Exhibit 10.15
LAW OFFICES
RENNER, OTTO, BOISSELLE & SKLAR, LLP
1621 EUCLID AVENUE. NINETEENTH FLOOR
CLEVELAND, OHIO 44115-2191
TEL: (216) 621-1113 FAX: (216) 621-6165
EMAIL MAILROOMORENNEROTTO.COM
March 25, 2003
Ms. Cheryl Gardner
Padova International USA
23121 Arroyo Vista, Suite B
Rancho Santa Margarita, CA 92688
Re: License Agreement with KTM Sportmotorcycle, USA Our File:
KTMAGO169H
Dear Ms. Gardner:
Lowell Anderson of KTM forwarded your request for a license agreement to
me because I handle the trademark matters for KTM. KTM has a standard license
agreement, and a copy ready for your president's signature is attached. Please
look this agreement over and let me know if you have any questions.
The agreement was drafted for licensees who were already making KTM
branded products. It therefor calls for samples of existing products and a
catalog. If you do not yet have a sample of each different material on which you
intend to use the KTM mark, you may send us a sample of the material with
someone else's mark on it. Our purpose is to get one tee shirt, one decal,
and/or one of each different material on which the KTM logo is going to be used
for quality control purposes. If you do not have designs yet established, the
license agreement allows for this by requiring you to submit new designs to us.
Between the material samples and the product designs which we approve, we will
be ale to monitor quality which is a requirement for a trademark owner.
The license agreement also requires a sign-up fee of $1,500. This is not
an advance against royalties, but a fee for entering the license agreement. In
addition, you will need to send us a certificate of insurance showing KTM
Sportmotorcycle USA, Inc. as an additional insured in the amount of $1 million.
If you have any questions concerning the license please feel free to call
me or e-mail me. My e-mail address is gkinder@rennerotto.com. I look forward to
hearing from you.\
Very truly yours,
Gordon D. Kinder
LICENSE AGREEMENT
THIS AGREEMENT is between KTM Sportmotorcycle USA, Inc., a corporation of
Ohio, having a place of business at 1119 Milan Avenue, Amherst, OH 44001
(hereinafter called LICENSOR), and Padova International U.S.A., Inc., a Nevada
corporation, dba Execute Sports, having its principal place of business at 23121
Arroyo Vista Suite B, Rancho Santa Margarita, CA 92688, (hereinafter called
"LICENSEE").
WHEREAS, LICENSOR is the owner of the mark KTM as applied to motorcycles
(the KTM MARK) and of U.S. Trademark Registration No. 1,664,945 for that mark, a
true and correct copy of the Trademark Registration being attached hereto,
marked Exhibit "A", and made a part hereof.
Whereas LICENSEE is in the business of manufacturing and selling
motorcycle accessories including motorcycle seat covers and graphics kits, using
the KTM MARK, or a substantially similar mark for sale on its products to the
public;
WHEREAS, LICENSEE has requested a license to use the KTM MARK in
connection with motorcycle seat covers and graphics kits, and LICENSOR has
agreed to grant LICENSEE such a license under certain terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the sum of $1500.00 to be paid to
LICENSOR on or before the Effective Date of this Agreement (hereinafter
defined), in consideration of the royalty payments specified below, the above
Recitals and for other good and valuable consideration, including the mutual
covenants herein expressed, the parties hereto agree as follows:
1. Grant.
LICENSOR hereby grants LICENSEE a non-exclusive license to use the KTM
MARK in accordance with the provisions of this Agreement in connection with
motorcycle seat covers and graphics kits (LICENSED PRODUCTS) for a period from
January 1, 2003 (the "Effective Date") through December 31, 2003. This AGREEMENT
does not grant LICENSEE the right to use the KTM mark in any manner other than
on LICENSED PRODUCTS and advertisements for or promotions of the sale of
LICENSED PRODUCTS.
2. Manner of Use of KTM MARK by LICENSEE and Quality Control.
The LICENSEE expressly recognizes as the essence of this agreement the
importance to LICENSOR, to its reputation and goodwill, and to the public, of
maintaining high, uniformly applied standards of quality in connection with
products bearing the KTM MARK. LICENSEE agrees to maintain the quality of the
goods offered under the KTM MARK including the advertising, marketing, and
promotion of those goods, and their cartons, containers, packing and wrapping
material, at the same high level that LICENSOR has established for the goods it
sells under the KTM MARK. LICENSOR has the right, upon reasonable notice to
visit LICENSEE's premises where the LICENSEE's goods are manufactured, stored,
packaged and/or offered for sale in order to assure itself that the quality of
the goods is being maintained. In addition, LICENSEE agrees to provide to
LICENSOR, at the beginning of the term of this agreement and at the beginning of
each calendar year thereafter for so long as this agreement is in effect,
representative samples of the products manufactured and/or sold by LICENSEE
bearing the KTM MARK so that LICENSOR may confirm that LICENSEE is maintaining
the required quality.
LICENSOR has the right to approve the manner of LICENSEE's use of the KTM
MARK. LICENSOR approves the current use of the KTM MARK as reflected in the
current catalog of LICENSEE's products, attached hereto as Exhibit B. Before
offering any other LICENSED PRODUCT,
LICENSEE agrees to provide a specimen in the form of a sample, printer's
proof, or equivalent to LICENSOR for LICENSEE's approval. LICENSOR shall have 30
days from receipt of the specimen to approve it as consistent with the KTM brand
and its image, which approval shall not be unreasonably withheld. If no response
from LICENSOR is received by LICENSEE within thirty days of receipt of the
specimen, approval shall be presumed.
LICENSEE agrees to submit to KTM an advance copy of any proposed
advertising or promotional materials for LICENSED PRODUCTS that include the KTM
MARK, regardless of medium, including but not limited to print media and
electronic media, for approval by KTM. Approval of the proposed manner of using
the KTM MARK in the submitted advertising and/or promotional materials shall not
be unreasonably withheld and shall be presumed unless KTM specifically
disapproves by notice sent to LICENSEE in a manner calculated to be received by
LICENSEE within two weeks of the day the proposed materials were received by
LICENSOR.
LICENSEE agrees to provide at the beginning of the term of this agreement
and at the beginning of each calendar year thereafter for so long as this
agreement is in effect a product catalog or other listing showing and describing
all LICENSED PRODUCTS offered for sale by LICENSEE.
LICENSEE agrees that whenever it uses the KTM MARK it shall include the
registration symbol, (R), to provide notice that the KTM MARK is registered.
If LICENSOR determines that the quality of the goods has not been
maintained or the registration symbol has not been used, LICENSOR shall promptly
notify LICENSEE in writing and shall specify the claimed defect in quality.
LICENSEE shall have thirty (30) days after receipt of a written notice from
LICENSOR to cure the claimed defect. The parties will use their best efforts to
amicably resolve any dispute concerning the existence of a quality defect. The
parties acknowledge that this agreement contains a covenant of good faith and
fair dealings.
3. Royalty Payments.
NET INVOICED PRICE shall mean the total invoice amount of all sales by the
LICENSEE of LICENSED PRODUCTS, less trade discounts, returns, insurance,
commissions to third parties, and shipping costs (so far as shipping costs are
separately invoiced). LICENSEE shall pay a royalty of three percent (3%) of the
NET INVOICED PRICE on a semi-annual- basis-within-thirty-days (30) of the end of
each calendar half. Payments shall be made by sending a check payable to
LICENSOR at the address stated above, unless otherwise instructed to do so. Each
payment shall be accompanied by a report categorizing the LICENSED PRODUCTS sold
by product number or other commercial trade designation and the total of the NET
INVOICED PRICE for each category.
4. Trademark Ownership, Use and Protection.
(a) LICENSEE recognizes LICENSOR's ownership of and title in and to the
KTM MARK and shall not at any time do or permit to be done any act or
thing which will in any way impair the rights of LICENSOR in and to the
KTM MARK and shall not at any time claim any right or interest in or to
the KTM MARK except as expressly granted herein.
(b) LICENSEE further agrees that during the term of this Agreement
and after its termination, however occurring, LICENSEE shall not:
(i) use the KTM MARK or any other marks confusingly similar thereto
in connection with any goods, products, or services not covered by this
Agreement; or
(ii) apply for or seek registration anywhere at
any time of the KTM MARK or any other marks confusingly similar thereto;
or
(iii) use the KTM MARK or any other marks confusingly
similar thereto in any corporate or trade name; or
(iv) do anything or commit any act which might prejudice or adversely
affect the validity of the KTM MARK or LICENSOR's ownership thereof.
(c) Upon termination of this Agreement, however occurring, LICENSEE
shall forthwith cease to use the KTM MARK and shall thereafter not use as
a trade name, trademark or service mark any marks or names consisting of
or containing the mark KTM or any other names or marks which are
confusingly similar to the KTM MARK.
5. Accounting.
(a) LICENSEE agrees to keep complete and accurate books and records
reflecting the number of LICENSED PRODUCTS manufactured and sold and the
NET INVOICED PRICE so that the royalties due hereunder may be accurately
computed.
(b) LICENSEE agrees to permit LICENSOR or its authorized agent to
inspect once per year all books and records of LICENSEE that reasonably
relate to enforcement of this agreement, upon at least 72 hours advance
notice and during regular business hours, for the purpose of inspecting
and copying such records specifically relating to the manufacture, use, or
sale of LICENSED PRODUCTS as defined herein in order to verify the amount
of royalties payable under this Agreement. The cost of any such inspection
shall be borne by LICENSOR. LICENSOR acknowledges the confidential nature
of the documents and information that are/will be entrusted to it by
LICENSEE upon execution of this Agreement. LICENSEE agrees, for itself,
its agents or assigns not to use, provide or allow all or any part of this
information to be provided to anyone for any purpose other than this
agreement without prior written authorization of the LICENSEE, and
undertakes to take all necessary measures to insure that this
confidentiality is maintained.
6. Indemnification.
LICENSEE hereby indemnifies and agrees to hold LICENSOR harmless from and
against any and all claims, liability, loss or damage, cost or expense,
including but not limited to attorneys' fees and related costs resulting from
the sale or offer of sale by LICENSEE of any product bearing the KTM MARK.
LICENSEE shall assume full responsibility for, and the expense of,
investigation, defense, legal fees and payment of any settlements or judgments
resulting from any complaint, demand, claim or legal action encompassed by the
foregoing indemnity provided LICENSEE is notified promptly in writing of any
such complaint, demand, claim or legal action and LICENSEE is given authority to
defend or settle such matter. LICENSEE shall maintain in full force and effect,
with all premiums paid thereon, product liability insurance relating to the
LICENSED PRODUCTS sold or offered for sale by LICENSEE under the KTM MARK, with
LICENSOR listed as an additional insured, in the amount of $1,000,000, for a
period of two years from the termination of this agreement. At the beginning of
the term of this agreement and at the beginning of each renewal term LICENSEE
shall provide LICENSOR a certificate of insurance showing LICENSOR as an
additional insured.
LICENSOR shall indemnify and hold harmless LICENSEE, including full
responsibility for attorney fees, costs and payments of any settlements or
judgments resulting from any complaint, demand, claim or legal action brought
against LICENSEE concerning the ownership or right to use the KTM MARK, provided
LICENSOR is notified promptly in writing of any such complaint, demand, claim or
legal action and LICENSOR is given authority to defend or settle such matter.
7. New Products.
This agreement covers LICENSED PRODUCTS only. In the event that LICENSEE
wants to use the KTM MARK in association with additional goods, it must submit
those goods for approval by LICENSOR and determination of an appropriate royalty
rate for those goods. LICENSOR reserves the right to refuse to approve any
additional goods in its sole discretion.
8. Term of Aqreement.
This Agreement shall take effect on the date last executed by one of the
parties and, unless sooner terminated as provided in paragraph 9 hereafter,
shall extend from that day to and including December 31, 2003. This agreement
shall be automatically renewed for additional one year terms, unless terminated
according to the terms of this agreement.
9. Automatic Termination.
This Agreement shall terminate immediately and automatically if any of the
following events occur:
(a), LICENSEE is ordered or adjudged bankrupt, is placed in the hands
of a receiver, or otherwise commences to enter into any plan or
composition with its creditors or makes any unauthorized assignment for
the benefit of its creditors;
(b) Any portion of the assets of-LICENSEE are lawfully seized or
attached;
(c) Any action is commenced to liquidate or dissolve LICENSEE, except
if such liquidation or dissolution follows a permitted assignment of
LICENSEE's rights granted in this Agreement;
(d) LICENSEE fails to maintain product liability insurance as
required in paragraph 6 of this Agreement.
If either party to this Agreement materially breaches any of the
provisions hereof other than by the actions or events described in paragraph 9
a, b, c, and/or d, the other-party may give written notice to the party
committing the breach specifying in detail the nature of such breach, and the
party given such notice shall have thirty days following receipt thereof, to
remedy such breach. If the breach is not corrected within such thirty-day
period, termination of this Agreement shall become effective immediately
thereafter upon such party giving prompt written notice of termination. Failure
of a party to exercise the herein provided right of termination for breach shall
not. constitute a waiver of the right of that party to terminate in the event of
a subsequent breach regardless of the character thereof.
10. Voluntary Termination.
This agreement may be terminated by either party by giving notice to the
other party at least thirty (30) days before the end its term or by mutual
written consent of the parties at any time.
11. No Agency
Nothing in this Agreement shall be construed to place either party in the
position of a partner, agent, or employee of the other party, and neither party
shall have any power to bind the other party to third parties. Both parties
covenant and agree not to hold each other out as an agent or employee of the
other party.
12. Waiver.
Waiver of any term or breach or series of breaches hereof shall not be
construed as a waiver of that or other terms or subsequent breaches whether or
not of the same or similar kind or import.
13. Breach and Remedies.
(a) In the event of any breach by LICENSEE of its obligations to pay
royalties, LICENSEE shall have ten (10) days after delivery of written
notice to cure the breach, then if not cured, LICENSOR shall have the
right, at its option, to sue to recover royalties owed (with LICENSEE
paying all costs and expenses, including attorneys fees), and to terminate
the Agreement.
(b) In the event of termination of this Agreement LICENSEE shall have
three (3) months thereafter to complete any work in progress and/or sell
any existing inventory of LICENSED PRODUCTS, provided any such work in
progress or inventory of LICENSED PRODUCTS complies with the quality
standards set forth in this agreement.
(c) Any dispute arising under or related to this Agreement-shall be
resolved in the State of Ohio, United States of America.
(d). LICENSOR and LICENSEE hereby agree to the jurisdiction of the
courts of the State of Ohio, United States of America, and agree to be
bound by any judgments rendered thereby.
(e) This Agreement shall be interpreted and enforced under the laws of
the State of Ohio, in the United States of America, exclusive of its
choice of laws and conflict of laws provisions.
14. Notices.
Any notice required or permitted to be given by either party hereto to the
other party, including any service of process, shall be deemed to be sufficient
if given in writing and sent by registered or certified mail or by overnight
courier to the other party at the respective address set out above.
Whenever any notice, payment, request for approval, or other communication
is required to be sent to LICENSOR, a copy shall be sent to LICENSOR's counsel
at the address below:
Either party may by written notice to the other change the address of such
party to which notices may be addressed.
15. Severance of Terms.
Any term or provision of this Agreement found to be illegal or
unenforceable shall be severed from this Agreement which shall otherwise remain
in full force and effect.
16. Bindinq Effect.
The parties hereto represent that each has the right, power and authority
to enter into this Agreement and to perform all of the obligations hereunder;
that the execution, delivery and performance of this Agreement has been duly
authorized by their respective corporations, and that this Agreement constitutes
a legal binding contract, enforceable in accordance with its terms.
17. Assignability.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their legal heirs, successors, and assigns; provided,
however, that the rights granted to the LICENSEE under this Agreement cannot be
assigned other than as part of the transfer or sale of substantially the entire
business of LICENSEE and then only with the prior written approval and consent
of the LICENSOR, which consent shall not be unreasonably withheld. However, no
assignment of any of LICENSEE's rights hereunder shall be binding and valid
until written notice thereof to LICENSOR and LICENSOR receives full and complete
assumption in writing from the assignee of all of LICENSEE'S obligations under
this Agreement, and the assignee also provides LICENSOR with reasonable evidence
that the assignee has in full force and effect, with all premiums paid thereon,
product liability insurance relating to the LICENSED PRODUCTS to be sold or
offered for sale by the assignee under the KTM MARK, with LICENSOR listed as an
additional insured, in the amount of $1,000,000, such product liability
insurance to be maintained in effect for the remainder of the term of this
Agreement as provided in paragraph 6(a) above.
18. Entire Agreement.
This Agreement constitutes the full and complete agreement between the
parties relating to the licensed KTM MARK. This Agreement may be modified only
by written amendments hereto made subsequently and executed by proper and duly
authorized representatives of the LICENSOR and LICENSEE.
19. Counterparts.
This agreement maybe signed in counter parts.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their
duly authorized officers effective from the Effective Date.
KTM Sportmotorcycle USA, Inc. Padova International USA Inc.
By: , President By: /s/ Don Dallape , President
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Dated: Dated: 3/3/03
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Witness Witness
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