EXHIBIT 10.66
Polaris Industries Inc.
Karts International Incorporated
Page 1
LICENSE AGREEMENT
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This license agreement ("Agreement") is entered into by and between Polaris
Industries Inc. ("Polaris" or "Licensor"), a corporation organized and existing
under the laws of the State of Delaware with its principal place of business at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Karts International
Incorporated, ("Karts" or "Licensee"), a corporation organized and existing
under the laws of the State of Nevada with its principal place of business at
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
WHEREAS, the licensor is in the business of manufacturing and marketing
snowmobiles, personal watercraft, all terrain vehicles, motorcycles, and related
parts, garments and accessories under the brand name Polaris, and owns certain
trademark rights and other intellectual property rights with respect to this
brand name and its products;
WHEREAS, the licensee is in the business of manufacturing and marketing gas
powered fun karts and mini-bikes and related parts and accessories and desires
to obtain from the Licensor a license under said trademark rights and other
intellectual property rights owned by the Licensor to develop the "Articles" as
hereinafter defined below;
NOW, THEREFORE, the parties do hereby agree and covenant as follows:
1. MEANING OF TERMS
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A. "Licensed Material" means the graphic representations of the
following: POLARIS, VICTORY and such other related marks as
are registered by Polaris in the authorized territories, and
artwork as may be designated by Licensor.
B. "Trademarks" means "POLARIS," "VICTORY," and other trademarks
as identified by Licensor and the representations of Licensed
Material included in Subparagraph 1.A. above.
C. "Articles" means the following items on or in connection with
which the Licensed Material and/or the Trademarks are
reproduced or used, and includes each and every stock keeping
unit ("SKU") of each Article: Four gas powered Fun Karts
originally identified as Eagle 11, Tracker, Trail Runner and
Trail Sport, "Victory Jr." mini-bike and other SKUs as may be
agreed upon in writing by the parties.
D. "Minimum Per Article Royalty" means for each Article
identified herein which is sold the sum indicated herein:
None.
E. "Term" means the period commencing December 30, 1999 and
ending April 30, 2003.
Polaris Industries Inc.
Karts International Incorporated
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F. "Territory" means USA and Canada.
G. "Royalties" means a royalty in the amounts set forth below:
(1) A royalty of 5% of Licensee's Net Invoiced ▇▇▇▇▇▇▇▇
for each Article sold during the Term of the
Agreement.
(2) The sums paid to Polaris as Royalties on any sales to
Licensee's Affiliates shall be no less than the sums
paid on sales to customers not affiliated with
Licensee.
(3) The full Royalty percentage shall be payable on close
out or other deep discount sales of Articles,
including sales to employees.
(4) Royalties reported on sales of Articles which have
been returned to Licensee for credit or refund and on
which a refund has been made or credit memo issued
may be credited against Royalties due up to 20% of
Net Invoiced ▇▇▇▇▇▇▇▇. The credit shall be taken in
the Royalty Payment Period in which the refund is
given or credit memo issued. Unused credits may be
carried forward, but in no event shall Licensee be
entitled to a refund of Royalties.
(5) The Royalties are payable in U.S. dollars. Foreign
currency ▇▇▇▇▇▇▇▇ shall be converted to U.S. dollars
at the conversion rate in effect and published in the
Wall Street Journal on the last --------------------
business day of the relevant Guarantee or Royalty
Payment Period.
H. "Net Invoiced ▇▇▇▇▇▇▇▇" means the following:
(1) Actual invoiced ▇▇▇▇▇▇▇▇ (i.e., sales quantity
multiplied by Licensee's selling price) for Articles
sold, and all other receivables of any kind
whatsoever, received in payment for the Articles,
whether received by Licensee or any of Licensee's
Affiliates, except as provided in Subparagraph
1.H.(2), less "Allowable Deductions" as hereinafter
defined.
(2) The following are not part of Net Invoiced ▇▇▇▇▇▇▇▇:
invoiced charges for transportation of Articles
within the Territory which are separately identified
on the sales invoice, and sales taxes.
I. "Allowable Deductions" means the following:
(1) volume discounts, and other discounts from the
invoice price (or post-invoice credits) provided in
the regular course of business by Licensee's
customers, including markdown allowances as well as
allowances or discounts relating to advertising, but
which advertising discounts shall be capped at three
percent (3%) of gross invoice, and so long as
Licensee documents all such discounts (or credits) to
Polaris's satisfaction.
Polaris Industries Inc.
Karts International Incorporated
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(2) The following are not Allowable Deductions, whether
granted on sales invoices or as discounts or as
post-invoice credits: cash discounts granted as terms
of payment; early payment discounts; new store
allowances; defective goods allowances or allowances
taken by customers in lieu of returning goods; costs
incurred in manufacturing, importing, selling,
distributing or advertising Articles; freight costs
incorporated in the selling price; and uncollectible
accounts.
J. "Royalty Payment Period" means each calendar quarterly period
during the Term and during the sell-off period, if granted.
K. "Advance" means the following sum(s) plus Goods and Services
Tax ("GST") if applicable, payable by the following date(s) as
an advance on Royalties to accrue in the following period(s):
$300,000, of which $30,000 is payable upon Licensee executing
the Polaris Terms Sheet and the remaining $270,000 payable
upon Licensee signing of this Agreement.
L. "Guarantee" means the following sum(s) which Licensee
guarantees to pay as minimum Royalties on Licensee's
cumulative sales in the following period(s): $1,800,000
guarantee all of which is payable as follows to the extent
actual royalties earned do not exceed the total guarantee set
forth herein;
(1) $600,000 for the first period December 15, 1999 to
April 30, 2001 of which the Advance of $300,000 set
forth in Paragraph 1.K shall be credited against the
guarantee for this first period.
(2) $600,000 for the second period May 1, 2001 to April
30, 2002.
(3) (3) $600,000 for the third period May 1, 2002 to
April 30, 2003.
M. "Sample" means two (2) samples of each SKU of each Article,
scheduled from the first production run of each supplier of
each SKU of each Article shipped to Polaris (1 unit to Polaris
Corporate Headquarters in Minneapolis, MN and 1 unit to
Polaris facility in Roseau, MN) at Licensee's expense
including shipping.
N. "Promotion Commitment" means the following minimum sum(s)
which Licensee agrees to spend in the following way(s): As
part of its overall annual advertising/marketing budget,
Licensee shall promote the Articles in the same manner as its
other product lines.
O. "Marketing Date" means the following date(s) by which the
following Article(s) shall be marketed and advertised to the
public: no later than March 1, 2000 for all Articles for which
Licensor has approved for marketing.
Polaris Industries Inc.
Karts International Incorporated
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P. "Ship Date" means the following dates(s) by which the
following Articles shall be shipped and available for purchase
by the public: June 1, 2000 for all Articles for which
Licensor has approved for sale
Q. "Affiliate" means with regard to Licensee, any corporation or
other entity which directly or indirectly controls, is
controlled by, or is under common control with Licensee. With
regard to Polaris, "Affiliate" means any corporation or other
entity which directly or indirectly controls, is controlled
by, or is under common control with Polaris. "Control" of an
entity shall mean possession, directly or indirectly, of power
to direct or cause the direction of management or policies of
such entity, whether through ownership of voting securities,
by contract or otherwise.
R. "Laws" mean any and all applicable laws, rules, and
regulations, including but not limited to, local and national
laws, rules and regulations, treaties, voluntary industry
standards, association laws, codes or other obligations
pertaining to any of Licensee's activities under this
Agreement, including but not limited to those applicable to
the manufacture, pricing, sale and/or distribution of the
Articles.
S. "Manufacturer" means any of Licensee's third-party
manufacturers and suppliers (and their sub-manufacturers and
suppliers) which reproduce or use the Licensed Material and/or
Trademarks on Articles, or components thereof, and/or which
assemble such Articles.
2. RIGHTS GRANTED
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A. (1) In consideration for Licensee's promise to pay and
Licensee's payment of all Royalties, Advances and
Guarantees required hereunder, Polaris grants
Licensee the exclusive right for the Articles during
the Term, and only within the Territory and within
the defined distribution channels as set forth in
Subparagraph 2A (3), to reproduce the Licensed
Material only on or `in connection with the Articles,
to use such Trademarks and uses thereof as may be
approved when each SKU of the Articles is approved
and only on or in connection with the Articles, and
to manufacture, distribute for sale and sell the
Articles. During the term of this Agreement, as long
as Licensee is in compliance with all provisions of
this Agreement, Polaris will not license any other
party to produce gas powered Fun Karts or gas powered
mini-bikes, nor will Polaris enter those categories
on their own.
(2) Licensee will not sell the Articles to any customer
whom Polaris advises Licensee is not carrying on its
business in such a manner as Polaris feels is
consistent with offering Polaris-related products to
the public.
(3) Licensee may only sell the Articles via wholesale to
Licensor's dealers and Licensee's dealers as mutually
agreed between Licensor and Licensee in writing.
Licensee shall pay Royalties on such sales at the
rate specified for customers in Subparagraph 1.G.
Polaris Industries Inc.
Karts International Incorporated
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(4) All rights not expressly granted to Licensee herein
are reserved to Polaris.
B. Unless Polaris consents in writing, Licensee shall not sell or
otherwise provide Articles for use as premiums or promotions
(including those in purchase-with-purchase promotions),
give-aways, fund-raisers, or entries in sweepstakes, or
through unapproved direct marketing methods, including but not
limited to, home shopping television programs, 6r to customers
for inclusion in another product. Polaris will approve or
disapprove Licensee's written request within fourteen (14)
business days of receipt of said request.
C. Unless Polaris consents in writing, Licensee shall not give
away or donate Articles to Licensee's accounts or other
persons for the purpose of promoting sales of Articles, except
for minor quantities or samples which are not for onward
distribution.
D. Nothing contained herein shall preclude Licensee from selling
Articles to Polaris or to any of Polaris's Affiliates, or to
Licensee's or Polaris's employees, subject to the payment to
Polaris of Royalties on such sales.
E. Polaris further grants Licensee the right to reproduce the
Licensed Material and to use the approved Trademarks, only
within the Territory, during the Term and the sell-off period,
if granted, on containers, packaging and display material for
the Articles, and in advertising for the Articles.
F. Nothing contained in this Agreement shall be deemed to imply
any restriction on Licensee's freedom and that of Licensee's
customers to sell the Articles at such prices as Licensee or
they shall determine.
3. ADVANCE
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A. Licensee agrees to pay the Advance, plus any taxes if
applicable, which shall be on account of Royalties to accrue
during the Term only, and only with respect to sales in the
Territory. If said Royalties should be less than the Advance,
no part of the Advance shall be repayable.
B. Royalties accruing during any sell-off period or extension of
the Term shall not be offset against the Advance.
C. There shall be no refund of any Advance paid to Polaris.
D. Royalties accruing by reason of any sales to Polaris or any of
Polaris's Affiliates for internal use shall be offset against
the Advance or any subsequent advance.
Polaris Industries Inc.
Karts International Incorporated
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4. GUARANTEE
---------
A. Royalties continue to accrue and are payable quarterly even if
the total guarantee in Subparagraph 1.L. is exceeded.
B. Advances applicable to Royalties due on sales in the period to
which the Guarantee relates apply towards meeting the
Guarantee.
C. Royalties paid with respect to sales to Polaris or to any of
Polaris's Affiliates shall apply towards the meeting of the
Guarantee or any subsequent guarantee.
D. There shall be no refund of any amount of the Guarantee paid
to Polaris.
5. PRE-PRODUCTION APPROVALS
------------------------
A. As early as possible, and in any case before commercial
production of any Article, Licensee shall submit to Polaris
for Polaris's review and written approval three copies of all
concepts, and all preliminary and proposed final artwork which
are to appear on or in any and all SKUs of the Articles.
Thereafter, Licensee shall submit to Polaris for Polaris's
written approval a preproduction prototype of each SKU of each
Article. Polaris shall endeavor to respond to such requests
within a reasonable time, but such approvals should be sought
as early as possible in case of delays. Licensee acknowledges
that Polaris may not approve concepts or artwork submitted
near the end of the Term. Any pre-production approval Polaris
may give will not constitute or imply a representation or
belief by Polaris that such materials comply with any
applicable Laws.
B. Approval or disapproval shall lie solely in Polaris's
discretion, and any SKU of any Article not so approved in
writing shall be deemed unlicensed and shall not be
manufactured or sold. If any unapproved SKU of any Article is
being sold, Polaris may, together with other remedies
available to Polaris, including but not limited to, immediate
termination of this Agreement, by written notice require such
SKU of such Article to be immediately -withdrawn from the
market.
C. Licensee is responsible for the consistent quality and safety
of the Articles and their compliance with applicable Laws.
Polaris will not unreasonably object to any change in the
design of an Article or in the materials used in the
manufacture of the Article or in the process of manufacturing
the Articles which Licensee advises Polaris in writing is
intended to make the Article safer or more durable.
6. APPROVAL OF PRODUCTION SAMPLES
------------------------------
A. Before shipping an Article to any customer, Licensee agrees to
furnish to Polaris, from the first production run of each
supplier of each of the Articles, for Polaris's approval of
all aspects of the Article in question, two (2) Samples with
packaging, which shall conform to the approved artwork and
prototypes. Approval or disapproval of the artwork as it
appears on any SKU of the Article, as well as of the quality
of the Article, shall he in Polaris's sole discretion and may,
Polaris Industries Inc.
Karts International Incorporated
Page 7
among other things, be based on unacceptable quality of the
artwork or of the Article as manufactured. Any SKU of any
Article not so approved shall be deemed unlicensed, shall not
be sold and, unless otherwise agreed by Polaris in writing,
shall be destroyed. Such destruction shall be attested to in a
certificate signed by one of Licensee's officers. Production
Samples of Articles for which Polaris has approved a
pre-production sample shall be deemed approved, unless within
twenty (20) business days of Polaris's receipt of such
production Sample Polaris notifies Licensee to the contrary.
Any approval of a production Sample attributable to Polaris
will not constitute or imply a representation or belief by
Polaris that such production Sample complies with any
applicable Laws.
B. Licensee agrees to make available at no charge such additional
Samples of any or all SKU'S of each Article as Polaris may
from time to time reasonably request and to permit Polaris to
inspect Licensee's manufacturing operations and testing
records (and those of Licensee's Manufacturers) for the
Articles in accordance with Paragraphs 10 and 23.
C. Licensee acknowledges that Polaris may disapprove any SKU of
an Article or a production run of any SKU of an Article
because the quality is unacceptable to Polaris.
D. No modification of an approved production Sample shall be made
without Polaris's further prior written approval. All SKU'S of
Articles being sold must conform in all respects to the
approved production Sample. It is understood that if in
Polaris's reasonable judgment the quality of any SKU of an
Article originally approved has deteriorated in later
production tuns, or if the SKU has otherwise been altered,
Polaris may, in addition to other remedies available to
Polaris, by written notice require such SKU of the Article to
be immediately withdrawn from the market.
E. The rights granted hereunder do not permit the sale of
"seconds" or "irregulars." All Articles not meeting the
standard of approved Samples shall be destroyed or all
Licensed Material and Trademarks shall be removed or
obliterated therefrom.
F. Licensee is responsible for the consistent quality and safety
of the Articles and their compliance with applicable Laws.
Polaris will not unreasonably object to any change in the
design of an Article or in the materials used in the
manufacture of the Article or in the process of manufacturing
the Articles which Licensee advises Polaris in writing is
intended to make the Article safer or more durable.
G. Polaris shall have the right, by written notice to Licensee,
to require modification of any SKU of any Article approved by
Polaris.
Polaris Industries Inc.
Karts International Incorporated
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H. If Polaris notifies Licensee of a required modification under
Subparagraph 6. G. with respect to any SKU of a particular
Article, such notification shall advise Licensee of the nature
of the changes required, and Licensee shall not accept any
order for any such SKU until the subject SKU has been
resubmitted to Polaris with such changes and Licensee has
received Polaris's written approval of the SKU as modified.
However, Licensee may continue to distribute Licensee's
inventory of the previously approved Articles until such
inventory is exhausted.
I. Licensee agrees to give Polaris written notice of the first
ship date for each Article pursuant to Subparagraph 1.▇.
▇. If Polaris has inadvertently approved a concept, of a product
or a product which is not included in the Articles under this
Agreement, or if Polaris has inadvertently approved an Article
using artwork and/or trademarks not included in the Agreement,
or not registered in the Territory, such approval may be
revoked at any time without any obligation whatsoever on
Polaris's part to Licensee. Any such product as to which
Polaris's approval is revoked shall be deemed unauthorized and
shall not be distributed or sold by or for Licensee.
7. APPROVAL OF PACKAGING, PROMOTIONAL MATERIAL AND ADVERTISING
-----------------------------------------------------------
All containers, packaging, display material, promotional material, web
sites, catalogs, and all advertising, including but not limited to,
television advertising and press releases, for Articles must be
submitted to Polaris and receive Polaris's written approval before use.
To avoid unnecessary expense if changes are required, Polaris's
approval thereof should be procured when such is still in rough or
storyboard format. Approval or disapproval shall lie in Polaris's sole
discretion, and the use of unapproved containers, packaging, display
material, promotional material, catalogs or advertising is prohibited.
Polaris's approval of any containers, packaging, display material,
promotional material, catalogs or advertising under this Agreement will
not constitute or imply a representation or belief by Polaris that such
materials comply with any applicable Laws. Whenever Licensee prepares
catalog sheets or other printed matter containing illustrations of
Articles, Licensee will furnish to Polaris six (6) copies thereof when
they are published.
8. PRINT, RADIO OR TV ADVERTISING
------------------------------
Licensee will obtain all approvals necessary in connection with print,
radio or television advertising, if any, which Polaris may authorize.
Licensee represents and warrants that all advertising and promotional
materials shall comply with all applicable Laws. Polaris's approval of
copy or storyboards for such advertising will not constitute or imply a
representation or belief by Polaris that such copy or storyboards
comply with any applicable Laws.
Polaris Industries Inc.
Karts International Incorporated
Page 9
9. LICENSEE NAME AND ADDRESS ON ARTICLES
-------------------------------------
A. Licensee's name, trade name (or Licensee's trademark which
Licensee has advised Polaris in writing that Licensee is
using) and Licensee's address (at least city and state) will
appear on permanently affixed labeling on each Article or, if
the Article is sold to the public in packaging or a container,
printed on such packaging or a container so that the public
can identify the supplier of the Article.
B. Licensee shall advise Polaris in writing of all trade names or
trademarks Licensee wishes to use on Articles being sold under
this license. Licensee may sell the Articles only under
mutually agreed upon trade names or trademarks.
10. COMPLIANCE WITH APPROVED SAMPLES AND APPLICABLE LAWS AND STANDARDS
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A. Licensee covenants that each Article and component thereof
distributed hereunder shall be of good quality and free of
defects in design, materials and workmanship, and shall comply
with all applicable Laws, and such specifications, if any, as
may have been specified in connection with this Agreement, and
shall conform to the Sample thereof approved by Polaris.
Licensee covenants that it will comply with all applicable
Laws in performing this Agreement, including but not limited
to, those pertaining to the manufacture, pricing, sale and
distribution of the Articles.
B. Without limiting the foregoing, Licensee covenants on behalf
of Licensee's -own manufacturing facilities, and agrees to
require all Manufacturers to covenant by signing the
Consent/Manufacturer's Agreement (referenced in Paragraph 23),
as follows:
(1) Licensee and the Manufacturers agree not to use child
labor in the manufacturing, packaging or distribution
of Polaris merchandise.
(2) Licensee and the Manufacturers agree only to employ
persons whose presence is voluntary. Licensee and the
Manufacturers agree not to use any forced or
involuntary labor, whether prison, bonded, indentured
or otherwise.
(3) Licensee and the Manufacturers agree to treat each
employee with dignity and respect, and not to use
corporal punishment, threats of violence, or other
forms of physical, sexual, psychological or verbal
harassment or abuse.
(4) Licensee and the Manufacturers agree not to
discriminate in hiring and employment practices,
including salary, benefits, advancement, discipline,
termination, or retirement, on the basis of race,
religion, age, nationality, social or ethnic origin,
sexual orientation, gender, political opinion or
disability.
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Karts International Incorporated
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(5) Licensee and the Manufacturers recognize that wages
are essential to meeting employees' basic needs.
Licensee and the Manufacturers agree to comply, at a
minimum, with all applicable wage and hour Laws,
including minimum wage, overtime, maximum hours,
piece rates and other elements of compensation, and
to provide legally mandated benefits. If local Laws
do not provide for overtime pay, Licensee and
Manufacturers agree to pay at least regular wages for
overtime work. Licensee and the Manufacturers agree
that, where local industry standards are higher than
applicable legal requirements, they will meet the
higher standards.
(6) Licensee and the Manufacturers agree to provide
employees with a safe and healthy workplace in
compliance with all applicable Laws, ensuring, at a
minimum, reasonable access to potable water and
sanitary facilities, fire safety, and adequate
fighting and ventilation.
(7) Licensee and the Manufacturers agree to respect the
rights of employees to associate, organize and
bargain collectively in a lawful and peaceful manner,
without penalty or interference, in accordance with
applicable Laws.
(8) Licensee and the Manufacturers agree to comply with
all applicable environmental Laws.
(9) Licensee and the Manufacturers agree to comply with
all applicable Laws, including those pertaining to
the manufacture, pricing, sale and distribution of
the Articles.
11. OWNERSHIP OF RIGHTS IN LICENSED MATERIAL
----------------------------------------
Licensee acknowledges that the copyrights and all other proprietary
rights in and to Licensed Material are exclusively owned by and
reserved to Polaris. Licensee shall neither acquire nor assert
copyright ownership or any other proprietary rights in the Licensed
Material or in any derivation, adaptation, variation or name thereof
Without limiting the foregoing, Licensee hereby assigns to Polaris all
Licensee's worldwide right, title and interest in the Licensed Material
and in any material objects consisting of or incorporating drawings,
paintings, animation cells, or sculptures of Licensed Material, or
other derivations, adaptations, compilations, collective works,
variations or names of Licensed Material, heretofore or hereafter
created by or for Licensee or any of Licensee's Affiliates. All such
new materials shall be included in the definition of "Licensed
Material" under this Agreement. If any third party makes or has made
any contribution to the creation of any new materials which are
included in the definition of Licensed Material under this Paragraph
11, Licensee agrees to obtain from such party a full assignment of
rights so that the foregoing assignment by Licensee shall vest full
rights to such new materials in Polaris. Licensee further covenants
that any such new materials created by Licensee or by any third party
Licensee has engaged are original to Licensee or such third party and
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Karts International Incorporated
Page 11
do not violate the rights of any other person or entity; this covenant
regarding originality shall not extend to any materials Polaris
supplies to Licensee, but does apply to all materials Licensee or
Licensee's third party contractors may add thereto. The foregoing
assignment to Polaris of material objects shall not include that
portion of Licensee's displays, catalogs or promotional material not
containing Licensed Material, or the physical items constituting the
Articles, unless such items are in the shape of the Licensed Material;
provided, however, such assignment shall include any and all design
elements incorporated into the Articles which convey the spirit and
theme of the Licensed Material, and which were developed for the first
time by or for Licensee for use with the Articles.
12. COPYRIGHT AND TRADEMARK NOTICES
-------------------------------
A. As a condition to the grant of rights hereunder, each Article
and any other matter containing Licensed Material shall bear a
properly located permanently affixed trademark and copyright
notices as Polaris specifies to Licensee in writing. Licensee
will comply with such instructions as to form, location and
content of the notices as Polaris may give from time to time.
Licensee will not, without Polaris's prior written consent `
affix to any Article or any other matter containing Licensed
Material notices in any other name. If through inadvertence or
otherwise a notice on any Article or other such matter should
appear in Licensee's name or the name of a third party,
Licensee hereby agrees to assign to Polaris the trademark or
copyright represented by any such notice in Licensee's name
and, upon request, cause the execution and delivery to Polaris
of whatever documents are necessary to convey to Polaris that
trademark or copyright represented by any such notice. If by
inadvertence a proper trademark or copyright notice is omitted
from any Article or other matter containing Licensed Material,
Licensee agrees at Licensee's expense to use all reasonable
efforts to correct the omission on all such Articles or other
matter in process of manufacture or in distribution. Licensee
agrees to advise Polaris promptly and in writing of the steps
being taken to correct any such omission and to make the
corrections on existing Articles which can be located.
B. At the request of Licensor, Licensee shall execute such
form(s) of assignment of copyright in any amendments or
derivative works based in whole or part on the Licensed
Property as Licensor may reasonably request.
13. NON-ASSOCIATION OF OTHER LICENSED PROPERTIES WITH LICENSED MATERIAL
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To preserve Polaris's identification with the Licensed Material `and to
avoid confusion of the public, Licensee agrees not to associate other
licensed properties with the Licensed Material or the Trademarks either
on the Articles or in their packaging, or, without Polaris's written
permission, on advertising, promotional or display materials. Licensee
may use its own trademarks on the Articles as provided in Subparagraph
16.C.
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Karts International Incorporated
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14. ACTIVE MARKETING OF ARTICLES
----------------------------
Licensee agrees to manufacture (or have manufactured for Licensee) and
actively offer for sale all the Articles and to actively exercise the
rights granted herein. Licensee agrees that by the Marketing Date
applicable to a particular Article, or the date of any applicable
amendment, shipments to customers of such Article will have taken place
in sufficient time that such Article shall be available for purchase in
commercial quantities by the public at the retail outlets authorized
pursuant to Subparagraph 2.A. In any case in which such sales have not
taken place or when the Article is not then and thereafter available
for purchase in commercial quantities by the public, Polaris may either
invoke Polaris's remedies under Paragraph 27, or withdraw such Article
from the list of Articles licensed in this Agreement without obligation
to Licensee other than to give Licensee written notice thereof
15. PROMOTION COMMITMENT
--------------------
Licensee agrees to carry out the Promotion Commitment as defined above.
16. TRADEMARK RIGHTS AND OBLIGATIONS
--------------------------------
A. All uses of the Trademarks by Licensee hereunder shall -inure
to Polaris's benefit. Licensee acknowledges that Polaris or
its licensor is the exclusive owner of all the Trademarks, and
of any trademark incorporating all or any part of a Trademark
or any Licensed Material, and the trademark rights created by
such uses. Without limiting the foregoing, Licensee hereby
assigns to Polaris all the Trademarks, and any trademark
incorporating all or any part of a Trademark or any Licensed
Material, and the trademark rights created by such, uses,
together with the goodwill attaching to that part of the
business in connection with which such Trademarks or
trademarks are used. Licensee agrees to execute and deliver to
Polaris such documents as Polaris requires to register
Licensee as a Registered User or Permitted User of the
Trademarks or such trademarks and to follow Polaris's
instructions for proper use thereof in order that protection
and/or registrations for the Trademarks and such trademarks
may be obtained or maintained.
B. Licensee agrees not to use any Licensed Material or
Trademarks, or any trademark incorporating all or any part of
a Trademark or of any Licensed Material, on any business sign,
business cards, stationery or forms (except as licensed
herein), or to use any Licensed Material or Trademark as the
name of Licensee's business or any division thereof, unless
otherwise agreed by Polaris in writing.
C. Nothing contained herein shall prohibit Licensee from using
Licensee's own trademarks on the Articles or Licensee's
copyright notice on the Articles when the Articles contain
independent material which is Licensee's property. Nothing
contained herein is intended to give Polaris any rights to,
and Polaris shall not use, any trademark, copyright or patent
used by Licensee in connection with the Articles which is not
derived or adapted from Licensed Material, Trademarks, or
other materials owned by Polaris or its Licensor.
Polaris Industries Inc.
Karts International Incorporated
Page 13
17. REGISTRATIONS
-------------
Except with Polaris's written consent, neither Licensee nor any of
Licensee's Affiliates will register or attempt in any country to
register copyrights in, or to register as a trademark, service ▇▇▇▇,
design patent or industrial design, or business designation, any of the
Licensed Material, Trademarks or derivations or adaptations thereof, or
any word, symbol or design which is so similar thereto as to suggest
association with or sponsorship by Polaris or any of Polaris's
Affiliates. In the event of breach of the foregoing, Licensee agrees,
at Licensee's expense and at Polaris's request, immediately to
terminate the unauthorized registration activity and promptly to
execute and deliver, or cause to be delivered, to Polaris such
assignments and other documents as Polaris may require to transfer to
Polaris all rights to the registrations, patents or applications
involved.
18. UNLICENSED USE OF LICENSED MATERIALS
------------------------------------
A. Licensee agrees that Licensee will not use the Licensed
Material, or the Trademarks, or any other material the
copyright to which is owned or licensed by Polaris in any way
other than as herein authorized (or as is authorized in any
other written contract in effect between the parties). In
addition to any other remedy Polaris may have, Licensee agrees
that all revenues from any use thereof on products other than
the Articles (unless authorized by Polaris in writing), and
all revenues from the use of any other copyrighted material of
Polaris's or its licensor's without written authorization,
shall be immediately payable to Polaris.
B. Licensee agrees to give Polaris prompt written notice of any
unlicensed use by third parties of Licensed Material or
Trademarks, and that Licensee will not, without Polaris's
written consent, bring or cause to be brought any criminal
prosecution, lawsuit or administrative action for
infringement, interference with or violation of any rights to
Licensed Material or Trademarks. Because of the need for and
the high costs of an effective anti-piracy enforcement
program, Licensee agrees to cooperate with Polaris, and, if
necessary, to be named by Polaris as a sole complainant or
co-complainant in any action against an infringer of the
Licensed Material or Trademarks and, notwithstanding any right
of Licensee to recover same, legal or otherwise, Licensee
agrees to pay to Polaris, and hereby waives all claims to, all
damages or other monetary relief recovered in such action by
reason of a judgment or settlement whether or not such damages
or other monetary relief, or any part thereof, represent or
are intended to represent injury sustained by Licensee as a
licensee hereunder; in any such action against an infringer,
Polaris agrees to reimburse Licensee for reasonable expenses
incurred at Polaris's request, including reasonable attorney's
fees if Polaris has requested Licensee to retain separate
counsel, or has approved the retention of separate counsel.
Polaris Industries Inc.
Karts International Incorporated
Page 14
19. STATEMENTS AND PAYMENTS OF ROYALTIES
------------------------------------
A. Licensee agrees to furnish to Polaris by the 30th day after
each Royalty Payment Period full and accurate statements on
quarterly sales and royalty statement forms Polaris designates
for Licensee's use, showing all information requested by such
forms, including but not limited to, the quantities, Net
Invoiced ▇▇▇▇▇▇▇▇ and applicable Royalty rate(s) of Articles
invoiced during the preceding Royalty Payment Period, and the
quantities and invoice value of Articles returned for credit
or refund in such period. At the same time Licensee will pay
Polaris all Royalties due on ▇▇▇▇▇▇▇▇ shown by such statements
plus taxes if applicable. No deduction or withholding from
Royalties payable to Polaris shall be made by reason of any
tax. Any applicable tax on the manufacture, distribution and
sale of the Articles shall be borne by Licensee.
B. Receipt or acceptance by Licensor of any of the statements
furnished pursuant to this Agreement or of any sums paid
hereunder shall not preclude Licensor from questioning the
correctness thereof at any time, and in the event that any
inconsistencies or mistakes are discovered in such statements
or payments, they shall immediately be rectified and the
appropriate payments made by Licensee. Upon demand of
Licensor, Licensee shall at its own expense, but not more than
one in any twelve (12) month period, furnish to Licensor a
detailed statement by an independent certified public
accountant showing the number, description of items sold
specifying the components of the Licensed Property utilized
and nature of Licensed Product(s), gross sales price itemized
deductions from gross sales price and net sales price of the
Licensed Product(s) covered by this Agreement distributed
and/or sold by Licensee up to and including the date upon
which Licensor has made such demand.
C. Licensee agrees to provide, in the event of a material default
in payment, at Licensor's request: (i) a letter of credit
issued in favor of Licensor from a financial institution as
approved by Licensor in an amount up to the Guaranteed
Consideration; and/or (ii) such other form of security
acceptable to Licensor. Licensee agrees to execute all
documentation as Licensor may require in connection with
perfecting such security interests.
D. The quarterly sales and royalty statement forms Polaris
designates for Licensee's use may be changed from time to
time, and Licensee agrees to use the most current form Polaris
provides to Licensee. Licensee agrees to fully comply with all
instructions supplied by Polaris for completing such forms.
E. Licensee's statements and payments, including all Royalties,
shall be delivered to the attention of Trademarketing
Resources, Inc. at ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇.
Polaris Industries Inc.
Karts International Incorporated
Page 15
F. Licensee represents and warrants that its information systems,
including without limitation, all its proprietary and all
third party hardware and software, process dates correctly
prior to, during and after the calendar year 2000 ("Year 2000
Compliance"). Year 2000 Compliance shall include, without
limitation, correct century recognition, calculations that
properly accommodate same century and multi-century formulas
and date ,values, and interface values that reflect the
appropriate century. Upon a breach by Licensee of its
obligation under this paragraph, Polaris shall be entitled to
terminate this Agreement in accordance with the provisions for
termination set forth herein.
20. TRADEMARKETING RESOURCES, INC. AS AGENT
---------------------------------------
Polaris has retained Trademarketing Resources, Inc. ("TRI") as its
agent for processing, administering and monitoring this Agreement.
Polaris may delegate any of its duties under this Agreement to TRI, and
any obligations of Licensee to Polaris arising out of this Agreement
shall be performed through TRI, including but not limited to approval
and payments. All payments shall be made in the name of Polaris.
21. CONFIDENTIALITY
---------------
Licensee agrees to keep the terms and conditions of this Agreement
confidential, and Licensee shall not disclose such terms and conditions
to any third party without obtaining Polaris's prior written consent;
provided, however, that this Agreement may be disclosed on a
need-to-know basis to Licensee's attorneys and accountants who agree to
be bound by this confidentiality provision. Polaris hereby consents to
Licensee's disclosure of information of a financial nature in this
Agreement to its auditors, to financial institutions in the ordinary
course of business, or as required by law. In addition, Licensee may
have access to information concerning Polaris's and/or its Affiliates'
business and operations, and/or other matters relating to Polaris's
and/or its Affiliates' creations or business plans, which information
may not be accessible or known to the general public. Licensee agrees
not to use or disclose such information to any third party without
obtaining Polaris's prior written consent.
22. INTEREST
--------
Royalties or any other payments due to Polaris hereunder which are
received after the due date shall bear interest at the rate of 18% per
annum from the due date (or the maximum permissible by law if less than
18%).
23. AUDITS AND MAINTAINING RECORDS
------------------------------
A. Licensee agrees to keep accurate records of all transactions
relating to this Agreement regarding the Licensed Material,
including, without limitation, shipments to Licensee of
Articles and components thereof, inventory records, records of
sales and shipments by Licensee, and records of returns, and
to preserve such records for the lesser of seven (7) years or
two (2) years after the expiration or termination of this
Agreement.
Polaris Industries Inc.
Karts International Incorporated
Page 16
B. Polaris, or Polaris's representatives, shall have the right
from time to time to examine and make extracts from all such
records to verify the accuracy of Licensee's statements or
Licensee's performance hereunder.
C. If in an audit of Licensee's records it is determined that
there is a short fall of three percent (3%) or more in
Royalties reported for any Royalty Payment Period, Licensee
shall upon request from Polaris reimburse Polaris for the full
out-of-pocket costs of the audit, including the costs of
employee auditors calculated at $100 per hour per person for
travel time during normal working hours and actual working
time.
D. If Licensee has failed to keep adequate records, for one or
more Royalty Payment Periods, Polaris will assume that the
Royalties owed to Polaris for such Royalty Payment Period(s)
are equal to a reasonable amount, determined in Polaris's
absolute discretion, which may be up to but will not exceed
the highest Royalties owed to Polaris in a Royalty Payment
Period for which Licensee has kept adequate records; if
Licensee has failed to keep adequate records for any Royalty
Payment Period, Polaris will assume a reasonable amount of
Royalties which Licensee will owe to Polaris, based on the
records Licensee has kept and other reasonable assumptions
Polaris deems appropriate. Failure to keep adequate records
constitutes a material breach and this Agreement is subject to
immediate termination under Paragraph 28.B.
24. MANUFACTURE OF ARTICLES BY THIRD PARTY MANUFACTURERS
----------------------------------------------------
A. Licensee agrees to supply Polaris with the names and addresses
of all of its own manufacturing facilities for the Articles.
If Licensee at any time desires to have Articles or components
thereof containing Licensed Material manufactured or developed
by a third party, Licensee must notify Polaris of the name and
address of such Manufacturer/Developer and the Articles or
components involved and obtain Polaris's prior written
permission to do so.
B. If any such Manufacturer/Developer utilizes Licensed Material
or Trademarks for any unauthorized purpose, Licensee shall
cooperate fully in bringing such utilization to an immediate
halt.
25. INDEMNITY
---------
A. Licensee shall indemnify Polaris during and after the term
hereof against all claims, demands, suits, judgments, losses,
liabilities (including settlements entered into in good faith
with Licensee's consent, not to be unreasonably withheld) and
expenses of any nature (including reasonable attorneys' fees)
arising out of Licensee's activities under this Agreement,
including but not limited to, any actual or alleged: (1)
negligent acts or omissions on Licensee's part, (2) defect
(whether obvious or hidden and whether or not present in any
Polaris Industries Inc.
Karts International Incorporated
Page 17
Sample approved by Polaris) in an Article, (3) personal
injury, (4) infringement of any rights of any other person by
the manufacture, sale, possession or use of Articles, (5)
breach on Licensee's part of any covenant, representation or
warranty contained in the Agreement, or (6) failure of the
Articles or by Licensee to comply with applicable Laws. The
parties indemnified hereunder shall include Polaris and its
parent, Affiliates and successors, and its officers,
directors, employees and agents including TRI. The indemnity
shall not apply to any claim or liability relating to any
infringement of the copyright or trademark of a third party
caused by Licensee's utilization of the Licensed Material in
accordance with the provisions hereof unless such claim or
liability arises out of Licensee's failure to obtain the full
assignment of rights referenced in Paragraph 11.
B. Licensee agrees to give Polaris prompt written notice of any
claim or suit which may arise under the indemnity provision
set forth above.
26. INSURANCE
---------
Licensee shall maintain in full force and effect at all times while
this Agreement is in effect and for three years thereafter commercial
general liability insurance on a per occurrence form, including broad
form coverage for "contractual liability," "property damage," "products
liability," "bodily injury," advertising injury" and "personal injury"
liability as those terms are defined in Insurance Services Office
("ISO") Form CG00-01-01-96 or its equivalent waiving subrogation as to
Polaris, with minimum limits of no less than five million dollars (US
$5,000,000.00) per occurrence, and naming as additional insureds those
indemnified in Paragraph 25 hereof Licensee also agrees to maintain in
full force and effect at all times while this Agreement is in effect
such Worker's Compensation Insurance as is required by applicable law
and Employer's Liability Insurance with minimum limits of one million
dollars (US $1,000,000.00) per occurrence. All Licensee insurance shall
be deemed primary and not contributory as respects any separate
insurance maintained by Polaris regardless of the "Other Insurance" or
similar provisions of the respective policies of insurance. Licensee
shall deliver to Polaris, within ten (10) business days after the
signing of this Agreement, a certificate or certificates of insurance
evidencing satisfactory coverage and indicating that Polaris shall
receive thirty (30)-days unrestricted prior written notice of
cancellation, non-renewal or of any material change in coverage.
Licensee's insurance shall be carried by an insurer with BEST Guide
rating of B + VII or better. Compliance herewith in no way limits
Licensee's indemnity obligations, except to the extent that Licensee's
insurance company actually pays Polaris amounts which Licensee would
otherwise pay Polaris.
27. WITHDRAWAL OF LICENSED MATERIAL
-------------------------------
Licensee agrees that Polaris may, without obligation to Licensee other
than to give Licensee written notice thereof withdraw from the scope of
this Agreement any Licensed Material which by the Marketing Date or, if
such a date is not specified in Subparagraph 1.O., by six (6) months
from the commencement of the Term or the date of any applicable
amendment, is not being used on or in connection with the Articles.
Polaris may also withdraw any Licensed Material or Articles the use or
sale of which under this Agreement would infringe or reasonably be
claimed to infringe the rights of a third party. In the case of any
withdrawal under the preceding sentence, the Advances and Guarantees
shall be adjusted to correspond to the time remaining in the Term, or
the number of Articles remaining under the Agreement, at the date of
withdrawal.
Polaris Industries Inc.
Karts International Incorporated
Page 18
28. TERMINATION
-----------
Without prejudice to any other right or remedy available to Polaris:
A. Polaris shall have the right at any time to terminate this
Agreement by giving Licensee written notice thereof if
Licensee fails to manufacture, sell and/or distribute the
Articles in accordance with this Agreement, or fails to
furnish statements and pay Royalties as herein provided, or
fails to notify Polaris of the accurate name and complete
address of its own manufacturing facilities or any
Manufacturer of the Articles, or if Licensee otherwise
breaches the terms of this Agreement, and if any such failure
or other breach is not corrected within fifteen (15) days
after Polaris sends Licensee written notice thereof.
B. Polaris shall have the right at any time to terminate this
Agreement immediately by giving Licensee written notice
thereof
(1) if Licensee delivers to any customer without
Polaris's written authorization merchandise
containing representations of Licensed Material or
other material the copyright or other proprietary
rights to which are owned or licensed by Polaris
other than Articles fisted herein and approved in
accordance with the provisions hereof;
(2) if a breach occurs which is of the same nature, and
which violates the same provision of this Agreement,
as a breach of which Polaris has previously given
Licensee written notice;
(3) if Licensee breaches any material term of any other
license agreement between the parties, and Polaris
terminates such agreement for cause;
(4) if Licensee shall make any assignment for the benefit
of creditor s, or file a petition in bankruptcy, or
is adjudged bankrupt, or becomes insolvent, or is
placed in the hands of a receiver, or if the
equivalent of any such proceedings or acts occurs,
though known by some other name or term;
(5) if Licensee is not permitted or is unable to operate
Licensee's business in the usual manner, or is not
permitted or is unable to provide Polaris with
assurance satisfactory to Polaris that Licensee will
so operate Licensee's business, as debtor in
possession or its equivalent, or is not permitted, or
is unable to otherwise meet Licensee's obligations
under this Agreement or to provide Polaris with
assurance satisfactory to Polaris that Licensee will
meet such obligations; and/or
Polaris Industries Inc.
Karts International Incorporated
Page 19
(6) if Licensee breaches any covenant set forth in
Paragraph 10 of this Agreement.
29. RIGHTS AND OBLIGATIONS UPON EXPIRATION OR TERMINATION
-----------------------------------------------------
A. Upon the expiration or termination of this Agreement, all
rights herein granted to Licensee shall revert to Polaris, any
unpaid portion of the Guarantee shall be immediately due and
payable, and Polaris shall be entitled to retain all Royalties
and other things of value paid or delivered to Polaris.
Licensee agrees that the Articles shall be manufactured during
the term in quantities consistent with anticipated demand
therefor so as not to result in an excessive inventory
build-up immediately prior to the end of the term. Licensee
agrees that from the expiration or termination of this
Agreement Licensee shall neither manufacture nor have
manufactured for Licensee any Articles, that Licensee will
deliver to Polaris any and all artwork which may have been
used or created by Licensee in connection with this Agreement,
and that, except as hereinafter provided, Licensee will cease
selling Articles. Any unauthorized distribution of Articles
after the expiration or termination of this Agreement shall
constitute trademark and/or copyright infringement.
B. If Licensee has any unsold Articles in inventory on the
expiration or termination date, Licensee shall provide Polaris
with a full statement of the kinds and numbers of such unsold
Articles. Assuming Licensee has provided such statement,
Licensee shall have the right for a limited period of three
(3) calendar months from such expiration or earlier
termination date to sell off and deliver such Articles as
authorized under Subparagraph 2.A. Licensee shall furnish
Polaris statements covering such sales and pay Polaris
Royalties in respect of such sales. Such Royalties shall not
be applied against the Advance or towards meeting the
Guarantee.
C. Licensee agrees to refrain from "dumping" the Articles in the
market during any sell-off period granted to Licensee.
"Dumping" shall mean the distribution of product at volume
levels significantly above Licensee's prior sales practices
with respect to the Articles, and at price levels so far below
Licensee's prior sales practices with respect to the Articles
as to disparage the Articles; provided, however, that nothing
contained herein shall be deemed to restrict Licensee's
ability to set product prices at Licensee's discretion.
D. Any inventory of final artwork as it appears on any SKU of the
Article in Licensee's possession or control after the
expiration or termination hereof and of any sell-off period
granted hereunder shall either be destroyed or sold to
Licensor at Licensee's cost at Licensor's discretion.
Polaris Industries Inc.
Karts International Incorporated
Page 20
30. WAIVERS
-------
A waiver by either party at any time of a breach of any provision of
this Agreement shall not apply to any breach of any other provision of
this Agreement, or imply that a breach of the same provision at any
other time has been or will be waived, or that this Agreement has been
in any way amended, nor shall any failure by either party to object to
conduct of the other be deemed to waive such party's right to claim
that a repetition of such conduct is a breach hereof.
31. PURCHASE OF ARTICLES BY POLARIS
-------------------------------
If Polaris wishes to purchase Articles, Licensee agrees to sell such
Articles to Polaris or any of Polaris's employees at its lowest quoted
wholesale price notwithstanding quantities purchased and to pay Polaris
Royalties on any such sales.
32. NON-ASSIGNABILITY
-----------------
A. Licensee shall not voluntarily or by operation of law assign,
sub-license, transfer, encumber or otherwise dispose of all or
any part of Licensee's interest in this Agreement (including,
but not limited to, any encumbrance of the Articles) without
Polaris's prior written consent, to be granted or withheld in
Polaris's absolute discretion. Any attempted assignment,
sub-license, transfer, encumbrance or other disposal without
such consent shall be void and shall constitute a material
default and breach of this Agreement. No rights under this
Agreement shall devolve by operation of law or otherwise upon
any receiver, liquidator, trustee, or other party.
B. Licensee agrees to provide Polaris with at least thirty (30)
days prior written notice of any desired assignment of this
Agreement or other transfer as defined in Subparagraph 32.A.
At the time Licensee gives such notice, Licensee shall provide
Polaris with the information and documentation necessary to
evaluate the contemplated transaction. Polaris's consent (if
given) to any assignment of this Agreement or other transfer
as defined in Subparagraph 32.A. shall be subject to such
terms and conditions as Polaris deems appropriate, including
but not limited to the execution of a letter of credit in the
amount of the outstanding portion of guaranteed royalties.
C. Licensee may, upon Polaris's prior written consent, sublicense
Licensee's rights and/or obligations hereunder to any of
Licensee's Affiliates, provided that each such Affiliate
agrees to be bound by all of the terms and conditions of this
Agreement, and provided that each such Affiliate agrees to
guarantee Licensee's full performance of this Agreement
(including but not limited to Paragraph 24) and to indemnify
Polaris for any failure of such performance, and further
provided that Licensee and each such Affiliate agree to
provide Polaris with satisfactory documentation of such
agreement(s), guarantee(s) and indemnification upon Polaris's
request therefor.
Polaris Industries Inc.
Karts International Incorporated
Page 21
33. RELATIONSHIP
------------
This Agreement does not provide for a joint venture, partnership,
agency, franchise, dealership, distributorship, or employment
relationship between the parties, or any other, relationship than that
of licensor and licensee.
34. CONSTRUCTION
------------
The language of all parts of this Agreement shall in all cases be
construed as a whole, according to its fair meaning and not strictly
for or against any of the parties. Headings of paragraphs herein are
for convenience of reference only and are without substantive
significance.
35. MODIFICATIONS OR EXTENSIONS OF THIS AGREEMENT
---------------------------------------------
Except as otherwise provided herein, this Agreement can only be
extended or modified by a writing signed by both parties; provided,
however, that certain modifications shall be effective if signed by the
party to be charged and communicated to the other party.
36. NOTICES
-------
All notices which either party is required or may desire to serve upon
the other party shall be in writing, addressed to the party to be
served at the address set forth on page I of this Agreement with a copy
to TRI at ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and may be
served personally or by depositing the same addressed as herein
provided (unless and until otherwise notified), postage prepaid, in the
United States mad. Such notice shall be deemed served upon personal
delivery or upon the date of mailing; provided, however, that Polaris
shall be deemed to have been served with a notice of a request for
approval of materials under this Agreement only upon Polaris's actual
receipt of the request and of any required accompanying materials from
TRI.
37. PREVIOUS AGREEMENTS
-------------------
This Agreement contains the entire agreement between the parties
concerning the subject matter hereof and supersedes any pre-existing or
contemporaneous agreement and any oral or written communications
between the parties.
38. CONSENT TO SERVICE OF PROCESS, VENUE, JURISDICTION
--------------------------------------------------
This Agreement and the enforcement hereof shall be subject exclusively
to the internal laws (but not the choice or conflicts of law rules) of
the State of Minnesota, United States of America. Licensee hereby
irrevocably waives any right it may have to assert the application of
any other law of any other state or nation. The parties agree that no
action or proceeding may be maintained by Licensee against Polaris
except either in Minnesota State District Court for the County of
Hennepin, or in the United States Federal Court, District of Minnesota,
and that these courts shall have exclusive jurisdiction over such
Polaris Industries Inc.
Karts International Incorporated
Page 22
action or proceeding. Licensee hereby irrevocably waives any right it
may have to commence any action or proceeding against Polaris in any
other court. Licensee further hereby submits to the personal
jurisdiction of the aforementioned courts with respect to any claims
relating to or arising out of this Agreement or any actions or failures
to act related thereto, and irrevocably waives any lights or defenses
it may have to the commencement or continuation of an action against it
in the aforementioned courts based on lack of personal jurisdiction or
improper or inconvenient venue. Licensee hereby further agrees that
service of process may be made upon it by certified mail or personal
service at the address provided above. This provision shall survive
termination or nonrenewal of this Agreement by either party for any
reason.
39. EQUITABLE RELIEF
----------------
Licensee acknowledges that Polaris will have no adequate remedy of law
if Licensee continues to manufacture, sell, advertise, promote or
distribute the Articles upon the expiration or termination of this
Agreement. Licensee acknowledges and agrees that, in addition to any
and all other remedies available to Polaris, Polaris shall have the
fight to have any such activity by Licensee restrained by equitable
relief, including, but not limited to, a temporary restraining order, a
preliminary injunction, a permanent injunction, or such other
alternative relief as may be appropriate, without the necessity of
Polaris posting any bond.
40. GOODWILL
--------
Licensee acknowledges that the rights and powers retained by Polaris
hereunder are necessary to protect Polaris's trademarks, copyrights and
property rights, and, specifically, to conserve Polaris's goodwill and
good name, and the name "Polaris," and therefore Licensee agrees that
Licensee will not allow the same to become involved in matters which
will, or could, detract from or impugn the public acceptance and
popularity thereof, or impair their legal status.
41. POWER TO SIGN
-------------
The parties warrant and represent that their respective representatives
signing this Agreement have full power and proper authority to sign
this Agreement and to bind the parties.
42. SURVIVAL OF OBLIGATIONS
-----------------------
The respective obligations of the parties under this Agreement, which
by their nature would continue beyond the termination, cancellation or
expiration of this Agreement, including but not limited to
indemnification, insurance, and payment of Royalties, shall survive
termination, cancellation or expiration of this Agreement.
Polaris Industries Inc.
Karts International Incorporated
Page 23
43. SEVERABILITY OF PROVISIONS
--------------------------
The terms of this Agreement are severable and the invalidity of any
term of this Agreement shall not affect the validity of any other term.
44. FORCE MAJEURE
-------------
If either party is delayed, or interrupted in, or prevented from the
performance of its obligations hereunder by reason of an act of God,
fire, flood, war, public disaster, strikes or labor difficulties,
governmental enactment, regulation or order, or any other cause beyond
its control, and if such party has given the other party prompt notice
thereof and, on request, such confirmatory documentation as the other
party may reasonably request and has in good faith kept the other party
apprised of when the delay, interruption or prevention is expected to
be resolved, the time for the performance of the party's obligations
shall thereupon be extended for a period equal to the duration of the
contingency that occasioned the delay, interruption or prevention, but
not exceeding sixty (60) days unless otherwise mutually agreed. If the
force majeure condition continues for more than sixty (60) days, either
party may terminate this Agreement upon written notice to the other
party.
Please sign below under the word "Agreed". When signed by both parties this
shall constitute an agreement between Polaris and Licensee.
AGREED:
POLARIS INDUSTRIES INC. KARTS INTERNATIONAL INCORPORATED
By: ________________________________ By: ________________________________
Title: ________________________________ Title: ________________________________
Date: ________________________________ Date: ________________________________
Polaris Industries Inc.
Karts International Incorporated
Page 24
EXHIBIT 1
Dated
Polaris Industries Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: Approval for Third Party Manufacturer-Developer
-----------------------------------------------
Gentlemen:
This letter will serve as notice to you that pursuant to Paragraph 23
of the License Agreement dated ___________, 199___ between Polaris Industries
Inc. and ___________________ ("Licensee"), we have been engaged as the
manufacturer/developer for LICENSEE in connection with the
manufacture/development of the Licensed Product(s) as defined in the aforesaid
License Agreement. We hereby acknowledge that we may not manufacture/develop
Licensed Product(s) for, or sell or distribute Licensed Product(s) to, anyone
other than Licensee. We hereby further acknowledge that we have received a copy
and are cognizant of the terms and conditions set forth in said License
Agreement and hereby agree to observe those provisions of said License Agreement
which are applicable to our function as manufacturer/developer of the Licensed
Product(s). It is understood that this engagement is on a royalty free basis.
We understand that our engagement as the manufacturer/developer for
LICENSEE is subject to your written approval. We request, therefore, that you
sign in the space below, thereby showing your acceptance of our engagement as
aforesaid.
Sincerely,
_________________________________________
Manufacturer/Developer/Company Name
Polaris Industries Inc.
Karts International Incorporated
Page 25
By: _____________________________________
Signature
_____________________________________
Printed Name
_____________________________________
Address
_____________________________________
_____________________________________
Dated
AGREED TO AND ACCEPTED:
POLARIS INDUSTRIES INC.
By: __________________________
Dated: _________________