Attached files
| file | filename |
|---|---|
| 10-Q - QUARTERLY REPORT - SPORT SUPPLY GROUP, INC. | v183643_10q.htm |
| EX-32 - CERTIFICATION - SPORT SUPPLY GROUP, INC. | v183643_ex32.htm |
| EX-31.2 - CERTIFICATION - SPORT SUPPLY GROUP, INC. | v183643_ex31-2.htm |
| EX-31.1 - CERTIFICATION - SPORT SUPPLY GROUP, INC. | v183643_ex31-1.htm |
Exhibit
10.3
LICENSE
AGREEMENT
This
License Agreement is made and entered into as of the 1st day of January 2010
(the “Effective
Date”) by and between Voit Corporation, a Texas corporation with offices
at 4414 Centerview Drive, Suite 204, San Antonio TX 78228 (“Licensor”), and Sport
Supply Group Inc., a Delaware corporation with offices at 1901 Diplomat Drive,
Farmers Branch, TX 75234 (“Licensee”). Capitalized
terms used in this Agreement and not otherwise defined in the context in which
they are used shall have the meanings ascribed to them in Section 1
herein.
WITNESSETH:
WHEREAS,
Licensor has certain rights in the Voit Intellectual Property (as defined
below); and
WHEREAS,
Licensee desires to use the Voit Intellectual Property in connection with the
sourcing, importing, marketing, sale, and distribution of Licensee Products in
the Territory to its customers in accordance with the terms and conditions set
forth in this Agreement, and Licensor desires to grant to Licensee the right to
use the Voit Intellectual Property in accordance with such terms and conditions;
and
WHEREAS,
Licensee recognizes that the valuable reputation and goodwill attaching to the
Voit Intellectual Property is dependent for its preservation on the high quality
standards set forth in this Agreement, and, accordingly, Licensee is willing to
comply with Licensor's standards, as required by the terms set forth herein, in
order to obtain such quality and to cooperate with Licensor, as required by the
terms contained herein, in preserving the reputation and goodwill attaching to
the Voit Intellectual Property.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements contained herein, the parties hereto, intending to be legally bound,
hereby agree as follows:
1
Definitions: As
used herein, the following terms shall be defined as set forth
below:
(a) “Contract Quarter”
means each successive three month period during the Term, commencing with the
Effective Date.
(b) “Contract Year” means
each successive twelve month period during the Term, commencing with the
Effective Date.
(c) “Customers” means the
Exclusive Customers and the Non-Exclusive Customers.
(d) “Exclusive Customers” shall be
specifically:
(A) Institutional
sporting goods customers, including but not limited to recreational departments,
educational institutions, youth sports leagues, community service groups, PTA’s,
athletic teams, and other team sports associations;
(B) Any
reseller of sporting goods which realizes more than 50% of its total sporting
goods revenues from customers of the type listed in Section 1(d)(A) above;
and
(C) Persons
or entities receiving Licensee’s various catalogs, or purchasing by or through
Licensee’s various catalogs and/or websites.
(e) “Licensee Products” shall mean
the Licensee products of the type listed in Schedule B attached
hereto.
(f) “Losses” shall mean
all settlements, judgments, awards, fines, penalties, interest, liabilities,
losses, costs, damages and expenses (including reasonable attorneys’ fees and
disbursements and court costs).
(g) “Marks” shall mean
trademarks listed in Schedule A attached
hereto.
(h) “Minimum Royalty”
shall mean, for each Contract Year during the Initial Term, an amount equal to
$130,000. Thereafter, the Minimum Royalty may be increased pursuant
to the terms of this Agreement.
(i) “Net Sales” shall mean
the total dollar amount of gross sales by Licensee of all Licensee Products at
the invoiced selling price less customary discounts, returns actually made or
allowed. No deductions shall be made for costs incurred in manufacturing,
selling, distributing, or advertising the Licensee Products, or for the
uncollectible accounts, taxes, cash discounts, or similar allowances. In the
case of sales to or use of the Licensee Products by a company associated with
Licensee or any other sales to related companies, the sales price shall be the
price regularly charged to the Licensee's independent bona fide
customers.
(j) “Non-Exclusive
Customers” shall mean:
(A) Samsclub.com,
walmart.com, and target.com;
(B) Amazon.com
pursuant to the terms and provisions of that certain Merchants@Amazon.com Participation
Agreement by and between Amazon.com Payments Inc. and Licensee, a copy of which
has been provided to Licensor or pursuant to Amazon’s Prime program whereby
Amazon purchases and inventories Licensee’s products;
(C) Premium
and incentive wholesale accounts; and
(D) Consumers
within the Territory (including without limitation, individual consumers
purchasing for their own account) and On-Line Sellers (as defined below) located
through E-Commerce (as defined below). “On-line Sellers”
shall mean any and all entities that sell, offer to sell, resell or offer to
resell a Licensee Product through E-Commerce. “E-Commerce” shall
mean conducting business (including the advertisement, offer for sale, sale and
distribution of products) through a global, international, national, local or
other electronic network (such as the Internet, private network or corporate
intranet), or any subpart thereof, which may be accessed or created now, or in
the future, and any other current or future means or method of advertisement,
sale, order taking or distribution via an electronic means.
2
(k)
“Territory”
shall mean the United States.
(l)
“Voit Intellectual
Property shall mean the intellectual property listed in Schedule A attached
hereto, including the Marks.
2
Scope of
License:
(a) Licensor
hereby grants to Licensee, and Licensee hereby accepts, (i) an exclusive right
to use the Voit Intellectual Property in the Territory in connection with the
sourcing, importing, marketing, manufacturing, sale, distribution, display,
promotion, and advertising of the Licensee Products to the Exclusive Customers
only, upon the terms and conditions hereinafter set forth and (ii) the
non-exclusive right to use the Voit Intellectual Property in the Territory
in connection with the sourcing, importing, marketing, manufacturing, sale,
distribution, display, promotion, and advertising of the Licensee Products to
the Non-Exclusive Customers.
(b) The
rights and licenses described in Section 2(a) above
shall extend to any independent contractors, agents, permitted assignees or
sublicensees, or service providers providing services to or on behalf of
Licensee (“Permitted
Third Parties”) but shall not include the right to pledge or otherwise
encumber the Marks or Licensee's right and license to use the
Marks. Notwithstanding the foregoing, Licensor consents to Licensee’s
limited assignment of Licensee’s rights under this Agreement to Licensee’s
lender(s) so long as such limited assignment is substantially in the form of the
Limited Assignment attached hereto as Schedule
C.
(c) Licensor
acknowledges that the rights and licenses set forth in this Agreement include,
but are not limited to, the non-exclusive right for On-Line Sellers who have
purchased or agreed to purchase Voit branded Licensee Products from Licensee, to
resell and distribute Voit branded Licensee Products to any person or entity
through E-Commerce.
(d) Since
the right to sell through E-Commerce (whether on Licensee’s websites or through
On-Line Sellers) contemplates marketing and advertising Voit branded products
throughout the entire world, Licensor hereby grants to Licensee the
non-exclusive right and license for (1) Licensee, (2) customers of Licensee who
have or may purchase Voit branded Licensee Products from Licensee, and (3)
others authorized by Licensee, to display and otherwise promote advertise,
merchandise, and offer for sale all Voit branded Licensee Products throughout
the world to any person or entity of any type, including but not limited to the
general public.
3
(e) It
is expressly understood that Licensor and its designees, licensees, successors
and assigns may sell any products of the type listed as Licensee Products to any
customers other than Customers (as defined herein), and that Licensor or its
designees, licensees, successors and assigns may sell to Customers any products
other than products of the same type as any of the Licensee
Products.
3
Term:
(a) This
Agreement shall become effective as of the Effective Date.
(b) The
initial term (“Initial
Term”) of this Agreement shall commence on the Effective Date and shall
continue for five years unless earlier terminated as provided
herein. This Agreement shall thereafter automatically renew for up to
two subsequent five year periods (the Initial Term and each subsequent five
year period may each hereinafter be referred to as a “Five Year Period” and
collectively as the “Term”) unless either
party notifies the other party of its intention not to renew at least 180 days
before the end of the Initial Term or any such five-year extension, or the
Agreement is otherwise terminated in accordance with the terms
herein.
4
Royalties and
Payments:
(a) As
compensation for the rights and license granted hereunder, Licensee shall pay to
Licensor (i) the Minimum Royalty to be paid in advance on or before January 30th
of each Contract Year and (ii) any additional Royalties owed to Licensor
pursuant to Section
4(b) below. Licensor may increase the Minimum Royalty once per
completion of each Five Year Period provided (A) Licensor provides Licensee
written notice of such increase at least 180 days prior to the last day of the
concluding Five Year Period and (B) the Minimum Royalty is not increased by more
than (x) fifteen (15) percent or (y) the cumulative increase in the rate of
inflation for such Five Year Period, whichever is less. In order to
determine the increase in inflation during such Five Year Period, the parties
agree to use the Bureau of Labor Statistics Consumer Price Index for all Urban
Consumers (CPI-U), U.S. City Average, all items, base period (1982-1984),
reference period-December. The reference period for the first Five
Year Period will compare the December 2014 index to the December 2009
index.
(b) Within
thirty (30) days after the end of each Contract Year, Licensee shall pay
Licensor an amount equal to the difference, if positive, of subtracting (i) four
percent (4%) of all Net Sales during that Contract Year (“Royalty”) minus (ii)
the Minimum Royalty paid by Licensee pursuant to Section 4(a) above.
Such payments shall be made in accordance with the Method of Payment specified
in Section 14
hereto.
4
(c) Within
thirty (30) days following each Contract Quarter, Licensee shall submit a
royalty report (“Royalty Report”),
consistent in the format historically sent by Licensee to Licensor, or in
another mutually agreeable format that may be reasonably established by Licensor
from time to time, certified by an officer of Licensee as true and accurate,
including but not limited to detailed information on Net Sales by Licensee
during said Contract Quarter, the computation of Royalties hereunder, and a
statement of Net Sales by the Licensee for each month of the Contract
Quarter.
(d) Licensee
agrees to pay interest at the lesser of (i) twelve (12%) percent per annum
or (ii) the maximum rate permitted by law on Royalties or Minimum Royalties
due and not paid by Licensee for more than 30 days following Licensee’s receipt
of written notice of such nonpayment from Licensor.
5
Quality
Standards:
(a) Licensor
acknowledges that it has approved Licensee’s current use of the Marks on
Licensee’s Products in existence on the Effective Date and in advertising and
promotional materials, including but not limited to: (i) Licensee’s uses on
binders, tradeshow booths, letterhead, and other marketing materials; and (ii)
the uses in the Licensee’s catalogs, fliers, post cards, web pages and other
marketing materials. Licensor further acknowledges and agrees
that any use by Licensee or Permitted Third Parties of the Marks on Licensee’s
Products or on Licensee’s advertising and marketing material that does not
materially differ from the uses by Licensee prior to the Effective Date
(including but not limited to replicating such uses on Internet web pages,
fliers, mailers, catalogs and other advertising pieces) will not require any
additional approvals. Licensee shall revise any photographs in its catalogs and
on its websites that do not reflect the type style requested by Licensor as of
the date of this Agreement and such revisions shall be reflected in Licensee’s
Spring 2011 catalog.
(b) Subject
to the foregoing, prior to any use of any of the Marks on any new products or
new advertising/marketing, Licensee shall furnish to Licensor, for the approval
of Licensor, samples and mock-ups of all Licensee Products and copies of all
formats of all advertising and promotional material on which any such Marks
appear (the “Materials”). All
samples and mock-ups shall be sent in accordance with the Notice provisions set
forth in Section
17 hereof. Licensor shall have the right to approve all
Licensee Products or Materials or to require Licensee, as a condition to
Licensor's approval, to make alterations or modifications to such Licensee
Products or Materials and promptly resubmit the same to
Licensor. Such approval shall not be unreasonably
withheld. Any Licensee Products and/or Materials submitted to
Licensor shall be deemed approved unless Licensor notifies Licensee to the
contrary within fifteen (15) days after receipt of such Licensee Products and/or
Materials. Licensee shall not distribute, sell, display or advertise
any Licensee Products unless and until the sample for such Licensee Product has
been approved or deemed approved by Licensor pursuant to this Section
5(b). All Licensee Products manufactured, distributed, sold,
displayed and/or advertised by Licensee shall conform to the sample approved or
deemed approved by Licensor. Licensor shall not be obligated to
return to Licensee any samples that it receives pursuant to this Section
5. Color changes, model changes, style and grade designations,
cosmetic type changes, or changes that do not materially alter the
specifications of a Licensee Product or Materials will not constitute a new
product or advertising that requires Licensor’s approval under this
agreement.
5
(c) Upon
request of Licensor but, in any event, not more than once per Contract Year,
Licensee shall furnish, or cause to be furnished, to Licensor current production
samples of the Licensee Products and the advertising, labeling, packaging and
boxing thereof, to allow Licensor to verify that the Licensee Products being
manufactured conform to the samples approved by Licensor pursuant to Section 5(b)
above. Licensor shall have the same right of approval or disapproval
with respect to each current production sample as it has with respect to samples
pursuant to Section
5(b) above. In the event that Licensor gives Licensee notice
of disapproval of any current production sample, Licensee shall promptly cure
the non-conformity and resubmit a conforming current production sample to
Licensor for approval. If a conforming current production sample is
not submitted by Licensee and approved or deemed approved by Licensor within
thirty (30) calendar days of Licensor's initial notice of disapproval, Licensee
shall, on written notice from Licensor, cease manufacture, distribution, and
sale of such Licensee Product until such approval is
obtained. Licensor acknowledges that, due to the catalog nature of
Licensee’s business, it is not feasible to remove such products from the catalog
until Licensee’s existing catalog is replaced by a new catalog.
(d) Licensee
shall manufacture, distribute, display, sell and advertise the Licensee Products
in accordance with the standards of quality associated with the Marks as may be
reasonably established by Licensor from time to time and, to insure compliance,
Licensor or its designated representative shall be permitted, no more than once
per Contract Year, upon at least 30 days prior written notice, to inspect any
facility used to manufacture, distribute, display or sell the Licensee
Products.
(e) Licensee
shall comply at all times at its sole expense with all applicable laws and
regulations pertaining to the sale, display, distribution, advertisement and
performance of the Licensee Products.
(f) Upon
Licensor's request, Licensee shall provide Licensor with satisfactory evidence
of the types and extent of its uses of the Marks.
6
Promotion of
Licensee Products:
Licensee
shall use commercially reasonable efforts to promote the Licensee Products sold
under the Marks and to coordinate the manufacture, distribution, sale, display,
and advertising of the Licensee Products sold under the Marks so as to maintain
and enhance the value of the goodwill residing in the Marks.
6
7
Licensee
Representations and Warranties: Licensee hereby represents and
warrants that:
(a) It
has full right, power, and authority to enter into this Agreement.
(b) Its
execution, delivery and performance of this Agreement do not and shall not
contravene any contractual restriction binding on or affecting any of its
properties, nor its certificate of incorporation, nor its by-laws.
(c) This
Agreement has been duly executed and delivered by Licensee and is a legal, valid
and binding obligation of Licensee enforceable against Licensee in accordance
with its terms.
8
Licensor
Representations, Warranties and
Covenants: Licensor hereby represents and warrants
that:
(a) It
has full right, power, and authority to enter into this Agreement.
(b) It
shall use its best efforts to secure and maintain all necessary rights to
effectuate the terms of this License Agreement.
(c) Its
execution, delivery, and performance of this Agreement do not and shall not
contravene any contractual restriction binding on or affecting any of its
properties, nor its certificate or articles of incorporation, nor its
by-laws.
(d) This
Agreement has been duly executed and delivered by Licensor and is a legal,
valid, and binding obligation of Licensor enforceable against Licensor in
accordance with its terms.
(e) No
other person or entity has been granted a right which would conflict with
Licensee’s rights hereunder.
(f) Licensor
is not insolvent and this Agreement is not being entered into in contemplation
of Licensor’s insolvency nor are such transactions being consummated with any
intent to hinder, delay or defraud any of Licensee’s creditors.
(g) Licensor
owns the entire right, title and interest in and to the Voit Intellectual
Property, free and clear of all liens, claims and encumbrances of any kind, and
Licensor has the exclusive rights to license the Voit Intellectual
Property. Licensee’s use of the Voit Intellectual Property in
accordance with and for the purposes set forth in this Agreement will not
infringe the contractual or proprietary rights of any third party or conflict
with any other agreement. To Licensor’s knowledge, there is no
infringement of the Voit Intellectual Property by any third
party. The Voit Intellectual Property includes all of the trademarks
containing the “Voit” name or any derivation thereof that Licensor owns or has
the right to use.
7
(h) During
the term of this Agreement, Licensor shall use its best efforts to obtain,
maintain and renew the Voit Intellectual Property and the registrations thereof
and shall not permit other persons to use the Voit Intellectual Property in any
manner that would conflict with Licensee’s rights under this
Agreement.
(i) Licensor
has not, and neither it nor any successor will, sell, assign, transfer or
otherwise encumber any of its rights in the Voit Intellectual Property or create
any lien, pledge or security interest in the Voit Intellectual Property, or any
part thereof, or permit the Voit Intellectual Property or any part thereof to be
or become subject to any lien, pledge or security interest, attachment or other
encumbrance without first agreeing to give and giving Licensee, in a form and
substance that is customary for license agreements or otherwise mutually
agreeable to Licensor and Licensee, a first lien security interest in the Voit
Intellectual Property to secure Licensor’s performance under this Agreement and
to secure any damages that would accrue to Licensee in the event of a rejection
of this Agreement in any bankruptcy proceeding. Licensor and Licensee
agree that no security interest or other lien created by Licensor in the Voit
Intellectual Property will be valid until the secured party has agreed in
writing with Licensee that the secured party’s rights and interests in the Voit
Intellectual Property will be subordinate to the rights of Licensee in the Voit
Intellectual Property as provided in this Agreement and pursuant to any security
interest to be granted to Licensee pursuant to the immediately preceding
sentence.
9
The
Marks:
(a) Licensee
shall duly include the Marks on or with all Licensee Products sold under the
Marks and shall include all notices and legends with respect to the Marks as are
required by applicable federal, state, and local trademark laws or any other
laws which may be reasonably requested by Licensor.
(b) Except
(i) as required by law, (ii) with respect to Licensee Products in existence
on the Effective Date, or (iii) as specifically agreed by Licensor by prior
writing, no other name, trademark, inscription or designation whatsoever shall
be affixed to the Licensee Products or packaging for the Licensee Products. If
Licensor does not object in writing to a proposed new use of another designation
on any Voit branded product within fifteen (15) days after its receipt of notice
from Licensee of the intended use, the proposed new use will be deemed
approved. In connection with the execution of this Agreement,
Licensor has approved Licensee’s use, in any combination with the Marks, of all
designations of any type used in connection with a Voit branded product as shown
in Licensee’s catalogs and websites. In the event that Licensee seeks
to affix to a Licensee Product the name of an individual endorsing that Licensee
Product, Licensee shall request written approval from the Licensor to do so,
such approval not to be unreasonably withheld.
8
(c) Licensee
hereby acknowledges Licensor's right, title and interest in and to the Marks and
Licensor's right to use and license the use of the Marks and agrees not to claim
any title to the Marks or any right to use the Marks except as permitted by this
Agreement. Licensee shall not directly or indirectly question, attack, contest,
or in any other manner, impugn the validity of the Marks or Licensor rights in
and to the Marks, or the license herein granted, including, without limitation
thereto, in any action in which enforcement of the provisions of this Agreement
is sought, nor shall Licensee willingly become a party adverse to Licensor in
litigation in which a third party is contesting the validity of the Marks or
Licensor's right in and to the Marks.
(d) Licensee
shall at no time adopt or use, without Licensor's prior written consent, any
variation of the Marks or any work or mark likely to be similar to or confusing
with the Marks.
(e) Licensee
shall conduct the merchandising and sale of the Licensee Products in good faith
and in a dignified manner, consistent with the general reputation of the Marks
and Licensor, and in accordance with commercially reasonable trademark
practice.
(f) Any
and all goodwill arising from Licensee's use of the Marks shall inure solely to
the benefit of Licensor, and neither during nor after the Term shall Licensee
assert any claim to the Marks or such goodwill. Licensee shall not take any
action that could be detrimental to the goodwill associated with the Marks or
with Licensor.
(g) Licensee
shall, during the Term of this Agreement and during the two (2) year period
following termination hereof, execute such documents as Licensor may reasonably
request from time to time to ensure that, as between the parties to this
Agreement, all right, title and interest in and to the Voit Intellectual
Property resides in Licensor.
10 Infringement:
(a) Each
party shall notify the other promptly of any actual or threatened infringements,
imitations, or unauthorized use of the Marks by others of which such party
becomes aware. Subject to Licensee’s rights and Licensor’s obligations pursuant
to this Section
10, Licensor shall have the sole right, and shall take all reasonable
steps at its expense, to bring any action on account of any such infringements,
limitations or unauthorized use, and Licensee shall, at Licensor’s expense,
cooperate with Licensor, as Licensor may reasonably request, in connection with
any such action brought by Licensor. Licensor shall retain any and all damages,
settlement, and/or compensation paid in connection with any such action brought
by Licensor. If Licensor does not undertake such action within thirty (30)
calendar days after notice from Licensee of such alleged infringement, Licensee
may prosecute the same, at its expense and with counsel of its own choosing,
provided that no settlement shall be made without the prior written approval of
Licensor (which approval shall not be unreasonably withheld) and Licensee shall
advise Licensor periodically of the status of the action and promptly of any
material developments. In the event that any damages, settlement, and/or
compensation are paid in connection with any such action, Licensee shall first
retain an amount in reimbursement of its expenses and any damages Licensee
suffered as a result of such infringement; any remaining amount shall be divided
equally between Licensee and Licensor.
9
(b) Licensor,
at its expense, shall defend and indemnify and save and hold Licensee and its
subsidiaries and affiliates and their respective directors, officers,
stockholders, and employees and permitted assigns harmless from and against any
and all liabilities, claims, causes of action, suits, damages, Losses and
expenses, including reasonable attorney's fees and expenses, by reason of
alleged or actual violation or infringement of any trademarks and/or service
marks held by third parties, based on Licensee exercising its rights related to
the Voit Intellectual Property granted pursuant to this Agreement. If Licensor
does not give notice to Licensee of its intent to defend or settle such action
within sixty (60) calendar days after notice from Licensee of such alleged
infringement, Licensee may defend the same, at the sole cost and expense of
Licensor, provided that no settlement shall be made without the prior written
approval of Licensor (which approval shall not be unreasonably withheld) and
Licensee shall advise Licensor periodically of the status of the action and
promptly of any material developments. Licensor reserves the right to
participate at any time in such proceedings.
(c) Licensor
shall have the right to compromise and settle any suit, claim or proceeding in
the name of Licensee; provided, however, that
Licensor shall not compromise or settle a suit, claim or proceeding (i) unless
it indemnifies Licensee for all Losses arising out of or relating thereto and
(ii) that includes an admission of liability of Licensee or seeks any material
non-monetary relief, without the written consent of Licensee, which consent
shall not be unreasonably withheld.
(d) The
terms of this Section
10 shall survive the termination of this Agreement.
11
Books, Records,
and Statements:
(a) Licensee
shall maintain during the Term of this Agreement and for at least two (2) years
following the termination hereof true and accurate books and records in which
there shall be reflected all sales of the Voit branded Licensee
Products.
10
(b) Licensee
shall furnish to Licensor with each payment of Royalties as provided in Section 4 hereof, a
Royalty Report as described in Section 4(c) hereof,
or in another mutually agreeable format that may be reasonably established by
Licensor from time to time. The information on this Royalty Report shall be held
and treated by the Licensor and its representatives and affiliates in confidence
and will not, without the prior written consent of Licensee, be disclosed or
used by the Licensor or its representatives or affiliates other than in
connection with this Agreement. Notwithstanding the foregoing, the
information in the Royalty Report will not be deemed confidential if such
information becomes generally available to the public other than as a result of
a disclosure by the Licensor or any of its representatives or affiliates. Such
Royalty Report shall be submitted whether or not they reflect any sales. Failure
to submit timely reports and/or any payments will incur an additional charge of
one (1%) per month on any balance unpaid as of the thirtieth day following
Licensee’s receipt of written notice from Licensor of such failure to timely
pay. The receipt or acceptance by Licensor of any Royalty Reports pursuant to
this license or of any Royalties paid hereunder (or the cashing of any Royalty
checks paid hereunder) shall not preclude Licensor or Licensee from questioning
the correctness thereof at any time.
(c) Licensor,
at its expense, shall have the right, no more than once per Contract Year,
during regular business hours, upon ten (10) business days' notice to Licensee,
to examine or audit the books and accounts and records of Licensee which pertain
to the manufacture, sale, display, advertising, and promotion of Licensee
Products sold under the Mark and any other books and records that may be
reasonably required by Licensor's accountants in order to verify the figures
reported in any Royalty Report. Such books of accounts and records
shall be made available to Licensor and its accountants at a location mutually
agreed upon by the parties. Licensee shall render all commercially reasonable
assistance to Licensor and its accountants for the purpose of facilitating the
checking or auditing of sales and of the figures set forth in any of Licensee's
Royalty Reports. If, as a result of such examination or audit, Licensor's
accountants determine that the amount of royalties due to Licensor was greater
than the amount of Royalties reported by Licensee in its quarterly Royalty
Reports, Licensor shall promptly furnish to Licensee a copy of the report
furnished of its accountants setting forth the amount of the deficiency in
payment of Royalties (the “Deficiency”) and
showing, in reasonable detail, the bases upon which the same was determined.
Licensee shall remit to Licensor a sum equal to the amount of the Deficiency so
claimed within thirty (30) days after notification of the Deficiency, plus
accrued interest calculated at the rate of twelve percent (12%) per annum. In
addition, if the examination or audit reveals an underpayment of the Royalties
in any six month period and Licensee does not dispute the amount of the alleged
underpayment, Licensee shall promptly remit to Licensor the reasonable cost of
such examination or audit.
11
12 Indemnification/Insurance:
(a) Licensee, at its expense, shall
defend and indemnify and save and hold Licensor harmless from and against any
and all liabilities, claims, causes of action, suits, damages and expenses,
including reasonable attorney's fees and expenses, which Licensor becomes liable
for, or may incur or be compelled to pay by reason of acts, whether of omission
or commission, that may be committed or suffered by Licensee or any of its
partners, servants, agents, contractors, consultants, advisors, employees or
affiliates in connection with Licensee's performance of this Agreement or in
connection with the Licensed Products (other than Licensed Products acquired
from Licensor or its affiliates) manufactured, distributed, sold, displayed,
advertised or promoted by Licensee, irrespective of whether any prior approvals
shall have been given by Licensor with respect thereto. The indemnification
shall not apply to any claims initiated because of an act or omission by
Licensor or to any trademark infringement action brought by a third party
against Licensee or Licensor, provided that Licensee has abided by the terms of
this Agreement. The provisions of this Section 12 (a) shall
survive the termination of this Agreement.
(b)
Licensee agrees to obtain and keep in full force and effect, during the term of
this Agreement at its sole cost and expense, policies of insurance insuring
against those risks customarily insured under general liability policies,
including, but not limited to, "product liability" and "completed operations".
Such policies of insurance shall have endorsements or coverage with combined
single limits of not less than one million dollars ($1,000,000) and shall name
the Licensor as an additional insured thereunder. Licensee shall notify Licensor
within thirty (30) days of Licensee’s receipt of any notice of cancellation. It
is also agreed that the "other insurance" clause, if any, will be deleted from
such policy, that the insurance under such policy shall be primary, and that
other insurance in force is neither primary nor contributing.
(c)
Licensee shall provide to Licensor, within thirty (30) days of the effective
date of this Agreement, a certificate showing proof that such policies of
insurance are in effect.
(d)
Licensee shall give Licensor thirty (30) days' prior written notice of any
reduction in limits or termination of such policies of insurance, or of any
intention on the part of Licensee not to pay the premiums thereof.
13 Termination:
(a) This
Agreement shall be terminable only in accordance with the provisions of this
section. In the event of any material breach of this Agreement, the
aggrieved party shall promptly provide written notice of the specific material
breach, and, except as set forth in Section 13(b), the
party committing such breach shall have sixty (60) days after its receipt of the
written notice of the specific material breach to effect a cure
thereof. If such a material breach is not cured within such sixty
(60) day period, the aggrieved party shall have the right to terminate this
Agreement by written notice of termination, provided, however, if such material
breach is of a nature that it is unable to be cured within such sixty (60) day
period despite the good faith efforts of the party receiving the notice, then
the aggrieved party may not terminate this Agreement so long as the other party
is diligently procuring such cure and, in fact, subsequently effects such cure
within a reasonable period of time.
12
(b)
Without prejudice to any other rights hereunder, each party (the
“Terminating
Party”) shall have the right to terminate this Agreement on notice to the
other party (the “Non-Terminating
Party”), effective immediately upon the Non-Terminating Party’s receipt
of said notice, in the event of the occurrence of any of the following
events:
(i) the
adjudication of insolvency or the making by the Non-Terminating Party of an
assignment for the benefit of creditors;
(ii) the
filing by or against the Non-Terminating Party of, or the entry of an order
for relief against the Non-Terminating Party in any voluntary or good faith
involuntary proceeding under any bankruptcy, insolvency, reorganization or
receivership law, including without limitation the U.S. Bankruptcy code, or an
admission seeking relief as herein allowed, which filing or order shall not have
been vacated within sixty (60) calendar days from the entry
thereof;
(iii) the
appointment of a receiver for all or a substantial portion of the
Non-Terminating Party’s property and such appointment shall not be discharged or
vacated within sixty (60) calendar days of the date thereof; or
(iv) the
assumption of custody, attachment or sequestration by a court of competent
jurisdiction of all or a significant portion of the Non-Terminating Party’s
property.
(c)
Licensee’s failure to pay the Minimum Royalty (or any portion thereof) in
accordance with the provisions of Section 4 shall be
considered a material breach of this Agreement that is subject to cure within
ten (10) business days after Licensee’s receipt of a written notice of such
breach. Licensee’s failure to pay any material amount due under Section 4 of this
Agreement other than the Minimum Royalty shall be considered a material breach
of this Agreement that is subject to cure within thirty (30) days after
Licensee’s receipt of a written notice of the specific amount due to Licensor,
provided, however, if: i) there is a good faith dispute about the amount that is
due to Licensor under Section 4, then
Licensee’s failure to pay the disputed amount will not be a material breach of
this Agreement unless Licensee fails to pay to Licensor any amount ultimately
deemed due within thirty (30) days of the final resolution of the good faith
dispute; or ii) as a result of an audit conducted in accordance with Section 11(c) of this
Agreement, it is determined that Licensee owes Licensor an additional amount
under Section
4, then Licensee’s failure to pay that amount will not be a material
default of this Agreement unless Licensee fails to pay to Licensor any amount
ultimately deemed due within thirty (30) days of the final resolution of the
audit.
13
(d) In
the event of any non-material breach under this Agreement, the aggrieved party
shall promptly provide written notice of the non-material breach. The
parties agree that non-material breaches cannot be a basis for terminating this
Agreement. The parties further agree that the matters that may result
in non-material breaches include, but are not limited to, the
following:
(i) Whether
Licensee has sold a Voit-branded product to a customer that is not covered by
Licensee’s license under this Agreement;
(ii) Whether
Licensee has sold a Voit-branded product that is not covered by Licensee’s
license under this Agreement;
(iii) Whether
a product advertised, offered or sold by Licensee is a new product that requires
approval under Section
5(b) or is already a Licensee Product as defined in this
Agreement;
(iv) Whether
Licensee or Licensor has complied with the approval provisions of Section 5;
and
(v) Whether
Licensee has complied with the requirements of Section
9(b).
Licensee agrees to refrain
from intentionally or willfully taking any actions that would violate the spirit
of this Agreement.
(e) If
Licensee has intentionally and willfully failed to obtain the approval required
under Section
5(b) for more than five (5) products in any single Contract Year, then
such intentional and willful failure shall constitute a material breach of the
Agreement that is subject to the provisions of Section
13(a). In that case, Licensee will be deemed to have cured the
breach by either obtaining Licensor’s approval for the products in accordance
with the provisions of Section 5(b) or by
stopping future sales of the products within sixty (60) days of Licensee’s
receipt of the notice required by Section 13(a).
(f) Upon
termination of this Agreement, unless otherwise permitted by Licensor, Licensee
shall discontinue using the Voit Intellectual Property in connection with the
manufacture, advertisement, sale, distribution and promotion of the Voit-branded
Products, with the following exceptions:
(i) Licensee
and its Permitted Third Parties shall be permitted to use the Voit Intellectual
Property in accordance with the provisions of this Agreement to fulfill any
orders for Voit-branded Products received as a result of catalogs then in
circulation, including catalogs published by or for customers of
Licensee.
14
(ii) For
twenty-four (24) months (the “Sell-Off Period”)
following the termination of this Agreement in accordance with the provisions of
Section 13,
Licensee shall be permitted to advertise, sell or otherwise distribute
(a) Licensee’s inventory of all Voit-branded products and unfinished
Licensee Products meant to be Voit-branded products when finished, including the
right to finish any work-in-process and use supplies of raw materials on hand or
ordered, (b) all Voit-branded products ordered from a supplier prior to
termination under purchase orders which cannot be cancelled without penalty to
or a claim against Licensee and (c) all Voit-branded products ordered prior
to termination under binding sales orders outstanding at the time of such
termination which sales orders cannot be cancelled without penalty to or a claim
against Licensee. Licensee will send to Licensor a summary of all of
the inventory of Voit-branded products described in subsections (a), (b) and (c)
of this paragraph.
(iii) The
parties agree that during the Sell-Off Period, they shall abide by and uphold
their rights and obligations accrued or existing as of termination of the
Agreement. The parties further agree that the representations, rights
and obligations contained in Sections 5, 7, 8, 10, 11,
12(a), 13, 14, 17, 18, 19 and
20 will survive the termination of this Agreement.
(g) At
the conclusion of the Sell-Off Period, Licensee’s obligation to pay Licensor any
future royalty, including the Minimum Royalty, shall terminate, provided,
however, this provision will not affect Licensee’s obligation to pay Licensor
any royalty due and owing as of the end of the Sell-Off Period. If
the Sell-Off Period ends at any time other than the end of a Contract Year, the
Minimum Royalty for that Contract Year will be pro-rated based on a fraction,
the numerator of which is the number of months of the Contract Year that
occurred prior to the end of the Sell-Off Period and the denominator of which
will be 12.
(h) Any
termination under this Section 13 shall not
affect any rights that have accrued prior to termination (including, without
limitation, royalties due to Licensor) and shall be without prejudice to any
other legal or equitable remedies to which the terminating party may be entitled
by reason of such rights. Notwithstanding anything to the contrary
contained herein, if this Agreement is terminated during a Contract Year in
which Licensee has paid a Minimum Royalty (i.e., after January 30), then
Licensee shall be subject to the terms of Section 4(b) for the
remainder of such Contract Year and shall only be liable to pay royalties at a
rate equal to four percent (4%) of all Net Sales during the subsequent Contract
Years in the Sell-Off Period with no obligation to pay a Minimum Royalty.
Notwithstanding anything to the contrary contained herein, if this Agreement is
terminated during a Contract Year in which Licensee has not paid a Minimum
Royalty (i.e., before January 30), then Licensee shall only be liable to pay
royalties at a rate equal to four percent (4%) of all Net Sales during the
entire Sell-Off Period with no obligation to pay a Minimum
Royalty.
15
14 Method of
Payment: All payments due pursuant to this Agreement shall be
made by check unless Licensor requests in writing that a specific payment be
sent via electronic transfer and simultaneously provides the electronic transfer
instructions in accordance with Section 17
hereof.
15 Relationship of the
Parties: The relationship of Licensee to Licensor is that of
an independent contractor and neither Licensee nor its agents or employees shall
be considered employees of the Licensor. Licensor shall pay its costs and
expenses incurred in connection with the preparation of this Agreement and its
representation hereunder. This Agreement does not constitute and should not be
construed as constituting a partnership or joint venture or grant of a franchise
between Licensor and Licensee.
16 Assignment: This
Agreement may be assigned by Licensor provided assignee agrees to be bound by
the terms and conditions of this Agreement. In the event of a sale, transfer,
assignment, pledge, lien, merger or change of control of either party, this
Agreement will remain binding on the parties and their successors. It
is the intention of the parties that Licensee or a Permitted Third Party shall
sell and distribute the Licensee Products. Licensee may assign, sublicense
and/or subcontract its right under this Agreement to any direct or indirect,
wholly-owned subsidiary of Licensee by providing Licensor with written notice
thereof. Notwithstanding anything to the contrary in this Agreement,
Licensee may assign, sublicense and/or subcontract its rights or any part of its
rights under this Agreement to any other entity provided that it obtains prior
written consent from Licensor, which consent a) will not be unreasonably
withheld; and b) will be provided within ten (10) days of Licensor’s receipt of
written notice from Licensee. For purposes of this Agreement,
neither a merger nor a change of control of Licensee (including, without
limitation, a sale of all or substantially all assets or a majority of the
voting stock of Licensee, or of any permitted assignee, sublicensee or
subcontractor) shall be deemed a transaction requiring Licensor’s consent or
that affects the validity or effectiveness of this Agreement. In the
event of an assignment, sublicense, subcontract, merger or change of control of
Licensee in accordance with the provision of this paragraph, the Agreement will
remain binding on Licensor’s and Licensee’s successors. Any consent by
Licensor to the assignment of this Agreement shall not relieve Licensee from its
obligations and liabilities hereunder, unless Licensor shall also expressly in
writing agree to such relief. In the event of any assignment, all reference
herein to Licensee shall mean both Licensee and its assignees, and the assignees
shall not be entitled to make any further assignment of this Agreement without
the prior written consent of Licensor, which consent will not be unreasonably
withheld.
17 Notices; Submissions by Licensee for
Approval:
(a) Any
notice, demand, waiver, consent, approval or disapproval (collectively referred
to as “notice”)
required or permitted herein shall be in writing, and shall be given either
personally and receipted, by messenger, by air courier, or by prepaid registered
or certified mail, with return receipt requested, addressed to the parties at
the following addresses or at
such other address as Licensor or Licensee may hereafter designate in
writing:
16
|
If
to Licensor:
|
If
to Licensee:
|
|
Voit
Corporation
4414
Centerview Drive
Suite
204
San
Antonio, TX 78228
Attn: Mr.
Jose Ramon Elizondo
|
Sport
Supply Group Inc.
1901
Diplomat Drive
Farmers
Branch, TX 75234
Attn: Mr.
Terrence M. Babilla
|
With a
copy sent to:
Voit
Mexico
Poniente
128 #579
Colonia
Industrial Vallejo
Mexico
City, C.P.02300
Attn: Mr.
Manuel Morales
(b) A
notice shall be deemed received upon the date of deliver if given personally, by
messenger, by air courier, or, if given by mail, on the date set forth on the
registered or certified mail receipt. Any party may change its address for the
purposes of notice by giving notice in accordance with the terms and conditions
of this Section
17.
(c) Any
materials submitted by Licensee to Licensor for approval pursuant to this
Agreement shall be submitted personally and receipted, by messenger, by air
courier, or by prepaid registered or certified mail, with return receipt
requested.
18
APPLICABLE
LAW: THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT
TO THE PRINCIPLES OF CONFLICT OF LAWS. ANY CASE, CONTROVERSY, SUIT, ACTION OR
PROCEEDING ARISING OUT OF, IN CONNECTION WITH, OR RELATED TO THIS AGREEMENT
SHALL BE BROUGHT IN ANY FEDERAL OR STATE COURT LOCATED IN THE COUNTRY
AND STATE OF TEXAS. LICENSOR AND LICENSEE HEREBY EXPRESSLY SUBMIT TO THE
PERSONAL JURISDICTION AND VENUE OF ANY FEDERAL OR STATE COURT LOCATED IN THE
COUNTRY AND STATE OF TEXAS.
19
Cumulative
Remedies: All remedies, rights, undertakings, obligations and
agreements contained herein shall be cumulative, and none of them shall be in
limitation of any other remedy, right, undertaking, obligation or agreement of
either party, including without limitation any rights or remedies accruing under
the Uniform Commercial Code and any other applicable law.
17
20
Modification,
Amendment, Supplement or Waiver: No modification, amendment,
supplement to or waiver of this Agreement or any of its provisions shall be
binding upon the parties hereto unless made in writing and duly signed by the
parties to this Agreement. A failure or delay of any party to this Agreement to
enforce at any time any of the provisions of this Agreement or to require at any
time performance of any of the provisions hereof, shall in no way be construed
to be a waiver of such provisions of this Agreement. A waiver by either party of
any of the terms and conditions of this Agreement in any one instance shall not
be deemed a waiver of such terms or conditions in the future, or of any
subsequent breach thereof.
21
Entirety of
Agreement: This Agreement constitutes the entire agreement
between the parties and supersedes all previous agreements, promises,
representations, understandings, and negotiations, whether written or oral,
between the parties with respect to the subject matter hereof.
22 Severability: In the
event any one or more of the provisions of this Agreement shall for any reason
be held to be invalid, illegal, or unenforceable, the remaining provisions of
this Agreement shall be unimpaired, and the invalid, illegal, or unenforceable
provision(s) shall be replaced by a mutually acceptable provision(s), which,
being valid, legal and enforceable comes closest to the intention of the parties
underlying the invalid, illegal or unenforceable provision(s).
23 Headings: The
headings in this Agreement are for the purposes of reference only and shall not
in any way limit or otherwise affect the meaning or interpretation of any of the
terms hereof.
24
Schedules: The
terms and provisions of the schedules attached to this Agreement are hereby
incorporated herein as if fully set forth herein.
[Signature
Page Follows]
18
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
|
VOIT
CORPORATION
|
|
|
By:
|
/s/ Jose R. Elizondo
|
|
Name:
|
Jose
R. Elizondo
|
|
Title:
|
CEO
|
|
SPORT
SUPPLY GROUP, INC.
|
|
|
By:
|
/s/ Terrence M. Babilla
|
|
Name:
|
Terrence
M. Babilla
|
|
Title:
|
President
|
19
SCHEDULE
A
TRADEMARKS
Trademarks:
|
Owner
|
Trademark
|
App
No /
App
date
|
Reg
No/ Reg
Date
|
Status
|
||||
|
Voit
Corporation
|
Voit,
Standard Character Mark
|
11/4/2008
|
77562705/
|
LIVE
|
||||
|
Voit
Corporation
|
Voit,
Standard Character Mark
|
9/4/2008
|
77562682/
|
LIVE
|
||||
|
Voit
Corporation
|
Voit,
Typed Drawing
|
1/29/2001
|
76201542/
|
LIVE
|
||||
|
Voit
Corporation
|
Voit,
Typed Drawing
|
5/18/1983
|
73426505/
|
LIVE
|
||||
|
Voit
Corporation
|
Voit,
Typed Drawing
|
8/20/1981
|
73324531/
|
LIVE
|
Voit
Intellectual Property shall include the trademarks listed above as well as all
graphic designs, patents, copyrights, logos, other designs and intellectual
property rights attributable to VOIT CORPORATION.
Schedule A
- 1
SCHEDULE
B
LICENSED
PRODUCTS
|
1.
|
Inflated
balls and accessory items
|
|
2.
|
Gym
mats
|
|
3.
|
Baseballs
and softballs
|
|
4.
|
Badminton
birds
|
|
5.
|
Baseball
batting tees
|
|
6.
|
Field
markers
|
|
7.
|
Baseball
bases
|
|
8.
|
Baseball
and softball bats
|
|
9.
|
Lacrosse
equipment
|
|
10.
|
Track
and field equipment
|
|
11.
|
Soccer
equipment including but not limited to shin guards, uniforms, socks, goal
keeper gloves, indoor/outdoor foam balls, soccer goals and nets, and other
accessories
|
|
12.
|
Exercise
equipment
|
|
13.
|
Physical
education equipment and
accessories
|
Schedule
B - 1