EXHIBIT 10.21
Redline Sports Marketing, Inc.
Agreement #: FF112299TS
Licensee: Famous Fixins
LIMITED LICENSE AGREEMENT
THIS AGREEMENT, is entered into as of the 22nd day of
November 1999, by and between REDLINE SPORTS MARKETING, INC., a
North Carolina corporation ("Redline"), and FAMOUS FIXINS, a
corporation under the laws of New York ("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, NON-
TRANSFERABLE 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
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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.
Section 2. TERRITORY
2.1 Contract Territory. The limited license granted
pursuant to this Agreement shall extend throughout the United
States of America and its territories and possessions (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,
2000 (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.
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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 fifteen percent
(15%) 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
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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 $5,000.00 during the Contract
Period. The 1999 Guaranteed Minimum Royalty ($2,500.00) is
payable as follows: $2,500.00 due upon execution of the
agreement. The 2000 Guaranteed Minimum Royalty ($2,500.00) is
payable as follows: $1,250.00 due on or before June 30 and
December 31, 2000, respectively. 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 l 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 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
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(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
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Redline fails to give written approval of any pre-production
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
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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
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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
righthand 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".
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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.
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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
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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
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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.
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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
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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
15
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 enforced 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.
16
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 Xxxx)
Telephone: 704/000-0000
Fax: 704/000-0000
To Licensee: Famous Fixins
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxx
Telephone: 212/000-0000
Fax: 212/000-0000
To Agent: The Xxxxx Licensing Group
00000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxx
Telephone: 704/000-0000
Fax: 704/000-0000
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
17
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.
FAMOUS FIXINS, a New York
corporation
By: /s/ Xxxxx Xxxxx
Title: President
REDLINE SPORTS MARKETING, INC., a
North Carolina corporation
By: /s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
Title: Vice President of Marketing
18
Exhibit A to Limited
License Agreement
Redline Sports Marketing, Inc.
December 31, 2000
FF112299TS
EXHIBIT A
REDLINE TRADEMARKS
Name(s) of Owners of Marks MARKS
The Home Depot "The Home Depot(r) "
Xxx Xxxxx Racing, Inc. "Xxx Xxxxx Racing, Inc.(r) " and
#20(r)
Xxxx Xxxxxxx "Xxxx Xxxxxxx(r) "
[in any combination acceptable to
Redline on any single Licensed
Product]
19
Exhibit B to Limited
License Agreement
Redline Sports Marketing, Inc.
December 31, 2000
FF112299TS
EXHIBIT B
REDLINE COPYRIGHT WORKS
Name(s) of Owners of Marks: MARKS
Xxx Xxxxx Racing, Inc. Likeness of the #20 Xxx Xxxxx
Racing Winston Cup Car, including
"The Home Depot"
Xxxx Xxxxxxx Enterprises "Xxxx Xxxxxxx" (name, likeness and
signature)
[in any combination acceptable
to Redline on any single Licensed
Product with approved artwork]
20
Exhibit C to Limited
License Agreement
Redline Sports Marketing, Inc.
December 31, 2000
FF112299TS
EXHIBIT C
LICENSED PRODUCTS
Mints
21
Exhibit D to Limited
License Agreement
Redline Sports Marketing, Inc.
December 31, 2000
FF112299TS
EXHIBIT D
MANUFACTURER'S AGREEMENT
This Manufacturer's Agreement is made pursuant to the License
Agreement between Redline Sports Marketing, Inc. ("Redline") and
the undersigned LICENSEE ("Licensee"), a copy of
which is attached hereto and made a part hereof ("License
Agreement"). _______________________________(full name) located
at ______________________________ ("Manufacturer") desires to
manufacture the following Licensed Products bearing Trademarks
and/or Copyright Works: _____________________. As a condition to
the manufacture by Manufacturer of any Licensed Product set forth
in Exhibit C of the License Agreement bearing any Trademarks
and/or Copyright Works listed in Exhibits A or B respectively of
the License Agreement, Manufacturer acknowledges that the
Trademarks and Copyright Works are the sole property of Redline
and that Manufacturer's right to manufacture the Licensed
Products with the Trademarks and/or Copyright Works thereon is in
all respects subject to the terms and conditions in the License
Agreement. Manufacturer agrees that the provisions of the
License Agreement shall take precedence over and supersede any
and all contractual relationships between Licensee and
Manufacturer and, in particular, Manufacturer recognizes that all
manufacturing rights are subject to (a) the restrictions on the
use of the Trademarks and Copyright Works and (b) the termination
provisions in the License Agreement. Manufacturer further
acknowledges that its manufacture of the Licensed Products shall
give Manufacturer no right to use the Trademarks and Copyright
Works or to sell Licensed Products bearing the Trademarks and
Copyright Works to Licensee beyond the term of the License
Agreement. Manufacturer shall not sell Licensed Products with
the Trademarks and Copyright Works thereon to any person or
entity except Licensee. If Redline terminates the License
Agreement, Manufacturer agrees to make no claim against Redline
for any reason whatsoever.
REDLINE SPORTS MARKETING, INC. MANUFACTURER
By:___________________________ By:__________________________
Xxxxx X. Xxxxxx
Vice President of Marketing Title:_______________________
Date:_________________________ Date:________________________
LICENSEE
By:___________________________
Title:________________________
Date:_________________________
