Exhibit 10.31
AGREEMENT
This Agreement ("Agreement") is made and entered into this __ day of
_________, 2003 between CART, Inc., a Michigan corporation, having its place of
business at 0000 Xxxxxxxx Xxxxxxx Xxxxx Xxxxx, Xxxxxxxxxxxx, XX 00000 ("CART")
and Xxxxxx/Xxxx Racing, 000 Xxxxx Xxxx., Xxxxxxxxxxxx, XX 00000 ("TEAM").
W I T N E S S E T H:
WHEREAS, CART has sanctioned the Bridgestone Presents the Champ Car World
Series Powered by Ford ("Championship Series") in 2003 ("Race Year");
WHEREAS, CART desires to induce TEAM to enter a second race car exclusively
in the Championship Series in the Race Year and TEAM is interested in entering a
second race car upon the terms and conditions set forth herein;
WHEREAS, CART desires to obtain endorsement and promotional services, and
TEAM is willing to advertise and promote the Championship Series on the terms
and conditions hereafter set forth; and
WHEREAS, the parties desire to establish a mutually beneficial relationship
in accordance with the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties agree as follows:
1. TEAM shall prepare and enter and expend its mutual efforts to qualify
and race a second race car exclusively in the Championship Series, in
all of the races in the Race Year.
2. In consideration for TEAM's agreement to race in each of the races, and
in consideration of TEAM's providing promotional benefits through
advertising on the second race car and other below enumerated
promotional services, CART agrees to pay TEAM the sum of One Million
($1,000,000.00) Dollars during the 2003 race season. The payments will
be made in twenty (20) equal installments. The payments shall be made
during the week following each of the races in the race season. If
there are less than twenty (20) races in the race season, the monies
remaining after the last race of the season shall be paid in a lump
sum.
3. TEAM understands that the payment of the funds set forth in paragraph 2
above is intended to supplement TEAM's revenue so that TEAM has enough
funding to field a team during the Race year. In the event that TEAM
receives net sponsorship revenue that totals more than Six Million Five
Hundred ($6,500,000.00) Dollars, TEAM will reimburse CART fifty (50%)
percent of all excess amounts until CART has been reimbursed the amount
set forth in paragraph 2 above. For purposes of this Agreement, net
sponsorship revenue shall include all amounts given to TEAM under this
Agreement and the Entrant Support and Participation Agreement and
reduced by commissions paid and out of pocket expenses required by the
sponsorship contract. In addition, any refund to CART will be reduced
by expenses incurred by TEAM under paragraph 5. So long as this
Agreement remains in effect, and for a period of one (1) year
thereafter, TEAM agrees to maintain complete and accurate books and
records containing information necessary to calculate the amount of
sponsorship funds connected. Upon at least ten (10) days written notice
by CART, TEAM shall allow its books and records to be examined and
audited by CART at reasonable times.
4. TEAM agrees to abide by all the rules and regulations of CART and the
series including but not limited to execution of the Entrant Support
and Participant Agreement.
5. TEAM agrees that it shall provide the following promotional services to
CART:
A. CART Sponsor will be designated as an Associate Sponsor provided
such CART Sponsor does not conflict with sponsor of TEAM unless this
requirement is waived by TEAM.
B. Identification Elements - These items will be provided for in 2003:
(i) Logo identification on the team transporters; in a location as
determined by TEAM
(ii) Logo identification on the fire suits and uniforms; in a
location as determined by TEAM
(iii) Website link to XXXX.xxx
C. Signage
(i) A maximum four spaces on the second race car, on both sides of
the front nose and if available, in the sole discretion of the
TEAM, on portions of the sidepod top and the engine cowling.
(ii) Logo on Team/Driver Uniforms
a. Driver's race suit
b. Driver's cap - CART Sponsor signage displayed on the side
or back of the cap. Any changes initiated by CART after the
initial cap order will be at CART's expenses.
c. Driver's "off track" clothing - CART Sponsor displayed on
driver's casual wear, at CART Sponsor expense.
d. Crew helmets - CART Sponsor signage displayed in a location
as determined by TEAM
e. Crew fire suits
f. Crew caps - CART Sponsor signage displayed on the side or
back of the cap. Any changes initiated by CART after the
initial cap order will be at CART's expense.
(iii) Logo on team equipment
a. CART Sponsor logo on scoring stand, refueling station, and
other team pit equipment as reasonably acceptable to TEAM
b. CART Sponsor logo on team transporters - Color and design
of graphics on team transporters determined by TEAM
(iv) Pit banner signage during race events, based on availability
(v) Provided such does not interfere with TEAM activities, TEAM
will provide Driver appearances for CART Sponsors at CART
Sponsor designated locations for PR purposes and autographs
totaling 8 appearances for all CART Sponsors during the racing
season. If the location is away from the race track or test
track CART Sponsor will reimburse TEAM for Drivers travel
expenses
(vi) Coordinated Public Relations Program
a. Sponsor recognition in all interviews; print, television,
radio, and digital mediums
b. Usage of driver/car/team for advertising needs
c. Media releases announcing team and sponsorship activities
d. Recognition on web page as an associate sponsor
e. Associate sponsor recognition on all Team printed material.
After initial printing any changes are at CART's expense.
f. Dedicated Public Relations department
D. Team must supply hospitality, race tickets and credentials for CART
Sponsor and its guests as set forth below:
(i) A reasonable number of motor home invitations at all CART
races
(ii) Two (2) annual credentials per sponsor, with a maximum of 6 in
total
(iii) Two (2) grandstand tickets per sponsor at each event with a
maximum of four in total for the season.
6. The term of this Agreement shall commence upon the date both parties
have executed this Agreement and shall continue until the end of the
2003 Race Year unless terminated prior thereto pursuant to the terms
hereof.
7. TEAM will not disclose, publish or disseminate confidential information
(which shall be defined as the terms of this Agreement) to anyone other
than those of their employees, attorneys and accountants with a need to
know and TEAM agrees to take such reasonable precautions as may be
necessary to prevent any unauthorized use, disclosure, publication,
dissemination of confidential information which shall include the terms
of this Agreement. In the event TEAM violates the provisions of this
paragraph, CART has the right to declare this Agreement null and void
and TEAM shall be required to refund any monies paid through that date.
Further, any press releases or public statements regarding the
relationship of the parties must be approved by CART.
8. The parties acknowledge the importance of each party's reputation, good
will and public image and, accordingly, agree to maintain and enhance
such image by restraining from taking any action contrary to the best
interest of either party, or detracting from the reputation of either
party. Each party shall refrain from making any statements about the
other party that adversely affects, casts in an unfavorable light, or
otherwise maligns the business or reputation of such other party or any
of its principals.
9. TEAM will maintain throughout the length of this Agreement, commercial
general liability insurance (including but not limited to advertising
liability and contractual liability coverage applicable to the terms of
the indemnification provisions of this Agreement) covering claims for
personal and bodily injury, and property damage arising out of the
staging and performance of the races, with limits of at least Three
Million ($3,000,000.00) Dollars combined single limit per occurrence.
Each party shall specifically name CART as an additional insured.
10. TEAM agrees to indemnify, defend and hold harmless CART and any
sponsor's of CART whose logo may appear on TEAM's car from and against
any and all expenses, damages, claims, suits, actions, judgments, and
costs, including reasonable attorneys' fees arising out of or in
connection with the running of a car in any race during the Race year.
CART will have the Sponsor hold the TEAM harmless regarding any
advertising disseminated by the Sponsor.
11. This Agreement shall be governed and construed in accordance with the
laws of the State of Indiana. If a dispute arises under this Agreement
which cannot be resolved first through good faith negotiations, such
dispute shall be submitted to arbitration and resolved by a single
arbitrator in accordance with the Commercial Arbitration Rules of the
American Arbitration Association then in effect. Such arbitration shall
take place at the office of the American Arbitration Association
located in Indianapolis, IN. The award of decision rendered by the
arbitrator shall be final, binding
and conclusive and judgment may be entered upon such award by any
court. This provision shall survive the termination and/or expiration
of this Agreement.
12. This writing constitutes the entire Agreement between the parties
hereto regarding the subject matter hereof and may not be changed or
modified except by a writing signed by the party or parties to be
changed thereby.
13. This Agreement does not constitute and shall not be construed as a
consulting, partnership or joint venture between TEAM and CART. Neither
party shall have any right to obligate or bind the other party in any
manner whatsoever, and nothing herein contained shall give, or is
intended to give, any rights of any kind to any third party.
14. The failure of either party at any time or times to demand strict
performance by the other of any of the terms, covenants or conditions
set forth herein shall not be construed as a continuing waiver or
relinquishment thereof and each may at any time demand strict and
complete performance by the other of said terms, covenants and
conditions.
15. This Agreement has been jointly drafted by the respective
representatives of CART and TEAM and no party shall be considered as
being responsible for such drafting for the purpose of applying any
rule construing ambiguities against the drafter or otherwise. No draft
of this Agreement shall be taken into account in construing the
Agreement.
16. It is hereby understood and agreed to by CART and TEAM that any
statement or notice required to be given hereunder shall be deemed
given if mailed, certified mail, return receipt requested to the
following addresses:
If to CART: CART, Inc.
0000 Xxxxxxxx Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attn: X. Xxxxxxxx Xxxx, III
If to TEAM: Xxxxxx/Xxxx Racing
000 Xxxxx Xxxx.
Xxxxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxx
17. This Agreement may be terminated in the event that:
(i) Either party to this Agreement files a petition in bankruptcy or
a petition in bankruptcy is filed against either party to this
Agreement that is not removed within thirty (30) days from the
date such petition is filed; a general assignment of either
party's assets is
made for the benefit of creditors; or CART dissolved or
liquidates pursuant to Delaware state law or otherwise.
(ii) Either party to this Agreement breaches any of the material
representations, warranties or covenants contained in this
Agreement, which breach is not cured by the breaching party
within thirty (30) days after receiving written notice of such
breach from the other party.
If the Agreement is terminated by TEAM pursuant to the terms of this
Paragraph 17, TEAM shall be entitled to retain all sums paid to it by
CART through the date of termination.
If the Agreement is terminated by CART pursuant to the terms of this
Paragraph 17, CART shall be entitled to immediately terminate any
future payments to TEAM.
18. Titles to articles, paragraphs and subparagraphs are for information
purposes only and shall not be considered a substantive part of the
Agreement.
19. This Agreement and any subsequent amendments may be executed in one or
more counterparts, each of which shall be deemed to be an original, but
all of which shall constitute one and the same agreement. This
Agreement and any subsequent amendments may be signed and delivered by
facsimile transmission, which delivery shall have the same binding
effect as delivery of the document containing the original signature.
At the request of any party, any document delivered by facsimile
signature shall be followed by or re-executed by all parties in
original form, provided that the failure of any party to do so will not
invalidate the signature delivered by facsimile transmission.
20. In the event that any provisions of this Agreement are found to be
invalid or unenforceable by any court of competent jurisdiction, such
provision may be deemed severed and any such finding shall not
invalidate or render unenforceable any other provisions hereof.
21. Each party shall comply with all governmental laws, ordinances, and
regulations applicable to the performance of this Agreement over which
said party has jurisdiction and control.
22. This Agreement may be unilaterally terminated by CART in the event CART
is unable to field eighteen (18) entrants in the 2003 Race Year or in
the event CART ceases to sanction races during the Race Year. In the
event of such termination, this Agreement shall be null and void with
no further obligations or liability on the part of either party. It is
further agreed and understood that this Agreement must be approved by
the Board of Directors of CART's parent company.
23. CART acknowledges that one of the indirect owners of TEAM is a current
member of the Board of Directors of Championship Auto Racing Teams,
Ltd., a Delaware corporation ("CHAMP"), CART's parent corporation.
CART, for itself and on behalf of CHAMP, acknowledges that Xxxx X. Xxxx
has excluded himself from voting on the decision making process with
regard to, whether or not CART should enter into a program to offer
sponsorship money to various Teams. Furthermore, CART, for itself and
on behalf of CHAMP, acknowledges that Xxxx X. Xxxx has not been
involved in any of the negotiations on behalf of CART or CHAMP with
regard to the transaction proposed under this Agreement and that the
substance of the transaction contemplated by this Agreement is similar
to those offer to other Teams. CART, for itself and on behalf of CHAMP,
acknowledges that at all times, Xxxx has disclosed the fact that he has
an interest in TEAM and that he would not be involved in the decision
on behalf of CART or CHAMP to enter into this Agreement. By approving
this Agreement, the Board of Directors of CHAMP specifically
acknowledge and agree to the terms of this paragraph.
CART, Inc.
By:____________________________________
Its:___________________________________
XXXXXX/XXXX RACING
By:____________________________________
Its:___________________________________
