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DD is never ending, if i just stop at what i had found, my opinions would not change, but that wouldnt be thorough DD.. Your quick to turn on me and say i'm trying to bring it down, or i sold my shares and want more... I dont want that at all (i have plenty of shares), i'm informing people this is a longer term play than the short hit and run play, and that slow and steady will as long as we continue to win, take us to .01+ I'm trying to keep the dumping from hitting a potential Life Changer for some. With court systems its never a 2 day trial as someone posted, yes once they finally got to trial it may have taken 2 days, but its never that easy.
You may hate my logic, because you are impatient and want your wham bam thank you mam right now.
Example: PlayBev involuntary bankruptcy
Office: Salt Lake City Filed: 04/26/2011
County: SALT LAKE-UT Terminated: 12/07/2012
Completing this took 591 days. Roughly 1 year and 7 1/2 months.
Link below shows the motions, court doc's, etc. only has about 7 months worth of court activity but is a good example.
Court Activity
I will be a long in this, unless there is news that turns this the other way, but i honestly dont see that happening.
What i think could potentially happen over the months to come:
They court case could continue and be a long drawn out one, or Playboy could take their heads out of their bums and realize the money they waste on a lawyer they could settle this quicker with mediation and some sort of agreement. I feel this is one of the last things they want to do right now, due to them wanting to internalize the whole operation and make it their own, so more $$$.
If it gets down to where i feel they know, or they have a feeling its a lost cause period, they will settle and it could benefit us greatly.
Potential outcomes: We win the case, Playboy is forced into 5 year renewal (if not longer), We receive a settlement for damages done, and lost income due to PBE interference with distributors. Based off the money i have seen in sales and from a rough estimate i feel we could have a fairly nice settlement. I do think we could get around 10-20mil alone in lost sales. Plus all the damage done to the distribution network, that could be anywhere from a couple million to 10-20million as well. It really depends on if those distributors will come back and or replace their purchase agreements over the years. When everything is said and done i feel after lawyers fee's, and everything we could look at a nice settlement of 30-35million.
With that 30-35mil, it would depend on what terms and agreements playbev and CBC have on division of funds. It could be that Playbev takes the majority and pays off debts owed(about 10mil to CBC for debt), and then setup to continue to run product as well as work on new product.
i could see CDC getting about 10-20mil maybe more, to continue distribution and marketing. Potential Share Buyback (even 6mil buyback at .005 would take 1.2bil shares out) Pay all debt off, to get us back to level playing field and it would be golden. No divy needed then, Our valuation would climb to the .05-.10 range IMO which would be rock solid, for continued operations. Over the next 5 years continue to grow into more markets worldwide, making Playboy shut up and color, and without question continue Licensing agreements.
That Sierra website is the worst thing to go by.. Posting anything they say is just ignorant IMO.. 14$ really? If this was the case we wouldn't be at .003. also the exaggeration of the cases on the 27th, and 3rd are the little ones we need to win for the case to continue to the big jury case in May. This isn't a short to the moon all gonna be rich on jan 3rd case.
We need to continue slow and steady. Spikes only cause huge bag holders.
I may post some more dd later, although may not be worth it due to the exaggeration going on.
Good luck to all.
Original Contract between PlayBev & Playboy
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
23
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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.
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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.
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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.
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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.
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(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
<PAGE>
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
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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(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
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
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<PAGE>
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
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR
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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.
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(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:
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(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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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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(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
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(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
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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
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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
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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
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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.
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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
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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
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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
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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;
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(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
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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
<PAGE>
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
<PAGE>
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
<PAGE>
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*
-----------------------
Some thoughts of mine: To force upon Playboy
See the bold red, I think if we can get another 5 years locked in, that would give CIRC plenty of time to continue growing and For sure changing the minds of playboy to cancel, and continue to renew for addition years. This does not include damages, this is just what i think they are trying to get forced on Playboy. Due to the circumvention of the latest contract
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
CONFIDENTIAL TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.
29
<PAGE>
(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.
Made a few phone calls today, if i get a call back ill have some potential new/updated information in regards to whats going on.
Think we got some flippers here.
gotta dilute you pay that .0002 dividend...
not yet, they are set for the motion court date on the 27th
Yep, which makes them look even worse..
Yep, dismissal of the motion, would be good. Wish had more depth to which of the 11 charges they are trying to dismiss.
I agree, more dismissals, of bogus claims.
Update: Playboy responded: Court Date 27 Dec 2012 0930
Playboy's Laywer:
KATTEN MUCHIN ROSENMAN LL
525 W MONROE STREET
CHICAGO IL, 60661
(312) 902-5200
Link for Info..
My integrity? lol, Oh let me guess i am suppose to be the dumb trader who holds all my shares for .01 .02 area... Anyone with some common sense knows to take profits on the way up. selling 7 million of my original 12 million shares to ride free shares puts my integrity in quesiton? Lol...
Oh, and quoting me rebutting someone who comes here and posts retarded statements with no facts/links is different from posting DD with FACT/Links. Just giving everyone the full picture.
Lol, it is part of a process, Posting DD i find, good or bad. I am PRO CIRC and believe they will win the majority of the battle and end up with a great settlement... Hence me owning 5mil shares at .0011 (all free riding shares) I'm here to help those make a quicker decision as to why this is a great stock. But you have the right to your opinion as to why i post my DD
Found some more info... Posting soon
No, trust me i want this to continue higher, but i wont with hold bad information to make a few $$ I rather we all win! thats why i say always take some profits to ride free shares. Plus i dont think this will ever see .0011 (my average) again. lol Just want everyone know the facts and what is going on.
Clearly you dont understand, everything has legitimacy... With this filing Playboy and Playbev/Cirtran will have to come to an agreement, this helps Playboy in negotiations on how much they will charge for use of trademark. This could be voided in May depending the outcome of the trial.
na, the suit wont be null and void, not until the second hearing.
Playboy vs Play Bev & Cirtran
Trademark Infringement
RFC Case Number: T-P12-10590P
Court Case Number: 2:12-cv-10590-SJO-E
File Date: Tuesday, December 11, 2012
Plaintiff: Playboy Enterprises International Inc.
Plaintiff Counsel: Tamany V. Bentz, Richard J. Frey, Melissa C.R. McLaughlin of Venable LLP
Defendant: Play Beverages LLC
Cirtran Beverage Corporation
Cirtran Corporation
Cause: 15:1114 Trademark Infringement
Court: California Central District Court
Judge: Judge S. James Otero
Referred To: Magistrate Judge Charles F. Eick
Playboy has filed a lawsuit for Trademark Infringement vs Play Bev & Cirtran.
RFC Case Number: T-P12-10590P
Court Case Number: 2:12-cv-10590-SJO-E
File Date: Tuesday, December 11, 2012
Plaintiff: Playboy Enterprises International Inc.
Plaintiff Counsel: Tamany V. Bentz, Richard J. Frey, Melissa C.R. McLaughlin of Venable LLP
Defendant: Play Beverages LLC
Cirtran Beverage Corporation
Cirtran Corporation
Cause: 15:1114 Trademark Infringement
Court: California Central District Court
Judge: Judge S. James Otero
Referred To: Magistrate Judge Charles F. Eick
Will post doc's in a bit.
Just a note to those new/old. The status posted as changed.. that never changed. The court doc was the same the day i posted it.
I have no new info i'm not a info holder, just dont like how my DD got twisted well then again i guess everything can be left up for Interpretation. But yea.. no new info. will probably look more this weekend.
Ofcoarse I have take profits plenty of times and riding free shares. I lowered the amount I hold though. Dd is always key.
There are lies posted every day, I am glad the stock went higher but the false info that was posted is pretty dumb. Make sure you validate dd for yourself and also doesn't hurt to make a phone call or two.
it is when your chasing 5k-20k lots at a time, all the way up :)
Whats got this bad boy moving again?
Court Date number 2!!! PLAYBOY SOL
Court date docket #2
Date: 5/28/2013
Court Time: 1030
Court Room: 2410
10 1/2 trading days until court day!
rotflmmfao
Well looks like i have found plenty :) your just another angry person who missed the boat.
My CIRC FACTS are plenty of info for those who are long. To much potential. (regardless of what your thoughts are) Everyone that has come to this board and tried to express the concerns you do end up joining the board in a positive manner because all they wanted is some cheap shares. Stocks go up and down, you gotta know when to hold, as well as fold em. Keep em to long might get burnt on the river, or that river could sail you down the mississippi to the GULF, since you bought a YACHT!!
GL & GTFO
GREAT DAY, Will be doing more research to find anything i am missing or additional information! Have a great weekend all (to include the bashers) you just want my shares for cheap :) !
top sticky
read my DD indepth court filing.
LoL, haters come when they dont get their shares.... We have had 2-3 show up with the same intent, eventually becoming shareholders...
:) I loaded the bank :) My DD makes MADMONEY!! ;)
Looking good here guys! Keep it up. Will be digging up everything i can this weekend to make sure nothing is missed!!
is that company dilution? just asking... shows 5k but sells like 2mil
Whoever is etrf is a flipper they do the same crap every day so damn annoying.
CIRC 1 left .0014
CIRC .0014 bid stacked! dont miss out