Contemplating an individual's endorsement of a product for sale.
Contemplating an Individual’s Endorsement of a Product for Sale
THIS AGREEMENT is made as of this [Date]by and between [INSERT NAME OF ENDORSED COMPANY] a [INSERT STATE OF INCORPORATION OF ENDORSED COMPANY]corporation with offices at [INSERT ADDRESS OF ENDORSED COMPANY](“Endorsed Constructor”) and[INSERT NAME OF ENDORSER], an individual whose address is [INSERT ENDORSER’S ADDRESS] (“Endorser”) (collectively the “Parties”).
WHEREAS, Endorser is recognized and widely known throughout the world as a [specify occupation or claim to fame of Endorser]; and
WHEREAS, Endorser’s name, by virtue of [his/her] ability and experience, has acquired a meaning in the mind of the purchasing public important to the advertising, promotion, and sale of services and merchandise; and
WHEREAS, Endorsed Constructor is engaged in the manufacture, distribution, and sale over the Internet of [specify products or services] (“Product”); and
WHEREAS, Endorsed Constructor is desirous of acquiring the exclusive right and license to utilize Endorser’s name in connection with the advertisement, promotion, and sale of the Product and Endorser is willing to grant such right and license.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other good and valuable consideration, it is agreed as follows:
1. GRANT OF RIGHTS
Subject to the terms and conditions set forth herein, Endorser grants to Endorsed Constructor the exclusive right and license during the Term of this Agreement and within the Territory to use Endorser’s name, nickname, initials, autograph, facsimile signature, photograph, likeness, and/or endorsement (the “Property”) in connection with the advertisement, promotion, and sale of the Product in the Territory as well as the right to use such Property on the Product and related packaging.
This Agreement shall be effective as of the date of execution by both parties and shall extend for the term set forth in Schedule A attached hereto (the “Term”).
A. In consideration for the licenses granted hereunder, Endorsed Constructor agrees to pay to Endorser the royalty recited in Schedule A (the Royalty) based on Endorsed Constructor’s Net Sales of Product.
B. The Royalty owed Endorser shall be calculated on a quarterly calendar basis (“Royalty Period”) and shall be payable no later than thirty (30) days after the termination of the preceding full calendar quarter, i.e., commencing on the first (1st) day of January, April, July, and October, except that the first and last calendar quarters may be “short” depending on the effective date of this Agreement.
C. For each Royalty Period, Endorsed Constructor shall provide Endorser with a written royalty statement in a form acceptable to Endorser. Such royalty statement shall be certified as accurate by a duly authorized officer of Endorsed Constructor reciting, on a country-by-country basis, the stock number, item, units sold, description, quantity shipped, gross invoice, amount billed customers less discounts, allowances, returns, and reportable sales for each Product. Such statements shall be furnished to Endorser regardless of whether any Products were sold during the Royalty Period or whether any actual Royalty was owed.
D. Endorsed Constructor agrees to pay to Endorser an Advance against Royalties in the amount recited in Schedule A, which may be credited against Endorsed Constructor’s actual royalty obligation to Endorser.
E. “Net Sales” shall mean Endorsed Constructor’s gross sales (the gross invoice amount billed customers) of Product, less customary discounts and allowances and, further, less any bona fide returns.
F. A Royalty obligation shall accrue upon the sale of the Product regardless of the time of collection by Endorsed Constructor A Product shall be considered “sold” when such Product is billed, invoiced, shipped, or paid for, whichever occurs first.
G. The receipt or acceptance by Endorser of any royalty statement or payment shall not prevent Endorser from subsequently challenging the validity or accuracy of such statement or payment.
H. Endorsed Constructor’s obligations for the payment of Royalties shall survive expiration or termination of this Agreement and will continue for as long as Endorsed Constructor continues to sell the Product.
I. All payments due Endorser shall be made in U.S. currency by check drawn on a U.S. bank, unless otherwise specified by Endorser.
J. Late payments shall incur interest at the Wall Street Journal Prime Rate per month from the date such payments were originally due.
4. PROMOTIONAL APPEARANCES
A. If requested to do so by Endorsed Constructor, Endorser agrees to make [himself/herself] available [number] times in each year of the Term for photographs for use in Endorsed Constructor’s advertising.
B. If requested to do so by Endorsed Constructor, Endorser shall make Four (4) public appearances in each year of the Term for the purpose of promoting the Product. If no photo sessions are required by Endorser in a given year, then Endorser shall make Six (6) public appearances in that year.
C. Endorsed Constructor recognizes that Endorser has a busy schedule as well as a desire to take land transportation in lieu of air transportation. As such, Endorsed Constructor agrees to provide Endorser with at least thirty (30) days’ written notice of any photographic sessions or public appearances to permit Endorser to properly schedule the session or appearance.
D. With respect to each photo session or public appearance as defined above, Endorsed Constructor agrees to pay all reasonable out of pocket expenses incurred by Endorser in connection with such session or appearance. No other compensation shall be required.
E. Endorsed Constructor shall not schedule any such session or appearance at a time that would conflict with Endorser’s performance of his or her obligations as a performer.
5. NOTICES AND PAYMENTS
Any notice required to be given pursuant to this Agreement shall be in writing and mailed to Endorser at such address as is designated in writing to Endorsed Constructor by certified or registered mail, return receipt requested, or delivered by a national overnight express service.
6. RECORD INSPECTION AND AUDIT
A. Endorser or his or her representatives shall have the right, upon reasonable notice, to inspect Endorsed Constructor’s books and records and all other documents and material in Endorsed Constructor’s possession or control with respect to the subject matter of this Agreement. Endorser shall have free and full access thereto for such purposes and may make copies thereof.
B. In the event that such inspection reveals an underpayment by Endorsed Constructor of the actual Royalty owed Endorser, Endorsed Constructor shall pay the difference, plus interest calculated at the rate of Wall Street Journal Prime Rate per month. If such underpayment be in excess of One Hundred Thousand Dollars ($100,000) for any Royalty Period, Endorsed Constructor shall also reimburse Endorser for the cost of such inspection.
C. All books and records relative to Endorsed Constructor’s obligations hereunder shall be maintained and made accessible to Endorser for inspection at a location in the United States for at least three (3) years after termination of this Agreement.
7. ENDORSED PRODUCTS FOR ENDORSER’S USE
During the Term of this Agreement, Endorsed Constructor shall supply Endorser, at no charge, such amounts of Product as Endorser may reasonably request for his or her own personal use or for distribution in connection with charitable events.
8. LABELING OF ENDORSED PRODUCTS
Each Product that is distributed or sold in the Territory shall have some part or all of Endorser’s endorsement affixed thereto or imprinted thereon.
9. RESERVATION OF RIGHTS
A. Subject to the terms of this Agreement, Endorser shall retain all rights in and to his or her name, his or her right of publicity, and the endorsement and, whether during the Term or any extension thereof, Endorser shall not be prevented from using, permitting, or licensing others to use his or her name or endorsement in connection with the advertisement, promotion, and sale of any product or service other than the Product or those that are substantially similar to the Product. Endorsed Constructor and Endorser agree that they shall take all necessary steps during the Term to protect the endorsement in connection with the advertisement, promotion, and sale of the Product.
B. It is understood and agreed that Endorser shall retain all right, title, and interest in his or her likeness, name, and/or trademarks, where applicable, except as licensed hereunder.
C. The parties agree to execute any documents reasonably requested by the other party to effect any of the above provisions.
10. QUALITY CONTROL
A. Endorsed Constructor shall fully comply with the marking provisions of the intellectual property laws of the applicable countries in the Territory with respect to the Product bearing Endorser’s name and likeness.
B. The Products shall be of a high quality at least equal to comparable products manufactured and marketed by Endorsed Constructor and in conformity with a standard sample approved by Endorser.
C. If the quality of a class of the Product falls below such a production-run quality, as previously approved by Endorser, Endorsed Constructor shall use its best efforts to restore such quality. In the event that Endorsed Constructor has not taken reasonable steps to restore such quality within sixty (60) days after notification by Endorser, Endorser shall have the right to terminate this Agreement.
D. At least once during each calendar year, Endorsed Constructor shall submit to Endorser Four (4) samples of the Product for approval.
11. REPRESENTATIONS, WARRANTIES AND INDEMNITY
A. Endorser represents and warrants that he or she has not granted nor will he or she grant to any other party any right, permission, or license to use the Property in connection with the advertisement, sale, or promotion of the Product or in connection with products that are identical or substantially similar to the Product.
B. Endorser further represents and warrants to Endorsed Constructor that he or she has the full right, power, and authority to grant the Property herein.
C. Endorser further represents and warrants that he or she has not misrepresented or concealed anything with respect to his or her background that may have a prejudicial effect on the value of the endorsement, that he or she is in good health and does not plan to retire during the Term of this Agreement, and that he or she has not engaged nor will he or she engage during the Term of this Agreement in any activity (criminal or otherwise) that could potentially have a negative impact on the Product.
D. Endorsed Constructor agrees to defend, indemnify, and hold Endorser harmless against all costs, expenses, and losses (including reasonable attorney fees and costs) incurred through claims of third parties against Endorser based on the manufacture or sale of the Product including, but not limited to, actions founded on product liability.
E. Endorser agrees to defend, indemnify, and hold Endorsed Constructor, and its officers, directors, agents, and employees, harmless against all costs, expenses, and losses (including reasonable attorney fees and costs) incurred through claims of third parties against Endorsed Constructor based on a breach by Endorser of any representation and/or warranty made in this Agreement or with respect to any third-party claims for infringement involving the use of the Property by Endorsed Constructor.
Endorsed Constructor shall, throughout the Term of the Agreement, obtain and maintain at its own cost and expense from a qualified insurance Endorsed Constructor licensed to do business in New York and having a Moody’s Rating of A- or better, standard Product Liability Insurance naming Endorser as an additional insured. Such policy shall provide protection against all claims, demands, and causes of action arising out of any defects or failure to perform, alleged or otherwise, of the Product or any material used in connection therewith or any use thereof. The amount of coverage shall be as specified in Schedule A attached hereto. The policy shall provide thirty (30) days’ notice to Endorser from the insurer by registered or certified mail, return receipt requested, in the event of any modification, cancellation, or termination thereof. Endorsed Constructor agrees to furnish Endorser a certificate of insurance evidencing such insurance prior to the manufacture, distribution, or sale of the Product.
A. Endorser shall have the right to terminate this Agreement upon sixty (60) days prior written notice to Endorsed Constructor in the event of the appearance of any of the following contingencies:
1. If Endorsed Constructor is adjudicated insolvent, declares bankruptcy, or fails to continue its business of selling the Product; provided, however, that nothing contained in this Agreement shall obligate Endorsed Constructor to sell any specific quantities of Product during the Term;
2. In the event Endorsed Constructor fails to make payment to Endorser of any sums due pursuant to this Agreement within thirty (30) days that such payment is due; or
3. In the event that Endorsed Constructor fails to maintain product liability insurance as herein provided.
B. Endorsed Constructor shall have the right to terminate this Agreement upon fifteen (15) days prior written notice to Endorser or his or her legal representative in the event that Endorser does any of the following:
1. Engages in illegal, immoral, or criminal conduct resulting in a felony conviction;
2. Misrepresents or conceals anything in his or her background that could be detrimental to the value of the endorsement being made;
3. Appears in less than [number] [specify type of entertainment property, e.g., motion picture] and as a [specify role, e.g., sportscaster] in less than [number] [specify type of event, e.g., games] during any calendar year;
4. Engages in conduct contrary to the best interests of Endorsed Constructor;
5. Engages in conduct that offends the sensitivities of a significant portion of the population;
6. Engages in conduct that could bring Endorser into public disrepute; or
7. Retires from the industry.
C. Either party may terminate this Agreement upon sixty (60) days’ written notice to the other party in the event of a breach of any provision of this Agreement by the other party, provided that, during sixty (60) day period, the breaching party fails to cure such breach.
D. Endorser shall have the right to terminate this Agreement at any time upon sixty (60) days’ written notice to Endorsed Constructor, such termination to become effective at the conclusion of such sixty (60) day period.
14. POST-TERMINATION RIGHTS
A. Not less than thirty (30) days prior to the expiration of this Agreement or immediately upon termination thereof, Endorsed Constructor shall provide Endorser with a complete schedule of all inventory of Product then on hand bearing the Property (the Inventory).
B. Endorser agrees that Endorsed Constructor shall, for a period of three (3) months (Sell Off Period) following the effective date of termination, have the right to continue to sell the Product bearing the Property that was manufactured or ordered prior to the effective date of termination. Such sales shall be made subject to all the provisions of this Agreement including the payment of a Royalty that shall be due within ninety (90) days after the close of the Sell Off Period.
C. Upon the expiration or termination of this Agreement, all rights granted to Endorsed Constructor under this Agreement shall forth with terminate and immediately revert to Endorser, and Endorsed Constructor shall discontinue all use of and reference to the Property.
D. In the event of termination of this Agreement other than because of a breach by Endorser of its representations and warranties, all monies paid to Endorser shall be deemed nonrefundable. In the event of termination of this Agreement by Endorsed Constructor because of a breach of any provision by Endorser or pursuant to Paragraph 13(B), Endorsed Constructor is hereby relieved of any further payment obligations to Endorser.
15. RELATIONSHIP OF THE PARTIES
Endorser’s performance of services for Endorsed Constructor hereunder is in his or her capacity as an independent contractor. Accordingly, nothing contained in this Agreement shall be construed as establishing an employer/employee, a partnership, or a joint venture relationship between Endorser and Endorsed Constructor.
16. FORCE MAJEURE
Neither party will be liable for, or will be considered to be in breach of or default under this Agreement on account of, any delay or failure to perform as required by this Agreement as a result of any causes or conditions that are beyond such Party’s reasonable control and that such Party is unable to overcome through the exercise of commercially reasonable diligence. If any force majeure event occurs, the affected Party will give prompt written notice to the other Party and will use commercially reasonable efforts to minimize the impact of the event.
This Agreement shall be governed in accordance with the laws of the State of New York. All disputes under this Agreement shall be resolved by litigation in the courts of the State ofNew York including the federal courts therein and the Parties all consent to the jurisdiction of such courts, agree to accept service of process by mail, and hereby waive any jurisdictional or venue defenses otherwise available to it.
18. AGREEMENT BINDING ON SUCCESSORS
The provisions of the Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, their heirs, administrators, successors and assigns.
Neither party may assign this Agreement or the rights and obligations thereunder to any third party without the prior express written approval of the other party which shall not be unreasonably withheld.
No waiver by either party of any default shall be deemed as a waiver of prior or subsequent default of the same of other provisions of this Agreement.
If any term, clause or provision hereof is held invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity or operation of any other term, clause or provision and such invalid term, clause or provision shall be deemed to be severed from the Agreement.
This Agreement constitutes the entire understanding of the Parties, and revokes and supersedes all prior agreements between the Parties and is intended as a final expression of their Agreement. It shall not be modified or amended except in writing signed by the Parties hereto and specifically referring to this Agreement. This Agreement shall take precedence over any other documents which may conflict with this Agreement.
IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound hereby, have each caused to be affixed hereto its or his/her hand and seal the day indicated.
SCHEDULE A TO AGREEMENT BETWEEN
1. The Product
The Product is as follows: [specify name and type of product].
2. The Term
The Initial Term shall be [number] years. The Endorsed Constructor shall have the right to renew this Agreement for an unlimited number of Extended Terms of [number] Years each, provided that it provides Endorser with at least [number] days’ written notice at the conclusion of the then in-effect Term and it has paid Endorser a minimum of at least [number] UNITED STATES DOLLARS ($[#]) during the then in-effect Term. Endorsed Constructor shall have the right to supplement the actual earned royalties to Endorser to achieve such [number] UNITED STATES DOLLARS ($[#]) minimum.
3. The Territory
The following countries shall constitute the Territory: [specify countries or territory].
4. Royalty Rate
The Royalty Rate is as follows: [number] Percent ([#]%).
The following Advance shall be paid upon execution of this Agreement: [number] UNITED STATES DOLLARS ($[#]).
6. Product Liability Insurance
[number] UNITED STATES DOLLARS ($[#]) combined single limit, with a deductible amount not to exceed [number] UNITED STATES DOLLARS ($[#]), for each single occurrence for bodily injury and/or for property damage.