1
Exhibit 10.1
MARKETING REPRESENTATION AGREEMENT
THIS AGREEMENT is made the 24th day of June 1998
BETWEEN
1 CHAMPIONSHIP AUTO RACING ITEMS, INC., 000 Xxxx Xxx Xxxxxx, Xxxx, Xxxxx
000, Xxxx, Xxxxxxxx 00000 ("CART"); and
2 ISL MARKETING AG, Xxxxxxxxxxxxxx 0, 0000 Xxxxxxx, Xxxxxxxxxxx ("ISL").
WHEREAS
A CART is the governing body of a number of international auto racing
series featuring open-wheeled racing cars and holds the world-wide
promotional, advertising and marketing rights in connection therewith.
B CART wishes to broaden and extend its existing relationship with ISL as
its exclusive marketing agent and representative for the promotion and
marketing of what is now known as the CART Federal Express Championship
Series ("FedEx Series") and other properties whose commercial rights
CART presently controls and ISL wishes to provide such services on the
terms hereinafter mentioned.
NOW IT IS HEREBY AGREED as follows:
1 APPOINTMENT OF ISL
------------------
1.1 Subject to the terms of this Agreement, CART hereby appoints ISL as its
exclusive representative for the solicitation and renewal on CART's
behalf of sponsorship agreements relating to the properties set forth
below with companies worldwide for the package of rights and
opportunities set forth in Schedule A hereto (the "Program") and ISL
hereby accepts such appointment relating to:
(i) the FedEx Series,
(ii) individual races within the FedEx Series with regard to the
"Released Categories" listed in Schedule B hereto;
(iii) the series presently known as the PPG Dayton Indy Lights
Championship (Indy Lights);
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(iv) the series presently known as the Kool Toyota Atlantic
Championship ("Atlantics");
(v) any and all future properties created by CART or in which CART
acquires a majority interest and/or acquires control over the
commercial rights. Such properties shall include, but shall not
be limited to: virtual reality entertainment products, race
driving schools, Karting centers and other race series. ISL
accepts that CART's ability to grant such rights exclusively to
ISL may be limited by the terms under which such properties
and/or their commercial rights are acquired by CART. This
Agreement shall be modified to reflect the exact circumstances
regarding each acquired property once such acquisition occurs.
Notwithstanding the foregoing, CART undertakes that no other
agent will be engaged subsequent to such an acquisition to market
the commercial rights of the property in question.
1.2 This Agreement supersedes the Marketing Representation Agreement dated
February 1, 1997 between CART and ISL attached hereto as Appendix A
("the Original Agreement") in so far as it relates to calendar year
1999. However, the Original Agreement shall remain valid in all other
respects until 31 December 1998.
1.3 With regard to Indy Lights, ISL recognizes that the right to market
sponsorships independently of packages with FedEx Series rights remain
with Continental Sports, Inc. until September l, 1998 ISL undertakes
that it shall not actively market rights for Indy Lights independently
of FedEx Series rights before that date.
1.4 CART undertakes to use its best efforts to enable ISL to include in the
Program certain other rights which may from time to time be required
with regard to a particular prospective sponsor, including but not
limited to driver personal services contracts, licensing agreements and
CART team sponsorship programs.
2. DUTIES AND OBLIGATIONS OF ISL
-----------------------------
2.1 ISL shall commit its full resources as reasonably required in its
marketing of the Programme and shall work diligently to achieve
sponsorship agreements on behalf of CART.
2.2 ISL shall open an office within the CART Headquarters, presently
located in Troy, Michigan and shall place within that office the
personnel wholly concerned with the solicitation and renewal of CART
sponsorships. CART shall provide ISL with such office space free of
charge provided that and for so long as it has sufficient space within
its facility to do so and does not need to acquire additional space in
order to accommodate ISL personnel. With regard to the operational
costs of such office, ISL shall pay CART only such sums as are incurred
in connection with the installation of telephone and telefax lines and
the use of such lines, and the cost of furniture and electronic
equipment such as computers, copiers and facsimile machines.
2.3 ISL has, and shall exercise, no authority to make statements or
representations concerning the Program that exceed or are inconsistent
with the rights packages agreed between
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CART and ISL for a particular tier of sponsorship. ISL has, and shall
exercise, no authority to bind CART to any undertaking or performance
with respect to the Program.
2.4 ISL shall bear the cost of travel and entertainment, of the sales
materials and of all other expenses directly relating to its activities
hereunder and shall determine the content (subject to final approval by
CART) and the suppliers of such materials. ISL shall update such sales
materials at least every second year of this Agreement.
2.5 ISL undertakes not to enter into any new agreements during the term of
this Agreement to become the marketing representative/agent of any auto
racing entity for the sale of sponsorships in connection with
automobile races or series in the United States of America not
sanctioned by CART. ISL also undertakes not to extend or renew its
existing agreements with NASCAR teams.
In addition, ISL undertakes not to enter into any agreement during the
term of this Agreement to become the marketing representative/agent of
any auto racing entity outside the United States of America for the
sale of sponsorships in connection with international, open-wheel,
single-seat, over 1,000cc automobile races or series.
3 COMPENSATION AND GUARANTEE
--------------------------
3.1 FedEx Series, Indy Lights and Atlantics
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3.1.1 In respect of calendar years 1999 and 2000, ISL guarantees
that it will generate the minimum sums specified in Schedule C
hereto ("the Overall Guarantee"), in cash and value in kind
actually received by CART (as defined in Schedule D) from
sponsorship agreements relating to the FedEx Series, Indy
Lights and Atlantics, failing which ISL shall pay CART the
difference between the amount actually generated for each
series and the said sums specified in Schedule C within thirty
(30) days of the end of the calendar year to which the
relevant portion of the Overall Guarantee applies. The values
of the product categories, the amounts payable by CART to race
organizing committees in respect thereof, the treatment of
unwanted value in kind, and the arrangements for payments are
set forth in Schedule D.
3 1.2 The amounts guaranteed in relation to Indy Lights and
Atlantics for calendar year 1999 is equal to the amount of
currently contracted sponsorship income for those series on
the date of signature of this Agreement. CART acknowledges
that ISL's guarantee for the said series for the year 1999
therefore fulfilled.
3.1.3 If either Xxxxx & Xxxxxxxxxx Inc. ("Kool") or Imperial Tobacco
Limited ("Player's") withdraws its sponsorship of Atlantics as
a result of current or pending legal restrictions on tobacco
advertising in the United States of America or Canada, then
the portion of the Overall Guarantee relating to Atlantics in
the year first affected by such withdrawal shall be reduced by
an amount equal to the amount of the lost sponsorship revenue.
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3.1.4 Beginning in calendar year 2001, and except as provided for in
Clause 3.1.5 below, the amount of the Overall Guarantee shall
increase by * MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
per cent (* MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
%) per annum per series over the level of the preceding year's
Overall Guarantee for the duration of this Agreement.
3.1.5 If CART includes in the FedEx Series in any given year after
calendar year 2000 a fourth race outside the United States of
America and Canada, then the portion of the Overall Guarantee
relating to the FedEx Series for the year following the year
in which the race is held shall be increased by * MATERIAL HAS
BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
CONFIDENTIAL MATERIAL HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. per cent (* MATERIAL HAS
BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
CONFIDENTIAL MATERIAL HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. %) from the level
specified in Clause 3.1.4. This increase shall continue in
each subsequent year in which the number of races in the FedEx
Series outside the United States of America and Canada remains
at four or more.
3.1.6 Once ISL has generated an amount in cash and value in kind
actually received by CART with regard to the FedEx Series
which is equal to the portion of the Overall Guarantee
relating to the FedEx Series, CART shall pay ISL * MATERIAL
HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. CONFIDENTIAL MATERIAL HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. per cent (*
MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. %) of
the amount generated by ISL in excess of the portion of the
Overall Guarantee relating to the FedEx Series up to and
including the sum of * MATERIAL HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. dollars ($* MATERIAL HAS BEEN OMITTED PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.) in 1999. This shall be paid as compensation for
ISL's costs of sale. In subsequent years of this Agreement,
the level of such compensation will be increased by * MATERIAL
HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. CONFIDENTIAL MATERIAL HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. per cent (*
MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. %) per
year.
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3.1.7 Once ISL has generated an amount in cash and value in kind
actually received by CART with regard to the FedEx Series
equal to the portion of the Overall Guarantee relating to the
FedEx Series determined for that year according to Clauses
3.1.1, 3.1.4 and 3.1.5 above and the compensation for costs of
sale for the relevant year of this Agreement (as specified in
Clause 3.1.6 above), all subsequent revenue generated by ISL
shall be divided * MATERIAL HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. between CART and ISL.
3.1.8 ISL shall receive no compensation on gross consideration
generated with regard to the FedEx Series, Indy Lights and
Atlantics, up to and including the levels of the respective
portions of the Overall Guarantee relating to each series.
3.1.9 With regard to gross consideration in cash or value in kind
generated by ISL and actually received by CART in respect of
Indy Lights or Atlantics in excess of the respective portions
of the Overall Guarantee, ISL shall receive a commission of *
MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. per
cent (* MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. %) of
the amount of gross consideration in excess of the respective
guaranteed amount up to a level of gross consideration of *
MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. per
cent (* MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. %) in
excess of the relevant portion of the Overall Guarantee in
1999 and * MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. per
cent (* MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. %) in
excess of the relevant portion of the Overall Guarantee
thereafter ("the Buffer Zone").
3.1.10 With regard to gross consideration in cash or in kind
generated by ISL in excess of the respective portions of the
Overall Guarantee and the Buffer Zone, all such consideration
shall be considered in every respect as income generated
relating to the FedEx Series and be treated as specified in
Clauses 3.1.6 and 3.1.7 above.
3.1.11 CART recognizes that ISL has agreed to the Overall Guarantee
on the understanding that * MATERIAL HAS BEEN OMITTED PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. If CART fails to comply with this understanding,
ISL shall have the right to negotiate in good faith for a
commercially reasonable reduction in the Overall Guarantee
specified in Clause 3.1.1 beginning with
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the Overall Guarantee relating to calendar year 2000. However,
the reduction in the Overall Guarantee for the year 2000 shall
not be applied to that year but rather to the Overall
Guarantee for the calendar year 2001, which shall be reduced
by the amount of the reductions for the calendar years 2000
and 2001 combined. The Overall Guarantee for calendar year
2002 shall then be calculated using the formula in Clauses
3.1.4 and 3.1.5 above based on the Overall Guarantee for the
calendar year 2001 after the agreed reduction for calendar
year 2001. In the absence of agreement on such reduction, ISL
shall be entitled to terminate this Agreement without
incurring any liability to CART in so doing.
3.1.12 CART further recognizes that ISL has agreed to the Overall
Guarantee on the understanding that CART will use its best
efforts to * MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
If CART fails to comply with this best efforts undertaking by
December 1, 1998, ISL shall have the right to negotiate in
good faith for a commercially reasonable reduction of the
Overall Guarantee beginning with the Overall Guarantee
relating to calendar year 2000. However, the reduction in the
Overall (Guarantee for the year 2000 shall not be applied to
that year but rather to the Overall Guarantee for the calendar
year 2001, which shall be reduced by the amount of the
reductions for the calendar years 2000 and 2001 combined. The
Overall Guarantee for calendar year 2002 shall then be
calculated using the formula in Clauses 3.1.4 and 3.1.5 above
based on the Overall Guarantee for the calendar year 2001
after the agreed reduction for calendar year 2001. In the
absence of agreement on such reduction, ISL shall be entitled
to terminate this Agreement without incurring any liability to
CART in so doing.
3.2 All Other Properties
--------------------
3.2.1 With regard to sponsorship revenues generated by ISL for the
properties specified in Clause 1.1(v) above, ISL shall receive
a commission of * MATERIAL HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. per cent (* MATERIAL HAS BEEN OMITTED PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. %) of the gross consideration in cash or value in
kind generated by ISL's activities under this Agreement. There
shall be no minimum guaranteed revenues with regard to these
properties.
3.2.2 With regard to revenues generated for individual CART races as
specified in Clause 1.1(ii) above, CART shall pay ISL a
commission of * MATERIAL HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. per cent (* MATERIAL HAS BEEN OMITTED PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT. CONFIDENTIAL MATERIAL
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. %) of the value of the gross consideration in cash
or value in kind generated by ISL for each individual race.
Such income shall
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not be considered as an "amount actually received by CART", as
specified in Schedule D, and shall not therefore count against
the Overall Guarantee.
3.2.3 With regard to the rights specified in Clause 1.4 above, CART
shall use its best efforts to ensure that ISL receives a
commission from the beneficiary of a minimum of * MATERIAL HAS
BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
CONFIDENTIAL MATERIAL HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. per cent (* MATERIAL HAS
BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
CONFIDENTIAL MATERIAL HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. %) of the value of the
gross consideration, whether in cash or in value in kind,
payable to the relevant entity as a result of ISL's efforts.
4 REPRESENTATIONS AND WARRANTIES
------------------------------
4.1 CART represents and warrants that it has the authority to
enter into this Agreement and to grant ISL the rights granted
hereunder.
4.2 CART represents and warrants that the execution and delivery
of this Agreement has been duly authorized by all necessary
corporate action of CART and the individual executing this
Agreement on behalf of CART has all requisite corporate
authority to act on behalf of CART and to make this Agreement
the valid and binding obligation of CART.
4.3 CART represents and warrants that it shall not itself sell or
seek to sell sponsorships and that it shall not appoint any
other marketing agent in connection with the sale of any CART
sponsorship.
4.4 ISL represents and warrants that it has the authority to enter
into this Agreement and to perform its obligations hereunder.
4.5 ISL represents and warrants that the execution and delivery of
this Agreement has been duly authorized by all necessary
corporate action of ISL and the individuals executing this
Agreement on behalf of ISL have all requisite corporate
authority to act on behalf of ISL and to make this Agreement
the valid and binding obligation of XXX.
0 XXXX, XXXXXXXXXXX AND RENEWAL
-----------------------------
5.1 The term of this Agreement shall commence on the date hereof and shall
relate to sponsorship agreements taking effect or operating with regard
to the 1999 FedEx Series, Indy Lights Series and Atlantic Series. ISL
will continue to solicit sponsors for the 1998 FedEx Series under the
terms of the Original Agreement and may begin immediately to solicit
sponsors for the 1999 FedEx Series as provided for under this
Agreement. This Agreement shall continue until 31 December 2007, unless
sooner terminated as herein provided.
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5.2 Either may terminate this Agreement forthwith by written notice:
(i) if the other party fails to observe or perform any of its
material obligations hereunder and does not remedy any such
failure within thirty (30) days after being called upon to do
so by written notice; or
(ii) if the other party becomes bankrupt or insolvent or enters
into liquidation (other than a voluntary liquidation for the
purposes of reconstruction, amalgamation or similar
reorganization) or enters into any arrangement or composition
with its creditors or any of them, or has receiver or
administrator appointed over all or part of its property or
assets.
5.3 Termination of this Agreement shall be without prejudice to any
existing rights and/or claims that the terminating party may have
against the other, and shall not relieve such other party from
fulfilling the obligations accrued prior to such termination.
5.4 In the event of ISL's failing to generate revenue equal to the Overall
Guarantee specified in Clause 3.1 in two successive years beginning in
2001, either party shall have the option to give the other twelve (12)
months' notice in writing that it wishes to renegotiate in good faith
the level of the Overall Guarantee for the year following the end of
the notice period, namely, 2004 at the earliest.
5.5 * MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. CONFIDENTIAL MATERIAL HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
6 RELATIONSHIP OF THE PARTIES
---------------------------
This Agreement does not constitute either party the agent of the other,
or create a partnership, joint venture or similar relationship between
the parties, and neither party shall have the power to bind the other
party in any manner whatsoever.
7 CONFIDENTIALITY
---------------
7.1 The parties acknowledge that the terms and conditions of this
Agreement are confidential and agree to take whatever measures
are reasonably necessary to preserve such confidentiality,
unless disclosure is required by law. Nevertheless, such
information may be disclosed to the parties' attorneys,
agents, consultants, financial advisers and others with a need
to know in the ordinary course of business, provided that such
persons are placed under a similar obligation of
confidentiality. The contents of any press announcement
regarding any of the details of this Agreement shall be agreed
by CART and ISL before release. Neither party shall
unreasonably withhold its agreement to such announcements.
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7.2 ISL acknowledges that all manuals, materials, systems,
procedures, techniques, rules and regulations, business
methods and any other communications and documents, trade
names, drawings, engineering or other data photographs,
samples, literature and all sale aids of every kind furnished
by CART to ISL or otherwise obtained by ISL are confidential
information and shall not be used, communicated or otherwise
transmitted directly or indirectly to others without the prior
written consent of CART. Upon the termination or expiration of
this Agreement, ISL shall return to CART all the
aforementioned and described items, and any other
communications and documents relating to the business of CART
that have come into the possession of ISL during the term of
this Agreement. The duties and obligations contained in this
paragraph shall survive the termination of this Agreement.
7.3 All media releases, public announcements and public
disclosures by either party or its employees or agents
relating to this Agreement, including but not limited to
promotional or marketing material, but not including any
announcement intended solely for internal distribution by
either party or any disclosure required by legal, accounting
or regulatory requirements beyond the reasonable control of
the disclosing party, shall be coordinated with and approved
by the other party prior to the release thereof.
8 NOTICES
-------
All notices, consents, approvals and statements hereunder shall be
given in writing to the respective addresses of the parties as first
set forth above, unless notification of a change of address is given in
writing. Any notice shall be sent by dispatch of telefax and confirmed
the same day by registered mail and shall be deemed received upon
receipt of telefax.
9 WAIVER
------
Any waiver by either party of a breach of any provision of this
Agreement shall be in writing and shall not operate as or be construed
to be a waiver of any other breach of such provision or of any other
provision of this Agreement. Failure by either party to insist upon
strict adherence to any provision of this Agreement on one or more
occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that provision or
any other provision of this Agreement.
10 ASSIGNMENT
----------
Neither party may assign or transfer its rights or obligations under
this Agreement without the prior written consent of the other party.
Any attempted transfer or assignment in breach of this provision shall
be void.
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11 HEADINGS
--------
The headings in this Agreement are for reference purposes only and
shall not in any way affect the meaning or interpretation of this
Agreement.
12 REMEDIES
--------
Each and every of the rights, remedies and benefits provided by this
Agreement shall be cumulative and shall not be exclusive of any other
such rights, remedies and benefits, or of any other rights, remedies
and benefits allowed by law.
13 INTEGRATION AND SEVERABILITY
----------------------------
This Agreement, together with Schedules A, B, C and D and Appendix A
hereto (which form an integral part of this Agreement), is intended to
be the sole and complete statement of obligation of the parties as to
the subject matter hereof and supersedes all previous understandings,
negotiations and proposals as to such subject matter. This Agreement
may not be altered, amended or modified except in writing signed by a
duly authorized representative of the parties hereto. In the event of
any one or more provisions contained in this Agreement being held, for
any reason, to be unenforceable in any respect under the laws of any
state or organization:
(a) such unenforceability shall not affect any other provisions of this
Agreement, and
(b) this Agreement shall be construed as if such unenforceable
provisions had not been contained therein, and
(c) the parties shall negotiate in good faith to replace any
unenforceable provision by such enforceable provision as has
effect nearest to that of the provision being replaced.
14 GOVERNING LAW
-------------
The validity, interpretation and construction of this Agreement shall
be governed and construed by the laws of the State of Michigan. Any
litigation commenced by either party to this Agreement as the result of
any alleged breach of this Agreement shall be commenced in the circuit
court for the County of Oakland, State of Michigan, or in the
appropriate lower district court in said county, or in the U.S.
District Court for the Eastern District of Michigan, and the parties
hereby consent to such personal jurisdiction.
15 COUNTERPARTS
------------
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument.
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AS WITNESS the hands of parties hereto
For CHAMPIONSHIP AUTO RACING For ISL MARKETING AG.
TEAMS, INC.
By: /s/ Xxxxxx X. Xxxxx By:
----------------------------------- --------------------------------
Name Printed: Xxxxxx X. Xxxxx Name Printed:
------------------------- ----------------------
Title: President Title:
-------------------------------- -----------------------------
By:
--------------------------------
Name Printed:
----------------------
Title:
-----------------------------
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SCHEDULE A
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PROGRAM
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The rights packages in respect of various levels of sponsorship will be
developed by CART and finalized with ISL's input. Such packages may, subject to
mutual agreement, include, without limitation, any or all of the following
rights:
i) entitlement status ("The FedEx Championship Series' or similar wording to
be defined");
ii) co-entitlement status ("The PPG Dayton Indy Lights Series" or similar
wording to be defined)
iii) category exclusivity;
iv) designation as Official Sponsor and Official Product or Service;
v) suppliership rights;
vi) logos on each car (title sponsor)
vii) option to purchase category-exclusive advertising rights on all race
telecasts;
viii) patches on drivers', crews' and officials' uniforms (title sponsor only);
ix) patch on CART officials uniforms and on CART transporters and motor
homes;
x) prominent identification on the CART "Traveling Road show" display and
exhibit;
xi) race tickets and VIP credentials (to be determined in proportion to
contribution);
xii) hospitality credit for each race or access to CART hospitality area; .
xiii) identification at the race on starting grid boards, Winners' Podium
backdrop and Media Center (title sponsor only);
xiv) the creation of premium items;
xv) CART Web-site recognition and hyper link to sponsor's home page;
xvi) access to CART market research studies;
xvii) use of CART marks for promotional use;
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xviii) identification in all CART-placed advertising, point-of-sale/display
materials, printed stationery, publications and TV programs;
xix) page of editorial and pages of advertising in each race program;
xx) expo area at each race;
xxi) trackside billboard(s);
xxii) identification on all promotional material for each race (title sponsor);
xxiii) PA announcements;
xxiv) services of a CART Account Executive;
xxv) use of CART display program;
xxvi) such other rights as are mutually agreed between the parties.
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SCHEDULE B
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THE RELEASED CATEGORIES
-----------------------
PAYMENT SYSTEMS
---------------
PHOTOGRAPHIC FILM
-----------------
CONSUMER ELECTRONICS
--------------------
SNACK FOODS
-----------
TELECOMMUNICATIONS
------------------
EXPRESS DELIVERY
----------------
COPIER / FAX / PRINTER
----------------------
CONFECTIONERY
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SCHEDULE C
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OVERALL GUARANTEE
-----------------
1999
FedEx Series $* MATERIAL HAS BEEN OMITTED PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT.
CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
Indy Lights $* MATERIAL HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. *
Atlantics $* MATERIAL HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
OVERALL GUARANTEE $* MATERIAL HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
2000
FedEx Series $* MATERIAL HAS BEEN OMITTED PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT.
CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
Indy Lights $* MATERIAL HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. *
Atlantics $* MATERIAL HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
OVERALL GUARANTEE $* MATERIAL HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
CONFIDENTIAL MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
* THESE FIGURES REFLECT THE REVENUE PAYABLE UNDER SPONSOR CONTRACTS EXISTING AT
THE DATE OF EXECUTION OF THIS AGREEMENT. IF CONTINENTAL SPORTS, INC. SELLS
FURTHER INDY LIGHTS SPONSORSHIPS BEFORE SEPTEMBER 1, 1998, THESE FIGURES SHALL
BE ADJUSTED ACCORDINGLY TO REFLECT CONTRACTED SPONSORSHIP REVENUES FOR 1999 AND
SUBSEQUENT YEARS AND WITH ANNUAL INCREASES IN THIS PORTION OF THE OVERALL
GUARANTEE BEING MADE IN ACCORDANCE WITH THE PROVISIONS OF CLAUSE 3.
16
SCHEDULE D
----------
FINANCIAL DETAILS AND COMPENSATION
----------------------------------
1. Values of Product Categories
"Amounts actually received by CART" (as referred to in Clause 3 of this
Agreement), shall be defined as the gross consideration, whether in
cash or value in kind, generated through the sale of sponsorships by
ISL less an appropriate deduction to be paid to each race promoter for
the rights delivered to sponsors. This is currently envisaged as *
MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. CONFIDENTIAL MATERIAL HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. dollars ($* MATERIAL HAS BEEN
OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. CONFIDENTIAL
MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.) per sponsor per race delivering the full package of
on-site rights set forth in Schedule A hereto for the "Title" sponsor
or "Partners". The exact amount of any deduction with regard to payment
for on-site rights delivery shall be subject to mutual agreement
between CART and ISL prior to the conclusion of each sponsorship
agreement.
"Amounts actually received by CART" shall also include any monies
received by CART from race promoters by way of indemnification for
cancellation of any races in the CART Series.
"Amounts actually received by CART" does not include the value in kind
element received by CART from sponsorship agreements existing on the
date of signature of this Agreement. However, should such deals be
renewed or renegotiated by ISL, then any incremental value in kind over
and above that received from a sponsor as part of their existing
contractual commitment to CART existent on the date of signature of
this Agreement, shall be treated as an "amount actually received by
CART".
2. Treatment of Unwanted Value in Kind
Any value in kind supplied as part of a sponsorship agreement solicited
by ISL will be considered commissionable unless CART provides written
notice to ISL prior to the conclusion of the relevant agreement that
the value in kind is unwanted, either in whole or in part. Should CART
subsequently use any or all of the previously notifies unwanted value
in kind, then it shall be deemed to have been wanted and be further
deemed to be commissionable.
3. CART Series Trust Account
(i) The parties shall jointly establish an account at a bank to be
agreed between them to be identified as the CART Series Trust
Account ("Trust Account") into which all receipts under this
Agreement shall be directed. Payments out of this Trust
Account shall be made by the Trustee Bank in accordance with
the terms of this Agreement and shall require authorized
signatures of both parties and both parties
17
shall have full access to the records relating to this Trust
Account. The costs associated with the Trust Account shall be
borne equally between the parties.
(ii) ISL and CART shall pay, or cause to be paid, into the Trust
Account all monies received under sponsorship agreements
solicited by ISL and entered into by CART, and all monies
received by way of indemnification for race cancellation as
referred to in Paragraph 1 above.
