LICENSE AGREEMENT
THIS AGREEMENT is made as of the 28th day of October, 1999, by and between
- OTAM SpA, a corporation organized under the laws of Italy, with its
registered offices located at Xxx X. Xxxx, 0, Xxxxx Xxxxxxxxxx Xxxxxx (XX),
Xxxxx (hereinafter referred to as the "Licensee")
and
- CIGARETTE RACING TEAM, INC., a corporation organized under the laws of the
State of Florida, U.S.A., with its principal place of business located at
0000 X.X. 000xx Xxxxxx, Xxxxxxxx, Xxxxxxx 00000, X.X.X. (hereinafter
referred to as the "Licensor")
(hereinafter collectively referred to as the "Parties")
WITNESSETH
WHEREAS, Licensor, to the best of its knowledge and belief, is the registered
owner of the trademarks, service marks, business names and
registrations for such trademarks, service marks and business names in
International Class 12, as listed on Schedule "A" attached hereto
(hereinafter referred to as the "Xxxx"); and
WHEREAS, Licensee desires to obtain rights in Licensor's Xxxx for use in
connection with manufacturing and selling of specific watercrafts
bearing such Marks as
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specifically defined in Schedule "B" attached hereto (hereinafter
referred to as the "Boats"); and
WHEREAS, Licensee and Licensor, have read this agreement (hereinafter referred
to as the "Agreement") and understand and accept the terms, conditions
and covenants contained in this Agreement as being reasonably
necessary in order to maintain Licensor's standards and business
practice as it relates to the retaining of entities utilizing
Licensor's Xxxx.
NOW THEREFORE, in consideration of the premises and of the mutual covenants and
conditions set forth herein, the Parties hereby agree as follows:
1. GRANT OF LICENSE
Licensor grants to Licensee the exclusive, world-wide right and license to
use the Licensor's Xxxx in connection with the manufacture and sale of the
Boats.
The Cigarette Heritage 45' will be identified as an "Express Cruiser" and
the Cigarette Millennium 55' will be identified as an "Express Cruiser
It is understood and agreed that Licensee shall have no right of sublicense
or assignment.
Licensor further grants to Licensee the right to use the Xxxx as part of
its corporate name as follows: "Cigarette Racing Team Italia SpA" to be
registered in Genoa, Italy, in accordance with Italian law or incorporate a
subsidiary with this name. This right will terminate upon termination of
this Agreement.
2. NON DISCLOSURE
As a condition of this Agreement, the Parties agree that
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during the term of this Agreement and any subsequent renewals as defined in
Article 4 herein, the Parties shall not disclose to any third party the
terms of the Agreement.
3. QUALITY STANDARDS
A. Licensee shall manufacture the Boats in compliance with such quality
standards and technical specifications as set forth in Schedule "B" for
boats of their class and category bearing the Xxxx;
B. Licensor authorizes Licensee to extend its forty-five (45) foot Boat up to
fifty (50) feet and its fifty-five (55) foot up Boat to sixty (60) feet.
The authority to extend each of the Boats is granted on the condition that
a complete set of architectural drawings for the extended Boat or Boats be
prepared on or before December 31, 2001. Upon notice of the substitution of
the extended Boat or Boats to Licensor, the new dimension(s) will
substitute that licensed hereunder;
C. Licensor grants to Licensee the right of first refusal to manufacture an
80' Express Cruiser bearing the Xxxx;
D. The Parties undertake to consult with one another prior to manufacturing
any new model(s) of the Boat(s);
E. Upon reasonable written request to Licensee, Licensor may inspect any Boat
utilizing the Xxxx;
F. Should Licensor disapprove of any product submitted for review, Licensor
shall notify Licensee in writing and shall set forth in detail:
(i) the disapproval;
(ii) the defect for each disapproval; and
(iii) the commercially reasonable suggestions for correcting each such
defect, however such suggestions shall not be binding.
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4. TERM
A. Initial Term
The initial term of this Agreement shall be for a period of five (5) years,
commencing on the date mentioned above, subject to the terms and conditions
set forth herein.
B. Renewal Option
Licensee shall have the option to renew this Agreement for two (2)
additional periods of thirty-six (36) months each. In all cases, renewal
shall require that: (i) Licensee not be in violation of this Agreement or
any other agreement between Licensor and Licensee; (ii) Licensee give
written notice of its election to renew not less than three (3) months
prior to the end of the term then in effect; and (iii) Licensee shall have
paid to Licensor pursuant to Article 5 herein royalties of at least Eight
Hundred Seventy Five Thousand United States Dollars ($875,000). If any
rules or laws modifies, alters or amends all or part of this renewal
provision, then such provision shall be modified, altered or amended
accordingly, so as to be in full compliance with such rules and laws.
C. Subsequent Renewal Option
Subsequent to the periods as mentioned in Article 4 (B) above, Licensee
shall have the option to renew this Agreement for two (2) additional
periods of thirty-six (36) months each, if (i) Licensee is not in violation
of this Agreement or any other agreement between Licensor and Licensee; and
(ii) Licensee gives written notice of
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its election to renew not less than three (3) months prior to the end of
the term then in effect.
5. ROYALTY - ADVANCE ON ROYALTY
A. Licensee shall pay to Licensor as a royalty a sum equal to Twenty Seven
Thousand United States Dollars ($27,000) for each 45' Boat and Sixty Five
Thousand United States Dollars (5 65,000) for each 55' Boat. The royalties
are subject to renegotiation if Licensee extends the length of the Boats
pursuant to Section 3B. hereof.
B. Advance on Royalties
Licensee shall pay to Licensor as an advance on royalties the sum of Xxx
Xxxxxxx Xxxxxxx Xxxx Xxxxxxxx Xxxxxx Xxxxxx Dollars ($ 175,000) per year
payable in four quarterly installments of Forty Three Thousand Seven
Hundred Fifty United States Dollars ($ 43,750) each commencing November 1,
1999 (the "Advance Royalty") Upon the sale of any Boat, the royalties
earned will be a credit against the Advance Royalty.
C. Licensor undertakes to invest a sum equal to ten percent (10%) of the total
sum received for Royalties and Advance on Royalties for publicity on behalf
of Licensee's products. Proof of the publicity and the investment cost
shall be furnished to Licensee
6. USE OF THE XXXX
X. Licensee acknowledges that the Xxxx (including all rights therein and
goodwill associated therewith) shall, as between Licensee and Licensor, be
and remain the exclusive and complete property of the Licensor. Licensee
shall not, during the term of this Agreement or
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thereafter, question or challenge the property right of Licensor therein,
or the validity of this Agreement.
B. Licensee acknowledges and agrees that:
(i) The Xxxx as owned by Licensor shall be and remain the sole and
complete property of Licensor;
(ii) Licensee shall not at any time acquire or claim any right, title or
interest of any nature whatsoever in the Xxxx by virtue of this
Agreement or of Licensee's uses thereof in connection with the Boats;
(iii) Any right, title or interest in or relating to the Xxxx which comes
into existence during the term of this Agreement as a result of the
exercise by Licensee of any right granted to it hereunder shall
immediately and automatically vest in Licensor;
(iv) Licensee acknowledges the validity of the Xxxx and agrees never to
contest or assist others to contest the validity thereof.
7. LICENSEE's REPRESENTATIONS AND WARRANTIES
Licensee represents and warrants the following:
(i) Licensee is free to enter into and fully perform this Agreement;
(ii) All designs, materials and intellectual property furnished by
Licensee in connection with each of the Boats will be of Licensee's
own and original creation (except for matters in the public domain or
material which Licensee is fully licensed to use);
(iii) The manufacture, advertisement and sale of the Boats will not
infringe upon or violate any rights of any third party of any nature
whatsoever;
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(iv) The Boats will be of high standard in style, appearance and quality,
will be safe for users and will comply with all applicable
governmental rules, guidelines, safety codes and regulations;
(v) The Boats will be manufactured, advertised and sold in accordance
with all applicable federal, state and local laws.
8. LICENSOR's REPRESENTATIONS AND WARRANTIES
Licensor represents and warrants the following:
(i) Licensor is the holder of the rights of the Xxxx and has the right to
grant the license as set forth in this Agreement;
(ii) Licensor has applied for and obtained trademark registration for the
Xxxx and agrees to pay all renewal fees necessary in order to maintain
the registration of the Xxxx during the term of this Agreement.
9. INDEMNITY
A. Licensee will at all times indemnify and hold Licensor, its officers,
directors and employees (including persons with whom Licensor has
contractual arrangements with respect to the Boats) harmless, from and
against any and all claims, damages, liabilities, costs and expenses
(including attorneys' fees) arising out of any alleged latent or patent
defects in the Boats, or any breach or alleged breach by Licensee of any
representation, warranty or obligation hereunder including, but not limited
to, any infringement or violation of any third party's rights with respect
to any patent, design, intellectual property or manufacture of the Boats.
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B. Licensor will at all times indemnify and hold Licensee, its officers,
directors and employees and those with whom Licensee has contractual
arrangements from and against any and all claims, damages, liabilities,
costs and expenses (including attorneys fees) arising out of any breach or
alleged breach by Licensor of its obligations hereunder.
C. During the term of this Agreement and any subsequent renewals thereof,
Licensee shall provide a guarantee in the form of a stand--by letter of
credit in the maximum amount of four hundred thousand United States dollars
($400,000.00), for claims made by a Boat owner against Licensor in
connection with repairs caused by latent or patent defects in the
manufacture of the Boats by Licensee.
10. INSURANCE
During the term of this Agreement, Licensee shall maintain, at its expense,
product liability insurance with a reputable insurance carrier in the
amount of two million United States dollars ($2,000,000.00). This insurance
policy shall name Licensor as an additional insured and will protect
against any claims, suits, losses, costs and expenses (including attorneys'
fees) relating to any actual or alleged harm, death or injury to any person
or loss or damage to any property arising out of or resulting from any
defect or alleged defects in the Boats. This policy shall provide for at
least 60 (sixty) days prior written notice to Licensor of the cancellation
or any substantial modification of the policy. As proof of insurance,
Licensee shall provide to Licensor a fully paid certificate of insurance
naming
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Licensor as an insured party before any Boats are offered for sale.
11. DEFAULT
A. In addition to and without prejudice to any rights which Licensor may have
at law or in equity, Licensor shall have the right to terminate this
Agreement with sixty (60) days prior written notice to Licensee specifying
the basis for default and termination upon the occurrence of any of the
following events:
(i) Licensee fails to make payment of royalties or furnish any statement
in accordance with the provisions set forth herein and such failure
extends for a period in excess of thirty (30) days;
(ii) Licensee fails to comply with any of its obligations or materially
breaches any warranty herein and does not cure such failure or breach
within thirty (30) days after notice thereof.
B. In the event of default, Licensor may require Licensee to provide immediate
payment of any royalties due or to become due hereunder.
12. BANKRUPTCY
If Licensee files a voluntary petition in bankruptcy and such petition is
not dismissed within thirty (30) days thereafter, or a receiver or trustee
for any of Licensee's property is appointed and such appointment is not
vacated within thirty (30) days thereafter, or Licensee takes advantage of
any insolvency law, then Licensor shall have the right to terminate this
Agreement
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and/or to require the immediate payment of any royalties due or to become
due hereunder.
13. FORCE MAJEURE
Licensee shall not be in breach or default of any provisions hereunder by
reason of delay or failure in performance of its duties and obligations due
to any act of God, war, riot or civil commotion, fire, accident, epidemic,
strike, lockout or other labor dispute, enactment of any rule, law, order
or act of governmental instrumentality (whether federal, state, local or
foreign) or any other cause beyond the reasonable control of Licensee and
should such condition continue for a period of three (3) months or more,
either party shall have the right to terminate this Agreement by giving the
other party at least thirty (30) days written notice to such effect.
14. TERMINATION
Licensee may, in its discretion, terminate its license under this Agreement
by giving at least sixty (60) days written notice to Licensor.
15. NOTICES
A. All notices and other communications under this Agreement shall, unless
otherwise stated herein, be given in writing to each party at the address
set forth below or at such other address as may be designated by the party
in a written notice to the other party and confirmed by registered mail.
All notices and communications sent by registered mail, hand delivered or
delivered by other means which provide for a receipt shall be effective
when
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sender is in receipt of a delivery notice signed by the recipient. All
notices shall be addressed as follows:
If to Licensor:
CIGARETTE RACING TEAM, INC.
0000 X.X. 000xx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
If to Licensee:
OTAM SpA
Xxx X. Xxxx, 0
00000 Xxxxx Xxxxxxxxxx Xxxxxx (XX)
B. Notices sent by telex or facsimile transmission shall not constitute proper
notice under this Agreement.
16. HEIRS, SUCCESSORS AND ASSIGNS
This Agreement shall apply to, inure to the benefit of and be binding on
the Parties, their respective heirs, executors, administrators, successors
and assigns.
17. ENTIRE AGREEMENT
A. This Agreement constitutes the entire agreement and understanding between
the Licensor and Licensee and supersedes any and all prior written or oral
agreements, understandings or arrangements between the Parties relating to
the subject matter contained in this Agreement. Neither Licensor nor
Licensee shall be entitled to rely on any agreement, understanding or
arrangement which is not expressly contained in this Agreement.
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B. The terms and conditions contained in this Agreement shall not be modified
or changed unless in writing and signed by a duly authorized corporate
officer, director or agent of the Licensor and Licensee.
C. No modification or amendment of any provision of this Agreement shall be
construed as a waiver, breach or cancellation of any other provision.
18. WAIVER
Failure by either of the Parties to enforce any rights under this Agreement
shall not be construed as a waiver of such rights. Any waiver, including
waiver of default, in any one instance, shall not constitute a continuing
waiver or a waiver in any one other instance. Any acceptance of money or
other performance by either of the Parties shall not constitute a waiver of
any default, except as to the payment of the particular payment or
performance so received.
19. ATTORNEYS' FEES
If either of the Parties commences an action against the other arising out
of or in connection to this Agreement, the prevailing party shall be
entitled to recover from the other party its reasonable attorneys' fees and
costs at the trial and appellate levels.
20. ASSIGNMENT
Neither party may assign or delegate any obligation under this Agreement or
any interest or right hereunder without prior written consent of the other
party.
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21. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Any provision of this Agreement which may be
determined by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction shall, as to that jurisdiction, be
effective to the extent of the prohibition or non enforceability without
invalidating the remaining provisions of this Agreement.
22. ARBITRATION
Any controversy or claim arising out of or relating to this Agreement, or
the breach thereof, shall be settled by arbitration in New York, New York,
U.S.A. in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect. One or more arbitrators shall be
appointed in accordance to the above mentioned rules and any award rendered
by the arbitrators shall be final and binding on the Parties and shall be
enforceable in any court of competent jurisdiction.
23. PROJECTIONS
The Parties shall provide in writing any terms, covenants, promises,
representations or claims regarding any income, sales or profits
projections that were made by either of the Parties or their
representatives to the other party (including the persons who made such
representations, the location and date thereof)
24. AUTHORITY
Licensor and Licensee have all requisite authority to enter into this
Agreement, whether arising under
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applicable Federal or State laws, rules or regulations to which either of
the Parties may be subject.
25. GENERAL
A. The invalidity or ineffectiveness of any provisions of this Agreement shall
not affect the validity or enforceability of any other provision or
covenant hereof or herein contained and any such invalid provision or
covenant shall be deemed to be severable.
B. The article headings contained herein are for the purpose of convenience
only and do not constitute part of this Agreement.
C. A reference to the singular includes a reference to the plural and vice
versa, and references to the masculine include a reference to the feminine
and neuter genders and vice versa.
D. This Agreement shall not be binding on either of the Parties, unless and
until it has been accepted and signed by authorized officers or directors
of the Licensor and Licensee.
26. SURVIVAL
The provisions contained in Articles 10 and 11 hereof and the obligations
to pay royalties pursuant to Article 5 hereof shall survive any termination
of this Agreement with respect to any Boats made or sold prior to such
termination and Articles 20 and 23 of this Agreement as well as this
Article 27 shall survive any termination.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
CIGARETTE RACING TEAM, INC. OTAM SpA
/s/ XXXX XXXXXX /s/ UGO CASA
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By: Xxxx Xxxxxx By: Ugo Casa
Chairman of the Board President
Chief Operating Officer
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