CONSOLIDATED AMENDMENT AGREEMENT
(CANADA)
THIS CONSOLIDATED AMENDMENT AGREEMENT made and entered into as
of the 1st day of January, 1997 by and between Everlast World's Boxing
Headquarters Corp., a New York corporation of ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ("Everlast") and Active Apparel Group, Inc., a Delaware corporation
having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Licensee")
W I T N E S S E T H
WHEREAS, by License Agreement dated January 1, 1993, which was
amended by a First Amendment Agreement dated November 5, 1993, (the said License
Agreement as so amended being hereinafter referred to as the "License
Agreement") Everlast authorized Total Impact, Inc. to use certain Licensed Marks
in Canada in connection with certain women's sportswear, and
WHEREAS, the License Agreement was duly assigned to TI
Sportswear, Inc., a New York corporation and the said New York corporation was
subsequently merged into the Licensee which thereby acquired and assumed the
License Agreement, and
WHEREAS, the parties desire to consolidate the prior amendment
and to further amend the License Agreement as hereinafter set forth,
NOW THEREFORE, for and in consideration of the premises and of
the mutual promises and conditions herein contained, the parties do
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hereby agree as follows:
1. Effective as of the date hereof the License Agreement is hereby
modified and amended in the following respects:
(i) Paragraph 1(a) shall be changed by deleting the words "headwear
specifically coordinated with Licensed Products and sold together
therewith" and inserting in lieu thereof "baseball style caps decorated
solely with the embroidered designs shown on Exhibit A annexed,
specifically coordinated with, and sold solely as an integral part of
an ensemble, with other Licensed Products".
(ii) The date "December 31, 1996" in paragraph 1(c) is changed to
"December 31, 2002".
(iii) Paragraph 1(f) is hereby amended in its entirety to read as
follows:
f) "Option Periods" shall mean the two
successive periods of five (5) years each
commencing January 1, 2003 and January 1, 2008
respectively."
(iv) The third sentence of Paragraph 3(c) is hereby amended in its
entirety to read as follows:
The minimum advertising expenditure under this
agreement during each Contract Year of the
Contract Period and each Option Period, if
Licenseee shall exercise such options, shall be
as follows:
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CONTRACT YEAR AMOUNT CDN $
------------- ------------
CONTRACT PERIOD
1997 55,000
1998 62,500
1999 70,000
2000 77,500
2001 85,000
2002 92,500
FIRST OPTION PERIOD
2003 100,000
2004 107,500
2005 115,000
2006 122,500
2007 130,000
SECOND OPTION PERIOD
2008 137,500
2009 145,000
2010 152,500
2011 160,000
2012 167,500
(v) Paragraphs 7(a) and 7(b) are hereby amended to read in their
entirety as follows:
7(a) Licensee shall pay to Everlast the minimum
amounts set forth below during each Contract Year of
the Contract Period:
YEAR AMOUNT CDN $
---- ------------
1997 132,000
1998 150,000
1999 168,000
2000 186,000
2001 204,000
2002 222,000
(b) Licensee shall pay to Everlast the minimum
amounts set forth below during each Contract Year of
the Option Period, if Licensee shall exercise such
options, the amounts set forth below:
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YEAR AMOUNT CDN $
---- ------------
FIRST OPTION PERIOD
2003 240,000
2004 258,000
2005 276,000
2006 294,000
2007 312,000
SECOND OPTION PERIOD
2008 330,000
2009 348,000
2010 366,000
2011 384,000
2012 402,000
All amounts to be paid under paragraph 7(a) or this
paragraph shall be paid in twelve equal installments on
the first day of each month during each respective
Contract Year.
(vi) Paragraph 8(b) is hereby amended to read in its entirety as
follows:
b) All references to currency herein shall be
to Canadian dollars. All payments by Licensee to
Everlast under this Agreement shall be made by
checks drawn in Canadian dollars on a United States
or Canadian bank to the order of Everlast and
delivered to Everlast at ▇.▇.▇▇▇ 3343, Commerce
Court Postal Station, Toronto, Ontario M5L 1K1, or
to such other address or account as everlast may
direct from time to time.
(vii) The last sentence of subparagraph 8(d) is deleted and the
following is hereby inserted in lieu thereof:
In lieu of such letter of credit, the
Licensee may pay to Everlast on or before the first
day of each Contract Year an amount equal to
twenty-five (25%) percent of the minimum annual
royalty to be paid pursuant to subparagraphs 7(a)
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and 7(b) of this Agreement during the relevant
Contract Year. Such amount shall be held as
security for the faithful performance of the
obligations on the part of the Licensee to be
performed under this Agreement. The amount of the
security then held by Everlast and not otherwise
previously applied will be carried over to the next
Contract Year pursuant to this subparagh. Upon the
expiration or other termination of this Agreement,
the remaining balance held by Everlast, pursuant to
this subparagraph shall be repaid without interest
to the Licensee, provided that the Licensee has
fully performed each of the obligations on its part
to be performed hereunder.
The maintenance of such Letter of Credit in
effect or the payment of the alternative deposit is
a strict condition of this Agreement. Everlast
shall have the option to forthwith terminate this
Agreement if such Letter of Credit shall not be
provided or shall expire without being
simultaneously replaced by a Letter of Credit
conforming to the foregoing provisions, or such
alternative deposit is not timely made.
(viii) The figures "Two Million ($2,000,000) Dollars" in Paragraphs
16(b) and 16(c) shall be changed to "Three Million Five Hundred Thousand
(CDN$3,500,000) Canadian Dollars" during the Contract Period, "Four Million
Two Hundred Thousand (CDN$4,200,000) Canadian Dollars" during the First
Option Period if Licensee shall exercise such option, and "Four Million
Nine Hundred Thousand (CDN$4,900,000) Canadian Dollars" during the Second
Option Period if Licensee shall exercise such option.
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(ix) The words "Five successive terms of one (1) year each" in the
first sentence of paragraph 17 are changed to "two successive periods of
five (5) years each commencing January 1, 2003 and January 1, 2008
respectively.
(x) Subparagraph 17(iii) is hereby amended in its entirety to read as
follows:
(iii) during the last twelve months ending on September
30th in the final Contract Year of the Contract Period
Licensee's Net Sales of Licensed Products in the
Contract Territory shall amount to at least $3,400,000
for the exercise of the first option, and during the
last twelve months ending on September 30th in the final
Contract Year of the First Option Period Licensee's Net
Sales of Licensed Products in the Contract Territory
shall amount to at least $4,900,000 for the exercise of
the second option.
2. The License Agreement and all of the remaining terms and provisions
thereof shall continue to remain in full force and effect. All rights and
obligations of the parties accruing prior to the date hereof shall not be
effected by this Consolidated Amendment Agreement.
IN WITNESS WHEREOF the parties have signed this Fourth Amendment
Agreement as of the day and year first above written.
EVERLAST WORLD'S BOXING HEADQUARTERS CORP., Licensor
By: /s/ ▇▇▇ ▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇, President
ACTIVE APPAREL GROUP, INC., Licensee
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Pres.
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
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EXHIBIT A
[GRAPHICS OMITTED]
Graphic representation of baseball style caps decorated with
embroidered design of (1) "EVERLAST WOMAN" and (2) "EVERLAST" with boxing gloves
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