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EXHIBIT 10.8
LICENSE AGREEMENT
Between
ELVIS PRESLEY ENTERPRISES, INC.
and
FX LUXURY REALTY LLC
Dated as of June 1, 2007
This License Agreement is made and effective as of June 1, 2007 (the “Effective Date”) by and between ELVIS PRESLEY ENTERPRISES, INC., a Tennessee corporation, having its principal office at 3734 Elvis Presley Boulevard, Memphis, Tennessee 38116 (“Licensor”), and FX LUXURY REALTY LLC, a Delaware limited liability company, having its principal office at 650 Madison Avenue, New York, New York, 10022 (“Licensee”) (each, a “party” and collectively, the “parties”), with reference to the following recitals:
RECITALS
WHEREAS, Licensor and its Affiliates (as defined below) own or have the right to grant licenses to (i) certain rights in and to the name, image and likeness of Elvis Presley, (ii) certain trademarks related to Elvis Presley, and (iii) other intellectual property related to Elvis Presley;
WHEREAS, Licensor or one of its Affiliates is the owner of or otherwise has the rights to exhibit and loan, on a temporary basis, certain artifacts related to Elvis Presley; and
WHEREAS, in accordance with the terms and conditions of this Agreement, Licensee desires to license from Licensor, and Licensor desires to license to Licensee, rights to use the foregoing in connection with the design, construction, operation, and promotion of real estate properties and for other purposes set forth herein.
NOW, THEREFORE, for the consideration set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
Article 1
DEFINITIONS Section 1.01 For all purposes hereof:
An “Affiliate” of a party is a Person which Controls, is Controlled by, or is under common Control with, such party, but only for so long as such Control continues.
“Agreement” means this License Agreement, including all Exhibits hereto, as may be amended from time to time.
“Artifact” means memorabilia associated with the life, career and celebrity of Elvis Presley (i) that are owned by Licensor or its Affiliates, or (ii) that Licensor or its Affiliates have the right to exhibit and loan on a temporary basis, in each case, including clothing, furniture, jewelry, automobiles, documents, writings, journals, books, photographs, and other personal effects.
“Audiovisual Works” means the works set forth on Exhibit B.
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“CityCentre Agreement” means the draft Production and Performance Services Agreement concerning the production and presentation of an Elvis Presley-themed Cirque du Soleil show at the MGM/CityCentre in Las Vegas, Nevada.“Control” (including “Controlled”) means (i) in respect of a corporation or company, (A) the ownership, directly or indirectly through other Controlled entities, of shares, units or other interests of such corporation or company carrying more than fifty percent (50%) of the voting rights ordinarily exercisable at meetings of shareholders or members of such corporation or company, or (B) the right to direct and manage the affairs of any such corporation or company and (ii) in respect of a partnership, joint venture or other entity, (A) the ownership, directly or indirectly through other Controlled entities, of more than fifty percent (50%) of the ownership interests of such partnership, joint venture or other entity, or (B) the right to direct and manage the affairs of any such entity.
“Creation” means all concepts, artwork, designs, images, names, advertisements, tags, labels, hang tags, photographs, likenesses, symbols, logos, copyrights, trade dress, trademarks or the like, and other things incorporating, in whole or in part, any Licensor Owned IP.
“Elvis Experience(s)” means permanent, non-touring interactive entertainment, educational and retail experiences incorporating music, Artifacts, and audiovisual works focusing on the life and times of Elvis Presley.
“Elvis Identification Elements” means the name, image, likeness, distinctive appearance, gestures and mannerisms, voice, signature, handwriting, sobriquet, persona, biography, and life story of Elvis Presley.
“Elvis Presley-themed” means that the overall look and feel and the primary theme of the applicable Hotel, Resort, Retail Store, Casino, Lounge, Spa, Theme Park, Food and Beverage Outlet, Residential Development, or Commercial Development, (i) is based around Elvis Identification Elements or the Marks, or (ii) conveys an immersion in experiencing the life and times of Elvis Presley.
“Elvis Property” or “Elvis Properties” means Elvis Presley-themed Hotel(s), Elvis Presley-themed Resort(s), Elvis Presley-themed Residential Development(s), Elvis Presley-themed Commercial Development(s), Elvis Presley-themed Casino(s), Elvis Presley-themed Lounge(s), Elvis Presley-themed Theme Park(s), and Elvis Presley-themed Food and Beverage Outlet(s).
“Elvis Related IP” means any Licensor-Owned IP, Presley Music, Third Party Elvis-related Materials and any other intellectual property or elements associated or identified with Elvis Presley.
“EPE Heartbreak Hotel” means “Elvis Presley’s Heartbreak Hotel” currently located at 3677 Elvis Presley Blvd. , Memphis, TN 38116 and operated by Licensor or one of Licensor’s Affiliates.
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“Generic Merchandise” means articles of merchandise that are Generic (e.g., bottled water, Tylenol, newspapers).
“Generic” means not incorporating any Elvis Related IP.
“Gross Revenues” means the gross amount of revenues earned or received by or on behalf of Licensee or any Licensee Related Party, in connection with the applicable activity or source subject of this Agreement, without any deduction of costs or expenses incurred by Licensee (including any deduction of construction, development, design, manufacturing or operating costs, costs in connection with advertising and/or promotion of any of the Elvis Properties, commissions, taxes, fees, assessments, or bad debts) and without any reserves (including any reserves for returns, refunds or bad debts); provided, however, that the term “Gross Revenues” shall (i) exclude sales taxes and returns of defective Elvis Property-themed Merchandise, such actual returns limited to three percent (3%) of the total of the regular list price for all Elvis Property-themed Merchandise sold during each calendar year and (ii) be subject to the provisions of this Agreement.
“including” and “includes” mean “including (or includes), without limitation”.
“Joachim Jean Aberbach Interests” means the Susan T. Aberbach Revocable Trust, the Anne Rachel Aberbach Family Trust and Jason S. Aberbach.
“Julian J. Aberbach Interests” means the Anne Marie Aberbach Revocable Trust and the Belinda Aberbach Stevenson Agar Revocable Trust.
“Licensee Owned IP” means the names, trademarks and/or logos of Licensee and Licensee Related Parties.
“Licensee Related Party” means any Affiliate of Licensee, any Project Company or any sublicensee of Licensee’s rights in and to the Licensor Owned IP hereunder.
“Licensor Owned IP” means any intellectual property or other proprietary rights related to Elvis Presley, owned or controlled by, or licensed to (with the right to grant sublicenses consistent with the terms of this Agreement) Licensor and its Affiliates, including, Elvis Identification Elements, the Marks, the Domain Names, the Photos, and the Audiovisual Works, but excluding Presley Music.
“Marks” means, collectively, the trademarks and/or service marks identified in Exhibit A hereto.
“Masterplan” means the master redevelopment plan for Graceland, and the surrounding areas in Memphis, Tennessee, to be undertaken by Licensor.
“Person” means any individual, corporation, partnership, limited partnership, limited liability company, joint venture, trust, or any other form of entity, unincorporated or governmental organization or any agency or political subdivision thereof.
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“Photos” means certain individual photographs depicting or otherwise relating to Elvis Presley that Licensor or its Affiliates have the right to license to Licensee under this Agreement that are identified by Licensor from time – to — time.
“Project Company” means a Person designated by Licensee to build and/or operate a particular Elvis Property.
“Seconds” means merchantable Elvis Property-themed Merchandise not suitable for sale at list price because they contain minor production or material flaws not affecting proper usage of the Licensor Owned IP.
“Site License” means an agreement between Licensor and a Project Company in the form attached as Exhibit J, granting such Project Company the right to build and operate a particular Elvis Property.
“Website” means a website owned by Licensee or one of its Affiliates and associated with one or more Elvis Properties.
Section 1.02 Other Defined Terms.
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Article 2
GRANT OF RIGHTS Section 2.01 Hotel License. Subject to the terms and conditions of this Agreement, Licensor grants to Licensee an exclusive, worldwide license to use the Licensor- Owned IP in connection with the design, construction, operation, advertising and promotion of Elvis Presley-themed hotels (“Elvis Presley-themed Hotel(s)”), Elvis Presley-themed golf courses (non- miniature), resorts and resort communities (“Elvis Presley-themed Resort(s)”), Elvis Presley-themed residential developments (“Elvis Presley-themed Residential
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Development(s)”), and Elvis-Presley-themed commercial (non-residential) developments that are related to or associated with any of the foregoing (“Elvis Presley-themed Commercial Development(s)”), which may include any of the following:
a) casinos, or other facilities that accommodate gambling activities (“Casino(s)”), some or all of which may, at Licensee’s election, be Elvis Presley-themed or otherwise incorporate the Licensor Owned IP into the name, design, and overall appearance of the Casinos or elements thereof (“Elvis Presley-themed Casino(s)”);
b) restaurants, food carts, food kiosks, snack bars, beverage bars and liquor bars that primarily serve food (“Food and Beverage Outlet(s)”), some or all of which may, at Licensee’s election, be Elvis Presley-themed or otherwise incorporate the Licensor Owned IP into the name, design, overall appearance, and/or menu items of the Food and Beverage Outlets or elements thereof (“Elvis Presley-themed Food and Beverage Outlet(s)”);
c) spas, gyms, and health clubs (“Spa(s)”), some or all of which may, at Licensee’s election, be Elvis-Presley-themed or otherwise incorporate the Licensor Owned IP into the name, design, and overall appearance of the Spas or elements thereof (“Elvis Presley-themed Spa(s)”);
d) lounges and clubs that do not primarily serve food (“Lounge(s)”), some or all of which may, at Licensee’s election, be Elvis Presley-themed or otherwise incorporate the Licensor Owned IP into the name, design, and overall appearance, of the Lounges or elements thereof (“Elvis Presley-themed Lounge(s)”);
e) retail and merchandise outlets (“Retail Store(s)”), some or all of which may, at Licensee’s election, be Elvis Presley-themed or otherwise incorporate the Licensor Owned IP into the name, design, and overall appearance of the Retail Stores or elements thereof (“Elvis Presley-themed Retail Store(s)”);
f) entertainment attractions including shows, stage productions, concerts, comedy specials, and sporting events (“Entertainment Attraction(s)”), some of which may incorporate the music of Elvis Presley, the Licensor Owned IP and/or be Elvis Presley-themed, provided that they are authorized and/or licensed by Licensor (e.g., the Ultimate Elvis Tribute Artist Contest, All Shook Up) and approved by Licensor prior to exploitation at the applicable Elvis Property in accordance with Section 11.07 (“Authorized Elvis Presley-themed Entertainment Attractions”); and
g) subject to Article 15, Elvis Experiences authorized and/or licensed by Licensor.
Section 2.02 Casino License. Subject to the terms and conditions of this Agreement, Licensor grants to Licensee an exclusive, worldwide license to use the Licensor- Owned IP in connection with the design, construction, operation and promotion of Elvis Presley-themed Casino(s), which Elvis Presley-themed Casinos may include Food and Beverage Outlets, Elvis Presley-themed Food and Beverage Outlets, Lounges, Elvis Presley-themed Lounges, Retail Stores, Elvis Presley-themed Retail Stores, Entertainment Attractions,
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Authorized Elvis Presley-themed Entertainment Attractions and, subject to Article 15, Elvis Experiences. Notwithstanding the foregoing, the parties acknowledge and agree that Licensee’s right to use the Licensor Owned IP in connection with Elvis Presley-themed slot machines and pachinko machines (“Excluded Gambling Items”) is subject to rights in the Licensor-Owned IP for Excluded Gambling Items that Licensor has granted exclusively to a third party. Licensor agrees to use reasonable best efforts to obtain from such third party for the benefit of Licensee the Excluded Gambling Items at prices that are no less favorable to Licensee than the prices charged by such third party for the Excluded Gambling Items to its best customers. Licensor acknowledges and agrees that it shall not use or license a third party to use the Licensor-Owned IP in connection with online casino services.
Section 2.03 Theme Park License. Other than with respect to Graceland in Memphis, Tennessee, which rights shall be reserved by Licensor, subject to the terms and conditions of this Agreement, Licensor grants to Licensee an exclusive, worldwide license to use the Licensor Owned IP in connection with the design, construction, operation and promotion of Elvis Presley-themed theme parks (“Elvis Presley-themed Theme Park(s)”), which Elvis Presley-themed Theme Parks may include Casinos, Elvis Presley-themed Casinos, Food and Beverage Outlets, Elvis Presley-themed Food and Beverage Outlets, Lounges, Elvis Presley-themed Lounges, Retail Stores, Elvis Presley-themed Retail Stores, Entertainment Attractions, Authorized Elvis Presley-themed Entertainment Attractions and, subject to Article 15, Elvis Experiences. Nothing in this Section 2.03 shall prevent Licensor from using the Licensor Owned IP in connection with the design, construction, operation and promotion of an Elvis Presley-themed ride, provided that any such ride or group of rides does not, in the reasonable discretion of the parties, comprise a park or section of a park that is Elvis Presley-themed.
Section 2.04 Lounge License. Other than with respect to the MGM CityCentre in Las Vegas, Nevada, which rights shall be reserved to Licensor, its partners and licensees during the term of the CityCentre Agreement, subject to the terms and conditions of this Agreement, Licensor grants to Licensee an exclusive, worldwide license to use the Licensor Owned IP in connection with the design, construction, operation and promotion of Elvis Presley-themed Lounges, which Elvis Presley-themed Lounges may include Food and Beverage Outlets, Elvis Presley-themed Food and Beverage Outlets, Entertainment Attractions, and Authorized Elvis Presley-themed Entertainment Attractions.
Section 2.05 Food Outlet License. Subject to the terms and conditions of this Agreement, Licensor grants to Licensee a nonexclusive, worldwide license to use the Licensor Owned IP in connection with the design, construction, operation and promotion of Elvis Presley-themed Food and Beverage Outlets, provided that (X) Licensee shall not be permitted to establish any Elvis Presley-themed Food and Beverage Outlets outside an Elvis Property in the Memphis, Tennessee area, and (Y) all Elvis Presley-themed Food and Beverage Outlets outside of any Elvis Property shall be at least fifteen (15) miles from any Elvis Presley-themed Food and Beverage Outlet operated or licensed by Licensor; provided, further, that Licensee shall have the right to operate an Elvis Presley-themed Food and Beverage Outlet within such fifteen (15) mile range (including in the same city and/or metropolitan area, but not Memphis, Tennessee, where applicable) where the applicable demographics will, in the reasonable business judgment of Licensor and Licensee, support additional Elvis Presley-themed Food and Beverage Outlets and
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where the operation of such Elvis Presley-themed Food and Beverage Outlet is unlikely to (i) cause customer confusion, result in brand conflict, or result in a weakening of the Licensor Owned IP, or (ii) materially and adversely impact the business of the existing Elvis Presley-themed Food and Beverage Outlet. For purposes of clarification, Licensee may build and operate an Elvis Presley-themed Food and Beverage Outlet, but except as permitted under this Agreement at an Elvis Property, Licensee may not use the Licensor Owned IP outside any Elvis Property in a non-Elvis Presley-themed restaurant (e.g., a 1950’s themed restaurant) or license to any third party the right to use Licensor Owned IP to design, construct, operate and promote a restaurant outside any Elvis Property co-branded with third party intellectual property (e.g., a Wolfgang Puck Elvis Presley restaurant, a “Jungle Room” as part of any Hard Rock Café).
Section 2.06 Merchandise License. Subject to the terms and conditions of this Agreement, Licensor grants to Licensee a nonexclusive, worldwide license to use the Licensor Owned IP in connection with the design, manufacture, sale, and promotion, solely at any Elvis Property, for consumer sales only (i.e., not wholesale sales), of retail merchandise based on the particular Elvis Property, and all packaging and promotional materials in respect thereof (“Elvis Property-themed Merchandise”), which Elvis Property-themed Merchandise may only be sold at the applicable Elvis Property and on the Website related to the applicable Elvis Property (or by Licensor pursuant to Section 12.12). All Elvis Property-themed Merchandise shall be readily identifiable as relating to a particular Elvis Property (e.g., a Heartbreak Hotel beach towel and not an Elvis Presley/Blue Hawaii beach towel).
Section 2.07 Merchandise Selection. Throughout the Term of this Agreement, Licensor and Licensee shall work together in good faith in deciding the types of articles of Elvis Property-themed Merchandise that Licensee may manufacture, sell, and market at each Elvis Property hereunder, provided that Licensor shall have final approval over all types and categories of Elvis Property-themed Merchandise that may be sold by Licensee. Notwithstanding the foregoing, Licensee shall have, at a minimum, the right to manufacture, sell, and market the types of articles set forth on Exhibit C hereto and any additional types of articles agreed to by the parties during the Term of this Agreement. Licensor agrees to act in good faith in determining the additional types of articles that may be manufactured, sold, and marketed by Licensee during the Term of this Agreement. Licensee acknowledges that Licensor is a party to certain exclusive license agreements that may restrict Licensor’s ability to permit Licensee to manufacture certain types of articles of Elvis Property-themed Merchandise not included on Exhibit C, or sell such items at certain price points. During the Term hereof, Licensor shall not enter into any agreement that would further restrict the rights of Licensee to manufacture and sell Elvis Property-themed Merchandise that has been previously approved for sale by Licensee. For the avoidance of doubt, other than rights granted to a third party manufacturer pursuant to Section 12.09, Licensee may not sublicense any merchandise rights to any third party.
Article 3
TRADEMARKS; RESERVATION OF RIGHTS Section 3.01 Geographic Limitations. The parties acknowledge that (i) Licensor and its Affiliates own numerous trademark applications and registrations covering the Licensor
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Owned IP in various geographic regions, and (ii) the scope of Licensor’s intellectual property protection may vary by geographic region and product class. Licensor has provided to Licensee a list of those countries and product classes in which the Marks are presently registered or where applications for registration are pending, which list may be amended from time to time (the “Registered Class/Territories”). Licensor shall, upon the request of Licensee no more frequently than semi-annually, provide Licensee with a then-current list of trademark applications and registrations covering the Licensor Owned IP. Nothing in this Section 3.01 shall limit the licenses granted to Licensee under Article 2.
Section 3.02 Expansion of Trademark Protection. In the event Licensee wishes to (A) use the Marks in connection with (i) the design, construction, operation and promotion of Elvis Properties or (ii) the design, manufacture, sale, and promotion of Elvis Property-themed Merchandise, in each case, outside the Registered Class/Territories, or (B) use the Marks in connection with products or services for which Licensor has not registered the applicable Marks, Licensee may request that Licensor register the Marks in such territory or for such products or services. Except as provided below, Licensor, at its sole costs and expense, agrees to file an application for registration of the applicable Mark in the requested territory or product class within fifteen (15) days of receipt of Licensee’s request. Licensor shall thereafter respond to any trademark examiner’s inquiries or requests for additional information in a timely manner and take all other actions that are reasonably necessary to pursue such applications and to maintain Licensor’s existing registrations for the Marks. Notwithstanding the foregoing, Licensor shall have the right to refuse the filing of a new application in accordance with this paragraph for good cause.
Section 3.03 Ownership of Licensee Created Marks. Any Elvis-related trademark that is not Licensor Owned IP, or similar thereto or derivative thereof, that is adopted by Licensee for use in connection with Elvis Properties in accordance with this Agreement during the Term of this Agreement shall be owned by Licensee for use solely in connection with hotel and casino services (but not gaming or gambling equipment or products) (the “Licensee Created Marks”). The Licensee Created Marks shall not incorporate or be derived from or similar to any of the Licensor Owned IP. Licensee may, at its sole costs and expense, file an application for registration of the applicable Licensee Created Mark in the territory or territories where Licensee uses or has a bona fide intent to use such Licensee Created Mark solely for hotel and/or casino services. Licensee shall notify Licensor of any Licensee Created Marks for which Licensee intends to seek registration (together with the territory and product class of such registration), and provide to Licensor any information that Licensor may reasonably request about such registrations. Licensee agrees that Licensor shall not be restricted by Licensee from filing for trademark registration for any of the Licensee Created Marks outside the categories of hotel and/or casino services.
Section 3.04 Refusal to Register. In the event that Licensor is unable to register a Mark in a requested territory because of the prior existence of a pending application or registration of that Mark in the requested territory (or any mark similar thereto or derivative thereof) which is not owned by Licensor, then Licensor shall immediately notify Licensee in writing and such inability to register the Mark shall not be deemed a breach of this Agreement by Licensor, provided that Licensor has used reasonable best efforts to so register the Marks.
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Section 3.05 Certain Trademark Limitations. Notwithstanding any of the foregoing, Licensee shall have no right to use the mark LOVE ME TENDER as the name of any Elvis Presley-themed Retail Store, EP’S DELTA KITCHEN AND BAR as the name of any Elvis Presley-themed Food and Beverage Outlet, or GRACELOUNGE as the name of any Elvis Presley-themed Lounge.
Section 3.06 Trademark Strategy. Upon the request of either party, Licensor and Licensee shall convene a meeting to develop and discuss in good faith a trademark strategy that is beneficial to the businesses of both parties.
Section 3.07 Joint Name and Logo. Licensor acknowledges that Licensee shall have the right to incorporate the Licensee Owned IP on each article of Elvis Property-themed Merchandise and otherwise to use the Licensee Owned IP in connection with the Elvis Properties, and also to create a joint Licensor/Licensee name and/or logo (the “Joint Name and Logo”) mutually approved by Licensor and Licensee under this Agreement (e.g., “Heartbreak Hotel at Park Central”) and to use such Joint Name and Logo on Elvis Presley-themed Merchandise and otherwise in connection with the Elvis Properties. Licensee shall not acquire any rights in the Licensor Owned IP nor shall Licensor acquire any rights in the Licensee Owned IP by virtue of any use of the Joint Name and Logo. Any intellectual property rights in the Joint Name and Logo independent of the Licensor Owned IP and the Licensee Owned IP shall be jointly owned by the parties. Any use of the Joint Name and Logo shall be strictly in accordance with the limitations of this Agreement, including the quality control restrictions hereof. Upon termination of this Agreement, without limiting the right of each party to use its respective portion of the Joint Name and Logo, neither Party shall thereafter use the Joint Name and Logo in its entirety.
Section 3.08 Domain Names. Any domain names used in connection with the Websites that incorporate any of the Marks, or derivatives thereof, in whole or in part (the “Domain Names”) shall be owned by Licensor and licensed to Licensee pursuant to the terms and conditions of this Agreement. Licensor shall remain the owner and Administrative Contact of the domain names and Licensee shall be the Technical Contact of the domain name as listed in the Domain Name Registry.
Section 3.09 Reservation of Rights. Licensor reserves all rights not granted to Licensee hereunder, and shall not be prohibited or restricted in any way, at any time, from exercising such rights, including:
a) establishing or operating, or licensing to any third party the right to establish or operate, any Food and Beverage Outlets, Spas, Retail Stores, productions, shows, and other special events such as tribute artist contests, charity events, concerts, fan club events, cruises, and television broadcasts, and/or any other form of entertainment attractions utilizing the Licensor Owned IP (including as part of the name or logo) anywhere in the world, provided that except for any activities taking place at Graceland in Memphis, Tennessee, and at the MGM/CityCentre in Las Vegas, Nevada, Licensor may not establish, operate, or license to any third party the right to establish or operate an Elvis Presley-themed Food and Beverage Outlet, Spa, or Retail Store within a radius of fifteen (15) miles from any Elvis Property, provided that, (i) the foregoing limitation shall
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not apply to Memphis, Tennessee, and (ii) Licensee shall not unreasonably withhold consent to a request by Licensor (or its licensee) to operate an Elvis Presley-themed Food and Beverage Outlet, Spa or Retail Store within such fifteen (15) mile range (including in the same city and/or metropolitan area, where applicable) where the applicable demographics will support additional Elvis Presley-themed real estate properties and where the operation of such Elvis Presley-themed Food and Beverage Outlet, Spa or Retail Store is unlikely to (i) cause customer confusion, result in brand conflict, or result in a weakening of the Licensor Owned IP, or (ii) materially and adversely impact the business of the existing Elvis Property.
b) granting to any third party any license to manufacture, sell, distribute, market and/or otherwise exploit merchandise which embodies any of the Licensor Owned IP, regardless of whether such third party establishes, operates, or sells to any retail store, hotel complex or other facility which offers merchandise, food, beverages, entertainment attractions, gambling or other products or activities which reference or allude in any way to Elvis Presley.
c) engaging in any commercial tie-in, or promotional or marketing activities that features the Licensor Owned IP together with the trademarks or copyrights of a third party (a “Co-Branded Campaign”), except for a Co-Branded Campaign with third party hotels or casinos (e.g., a Co-Branded Campaign with Wyndham Hotels), provided that Licensor shall have the right to continue to enter into (i) local co-branding arrangements with hotels in Memphis, Tennessee for Elvis Birthday and Elvis Week promotional campaigns and (ii) Co-Branded Campaigns with any hotel in which any Elvis Presley-themed Cirque du Soleil show is presented or any Elvis Experience is housed, including the MGM CityCentre in Las Vegas, Nevada.
d) Licensing de minimis uses of the Licensor Owned IP in connection with a third party real estate property, provided that such real estate property is not Elvis Presley-themed (e.g., the display of a photograph of Elvis in a non-Elvis Presley-themed lounge).
e) Using or licensing the Licensor Owned IP for any purpose not specifically prohibited pursuant to this Agreement.
Section 3.10 Entertainment Attractions. Other than Elvis Experiences and Authorized Elvis Presley-themed Entertainment Attractions, which are subject to Licensor’s approval at each Elvis Property pursuant to Section 10.07, Licensee shall have no right to create, produce, develop, or exploit at any Elvis Property any other entertainment attraction that is Elvis Presley-themed, is readily identifiable with Elvis Presley, or uses the Licensor Owned IP or features the music of Elvis Presley without Licensor’s prior written consent (e.g., tribute artist contest and/or performances not authorized by Licensor, production of Viva Las Vegas the musical). Nothing herein shall restrict Licensee’s right to create, produce, develop and exploit at any Elvis Property any entertainment attraction that does not have an Elvis Presley theme, is not readily identifiable with Elvis Presley, does not use the Licensor Owned IP and does not feature the music of Elvis Presley without Licensor’s consent, provided that such entertainment attraction does not otherwise violate Licensee’s obligations hereunder.
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Section 3.11 Elvis Experiences. The parties agree that nothing in this Agreement grants to Licensee any right to use the Licensor Owned IP to design, construct, operate or promote Elvis Experiences except as expressly provided in Article 15.
Article 4
LICENSE OF ELVIS ARTIFACTS Section 4.01 License of Artifacts. Licensor shall make available to Licensee hereunder, for public display, solely at each Elvis Property, a reasonable number of Artifacts as determined by Licensor in its exercise of reasonable discretion. The parties agree to consult in good faith regarding the types of Artifacts to be displayed at each Elvis Property, provided that Licensor shall have final approval and discretion over the selection of any Artifacts for display at any of the Elvis Properties. For purposes of clarification, Licensor reserves the right to (i) withhold at any time during the Term of this Agreement certain categories of Artifacts from being displayed at any of the Elvis Properties, (ii) display any Artifacts or license to third parties rights to display any Artifacts anywhere in the world, (iii) grant exclusive rights to third parties to display certain categories of Artifacts (e.g., an exclusive license to the President Nixon Library to display all Elvis Presley/Richard Nixon Artifacts). If Licensor withdraws Artifacts that have been delivered to Licensee for public display at an Elvis Property for any reason, Licensor shall use reasonable best efforts to replace such withdrawn Artifacts with comparable Artifacts.
Section 4.02 Delivery of Artifacts. At its sole cost and expense, and following the instructions provided by Licensor, Licensee will arrange for roundtrip delivery of the Artifacts to the Elvis Property and returned back to Licensor within sixty (60) business days following the termination of this Agreement or upon the replacement of the Artifacts with new Artifacts to be displayed at each Elvis Property. Licensee shall maintain exclusive possession of the Artifacts during the period of time in which the Artifacts are in Licensee’s possession.
Section 4.03 Protection of Artifacts. Licensee will treat each Artifact with due care and shall take all measures necessary to fully protect such Artifact from damage, consistent with the limitations and instructions set forth in Exhibit D hereto and such other reasonable restrictions as promulgated by Licensor from time-to-time. Each Artifact, if not displayed in a case or behind glass or plexiglas, will have sufficient distance from the public to prevent touching. All exhibit areas will be under surveillance when open to the public. Licensee shall keep each Artifact in the same condition as such items were delivered to Licensee hereunder, except for normal wear and tear. All such items shall be marked “Courtesy of Elvis Presley Enterprises, Inc., On Loan From Graceland”. Licensor reserves the right, after reasonable notice to Licensee, to inspect the Artifacts and obtain the immediate return of any Artifact that in Licensor’s good faith judgment has not been handled or treated properly.
Section 4.04 No Museums. In selecting the Artifacts and in placing the Artifacts throughout each Elvis Property, Licensor and Licensee acknowledge that it is their mutual intention hereunder that no Elvis Property shall look like or be perceived to be an Elvis Presley museum (i.e., a similar experience to visiting Graceland), and neither party shall act contrary thereto.
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Section 4.05 Insurance. Prior to delivery thereof to Licensee, Licensor shall identify to Licensee the appraised value of each Artifact as determined by Licensor in its reasonable discretion. Licensee will insure each loaned Artifact for at least the amount specified by Licensor against all risks of physical loss or damage from any cause while in transit and on location during the period of the loan. Licensee shall be entitled to reject an Artifact on the basis of the cost to Licensee of insuring it.
Section 4.06 Prior Inspection. Before commencing the display of the Artifacts at any Elvis Property, Licensee shall give Licensor the opportunity to inspect the placement of each Artifact and make a determination whether the Artifacts are displayed according to the terms of this Agreement.
Article 5
THIRD PARTY INTELLECTUAL PROPERTY RIGHTS Section 5.01 Presley Music. Except for the specific rights granted hereunder with respect to the use by Licensee of the Licensor Owned IP, this Agreement does not grant Licensee any rights to license, use and/or exploit any other intellectual property rights in which Licensor or one of its Affiliates has an ownership interest and/or income participation, including musical compositions owned, in whole or part, by Licensor or one of its Affiliates (“Presley Music”). Licensee hereby acknowledges that it is not receiving a license hereunder with respect to any rights regarding the publication, mechanical reproduction, synchronization, small performing, grand performance, master use and/or any other rights in and to the Presley Music. Licensor agrees to use reasonable best efforts to assist Licensee in procuring any licenses, clearances, approvals, consents and/or permissions (“Consents”) from Licensor’s Affiliates, the Julian J. Aberbach Interests, the Joachim Jean Aberbach Interests, and/or any third parties, required by Licensee with respect to the license, use, and/or exploitation of the Presley Music in connection with any of the Elvis Properties, including issuing appropriate licenses to Licensee on so-called “arm’s length” terms with respect to any Presley Music, provided, however, that nothing contained in this Agreement shall be construed as obligating Licensor or one of its Affiliates to (i) violate any fiduciary obligations it has to writers, co-publishers, co-owners and the like of Presley Music, (ii) actually negotiate the terms for the Consents required to be secured hereunder, (iii) grant rights to Licensee where to do so would violate the approval or consents rights of a third party, or (iv) grant rights to Licensee broader than or otherwise inconsistent with the rights granted to Licensee and restrictions imposed upon Licensee elsewhere in this Agreement.
Section 5.02 Other Third Party Owned IP. Except for the specific rights granted hereunder with respect to the use by Licensee of the Licensor Owned IP, this Agreement does not grant Licensee any rights to license, use and/or exploit any intellectual property owned or controlled by third parties, including certain intellectual property related to Elvis Presley, such as photographs, audiovisual materials (e.g., films and television programs in which Elvis Presley appeared and/or performed in), artwork, and certain musical compositions and/or sound recordings of music recorded by Elvis Presley (collectively, “Third Party Elvis-Related Materials”). Licensee shall be solely responsible for procuring Consents required in connection with the license, use, and/or exploitation of all third party owned intellectual property, including
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Third Party Elvis-Related Materials, provided that, subject to Section 11.01, Licensor shall have the right to consent to the use of Third Party Elvis-Related Materials at any of the Elvis Properties. Licensee shall obtain all Consents required by unions and/or guilds having jurisdiction, as well as the copyright owners of, or other rights holders (such as privacy and publicity rights holders), in any third party trademarks, photographs, audiovisual materials, motion pictures, television programs, master recordings, musical compositions, and artwork to be embodied in, or otherwise used at or in connection with the Elvis Properties and/or the manufacture and sale of Elvis Property-themed Merchandise related thereto. Licensor agrees to use reasonable best efforts to assist Licensee in procuring any Consents required by Licensee under this Agreement with respect to the license, use, and/or exploitation of Third Party Elvis-Related Materials including advising Licensee, to the extent known, of the parties that need to be contacted for such Consents and making introductions for Licensee where Licensor has an existing relationship, provided, however, that nothing contained in this Agreement shall be construed as obligating Licensor to (i) violate any fiduciary obligations it has to any third parties of Third Party Elvis-Related Materials, (ii) actually negotiate the terms for the Consents, (iii) grant rights to Licensee where to do so would violate the approval or consents rights of a third party, or (iv) grant rights to Licensee broader than or otherwise inconsistent with the rights granted to Licensee and restrictions imposed upon Licensee elsewhere in this Agreement.
Section 5.03 Third Party IP Clearances. In connection with the use and exploitation of Licensor Owned IP, Licensor may determine that it may need to seek clearances from third parties where Licensor Owned IP may be subject to intellectual property rights, including privacy and publicity rights, of third parties which rights are embodied in such Licensor Owned IP, including in certain Photos and Audiovisual Works (“Third Party IP Clearances”) (e.g., a photograph of Elvis Presley together with Frank Sinatra). Licensee shall be solely responsible for procuring all Third Party IP Clearances. Licensor agrees to use reasonable best efforts to assist Licensee in procuring any Third Party IP Clearances, including advising Licensee, to the extent known, of the parties that need to be contacted for such Third Party IP Clearances, and making introductions for Licensee where Licensor has an existing relationship, provided, however, that nothing contained in this Agreement shall be construed as obligating Licensor to (i) violate any fiduciary obligations it has to any third parties, (ii) actually negotiate the terms for the Third Party IP Clearances, (iii) grant rights to Licensee where to do so would violate the approval or consents rights of a third party, or (iv) grant rights to Licensee broader than or otherwise inconsistent with the rights granted to Licensee and restrictions imposed upon Licensee elsewhere in this Agreement.
Article 6
MEMPHIS DEVELOPMENT AND OTHER PROJECTS Section 6.01 Right to Construct First Memphis Hotel. Licensor grants Licensee the option to design, construct, and operate the first new hotel on or contiguous to the Graceland property in Memphis, Tennessee from and after the date hereof either as part of the Masterplan or otherwise (whether or not such hotel is an Elvis Presley-themed Hotel) (the “First Memphis Hotel”). Licensee shall exercise said option in writing to Licensor within six (6) months from the Effective Date, or Licensee shall lose the right to construct the First Memphis Hotel. If Licensee exercises said option, and the construction of the First Memphis Hotel has not begun by
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the later of twenty four (24) months from the effective date of this Agreement or twelve (12) months after Licensor has made the land available for development of the First Memphis Hotel, Licensee shall lose the right to construct the First Memphis Hotel but shall not be liable to Licensor for any damages as a result of not constructing the First Memphis Hotel, nor shall it have any other effect on this Agreement. Licensor shall obtain and assign to Licensee fee title to the land for the First Memphis Hotel unless there is a compelling reason that such fee title cannot be obtained and Licensee is advised of such reason. If Licensor is unable to obtain fee title to the First Memphis Hotel land, then Licensor shall obtain and assign to Licensee a lease to such land in form and substance reasonably acceptable to Licensee, with a term that is not less than ninety- nine (99) years. Licensor shall have the right to decide the location of the First Memphis Hotel in consultation with Licensee. Licensor shall be solely responsible for removing any tenants located at any property in which the First Memphis Hotel will be built, and the land shall not be considered “available for development” as provided above until such tenants have been removed.
Section 6.02 First Phase Government Funding and Tax Abatements. Any government funding and/or tax abatements provided to Licensor or Licensee or any of their Affiliates for the first phase of the Masterplan or otherwise shall be shared by Licensor and Licensee to the extent permissible under applicable law and to the extent such government funding and/or tax abatements are related to the development of properties, including hotels, surrounding the Graceland property (i.e., such funding or abatement is not related to the expansion of the Graceland museum).
Section 6.03 Subsequent Memphis Hotels. Provided Licensee has exercised the option and constructed the First Memphis Hotel in accordance with Section 6.01, Licensor grants Licensee the option to design, construct, and operate subsequent new hotels on or contiguous to the Graceland property in Memphis, Tennessee from and after the date hereof either as part of the Masterplan or otherwise (whether or not the hotels are an Elvis Presley-themed Hotel) (the “Subsequent Memphis Hotels”). Licensee must exercise said option in writing to Licensor within six (6) months from the opening of the First Memphis Hotel or Licensee shall lose the right to construct the Subsequent Memphis Hotels. If Licensee exercises said option, and if the construction of the Subsequent Memphis Hotels have not begun by the later of twenty four (24) months from the opening of the first Memphis Hotel or twelve (12) months after Licensor has made the land available for development of the Subsequent Memphis Hotels, Licensee shall lose the right to construct the Subsequent Memphis Hotels but shall not be liable to Licensor for any damages as a result of not constructing the Subsequent Memphis Hotels nor shall it have any other effect on this Agreement. Licensor shall have the right to decide the location of any of the Subsequent Memphis Hotels in consultation with Licensee. Licensor shall be solely responsible for removing any tenants located at any property in which the Subsequent Memphis Hotels will be built, and the land shall not be considered “available for development” as provided above until such tenants have been removed.
Section 6.04 Second Phase Government Funding and Tax Abatements. Any government funding and/or tax abatements provided to Licensor or Licensee or any of their respective Affiliates for the second phase of the Masterplan or otherwise shall be shared by Licensor and Licensee to the extent permissible under applicable law and to the extent such government funding and/or tax abatements are related to the development of properties,
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including hotels, surrounding the Graceland property (i.e., such funding or abatement is not related to the expansion of the Graceland museum).
Section 6.05 Elvis Presley-themed Hotel in Memphis. Licensee acknowledges that at least one (1) of the Memphis hotels constructed by Licensee under this Article 6, if any, shall be an Elvis Presley-themed Hotel.
Section 6.06 EPE Heartbreak Hotel. Notwithstanding any of the foregoing, including Licensee’s exclusive rights under Section 2.01, Licensee acknowledges that Licensor reserves all rights to continue to operate the EPE Heartbreak Hotel and use the mark “HEARTBREAK HOTEL” in connection therewith, until such time that Licensor and Licensee agree in good faith (upon Licensee’s exercise of its option either with respect to the First Memphis Hotel or the Subsequent Memphis Hotels), that such hotel shall be re-branded, re-developed, destroyed, or replaced with a new hotel constructed and operated by Licensee or its Project Company under the mark “HEARTBREAK HOTEL”. If the parties decide that the EPE Heartbreak Hotel shall not be re-branded, re-developed, destroyed, or replaced with a new hotel constructed and operated by Licensee under the mark “HEARTBREAK HOTEL”, Licensor and its Affiliates may continue to operate and receive all revenue from the EPE Heartbreak Hotel.
Section 6.07 Sharing of Costs Subsequent to Development of Hotels. The parties shall discuss in good faith the sharing of costs and responsibilities relating to infrastructure (e.g., driveways, easements, municipal services) that affect both Licensor and Licensee properties, and the efforts and responsibilities for the marketing and promotion of such properties in Memphis, Tennessee.
Article 7
ROYALTY AND PAYMENTS Section 7.01 Gross Revenues. Licensee shall pay to Licensor royalties in respect of all Gross Revenues derived from any and all sources in connection with the Elvis Properties, in accordance with the terms and provisions set forth in this Article 7. All sales by Licensee of any goods or services to any Licensee Related Party, including all inter-company transactions, shall be carried on Licensee’s books of account at the full regular wholesale price charged to unrelated third parties, and Licensee shall account for and pay royalty payments on all such sales as if they occurred on an arms-length basis to an unrelated party. For the avoidance of doubt, amounts received by Licensee in respect of the sale, financing or other disposition of an Elvis Property shall not be included in Gross Revenues.
Section 7.02 Comps. Licensee shall be permitted to distribute commercially reasonable quantities of Elvis Property-themed Merchandise, food, beverages, liquor, room and board, tickets, or other items free of charge, in a manner consistent with industry custom and practice without incurring any obligation to pay royalties thereon under this Agreement, provided that the value of such items does not exceed five percent (5%) of the Gross Revenues derived therefrom during the year in which such distributions occurred. In the event the value of such items that are distributed free of charge exceeds five percent (5%) of the Gross Revenues
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derived therefrom during the year in which such distributions occurred, Licensee shall pay royalties on the excess of such value over five percent (5%) in accordance with this Agreement.
Section 7.03 Elvis Property Royalties. Except as otherwise provided in this Article 7, Licensee shall pay to Licensor a royalty of three percent (3%) of any and all Gross Revenues derived from the Elvis Properties, including the First Memphis Hotel and the Subsequent Memphis Hotel, or the operation thereof, or from activities, services, products or other sources at, from, or in connection therewith. To the extent Licensee pays a fee to a third party to establish or supervise such third party’s Food and Beverage Outlet, Lounge, Spa and/or Retail Store on the Elvis Property (e.g., a fee paid to Jean Georges to establish a restaurant at an Elvis Property), the Gross Revenues derived therefrom shall be excluded from Gross Revenues for the purpose of computing royalties, up to an amount not to exceed ten percent (10%) of Licensee’s total Gross Revenues for the applicable calendar year.
Section 7.04 Gaming Royalty. To the extent not prohibited by applicable law and would not require Licensor to be licensed, Licensee shall also pay to Licensor a royalty of three percent (3%) of Gross Revenue derived from gambling at each Elvis Property. If payment to Licensor of such royalties is prohibited by law or would require Licensor to be licensed, Licensee shall instead pay to Licensor a certain royalty per square foot (the “Base Casino Royalty”) of Casino floor for each Casino located in Las Vegas, Nevada, with the dollar amount per square foot to be determined by an independent third party acceptable to Licensor and Licensee within sixty (60) days after the Effective Date, and thereafter adjusted annually (from the Effective Date) on the basis of the Consumer Price Index as issued by the US Bureau of Labor Statistics. For each Casino located outside Las Vegas Nevada where payment to Licensor of royalties based on Gross Revenues is prohibited by law, Licensee shall instead pay to Licensor a royalty of X dollars per square foot, where:
X= (inflation adjusted Base Casino Royalty) * Y/Z
where
Y = average gaming floor revenue for the applicable Casino location in the previous year
Z = Las Vegas average gaming floor revenue in the applicable year
Section 7.05 Elvis Property-themed Merchandise. Licensee shall pay to Licensor a royalty of ten percent (10%) of any and all Gross Revenues derived from the sale of Elvis Property-themed Merchandise. Such royalty in respect of particular Elvis Property-themed Merchandise shall accrue when such merchandise is sold, shipped, delivered, billed and/or paid for, whichever occurs earlier. Gross Revenues derived from the sale of Elvis Property-themed Merchandise shall not be included in the computation of Gross Revenues for purposes of determining royalties payable to Licensor under Section 7.03.
Section 7.06 Royalty Payments with Respect to Elvis Presley-Themed Food and Beverage Outlets, Lounges, Spas, and Retail Stores Operated by Third Parties. Subject to obtaining Licensor’s approval under Section 11.06, Licensee shall pay to Licensor a royalty up to three percent (3%) (but if a lower percentage is actually received by Licensee, then such lower percentage subject to Licensor’s consent) of any and all gross revenues derived from any Elvis
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Presley-themed Food and Beverage Outlets, Lounges, Spas, and Retail Stores operated by third parties and/or co-branded with third party names and/or marks (e.g. Elvis Presley-themed Hard Rock Café, Elvis Presley-themed Johnny Rockets, Elvis Presley-themed Equinox Gym). Such royalty shall be based upon the total gross revenues generated from the Elvis Presley-themed Food and Beverage Outlets, Lounges, Spas, and Retail Stores (not merely the portion or percentage thereof received by Licensee). Licensee shall retain all royalties based on gross revenues above three percent (3%). Neither (x) rent payable by such third parties to Licensee or (y) gross revenues derived from the Elvis Presley-themed Food and Beverage Outlets, Lounges, Spas, and Retail Stores operated by third parties and/or co-branded with third party names and/or marks shall be included in the computation of Gross Revenues for purposes of determining royalties payable to Licensor under Section 7.03.
Section 7.07 Sponsorships, Commercial Tie-Ins, and Co-Branding Opportunities. Licensor’s royalty with respect to any Gross Revenues from any third party sponsorships, commercial tie-ins and co-branding opportunities (e.g., if a third party pays fees for their name or trademark to be associated with an Elvis Property) shall be negotiated in good faith by Licensor and Licensee at the time such sponsorship is permitted hereunder, if at all, pursuant to Section 13.05a).
Section 7.08 Guaranteed Minimum Royalties. Licensee shall pay Licensor the below guaranteed minimum royalties for each calendar year within thirty (30) days of the end of such calendar year (i.e., by January 30th of the immediately following year) during the Term (“Guaranteed Minimum Royalties”), except that the Guaranteed Minimum Royalty for the calendar year ending December 31, 2007 shall be due upon the earlier of (i) the date of Licensee’s receipt of funds from the closing of the Rights Offering and, if required, the Back-Stop (each as defined in the Membership Interest Purchase Agreement dated as of June 1, 2007 by and among Licensee, Licensor, and Flag Luxury Properties, LLC) or (ii) December 1, 2007. The Guaranteed Minimum Royalty shall be non-refundable but actual royalties paid during the applicable calendar year shall be applied against the Guaranteed Minimum Royalty. Notwithstanding any of the foregoing, any direct payments made by a Project Company or other Person that holds a Site License to Licensor shall be applied against the Guaranteed Minimum Royalties due to Licensor hereunder.
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Section 7.09 Royalty Payments. Licensee shall calculate the royalties due hereunder based upon Gross Revenues in quarterly periods ending on the last days of March, June, September, and December of each calendar year, and shall pay the royalty payment then due within thirty (30) days of the end of such quarterly period. To the extent that the royalties paid hereunder during any calendar year are less than the Guaranteed Minimum Royalty for the applicable calendar year, Licensee shall pay such shortfall with the payment due January 30 of the following calendar year. Termination of this Agreement shall not relieve Licensee from its royalty payment obligations with respect to royalties accruing during the Term or the Unbranding Period. Further, in the event of any termination of this Agreement, including without limitation any termination pursuant to Section 23.03, Licensee shall pay to Licensor a pro-rated Guaranteed Minimum Royalty calculated as (i) the total Guaranteed Minimum Royalty for the calendar year in which such termination occurs, (ii) divided by 365, (iii) multiplied by the number of days that have elapsed in such calendar year through the date of termination. All actual royalties paid for such calendar year through the date of termination shall be applied against such pro-rated Guaranteed Minimum Royalty. To the exte | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||