6.1 LICENSE AGREEMENT BETWEEN XXXXX XXXXXXXX AND THE COMPANY
AGREEMENT
THIS AGREEMENT ("Agreement") entered into this __ day of December,
1997 by and between AWG, Ltd., a Delaware corporation with offices at 0000
Xxx Xxxxx Xxxx, Xxxx, Xxxxxxxxxx 00000 ("AWG") and XXXXX XXXXXXXX, an
individual whose address is c/o Sports Management Network, 00000 Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000 ("ANDRETTI").
W I T N E S S E T H
WHEREAS AWG is a company engaged in the worldwide distribution,
marketing and sale of wines and other related products;
WHEREAS, ANDRETTI is an internationally recognized celebrity whose
name, image, endorsement and services have taken on substantial goodwill and
value;
WHEREAS, ANDRETTI has by the maintenance of high standards of
quality and service, established a reputation, demand and goodwill for
products and organizations bearing the name, image, likeness and/or
endorsement of ANDRETTI, ("ANDRETTI Rights"); and
WHEREAS, AWG desires to utilize the ANDRETTI Rights to further its
marketing, sales and corporate objectives.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and for other good and valuable consideration, the receipt of which is
hereby acknowledged, it is agreed as follows:
1. Prior License Agreements Superseded
This AWG Agreement shall supersede and replace all between ANDRETTI
and AWG dated with all obligations and responsibilities thereunder
on the part of both parties excused.
2. Grant and Scope of License
ANDRETTI hereby grants to AWG, subject to the approval of ANDRETTI,
the non-transferable, non-sublicensable right to use the ANDRETTI
Rights in conjunction with the packaging and promotion of AWG
products ("Products").
3. Exclusivity
During the term of this Agreement, ANDRETTI shall not authorize the
use of the ANDRETTI Rights in connection with the manufacture,
distribution, marketing, and sale of any wine product or business
enterprise competitive with AWG or its Business Operations. It is
the intent of the parties that the license contained in Paragraph 1
hereof shall be exclusive with respect to Products and the Business
Operations in the Territory.
4. Term
Subject to termination provisions set froth in Paragraph 15 of this
Agreement, the term of this Agreement shall commence upon the
execution hereof and be continuous. For purposes of this Agreement,
each twelve (12) month period from January 1 through December 31
shall constitute one "Contract Year". This period shall hereinafter
be referred to as the "Term".
5. Territory
The license granted herein extends throughout the World
("Territory").
6. Marketing, Distribution and Promotion
A. AWG and the Board of Directors shall aggressively and
continuously make best efforts to distribute, market,
promote and sell the Products throughout the Territory,
including but not limited to Europe, Canada, South America,
Asia, Australia and the United States, and AWG shall use
its best efforts to make and maintain all necessary
arrangements for the distribution, marketing, promotion and
sale of the Articles throughout Territory. As used in this
Paragraph, "best efforts" shall include, but not be limited
to, developing and distributing point-of-sale and print
advertising materials and establishing and implementing a
defined public relations and sales plan to support AWG's
marketing and sales efforts undertaken with respect to the
Articles.
7. Services of ANDRETTI
During each Contract Year of this Agreement, AWG shall have the
right to utilize ANDRETTI's services for the production of
television and radio commercials, print advertisements, point of
sale executions, label designs, out-of-home advertisements, public
service announcements, trade relations activities, company and
wholesaler communications, and personal appearances or other media
forms now or hereafter known or created. While ANDRETTI will make
these appearances for no appearance fee, AWG shall be wholly
responsible for travel and related expenses incurred to perform
these services, including but not limited to the cost of first-class
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air fare for ANDRETTI and one guest. Additionally, to the extent
possible and where not conflicting or interruptive with other
professional activities, ANDRETTI will make himself available at
race venues for introductory visits with customers or guests at
AWG's request at no additional cost to AWG. ANDRETTI will provide
AWG with a calendar of available days as well as information as to
where he will be traveling in order to facilitate these appearances.
In the event ANDRETTI shall die during the Term of this Agreement,
AWG shall meet with ANDRETTI's personal representative to discuss
the option of having ANDRETTI's son, Xxxxxxx, perform the services
to be performed by ANDRETTI pursuant to Paragraph 7 of this
Agreement. In the event the personal representative, AWG and
ANDRETTI's child or children mutually reach such an agreement, a
written amendment will be executed by the parties reflecting such
agreement.
8. Compensation
In consideration for ANDRETTI's services and grants as herein set
forth, AWG shall provide to ANDRETTI a royalty equal to five percent
(5%) royalty on AWG gross revenue from sales of Products bearing the
ANDRETTI Rights. In addition, an annual payment equal to the lesser
of two percent (2%) of Company profits or One Hundred Fifty Thousand
Dollars and 00/100 ($150,000.00) shall apply to all other wine label
sales. Payment of the five percent (5%) royalty shall be made on a
monthly basis on paid invoices and shall accompany the previous
month's status and sales report pursuant to Paragraph 10F. In the
event that ANDRETTI shall die during the Term of this Agreement and
AWG, ANDRETTI's personal representative and ANDRETTI's son Xxxxxxx
are unable to reach an agreement regarding ANDRETTI's services as
set forth in Paragraph 7, AWG shall have the option to reduce the
above royalty by twenty-five (25%) percent. This option shall be
exercised by AWG, if at all, by written notice to ANDRETTI's
personal representative within ninety (90) days from the date of
this death.
9. Undertaking of AWG
The obligations of AWG shall include but not limited to:
A. The performance of all obligations required of AWG as
provided in this Agreement.
B. The payment to ANDRETTI of all royalties due based upon
sales in monthly periods. At the time for each payment, AWG
shall furnish ANDRETTI with a full and accurate statement
of Gross Sales during the immediately preceding month,
showing AWG's total distribution and sale of the Products
during the month, including an itemized list of the prices
and quantities of Products distributed and sold. Neither
the expiration nor the termination of this Agreement shall
relieve AWG from this obligation.
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For at least two (2) years following the termination or
expiration of this Agreement, AWG shall maintain such books
and records including, but not limited to, production,
inventory and sales records ("Books and Records") at AWG's
principal office as are necessary to substantiate that (i)
all statements submitted to ANDRETTI hereunder were true,
complete and accurate and (ii) all royalties and other
payments due ANDRETTI hereunder shall have been paid in
accordance with the provisions of this Agreement. All Books
and Records shall be maintained in accordance with
generally accepted accounting principles consistently
applied. During the term hereof, and for two (2) years
after the termination or expiration of this Agreement, the
Books and Records shall be open to inspection, audit and
copy by or on behalf of ANDRETTI during business hours.
10. Warranties and Representations of AWG and the AWG Board of Directors
AWG warrants, represents, covenants and agrees as follows:
A. That AWG has the right, power and authority to fulfill its
obligations under this Agreement and has not granted any
Rights that would interfere with the ANDRETTI Rights
granted to ANDRETTI under this Agreement;
B. The execution, delivery and performance of this Agreement
by AWG does not violate or in any way conflict with any
contract, agreement, judgment, award, law, rule or
regulation to which AWG is a part or is bound, and;
The above warranties and representations are in addition to, and
shall not be construed as restricting or limiting any warranties of
AWG, express or implied, which are provided by law or exist by
operation of law.
11. Ownership and Protection of the Rights and Properties
A. AWG acknowledges that the ANDRETTI Rights are the exclusive
property of ANDRETTI. AWG shall not use the ANDRETTI Rights
or Licensed Artwork bearing said Rights in any manner
whatsoever which, directly or indirectly, might derogate or
detract from their secondary meaning or goodwill.
B. AWG shall not at any time use, promote, advertise, display
or otherwise publish the ANDRETTI Rights or Licensed
Artwork bearing said Rights or any material utilizing or
reproducing any portion thereof, in such a manner as may
impair any of ANDRETTI's rights therein or reflect
adversely on the ANDRETTI, ANDRETTI Rights.
C. AWG shall use a registration indicator in the form of a
(R), "TM" as ANDRETTI directs in conjunction with the
ANDRETTI Rights.
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D. AWG shall provide all reasonable assistance and all
materials and execute all documents requested by ANDRETTI
to assist ANDRETTI in the maintenance and/or preservation
of the ANDRETTI Rights.
E. AWG shall not contest the validity of the ANDRETTI Rights,
nor will AWG willingly become an adverse party to
litigation in which others shall contest the validity of
the ANDRETTI Rights, Licensed Artwork bearing said Rights
or ANDRETTI's rights therein.
12. Promotional Articles
During the term of this Agreement and any renewal hereof, AWG shall
supply ANDRETTI, at no charge, reasonable quantities of the Products
as ANDRETTI may request.
13. Approval
A. All Products shall be of a style, appearance and quality
satisfactory to ANDRETTI as determined in his sole and
absolute discretion. AWG shall submit, prior to
manufacturing, distributing, marketing, promoting and
selling any of the Products, at no cost to ANDRETTI, two
(2) samples of each Product together with all tags, labels
and packaging materials to be used with the Products for
ANDRETTI's approval. Approval shall not be unreasonably
withheld. If ANDRETTI fails to give disapproval of any
sample submitted by AWG within five (5) days after the date
of ANDRETTI's receipt of AWG's submission, such failure
shall constitute an approval of the submission.
B. AWG shall submit, at least Fifteen (15) days prior to its
release to the general public, all promotional and
advertising materials relating to the Products and Business
Operations which utilize the ANDRETTI Rights including, but
not limited to, all copy and artwork prepared for use in
press releases, catalogs, point-of-sale, print and
electronic advertising for ANDRETTI's approval. Approval
shall not be unreasonably withheld. If ANDRETTI fails to
give disapproval of such promotional or advertising
materials submitted by AWG within five (5) days after the
date of ANDRETTI's receipt of AWG's submission, such
failure shall constitute an approval of the submission.
C. AWG shall maintain the same quality in the Products,
Business Operations and all point-of-sale materials
relating to the Products and Business Operations produced
as in the samples approved by ANDRETTI. AWG agrees to
provide upon demand a reasonable number of the Products and
of point-of-sale materials relating to the Products and
Business Operations at no cost to ANDRETTI for periodic
inspection and for the promotional use of ANDRETTI.
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D. If during the term of this Agreement there is to be any
change in the Products or the promotional or advertising
materials relating to the Products after the approval of
samples, AWG shall comply with the provisions of this
Paragraph for the changed item before the item's
manufacture, distribution, marketing or sale.
14. Compliance with Government Standards
AWG represents and warrants that the Products shall meet or exceed
all Federal, State and local standards, regulations and guidelines
pertaining to such products, including, but not limited to, those
pertaining to product safety, labeling, warnings, quality and
propriety. AWG agrees that it will not sell any Products or cause or
permit any Products to be manufactured, distributed, marketed or
sold in violation of Federal, State or local laws.
15. Termination
Without prejudice to any other rights which ANDRETTI may have,
ANDRETTI may at any time give notice of termination effective
immediately:
A. If AWG shall fail to make any payments due
hereunder or to deliver any of the statements
required hereunder; or
B. If AWG becomes subject to any voluntary or
involuntary order of any governmental agency
involving the recall of any Products or
promotional or advertising material because of
safety, health or other hazards or risks to the
public; or
C. If AWG fails to obtain or maintain adequate
product liability insurance as determined by the
AWG Board of Directors; or
D. If AWG commits any material breach of its
obligations under this Agreement. For purposes of
this Agreement, material breach shall include the
failure, in Andretti's reasonable discretion, to
maintain a high degree of quality in relation to
the products or materials bearing the Andretti
Rights.
16. Post-Termination and Expiration Rights and Obligations
A. After expiration of the term of this Agreement or the
termination of this Agreement, AWG may dispose of Products
which are on hand or in the process of manufacture at the
date of expiration or at the time notice of termination is
received for a period of sixty (60) days after the date of
expiration or the date of notice of termination, as the
case may be, provided that the royalties with respect to
that period are paid and the appropriate statements for
that period are furnished. Any Products not disposed of by
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AWG within this sixty (60) day period must be destroyed or
reprocessed so that the ANDRETTI Rights are no longer
present in whole or in part on the Products or on their
packaging material. Upon ANDRETTI's request, AWG shall
provide evidence satisfactory to ANDRETTI of such
destruction or reprocessing of remaining Articles or
packaging material. After termination of this Agreement
under any provision, AWG shall, within sixty (60) days
after the effective date of termination, make a final
statement and payment of royalties. If the term of this
Agreement expires AWG shall, within ninety (90) days after
expiration of the term, make a final statement and payment
of royalties.
B. After the expiration or termination of this Agreement,
all rights granted to the AWG shall forthwith revert to
ANDRETTI and AWG shall refrain from further use of the
ANDRETTI Rights and Licensed Artwork bearing said Rights,
or from use of any marks or designs similar to the ANDRETTI
Rights and Licensed Artwork in connection with the
manufacture, distribution, marketing or sale of Products.
AWG also shall turn over to ANDRETTI all molds, silkscreens
and other materials which reproduce the ANDRETTI Rights or
Licensed Artwork bearing said Rights or shall give evidence
satisfactory to ANDRETTI of their destruction. AWG shall be
responsible to ANDRETTI for any damages caused by the
unauthorized use by AWG of such molds, silkscreens or
reproduction materials which are not turned over to
ANDRETTI.
C. Within fifteen (15) days after expiration or notice of
termination of this Agreement, AWG shall deliver to
ANDRETTI a written statement indicating the number and
description of the Products which it had on hand or in the
process of manufacturing as of the date of expiration or
termination notice. ANDRETTI may conduct a physical
inventory in order to verify such statement.
17. Indemnity and Insurance
A. AWG acknowledges that it will not have any claims against
ANDRETTI for any damage arising out of the operation of
AWG's business. AWG agrees to indemnify, hold harmless and
defend ANDRETTI as well as his agents, attorneys, officers,
employees, successors and assigns from and against all
suits, actions, claims, injuries, damages, costs and
expenses including attorney's fees, court costs and other
legal expenses arising out of or connected with (i) the
manufacture, distribution, marketing or sale of the
Products; (ii) any promotional or advertising material
relating to the Products; (iii) AWG's methods of marketing,
selling or distributing the Products; (iv) any unauthorized
use of, or infringement of, any trademark, service xxxx,
copyright, patent, process, license, method or device by
AWG in connection with the Products; (v) any intentional
torts or criminal acts; (vi) any personal injury or death
resulting from the advertisement,
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manufacture distribution, sale or consumption of the
Products; (vii) agreements or alleged agreements made or
entered into by AWG to effectuate the terms of this
Agreement; or (viii) alleged defects or deficiencies in
said Products or the use thereof, or false advertising,
fraud, misrepresentation or other claims related to the
Products.
B. AWG's indemnity obligations under this Agreement shall
survive the term of this Agreement.
18. Assignment and Sublicense
AWG shall not assign, transfer nor sublicense any rights granted to
AWG under this Agreement without the prior written approval of
ANDRETTI. AWG shall make all requests for approval to assign rights
in writing to ANDRETTI.
19. Impossibility
AWG and ANDRETTI agree that, in the event of governmental regulation
or enactment which disallows or prohibits the use of ANDRETTI's name
and likeness being utilized as contemplated under this Agreement,
performance under this Agreement will be impossible at which point
all further obligations on the part of both parties shall be excused
and rights provided for hereunder shall cease.
20. Notices
Any notice which either of the parties desires or is required to
give to the other under the terms of this Agreement shall be deemed
given if sent registered, certified, or by courier, postage prepaid,
addressed to such party at the address specified below:
If to ANDRETTI: Mr. Xxxxx XXXXXXXX
c/o Sports Management Network, Inc.
00000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
ATTN: Xxxx X. Xxxxxxxxx
If to AWG, Inc. AWG, Ltd.
0000 Xxx Xxxxx Xxxx
Xxxx, Xxxxxxxxxx 00000
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21. Entire Agreement
This Agreement supersedes all prior writings, discussions,
negotiations and understandings of whatever kind or nature between
the parties and/or their representatives, and may be amended only by
a writing signed by the parties.
IN WITNESS WHEREOF, the parties have hereto set their hands and
seals on the day and year first above written.
ANDRETTI AWG, Ltd.
BY: _________________________ BY: ______________________
Xxxxx Xxxxxxxx Xxxx Xxxxxxxx
DATE: ______________________ ITS:______________________
DATE:_____________________
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