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Exhibit 10.19
CART, INC.
OFFICIAL ORGANIZER/PROMOTER AGREEMENT
MONTERREY, MEXICO
DRAFT as of: March 28, 2000
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CART, INC.
OFFICIAL ORGANIZER/PROMOTER AGREEMENT
The undersigned hereby applies for the right to conduct a FedEx Championship
Series (herein sometimes referred to as "the Series") race Competition
sanctioned or co-sanctioned by CART, Inc.("CART"), upon the following terms and
conditions. It is understood that this is an application only until accepted and
approved by CART in writing and that this Competition shall not be advertised or
communicated to the public, press or any other media or business arrangement as
having been approved by CART until this application has been so approved and
until an official sanction has been granted by CART.
Track: Monterrey, Mexico
Location: Monterrey, Nuevoleon, Mexico
Organizer/Promoter: Monterrey Grand Prix, 5. de R.L. de C.V.
Address: c/o 301 W. Michigan Avenue
Jackson, MI 49201
Telephone: (517) 787-6633
Facsimile: (517) 787-6630
E-mail Address:
Race Distance: TBD
Track Length and Type: Road Course
Postponed Date: Rain tires to be used.
DEFINITIONS:
A. The term "Competition" as used herein shall include the annual
Champ Car race(s) designated hereinabove, as well as all time
trials, practice runs and rain or postponed dates related
thereto.
B. The term "Event" as used herein shall include the
Competition(s) as well as any other race(s), race-related
activities or any other activities associated with the
Competition(s), as approved by CART hereunder.
C. The terms "Dollars" and "$" refer to the lawful currency of
the United States of America.
D. References in this Agreement to "FedEx" shall be to Federal
Express Corporation, and/or (where applicable) any successor
or additional Series title or co-title sponsor.
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1. A. Subject to compliance with all the terms and conditions set
forth in this Agreement, Organizer/Promoter shall organize,
promote and conduct a FedEx Championship Series race
Competition in the following year(s): 2001-2005.
B. Organizer/Promoter and CART will mutually agree as to the date
for each race hereunder. The parties agree that they will
exercise reasonable efforts to schedule the races during the
same weekend each year and acknowledge the desirability of
such date equity. If, however, due to television and
scheduling conflicts, in CART's sole discretion it becomes
necessary to schedule a race for a different weekend, CART
will exercise reasonable efforts to notify Organizer/Promoter
of such intention at the earliest possible time.
C. Organizer/Promoter agrees not to organize, promote, conduct,
authorize or permit the staging of any other major motor
racing event(s) at the track(s) designated hereinabove,
without the written approval of CART, within the following
period of time either preceding or following any Competition
hereunder: three (3) weeks.
D. It is the intention of both CART and Organizer/Promoter to
establish a long-term relationship with a view to gaining the
greatest possible benefits for CART and Organizer/Promoter.
Therefore, provided Organizer/Promoter is not in breach of any
provision of this Agreement, CART and Organizer/Promoter shall
commence good faith negotiations with a view to mutually agree
on terms and conditions for the extension of this Agreement
beyond the Events covered hereunder. Such negotiations shall
commence on or about six (6) months following the 2003 Event
and shall continue on an exclusive basis for a period of six
(6) months.
E. In addition to the annual FedEx Championship Series
Competition to be conducted by Organizer/Promoter, the other
races to be held during each Event may include up to three (3)
support races to be provided by CART, subject to a further
mutual agreement as to the commercial terms for such
additional races. However, it is understood that for each
Event covered by this Agreement, CART will provide the Indy
Lights races at no additional fee to Organizer/Promoter.
2. The total Organization and Rights Fee payable for the 2001 Competition
shall be Two Million Five Hundred Ninety Thousand ($2,590,000.00)
Dollars and shall be paid to CART as follows:
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A. Fifteen (15%) percent, or Three Hundred Eighty Eight Thousand
Five Hundred ($388,500.00) Dollars not later than six (6)
months prior to the date of the race.
B. Thirty-five (35%) percent, or Nine Hundred Six Thousand Five
Hundred ($906,500.00) Dollars not later than three (3) months
prior to the date of the race.
C. The balance due of One Million Two Hundred Ninety Five
Thousand ($1,295,000.00) Dollars not later than thirty (30)
days prior to the date of the race.
3. The total Organization and Rights Fee payable for the 2002 Competition
shall be Two Million Seven Hundred Four Thousand Four Hundred
($2,704,400.00) Dollars and shall be paid to CART as follows:
A. Fifteen (15%) percent, or Four Hundred Five Thousand Six
Hundred Sixty ($405,660.00) Dollars not later than six (6)
months prior to the date of the race.
B. Thirty-five (35%) percent, or Nine Hundred Forty Six Thousand
Five Hundred Forty ($946,540.00) Dollars not later than three
(3) months prior to the date of the race.
C. The balance due of One Million Three Hundred Fifty Two
Thousand Two Hundred ($1,352,200.00) Dollars not later than
thirty (30) days prior to the date of the race.
4. The total Organization and Rights Fee payable for the 2003 Competition
shall be Two Million Eight Hundred Twenty Three Thousand Three Hundred
Ninety Three Dollars and Sixty ($2,823,393.60) Cents and shall be paid
to CART as follows:
A. Fifteen (15%) percent, or Four Hundred Twenty Three Thousand
Five Hundred Nine Dollars and Four ($423,509.04) Cents by
December 1, 2002.
B. Thirty-five (35%) percent, or Nine Hundred Eighty Eight
Thousand One Hundred Eighty Seven Dollars and Seventy Six
($988,187.76) Cents by January 1, 2003.
C. The balance due of One Million Four Hundred Eleven Thousand
Six Hundred Ninety Six Dollars and Eighty ($1,411,696.80)
Cents not later than thirty (30) days prior to the date of the
race.
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5. The total Organization and Rights Fee payable for the 2004 Competition
shall be Two Million Eight Hundred Ninety Nine Thousand Six Hundred
Twenty Five Dollars and Twenty ($2,899,625.20) Cents and shall be paid
to CART as follows:
A. Fifteen (15%) percent, or Four Hundred Thirty Four Thousand
Nine Hundred Forty Three Dollars and Seventy Eight
($434,943.78) Cents by December 1, 2003.
B. Thirty-five (35%) percent, or One Million Fourteen Thousand
Eight Hundred Sixty Eight Dollars and Eighty Two
($1,014,868.82) Cents by January 1, 2004.
C. The balance due of One Million Four Hundred Forty Nine
Thousand Eight Hundred Twelve Dollars and Sixty
($1,449,812.60) Cents not later than thirty (30) days prior to
the date of the race.
6. The total Organization and Rights Fee payable for the 2005 Competition
shall be Three Million Four Thousand Eleven Dollars and Seventy
($3,004,011.70) Cents and shall be paid to CART as follows:
A. Fifteen (15%) percent, or Four Hundred Fifty Thousand Six
Hundred One Dollars and Seventy Six ($450,601.76) Cents by
December 1, 2004.
B. Thirty-five (35%) percent, or One Million Fifty One Thousand
Four Hundred Four Dollars and Nine ($1,051,404.09) Cents by
January 1, 2005.
C. The balance due of One Million Five Hundred Two Thousand Five
Dollars and Eighty Five ($1,502,005.85) Cents not later than
thirty (30) days prior to the date of the race.
7. Organizer/Promoter expressly understands and agrees that said
Organization and Rights Fees are intended to be net and are
non-refundable except as expressly provided in this Agreement. If said
Organization and Rights Fees are not paid to CART in the manner and by
the time provided above, CART shall have the option to declare this
Agreement terminated after a fourteen (14) day notice of
default/opportunity to cure, in which circumstance CART will be
relieved from any further liability or responsibility hereunder, and in
addition, Organizer/Promoter shall forthwith pay to CART and CART shall
be entitled to enforce collection of the total amount required under
this Agreement for the Competition for which such fees are not paid and
for the following year's
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Competition as liquidated damages, together with all costs incurred by
CART in connection therewith, including reasonable attorney fees, and
interest at the rate of twelve (12%) percent per annum. Upon receipt in
full of the amounts specified in this Paragraph 7, CART acknowledges
that the receipt of said sums shall be CART's sole and exclusive remedy
in the event CART terminates this Agreement as provided in this
Paragraph 7. Organizer/Promoter shall be responsible for payment of any
taxes assessed by any taxing authority on the Organization and Rights
Fees and/or any withholding requirements based on the distribution of
same to the teams. Any such tax liability shall be in addition to the
Organization and Rights Fees payable hereunder. In no event will
Organizer/Promoter be responsible for any taxes imposed by any taxing
authority on the income of CART.
8. Organizer/Promoter shall not be responsible for any purse distribution
whatsoever in respect to a Competition. CART must approve any and all
awards given in conjunction with a Competition and/or for the FedEx
Championship Series or any other CART sanctioned activity.
Organizer/Promoter agrees to provide driver and owner trophies in
recognition and representative of the achievements of at least the
first three (3) finishing positions in each Competition.
9. A. CART shall be responsible for providing not less than
twenty (20) entrants for each Competition. If CART is unable
to provide twenty (20) entrants for any Competition,
Organizer/Promoter shall have the right to cancel such
Competition, providing that Organizer/Promoter first informs
CART in writing of such intent, and provided further that
twenty (20) entries have not been received within seven (7)
days after receipt by CART of such notice. If
Organizer/Promoter under these circumstances exercises this
cancellation right, CART will reimburse Organizer/Promoter for
the portion of the Organization and Rights Fee theretofore
paid for such Competition.
B. Either party hereto shall have the right to cancel a
Competition due to a "force majeure". "Force majeure" shall
mean any event or circumstances (whether arising from natural
causes, human or governmental agency or otherwise) beyond the
control of the parties including by way of illustration, but
not by way of limitation, strikes, lock-outs or other labor
disputes, civil strife, war, flood, fire, or acts of God. If
there is an unexpected cancellation due to a "force majeure",
Organizer/Promoter will be entitled to the return of the
portion of the Organization and Rights Fee theretofore paid,
except that Organizer/Promoter agrees that CART may retain a
sum equivalent to the necessary expenses reasonably incurred
by CART and its teams in preparing for such Competition,
provided, however, that where CART receives not less than ten
(10) business days notice of such unexpected cancellation, the
parties acknowledge that such expenses will
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be primarily limited to actual CART and team out-of-pocket,
non-refundable expenditures, i.e., hotel deposits, airline
ticketing, car rental, other ground transportation
arrangements, etc., which expenses shall be mutually agreed
by the parties provided, however, that if the parties are
unable to agree informally as to the amount of such
expenses, such dispute shall be submitted to binding
arbitration and the result of such arbitration shall be
enforceable by any court having jurisdiction.
C. If Organizer/Promoter cancels or fails to stage a Competition
for any reason other than those mentioned within this
Paragraph 9, Organizer/Promoter shall forthwith pay to CART
and CART shall be entitled to enforce collection of the total
amount required under this Agreement for the Competition that
was not held and the following year's Competition as
liquidated damages, together with all costs incurred by CART
in connection therewith, including reasonable attorney fees,
and interest at the rate of twelve (12%) percent per annum.
Upon receipt in full of the amounts specified in this
Paragraph 9C, CART acknowledges that the receipt of said sums
shall be CART's sole and exclusive remedy in the event
Organizer/Promoter cancels or fails to state a Competition.
10. Except as expressly provided herein, Organizer/Promoter owns and shall
have exclusive control over all commercial rights to each Event
including by way of illustration, but not by way of limitation, the
right to sell and receive all the proceeds from Event sponsorships,
signage, admission tickets, programs, novelties, concessions (including
food and beverage), catering (including food and beverage), hospitality
facilities, hotel rooms, expositions, displays, parking spaces,
banquets and licenses to parades.
11. Organizer/Promoter shall assume and perform all organizational and
promotional activities for each Event except as otherwise provided
herein, including but not limited to business organization, promotional
activity, management, marketing, general affairs, selling tickets,
track maintenance and accommodations of the press, and further
understands and agrees that CART disclaims any warranty expressed or
implied, as to the potential success of any Event organized hereunder.
12. Organizer/Promoter shall organize and promote the races hereunder as
major motor racing events. Organizer/Promoter shall have the right to
on-site track entitlement, and revenues therefrom. On-site entitlement
is to designate the title/name of the Champ Car race and all CART
sanctioned support activities at the venue, subject to CART approval
which shall not be unreasonably withheld. Such title sponsorships must
not conflict with CART Series sponsors (presently
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FedEx) or co-Series sponsors. 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 at 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 in writing prior to the release thereof.
13. A. CART hereby grants Organizer/Promoter the non-exclusive
right to use the names and logos of CART and the FedEx
Championship Series in its promotion of each Event during the
term hereof, in accordance with all provisions contained in
this Agreement. Any logo, design, mark or representation made,
formulated, or developed in conjunction with such Event shall
be subject to the prior written approval of CART.
B. Organizer/Promoter shall display in all advertising and
publicity material including but not limited to news releases,
posters, banners, program covers, brochures, tickets, passes,
credentials and print and television advertising relating to
each Event the phrase: "FedEx Championship Series" and the
Series logo (as approved and supplied by CART). CART reserves
the right to change such phrase and logo.
C. Organizer/Promoter shall include in its display of the Series
name and logo the symbol (R) to indicate that they are
registered marks. A sheet of camera ready art depicting these
logos shall be provided by CART. Further, in promoting and
advertising each Event, Organizer/Promoter shall promote the
Competition as a part of the FedEx Championship Series or as
otherwise designated by CART. Organizer/Promoter shall provide
such verification of compliance with the provisions contained
in this Paragraph 13 as CART may reasonably request.
D. Organizer/Promoter shall not use the names, logos or
trademarks of CART or any Series sponsor for any purpose other
than as herein defined.
E. Upon the expiration or termination of this Agreement for any
reason, Organizer/Promoter shall cease and desist any and all
use of the names, logos or trademarks of CART or any Series
sponsor or any colorable imitation, variation or adaptation
thereof.
F. CART and Organizer/Promoter shall at CART's expense promptly
take such action as may be necessary to protect the names,
logos and trademarks of CART, the Series, and the Series
sponsors against any infringement or threatened infringement
or any common law "passing off".
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G. The trademarks, trade names, logos, label designs, product
identification and artwork of each party as referred to herein
(collectively "Trademarks") shall remain the property of such
party. Any and all rights in each party's Trademarks under
trademark or copyright law or other property rights shall
inure to the benefit of and be the exclusive property of such
party. Neither party shall file any application for
registration of the other's Trademarks or other intellectual
property or any marks or works similar thereto.
14. A. Organizer/Promoter agrees that each Competition shall be
organized, approved by CART and conducted in accordance with
all applicable statutes, ordinances, regulations or other
requirements of any government authority, the FIA (CART shall
determine in its sole discretion the applicability of FIA
requirements), and the CART Rule Book as amended from time to
time and as the same may be modified or supplemented by any
other rules, regulations, bulletins or releases that may be
applicable to such Competition. CART reserves the right to
terminate this Agreement at any time without further liability
for failure of Organizer/Promoter to abide by said
requirements, regulations, rules, or the terms and conditions
of this Agreement, by so notifying Organizer/Promoter in
writing, upon a five (5) day notice of default/opportunity to
cure, unless the circumstances of the default mandate a more
immediate cure, or do not warrant any cure period. CART shall
notify Organizer/Promoter in writing of any alleged default
and Organizer/Promoter shall have five (5) days after receipt
of such notice to cure the default, provided, however, if the
nature of the default is such that it cannot reasonably be
cured within five (5) days, Organizer/Promoter shall not be
deemed to be in default if it commences the cure within such
five (5) day period and thereafter completes the curative
action within a reasonable time. Organizer/Promoter
acknowledges receipt of a copy of the CART Rule Book.
B. Organizer/Promoter shall be responsible for any licensing
fees, bonds, permits, or any other enabling documents and any
associated costs required by any government agencies as
related to any or all Event matters.
15. Organizer/Promoter represents and warrants that it has or will have
sole control of the track and of the premises upon which the track is
located, including all facilities thereon, and that Organizer/Promoter
has full authority to conduct each Event thereon as provided for herein
for the defined scheduled term of each Event.
16. A. Organizer/Promoter shall provide at its expense during each
Event the
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track or race course which must meet or exceed the safety
requirements of CART and the FIA and all facilities in
good repair and ready for use, and Organizer/Promoter shall
permit CART or its insurance broker or other designated
representative, and the FIA to inspect the track, race course
and/or facilities before, during and after each Event. Except
as provided in Paragraph 16C, all repairs deemed necessary in
order for the track to meet CART and/or FIA safety
requirements must be made at Organizer/Promoter's expense and
the failure to make the necessary repairs may result in the
postponement or cancellation of such Event, in CART's sole
discretion. The track site, design and condition shall be
subject to review and approval by CART and the FIA.
Organizer/Promoter and CART shall consult with one another on
the layout and design of the track, including but not limited
to the pit area, safety barriers, retention systems, and other
facilities for the Competition.
B. Annually, seven (7) months prior to the next Event,
Organizer/Promoter shall submit an engineering drawing(s) of
proposed changes to the race circuit and other facilities for
CART's approval. CART will have thirty (30) days to
acknowledge approval or request changes. Such drawings are to
be treated as confidential, for use by CART as contemplated
under this Agreement, and shall not be copied, disseminated
(without Organizer/Promoter's prior consent, which shall not
be unreasonably withheld), or used for any commercial purpose,
subject to any required disclosure pursuant to Paragraph 45
below. CART shall have the right to inspect the circuit for
the purpose of verifying that the circuit is being constructed
in accordance with the drawings as submitted and approved.
Within sixty (60) days after the execution of this Agreement,
CART and Organizer/Promoter shall mutually agree on the
specific track and facility improvements to be implemented for
the first Event covered by this Agreement, and a written
summary thereof shall be prepared and appended hereto.
Thereafter, a similar process shall occur within sixty (60)
days following each Event, in respect to improvements or
adjustments to be implemented for the following year's Event.
C. Any changes to the safety system requested by CART will be
identified and communicated by CART to Organizer/Promoter
within one hundred twenty (120) days after the conclusion of
each Event hereunder. Absent unforeseeable supervening
circumstances, the parties agree that the cost of such changes
to be implemented for any Event hereunder shall not exceed ten
percent (10%) of the Organization and Rights Fee for such
Event. The foregoing cost limitation shall be construed to
exclude Organizer/Promoter's capital improvements/investments
(i.e., fencing, barriers, gravel traps, etc.), as well as
changes to the safety system requested by any third party
(i.e., not mandated by CART).
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D. Organizer/Promoter shall be responsible for compliance with
all environmental issues associated with this Event.
17. A. Organizer/Promoter shall provide at its expense such
facilities as CART deems adequate for the use of CART
personnel and those directly associated with the Event,
including but not limited to race control facilities, garage
areas, team and supplier work areas, facilities for
participant registration, television, scoring, race car
inspection, compiling and distributing media information, a
media work area, and facilities and services as may be
reasonably required by those who supply products and/or
services for the Event. Further details of these and other
operational and facility requirements of Organizer/Promoter
are agreed to as outlined in SCHEDULE A attached hereto and
made a part hereof. Failure to comply with all applicable
requirements may result in a fine, which may be levied by CART
in its sole discretion, subject to a reasonable notice of
default/opportunity to cure. Such fine shall be reasonably
related to the magnitude of the requirement(s) with which
Organizer/Promoter failed to comply, and any fine in excess of
Fifty Thousand ($50,000.00) Dollars shall be subject to the
appeal provisions set forth in the CART Rule Book.
B. Organizer/Promoter at its expense shall provide, install and
maintain the equipment necessary to operate CART's Timing and
Scoring system, in accordance with the specifications supplied
by CART and its timing and scoring provider, including on
street courses the annual set up and tear down of all antennas
and cabling. Organizer/Promoter will provide CART's timing and
scoring provider or sponsor, free of charge at the
start/finish line, on the Timing and Scoring structure and at
least one other prominent location, space to affix and display
the logo and/or officially designated status of CART's timing
and scoring provider or sponsor. Organizer/Promoter shall not
sell or secure any timekeeping and/or watch sponsorship which
would be in effect during any CART Event. In the event
Organizer/Promoter intends to sell signage to a watch company
(i.e., not in connection with a timekeeping or watch
sponsorship), Organizer/Promoter may do so provided that CART
is given prior written notice, and any such watch company
signage shall be located at least one hundred (100) meters
from any signage related to CART's timing and scoring provider
or sponsor and further provided that such company shall not be
granted official sponsor, supplier, or comparable designation
rights or status in conjunction with any Event hereunder.
18. Organizer/Promoter shall at its expense furnish all facilities,
personnel, equipment, security, and services for accommodating and
controlling the public
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during each Event, for whose safety and comfort Organizer/Promoter is
solely responsible and liable.
19. A. Organizer/Promoter shall provide at its expense all necessary
personnel as required by CART for the conduct of each
Competition hereunder(other than the CART staff and
officials), and Organizer/Promoter shall assume all the
responsibilities pertaining to workers, volunteers and
subcontractors necessary to properly staff the facility for
the purposes of the Competition and the public for each Event
weekend.
B. CART and Organizer/Promoter shall mutually agree to a
communications plan, to be provided at Organizer/Promoter's
expense. Such Plan shall include translators and translations
as may be reasonably requested by CART and its teams, for
their operations while in Mexico and the conduct of each
Competition.
20. Organizer/Promoter at its expense shall obtain and maintain insurance
for each Event and all scheduled activities with an insurance company
approved by CART. Such insurance must conform to the minimum coverages,
specifications, limits, etc., as set forth in SCHEDULE B attached
hereto and made a part hereof. If Organizer/Promoter fails to maintain
such policies with the required minimum coverage throughout the Event,
CART may cancel such Event immediately with prior notice to
Organizer/Promoter, subject to a reasonable notice of
default/opportunity to cure, or CART may, in its discretion, obtain the
required insurance from an approved insurance company, with acceptable
terms, at Organizer/ Promoter's expense.
21. Only those individuals approved by CART or Organizer/Promoter,
including but not limited to appropriate staff and officials of CART
and Organizer/Promoter, drivers and other crew members and necessary
fire, wrecker, ambulance and security crews, shall have access to or be
allowed in the paddock, garage and pit areas, the racing surface, and
other areas to which admission by the general public is normally
prohibited during the Event, and Organizer/Promoter shall be solely
responsible and provide sufficient security personnel in such areas to
enforce this provision at all times during each Event. Such access must
be in compliance with the CART Rule Book and may not interfere with or
adversely affect the Competition.
22. Organizer/Promoter shall honor CART's Unified Credential System and
shall comply with the facility access provisions implemented by CART,
as set forth in
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SCHEDULE C attached hereto and made a part hereof, and as the same may
be amended by future discussions and concurrence between CART and its
race promoters through the promoter group.
23. A. CART shall have the exclusive right to contract out or to take
or cause to be taken by others, make, broadcast, rebroadcast,
use, reproduce, transmit, copyright, sell, license or
otherwise dispose of for any purpose whatsoever, television
pictures, sound film and tape, motion pictures, still
photographs, illustrations, graphics, electronic images and
sound of each Event, by any and all means, uses and media, now
known or hereafter developed, and the right to use the track
PA system audio on the CART web site CART.com. CART shall
retain all United States national, international and local
broadcast rights including broadcast television, cable and
radio. Organizer/Promoter will assure that the presence of
personnel and equipment for these or similar purposes shall
not be inconsistent with the rights of CART herein provided
and shall not interfere or conflict with the exercise of any
such rights by CART as herein provided.
B. CART shall have the non-exclusive right to market for any
commercial purposes the name, identity, layout, likeness,
appearance, signage and logo(s) of the track, on a composite
basis with other tracks where CART races are conducted,
provided, however, that any use of such images for commercial
product licensing purposes shall be pursuant to a separate
licensing agreement to be negotiated.
C. Organizer/Promoter shall be entitled to receive footage and
photographs for promotional purposes, subject to the then
prevailing production cost.
D. The parties recognize that Mexican television rights related
to the Series are currently subject to third party contractual
requirements. Subject to the foregoing, the parties
acknowledge Organizer/Promoter's desire to acquire such
rights, and the issue of such future Mexican television rights
is, therefore, deferred for future good faith negotiations if
such rights are ultimately available.
24. Organizer/Promoter recognizes and acknowledges that CART has entered or
intends to enter into a television contract with a United States
national broadcast or United States cable network and international
networks for the coverage of each Competition hereunder.
A. Detailed operational and facility requirements of
Organizer/Promoter in respect to television and other on-site
media are identified in SCHEDULE A.
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B. CART has arranged with the television production companies
(subject to network approval) to provide the video portion of
the program feed from the mobile unit to Organizer/Promoter,
so that Organizer/Promoter may feed the video signal as a
courtesy to the medical center, stewards trailer (with
monitor), CART business center, operations trailer (with
monitor), media center and hospitality suites. This feed is
limited to on-site press and hospitality use only. Any other
feeds to hotels, bars, or other establishment(s) whether
on-site or off, are strictly prohibited, unless approved in
writing by CART or the television production company.
Organizer/ Promoter shall be responsible for the installation
and maintenance of appropriate cable originating at the
television compound which will then feed the system.
Maintenance and operation of the system is the sole
responsibility of Organizer/Promoter.
C. CART and Organizer/Promoter agree that it is in the best
interest of the sport, its promoters and sponsors to have the
same on-site and United States television title sponsor. CART
and Organizer/Promoter recognize and agree that all United
States television entitlements are derived from a privilege
granted by the United States television network and are
subject to United States network approval. In the event
Organizer/Promoter provides CART with a United States
television entitlement sponsor, such sponsor must agree to:
(i) purchase one (1) of several commercial unit package
options for either United States network or cable coverage to
be published by CART or its designee each year, (ii) enter
into a negotiated agreement with CART or its designee, or
(iii) guarantee a payment for entitlement in return for which
Organizer/Promoter will receive eight (8) thirty (30) second
commercial units to package with its on-site title. The
published rate option packages and payment option will be made
available to Organizer/Promoter at least one (1) year in
advance.
D. Organizer/Promoter may, at its option, and subject to approval
by CART or its designee and the appropriate network, elect to
guarantee over-the-air United States broadcast network
coverage of its Event. In this event Organizer/Promoter will
be required to provide a United States television title
sponsor subject to: (i) purchase of one (1) of several
published minimum commercial unit packages, (ii) enter into a
negotiated agreement with CART or its designee, or (iii)
guarantee a payment for entitlement to be determined each
year. In the payment option (iii) Organizer/Promoter will
receive eight (8) thirty (30) second units in the telecast to
package with its on-site title.
E. In the event Organizer/Promoter elects not to provide CART
with a United States television entitlement sponsor or to
guarantee over-the-air United States broadcast network
coverage, then CART or its designee shall have the option to
secure a United States television entitlement sponsor which
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Monterrey Promoter Agreement
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need not be the same as the on-site entitlement sponsor.
F. CART and Organizer/Promoter agree that the policies and terms
set forth as a condition of both United States and
international television coverage of this Event may change
from time to time, and, therefore, the United States and
international television agreement may supersede portions of
this Agreement. In the event that the United States and
international television agreement supersedes a portion of
this Agreement, CART will immediately notify
Organizer/Promoter and work toward a mutually agreed upon
solution.
25. Organizer/Promoter recognizes and acknowledges that CART has the right
to contract for official sponsors for the FedEx Championship Series,
which need not coincide with specific Event sponsors, as well as to
grant other official product designations on a Series wide basis, in
CART's sole discretion.
26. A. CART or its designee shall have the exclusive right to provide
any and all pace cars throughout the entire Event. In
addition, only pace cars provided by CART or its designee
shall be allowed to participate in the parade laps immediately
preceding the start of the Champ Car race. Further details of
these and other responsibilities of Organizer/Promoter to CART
and/or a co-Series sponsor to be designated by CART are agreed
to as outlined in SCHEDULE D attached hereto and made a part
hereof.
B. The Events shall be included in the FedEx Series sponsorship
and marketing program, in each year such Event(s) are
conducted pursuant to this Agreement, including extensions
and/or renewals thereof, up to and including the year 2001,
provided the FedEx Series Sponsorship Agreement is then in
full force and effect, or longer if such Agreement is
extended, provided, however, CART may terminate such
participation as of December 31, 2000, upon notice to
Organizer/Promoter of such intent by July 1, 2000. Other than
the provisions of SCHEDULE G (FedEx Series Marketing and
Sponsorship Program), such termination by CART as provided in
the proceeding sentence shall have no impact on the terms of
this Agreement. Details of the FedEx sponsorship and marketing
program and the responsibilities of Organizer/Promoter to
FedEx are agreed to as outlined in SCHEDULE G attached hereto
and made a part hereof.
27. A. Organizer/Promoter agrees that the scheduled CART sanctioned
activities during each Event shall have priority over any
other race or other activity scheduled during such Event.
Organizer/Promoter will not schedule any supporting races,
tests, or ancillary activities on the same day as
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Monterrey Promoter Agreement
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Draft #4
registration or inspection, or on any other day during an
Event, without prior written approval of CART. Further details
of these and other scheduling considerations/requirements are
agreed to as outlined in SCHEDULE E attached hereto and made a
part hereof.
B. Organizer/Promoter acknowledges that current CART regulations
prohibit testing by CART teams at facilities outside the North
American continent and agrees to abide by this regulation.
28. CART shall conduct grid/pre-race activities which shall include but are
not limited to the pole awards, other contingency award activities,
driver introductions, etc.
29. CART shall maintain control of the Victory Circle location, facilities
and proceedings. Details of these proceedings and the requirements of
Organizer/Promoter in regard thereto are agreed to as outlined in
SCHEDULE F attached hereto and made a part hereof.
30. CART shall have reasonable access to the PA system in order for CART to
fulfill its contractual obligations to its sponsors and inform
participants and spectators of activities during the Event.
31. A. CART or its licensed representative, shall have the right to
sell official licensed CART merchandise from its own temporary
concession facility and/or a facility supplied by the
Organizer/Promoter as determined by CART. Official Event
Concessionaire locations notwithstanding, CART or its licensed
representative shall be given first choice for any and all of
its vendor locations which shall be in a prominent,
high-traffic location, generally near the paddock area. CART
or its licensed representative shall pay to the
Organizer/Promoter for each location including associated
credentials and any required services, the lesser of the then
current market price or a single fee of One Thousand Five
Hundred ($1,500.00) Dollars. Sales information shall be
confidential and proprietary property of CART or its licensed
representative.
B. Selected items of CART merchandise, at the discretion of CART,
may be offered to the Organizer/Promoter for sale in its
concession facilities at terms to be agreed upon by the
parties in writing in advance.
C. Organizer/Promoter shall include at its cost a CART Licensed
Products advertisement in the official race program. Camera
ready art shall be provided by CART or its licensed
representative.
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Monterrey Promoter Agreement
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D. CART and Organizer/Promoter shall negotiate in good faith for
the manufacture and distribution by CART licensees of
merchandise bearing the marks of both CART and the Event. Such
cross-licensed merchandise may be offered for sale through
CART and Organizer/Promoter controlled vendor locations as
agreed upon by the parties. CART licensees shall also have the
opportunity to sell such cross-licensed merchandise to
off-track retailers.
E. CART logos and trademarks including but not limited to all
Series logos and marks, sanctioning body logos and marks, and
any other CART or CART related logos and marks may not be used
by Organizer/Promoter on any merchandise whatsoever without
express advance written approval of CART.
F. It is Organizer/Promoter's responsibility to insure that any
and all concessions and/or merchandise is properly licensed.
In the event that CART discovers any unlicensed products, it
will have the right to take appropriate action in its sole
discretion.
G. All CART Champ Car teams will be afforded the opportunity to
sell merchandise within the confines of the race facility. All
teams will be in a prominent, high-traffic location.
Participating teams will pay a rights fee for the location,
which fee shall be (i) consistent with the then current market
price and (ii) no less favorable than the terms and conditions
provided to other vendors located within the same area.
H. This Section 31 shall supersede all related terms of the
Organizer/Promoter's standard Vendor Agreement.
32. In conjunction with the CART Winner's Circle Club, Organizer/Promoter
shall provide at its expense:
A. Limited access to restricted areas for club members during
group tours and club functions.
B. Inclusion of a CART Winner's Circle Club advertisement in the
official race program. Camera ready art shall be provided by
CART or its designee.
C. Covered facility for meetings with a proper PA system (size to
be specified by CART).
33. Organizer/Promoter shall cooperate with CART in its spectator research
efforts,
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Monterrey Promoter Agreement
March 28, 2000
Draft #4
including but not by way of limitation allowing CART representatives
access to spectators for personal interviews and questionnaire
distribution and inclusion of a CART questionnaire in the official race
program, for which camera ready art will be provided. The results of
such research shall be made available without cost to Organizer/
Promoter.
34. A. In addition to the FedEx Series sponsorship and marketing
program, CART shall have the right to designate up to seven
(7) exclusive sponsorships utilizing the following
entitlements to be provided by Organizer/Promoter for each
sponsorship at no cost to CART except as otherwise stated:
- Series-wide product category exclusivity;
- Twenty Thousand ($20,000.00) Dollar
hospitality credit which can be applied to
facility, food and beverage;
- Acknowledgment by Organizer/Promoter as an
Event sponsor, with such recognition to
include all entitlements normally afforded
an associate Event sponsor;
- Inclusion in the Event press kit;
- One full page, four-color advertisement in
the Event souvenir program;
- One page of editorial in the Event souvenir
program;
- One 40' x 40' expo/sampling space;
- Twenty (20) big screen messages (street
courses only);
- Twenty (20) public address announcements
over Event weekend;
- One Hundred (100) grandstand admission
tickets;
- One Hundred (100) restricted area
credentials;
- Track side signage, which receives
significant exposure to the global audience;
CART and Organizer/Promoter to agree on size
and placement;
All costs associated with the design and production of the
advertising page and wall signs shall be borne by Sponsor. For
each such sponsorship sold by CART, Organizer/Promoter shall
receive One Hundred Thousand ($100,000.00) Dollars in return
for the above listed entitlements. The parties acknowledge the
following categories represent acceptable potential
sponsorships:
- payment systems
- confectionery
- snacks
- film
- camera
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Monterrey Promoter Agreement
March 28, 2000
Draft #4
- electronics (i.e., television, hi-fi, audio,
etc.)
- long distance
Exclusive of FedEx and MCI (or its Mexico affiliate),
Organizer/Promoter shall have the right to market the race to
sponsors in the exclusive marketing categories so long as CART
has not secured Series wide sponsorship in that category six
(6) months prior to an Event hereunder. Organizer/Promoter
shall promptly notify CART of any proposed sponsorship
involving one of the released categories, and may proceed
further with such sponsorship only if CART does not then have
consummated or pending (subject to consummation within thirty
(30) days) the sale of the category Series wide. Further,
Organizer/Promoter shall negotiate with CART and such proposed
sponsor in good faith for a reasonable period of time to
secure the participation of such sponsor in the Series, either
on a Series wide basis, or with respect to some or all
individual Series races. If after a reasonable period of good
faith negotiations, no such arrangement is achieved, then
Organizer/Promoter may proceed with such sponsor with respect
to one or more Events hereunder. Upon the conclusion of the
last Event subject to such agreement with Organizer/Promoter,
the category shall again become subject to the above
provisions.
B. Organizer/Promoter shall provide CART with two (2) pages in
the Event Program without charge for CART's own use. CART's
placement of advertising within the Program shall be sensitive
to Organizer/Promoter's existing commercial and promotional
relationships.
C. Organizer/Promoter recognizes that each participating team has
a race sponsor. Organizer/Promoter agrees that each team may
place its team name and sponsor(s) on both sides of the wall
in the team's assigned pit box, subject to applicable
governmental laws and regulations.
35. Organizer/Promoter shall provide CART at no cost a preferred location
pit row suite or other mutually agreed upon hospitality provisions for
not less than forty (40) guests per day. Hospitality provisions will
include food and beverage (alcoholic and non-alcoholic) as associated
with pit suite participation.
36. If appropriate as determined by CART in its sole discretion, each
Competition shall appear on the FIA calendar as a full international
FIA event. Organizer/Promoter agrees to file this listing through CART
and reimburse CART for all applicable listing fees. In addition,
Organizer/Promoter agrees to pay through CART the applicable National
Motorsports Council assessments, as determined by the Council's
Executive Committee.
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Monterrey Promoter Agreement
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37. Organizer/Promoter agrees to indemnify and hold harmless CART, its
directors, officials and officers, participants, agents and employees,
members and sponsors from any and all liabilities including liability
resulting from negligence of the same and all costs and expenses,
including attorneys fees incurred in the defense thereof, asserted or
imposed upon CART, its directors, officials, official representatives,
employees, officers, members and sponsors arising out of or as a result
of an Event hereunder, directly or indirectly, and whether any such
claim or liability arises before, during or after the Event.
38. Organizer/Promoter agrees not to take any action adverse to the
interest of CART and, in consideration of the acceptance and approval
of this application, releases and discharges CART and its officials and
representatives from all liability for personal injury that may be
received, and from all claims and demands for damages to real or
personal property or to any person growing out of or resulting from an
Event hereunder, whether caused by any construction or condition or any
track or track equipment, cars or debris, or resulting from any act or
failure of any official or any person assisting the officials serving
in connection therewith.
39. Nothing contained herein shall be construed to place CART in the
relationship of a partner or joint venturer with Organizer/Promoter,
and Organizer/Promoter shall have no power to obligate or bind CART in
any manner whatsoever other than as specifically provided for herein.
Neither party undertakes by this Agreement to perform any obligations
of the other, whether regulatory or contractual, or to assume any
responsibility for the other's business or operations.
40. A. The validity, interpretation and construction of this
Agreement shall be governed and construed by the laws of the
State of Michigan.
B. In the event a dispute arises under this Agreement which
cannot be resolved, such dispute shall be submitted to
arbitration and resolved by a single arbitrator (who shall be
a lawyer) in accordance with the Commercial Arbitration Rules
of the American Arbitration Association then in effect. All
such arbitration shall take place at the office of the
American Arbitration Association located in Southfield,
Michigan. The award or decision rendered by the arbitrator
shall be final, binding, and conclusive and judgment may be
entered upon such award by any court.
41. This Agreement is not transferable or assignable. Any transfer or
assignment in
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Monterrey Promoter Agreement
March 28, 2000
Draft #4
violation of this provision shall be void. A transfer of more than
forty-nine (49%) percent of the voting stock or other controlling
interest in Organizer/Promoter, in one or more transactions (other than
to the legal spouse, heirs, next-of-kin or estate of a deceased
transferor, or a deceased principal of a transferor), without CART's
prior written approval, is deemed to constitute a transfer. A transfer
of less than forty nine (49%) percent may also constitute a transfer
for such purposes, if coupled with the imposition of super majority
voting requirements, so as to effectively result in a change in
controlling interest. In the event that a prohibited transfer or
assignment is attempted, such action will not be effective, and CART
may elect to terminate this Agreement effective immediately.
42. Any notice or written communication required or permissible hereunder
shall be sent by registered mail (or certified mail with return
receipt), postage prepaid, addressed as follows:
<TABLE>
<S> <C>
To CART: To Organizer/Promoter:
Championship Auto Racing Teams, Inc. Monterrey Grand Prix, 5. de R.L. de C.V.
755 W. Big Beaver Road, Suite 800 c/o 301 W. Michigan Avenue
Troy, MI 48084 Jackson, MI 49201
</TABLE>
43. A. This Agreement (including the Schedules annexed hereto)
contains the entire agreement of the parties hereto and no
representations, inducements, promises, or agreements, oral or
otherwise, not embodied herein shall be of any force or
effect. This Agreement may be modified only upon the written
consent of the parties hereto.
B. No waiver by either party, whether expressed or implied, of
any provision of this Agreement or any breach or default shall
constitute a continuing waiver thereof.
C. Except as specifically otherwise stated, each and every of the
rights, remedies and benefits provided by this Agreement shall
be cumulative, and shall not be exclusive of any other said
rights, remedies and benefits, or of any other rights,
remedies and benefits allowed by law.
D. If any provision in this Agreement is held to be invalid or
unenforceable, it shall be ineffective only to the extent of
the invalidity, without affecting or impairing the validity
and enforceability of the remainder of the provision or the
remaining provisions of this Agreement.
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Monterrey Promoter Agreement
March 28, 2000
Draft #4
44. The parties acknowledge the importance of each party's reputation, good
will and public image and, accordingly, agree to maintain and enhance
such image by restraining from taking any action contrary to the best
interest of either party, or detracting from the reputation of either
party. Each party shall refrain from making any statements about the
other party that adversely affects, casts in an unfavorable light, or
otherwise maligns the business or reputation of such other party or any
of its principals.
45. At all times, the terms and conditions of this Agreement are
confidential to CART, Organizer/Promoter, their parent companies and
their respective subsidiaries, and shall not be disclosed to any other
entity or individual without the other party's prior written consent.
Notwithstanding the foregoing, disclosure may be made if necessary to
enforce a party's rights under this Agreement, or if required by any
securities or other law or regulation or by a governmental agency, in
which case any and all documents, information, or materials disclosed
shall be marked "confidential" and such party shall seek confidential
treatment of such information.
46. A. Organizer/Promoter and CART agree to consult, assist, and
coordinate with the applicable Mexican/United States customs
services, taxation, provincial, state, local government or
other authorities to facilitate the entry into Mexico of the
participating racing team members as well as the CART
officials and staff members, and the exportation from the
United States, the importation into Mexico, the exportation
from Mexico and the importation into the United States, of the
race cars and all related equipment and other items necessary
for temporary use in Mexico in respect of the events to be
conducted under this Agreement. Further in this regard, CART
shall cooperate and comply with, and cause each racing team
and their respective members to cooperate and comply with all
directions, procedures, information, requests, etc., of the
above mentioned authorities.
B. Organizer/Promoter shall pay, when due, or secure the payment,
by means of a bond or other undertaking which shall be at
Organizer/Promoter's expense, of any customs duties, import or
export duties and sales or use tax or any other governmental
fee(s) which at any time are imposed, assessed, levied or
charged on or upon Organizer/ Promoter or CART or any team by
the Mexican customs service (or other agency) or the United
States Customs Service (or other agency) in respect of the
race cars and all related equipment and other items necessary
for temporary use in Mexico in respect of the Events to be
conducted under this Agreement, and shall provide to CART
within forty-five (45) days of the conclusion of the Event a
copy of the notice of
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Monterrey Promoter Agreement
March 28, 2000
Draft #4
assessment of duties or taxes issued by the Mexican customs
service (or other agency) or the United States Customs Service
(or other agency) in respect thereof.
47. The following Schedules are attached hereto, incorporated herein by
reference as though set forth in their entirety in this Agreement, and
labeled as follows:
SCHEDULE A - OPERATIONAL, MEDIA, AND OTHER FACILITY/SUPPLY
REQUIREMENTS
SCHEDULE B - INSURANCE REQUIREMENTS
SCHEDULE C - UNIFIED CREDENTIAL SYSTEM AND FACILITY ACCESS
PROVISIONS
SCHEDULE D - CO-SERIES SPONSOR AND OFFICIAL PACE CARS
SCHEDULE E - EVENT ACTIVITIES
SCHEDULE F - POST RACE PROCEDURES/ACTIVITIES
SCHEDULE G - FEDEX
SPONSORSHIP AND MARKETING PROGRAM
Any person or organization having responsibility in the organization, promotion
or staging of any Competition, whether by contract or otherwise, shall co-sign
this Agreement and shall be jointly responsible hereunder. Organizer/Promoter
and the undersigned warrant and represent that Applicant has the full right and
authority to enter into and perform this Agreement, and that the execution and
delivery of this Agreement has been duly authorized by all necessary
governmental and/or corporate action.
Date:
----------------------------------------
--------------------------------------------------------------------------
Applicant
By:
-----------------------------------------------------------------------
Its:
----------------------------------------------------------------------
Date:
-----------------------------------------
--------------------------------------------------------------------------
Co-Signer's Signature
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Monterrey Promoter Agreement
March 28, 2000
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CART APPROVAL
The foregoing application is hereby approved and accepted in accordance
with the terms stated therein.
Date: _______________________ CART, Inc.
By:
--------------------
Its:
23
