
time to time)and inform visitors to such E-commerce Web Site that
the Products and other Playboy-branded Products are available for
sale through such link.
b. Licensee may not advertise or promote the availability of the
Products on its own E-commerce Web Site, or accept orders for the
Products through its own E-commerce Web Site, if Playboy-branded
products [including, but not limited to, the Products, other
Playboy-branded items not in the Product category, video media and
Spice-branded products] constitute twenty percent (20%) or more of
such E-commerce Web Site's total product offerings. For purposes
of clarification, such Playboy-branded products (i) may not be the
only branded products advertised, promoted and sold on and through
such E-commerce Web Site; and (ii) must not constitute twenty
percent (20%) or more of all products advertised, promoted or sold
on such E-commerce Web Site.
c. Licensee may not use any of the Trademarks, or portions thereof,
in connection with the domain name, html title, meta tags or other
hidden html text for its E-commerce Web Site.
d. Licensee will ensure that its E-commerce Web Site continuously
displays a banner in the form and content acceptable to Licensor
informing all visitors to such E-commerce Web Site that no orders
for the Products will be accepted and no Products will be shipped
outside the Territory.
e. Licensee will ensure that its E-commerce Web Site continuously
displays the trademark or copyright notices as directed by
Licensor in connection with the display, advertisement and offer
of the Products.
f. None of the Playboy Properties used in conjunction with the
advertisement of the Products on Licensee's E-commerce Web Site
may be changed, manipulated or modified in appearance. Licensee
may not use the Playboy Properties to advertise, promote or sell
non-Playboy branded products or services.
g. All aspects of the display of the Playboy Properties and Products
on Licensee's E-commerce Web Site will be subject to the prior and
ongoing approval of Licensor, including design, layout, content,
advertising and links. Licensee must obtain Licensor's approval
prior to any change in already approved design, layout, content
advertising or links of Licensee's E-commerce Web Site.
h. Notwithstanding anything hereof to the contrary, Licensor shall
have the right to immediately withdraw the permission set forth in
this Exhibit B and the Agreement upon receipt of Licensor's
written notice if Licensor deems, in its sole discretion, that any
aspect of Licensee's E-commerce Web Site, including, but not
limited to, content, advertising, links or html code, violates the
Standards and Practices, which Licensor may amend from time to
time, set forth on Attachment 1 attached hereto and made a part
hereof. In the event of such withdrawal, Licensee must immediately
remove all of the Playboy Properties and the Products from
Licensee's E-commerce Web Site.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
51
i. Licensee shall include its own Privacy Policy on Licensee's
E-commerce Web Site consistent with the terms and conditions of
Playboy.com, Inc.'s privacy policy which is attached hereto by way
of example as Attachment 2.
j. None of the advertisements contained on Licensee's E-commerce Web
Site shall include those categories set forth on Attachment 3
attached hereto and made a part hereof unless approved in advance
in writing by Licensor.
2. E-tailers' and Retailers' E-commerce Web Sites: Licensee may sell and
distribute the Products, and allow its distributors to sell and
distribute the Products, to E-tailers and retailers which may sell and
distribute the Products via such E-tailers' or retailers' E-commerce
Web Sites provided that:
a. Licensee will not sell or distribute the Products to any E-tailer
or retailer who will advertise, promote or offer the Products on
an E-commerce Web Site if Playboy-branded products [including, but
not limited to, the Products, other Playboy-branded items not in
the Product category, video media and Spice-branded products]
constitute twenty percent (20%) or more of any such E-commerce Web
Site's total product offerings. For purposes of clarification,
such Playboy-branded products (i) may not be the only branded
products advertised, promoted and sold on and through any such
E-commerce Web Site; and (ii) must not constitute twenty percent
(20%) or more of all products advertised, promoted or sold on and
through any such E-commerce Web Site;
b. Licensee will use commercially reasonable efforts to ensure that
such E-tailers and retailers follow the guidelines set forth in
these E-commerce Guidelines for the advertisement, promotion and
offer of the Products via any E-commerce Web Site; and
c. Unless authorized by Licensor in writing, Licensee will not sell
or distribute the Products to an E-tailer or retailer: (i) who is
identified with or by the names of any adult male
lifestyle/entertainment publications which are, in Licensor's
opinion, competitive with PLAYBOY Magazine; (ii) who will
advertise, promote or offer the Products on an E-commerce Web Site
that is identified with or by the names of any adult male
lifestyle/entertainment publications which are, in Licensor's
opinion competitive with PLAYBOY Magazine; or (iii) who will
advertise, promote, or offer the Products for sale on an
E-commerce Web Site in conjunction with any products or services
identified with or by the names of any adult male
lifestyle/entertainment publications which are, in Licensor's
opinion, competitive with PLAYBOY Magazine.
In the event Licensor discovers any E-commerce Web Site which is in
violation of any of the guidelines set forth in this Exhibit B,
Licensee, upon Licensor's prior written notice, shall cease all sales
and distribution of the Products to the retail or E-tailer owner or
controller of any such E-commerce Web Site.
3. Distributors' E-commerce Web Sites: Licensee will ensure that its
third-party distributors adhere to the terms and conditions of the
E-commerce Guidelines attached to each such distributor's Distributor
Contract. Licensee shall also ensure that its affiliated distributors
adhere to the terms and conditions set forth in the Agreement and in
these E-commerce Guidelines. In the event Licensor discovers any
E-commerce Web Site, either owned or controlled by any affiliated or
third-party distributor, which is in violation of any of the E-commerce
Guidelines, Licensee shall, at Licensor's option, cease selling or
distributing the Products to any such distributor.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
52
ATTACHMENT 1
ATTACHED TO AND MADE A PART OF EXHIBIT B TO
THE PRODUCT LICENSE AGREEMENT
BETWEEN
PLAYBOY ENTERPRISES INTERNATIONAL, INC.
AND
PLAY BEVERAGES, LLC
DATED AS OF NOVEMBER 1, 2006
STANDARDS AND PRACTICES
-----------------------
The following may not be depicted (in actual or simulated form) or explicitly
described on any E-commerce Web Sites displaying the Playboy Properties or the
Products:
1. Violence
Violent behavior and links to sexuality or eroticism with violence,
directly or indirectly.
2. Rape
Rape (including so-called "implicit" or "consenting" rape) is strictly
forbidden.
3. Incest
4. Sadism and Masochism
5. Bondage
6. Bestiality
7. Child Pornography
No nude or seminude photos of anyone under 18 years old at the time
such photos were taken. Even if a model visibly looks or is actually
older than 18, no depictions of any model who is portrayed as younger
than 18 in any sexual act. No explicit description of or explicit
references to anyone under 18 years of age.
8. Extreme Sexual Explicitness
No penetration, erections, ejaculations or close-up shots or
descriptions of oral sex.
9. Graphic Close-ups of Genitals
No close-ups or descriptions of genitals, particularly in the context
of actual or simulated sexual activity.
10. Actual Sexually Explicit Conduct
No sexual intercourse (including genital-genital, oral-genital,
anal-genital or oral-anal).
11. Necrophilia
12. Defecation
13. Fisting
14. Bukkake
15. Any content or interactivity, the presentation of which would be
obscene, illegal or actionable under applicable laws.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
53
ATTACHMENT 2
ATTACHED TO AND MADE A PART OF EXHIBIT B TO
THE PRODUCT LICENSE AGREEMENT
BETWEEN
PLAYBOY ENTERPRISES INTERNATIONAL, INC.
AND
PLAY BEVERAGES, LLC
DATED AS OF NOVEMBER 1, 2006
EXAMPLE PRIVACY POLICY
----------------------
This Privacy Policy (the "Policy") applies to Playboy Enterprises, Inc.'s and
Playboy.com, Inc.'s (collectively, "Playboy") family of websites (the "Sites").
These include playboy.com; cyber.playboy.com; store.playboy.com;
auctions.playboy.com; playboynet.playboy.com; racingusa.playboy.com;
sportsbook.playboy.com; casino.playboy.com; and any other sites at which this
Policy appears. It does not apply to other online or offline Playboy sites,
products or services.
This Policy explains what information we collect about you and what we do with
it. We reserve the right to modify this policy at any time, and we will post any
new policy here. By using or navigating any of the Sites, you acknowledge that
you have read, understand and agree to be bound by this Policy or any modified
Policy as posted. If you do not agree to these terms, please do not use or visit
any of our Sites.
What information do we collect?
We collect personal information that you provide to us such as your name, e-mail
address, street address and telephone number. We also collect credit card
information from you. We generally collect this personal information on our
registration and order forms when you sign up to receive products or services
from any of our Sites. We may also collect information from our online surveys
such as age, gender and income level. Finally, we collect IP addresses and
anonymous demographic information.
What do we do with the information we collect?
We use personal information and other demographic or profile information you
provide to us to fulfill your order or request; to provide you with information
about Playboy and some of our partners; and to contact you when necessary.
We use IP addresses and anonymous demographic information to tailor your
experiences at our Sites by showing content in which we think you will be
interested and displaying content according to your preferences. Anonymous
demographic information is shared with advertisers and market researchers on an
aggregate basis.
We use information collected to evaluate and improve our services. We may
develop and use, in our sole discretion, consumer research which may be based on
your use of our services.
Personal information collected on the Sites is stored and processed in the
United States and by using this site, you consent to any such transfer of
information outside of your country.
Do we share the information we collect with third parties?
In some cases, we will share information we collect (including personal
information or anonymous demographic information) with third party companies who
may offer products or services in which we believe you may be interested. We
also share this information with third parties with whom we partner to
co-promote and administer sweepstakes and contests on our Sites. You may elect
not to receive promotional e-mails from us or other companies we select by
choosing one of the unsubscribe options described below.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
54
We may also share information we collect with third party service providers to
manage certain aspects of the services we provide, such as maintaining our
servers and processing or fulfilling orders for products and services you
purchase through the Sites.
We may also disclose your information in special cases if required to do so by
law, court order or other governmental authority or when we believe in good
faith that disclosing this information is otherwise necessary or advisable,
including, for instance, to identify, contact, or bring legal action against
someone who may be causing injury to or interfering with the rights or property
of Playboy, another user or anyone else that could be harmed by such activities.
Is the information submitted in public forums confidential?
No. The Sites may offer chat rooms, forums, message boards and/or news groups to
our users. Please remember that any information disclosed in these areas becomes
public information. Accordingly, you should exercise caution when deciding to
disclose your personal information and you do so at your own risk.
Do we use cookies?
Yes. Cookies are pieces of information generated by web servers and stored in
your computer for future access. The Sites use cookie technology to enhance your
online experience by making it easier for you to navigate through our Sites or
make a feature work better. Generally, cookies can be disabled. However, you
must accept cookies in order to navigate the Sites; register for our membership
Sites and order products from our online stores.
Do we use web beacons?
Yes. Some of our Sites may contain electronic images known as "web beacons" or
single-pixel gifs that allow us to count visitors to our Sites and deliver
co-branded services. Web beacons collect limited information including cookie
number, time and date of a page view and a description of the page on which the
web beacon resides.
Are the Sites secure?
We are committed to maintaining the security of your information and have
measures in place to protect against the loss, misuse and alteration of the
information under our control. All credit transactions occur in a secure area of
the Site using Secure Sockets Layer ("SSL") software to process orders. SSL
encrypts the information you input on the Sites. In addition, all information is
stored in a secure location behind a firewall with limited administrative
access.
Does this Policy apply to linked sites other than the Sites?
No. The Sites contain links to other Internet sites, resources and sources of
Playboy. By clicking on an ad banner or other link, you will be redirected off
the Sites and to third party websites. Playboy is not responsible for the
privacy policies of such sites. You should make sure that you read and
understand the privacy policies of these sites and direct any concerns regarding
external links to the site administrator or webmaster of that third party
website.
How do I unsubscribe?
All e-mails you receive from us will include specific instructions on how to
unsubscribe and you may unsubscribe at any time. Additionally, we give you the
following options for removing your information from our database:
(1) send an email to admin@playboy.com;
(2) select the opt-out link at the bottom of any Playboy email and
follow the instructions provided;
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
55
(3) send mail to the following address: Customer Service, Playboy.com,
Inc., 680 North Lake Shore Drive, Chicago, IL 60611.
Can I update/correct my information?
Yes. You may correct or update your personal information by sending us an email
at pb@playboy.com.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
56
ATTACHMENT 3
ATTACHED TO AND MADE A PART OF EXHIBIT B TO
THE PRODUCT LICENSE AGREEMENT
BETWEEN
PLAYBOY ENTERPRISES INTERNATIONAL, INC.
AND
PLAY BEVERAGES, LLC
DATED AS OF NOVEMBER 1, 2006
UNACCEPTABLE ADVERTISEMENT CATEGORIES ON E-COMMERCE WEB SITES
-------------------------------------------------------------
SEXUAL AIDS & DEVICES (TAKEN ON A CASE-BY-CASE BASIS)
Dildos
Vibrators - if implied use is sexual
Creams and ointments - that increase pleasure or claim to extend tumescence,
etc.
EXPLICIT SEXUAL MATERIAL
X-Rated videos
X-Rated audio cassettes
Sexually oriented telephone services
Explicit sex books
Suggestive T-shirts
X-Rated clothes (i.e., candypants)
Adult entertainment nightclubs and cabarets
MEDICAL
Growing new hair (including transplants) (TAKEN ON CASE-BY-CASE BASIS) Hypnotism
(i.e., stop smoking, lose weight) Breast/Penis enlargement
Super vitamins with unsubstantiated claims
Condoms - if copy is suggestive
Aphrodisiacs
Inhalants (i.e., amylnitrate)
Weight reducers
Hemorrhoid remedies
SELF-IMPROVEMENT/BEATING THE ODDS
Betting services
Books on cheating (cards, IRS, etc.)
Lotteries
Home study courses
DRUG PARAPHERNALIA
All items including rolling papers
WEAPONS
Hand guns
Switchblade knives
SUGGESTIVE NAMES
No drug related product names unless the description of the product's use is
clear.
COMPARISON ADVERTISING
Aggressive competitive ads that might create a problem with other advertisers.
Aggressively competitive claims which are not substantiated.
MISCELLANEOUS
No PLAYBOY name or logo without permission
No Nazi or anti-Semetical paraphernalia
No ads for competitive publications such as XXXXXXXXXXXXXXX
All mail-order must include a money-back guarantee
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
57
EXHIBIT C
ATTACHED HERETO AND MADE A PART OF
THE PRODUCT LICENSE AGREEMENT BETWEEN
PLAYBOY ENTERPRISES INTERNATIONAL, INC.
AND
PLAY BEVERAGES, LLC
DATED AS OF NOVEMBER 1, 2006
TO BE PUT ON GUARANTOR'S LETTERHEAD
NO REVISIONS MAY BE MADE TO THIS LETTER.
[DATE]
Playboy Enterprises International, Inc.
680 North Lake Shore Drive
Chicago, IL 60611
SUBJECT: GUARANTEE
Dear Sirs:
In order to induce you to continue with the Product License Agreement
dated as of November 1, 2006 (the "Agreement") with Play Beverages, LLC ("Play
Bev"), a ___________________ company of ___________________
("_________"),_________ hereby guarantees without any limitation of any kind,
the performance by Play Bev of all the terms and conditions of the Agreement,
and, therefore undertakes to be responsible to you, jointly and severally with
Play Bev for all liabilities of Play Bev arising out of its obligations under or
in connection with said Agreement or by reason of any breach thereof.
This Guarantee shall remain in force and may be called upon by you
without requiring you to commence any proceedings of any nature against Play Bev
pursuant to the terms of the Agreement.
Very truly yours,
By:
-------------------------
Title:
-------------------------
Date:
-------------------------
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
58
EXHIBIT D
ATTACHED HERETO AND MADE A PART OF
THE PRODUCT LICENSE AGREEMENT BETWEEN
PLAYBOY ENTERPRISES INTERNATIONAL, INC.
AND
PLAY BEVERAGES, LLC
DATED AS OF NOVEMBER 1, 2006
SUPPLIER/SUBCONTRACTOR CONTRACT
-------------------------------
1. By execution of this Supplier/Subcontractor Contract ("Contract"),
____________ ("Supplier") agrees and acknowledges that: (i) all images
and/or trademarks including, but not limited to PLAYBOY, (the "Playboy
Properties") applied at the request of Play Beverages, LLC
("Purchaser") to merchandise covered by this Contract are properties of
Playboy Enterprises International, Inc. ("Playboy"), and when used upon
merchandise means that such merchandise is sponsored, approved,
recommended or sold by Playboy or its licensees; (ii) Supplier will not
sell, ship or otherwise dispose of any such merchandise except upon the
order of Purchaser or Playboy; (iii) Supplier will never make, cause
others to make or assist others in making, any claim whatsoever to any
or all of the Playboy Properties or any trademark, image, designation,
name, phrase, design or symbol similar thereto in connection with the
manufacture, advertising, promotion, sale or distribution of
merchandise; and (iv) Supplier will defend, indemnify and hold harmless
Purchaser and Playboy and the distributors and dealers and the officers
and employees of each of the foregoing against all liability whatsoever
which may be incurred by them or any of them as a result of any alleged
defects in material or workmanship in the merchandise covered by this
Contract.
2. Supplier agrees that no production or manufacture of any merchandise
covered by this Contract will commence until this Contract has been
signed, dated and returned by Supplier to Purchaser. Supplier further
agrees that it will not produce, cause to be produced or assist in the
production of more units than are specified by Purchaser nor will
Supplier produce, cause to be produced or assist in the production of
any product or item not specifically requested by Purchaser using any
or all of the Playboy Properties or any trademarks, images,
designations, names, phrases, designs or symbols similar to any or all
of the Playboy Properties during or at any time after the completion of
merchandise requested by this Contract.
3. Supplier will, upon request from Purchaser or Playboy, deliver to
Purchaser or will destroy in the presence of Purchaser or its
representative(s), all molds, designs or any other elements used in
reproducing any or all of the Playboy Properties.
4. Playboy is an intended third-party beneficiary of this Contract.
5. This Contract, when attached to a purchase order, shall consist of the
entire agreement between the parties and shall supersede any
conflicting or contrary terms and conditions of any purchase order or
other order form whether supplied by Purchaser or Supplier.
6. This Contract may not be modified or terminated except in writing, and
no claimed modification, termination or waiver shall be binding unless
also signed by an authorized representative of Playboy.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
59
7. VIOLATION OF THIS AGREEMENT BY SUPPLIER MAY RESULT IN PROSECUTION FOR
TRADEMARK INFRINGEMENT, UNFAIR COMPETITION AND OTHER CAUSES OF ACTION
AND THE IMPOSITION OF FINES AND/OR CRIMINAL PENALTIES.
SUPPLIER PURCHASER
PLAY BEVERAGES, LLC
(Name of Company - Please Print)
By: By:
------------------------ ----------------------
Title: Title:
------------------------ ----------------------
Date: Date:
------------------------ ----------------------
SUPPLIER INFORMATION PLAYBOY
Name: Name: PLAYBOY ENTERPRISES
------------------------ INTERNATIONAL, INC.
Address: Address: 730 Fifth Avenue
------------------------
New York, NY 10019
------------------------
Contact: Contact: Sarah Haney
------------------------
Telephone: Telephone: 212 261 5000
------------------------
Facsimile: Facsimile: 212 957 2950
------------------------
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
60
EXHIBIT E
ATTACHED HERETO AND MADE A PART OF
THE PRODUCT LICENSE AGREEMENT BETWEEN
PLAYBOY ENTERPRISES INTERNATIONAL, INC.
AND
PLAY BEVERAGES, LLC
DATED AS OF NOVEMBER 1, 2006
DISTRIBUTOR CONTRACT
--------------------
1. By execution of this Distributor Contract ("Contract"), ___________
("Distributor") agrees and acknowledges that: (i) all trademarks and/or
images including, but not limited to, PLAYBOY (the "Playboy
Properties") used on _____________ (the "Products") distributed in
__________ (the "Territory") at the request of Play Beverages, LLC
("Playboy's Licensee") are trademarks of Playboy Enterprises
International, Inc. ("Playboy"), and when used upon the Products means
that such Products are sponsored, approved, recommended or sold by
Playboy or its licensees; (ii) Distributor will not sell, ship or
otherwise dispose of any Products except upon the order and within the
specifications and guidelines of Playboy's Licensee or Playboy; (iii)
Distributor will never make, cause others to make or assist others in
making, any claim whatsoever to any or all of the Trademarks or any
trademark, designation, name, phrase, design or symbol similar thereto
in connection with the manufacture, advertising, promotion, sale or
distribution of merchandise; and (iv) Distributor will defend,
indemnify and hold harmless Playboy's Licensee and Playboy and the
distributors and dealers and the officers and employees of each of the
foregoing against all liability whatsoever which may be incurred by
them or any of them as a result of Distributor's distribution of the
Products covered by this Contract. In no event may Distributor
advertise, sell or distribute the Products outside of the Territory.
2. Distributor agrees that no distribution of the Products covered by this
Contract will commence until this Contract has been signed, dated and
returned by Distributor to Playboy's Licensee. Distributor further
agrees that it will not distribute, cause to be distributed or assist
in the distribution of the Products outside the Territory or other than
as specified by Playboy's Licensee nor will Distributor distribute,
cause to be distributed or assist in the distribution of any product or
item not specifically requested by Playboy's Licensee which bears any
or all of the Playboy Properties or any trademarks, images,
designations, names, phrases, designs or symbols similar to any or all
of the Playboy Properties during or at any time after the distribution
of the Products requested by this Contract. Within member states of the
European Community (the "EU"), rights or obligations created or imposed
by this Contract may not be exercised or enforced in a manner contrary
to Community Law. Licensee may not solicit orders from outside the
Territory nor engage in any commercial or promotional activities with
respect to the Products outside the Territory, the right of any
purchaser of the Products within the Territory to export the Products
purchased to other member states of the EU staying unaffected.
Limitation of the exercise of rights or the enforcement of obligations
due to Community Law or the provisions of the foregoing subparagraphs
shall not affect the validity or enforceability of any other rights and
obligations under this Contract.
3. Any advertisement, promotion, sale or distribution of the Products via
an "E-Commerce Web Site" or the fulfillment of any orders for the
Products placed via any "E-Commerce Web Site" shall be subject to the
terms and conditions of the E-commerce Guidelines attached to this
Contract as Attachment 1 and made a part hereof. In the event
Distributor fails to adhere to any of the terms and conditions of the
E-commerce Guidelines, Playboy's Licensee may immediately terminate
this Contract upon written notice to Distributor. "E-Commerce Web Site"
shall mean promoting, offering, providing or selling the Products using
or via communications involving the TCP/IP Protocol or any TCP/IP
Successor. "TCP/IP Protocol" (which stands for Transmission Control
Protocol/Internet Protocol) shall mean the two-layered program that is
the basic communication language or protocol of publicly accessible
computer networks such as the Internet and private computer networks
such as intranets and extranets. "TCP/IP Successors" shall mean
programs, languages, protocols or other technical means that are being
developed or that have yet to be developed which are intended to
supplement, supersede or replace TCP/IP or its use for communications
on computer networks.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
61
4. Distributor will be responsible for ensuring all of its distributors
(not retailers) for the Products adhere to and perform their duties in
accordance with the terms and conditions of this Contract including
adhering to the Territory restrictions.
5. Distributor will maintain accurate records concerning the distribution
of the Products and shall supply within ten (10) days of a request from
Playboy or Playboy's Licensee a statement detailing Distributor's
accounts for the Products. Upon request from Playboy's Licensee and/or
Playboy, Playboy's Licensee and/or Playboy shall also have the right at
all reasonable hours to conduct an examination of Distributor's books
and records and shall have the right to make extracts therefrom in
order to ensure Distributor's compliance with this Contract.
6. Playboy is an intended third-party beneficiary of this Contract.
7. This Contract, when attached to a distribution order, shall consist of
the entire agreement between the parties and shall supersede any
conflicting or contrary terms and conditions of any distribution order
or other order form whether supplied by Distributor or Playboy's
Licensee.
8. This Contract may not be modified or terminated except in writing, and
no claimed modification, termination or waiver shall be binding unless
also signed by an authorized representative of Playboy.
9. If Distributor violates any of the terms and conditions of this
Contract, Playboy's Licensee and/or Playboy will have the right to
immediately terminate this Contract upon written notice to Distributor.
In such event, Distributor must provide Playboy's Licensee and/or
Playboy within ten (10) days of the date of such notice of termination
with a statement setting forth the number of Products on hand and a
listing of all of Distributor's accounts for the Products.
10. In the event the Product Licensee Agreement between Playboy and
Playboy's Licensee dated as of November 1, 2006 (the "Agreement")
expires or is terminated, this Distributor Contract shall immediately
terminate upon the expiration or termination of the Agreement.
11. Playboy shall have the right to terminate this Distributor Contract
upon not less than ten (10) days prior written notice.
12. VIOLATION OF THIS AGREEMENT BY DISTRIBUTOR MAY RESULT IN PROSECUTION
FOR TRADEMARK INFRINGEMENT, UNFAIR COMPETITION AND OTHER CAUSES OF
ACTION AND THE IMPOSITION OF FINES AND/OR CRIMINAL PENALTIES.
DISTRIBUTOR PLAYBOY'S LICENSEE
PLAY BEVERAGES, LLC
(Name of Company - Please Print)
By: By:
-------------------------- ----------------------
Title: Title:
-------------------------- ----------------------
Date: Date:
-------------------------- ----------------------
DISTRIBUTOR INFORMATION PLAYBOY
Name: Name: PLAYBOY ENTERPRISES
--------------------------
INTERNATIONAL, INC.
Address: Address: 730 Fifth Avenue
--------------------------
New York, NY 10019
--------------------------
Contact: Contact: Sarah Haney
--------------------------
Telephone: Telephone: 212 261 5000
--------------------------
Facsimile: Facsimile: 212 957 2950
--------------------------
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
62
ATTACHMENT 1
ATTACHED TO AND MADE A PART OF
THE DISTRIBUTOR CONTRACT BETWEEN
PLAY BEVERAGES, LLC
AND
-----------------------------
DATED AS OF ________________
E-COMMERCE GUIDELINES
---------------------
1. Distributor's E-commerce Web Site: Distributor may advertise and offer
the availability of the Products on its own E-commerce Web Site and may
accept orders for the Products placed through its own E-commerce Web
Site subject to the following provisions:
a. Distributor's E-commerce Web Site must, in conjunction with a link
to www.playboystore.com (or any other url as Playboy's Licensee
may direct from time to time), inform visitors to such E-commerce
Web Site that the Products and other fine Playboy-branded Products
are available for sale through such link.
b. Distributor may not advertise or promote the availability of the
Products on its own E-commerce Web Site, or accept orders for the
Products through its own E-commerce Web Site, if Playboy-branded
products [including, but not limited to, the Products, other
Playboy-branded items not in the Product category, video media and
Spice branded products] constitute twenty percent (20%) or more of
any such E-commerce Web Site's total product offerings. For
purposes of clarification, such Playboy-branded products (i) may
not be the only branded products advertised, promoted and sold on
and through such E-commerce Web Site; and (ii) must not constitute
twenty percent (20%) or more of all products advertised, promoted
or sold on such E-commerce Web Site.
c. Distributor may not use any of the Trademarks, or portions
thereof, in connection with the domain name, html title, meta tags
or other hidden html text for its E-commerce Web Site.
d. Distributor will ensure that its E-commerce Web Site continuously
displays a banner in the form and content acceptable to Playboy
informing all visitors to such E-commerce Web Site that no orders
for the Products will be accepted and no Products will be shipped
outside the Territory.
e. Distributor will ensure that its E-commerce Web Site continuously
displays the trademark or copyright notices as directed by
Playboy's Licensee in connection with the display, advertisement
and offer of the Products.
f. None of the Playboy Properties used in conjunction with the
advertisement and offer of the Products on Distributor's
E-commerce Web Site may be changed, manipulated or modified in
appearance. Distributor may not use the Playboy Properties to
advertise, promote or sell non-Playboy branded products or
services.
g. All aspects of the display of the Playboy Properties and Products
on Distributor's E-commerce Web Site will be subject to the prior
and ongoing approval of Playboy, including design, layout,
content, advertising and links. Distributor must obtain Playboy's
approval prior to any change in already approved design, layout,
content advertising or links of Distributor's E-commerce Web Site.
h. Notwithstanding anything hereof to the contrary, Playboy's
Licensee shall have the right to immediately withdraw the
permission set forth in this Attachment 1 and the Distributor
Contract upon receipt of the written notice Playboy's Licensee if
Playboy deems, in its sole discretion, that any aspect of
Distributor's E-commerce Web Site, including, but not limited to,
content, advertising, links or html code, violates the Standards
and Practices, which Playboy may amend from time to time, set
forth on Attachment 1.A. attached hereto and made a part hereof.
In the event of such withdrawal, Distributor must immediately
remove all of the Playboy Properties and the Products from
Distributor's E-commerce Web Site.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
63
i. Distributor shall include its own Privacy Policy on Distributor's
E-commerce Web Site consistent with the terms and conditions of
Playboy.com, Inc.'s privacy policy which is attached hereto by way
of example as Attachment 1.B.
j. None of the advertisements contained on Distributor's E-commerce
Web Site shall include those categories set forth on Attachment
1.C. attached hereto and made a part hereof unless approved in
advance in writing by Playboy.
2. E-tailers' and Retailers' E-commerce Web Sites: Distributor may sell
and distribute the Products to E-tailers and retailers which may sell
and distribute the Products via such E-tailers' or retailers'
E-commerce Web Sites provided that:
a. Distributor will not sell or distribute the Products to any
E-tailer or retailer who will advertise, promote and offer
Playboy-branded products on an E-commerce Web Site if
Playboy-branded products [including, but not limited to, the
Products, other Playboy-branded items not in the Product category,
video media and Spice branded products] constitute twenty percent
(20%) or more of any such E-commerce Web Site's total product
offerings. For purposes of clarification, such Playboy-branded
products (i) may not be the only branded products advertised,
promoted and sold on and through any such E-commerce Web Site; and
(ii) must not constitute twenty percent (20%) or more of all
products advertised, promoted or sold on and through any such
E-commerce Web Site.
b. Distributor will use commercially reasonable efforts to ensure
that such E-tailers and retailers follow the guidelines set forth
in these E-commerce Guidelines for the advertisement, promotion
and offer of the Products via any E-commerce Web Site; and
c. Unless authorized by Playboy in writing, Distributor will not sell
or distribute the Products to an E-tailer or retailer: (i) who is
identified with or by the names of any adult male
lifestyle/entertainment publications which are, in Playboy's
opinion, competitive with PLAYBOY Magazine; (ii) who will
advertise, promote or offer the Products on an E-commerce Web Site
that is identified with or by the names of any adult male
lifestyle/entertainment publications which are, in Playboy's
opinion competitive with PLAYBOY Magazine; or (iii) who will
advertise, promote, or offer the Products for sale on an
E-commerce Web Site in conjunction with any products or services
identified with or by the names of any adult male
lifestyle/entertainment publications which are, in Playboy's
opinion, competitive with PLAYBOY Magazine.
In the event Playboy or Playboy's Licensee discovers any E-commerce Web
Site which is in violation of any of the guidelines set forth above,
Distributor, upon the prior written notice of Playboy's Licensee, shall
cease all sales and distribution of the Products to the retail or
E-tailer owner or controller of any such E-commerce Web Site.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
64
ATTACHMENT 1.A.
ATTACHED TO AND MADE A PART OF ATTACHMENT 1 TO
THE DISTRIBUTOR CONTRACT
BETWEEN
PLAY BEVERAGES, LLC
AND
-----------------------------
DATED AS OF ________________
STANDARDS AND PRACTICES
-----------------------
The following may not be depicted (in actual or simulated form) or explicitly
described on any E-commerce Web Sites displaying the Playboy Properties or the
Products:
1. Violence
Violent behavior and links to sexuality or eroticism with violence,
directly or indirectly.
2. Rape
Rape (including so-called "implicit" or "consenting" rape) is strictly
forbidden.
3. Incest
4. Sadism and Masochism
5. Bondage
6. Bestiality
7. Child Pornography
No nude or seminude photos of anyone under 18 years old at the time
such photos were taken. Even if a model visibly looks or is actually
older than 18, no depictions of any model who is portrayed as younger
than 18 in any sexual act. No explicit description of or explicit
references to anyone under 18 years of age.
8. Extreme Sexual Explicitness
No penetration, erections, ejaculations or close-up shots or
descriptions of oral sex.
9. Graphic Close-ups of Genitals
No close-ups or descriptions of genitals, particularly in the context
of actual or simulated sexual activity.
10. Actual Sexually Explicit Conduct
No sexual intercourse (including genital-genital, oral-genital,
anal-genital or oral-anal).
11. Necrophilia
12. Defecation
13. Fisting
14. Bukkake
15. Any content or interactivity, the presentation of which would be
obscene, illegal or actionable under applicable laws.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
65
ATTACHMENT 1.B.
ATTACHED TO AND MADE A PART OF ATTACHMENT 1 TO
THE DISTRIBUTOR CONTRACT
BETWEEN
PLAY BEVERAGES, LLC
AND
-----------------------------
DATED AS OF ________________
EXAMPLE PRIVACY POLICY
----------------------
This Privacy Policy (the "Policy") applies to Playboy Enterprises, Inc.'s and
Playboy.com, Inc.'s (collectively, "Playboy") family of websites (the "Sites").
These include playboy.com; cyber.playboy.com; store.playboy.com;
auctions.playboy.com; playboynet.playboy.com; racingusa.playboy.com;
sportsbook.playboy.com; casino.playboy.com; and any other sites at which this
Policy appears. It does not apply to other online or offline Playboy sites,
products or services.
This Policy explains what information we collect about you and what we do with
it. We reserve the right to modify this policy at any time, and we will post any
new policy here. By using or navigating any of the Sites, you acknowledge that
you have read, understand and agree to be bound by this Policy or any modified
Policy as posted. If you do not agree to these terms, please do not use or visit
any of our Sites.
What information do we collect?
We collect personal information that you provide to us such as your name, e-mail
address, street address and telephone number. We also collect credit card
information from you. We generally collect this personal information on our
registration and order forms when you sign up to receive products or services
from any of our Sites. We may also collect information from our online surveys
such as age, gender and income level. Finally, we collect IP addresses and
anonymous demographic information.
What do we do with the information we collect?
We use personal information and other demographic or profile information you
provide to us to fulfill your order or request; to provide you with information
about Playboy and some of our partners; and to contact you when necessary.
We use IP addresses and anonymous demographic information to tailor your
experiences at our Sites by showing content in which we think you will be
interested and displaying content according to your preferences. Anonymous
demographic information is shared with advertisers and market researchers on an
aggregate basis.
We use information collected to evaluate and improve our services. We may
develop and use, in our sole discretion, consumer research which may be based on
your use of our services.
Personal information collected on the Sites is stored and processed in the
United States and by using this site, you consent to any such transfer of
information outside of your country.
Do we share the information we collect with third parties?
In some cases, we will share information we collect (including personal
information or anonymous demographic information) with third party companies who
may offer products or services in which we believe you may be interested. We
also share this information with third parties with whom we partner to
co-promote and administer sweepstakes and contests on our Sites. You may elect
not to receive promotional e-mails from us or other companies we select by
choosing one of the unsubscribe options described below.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
66
We may also share information we collect with third party service providers to
manage certain aspects of the services we provide, such as maintaining our
servers and processing or fulfilling orders for products and services you
purchase through the Sites.
We may also disclose your information in special cases if required to do so by
law, court order or other governmental authority or when we believe in good
faith that disclosing this information is otherwise necessary or advisable,
including, for instance, to identify, contact, or bring legal action against
someone who may be causing injury to or interfering with the rights or property
of Playboy, another user or anyone else that could be harmed by such activities.
Is the information submitted in public forums confidential?
No. The Sites may offer chat rooms, forums, message boards and/or news groups to
our users. Please remember that any information disclosed in these areas becomes
public information. Accordingly, you should exercise caution when deciding to
disclose your personal information and you do so at your own risk.
Do we use cookies?
Yes. Cookies are pieces of information generated by web servers and stored in
your computer for future access. The Sites use cookie technology to enhance your
online experience by making it easier for you to navigate through our Sites or
make a feature work better. Generally, cookies can be disabled. However, you
must accept cookies in order to navigate the Sites; register for our membership
Sites and order products from our online stores.
Do we use web beacons?
Yes. Some of our Sites may contain electronic images known as "web beacons" or
single-pixel gifs that allow us to count visitors to our Sites and deliver
co-branded services. Web beacons collect limited information including cookie
number, time and date of a page view and a description of the page on which the
web beacon resides.
Are the Sites secure?
We are committed to maintaining the security of your information and have
measures in place to protect against the loss, misuse and alteration of the
information under our control. All credit transactions occur in a secure area of
the Site using Secure Sockets Layer ("SSL") software to process orders. SSL
encrypts the information you input on the Sites. In addition, all information is
stored in a secure location behind a firewall with limited administrative
access.
Does this Policy apply to linked sites other than the Sites?
No. The Sites contain links to other Internet sites, resources and sources of
Playboy. By clicking on an ad banner or other link, you will be redirected off
the Sites and to third party websites. Playboy is not responsible for the
privacy policies of such sites. You should make sure that you read and
understand the privacy policies of these sites and direct any concerns regarding
external links to the site administrator or webmaster of that third party
website.
How do I unsubscribe?
All e-mails you receive from us will include specific instructions on how to
unsubscribe and you may unsubscribe at any time. Additionally, we give you the
following options for removing your information from our database:
(1) send an email to admin@playboy.com;
(2) select the opt-out link at the bottom of any Playboy email and
follow the instructions provided;
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
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67
(3) send mail to the following address: Customer Service, Playboy.com,
Inc., 680 North Lake Shore Drive, Chicago, IL 60611.
Can I update/correct my information?
Yes. You may correct or update your personal information by sending us an email
at pb@playboy.com.
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
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ATTACHMENT 1.C.
ATTACHED TO AND MADE A PART OF ATTACHMENT 1 TO
THE DISTRIBUTOR CONTRACT
BETWEEN
PLAY BEVERAGES, LLC
AND
-----------------------------
DATED AS OF ________________
UNACCEPTABLE ADVERTISEMENT CATEGORIES ON E-COMMERCE WEB SITES
-------------------------------------------------------------
SEXUAL AIDS & DEVICES (TAKEN ON A CASE-BY-CASE BASIS)
Dildos
Vibrators - if implied use is sexual
Creams and ointments - that increase pleasure or claim to extend tumescence,
etc.
EXPLICIT SEXUAL MATERIAL
X-Rated videos
X-Rated audio cassettes
Sexually oriented telephone services
Explicit sex books
Suggestive T-shirts
X-Rated clothes (i.e., candypants)
Adult entertainment nightclubs and cabarets
MEDICAL
Growing new hair (including transplants) (TAKEN ON CASE-BY-CASE BASIS)
Hypnotism (i.e., stop smoking, lose weight)
Breast/Penis enlargement
Super vitamins with unsubstantiated claims
Condoms - if copy is suggestive
Aphrodisiacs
Inhalants (i.e., amylnitrate)
Weight reducers
Hemorrhoid remedies
SELF-IMPROVEMENT/BEATING THE ODDS
Betting services
Books on cheating (cards, IRS, etc.)
Lotteries
Home study courses
DRUG PARAPHERNALIA
All items including rolling papers
WEAPONS
Hand guns
Switchblade knives
SUGGESTIVE NAMES
No drug related product names unless the description of the product's use is
clear.
COMPARISON ADVERTISING
Aggressive competitive ads that might create a problem with other advertisers.
Aggressively competitive claims which are not substantiated.
MISCELLANEOUS
No PLAYBOY name or logo without permission
No Nazi or anti-Semetical paraphernalia
No ads for competitive publications such as XXXXXXXXXXXXXX
All mail-order must include a money-back guarantee
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
69
EXHIBIT F
ATTACHED HERETO AND MADE A PART OF
THE PRODUCT LICENSE AGREEMENT BETWEEN
PLAYBOY ENTERPRISES INTERNATIONAL, INC.
AND
PLAY BEVERAGES, LLC
DATED AS OF NOVEMBER 1, 2006
PROPRIETARY MATERIAL
--------------------
Item Quantity
1.
2.
3.
Received by: Sent by:
PLAY BEVERAGES, LLC PLAYBOY ENTERPRISES
INTERNATIONAL, INC.
By: By:
---------------------------- ------------------------
Title: Title:
---------------------------- ------------------------
Date: Date:
---------------------------- ------------------------
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
70
EXHIBIT G
ATTACHED HERETO AND MADE A PART OF
THE PRODUCT LICENSE AGREEMENT BETWEEN
PLAYBOY ENTERPRISES INTERNATIONAL, INC.
AND
PLAY BEVERAGES, LLC
DATED AS OF NOVEMBER 1, 2006
ADDITIONAL TERMS AND CONDITIONS
-------------------------------
1. XXXXXXXXXXX
2. XXXXXXXXXXX
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
71
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