SUPPLY AND PURCHASE AGREEMENT
BETWEEN VARSITY AND SSA
THIS AGREEMENT, made this 13th day of December, 2002, by and between
Select Sport America Inc., 00 Xxxxxxxx Xxxx, Xxxxxxx, XX 00000, XXX, a
_____________ corporation ("SSA") and Varsity Spirit Fashions and Supplies,
Inc., 0000 Xxxxx Xxxxxx Xxxxx, Xxxxxxx, XX 00000, XXX, a Minnesota corporation
("Varsity").
WHEREAS, Varsity has executed a license agreement with Select Sport
A/S, a Danish company (hereinafter "Select Dk") which grants Varsity an
exclusive license to market, source (anywhere in the World) and sell in the U.S.
("Varsity Territory") certain products which bear the SELECT Trademark
(hereinafter sometimes "Varsity Exclusive Products"). Varsity was also granted a
non-exclusive license to market, source and sell in the Varsity Territory
certain other products (hereinafter sometimes "Varsity Non-Exclusive Products")
which bear the SELECT trademark (sometimes combined hereinafter referred to as
"Varsity Products"). Varsity Products are those annexed as APPENDIX A hereof;
WHEREAS, SSA has been granted the right from Select Dk to distribute
and sell, in the Varsity Territory and otherwise, soccer balls, water bottles,
ball bags, ball pumps, training vests, shin guards, and goalie gloves, bearing
the SELECT trademark (hereinafter sometimes "SSA Products"),
WHEREAS, SSA has been granted the right to sell apparel bearing the
SELECT trademark bought from Varsity to be distributed for promotional purposes
only;
WHEREAS, Varsity and SSA wish to come to an agreement herein with
regard to the parties' respective rights to market, sell and distribute in the
Varsity Territory the Varsity Products and the SSA Products;
NOW, THEREFORE, for good and valuable consideration, it is hereby
agreed as follows:
1. For the term of this Agreement, so long as SSA can supply same in
reasonable quantities with reasonable delivery availability, Varsity will
purchase soccer balls from SSA and SSA will supply same to Varsity. Such balls
will be Special Make Up (SMU) designs, and will carry "non-standard" Select ball
graphics and names. Varsity's ball collection will not exceed six (6) current
models in any product year, unless otherwise agreed to by Varsity and SSA.
Varsity designs may not include an all-white model (i.e., without graphics).
Varsity's use of SELECT on Varsity's SMU balls will be restricted to an
acknowledgement on the valve panel.
2. Varsity will pay to SSA ten percent (10%) above SSA's cost price
(FOB Pakistan, or source country) for their ball purchases from SSA. Varsity
will meet the normal payment terms of Select Dk. All prices are FOB Pakistan or
source country and Varsity shall pay freight costs etc. on the balls ordered by
Varsity from source country to Varsity's warehouse, to which all such balls are
to be delivered, unless otherwise agreed with regard to a particular shipment.
3. DISTRIBUTION
a. Varsity understands and acknowledges that SSA besides selling
to the retail market are selling soccer balls to the mega-clubs, leagues
colleges, camps and events and SSA understands Varsity plans to sell its Varsity
Non-Exclusive Products, which may include SMU balls, to these same customers,
excluding the retail market.
b. In order to maintain the quality of the SELECT brand, it is
agreed that neither Varsity nor SSA will sell SELECT branded products to mass
merchants and warehouse clubs.
4. PURCHASE OF CERTAIN ITEMS FROM VARSITY
a. The parties agree that SSA can sell and distribute ball bags,
training vests, pumps and water bottles bearing the SELECT trademark, which may
be sourced independently by SSA, or from Varsity. Notwithstanding the same, if
purchased from Varsity, SSA will pay to Varsity ten percent (10%) over Varsity's
cost of goods (where "cost" includes any applicable royalties to be paid by
Varsity to Select Dk).
b. Notwithstanding the fact that Varsity has been granted an
exclusive license to sell and distribute apparel products in the U.S., SSA can
distribute certain SELECT branded apparel products (namely, T-shirts, polo
shirts, coaches shorts, fleece, wind tops/jackets etc.). However, all such
soccer apparel except training vests must be purchased from Varsity. SSA will
pay to Varsity ten percent (10%) over Varsity's cost of goods (such "cost"
including any applicable royalties to be paid by Varsity to Select Dk).
c. Notwithstanding anything to the contrary herein, the parties
agree that SSA can sell all items in the current SSA business inventory up to
December 31, 2003. Contemporaneously with the signing hereof by SSA, SSA will
supply to Varsity a list of such inventory items identified by product and
quantities remaining.
5. TERM. This Agreement will begin on 12/13/02 and continue in effect
for the length of the term of the Varsity License with Select Dk or its
successor, or so long as SSA continues to be the U.S. distributor for Select Dk,
whichever terminates sooner unless this Agreement is terminated by either party
as set forth herein.
6. TERMINATION
a. RIGHT TO TERMINATE
The Agreement may be terminated by written notice by either party if
the other party is unable to pay its debts when they become due, make an
assignment for the benefit of creditors, file any petition or have any petition
filed against it under the bankruptcy or insolvency laws of any jurisdiction,
have or suffer a receiver or trustee to be appointed for its business or
property, or be adjudicated a bankrupt or insolvent.
b. TERMINATION BY BREACH
In the event of material breach by either party hereunder, the
aggrieved party may give written notice thereof and demand correction from the
other, and if said correction is not made and demonstrated to the other's
satisfaction within thirty (30) days of such demand, the aggrieved party may
terminate the Agreement.
7. MISCELLANEOUS
a. SSA recognizes that Varsity has also been granted the right to
use the trademark SELECT as part of a domain name and as part of a "dba" and the
right to sell SELECT products on the internet to customers in the Varsity
Territory. SSA agrees that such domain name and internet use of SELECT will not
conflict with any rights granted to SSA.
b. SSA recognizes that Varsity has also been granted the license
to sell the Varsity Exclusive Products and Non-Exclusive Products as shown on
Exhibit A and that sales of such products would not impair or conflict with the
distribution rights granted to SSA.
c. Force Majeure
(i) If either party to this Agreement is prevented or
delayed in the performance of any of its obligations under this Agreement by
FORCE MAJEURE, meaning a delay caused by war, strikes, delivery impairments of
any kind, litigation with any third-party pertaining to the right to use the
SELECT Trademark in the U.S. and if such party gives written notice thereof to
the other party specifying the matters constituting FORCE MAJEURE, together with
such evidence as it reasonably can give and specifying the period for which it
is estimated that such prevention or delay will continue, then the party so
prevented or delayed shall be excused the performance or the punctual
performance as the case may be as from the date of such notice for so long as
such cause of prevention or delay shall continue.
(ii) If by virtue of the preceding sub-clause either
party shall be excused the performance or punctual performance of any obligation
for a continuous period of three (3) months, then the parties shall consult
together with a view to agreeing what action should in the circumstances be
taken and what
amendments to the terms of this Agreement ought to be made, if any, including
possible termination.
(iii) If at any time before the Agreement is wholly
terminated under this article, the party who has been excused the performance of
any of its obligations in accordance with the preceding provisions of this
article receives a written notice from the other party that such other party
wholly waives its right to receive further performance of that obligation, then
the Agreement shall not be terminated but shall remain in force subject to such
waiver.
d. CONTROLLING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
Any and all disputes, controversies and claims arising out of or in
connection with this Agreement, or the breach, termination or invalidity
thereof, shall be finally settled by arbitration in New York in accordance with
the rules of the American Arbitration Association.
The arbitration award shall be final and binding upon the parties.
Each party waives any objection which such party may now or hereafter have to
the laying of venue of any such action, suit or proceeding and irrevocably
submits to the jurisdiction of any such arbitration in any such action, suit or
proceeding.
Notwithstanding the foregoing, neither party waives the right to seek
injunctive relief pertaining to this Agreement or the transactions contemplated
hereby.
e. NOTICES
Except as otherwise set forth herein, any agreement, approval,
consent, notice, request or other communication required or permitted to be
given by either party to the other under this Agreement shall be in writing and
shall be deemed to have been given (i) when delivered by hand or by courier,
(ii) when three(3) days have elapsed after its transmittal by a nationally
recognized overnight courier such as Federal Express to the address set forth
below, or (iii) immediately upon transmittal by facsimile to the number set
forth below, in each case, with a copy provided in the same manner and at the
same time to the copy recipients shown below:
To SSA:
Select Sport America, Inc.
Attn: President
00 Xxxxxxxx Xxxx,
Xxxxxxx, XX 00000
XXX
With a copy to: Select Sport A/S
Attn: Adm. direktor
Xxxxxxxxxxxxx 00
0000 Xxxxxxxx
Xxxxxxx
To Varsity: Varsity Spirit Fashions & Supplies Inc.
Attn: Xxx XxXxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
XXX
Tel.: (000) 000 0000
Fax: (000) 000 0000
With a copy to: Xxxxxx X. Xxxxx, Esq.
St. Xxxx Xxxxxxx Xxxxxxxx & Reens LLC
000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
XXX
Tel.: (000) 000-0000
Fax: (000) 000-0000
or to such other address as the recipient party shall have designated by notice
so given.
f. ENTIRE AGREEMENT
This Agreement, including the Appendices referenced herein,
constitutes the entire agreement of the parties relating to its subject matter
and supersedes all prior oral or written understandings or agreements in
relation thereto. No promise, understanding, representation, inducement,
condition or warranty not set forth herein has been made or relied upon by
either party hereto.
g. AMENDMENTS
This Agreement may not be amended, modified or cancelled except by a
written instrument executed by both parties.
h. BINDING EFFECT
This Agreement shall be binding upon and shall inure to the benefit
of the Licensor and the Licensee and any and all parents, shareholders and/or
subsidiaries as applicable.
i. ASSIGNABILITY
This Agreement is not assignable by SSA except to an entity owned or
controlled by SSA without the prior written permission of Varsity.
j. WAIVER
No waiver of, acquiescence in or consent to any breach of or default
under this Agreement shall be deemed a waiver of, acquiescence in or consent to
any other breach or default occurring at any time.
k. SEVERABILITY
If any provision of this Agreement, or the application of the
provision to any person or circumstance, is held to be inconsistent with any
present or future law, ruling, rule or regulation or any court or governmental
or regulatory authority having jurisdiction over the subject matter of this
Agreement, such provision shall be deemed to be modified to the minimum extent
necessary to comply with such law, ruling, rule or regulation, and the remainder
of this Agreement, or the application of such provision to persons or
circumstances other than those as to which it is held inconsistent, shall not be
affected. If any provision is determined to be illegal, unenforceable or void,
and if the remainder of this Agreement shall not be affected by such
determination and is capable of substantial performance, then such void
provision shall be deemed rescinded and each provision not so affected shall be
enforced to the extent permitted by law.
l. COUNTERPARTS
This Agreement may be executed in several counterparts, each of which
shall constitute an original, but all of which taken together shall constitute
one and the same instrument.
m. HEADINGS
The headings in this Agreement are for reference purposes only, do
not constitute a part of this Agreement and shall not affect its meaning or
interpretation.
SELECT SPORT AMERICA INC. VARSITY SPIRIT FASHIONS &
SUPPLIES, INC.
By /s/ Xxxxx Xxxx By /s/ Xxxx X. Xxxxxxx
------------------------------------ -------------------------------------
Name Xxxxx Xxxx Name Xxxx X. Xxxxxxx
---------------------------------- -----------------------------------
Title CFO Title Senior Vice-President
--------------------------------- ----------------------------------
Date 12/13/02 Date 12/13/02
---------------------------------- -----------------------------------
APPENDIX A
"PRODUCTS" - DEFINITION
VARSITY EXCLUSIVE PRODUCTS:
a. Soccer team uniforms, meaning soccer jerseys, shorts and socks, including
goalkeeper apparel.
b. Team outerwear, meaning tracksuits and fleece tops.
c. Coaching apparel, including polo shirts, shorts and jackets.
d. Other soccer type apparel, including T-shirts, shorts, outerwear and fleece.
e. Accessories, meaning sports bags, backpacks, caps, hats and coaches bags.
f. Soccer footwear.
g. Organising and Operating Soccer camps and events.
VARSITY NON-EXCLUSIVE PRODUCTS:
Soccer balls, water bottles, ball bags, ball pumps, shin guards, goalie gloves,
products provided to soccer camps and soccer events.
