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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.