EXHIBIT 10.6
FIRST TEAM SPORTS, INC.
0000 Xxxx Xxxxxxxxx
Xxxxx, Xxxxxxxxx 00000
As of March 1, 1997
Xxxxx X. Xxxxxxx
Xxxxx Xxxxx Xxxxxxx
c/o International Management Group
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
RE: License Agreement dated December 1, 1994 by and among First Team Sports,
Inc., Xxxxx X. Xxxxxxx and Xxxxx Xxxxx Xxxxxxx (the "License Agreement").
Dear Xxxxx and Xxxxx:
This letter sets forth our agreement to amend the License Agreement as set
forth herein. References to Articles or Sections are to the License Agreement.
Capitalized terms used and not otherwise defined herein shall mean as defined in
the License Agreement.
The License Agreement is hereby amended as follows:
1. Term. Article II is amended to extend the Term until November 30, 2004.
All references in the License Agreement to dates related to the end of the Term
shall be appropriately adjusted.
2. Workdays. Section 3.2 is amended to reduce the number of Workdays per
Year from two (2) to one (1), which one Workday must be in the city of WDG's
permanent residence, unless otherwise agreed to by WDG. Section 3.3 is amended
to reduce the number of additional Workdays per Year after WDG's retirement from
two (2) to one (1), which one additional Workday need not be in the city of
WDG's permanent residence (but must be within North America, unless otherwise
agreed to by WDG).
3. Guaranteed Fees.
(a) Sections 5.1.1 and 5.1.2 are amended to provide that the In-Line
Guarantee and the Street Hockey Guarantee are combined into a single guaranteed
payment in the following annual amounts:
Year Ending Amount
November 30, 1997 $434,550
November 30, 1998 $349,500
November 30, 1999 $349,500
November 30, 2000 $349,500
November 30, 2001 $349,500
November 30, 2002 $349,500
November 30, 2003 $349,500
November 30, 2004 $349,500
Such combined In-Line Guarantee and Street Hockey Guaranty shall be paid in
quarterly installments of $87,350 on each December 1, March 1, June 1, and
September 1.
(b) This Amendment shall be deemed effective March 1, 1997. Licensee
acknowledges receipt of $87,350 upon the execution and delivery of this letter
agreement, which payment shall constitute payment of the March 1, 1997 quarterly
installment.
(c) Section 5.4 is amended to provide that the combined In-Line Guarantee
and Street Hockey Guaranty shall be credited against, and recoupable from, the
Royalties otherwise payable to Personality in respect of both Gross Street
Hockey Sales and Gross In-Line Sales, and that all Royalties to which
Personality is entitled under the License Agreement shall continue through the
expiration or earlier termination of the Term.
4. Termination. Article X of the License Agreement is amended to give
Personality the additional right, exercisable in Personality's sole discretion,
to terminate the License Agreement for any reason whatsoever, upon Personality
giving Licensee not less than three (3) months' prior written notice. Section
10.6 is amended to change the four (4)-month inventory sell-off period to six
(6) months, but Licensee shall not be entitled to utilize any advertising or
promotional materials during the six-month sell-off period.
Except as amended by the foregoing provisions, the License Agreement
remains unchanged and in full force and effect.
Subject to the approval of First Team Sports' Board of Directors (and, if
necessary, shareholders), in consideration of the extension of the Term of the
License Agreement and of
WDG's advisory services to First Team Sports on the Workdays, First Team Sports
shall grant WDG a non-qualified stock option under the Company's 1990 Stock
Option Plan to purchase 50,000 shares of First Team Sports' Common Stock at an
exercise price of $6.00 per share exercisable immediately.
First Team Sports agrees to reimburse WDG and JJG their reasonable
attorneys' fees and disbursements incurred in connection with the negotiation
and execution of this Letter Agreement promptly upon presentation of an invoice
from their legal counsel itemizing said fees and disbursements.
Please indicate your acceptance of the foregoing provisions by signing and
returning the undersigned the enclosed duplicate copy of this letter.
Very truly yours,
First Team Sports, Inc.
By: /s/ Xxxxx X. Xxxxxxxxxx
Its: Vice Chairman
ACCEPTANCE
The undersigned acknowledges and agrees to the foregoing provisions.
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxx Xxxxx Xxxxxxx
Xxxxx X. Xxxxxxx Xxxxx Xxxxx Xxxxxxx
