CONSOLIDATED AMENDMENT AGREEMENT
THIS CONSOLIDATED AMENDMENT AGREEMENT made and entered into as of the
1st day of January, 1997 by and between Everlast World's Boxing Headquarters
Corp., a New York corporation of 000 Xxxx 000xx Xxxxxx, Xxxxx, Xxx Xxxx 00000
("Everlast"), and Active Apparel Group, Inc., a Delaware corporation having its
principal place of business at 0000 Xxxxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000 (the "Licensee")
W I T N E S S E T H
WHEREAS, by License Agreement dated June 1, 1992, which was amended by
a First Amendment Agreement dated June 1, 1992, a Second Amendment Agreement
dated January 1, 1993, and a Third Amendment Agreement dated November 15, 1993
(the said License Agreement as so amended being hereinafter referred to as the
"License Agreement") Everlast authorized Total Impact, Inc. to use certain
Licensed Marks in connection with certain women's sportswear, and
WHEREAS, the License Agreement was duly assigned to TI Sportswear,
Inc., a New York corporation and the said New York corporation was subsequently
merged into the Licensee which thereby acquired and assumed the License
Agreement, and
WHEREAS, the parties desire to consolidate the prior amendments and to
further amend the License Agreement as hereinafter set forth,
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NOW THEREFORE, for and in consideration of the premises and of the
mutual promises and conditions herein contained, the parties do hereby agree as
follows:
1. Effective as of the date hereof the License Agreement is hereby
modified and amended in the following respects:
(i) Paragraph l(a) shall be changed by deleting the words
"headwear specifically coordinated with Licensed Products and sold
together therewith" and inserting in lieu thereof "baseball style caps
decorated solely with the embroidered designs shown on Exhibit A
annexed, specifically coordinated with, and sold solely as an integral
part of an ensemble, with other Licensed Products".
(ii) The date "December 31, 1996" in Paragraph l(c) is changed
to "December 31, 2002".
(iii) Paragraph l(f) is hereby amended in its entirety
to read as follows:
f) "Option Periods" shall mean the two
successive periods of five (5) years each
commencing January 1, 2003 and January 1, 2008
respectively.
(iv) The third sentence of Paragraph 3(c) is hereby amended in
its entirety to read as follows:
The minimum advertising expenditure under this
agreement during each Contract Year of the
Contract Period and each Option Period, if
Licensee shall exercise such options, shall be
as follows:
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CONTRACT YEAR AMOUNT $
CONTRACT PERIOD
1997 187,500
1998 206,250
1999 225,000
2000 243,750
2001 262,500
2002 281,250
FIRST OPTION PERIOD
2003 300,000
2004 318,750
2005 337,500
2006 356,250
2007 375,000
SECOND OPTION PERIOD
2008 393,750
2009 412,500
2010 431,250
2011 450,000
2012 468,750
(v) Paragraphs 7(a) and 7(b) are hereby amended to read in
their entirety as follows:
7(a) Licensee shall pay to Everlast
the minimum amounts set forth below during each
Contract Year of the Contract Period:
YEAR AMOUNT--$
---- ---------
1997 450,000
1998 495,000
1999 540,000
2000 585,000
2001 630,000
2002 675,000
(b) Licensee shall pay to Everlast the
minimum amounts set forth below during each
Contract Year of each Option Period, if
Licensee shall exercise such options, the
amounts set forth below:
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YEAR AMOUNT--$
---- ---------
FIRST OPTION PERIOD
2003 720,000
2004 765,000
2005 810,000
2006 855,000
2007 900,000
SECOND OPTION PERIOD
2008 945,000
2009 990,000
2010 1,035,000
2011 1,080,000
2012 1,125,000
All amounts to be paid under paragraph 7(a) or
this paragraph shall be paid in twelve equal
installments on the first day of each month
during each respective Contract Year.
(vi) There shall be added to paragraph 8 of the Agreement the
following subparagraph (e):
(e) Within 30 days following the
execution of this Agreement, Licensee shall
cause to be issued and delivered to Everlast a
letter of Credit in which Everlast shall be the
beneficiary, issued by an American bank or
trust company having a net worth in excess of
$100.00 million, and shall maintain such a
Letter of Credit in effect during the Contract
Period. The Letter of Credit (a) shall be for a
period of one year and shall be automatically
renewed unless the issuing bank shall give 30
days prior written notice during which time
Licensor may draw upon the Letter of Credit for
any amounts due from the Licensee, (b) shall be
in an amount from time to time equal to the
total retainers to be paid by Licensee to
Everlast pursuant to Paragraph 7 hereof during
the Contract Year during which the Letter of
Credit shall expire, (c) shall permit Everlast
to draw upon the Letter of Credit from time to
time upon the affidavit of an officer of
Everlast stating the amount due from the
Licensee, and (d) shall otherwise in form and
substance be satisfactory to Everlast.
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In lieu of such letter of credit, the
Licensee may pay to Everlast on or before the
first day of each Contract Year an amount equal
to twenty-five (25%) percent of the minimum
annual royalty to be paid pursuant to
subparagraphs 7(a) and 7(b) of this Agreement
during the relevant Contract Year. Such amount
shall be held as security for the faithful
performance of the obligations on the part of
the Licensee to be performed under this
Agreement. The amount of the security then held
by Everlast and not otherwise previously
applied will be carried over to the next
Contract Year and shall serve to reduce the
payment required to be made upon the first day
of the next Contract Year pursuant to this
subparagraph. Upon the expiration or other
termination of this Agreement, the remaining
balance held by Everlast pursuant to this
subparagraph shall be repaid without interest
to the Licensee, provided that the Licensee has
fully performed each of the obligations on its
part to be performed hereunder.
The maintenance of such Letter of
Credit in effect or the payment of the
alternative deposit is a strict condition of
this Agreement. Everlast shall have the option
to forthwith terminate this agreement if such
Letter of Credit shall not be provided or shall
expire without being simultaneously replaced by
a Letter of Credit conforming to the foregoing
provisions, or such alternative deposit is not
timely made.
(vii) The figures "Two Million ($2,000,000) Dollars" in
Paragraphs 16(b) and 16(c) shall be changed to "Two Million Five
Hundred Thousand ($2,500,000) Dollars" during the Contract Period,
"Three Million ($3,000,000) Dollars" during the First Option Period if
Licensee shall exercise such option, and "Three Million Five Hundred
Thousand ($3,500,000) Dollars" during the Second Option Period if
Licensee shall exercise such option.
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(viii) The words "five successive terms of one (1) year each"
in the first sentence of paragraph 17 are changed to "two successive
periods of five (5) years each commencing January 1, 2003 and January
1, 2008 respectively.
(ix) Subparagraph 17(iii) is hereby amended in its entirety
to read as follows:
(iii) during the last twelve months
ending on September 30th in the final Contract
Year of the Contract Period Licensee's Net
Sales of Licensed Products in the Contract
Territory shall amount to at least $10,500,000
for the exercise of the first option, and
during the last twelve months ending on
September 30th in the final Contract Year of
the First Option Period Licensee's Net Sales of
Licensed Products in the Contract Territory
shall amount to at least $14,250,000 for the
exercise of the second option.
(x) Paragraph 21 of the License Agreement shall be amended to
read as follows:
ASSIGNMENT. This Agreement shall bind, and
inure to the benefit of Everlast, and the
successors and assigns of Everlast. The rights
granted to Licensee hereunder shall be
exclusive to it and shall not, without the
prior written consent of Everlast, be
transferred or assigned by it to any other
person, firm or corporation except (i) to a
wholly owned subsidiary thereof (in which case
Licensee shall remain fully liable to Everlast
hereunder as though it were a party hereto), or
(ii) in the event of the merger, consolidation
or acquisition of Licensee by an unrelated
entity (provided that the successor entity
assumes the obligations of Licensee hereunder
and has a net worth at least equal to that of
Licensee at that time). In addition, the
provisions hereof shall be deemed to preclude
assignment by operation of law and shall be
deemed to restrict the hypothecation, pledge,
granting of a security
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interest or in any manner taking steps or
permitting the integrity of this Agreement
between the parties to be affected in any
manner or form. Any assignment, transfer, or
sublicense of any of the rights granted to the
Licensee hereunder which does not conform to
the requirements of this Agreement shall be
null and void."
2. The License Agreement and all of the remaining terms and provisions
thereof shall continue to remain in full force and effect. All rights and
obligations of the parties accruing prior to the date hereof shall not be
effected by this Consolidated Amendment Agreement.
IN WITNESS WHEREOF the parties have signed this Fourth Amendment
Agreement as of the day and year first above written.
EVERLAST WORLD'S BOXING HEADQUARTERS CORP., Licensor
By: /s/ Xxx Xxxxxx
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Xxx Xxxxxx, President
ACTIVE APPAREL GROUP, INC., Licensee
By: /s/ Xxxxxx Xxxxxxxx
----------------------------------------
Xxxxxx Xxxxxxxx, President
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EXHIBIT A
[GRAPHICS OMITTED]
Graphic representation of baseball style caps decorated with
embroidered design of (1) "EVERLAST WOMAN" and (2) "EVERLAST" with boxing gloves
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