HomeMy WebLinkAboutC-6446 - Exclusive Merchandising Agreement - City Centennial-Related MerchandiseMERCHANDISING AGREEMENT
THIS MERCHANDISING AGREEMENT ("Agreement") is entered into and
effective as of 2S ,1 , 2006, by and between the City of Newport Beach, a
municipal corporation (City"), and Beach Drive Co., a sole proprietorship ("Vendor").
RECITALS
A. City is coordinating celebrations and other events commemorating its Centennial
Anniversary from October 2005 through October 2006.
.B. Vendor is engaged in the business of producing and selling merchandise to
companies, retailers, and non-profit organizations.
C. Vendor desires to produce, market and sell "Centennial -Related Merchandise" to
companies and retailers. The term "Centennial -Related Merchandise" shall mean
only the items listed on Exhibit "A", attached hereto, and such other items as the
City designates, in writing, as Centennial -Related Merchandise.
D. City agrees to allow Vendor to produce, market and sell "Centennial-Rclated
Merchandise "based upon the terms set forth below.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set
forth, the City and Vendor hereby agree as follows:
Grant of Right to sell Centennial -Related Merchandise.
Subject to the terns and conditions set forth herein, City hereby grants to Vendor
the right to sell Centennial -Related Merchandise to companies, retailers and non-
profit organizations.
2. Limitation on Grant.
The right granted in Section 1 relates solely to the production and sales of
Centennial -Related Merchandise. The right granted in Section 1 is not exclusive,
and City shall have the option to contract with another vendor at any time to sell
or market Centennial -Related Merchandise.
3. Term.
The term of this Agreement shall be six (6) months, commencing on May 1, 2006,
and expiring on October 31, 2006 ("Term").
4. Vendor Scope of Work.
Vendor shall produce, market and sell Centennial -Related Merchandise, subject to
City's approval as described below, to companies and retailers.
5. Merchandise.
Prior to offering a Centennial -Related Merchandise item for sale, Vendor
shall obtain the written approval of City of both the design of that item and
its sale price.
No item shall be sold unless approved by the City.
Vendor shall deliver samples of such items to the City. No item shall be sold at a
price exceeding the wholesale price approved by the City. Vendor shall produce
sufficient quantities of Centennial -Related Merchandise, and maintain sufficient
back-up inventory to meet City and customer demand.
6. Trademark/Logo.
In connection with this Agreement, and subject to the City's written consent for
each instance, including but not limited to, the personalization of any Centennial -
Related Merchandise with Vendor's customer's logo, Vendor shall have the right
to use City's Centennial name, trademark, and logo. Vendor acknowledges that
City has an interest in maintaining and protecting the image and reputation of its
trademark, and that in order to accomplish this purpose, Vendor must in all cases
assure City that its' trademark and logo are at all times used in a manner
consistent with the requirements established by City. Vendor agrees that City has
the right to examine and approve or disapprove in advance the use, contents,
appearance, and presentation of any and all advertising, promotional or other
similar materials, proposed to be used in comnection with City's Centennial name,
trademark or logo. Vendor agrees that nothing contained in this Agreement shall
give it any right, title or interest in City's trademarks and logos, and that such
trademarks and logos are the sole property of City.
7. Risk of Loss.
Vendor shall bear the risk of damage to, or loss of, Centennial -Related
Merchandise, Vendor's equipment or any other property used in the performance
of this Agreement and City shall have no responsibility for the protection or
preservation of Centennial -Related Merchandise, Vendor' equipment or any
other property used in the performance of this Agreement.
8. Payment to City.
A. Payment.
On the tenth (10`x') of each month, Vendor shall pay to City an amount
equal to eight percent (8%) of the Gross Receipts resulting from the
operations permitted under this Agreement ("Vendor Fees") from the
previous month. All items sold prior to the execution of this agreement
shall be subject to its terms. All Vendor Fees must be mailed to:
Revenue Division
City of Newport Beach
3300 Newport Blvd.
PO Box 1768
Newport Beach, CA 92658-8915
The place of payment may be changed at any time by the City upon thirty
(30) days prior written notice to Vendor. Mailed payments of the Vendor
Fees shall be deemed paid on the date the payment is postmarked by the
postal authorities. If postmarks are illegible, the payment shall be deemed
paid upon actual receipt by City's Accounts Receivable division. Vendor
assumes all risk of loss and responsibility for late payment charges if
payments are made by mail.
B. Delinquent Vendor Fees.
If Vendor fails to pay any Vendor Fees when due, Vendor will pay, in
addition to the unpaid Vendor Fees, five percent (5%) of the delinquent
Vendor Fee amount as a late fee. If the Vendor Fees arc still unpaid at the
end of the fifteen (15) days, Vendor shall pay an additional five percent
(5%) of the delinquent Vendor Fee amount as a late fee. It is mutually
agreed by the parties to this Agreement that these amounts are appropriate
to compensate the City for loss resulting from the late payment of Vendor
Fees, including lost interest opportunities, and other cost of servicing the
delinquent account.
C. Unauthorized Use Charge.
Vendor shall pay City one hundred percent (100%) of the Gross Receipts
for any sale of goods not specifically pennitted by this Agreement. The
existence of this provision, and the payment of this charge or any part of
it, does not constitute an authorization for a particular service or use, and
does not waive any City rights to terminate the sales or use, or to default
Vendor for participating in or allowing any authorized use.
D. Gross Receipts.
"Gross Receipts", as used in this Agreement, shall mean the total amount
of money received from Vendor's sales of Centennial -Related
Merchandise from whatever source derived whether received or to become
due, before any deductions including, but nor limited to, any costs,
possessory interest taxes, or other property taxes. Gross Receipts,
however, shall not include: (1) federal, state, or municipal taxes collected
fi-om the consumer (regardless of whether the amount is stated to the
consumer as a separate charge) and paid over periodically by Vendor to a
governmental agency accompanied by a tax return or statement as required
by law; or (2) refunds for merchandise that is returned. The amount of
taxes and refunds shall be clearly shown on the books and records of
Vendor. Vendor Fees shall be calculated and paid by Vendor on the basis
of Gross Receipts, whether the income is received by Vendor or by any
permittee or licensee, or their agents.
9. Taxes.
Vendor agrees to pay, before delinquency, all federal, state or local taxes,
assessments and fees assessed or levied by reason of the business or other Vendor
activities related to the operation of the merchandising business, including
licenses or permits. Such taxes shall also include, but not be limited to, sales
taxes and any property taxes. Vendor acknowledges that this Agreement may
ID
create a possessory interest subject to property taxation and that Vendor shall pay
any property taxes levied on such interest.
10. Books and Records.
In addition to the Scope of Work, Vendor shall maintain detailed books and
accounts. Such books and accounts shall include:
A. Monthly inventory sheets reflecting sales to retailers;
B. Monthly inventory sheets reflecting sales to companies; and
C. Other records as City may request from time to time.
All such sheets shall be signed by Vendor or its authorized agent attesting
to the accuracy thereof.
Vendor shall deliver such records to the City concurrently with its payment of the
Vendor Fees.
Records shall be supported by source documents such as sales slips, daily cash
register tapes, purchase invoices, e-mails, print-outs of on-line invoices or other
documents as necessary to allow City to easily determine the Gross Receipts.
City, or its designee, shall have the right to examine Vendor's books and records
at any reasonable tirne for a period of three (3) years following the end of the
Term. Vendor shall keep such books and records in one (1) location within the
County of Orange. These books and records must be maintained separately from
all other accounts not relating to the Centennial -Related Merchandise. City, at its
discretion, shall have the right to inspect and audit the business of Vendor, its
agents, permittees, and licensees operating in connection with the Centennial -
Related Merchandise, as necessary and appropriate for City to determine the
amounts of Vendor Fees due City in compliance with the requirements of this
Agreement. At City's request, Vendor shall promptly provide, at Vendor's
expense, any necessary data to enable City to fully comply with all requirements
of the state and federal government related in any way to this Agreement. Such
data shall include, if required, a detailed breakdown of Vendor's receipts and
expenses.
The fill cost of City's audit shall be borne by City Lidless one of the following
conditions exist, in which case Vendor shall pay the cost of City's audit:
the audit(s) reveal an underpayment of more than five percent (5%)
or more than $10,000, whichever is less, between the Vendor Fees
due as reported and paid by Vendor pursuant to this Agreement
and the Vendor Fees determined by the audit; or
2. Vendor has failed to maintain complete and true books, records,
accounts, and supporting documents in strict accordance with this
Section.
Any underpayment of Vendor Fees of less than five percent (5%) revealed by the
audit shall be paid within thirty (30) days written notice from City, without
penalty, otherwise, Vendor shall incur late fees on the delinquent amount pursuant
to Section 8(B).
Vendor's .failure to keep complete and accurate records by means of double -entry
bookkeeping and make therm available for City inspection is, like all other failures
to comply with covenants of this Agreement, a breach of this Agreement and
cause for termination.
11. Vendor's Representations.
Vendor represents and warrants to City as follows:
A. that it has been validly formed and duly exists as a sole proprietcrship
under the laws of the State of California;
B. that it has the right and authority to enter- into this Agreement and is not
prevented from entering into this Agreement by any statute, regulation or
order of any governmental authority, or by any license, debt instrument,
mortgage, lease, contract, or other agreement or instrument binding upon
it or any of its property;
C. that it is duly authorized to enter into this Agreement and has taken all
necessary action to obtain such authorization, and that no consent of, or
notice to, any other individual, private entity or governmental authority is
required in connection with the execution, delivery and performance of
this Agreement;
D. that it has the capability to perform its duties and functions as
contemplated by this Agreement; and
E. that this Agreement, when properly executed by both parties, will
constitute a legal, valid and binding agreement, enforceable by City in
accordance with its terms.
12. No Partnership or Agency.
The parties hereby agree that Vendor shall be and act as an independent
contractor. This Agreement is not intended to create, nor shall it be construed as
creating, a partnership. Except as specified by City in writing, Vendor shall have
no authority, express or implied, to act on behalf of City in any capacity
whatsoever as an agent.
13. Assignment.
Vendor shall not sell, assign or otherwise transfer a controlling interest in
Vendor's rights hereunder.
14. Compliance with Applicable .Laws.
Vendor at its sole cost and expense, but with reasonable cooperation from City,
shall obtain all permits licenses and governmental authorizations necessary for the
conduct of its business in accordance with the terms of this Agreement, including
a business license from the City. Vendor shall also comply with all applicable
laws, statutes, ordinances and regulations governing Vendor's performance of its
obligations hereunder.
15. Vendor Representative.
Vendor hereby designates Alan Brandenburger, who shall be City's primary
contact to Vendor.
This Agreement will be administered by the Revenue Division.. Glen Everroad,
Revenue Division Manager, shall be the Project Administrator and shall have the
authority to act for City under this Agreement. The Project Administrator or his
authorized representative shall represent City in all matters pertaining to the
services to be rendered pursuant to this Agreement.
16. Insurance and Indemnity.
Without limiting Consultant's indemnification of City, and prior to
commencement of work, Consultant shall obtain, provide and maintain at its own
expense during the term of this Agreement, a policy or policies of liability
insurance of the type and amounts described below and in a form satisfactory to
City.
A. Certificates of Insurance. Consultant shall provide certificates of
insurance with original endorsements to City as evidence of the insurance
coverage required herein. Insurance certificates must be approved by
City's Risk Manager prior to commencement of performance or issuance
of any permit. Current certification of insurance shall be kept on file with
City's at all times during the term of this Agreement.
B. Signature. A person authorized by the insurer to bind coverage on its
behalf shall sign certification of all required policies.
C. Acceptable Insurers. All insurance policies shall be issued by an
insurance company currently authorized by the hlsurance Commissioner
to transact business of insurance in the State of California, with an
assigned policyholders' Rating of A (or higher) and Financial Size
Category Class VII (or larger) in accordance with the latest edition of
Best's Key Rating Guide, unless otherwise approved by the City's Risk
Manager,
D. Worker's Compensation.
Vendor shall maintain Workers' Compensation Insurance and Employer's
Liability Insurance for its employees in accordance with the laws of the
State of California. Any notice of cancellation or non -renewal of all
Workers' Compensation policies must be received by City at least thirty
(30) days prior to such change. The insurer shall agree to waive all rights
of subrogation against City, its officers, agents, employees and volunteers
for losses arising from work performed by Vendor for City.
E. General Liability Coverage.
Vendor shall maintain commercial general liability insurance with a
combined single limit of not less than One Million and 00/100 Dollars
($1,000,000.00) per occurrence for bodily injury, personal injury and
property damage, including without limitation, contractual liability. If
commercial general liability insurance or other form with a general
aggregate limit is used, either the general aggregate limit shall apply
separately to the work to be performed under this Agreement, or the
general aggregate limit shall be at least twice the occurrence limit.
F. Automobile Liability. Coverage.
Vendor shall maintain automobile insurance covering bodily injury and
property damage for all activities of Vendor arising out of or in connection
with work to be performed under this Agreement, including coverage for
any owned, hired, non -owned, or rented vehicles, in an amount not less
than Five Hundred Thousand and 00/100 Dollars ($500,000.00) combined
single limit for each occurrence.
G. Endorsements.
Each general liability and automobile liability insurance policy shall be
endorsed with the following specific language:
City, its elected or appointed officers, officials, employees, agents
and volunteers are to be covered as additional insureds with respect
to liability arising out of work performed on behalf of the Vendor.
2. This policy shall be considered primary insurance as respects to
City, its elected or appointed officers, officials, employees, agents
and volunteers as respects to all claims, losses, or liability arising
directly or indirectly from the Vendor's operations or services
provided to City. Any insurance maintained by City, including any
self-insured retention City may have, shall be considered excess
insurance only and not contributory with the insurance provided
hereunder.
3. This insurance shall act for each insured and additional insured as
though a separate policy had been written for each, except with
respect to the limits of liability of the insuring company.
4. The insurer waives all rights of subrogation against City, its
elected or appointed officers, officials, employees, agents and
volunteers.
Any failure to comply with reporting provisions of the policies
shall not affect coverage provided to City, its elected or appointed
officers, officials, employees, agents or volunteers.
6. The insurance provided by these policies shall not be suspended,
voided, canceled, or reduced in coverage or in limits, by either
party except after thirty (30) days written notice has been received
by City.
H. Timely Notice of Claims.
Vendor shall give City prompt and timely notice of claim made or suit
instituted arising out of or resulting from Vendor's performance under this
Agreement.
Change in Amounts.
City, at its discretion, may require the revisions of amounts and coverages
at any time during the term by giving Vendor sixty (60) days prior written
notice. City's requirements shall be designed to assure protection from
and against the kind and extent of risk existing in the operation pursuant to
this Agreement. Vendor also agrees to obtain any additional insurance
required by City for new improvements, in order to meet the requirements
of this Agreement.
Failure to Comply.
If Vendor fails or refuses to take out and maintain the required insurance
or fails to provide the proof of coverage, City has the right to obtain the
insurance. Vendor shall reimburse City for the premiums paid with
interest from the effective date of coverage at the maximum allowable
legal rate then in effect in California. City shall give notice of the
payment of premiums within thirty (30) days of payment stating the
amount paid, names of the insurer(s), and rate of interest. Reimbursement
and interest shall be paid by Vendor on the first (1") day of the month
following the notice of payment by City.
Notwithstanding the preceding Section, if Vendor fails or refuses to take
out or maintain insurance, City has the right to declare this Agreement in
default without further notice to Vendor, and City shall be entitled to
exercise all legal remedies in the event of such default.
17. Indemnity.
To the fullest extent pennitted by law, Vendor shall indemnify, defend and hold
harmless City, its City Council, boards and commissions, officers, agents and
employees (collectively, the "Indemnified Parties") from and against any and all
claims (including, without limitation, claims :for bodily injury, death or damage to
property), demands, obligations, damages, actions, causes of action, suits, losses,
judgments, fines, penalties, liabilities, costs and expenses (including, without
limitation, attorney's fees, disbursements and court costs) of every kind and
nature whatsoever (individually, a Claim; collectively, "Claims"), which may
arise from or in any manner relate (directly or indirectly) to any work performed
or services provided under this Agreement or Vendor's presence or activities at
any place including, but not limited to, Centennial Events (including the negligent
and/or willful acts, errors and/or omissions of Vendor, its principals, officers,
agents, employees, suppliers, consultants, subcontractors, anyone employed
Agreement, this Agreement shall continue in frill force and effect for so
ID
long as City does not terminate this Agreement pursuant to Section 19,
and City may enforce all its rights and remedies tinder this Agreement,
including, but not limited to, the right to recover any Vendor Fees as they
become due, plus damages.
20. Waiver.
The waiver by a party of the performance of any provision, term, covenant or
condition of this Agreement shall not invalidate this Agreement nor shall such
waiver constitute a continuing waiver or a waiver of any other provision, term,
covenant or condition of the Agreement, whether or not similar, or a waiver of
any subsequent breach of the same. The subsequent acceptance of Vendor Fees
by City shall not be deemed a waiver of any preceding breach by Vendor of any
provision, term, covenant or condition of this Agreement, regardless of City's
knowledge of such preceding breach at the time of acceptance of the Vendor Fees.
The waiver by a party of the time for performing any act shall not constitute a
waiver of the time of performing any other act, whether or not similar. No waiver
shall be binding unless executed in writing by the party making the waiver
Failure on the part of City to require or exact frill and complete compliance with
any of the provisions, covenants, conditions or terms of this Agreement shall not
be constructed as in any manner changing the terms of this Agreement and shall
not prevent the City from enforcing any provision hereof.
21. Rules and Regulations.
Vendor shall comply with all rules and regulations concerning activities at the
Centennial Events as City shall issue from time to time.
22. Nondiscrimination.
Vendor agrees not to discriminate in any manner against any person or persons on
account of race, color, religion, gender, sexual orientation, medical status,
national origin, age, marital status, or physical disability under this Agreement,
including but not limited to the providing of goods, services, facilities, privileges,
advantages, and accommodations, and to the obtaining and holding of
employment.
23. Fair Employment.
In the performance of this Agreement, Vendor shall not discriminate against any
employee or applicant for employment because of race, religious creed, color,
national origin, ancestry, physical disability, mental disability, medical condition,
marital status, sex, sexual orientation, or age pursuant to Section 12940 et seq. of
the Government Code. Vendor shall take affirmative action to ensure that
applicants are employed, and that employees are treated during employment
without regard to their race, religious creed, color, national origin, ancestry,
physical disability, mental disability, medical condition, marital status, sex, sexual
orientation, or age. Such action shall include, but not be limited to, the following:
employment, upgrading, demotion or transfer, recruitment or recruitment
advertising, layoff or termination; rates of pay or other forms of compensation;
terns, conditions or privileges of employment; and selection for training,
including apprenticeship. Vendor shall permit access to its records of
employment, employment advertisements, application forms, and other pertinent
dates and records by the Fair Employment and Housing Commission or City for -
the purpose of investigation to ascertain compliance with this Section.
24. Standard of Employees.
Vendor and its employees shall at all times conduct themselves and the operations
of Vendor in a creditable manner. Vendor shall thoroughly train its employees in
their duties and shall regularly monitor them to ensure that they behave in a
courteous manner, do not disturb the quiet enjoyment of others, and otherwise
comply with all of the provisions in this Agreement.
25. Notices.
All notices, demands, requests or approvals to be given tinder the terms of this
Agreement shall be given in writing, to City by Vendor and conclusively shall be
deemed served when delivered personally, or on the third (3"(') business day after
the deposit thereof in the United States mail, postage prepaid, first-class mail,
addressed as hereinafter provided. All notices, demands, requests or approvals
from Vendor to City shall be addressed to City at:
Attn: Glen Everroad
Revenue Division Manager
City of Newport Beach
3300 Newport Boulevard
PO Box 1768
Newport Beach, CA 92663
All notices, demands, requests or approvals from City to Vendor shall be
addressed to Vendor at:
Alan Brandenburger
Beach Drive Co.
201 Shipyard Way #7
Newport Beach, CA 92663
26. Headings.
The headings of the various paragraphs hereof are intended solely for means of
reference, and are not intended for any purpose whatsoever to modify, explain or
place any construction of any on the provisions of this Agreement.
27. Invalidity.
If any provision of this Agreement, or the application thereof to any persons or
circumstances, shall to any extent be held to be invalid or unenforceable, neither
the remainder of the Agreement nor the application of such provision to persons
or circumstances other than those as to whom or which it is held to be invalid or
unenforceable shall be affected thereby, and every provision of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
28. Attorney's Fees.
The prevailing party in any action brought to enforce the terms and conditions of
this Agreement, or arising out of the perfornlance of this Agreement, shall not be
entitled to recover its attorneys' fees.
29. Entire Agreement.
This Agreement contains the entire understanding of the parties. The terms of this
Agreement are intended by the parties hereto as a final expression of their
agreement with respect to the subject matter hereof, and may not be contradicted
by evidence of any prior or contemporaneous agreement. The parties further
intend that this Agreement constitute the complete and exclusive statement of its
terms, and that no extrinsic evidence whatsoever may be introduced in any formal
or informal proceedings, involving this Agreement. No provisions of this
Agreement may be amended or added to except by an agreement in writing,
signed by all of the parties hereto, or their respective successors in interest.
30. Successors.
All of the terms, covenants and conditions of this Agreement shall be binding
upon, and shall inure to the benefit of, the heirs, executors, administrators,
successors and assigns of the parties hereto.
31. Time is of the Essence.
Timc is of the essence in performance of all the terms, covenants, and conditions
of this Agreement, and, except as otherwise provided in this Agreement, all of the
terns, covenants, and conditions of this Agreement shall apply to benefit, and
bind the successors and assigns of the respective parties, jointly and individually.
32. Governing Law.
This Agreement shall be governed by, and construed in accordance with, the laws
of the State of California. Any action brought relating to this Agreement shall be
adjudicated in a court of competent jurisdiction in the County of Orange.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of
the date first above written.
APPROVED AS TO FORM:
CAV
Aaron Harp
City Attorney
for the City of Newport Beach
ATTEST:
By
,aU&A,j\k /b - 9-'r&V
LaVonne Harkless,
City Clerk
CITY OF NEWPORT BEACH,
A Municipal Corporation
By:
Homer Bludau
City Manager
for the City of Newport Beach
VENDOR:
B•
Alan Brandenburger
Its
Beach Drive Co.
Attachments: Exhibit A — Centennial Related Merchandise
EXHIBIT "A"
CENTENNIAL -RELATED MERCHANDISE
Hats-- $ 10.00
T-shirts-- $ 10.50
Polo's-- $21.00
Fleece Tops--$ 42.00
Blankets-- $ 28.50
Jackets-- $ 48.00
Sports Bag $31.00
Beach Towel $32.50
Golf Towel $12.00
These prices include all items embroidered with Centennial logos.