Exhibit 10.16
Redline Sports Marketing, Inc.
Agreement #:ESM092704BL
Licensee: Execute Sports Marketing
LIMITED LICENSE AGREEMENT FOR XXXXX XXXXXXX
THIS AGREEMENT, is entered into as of the 27th day of September 2004, by and
between REDLINE SPORTS MARKETING, INC., a North Carolina corporation
("Redline"), and PADOVA INTERNATIONAL dba EXECUTE SPORTS MARKETING, a
corporation under the laws of California ("Licensee").
BACKGROUND
A. Redline is the owner of, or has rights to, and desires to license certain
trademarks which are set forth on the attached Exhibit A ("Redline Trademarks").
B. Redline has rights in and desires to license certain copyrights in works,
which are set forth on the attached Exhibit B ("Redline Copyright Works").
C. Licensee is engaged in the business of manufacturing and selling the
products set forth on Exhibit C ("Licensed Products") attached hereto and
desires to obtain a limited license from Redline to manufacture and sell such
products bearing the Redline Trademarks and Redline Copyright Works as more
specifically set forth herein.
D. Redline desires to protect the integrity of their respective trademarks
and to protect and preserve the integrity of and their respective rights in
their respective copyright works.
E. Licensee and Redline agree that certain restrictions on Licensee's use of
the Redline Trademarks and Redline Copyright Works are necessary to protect
their rights. Redline and Licensee have entered into this Agreement to set forth
their respective rights and obligations.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
Section 1. LICENSE
1.1 Grant of Limited License By Redline. Upon the terms and conditions set forth
herein, Redline hereby grants to Licensee, and Licensee hereby accepts, a
LIMITED, NONTRANSFERABLE license and NON-EXCLUSIVE right to use the Redline
Trademarks and the Redline Copyright Works in the Contract Territory (as defined
below) during the Contract Term (as defined below) in connection with the
manufacture, packaging, shipping and sale of the products set forth on Exhibit C
bearing the Redline Trademarks and the Redline Copyright Works (the "Licensed
Products"). It is understood and agreed that this license shall pertain only to
Licensed Products and does not extend to any other product or service. The
rights granted to Licensee hereunder shall not include the right of Licensee, or
any person or entity purchasing from Licensee other than Action Performance
Companies and their successors or assigns, to sell Licensed Products at race
tracks or souvenir trailers or concessionaires track side at or during any
racing event. Licensee shall only have the right to manufacture or produce
Licensed Products in quantities that are reasonably required to meet its
customer demands.
1.2 Limitations; No Right to Sublicense. The license and rights granted herein
shall be limited to the express terms set forth herein and shall not include any
right of Licensee to do any of the following acts, each of which is expressly
prohibited hereby: (i) manufacture any souvenirs, including the packaging
thereof, bearing the Redline Trademarks, or Redline Copyright Works, or any of
them, except for Licensed Products; (ii) grant sublicenses or assignments in or
of the license granted herein or any portion thereof, except as approved in
writing by Redline and where the sublicensed manufacturer has executed a
manufacturing agreement satisfactory to Redline; (iii) produce any Licensed
Products under any name other than Licensee's name set forth on Exhibit C; (iv)
use or knowingly permit the use of any of the Redline Trademarks or Redline
Copyright Works in any manner or for any purpose not specifically authorized
under this Agreement; (v) change, alter, add to, delete from, augment or modify
the Licensed Products in any way or mix the Redline Trademarks or Redline
Copyright Works with any other unauthorized licensed indicia; or (vi) sell the
Licensed Products to any person or entity for incorporation into another product
or souvenir that has not been properly licensed by Redline. No license is
granted hereunder for the manufacture, sale, or distribution of Licensed
Products to be used as premiums, for fund raising, as giveaways, in combination
sales, or to be disposed of under similar methods of merchandising or sold for
less than the usual selling price for the purpose of increasing sales. Licensee
shall not use any of the Redline Trademarks or Redline Copyright Works in
connection with any sweepstake, lottery, game of chance or any similar
promotional sales device, scheme, or program. In the event Licensee desires to
use Licensed Products as premiums or for promotional purposes, Licensee
acknowledges that a separate contractual arrangement must be made with Redline.
Licensee's use of the Redline Trademarks or Redline Copyright Works is for the
benefit of Redline and Licensee shall not acquire any rights whatsoever in the
Redline Trademarks or Redline Copyright Works except as specifically set forth
herein. Licensee is prohibited from using the Xxx Xxxxx Racing trademarks or any
affiliate trademarks in any domain name registration or uniform resource locator
(URL) address. It is agreed and understood that should Licensee desire to use
the said trademarks on any Internet site, the request must be submitted to Xxx
Xxxxx Racing in writing.
Section 2. TERRITORY
2.1 Territory. The limited license granted pursuant to this Agreement shall
extend throughout the United States of America and its territories and
possessions and Canada (the "Contract Territory"). Licensee may submit a written
request to Redline to extend the Contract Territory to additional countries. The
Contract Territory will be expanded only upon written approval of Redline. This
Agreement grants no right to manufacture, sell, market or distribute Licensed
Products outside the Contract Territory, and this Agreement grants no right to
authorize any person or entity to manufacture, sell, market or distribute
Licensed Products outside the Contract Territory. Licensee agrees not to sell
Licensed Products to any person or entity who Licensee knows or has reason to
know intends or is likely to resell Licensed Products outside the Contract
Territory.
Section 3. TERM
3.1 Term. The term of this Agreement shall be for a period beginning on the date
hereof and ending on December 31, 2005 (the "Contract Period") unless sooner
terminated in accordance with the terms hereof. This Agreement may be renewed by
a writing signed by each party hereto.
Section 4. ROYALTY AND COMPENSATION
4.1 Royalty. (a) In consideration of the rights granted by Redline hereunder,
Licensee hereby irrevocably agrees to pay Redline a royalty (the "Royalty")
equal to twelve percent (12%) of the Net Sales Price for each Licensed Product
sold (except in prearranged special projects wherein specific royalty rate will
be discussed) or otherwise distributed by Licensee payable in U.S. Dollars
payable as set forth below.
(b) "Net Sales Price" shall mean the wholesale list price or top-of-the-line
gross invoice sales price, whichever is greater, less permitted discounts and
allowances, not to exceed one percent (1%) of Licensee's Net Sales of Licensed
Product per annual period. No deductions shall be made for uncollectible
accounts or for other costs incurred in the manufacturing, selling, advertising
or distribution of the Licensed Products. The royalty obligations shall accrue
on the earliest of shipping or actual invoicing by Licensee regardless of the
time of collection by Licensee.
(c) If Licensee sells any Licensed Products to any party affiliated with
Licensee or directly or indirectly related to or under common control with
Licensee, at a price less than the regular price charged to unrelated parties,
then the royalty payable to Redline shall be computed on the basis of the
regular price charged to unrelated parties.
(d) Upon expiration or termination of this Agreement, all Royalty obligations,
including any unpaid portion of the Guaranteed Minimum Royalty, shall be
accelerated and shall immediately be due and payable, subject only to the right
of sell down.
(e) All of Licensee's obligations under this Section 4 shall be performed
without any right of Licensee to invoke set-offs, deductions and other similar
rights.
(f) If Licensee enters any agreement permitting Licensee to use the name and/or
likeness of any other NASCAR team or personality and such agreement provides for
a higher royalty percentage than specified herein, Licensee immediately shall
give Redline notice of such agreement and higher royalty percentage. The parties
agree that such notice shall automatically amend the royalty percentage of this
Agreement to the royalty percentage of the notified agreement and that the
amended, higher royalty percentage shall be applied retroactively to all sales
made under this Agreement.
4.2 Guaranteed Minimum and Advance Royalties. Licensee agrees that
notwithstanding the actual amount of sales of Licensed Products, it shall be
obligated to make certain nonrefundable minimum payments to Redline ("Guaranteed
Minimum Royalties") in the amount of $7,000.00 during the Contract Period. The
2004 Guaranteed Minimum Royalty ($1,000.00) is payable as follows: $1,000.00 due
upon execution of the agreement. The 2005 Guaranteed Minimum Royalty ($6,000.00)
is payable as follows: $1,500.00 due on or before March 31, June 30, September
30 and December 31, 2005. All payments of Royalty pursuant to Section 4.1 in
each calendar year will be credited against the Guaranteed Minimum Royalty. Once
the prepaid minimum amount is reached, royalty payments will be made in
accordance with Section 4.1. Guaranteed Minimum Royalties in excess of actual
sales for any calendar year will not be applied against royalties due in any
subsequent calendar year.
4.3 Payments, Statements and Records. All royalty payments shall be due and
payable within twenty (20) days after the end of each calendar quarter for sales
or distributions during the previous quarter. Complete and accurate royalty
reports will be due whether or not there were sales during the previous quarter.
Late payments shall bear interest at a rate equal to 1(1)/2% per month until
paid. Licensee shall (i) furnish to Redline in connection with each royalty
payment, a statement of account of all sales activity relating to the Licensed
Products (including a per item breakdown including description of the Licensed
Product, number sold or distributed and Net Sales Price), together with such
supporting detail that Redline may require and (ii) keep full, true, clear and
accurate records and books of account with respect to all Licensed Products,
such books and records to be retained for at least three (3) years after
expiration of the Contract Period. Redline shall have the right to inspect any
such books and records related to the 4 Licensed Products and the manufacturing
facilities of Licensee or its authorized manufacturer during normal business
hours and, where possible, upon advance notice.
The Royalties and Guaranteed Minimum Royalties due hereunder shall be paid to
Redline at the address set forth in Section 10.6 hereof.
In the event that an audit by Redline (or its representatives) determines a
payment deficiency for Royalties due versus Royalties actually paid by Licensee
of five percent (5%) or greater, then the cost of the audit shall be paid by
Licensee, together with the Royalty deficiency plus interest thereon at an
interest rate of 1(1)/2% per month until paid in full.
The receipt and/or acceptance by Redline of the statements furnished or
royalties paid hereunder or the cashing of any royalty checks paid hereunder,
shall not preclude Redline from questioning the correctness thereof at any time.
In the event that any inconsistencies or mistakes are discovered in such
statements or payments, they shall immediately be rectified by Licensee and the
appropriate payment shall be made by Licensee.
Section 5. MANUFACTURE AND QUALITY STANDARDS
5.1 Quality Standards. The Licensed Products shall meet or exceed Redline's
standards and shall be of high and uniform premium quality (including, but not
limited to, quality of material and workmanship), in Redline's reasonable
judgment, sufficient to protect and enhance the Licensed Products and the
substantial goodwill pertaining thereto. All Licensed Products shall be
consistent with, or superior in quality to, the samples or prototypes provided
to and approved by Redline. Licensee shall manufacture, package, ship and label
the Licensed Products in accordance with (i) all applicable foreign, federal,
state and local laws, rules and regulations and (ii) the manufacturing and
packaging specifications and requirements established from time to time by
Redline. Licensee shall furnish to Redline design concepts, artwork and product
samples for approval prior to use by Licensee as set forth in Section 5.2.
5.2 Quality and Approval of Licensed Products. (a) Purpose of Quality Control.
In order to maintain the quality reputation of Redline Trademarks and the rights
in the Redline Copyright Works, all Licensed Products and promotional or
packaging material relating to the Licensed Products must receive the approval
of Redline. All approvals in this Section 5.2 shall be in writing.
(b) Pre-Production Submittal Approval. Licensee shall submit at its own cost to
Redline for Redline's written approval three (3) pre-production submittals for
any proposed Licensed Products together with all promotional and packaging
material, containers, cartons and wrapping relating to the Licensed Products.
LICENSEE SHALL NOT MANUFACTURE, SELL, MARKET OR DISTRIBUTE ANY LICENSED PRODUCTS
OR ANY PROMOTIONAL OR PACKAGING MATERIAL, CONTAINERS, CARTONS AND WRAPPING
RELATING TO THE LICENSED PRODUCTS BEFORE OBTAINING REDLINE'S WRITTEN APPROVAL OF
ALL REQUIRED PRE-PRODUCTION SUBMITTALS FOR EACH SUCH ITEM. If Redline fails to
give written approval of any preproduction submittal within thirty (30) days
after receipt of Licensee's submission of Redline, such failure shall constitute
a disapproval of the pre-production submittal.
(c) Production Submittal Approval. Licensee shall submit, at its own cost, to
Redline six (6) final production samples of any Licensed Products from the first
production run to be received in Redline's office no later than ten (10) days
following such production and prior to first shipment. Licensee may manufacture,
sell, market and distribute Licensed Products after submitting to Redline
production samples of such Licensed Products, provided that (i) such samples
fully conform to the approved pre-production samples; and (ii) upon Redline's
demand, Licensee shall immediately cease all manufacture, sale, marketing and
distribution of any Licensed Product if Redline disapproves its production
samples. If Redline fails to give written disapproval of any production sample
submitted by Licensee within thirty (30) days after the date of Redline's
receipt of Licensee's submission, such failure shall constitute an approval of
the submission.
(d) Quality Maintenance. Licensee shall maintain the same quality in the
Licensed Products and promotional and packaging material relating to the
Licensed Products produced as in the samples approved by Redline. Licensee
agrees to provide upon demand a reasonable number of samples of the Licensed
Products and of promotional and packaging material relating to the Licensed
Products at no cost to Redline for periodic quality control inspection. All such
samples shall be excluded from Net Sales.
(e) Changes. If during the term of this Agreement there is to be any change in
the Licensed Products or the promotional or packaging material relating to the
Licensed Products after the approval of production samples, Licensee must comply
with the provisions of Section 5.2(b) and Section 5.2(c) for the changed item
before the item's manufacture, sale, marketing or distribution.
(f) Licensee's Production Facilities. Licensee agrees to furnish Redline
promptly with the addresses of Licensee's production facilities for the Licensed
Products and the names and addresses of the persons or entities, if any, which
are manufacturing each of the Licensed Products for Licensee. Redline shall have
the right upon reasonable notice to Licensee, during regular business hours, to
inspect any production facility where any Licensed Product is being manufactured
to determine whether Licensee is adhering to the requirements of this Agreement
relating to the nature and quality of the Licensed Products and the use of the
Redline Trademarks and Redline Copyright Works in connection therewith.
(g) Damaged, Defective or Non-Approved Items. Licensee shall not sell, market,
distribute or use for any purpose or permit any third party to sell, market,
distribute or use for any purpose any Licensed Products or promotional and
packaging material relating to the Licensed Products which are damaged,
defective, seconds or otherwise fail to meet the specifications or quality
standards of Redline or the trademark and copyright usage and notice
requirements of this Agreement. If in Redline's opinion any Licensed Products or
promotional or packaging material relating to any Licensed Products are damaged,
defective, seconds or otherwise fail to meet the quality standards reflected in
the production samples of the Licensed Products approved hereunder or the
trademark or copyright usage and notice requirements of this Agreement, then,
upon Redline's demand, Licensee shall immediately cease all further manufacture
and distribution of such items until the failure is corrected and the party
having made the demand gives written approval of the correction. If requested by
Redline, Licensee will recall any substandard Licensed Products or promotional
or packaging material relating to the Licensed Products to Licensee's warehouse
or plant at Licensee's sole expense.
(h) Laboratory Testing. Licensee agrees that upon reasonable demand by Redline,
it will undertake and pay for any pre-production laboratory testing necessary
with respect to the Licensed Products. Any such testing shall be done by a
qualified independent laboratory acceptable to Redline. If testing is required,
approval for production will be contingent upon test results satisfactory to
Redline.
(i) First Shipment. Licensee agrees to give Redline prompt notice of the first
shipment of Licensed Products.
5.3 Advertising and Promotion. (a) All advertising and promotional material
prepared by Licensee in connection with the Licensed Products shall be subject
to the prior written approval of Redline. If Redline fails to give written
approval of the advertising or promotional material within thirty (30) days
after receipt of Licensee's submission to Redline, such failure shall constitute
a disapproval of the submittal. If the text of the advertising and/or
promotional material has been previously approved in writing by Redline,
Licensee may re-use such material without again obtaining the written approval
of Redline unless such approval has been previously withdrawn in writing by
Redline or unless this Agreement has been terminated. All copyrights in such
advertising and promotional material shall bear a copyright notice in the name
of Redline.
(b) Licensee shall diligently and continuously market and distribute the
Licensed Products in the Contract Territory and will use its best efforts to
make and maintain adequate arrangements for the marketing and distribution
necessary to meet the demand for the Licensed Products in the Contract
Territory.
(c) Licensee shall at all times maintain an inventory of the Licensed Products
sufficient to supply promptly the reasonably foreseeable demand for the Licensed
Products within the Contract Territory.
5.4 Trademark and Copyright Protection; Intellectual Property. Licensee
acknowledges that the manufacture and sale by it of the Licensed Products shall
not vest in Licensee any ownership rights whatsoever in the Redline Trademarks
or Redline Copyright Works. Licensee agrees that its use of the Redline
Trademarks or Redline Copyright Works shall inure to the benefit of Redline, as
applicable. Licensee shall cause to appear on all Licensed Products, and on all
materials in connection with which the Redline Trademarks or Redline Copyright
Works are used hereunder, legends, markings, indications and notices in order to
give notice of the trademarks, tradenames, copyrights or other rights therein or
pertaining thereto. Licensee shall comply with all practices and governmental
regulations in force or customarily used in the United States (or if applicable,
the relevant foreign jurisdictions) in order to safeguard the rights of Redline
to the Redline Trademarks or Redline Copyright Works, including without
limitation imprinting where appropriate, irremovably, legibly and permanently on
the Licensed Products, packaging, labeling and advertising or promotional
material used in connection therewith, notice of trademarks and/or copyrights,
including but not limited (i) the symbol "TM" in the upper right-hand corner
next to the xxxx, for marks which are not yet registered with the United States
Patent and Trademark Office, (ii) the symbol "(R)" in the upper right-hand
corner next to the xxxx, for marks which are registered with the United States
Patent and Trademark Office; (iii) the symbol "(C)200_ Xxx Xxxxx Racing" for any
copyrights of printed materials, and (iv) an indication that the Licensed
Product, whether the xxxx is registered or unregistered, is "made under license
from Xxx Xxxxx Racing".
This Agreement shall not be considered as implying any assignment, either
partial or temporary, of Redline's trademark rights, Redline remaining as the
sole holders of all rights therein as well as all actions and/or claims in
connection with said marks. All rights in said trademarks and service marks
other than those specifically granted herein are reserved to Redline for its own
respective use and benefit. Licensee will at no time use or authorize the use of
any trademark, trade name or other designation identical with or confusingly or
colorably similar to Redline's trademarks or service marks.
Licensee acknowledges that:
(i) The Redline Trademarks and Redline Copyright Works, copyrights, logos and
images associated with the Redline Trademarks and Redline Copyright Works, (the
"Property") are unique and original and that Redline, as applicable, are the
owners thereof;
(ii) Redline has acquired substantial and valuable good will in the Property;
(iii) The Property has acquired a secondary meaning as trademarks uniquely
associated with the merchandise authorized by Redline;
(iv) All rights in any additional material, new versions, translations,
rearrangements or other changes in the Licensed Products which may be created by
or for Licensee shall, as between Redline and Licensee, be and will remain the
exclusive property of Redline, as applicable, and;
(v) Any copyrights, trademarks and design patents heretofore obtained by Redline
or in connection with the marks are good and valid.
(vi) As between Redline and Licensee, Redline shall be deemed to be the owner of
all materials created for the Licensed Products hereunder, including but not
limited to artwork and designs. In connection herewith, Licensee hereby assigns
and transfers to Redline, as applicable, or its designee, all rights, including
copyright, title and interest in and to all such materials and elements free of
charge.
This Agreement shall not be considered as implying any assignment, either
partial or temporary, of Redline's copyrights, remaining as the sole holder of
said copyrights, as well as of all actions and/or claims in connection with said
copyrights.
Licensee shall not, during the Contract Term or any time thereafter, dispute or
contest, nor cause or assist or aid others in disputing or contesting, Redline's
or its licensors, exclusive right and title to the marks or Property, or any
other rights of Redline's in and to the subject matter of this Agreement.
Section 6. FURTHER OBLIGATIONS OF LICENSEE
6.1 Best Efforts. Licensee shall protect and promote the goodwill and reputation
of Redline and will avoid activity detrimental to their interest, reputation and
goodwill. Licensee shall exercise its best efforts to promote the Licensed
Products.
6.2 Insurance. Licensee shall acquire and maintain, at its own expense, in full
force and effect throughout the Contract Term and for a one year period
thereafter, products liability, completed operations, advertiser's, and
comprehensive liability insurance policies with respect to the Licensed Products
with an insurer with a Xxxxx'x rating of B or higher satisfactory to Redline and
shall name Redline as additional insured therein. Such standard insurance shall
provide protection against any and all claims, demands and causes of action
arising out of any defects or failure to perform, alleged or otherwise, of the
Licensed Products, or any material used in connection therewith or any use
thereof. Such standard advertiser's liability insurance shall provide protection
against any and all claims, demands and causes of action arising out of errors
and omissions in any advertisement that may be utilized for the Licensed
Products. The amount of coverage of each policy should be a minimum of two
million dollars ($2,000,000.00) combined single limit, with deductible not in
excess of five thousand dollars ($5,000.00), for each single occurrence for
bodily injury and/or for property damage and a per annum aggregate limitation of
not less than two million dollars ($2,000,000.00). Each policy shall provide for
thirty (30) days' notice to Redline from the insurer by registered or certified
mail, return receipt requested, in the event of any modification, cancellation
or termination. Licensee agrees to furnish Redline a Certificate of Insurance
evidencing same prior to manufacture of any Licensed Products and, in no event,
shall the Licensee manufacture Licensed Products before receipt by Redline of
such evidence of insurance.
6.3 Manufacturing Agreements. In the case that Licensee utilizes any
submanufacturers, Licensee shall negotiate in good faith any manufacturing
agreements that Redline may require in connection with the Licensed Products
prior to manufacture and shall comply with all requirements of any such
manufacturing agreement.
6.4 Approvals. Licensee shall undertake to secure from the appropriate
authorities, at its own cost and expense, all permits, concessions or other
documents required by law in connection with the manufacture, packing, shipping,
sale or other use of the Licensed Products. Licensee shall be responsible for
(i) all authorizations for the use of, and (ii) the payment of any royalties
that may be due and owing to the owners of any trademarks or tradenames (other
than Redline as provided for herein) which may be used in connection with the
Licensed Products.
Section 7. INDEMNIFICATION
7.1 Indemnification. If any person shall make a claim for any damage or injury
of any kind or nature whatever, including death, whether such claim be for
breach of warranty, product liability, or for any other alleged type of damage,
and whether such claim be based in negligence, strict liability, or under any
other theory, against Redline and/or any of its affiliates, partners,
shareholders, agents, employees, and directors or licensors (collectively, the
"Indemnified Parties") arising out of the Licensed Products or Licensee's
actions or inactions in accordance with this Agreement, Licensee will indemnify
and hold harmless Redline and each Indemnified Party from and against any and
all loss, expense, damage, or injury that Redline and any Indemnified Party may
sustain as a result of any such claim, and Licensee will assume on behalf of
Redline and such Indemnified Parties the defense of any action at law or suit in
equity or any other proceeding which may be brought against Redline or any
Indemnified Party upon such claim and will pay on behalf of Redline and/or such
Indemnified Party upon its demand the amount of any and all costs, fees, and
expenses in connection with such defense, including the fees of Redline and/or
such Indemnified Party's counsel, as well as any judgment, fine, or penalty that
may be entered against Redline and/or such Indemnified Party in any such action,
suit, or proceeding. This indemnity shall continue in force notwithstanding the
termination of this Agreement.
Section 8. REPRESENTATIONS AND WARRANTIES
8.1 Representations and Warranties. Each party represents and warrants to the
other that: (i) it has, and will maintain at all times during this Agreement,
all federal, state and local governmental permits and licenses required in order
to conduct its business as contemplated hereunder; (ii) it is duly organized and
validly existing under the laws of the state of its organization; (iii) it has
full power and authority to enter into and perform this Agreement and the person
or persons executing this Agreement have been duly authorized to do so; and (iv)
the execution, delivery and performance of this Agreement shall not conflict
with, violate or constitute a default under, any other contracts, agreements or
undertakings to which it is a party or by which it is bound. EXCEPT AS SET FORTH
IN SECTION 8.2 BELOW, REDLINE DOES NOT MAKE ANY OTHER REPRESENTATIONS OR
WARRANTIES, EXPRESSED OR IMPLIED.
8.2 Trademark Indemnity by Redline. Redline represents and warrants that it has
the rights to grant the licenses in the Redline Trademarks and Redline Copyright
Works granted herein as set forth on Exhibits A and B. In the event a third
party should file within the Contract Territory any claim against Licensee for
trademark or trade dress infringement, for copyright infringement for works
supplied to Licensee by Redline or for other similar intellectual property
infringement, occurring within the Contract Territory, solely on account of
Licensee's proper use of the Redline Trademarks, Redline Copyright Works in
accordance with the terms hereof, Licensee shall promptly notify Redline of such
claim, and thereafter if such claim arises out of Redline's failure to possess
full right and authority to grant the license in the Redline Trademarks or
Redline Copyright Works, as applicable, evidenced by this Agreement, then
Redline shall undertake defense of such claim through counsel of its choosing
and at its expense as to the Redline Trademarks and Redline Copyright Works and
shall take whatever steps they deem necessary or appropriate to defend and
finally dispose of such claim. If the claim is disposed of by agreed or court
imposed suspension of distribution of Licensed Products, Licensee, upon notice
from Redline shall suspend its distribution of Licensed Products. EXCEPT FOR
DEFENSE OF A CLAIM AND PAYMENT OF ACCOMPANYING DAMAGES TO THE CLAIMANT, REDLINE
SHALL NOT BE RESPONSIBLE FOR ANY DAMAGES OR EXPENSES SUFFERED BY LICENSEE AS A
RESULT OF SUCH SUSPENSION OR LIMITATION, INCLUDING WITHOUT LIMITATION
CONSEQUENTIAL DAMAGES.
8.3 Safety. Licensee certifies that all Licensed Products will meet all
applicable Consumer Product Safety Commission (CPSC) and all applicable American
Society for Testing and Materials (ASTM) standards as well as comply with all
other applicable federal, state and local laws and regulations.
Section 9. TERMINATION
9.1 Payment and Covenant Default. If Licensee shall fail to make any payment due
hereunder and if such default shall continue uncured for a period of five (5)
days thereafter, Redline shall have the right to terminate this Agreement
forthwith. If Licensee shall otherwise fail to perform any of the terms,
conditions, agreements or covenants in this Agreement, and such default shall
continue uncured for a period of twenty (20) days after written notice thereof
to Licensee, Redline shall have the right to terminate this Agreement forthwith.
9.2 Insolvency. Either party may by written notice terminate this Agreement
immediately without incurring thereby any liability to the other in the event
the other party shall (i) be dissolved, be adjudicated insolvent or bankrupt or
cease operations, admit in writing its inability to pay its debts as they mature
or make a general assignment for the benefit of, or enter into any composition
or arrangement with, creditors, or file for relief under any insolvency law;
(ii) apply for, or consent (by admission of material allegations of a petition
or otherwise) to the appointment of a receiver, trustee or liquidator of all or
a substantial part of its assets or affairs, or authorize such application or
consent, or suffer any proceedings seeking such appointment to be commenced
against it (whether voluntary or involuntary) which continues undismissed for a
period of thirty (30) days; or (iii) be the subject of any other proceeding not
defined above whereby any substantial portion of the property or assets of such
party are or may be distributed among its creditors (or any group of them).
9.3 Change in Control. Redline may immediately terminate this Agreement without
liability if Licensee undergoes any substantial change in its ownership or
control.
9.4 Use of Marks. Redline may immediately terminate this Agreement where the
team has undergone substantial change, such as if the sponsor withdraws or
changes, if the driver changes teams, if the car number changes or if the color
scheme, logo scheme or make of the car changes.
9.5 Insurance. Redline may terminate this Agreement immediately if Licensee
fails to maintain the insurance required hereunder.
9.6 Production. Redline may terminate this Agreement immediately if Licensee
does not introduce Licensed Products to the market within ninety (90) days of
execution of this contract or continue to diligently pursue sales thereafter.
9.7 Quality. Redline may terminate this Agreement immediately if the quality of
the Licensed Products is lower than of the approved samples.
9.8 Approval. Redline may terminate this Agreement immediately if Licensee
manufactures, sells, markets, distributes or uses in any way any Licensed
Products or promotional or packaging material relating to the Licensed Products
without having prior written approval of Redline as provided for by the
provisions of this Agreement or continues to manufacture, sell, market,
distribute or use in any way any Licensed Products or promotional or packaging
material relating to the Licensed Products after receipt of notice of Redline
disapproving such items. In addition to, or as an alternative, at the sole
discretion of Redline, as liquidated damages, Licensee shall pay to Redline the
sum of five thousand dollars ($5,000.00) on demand for failure, per occurrence,
to follow proper approval procedures as set forth herein.
9.9 Rights and Remedies. On the expiration or sooner termination of this
Agreement:
(a) The rights and license granted to Licensee herein shall forthwith terminate
and automatically revert to Redline.
(b) Licensee shall discontinue all use of the Redline Trademarks and Redline
Copyright Works and shall deliver to Redline all products, packages and other
materials in its possession bearing the Redline Trademarks and Redline Copyright
Works and previously paid for by Redline, and shall either (i) destroy all
products, packages and other materials in its possession bearing Redline
Trademarks and Redline Copyright Works not previously sold to Redline and
provide satisfactory evidence to Redline of such destruction or (ii) cause all
Redline Trademarks and Redline Copyright Works, to be removed from the Licensed
Products and provide Redline with satisfactory evidence of such removal;
provided, however, that if Licensee is not in breach of this Agreement Licensee
shall be entitled to dispose of existing approved Licensed Products within sixty
(60) days after any such termination.
(c) The termination or expiration of this Agreement shall not relieve Licensee
of any obligation due to Redline arising or accrued prior to or as of the date
of such termination or expiration, including the obligation to pay Royalties and
Guaranteed Minimum Royalties.
The parties acknowledge that there may not be an adequate remedy at law to
redress a breach or threatened breach of the terms of this Agreement, and
therefore agree that either party, or their respective assigns, shall be
entitled to an injunction or other equitable relief against the other to
restrain it from such breach, and each party waives any claim or defense that
the other has an adequate remedy at law. The foregoing is in addition to any
remedies at law that either party may have.
Section 10. MISCELLANEOUS
10.1 No Agency Relation. Nothing herein contained shall create or be deemed to
create any agency, partnership or joint venture between the parties hereto, and
neither party shall have power or authority to obligate or bind the other in any
manner whatsoever.
10.2 Amendments. No addition to, deletion from or modification of any of the
provisions of this Agreement shall be binding upon the parties unless made in
writing and signed by a duly authorized representative of each party.
10.3 Assignment. The rights of Licensee under this Agreement shall not be
assigned, sublicensed, or subcontracted, in whole or in part (whether by
operation of law or otherwise) without the prior written consent of Redline. Any
assignment or attempted assignment pursuant to the change of control of Licensee
or the sale of the stock, assets or business of Licensee shall not be effective
without the prior written consent of Redline.
10.4 Applicable Law. This Agreement and all purchase orders placed pursuant to
this Agreement shall be governed by and construed and enformced in accordance
with the internal laws and judicial decisions of the State of North Carolina.
Any litigation, action or proceeding arising out of or relating to this
Agreement shall be instituted in any State or Federal court in the State of
North Carolina, Mecklenburg or Cabarrus Counties. Licensee hereby waives any
objection which it might have now or hereafter to the venue of any such
litigation, action or proceeding, submits to the jurisdiction of any such court
and, waives any claim or defense of inconvenient forum. Licensee consents to
service of process by Registered Mail, Return Receipt Requested, at Licensee's
address and expressly waives the benefit of any contrary provision of law.
10.5 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.
10.6 Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed duly given when personally delivered or sent by registered
or certified mail, return receipt requested, postage prepaid, or by facsimile
transmission or overnight carrier.
To Redline: Redline Sports Marketing, Inc. 00000 Xxxxx Xxxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx (Xxxxxx Xxxxx) Telephone: 704/000-0000 Fax: 704/000-0000
To Licensee: Xxxxx Xxxxxx/Xxx Xxxxxxx
Padova International dba Execute Sports Marketing
0000 Xxxxxx Xxx Xxx Xxxxx 000
Xxx Xxxxxxxx, XX 00000
or to other such address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth herein,
provided that notice of a change of address all be deemed given only upon
receipt.
10.7 Purchases by Redline. Redline shall be permitted to purchase Licensed
Products from Licensee at the most favorable prices offered by Licensee to any
other person or entity.
10.8 Charity and Promotions. Purchases by Redline. In addition to the samples
provided for herein, Licensee hereby agrees to provide Redline at no charge,
upon request, with final packaged production samples of the Licensed Product for
Redline to use to donate for appropriate charity auctions or other charitable
purposes or to use in connection with the Xxx Xxxxx Racing team, its sponsors,
endorsement sponsors, crew members, or other similar purposes, but not for
resale by Redline.
10.9 Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and
understandings, verbal or written, relating to the subject matter hereof. There
are no unwritten oral agreements between the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
PADOVA INTERNATIONAL, dba EXECUTE SPORTS MARKETING, a California corporation
By:/s/ Xxx Xxxxxxx
-------------------------
Title: President/CEO
REDLINE SPORTS MARKETING, INC., a North Carolina corporation
By:/s/ Xxxxx X. Xxxxxx
-------------------------
Xxxxx X. Xxxxxx
Title: Vice President of Marketing
Exhibit A to Limited
License Agreement
Redline Sports Marketing Inc.
December 31,2005
ESM092704
EXHIBIT A
Name(s) of Owners of Marks: MARKS
Interstate Batteries "Interstate(R)" and "Interstate(R)
Batteries"
Xxx Xxxxx Racing, Inc. "Xxx Xxxxx Racing Inc.(R)" and #18(R)
Xxxxx Xxxxxxx "Xxxxx Xxxxxxx(R)"
[in any combination acceptable to
Redline
on any single Licensed Product]
Exhibit B to Limited
License Agreement
Redline Sports Marketing Inc.
December 31,2005
ESM092704
EXHIBIT B
REDLINE COPYRIGHT WORKS
Name(a) of Owners of Marks: MARKS
Xxx Xxxxx Racing, Inc. Likeness of the #18
Xxx Xxxxx Racing
Nextel Cup Car, including "Interstate
Batteries"
Xxxxx Xxxxxxx Enterprises "Xxxxx Xxxxxxx" (name, likeness,
Signature)
[in any combination acceptable to
Redline on any single Licensed Product
With approved artwork]
