EXHIBIT 10.60
EVENTS LICENSE AND INVENTORY SALES AGREEMENT
THIS AGREEMENT ("Agreement") is made by and between ▇▇▇▇▇▇, Inc., a
California corporation doing business as Easyriders Events at ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Easyriders") and Paisano Publications,
Inc., a California corporation ("Paisano") on the one hand (collectively,
"Licensor"), and Action Promotions, Inc. ("Licensee"), as of the "Effective
Date" specified in section 12 below.
1. Recitals This Agreement is made with reference to the following material
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facts:
1.1 Paisano is the publisher of various magazines sold under the titles
("Titles") "Easyriders", "Biker", "Tattoo", "V-Twin", "VQ", "In the Wind", and
others (collectively, the "Magazines").
1.2 Paisano regularly sells and distributes apparel, accessories and other
merchandise (collectively, "Easyriders Merchandise") under various brand names,
including one or more Titles (the "Brand Names"). The Titles and Brand Names,
and all trademarks, logos, names, likenesses, visual representations and
commercial symbols related thereto which are the subject of this agreement are
listed on the attached Schedule 1.2, and, are hereinafter referred to as the
"Symbols".
1.3 Easyriders regularly organizes and produces, on an annual basis, a
series of consumer-oriented entertainment events (the "Events"). The Events are
marketed under one or more of the Symbols, and feature, among other things, the
sale of Easyriders Merchandise. In addition, Easyriders regularly organizes and
hosts a company pavilion (the "Easyriders Pavilion") at motorcycle industry
shows attended by both consumers and dealers.
1.4 Licensee desires to acquire the right to use the Symbols for certain
commercial purposes, namely to produce and manage the Events, and Licensor
desires to grant such rights to Licensee subject to the terms and conditions of
this Agreement.
1.5 Licensee further desires to insure a supply of Easyriders Merchandise
for re-sale at Events, the Easyriders Pavilion, other motorcycle themed
festivals and events as well as other authorized retail outlets, and Paisano
desires to sell such merchandise to Licensee, as provided herein.
2. License Subject to Licensor's right to terminate under Section 6,
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Licensor hereby grants to Licensee the following limited rights, which shall be
exclusive to Licensee during the Term, as provided below:
(a) To use the Symbols for the purpose of pursuing, under its
management and control, the business established by Licensor of
organizing and producing the Easyriders Events, marketed under the
name of the Symbols.
(b) To use the Symbols in conjunction with the sale, development,
marketing and distribution of Event-specific/Event-identified
Easyriders Merchandise which incorporates
the name of such Event ("Event Merchandise"). The term "Event
Merchandise" shall not include any right to create, develop, promote,
market, license, sell or otherwise distribute publications in any
form, including but not limited to magazines, newsletters, books,
posters, calendars, videos, radio or televison programs, Internet
content, movies or any other expression or form of media publication.
(c) To enjoy all of the foregoing rights on a worldwide basis during
the Term, subject to any laws, regulations or other restrictions or
limitations arising from the intellectual property rights of third
parties.
3. Covenants Concerning License
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3.1 Licensee shall have no right to directly or indirectly sell, market or
distribute Events Merchandise through any distribution channel other than at
Events, the Easyriders Pavilion, other motorcycle themed festivals and events as
well as such retail outlets as may specifically be approved by Licensor pursuant
to the provisions of Section 5.2. Licensor shall also have the right to pre-
approve and inspect all merchandise designs and samples for quality control and
other legitimate commercial purposes, provided, however, if Licensor does not
respond within 5 business days after receiving such merchandise designs and
sample(s), Licensor shall be deemed to have given it consent. Licensor, by
Licensor's authorized representatives, may at any time enter upon Licensee's
premises to determine whether the Events Merchandise is in accordance with
specifications approved by Licensor.
3.2 Licensor agrees to consider in good faith all proposals advanced by
Licensee to market and sell Events Merchandise through other distribution
channels but shall have no obligation to consent to, approve or compensate
Licensee for any such proposal absent a new written agreement containing terms
and conditions acceptable to both parties. Further, Licensor is not bound to
enter an agreement with Licensee and is free to evaluate and enter into an
agreement concerning such matters with another party without any obligation to
Licensee concerning the same.
3.3 In connection with the foregoing grant of rights and inconsideration of
Licensee entering into this Agreement, Paisano shall provide the following
advertising and editorial support to the Licensee's production of the Events:
1 full page and 2 one-third pages of 4-color ads (all content
provided by Licensee) in each issue of every related title
Paisano continues to publish. In this context, "related" means
the Paisano title or titles reasonably associated with the Event
in question, e.g. Easyriders for motorcycle shows and Tattoo for
tattoo-theme Events.
At Licensee's sole cost (including reimbursement for incremental
materials and labor incurred by Licensor), the right to put in
Regional inserts ("bind-
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ins" or "blow-ins") to support Events, in Licensee's discretion.
There shall be no charge, however, for the right to place these
inserts into magazines.
At Licensee's sole cost use of Licensor's third party mailing
house (which holds Licensor's confidential mailing list) solely
for purposes of mailing materials to Licensor's subscribers
promoting and marketing the Events. Licensor shall make no charge
to Licensee for Licencee's use of Licensor's confidential mailing
list.
Up to 2 editorial articles per year for each "category" of event,
e.g. Bike Show, Rodeo, Rock n' Blues, Tattoo.
3.4 In connection with the foregoing grant of rights, Licensee shall be
entitled to the use during the Term of all tangible assets of Licensor allocated
to Events. A list of the equipment related utilized in connection with the
Event("Event Equipment") is itemized on Exhibit "A" hereto. Licensee accepts
such Event Equipment on an "as is" basis and Licensee takes full responsibility
for the cost of maintenance and protection of same.
3.5 It is understood and agreed that the foregoing grant of rights does not
apply to Easyriders Pavilions, including without limitation Daytona Bike Week,
Daytona Biketoberfest, Myrtle Beach and Sturgis, nor does such grant apply to
the Eagles Eye trade show which Licensor plans to sponsor and launch as an
annual event commencing in February 2001. Licensor agrees, however, that it will
permit Licensee to submit a bid to produce each Easyriders Pavilion, and will
negotiate in good faith with Licensee for the purpose of attempting to reach an
agreement with Licensee in connection therewith. Licensee shall be permitted to
sell Easyriders Merchandise and Event Merchandise in each Easyriders Pavilion,
provided the same is permitted by the venue in question. In this regard,
Licensor agrees to permit Licensee to set-up five (5) 10' x 10' areas for
purposes of selling Easyriders' Merchandise and Event Merchandise.
3.6 The parties acknowledge that the nature and quality of the Events, and
the number of Events per year, is of material interest to Licensor. Accordingly,
Licensee agrees that for each calendar year of the Term, it will notify Licensor
as soon as practicable of its schedule and plan for the Events of each ensuing
year, and allow Licensor an opportunity to reasonably consult with Licensee
concerning such plan.
3.7 During the Term, Licensee agrees to maintain in full force and effect,
with respect to each Event, the following minimum levels of insurance coverage.
As to Events: A policy of general and comprehensive liability
coverage, insuring against all manner of injuries and damages
arising out of the Events, in the sum of not less than $2 million
for each occurrence. Such policy or policies shall cover Licensee
and shall name Easyriders and Paisano as additional insureds.
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As to Event Equipment: A comprehensive policy providing coverage
for loss or damage to the Event Equipment as identified on
Exhibit "A", for the full replacement value thereof, which policy
shall name Easyriders and Paisano as additional insured.
All other insurance and permits required under federal, state and
local laws to operate the business of Licensee referred to
herein.
3.8 Should Licensor develop and launch any new Paisano magazine title it
shall notify Licensee and offer Licensee an option to include such new title as
a Symbol covered by the terms and conditions of this Agreement. Such offer shall
be in writing, and shall be exercisable for a period expiring 21 days following
the delivery of such notice. If Licensee fails to respond within such period, or
notifies Licensor of its intention not to exercise such option within such
period, then such option shall expire, and Licensor shall be free to offer such
new magazine title to any person or entity for the purpose of developing and
producing an event corresponding to the theme and/or title of such new
publication, or to itself develop and/or produce such an event.
3.9 Licensee shall indicate Licensor's ownership of the Symbols whenever
Licensee uses the Symbols in connection with the advertising, manufacture, or
sale of the Events Merchandise. Licensor will furnish Licensee with samples of
Licensor's trade dress and Labels, and Licensee will use only such trade dress
and labels in connection with the Events Merchandise unless otherwise directed
in writing by Licensor.
3.10 Licensee will comply with all laws applicable to the Symbols,
including compliance with marking requirements. Should Licensee fail to perform
Licensee's obligations under this Section, Licensor may perform them on
Licensee's behalf, without notice to Licensee and at Licensee's sole cost and
expense.
3.11 Although none of the rights granted to Licensee by this Agreement can
be assigned to others without Licensor's express written consent, Licensee is
permitted hereby to cause the Events Merchandise to be manufactured by others
for Licensee. In such event, the agreements between Licensee and Licensee's
subcontractors shall be subject to Licensor's written approval, which consent
shall not be unreasonably withheld, and shall provide that Licensor may enter
upon Licensee's subcontractors' premises to determine whether the Events
Merchandise is being produced in accordance with the terms and conditions of
this Agreement. Licensor agrees that Hot Action Sportswear, Inc. is pre-
approved as a subcontractor to manufacture all Events Merchandise as provided
for under this agreement.
3.12 Licensee acknowledges Licensor's exclusive right, title, and interest
in and to the Symbols and will not do anything that will in any way impair or
tend to impair any part of Licensor's right, title, and interest. In connection
with the use of the Symbols, Licensee will not represent that Licensee has any
ownership in the Symbols or in its registration. Use of the Symbols by Licensee
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will not create any right, title, or interest in or to the Symbols in favor of
Licensee. Licensee will not at any time, either during the term of this
Agreement or after it has ended, adopt or use any work or ▇▇▇▇ that is similar
to or confusing with the Symbols, without Licensor's prior written consent.
Further, Licensee agrees that in creating, developing, promoting, advertising,
marketing, producing and operating the Events it will not, by act or omission,
do anything or cause anything to be done directly or indirectly which will
reflect adversely upon Licensor or any of the Symbols, adversely affect the
reputation and goodwill of Licensor, or otherwise cause damage or harm to
Licensor or any affiliate thereof.
3.13 Licensee agrees to permit Licensor the right to set up and staff up to
five (5) 10' x 10' areas at each Event for the purpose of marketing the
publications and services of Licensor other than Easyriders Merchandise,
including without limitation, Easyriders Franchising (or any successor thereto),
Bros Club and magazine subscriptions. Licensor shall be responsible for all cost
related to the set up and operation of such sites. Licensor shall not sell,
offer for sale or distribute any Events Merchandise at such sites, or any
merchandise which is similar to Events Merchandise.
4. Royalties.
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4.1 In exchange for the foregoing grant of exclusive rights, Licensee shall
pay to Licensor the following consideration:
(a) A "Fixed Base Royalty" fee of Four Million Dollars ($4,000,000),
payable at the rate of One Hundred Thousand Dollars ($100,000) per calendar
quarter (or portion thereof), commencing September 1, 2000, and thereafter
for each of the 39 ensuing quarters (provided the Effective Date is no
later than the date provided for in section 5.1.
(b) Subject to the provisions of subsection 4.1 (c) below, an
additional yearly royalty (the "Gross Revenue Royalty") equal to the
greater of (i) $150,000 per year (pro-rated for calendar year 2000 in
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accordance with the Effective Date) (the "Minimum Royalty"), or (ii) five
percent (5%) of the Gross Event Revenue per year. "Gross Event Revenue"
shall include gate revenues, revenue from the sale of Event Merchandise,
all revenues from concessions, all ticket sales, and all other Event-
related revenues, excluding the sale of Easyriders Merchandise purchased at
dealer price, and sales tax collected under the applicable state law. Five
percent (5%)of the Gross Event Revenue shall be known as the "Percentage
Royalty." The Gross Revenue Royalty shall be payable quarterly commencing
ninety (90) days after Effective Date. If the Percentage Royalty is less
than the Minimum Royalty, only the Minimum Royalty shall be due. If the
Percentage Royalty is greater than the Minimum Royalty, Licensee shall pay
(i) the Minimum Royalty, plus (ii) an amount equal to the difference
between the Minimum Royalty and the Percentage Royalty.
(c) For purposes of subsection 4.1 (b) above, the Minimum Royalty
shall increase by a factor of 5% per year for every year thereafter during
the Term. For
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example, and by way of illustration only, the Minimum Royalty will be
$157,500 for Year 2, $165,357 for Year 3, and so on.
4.2 The Fixed Rate Royalty and Gross Revenue Royalty will hereinafter
collectively be known as License Royalty.
4.3 All such consideration due Licensor is due no later than 30 days after
the close of each respective quarterly period under this Agreement and interest
shall accrue upon any unpaid balance thereon at an annual rate of twelve percent
(12%) until such unpaid balance has been paid. Such rate of interest shall
increase to fifteen percent (15%) on any unpaid balance remaining outstanding in
excess of sixty (60) days.
4.4 Along with each royalty payment, Licensee shall provide Licensor a
statement ("Financial Report") showing the number of units of the Event
Merchandise sold by Licensee during the period covered by the royalty payment,
as well as Licensee's gross receipts for those sales and the computation of
royalties due to Licensor. Such Financial Report will be executed by the
President or Chief Financial Officer of Licensee and will contain a
representation that the financial information contained therein is to their best
knowledge and belief a true and accurate accounting of royalties due Licensor
for the quarter just ended.
4.5 Upon reasonable notice and at reasonable intervals, Licensor or its
auditors shall have the right to examine the books and records of Licensee at
Licensor's cost, provided, however, that if any such audit shows an underpayment
to Licensor of more than 5% as to any applicable royalty payment, Licensee shall
reimburse Licensor for the cost of such audit.
5. Licensee's Pre-Payment for Easyriders Merchandise and related Credit Terms.
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5.1 Upon delivery to Licensor by no later than April 17, 2000 of (i) cash
in the sum of not less than $750,000 and (b) other consideration acceptable to
Licensor having a value of $750,000 as determined by Licensor, the Licensee
shall be deemed to own the right to a credit from Paisano towards the sale of
Easyriders Merchandise from Paisano to Licensee, or alternatively, as a credit
toward the License Royalty Fees (the "Credit"), in the sum of $1,500,000. The
Credit shall be applied first against the purchase of Easyriders Merchandise
supplied by Paisano to Licensee, and secondly, and only to the extent that
Paisano is unable to supply Easyriders Merchandise, the Credit shall be applied
against Licensee's License Royalty, as described in paragraph 4.
(a) The purchase price of the Easyriders Merchandise shall be the
"Dealer's Price" as set forth in Paisano's dealer catalogue, as the same is
published from time-to-time, provided that (i) as to routine, standard
orders (i.e., not close- outs or bulk dispositions), the price charged to
Licensee shall not be greater than that charged to any other wholesale
buyer, and (ii) as to close-outs and bulk sales of discontinued items, the
price charged to Licensee
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shall be 2/3ds of Paisano's cost (subject to mutual negotiation in good
faith as to alternate terms).
(b) The Credit may be used only to acquire any and all merchandise
featured in Paisano's dealers catalog. All deliveries by Paisano shall be
FOB Licensor's warehouse in Agoura Hills, California (or wherever the same
may be located).
(c) In order to exercise the Credit, Licensee shall deliver to Paisano
a purchase order specifying the items to be acquired. Paisano agrees to
maintain reasonable levels of inventory, in its discretion, or at such
levels as may be determined by Licensee with the reasonable consent of
Paisano. Paisano shall have a commercially reasonable amount of time to
fulfill orders. Notwithstanding the foregoing, (i) Paisano shall not be
obliged to fill orders amounting to (i) more than Two Hundred Thousand
Dollars ($200,000) worth of Easyriders Merchandise during each 12 month
period following the Payment Date, or (ii) Seventy-five Thousand Dollars
($75,000) or more during any one month, and (ii) Licensee agrees to order a
minimum of Two Hundred Thousand Dollars ($200,000) worth of Easyriders
Merchandise during each 12 month period following the Payment Date. The
provisions of this subsection (c) shall apply only until the Merchandise
and Royalty Credit is exhausted.
5.2 The Easyriders Merchandise shall be sold by Licensee only at Events,
the Easyriders Pavilions, and other motorcycle themed festivals and events, as
well as such retail outlets as are specifically approved by Licensor in advance
and in its sole discretion. Licensee is hereby granted the right to sell
Easyriders Merchandise at Events, the Easyriders Pavilions, and other motorcycle
themed festivals and events,, subject to the requirement that Licensee shall
provide all booths, booth equipment, storage and signage, and shall otherwise be
responsible for all sales activities. In this regard, Licensee agrees to abide
by all standard and reasonable rules established by Easyriders and applicable
generally to Event and Pavilion participants. Licensee shall have no right to
market, sell or distribute Easyriders Merchandise through any other channel,
such as, without limitation, retail stores or direct sales (radio, television,
mail), unless prior written authority has been provided for by Licensor.
5.3 In determining what products to carry as Easyriders Merchandise, and
what Symbols to be used in connection therewith, Paisano agrees that it will
consider in good faith all recommendations of Licensee. During the Term,
Paisano agrees to carry Easyriders Merchandise in at least substantially similar
selection, quality and quantity as at present.
5.4 Should at any time Paisano fail to fulfill any purchase order placed
with them by the Licensee pursuant to 5.4(c) in a commercially reasonable amount
of time, and in no case longer than 30 days from the date of the purchase order,
then the face amount of that purchase order or orders shall be applied against
and deducted from the Licensee's next quarterly payment of the Licensee Royalty
payment as provided above in paragraph 4.1.
5.5. Should Paisano fail to supply Easyriders Merchandise to fulfill at
least 25% of the face value of purchase order(s) for two quarters in row, then
beginning with the next quarter, the
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Merchandise and Royalty Credit shall be applied against the Fixed Base Royalty
at Fifty Thousand Dollars ($50,000) per quarter until the Merchandise and
Royalty Credit is exhausted.
6. Representations and Warranties.
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6.1 Representations and Warranties of Licensor. Licensor represents and
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warrants to Licensee that:
(a) Licensor has the full and complete right to enter into and perform
the obligations of this Agreement, and to grant the rights specified in the
license above.
(b) Subject to the provisions of Section 3 10, exploitation of the
Symbols in the United States, as contemplated by this Agreement, will not
infringe upon any trademarks, service marks, license rights of intellectual
property interests of any other party.
(c) No party other than Licensee has the rights granted by this
Agreement.
6.2 Representations and Warranties of Licensee. Licensee represents and
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warrants to Licensor that:
(a) The Events and/or Licensee's use of the Symbols will not disparage
or reflect adversely upon Licensor or the Symbols, hold Licensor or the
Symbols up to scorn or ridicule, damage the reputation and goodwill of
Licensor, or otherwise harm Licensor.
(b) Licensee has the full and complete authority to enter into and
perform the obligations of this Agreement, have the financial capacity to
perform as contemplated hereby and do so as principals and not as the
agents for any other person or entity.
(c) Licensee acknowledges that Licensor and the Symbols enjoy an
excellent reputation, that the Symbols constitute valuable intellectual
property of Licensor, and that improper use of the Symbols could cause
Licensor irreparable harm.
(d) Licensee will abide by all laws both in the United States and
other countries where violation of such laws could adversely affect the
image, reputation or financial condition of Licensor and/or its affiliates.
7. Term and Termination.
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7.1 Subject to the provisions of Section 3.6, the License granted hereby
shall be in effect for a period of 10 years following the Effective Date (the
"Term").
7.2 Licensor shall have the right, upon five (5) days advance notice, to
terminate this Agreement prior to expiration of the Term in the event that (a)
Licensee is adjudicated bankrupt or insolvent, or makes a general assignment for
the benefit of creditors, (b) Licensee materially
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breaches its obligations under this agreement, and if such breach is capable of
being cured, fails to cure the same within twenty (20) business days of receipt
of notice from Licensor which specifies the nature of the breach, or (c) in the
course or performing the obligations of this Agreement, Licensee engages in any
conduct deemed materially detrimental in the good faith opinion of Licensor to
the interests of Licensor such that continuation of this Agreement would not be
in the best business interests of Licensor.
7.3 For purposes of section 7.2, the term "material breach" shall mean any
default by Licensee in the performance of (a) and all sections hereof which
specify and/or limit Licensee's use of the Symbols, (b) Sections 3.1, 3.7, 3.8,
3.9, 6.2, 10, 11 and 15, (c) any default in payment as provided in Section 4,
and (d) any other obligation which, by reason of such default, substantially
prevents Licensor from realizing the overall benefits contemplated by this
Agreement, or is likely to cause such consequences.
8. Option to Extend.
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8.1 Licensor hereby grants Licensee an option to extend this Agreement for
two additional terms of ten (10) years, upon the same terms provided for herein
except that as to Section 4, all payments required to be made by Licensee to
Licensor shall be adjusted to reflect any and all changes in the US Consumer
Price Index (CPI) as of the extension date, from the CPI as of the Effective
Date of this Agreement (or any renewal agreement). Additionally, Licensee shall
make no pre-payment for Easyriders Merchandise as provided in paragraph 5, in
any renewal term of this agreement.
8.2 In order to exercise such option to renew, Licensee shall deliver
notice thereof to Licensor as provided in section 12.13 below, not later than
180 days prior to the end of the Initial term.
9. Indemnification by Licensor In the event of any claim, demand, legal action
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or other legal proceeding against Licensee, or any officer, director, employee
or agent of Licensee (collectively "Licensee Parties") which arises from, or
occurs by reason of any actual or alleged breach of the foregoing warranties by
Licensor, or any breach of this Agreement by Licensor, Licensor shall fully
indemnify and hold each Licensee Party harmless from any and all losses,
damages, awards, judgments, settlements, decrees and expenses, including,
without limitation, attorneys fees and costs, arising from or connected with
such claim, demand or legal action/proceeding, provided that in order to be
entitled to such indemnification, Licensee shall provide Licensor with timely
notice of the basis therefor, and thereafter cooperate with Licensor in the
defense of any such claim, demand or legal action/proceeding.
10. Indemnification by Licensee. In the event of any claim, demand, legal
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action or other legal proceeding against Licensor, or any officer, director,
employee or agent of Licensor (collectively "Licensor Parties") which arises
from, or occurs by reason of any actual or alleged material breach of this
Agreement by Licensee, Licensee shall fully indemnify and hold each Licensor
Party harmless
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from any and all losses, damages, awards, judgments, settlements, decrees and
expenses, including, without limitation, attorneys fees and costs), arising from
or connected with such claim, demand or legal action/proceeding provided that in
order to be entitled to such indemnification, Licensor shall provide Licensee
with timely notice of the basis therefor, and thereafter cooperate with Licensee
in the defense of any such claim, demand or legal action/proceeding.
11. Assignment Neither party may assign, transfer or delegate all or any of the
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rights and obligations created by this Agreement without the express written
consent of the other party.
12. Effective Date The effective date of this Agreement is 12:01 a.m. Los
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Angeles Time on the day on which both parties hereto have executed the same.
13. Other Covenants of the Parties.
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13.1 In order to protect its interests concerning the Symbols, Licensor
shall have the right to reasonably approve the name of any entity formed by
Licensee to conduct its business. Licensee shall provide Licensor with
sufficient prior notice of its proposed name, and Licensor shall have a period
of fifteen (15) business days to approve. If Licensor fails to respond within
such period, its approval shall be deemed to have been given.
13.2 In the event of breach of this Agreement by Licensee, Licensor shall
be entitled to exercise any and all remedies at law or in equity available to it
pursuant to the laws of the State of California. In particular, Licensee
acknowledges that any breach of this Agreement concerning the permitted use of
the Symbols, or of Sections 3.6 and 3.10 would be likely to cause irreparable
harm to Licensor, as a consequence of which Licensor shall be entitled to
injunctive relief in the event of breach of any such provision.
13.3 Licensee shall be responsible to pay its own taxes and file
appropriate tax returns where required as a result of all activities pursued
under this Agreement and shall indemnify Licensor for any such Licensee taxes
(including interest or penalties) which may be imposed on Licensor as a result
of Licensee's noncompliance with this provision of the Agreement.
14. General Provisions.
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14.1 Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of California. Any action brought by
either party arising out of this Agreement shall be brought in a court of
competent jurisdiction in the County of Los Angeles, California, and Licensee
hereby consents to the jurisdiction of such court for purposes of adjudicating
any and all disputes arising hereunder.
14.2 Further Assurances. Each party to this Agreement shall execute all
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instruments and documents and take all actions as may be reasonably required to
effectuate this Agreement.
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14.3 Counterparts. This Agreement may be executed in counterparts, each
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of which shall be deemed an original and all of which together shall constitute
one document.
14.4 Time of Essence. Time and strict and punctual performance are of the
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essence with respect to each provision of this Agreement.
14.5 Attorney's Fees. In the event any dispute arises between the parties
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hereto to enforce or interpret the provisions of this Agreement, the prevailing
party in such action shall be entitled to recover from the other party all
reasonable costs, expenses, attorney's fees and costs actually incurred relating
to or arising from such action.
14.6 Modification. This Agreement may be modified only by a contract in
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writing executed by the party(ies) to this Agreement against whom enforcement of
such modifications is sought.
14.7 Headings. The headings of the sections of this Agreement have been
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included only for convenience, and shall not be deemed in any manner to modify
or limit any of the provisions of this Agreement, or be used in any manner in
the interpretation of this Agreement.
14.8 Prior Understanding. This Agreement contains the entire agreement
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between the parties to this Agreement with respect to the subject matter of this
Agreement, is intended as a final expression of such parties' agreement, is
intended as a complete and exclusive statement of the terms of such agreement,
and supersedes all negotiations, stipulations, understandings, agreements,
representations and warranties, if any, with respect to such subject matter,
which precede the execution of this Agreement.
14.9 Interpretation. Whenever the context so requires in this Agreement,
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all words used in the plural (and vice versa), each gender shall be construed to
include any other genders, and the word "person" shall be construed to include a
natural person, a joint venture, a trust, an estate or any other entity. This
Agreement shall be deemed to have been created jointly by all of the parties and
shall be interpreted the same way as to all parties, without regard to which of
them may have actually drafted the instrument.
14.10 Partial Invalidity. Each provision of this Agreement shall be valid
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and enforceable to the fullest extent permitted by law. If any provision of this
Agreement or the application of such provision to any person or circumstance
shall, to any extent, be invalid or unenforceable, the remainder of this
Agreement, or the application of such provision to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected by such invalidity or unenforceability, unless such provision of such
application of such provision is essential to this Agreement.
14.11 Notices. Notices under this agreement shall be deemed effective
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upon receipt, if delivered by messenger, facsimile or overnight courier, and if
by regular US mail, on the 3rd day following deposit in the US mail, postage
prepaid. All notices shall be sent as follows:
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If to Easyriders or Paisano: With a copy to:
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Attention: J. ▇▇▇▇▇▇ Fabregas ▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Easyriders, Inc.
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Licensee: With a copy to:
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Action Promotions, Inc. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇. ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
14.12 Successors-in-Interest and Assigns. Subject to any restriction on
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transferability contained in this Agreement, this Agreement shall be binding
upon and shall inure to the benefit of the successors-in-interest and permitted
assigns of each party to this Agreement. Nothing in this Paragraph shall create
any rights enforceable by any person not a party to this Agreement., except for
the rights of the successors-in-interest and assigns of each party to this
Agreement, unless such rights are expressly granted in this Agreement to other
specifically identified persons.
14.13 Waiver. Any waiver of a default under this Agreement must be in
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writing and shall not be a waiver of any other default concerning the same or
any other provision of this Agreement. No delay or omission in the exercise of
any right or remedy shall impair such right or remedy or be construed as a
waiver. A consent to or approval of any act shall not be deemed to waive or
render unnecessary consent to or approval of any other or subsequent act.
15. Confidentiality.
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15.1 Licensee will have access to or learn certain information belonging to
Licensor that is proprietary and confidential. The term "Confidential
Information", as used throughout this Agreement, means any secret or proprietary
information relating directly to Licensor's business and that of Licensor's
affiliates, including, but not limited to, products, customer lists, pricing
policies, employment records and policies, operational methods, marketing plans
and strategies, product development techniques or plans, business acquisition
plans, new personnel acquisition plans, methods of manufacture, technical
processes, designs and design projects, inventions and research programs, trade
know-ho, trade secrets, specific software, algorithms, computer processing
systems, object and source codes, user manuals, systems documentation, and other
business and financial affairs of Licensor and its affiliated companies and
subsidiaries.
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15.2 Licensee will keep strictly confidential all Confidential Information
and will not, without Licensor's express written authorization, signed by one of
Licensor's authorized officers, use or sell, market or disclose any Confidential
Information to any third person, firm, corporation or association for any
purpose. Licensee further agrees that Licensee will not make any copies of the
Confidential Information except upon Licensor's written authorization, signed by
one of Licensor's authorized officers, and will not remove any copy or sample of
Confidential Information from the premises of Company without such
authorization.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the Effective Date.
▇▇▇▇▇▇, INC. d.b.a. EASYRIDERS EVENTS PAISANO PUBLICATIONS, INC.
By: /s/ J. ▇▇▇▇▇▇ Fabregas By: /s/ J. ▇▇▇▇▇▇ Fabregas
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Name: J. ▇▇▇▇▇▇ Fabregas Name: J. ▇▇▇▇▇▇ Fabregas
-------------------------- -------------------------
Title: Secretary Title: EVP and Secretary
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Date: 3/31/00 Date: 3/31/00
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ACTION PROMOTIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: President
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Date: 3/31/2000
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Action Promotions, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
March 31, 2000
Paisano Publications, Inc.
▇▇▇▇▇▇, Inc.
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
This letter will serve to amend and supplement the Events License and Inventory
Sales Agreement (the "Events Agreement") dated as of March 31, 2000 by and
between Paisano Publications, Inc. and ▇▇▇▇▇▇, Inc. (collectively, "Company"),
and Action Promotions, Inc. ("API").
1. Section 5.1 of the Events Agreement is amended to provide that the $750,000
in cash to be paid by API shall be paid in two equal installments, the first on
March 31, 2000 in the sum of $375,000, and the second on or before April 17,
2000 in the sum of $375,000.
2. The Events Agreement is otherwise amended to include the following
supplemental agreements among the parties:
2.1 Effective April 1, 2000, responsibility for all future events as
contemplated by the Events Agreement shall become that of API, as provided for
in the Events Agreement, with the exception of the "Artistry in Ink" tattoo show
scheduled for May 28-29, 2000 (the "Tattoo Show"). Company shall be responsible
for producing the Tattoo Show, and shall be entitled to retain all revenues
realized thereby.
2.2 It is acknowledged that Company has expended funds for the purpose of
producing future events which are now the responsibility of API ("Future
Events"), as set forth on Exhibit A, attached hereto and made a part hereof by
this reference. The total amount of such expenditures shall be credited as a
payable to Company, to be settled in accordance with section 2.8 below.
2.3 To the extent that API continues on an interim basis to (a) utilize
personnel employed by the Company to work on Future Shows, and/or (b) utilize
the office facilities of Company, then API shall reimburse Company for the cost
thereof, as itemized on Exhibit B (employees) and Exhibit C (office facilities),
attached hereto and made a part hereof by this reference, provided that the
reimbursement for employees shall be at the rate of 90% of the figure set forth
on Exhibit B, and reimbursement for facilities is agreed to be at the rate of
$1,400 per month. Payment to Company shall be in accordance with section 2.8
below.
2.4 It is acknowledged that with respect to events already produced by
Company ("Past Events"), Company has incurred certain obligations which remain
unpaid, as set forth on Exhibit D, attached hereto and made a part hereof by
this reference. Company agrees to pay all such obligations (including all
others pertaining to Past Events not presently ascertained and the Tattoo Event)
and to hold API harmless therefrom.
2.5 It is acknowledged that the Company may be obligated to a stage
provider for two Future Events at an estimated total cost of up to $11,000 per
event. Any and all sums required to be paid to
satisfy this obligation which do not inure to the benefit of API for Future
Events shall be the obligation of Company to be settled in accordance with
section 2.8.
2.6 It is acknowledged that Company's "Kodak All-in-One" and all property
listed on Exhibit E, attached hereto and made a part hereof by this reference,
with the exception of the "Sleds" constitutes property needed by API for
purposes of producing Future Events (the "Events Property"). Company shall use
commercially reasonable efforts to deliver such Events Property to API by no
later than April 30, 2000, for use by API in accordance with the Events
Agreement. If the Events Property cannot be delivered by such date, or such
later date as agreed to by API, then the value thereof, as set forth on Exhibit
E, shall be a credit to API to be settled in accordance with section 2.8. API
shall then be responsible for procuring replacement property at its own cost,
which replacement property shall be owned by ▇▇▇▇▇▇ Inc, to be used by API
subject to and in accordance with the Events Agreement.
2.7 By no later than April 30, 2000, Company shall convey to API full
title and ownership of the Dodge pick-up truck and ▇▇▇▇▇ trailer currently in
Company's possession. In consideration therefor, API shall be responsible for
securing, at its sole cost and expense, replacement Sleds. In the event API
ceases to produce events under the Events Agreement, Company shall have the
right to purchase the Sleds so acquired by API for a price equal to the amount
paid out-of-pocket by API to obtain the existing Sleds or replacement Sleds.
2.8 All credits and inter-party obligations shall be accounted for and
settled, to the extent reasonable and practicable, on April 30, 2000, by an
equalizing payment by one party to the other. Either party may also elect to
pay such sum to the other as an addition to or deduction from the amounts due in
connection with sections 4 (merchandise credit) and 5 (royalties) under the
Events Agreement.
Please acknowledge your agreement with the foregoing by signing below and
returning a copy of such signed instrument to the undersigned.
Sincerely,
Action Promotions, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name and Title: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
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ACCEPTED AND AGREED TO this 31st day of March, 2000.
Paisano Publications, Inc. ▇▇▇▇▇▇,Inc.
By: /s/ J. ▇▇▇▇▇▇ Fabregas By: /s/ J. ▇▇▇▇▇▇ Fabregas
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Name: J. ▇▇▇▇▇▇ Fabregas Name: J. ▇▇▇▇▇▇ Fabregas
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Title: EVP and Secretary Title: Secretary
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