<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
F O R M 1 0 - K / A
(Amendment No. 1)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 COMMISSION FILE NUMBER 1-8176
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____ TO _____.
__________________________
LITTLEFIELD, ADAMS & COMPANY
(Exact name of Registrant as specified in its charter)
NEW JERSEY 22-1469846
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
253 NORTH FIRST AVENUE, STURGEON BAY, WISCONSIN 54235
(Address or principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (414) 743-8743
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EXCHANGE ON WHICH REGISTERED
------------------------------ ------------------------------------
COMMON STOCK, $1.00 PAR VALUE AMERICAN STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
__________________________
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of voting stock held by non-affiliates of the
registrant at March 21, 1996, was approximately $3,997,000. On such date, the
last sale price of registrant's common stock was $2.00 per share. Solely for
the purposes of this calculation, shares beneficially owned by directors and
officers of registrant have been excluded, except shares with respect to which
such directors and officers disclaim beneficial ownership. Such exclusion
should not be deemed a determination or admission by registrant that such
individuals are, in fact, affiliates of registrant.
Indicate number of shares outstanding of each of the registrant's classes
of common stock, as of March 21, 1996.
CLASS OUTSTANDING ON MARCH 21, 1996
- --------------------------------------- ------------------------------
Common Stock, par value $1.00 per share 2,279,647
DOCUMENTS INCORPORATED BY REFERENCE
PART OF THE FORM 10-K INTO WHICH
DOCUMENT THE DOCUMENT IS INCORPORATED
------------------------------------------ ----------------------------------
Definitive Proxy Statement to Shareholders Part III, Items 10, 11, 12, and 13
<PAGE> 2
Littlefield, Adams & Company (the "Registrant", the "Company" or "LFA"), a New
Jersey corporation, is filing this Amendment No. 1 on Form 10-K/A (this
"Amendment") to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 (the "Original Report") in order to indicate on the
Exhibit Index and on the relevant Exhibits that portions of such Exhibits have
been omitted and filed separately with the Securities and Exchange Commission
pursuant to the Company's request for confidential treatment with respect
thereto.
Littlefield, Adams & Company 1995 Form 10-K/A, PAGE 2
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ITEM 14: FINANCIAL STATEMENTS, EXHIBITS AND REPORTS ON FORM 8-K
- ------- ------------------------------------------------------
(a) The following documents are filed as part of this report:
(1) Consolidated Financial Statements*
---------------------------------
Report of Independent Public Accountants
Consolidated Balance Sheets At December 31, 1995 and 1994
Consolidated Statements of Operations For Years Ended December 31, 1995,
1994 and 1993
Consolidated Statements of Shareholders' Investment For Years Ended
December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows For Years Ended December 31, 1995,
1994 and 1993
Notes to Consolidated Financial Statements
(2) Exhibits
--------
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
2.1 Reorganization agreement with Sports Imprints, Inc.
Incorporated by reference to exhibit 2.1 to the Registrant's 1994
Form 10-K, filed March 1995.
2.2 Settlement agreement in the Registrant's Securities Class
Action litigation. Incorporated by reference to exhibit 2.5 to
the Registrant's 1994 Form 10-K, filed March 1995.
3.1 Certificate of Incorporation of the Registrant and all
amendments thereto. Incorporated by reference to exhibit 1 to
the Registrant's Form 8-K filed November 1991.
3.2 Certificate of Amendment to the Certificate of
Incorporation of Littlefield, Adams & Company amending Article IV
to increase the number of shares of Common Stock authorized for
issuance from 3,000,000 shares, $1.00 par value, to 25,000,000
shares, $1.00 par value. Incorporated by reference to exhibit 3.2
to the Registrant's 1994 Form 10-K, filed March 1995.
3.3 Certificate of Amendment to the Certificate of
Incorporation of Littlefield, Adams & Company amending Article VI
to provide for classification of the Board of Directors into
three classes. Incorporated by reference to exhibit 3.3 to the
Registrant's 1994 Form 10-K, filed March 1995.
3.4 Composite copy of the Certificate of Incorporation of the
Registrant. Incorporated by reference to exhibit 3.4 to the
Registrant's 1994 Form 10-K, filed March 1995.
* Previously filed with Original Report.
** The Company has requested confidential treatment for portions of this
Exhibit, and such portions are omitted from the Exhibit filed herewith. A
complete copy of such Exhibit has been filed separately with the Securities and
Exchange Commission.
Littlefield, Adams & Company 1995 Form 10-K/A, PAGE 3
<PAGE> 4
3.5 By laws of the Registrant, as amended.*
10.1 Deed of trust secured by property on Rockland Avenue in
Roanoke, Virginia. Incorporated by reference to exhibit 10.1
to the Registrant's Form 8-K filed October 1990.
10.2. A. Promissory Note for $250,000, dated August 29, 1994, between
Collegiate Pacific Company and The Bank of Floyd. Incorporated
by reference to exhibit 10.2A to the Registrant's 1994 Form
10-K, filed March 1995.
B. Line of Credit of $500,000, dated August 29, 1994, between
Collegiate Pacific Company and The Bank of Floyd. Incorporated
by reference to exhibit 10.2B to the Registrant's 1994 Form
10-K, filed March 1995.
10.3 Agreements with bankruptcy creditors of Sports Imprints, Inc.,
for Purchase of Claims. Incorporated by reference to exhibit
10.3 to the Registrant's 1994 Form 10-K, filed March 1995.
10.4 Financing Agreement with Merchant Factors Corp. dated October
16, 1993. Incorporated by reference to exhibit 10.27.2. to the
Registrant's Form 8-K filed February 7, 1994.
10.5 Littlefield, Adams & Company Incentive Plan. Incorporated by
reference to exhibit 2.1 to the Registrant's 1994 Form 10-K,
filed March 1995.
10.6 Settlement Agreement between Harley-Davidson Motor Co. and
Sports Imprints division of Littlefield, Adams & Company, dated
March 1, 1996, relating to License Agreement with
Harley-Davidson Motor Co., dated January 12, 1995.**
10.7 License agreement with PepsiCo, Inc., dated as of February 1,
1996.*
10.8 Full and Final Release and Settlement Agreement by and among
Littlefield, Adams & Company, Jeffers, Brook, Kreager and
Gragg, Inc., David Ylitalo, and Michael Kreager.**
10.9 Financing Agreement with Merchant Factors Corp., dated January
25, 1996.*
16.1. A. Letter dated September 22, 1994, re: Change in Certifying
Accountant, from former independent accountant Carneiro,
Chumney & Co., L.C. Incorporated by reference to exhibit 16(i)
to Amendment No. 1 to Form 8-K/A, filed November 2, 1994.
B. Letter dated November 1, 1994, re: Change in
Certifying Accountant, from former independent accountant
Carneiro, Chumney & Co., L.C. Incorporated by reference to
exhibit 16(ii) to Amendment No. 1 to Form 8-K/A, filed
November 2, 1994.
21. N/A
27. Financial Data Schedule.*
99.1. Letter dated November 1, 1994, from new independent accountant
Arthur Andersen LLP regarding Form 8-K/A Amendment No. 1.
Incorporated by reference to exhibit 99(ii) to Amendment No. 1
to Form 8-K/A, filed November 2, 1994.
(b) REPORTS ON FORM 8-K:
-------------------
No reports on Form 8-K were filed in the fourth quarter of 1995.
* Previously filed with Original Report.
** The Company has requested confidential treatment for portions of this
Exhibit, and such portions are omitted from the Exhibit filed herewith. A
complete copy of such Exhibit has been filed separately with the Securities and
Exchange Commission.
Littlefield, Adams & Company 1995 Form 10-K/A, PAGE 4
<PAGE> 5
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, this 17th day of
June 1996.
LITTLEFIELD, ADAMS & COMPANY
By: /s/ Stanley I. Halbreich
---------------------------------------
Chief Financial Officer and Treasurer
(principal financial and accounting
officer)
Littlefield, Adams & Company 1995 Form 10-K/A, PAGE 5
<PAGE> 6
EXHIBIT INDEX REQUIRED BY ITEM 601 OF REGULATION SK
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
2.1 Reorganization agreement with Sports Imprints, Inc.
Incorporated by reference to exhibit 2.1 to the Registrant's 1994
Form 10-K, filed March 1995.
2.2 Settlement agreement in the Registrant's Securities Class
Action litigation. Incorporated by reference to exhibit 2.5 to the
Registrant's 1994 Form 10-K, filed March 1995.
3.1 Certificate of Incorporation of the Registrant and all
amendments thereto. Incorporated by reference to exhibit 1 to the
Registrant's Form 8-K filed November 1991.
3.2 Certificate of Amendment to the Certificate of
Incorporation of Littlefield, Adams & Company amending Article IV
to increase the number of shares of Common Stock authorized for
issuance from 3,000,000 shares, $1.00 par value, to 25,000,000
shares, $1.00 par value. Incorporated by reference to exhibit 3.2
to the Registrant's 1994 Form 10-K, filed March 1995.
3.3 Certificate of Amendment to the Certificate of
Incorporation of Littlefield, Adams & Company amending Article VI
to provide for classification of the Board of Directors into three
classes. Incorporated by reference to exhibit 3.3 to the
Registrant's 1994 Form 10-K, filed March 1995.
3.4 Composite copy of the Certificate of Incorporation of the
Registrant. Incorporated by reference to exhibit 3.4 to the
Registrant's 1994 Form 10-K, filed March 1995.
3.5 By laws of the Registrant, as amended.*
10.1 Deed of trust secured by property on Rockland Avenue in
Roanoke, Virginia. Incorporated by reference to exhibit 10.1 to the
Registrant's Form 8-K filed October 1990.
10.2 A. Promissory Note for $250,000, dated August 29, 1994, between
Collegiate Pacific Company and The Bank of Floyd. Incorporated
by reference to exhibit 10.2A to the Registrant's 1994 Form
10-K, filed March 1995.
B. Line of Credit of $500,000, dated August 29,
1994, between Collegiate Pacific Company and The Bank of
Floyd. Incorporated by reference to exhibit 10.2B to the
Registrant's 1994 Form 10-K, filed March 1995.
10.3 Agreements with bankruptcy creditors of Sports Imprints, Inc., for
Purchase of Claims. Incorporated by reference to exhibit 10.3 to
the Registrant's 1994 Form 10-K, filed March 1995.
10.4 Financing Agreement with Merchant Factors Corp. dated October 16,
1993. Incorporated by reference to exhibit 10.27.2. to the
Registrant's Form 8-K filed February 7, 1994.
10.5 Littlefield, Adams & Company Incentive Plan. Incorporated by
reference to exhibit 2.1 to the Registrant's 1994 Form 10-K, filed
March 1995.
10.6 Settlement Agreement between Harley-Davidson Motor Co. and Sports
Imprints division of Littlefield, Adams & Company, dated March 1,
1996, relating to License Agreement with Harley-Davidson Motor Co.,
dated January 12, 1995.**
* Previously filed with Original Report.
** The Company has requested confidential treatment for portions of this
Exhibit, and such portions are omitted from the Exhibit filed herewith. A
complete copy of such Exhibit has been filed separately with the Securities and
Exchange Commission.
Littlefield, Adams & Company 1995 Form 10-K/A
<PAGE> 7
EXHIBIT INDEX REQUIRED BY ITEM 601 OF REGULATION SK
(continued)
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
10.7 License agreement with PepsiCo, Inc., dated as of February 1, 1996.*
10.8 Full and Final Release and Settlement Agreement by and among
Littlefield, Adams & Company, Jeffers, Brook, Kreager and
Gragg, Inc., David Ylitalo, and Michael Kreager.**
10.9 Financing Agreement with Merchant Factors Corp., dated January 25,
1996.
16.1. A. Letter dated September 22, 1994, re: Change in Certifying
Accountant, from former independent accountant Carneiro,
Chumney & Co., L.C. Incorporated by reference to exhibit 16(i)
to Amendment No. 1 to Form 8-K/A, filed November 2, 1994.
B. Letter dated November 1, 1994, re: Change in Certifying Accountant,
from former independent accountant Carneiro, Chumney & Co., L.C.
Incorporated by reference to exhibit 16(ii) to Amendment No. 1 to
Form 8-K/A, filed November 2, 1994.
21. N/A
27. Financial Data Schedule.*
99.1. Letter dated November 1, 1994, from new independent accountant
Arthur Andersen LLP regarding Form 8-K/A Amendment No. 1.
Incorporated by reference to exhibit 99(ii) to Amendment No. 1
to Form 8-K/A, filed November 2, 1994.
* Previously filed with Original Report.
** The Company has requested confidential treatment for portions of this
Exhibit, and such portions are omitted from the Exhibit filed herewith. A
complete copy of such Exhibit has been filed separately with the Securities and
Exchange Commission.
Littlefield, Adams & Company 1995 Form 10-K/A
<PAGE> 1
CONFIDENTIAL MATERIAL OMITTED PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT
COMPLETE COPY OF DOCUMENT
FILED SEPARATELY WITH COMMISSION
EXHIBIT 10.6
SETTLEMENT AGREEMENT (REDACTED COPY)
This Settlement Agreement is entered into in Huber Heights, Ohio this 1st
day of March 1996 by Harley-Davidson Motor Company ("Harley-Davidson") and
Sports Imprints, a Division of Littlefield, Adams & Company, d/b/a Funwear
("Sports Imprints").
RECITALS
A. Harley-Davidson and Sports Imprints are parties to a License Agreement
whereby Harley-Davidson granted Sports Imprints the nonexclusive right to apply
certain trademarks, trade dress and designs to certain articles of apparel for
resale to mass merchandisers. The current License Agreement is attached to this
Settlement Agreement as Exhibit 1.
B. Harley-Davidson desires to upgrade the quality of apparel associated
with its trademarks, trade dress and designs and to sell these licensed
products through second-tier department stores rather than mass merchandisers.
C. Sports Imprints contends that Harley-Davidson's plan to upgrade the
marketing of its trademarked apparel violates the Wisconsin Fair Dealership Law,
the Sherman Act and other laws, which contentions Harley-Davidson disputes.
Harley-Davidson contends that Sports Imprints has breached duties arising from
or relating to the License Agreement between the parties which Sports Imprints
disputes.
<PAGE> 2
D. Both parties desire to settle their dispute as stated in this
Settlement Agreement, Sports Imprints acknowledges that Harley-Davidson offered
to renew the License Agreement on substantially identical terms or enter into a
new License Agreement which would have allowed Sports Imprints to move from the
mass merchandising market into the second-tier department store market, but
Sports Imprints preferred to terminate the License Agreement and accept the
termination benefits described in this Settlement Agreement.
MUTUAL COVENANTS
In consideration of the recitals above and the mutual covenants which
follow, and subject to the entry of an order by the Circuit Court for Milwaukee
County approving this Settlement Agreement in a form mutually acceptable to
Harley-Davidson and Sports Imprints, Harley-Davidson and Sports Imprints agree
as follows:
1. Restoration and Modification of License Agreement. The License
Agreement expired by its terms on December 31, 1995; however, upon execution of
and subject to the terms of this Settlement Agreement, the parties have agreed
to continue to operate under the terms of the License Agreement until December
31, 1996, except for the following modifications: [CONFIDENTIAL MATERIAL
OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
(3) All sentences except the first sentence in paragraph 8(a) of the
License Agreement are deleted and the words "except as hereinafter provided" in
the first
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sentence of paragraph 8(a) of the License Agreement are also deleted; (4) the
words "or any ninety-day sell-off period allowed hereunder" are deleted from
paragraph 8(b) of the License Agreement; and (5) paragraph 19(a) of the License
Agreement is extinguished and the parties acknowledge they did not intend by
contract to extend application of the Wisconsin Fair Dealership Law to this
relationship.
2. Termination of License Agreement. Upon execution of this Settlement
Agreement, Sports Imprints unilaterally and irrevocably resigns and terminates
the License Agreement effective December 31, 1996. Harley-Davidson accepts
Sports Imprints' resignation and termination.
3. Sports Imprints Releases Harley-Davidson. Sports Imprints for itself,
and its predecessors or successors in interest, insurers, parents,
subsidiaries, affiliated companies, and the attorneys, assigns, agents,
representatives, partners, officers, directors, limited partners, shareholders
and employees of each of the foregoing, hereby releases Harley-Davidson, its
predecessors or successors in interest, insurers, parents, subsidiaries,
affiliated companies, and the attorneys, assigns, agents, representatives,
partners, officers, directors, limited partners, shareholders and employees of
each of the foregoing, of and from any and all claims, causes of action or
liabilities of any nature, known or unknown, accrued or unaccrued, which have
arisen or may in the future arise from any action, omission, occurrence or
transaction, or series of actions, omissions, occurrences, transactions, which
arose, occurred or were initiated at any time on or before the date of this
Settlement Agreement, including but not limited to any claims arising under the
Wisconsin Fair Dealership Law, the Sherman Act, or any other law, relating to
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Harley-Davidson's decision to upgrade its marketing and distribution strategy
for trademarked apparel and the termination of the License Agreement effective
December 31, 1996. Notwithstanding the foregoing, upon full execution of this
Settlement Agreement, Harley-Davidson shall be obligated to perform in
accordance with its terms and in accordance with the License Agreement, as
amended by this Settlement Agreement.
4. Harley-Davidson Releases Sports Imprints. Harley-Davidson, for itself, and
its predecessors or successors in interest, insurers, parents, subsidiaries,
affiliated companies, and the attorneys, professionals, assigns agents,
representatives, partners, officers, directors, limited partners, shareholders
and employees of each of the foregoing, hereby releases Sports Imprints, its
predecessors or successors in interest, insurers, parents, subsidiaries,
affiliated companies, and the attorneys, professionals, assigns agents,
representatives, partners, officers, directors, limited partners, shareholders
and employees of each of the foregoing, of and from any and all claims, causes
of action or liabilities of any nature, known or unknown, accrued or unaccrued,
which have arisen from any action, omission, occurrence or transaction, or
series of actions, omissions, occurrences, transactions, which occurred on or
before the date this Settlement Agreement is fully executed, and including, but
not limited to, any claims whatsoever arising under or relating to the
relationship and/or the License Agreement between the parties. Sports Imprints
shall have no duty, now or in the future, to report or disclose any matters or
information pertaining to any of the claims described in this paragraph, and
any liability for any such nondisclosure is fully and forever released.
Notwithstanding the foregoing, upon full execution of this Settlement
Agreement, Sports Imprints
4
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shall be obliged to perform in accordance with its terms, in accordance with
the License Agreement, as amended by this Settlement Agreement and as agreed in
the Operating Protocol attached as Exhibit 2 to this Settlement Agreement.
5. Harley-Davidson and Sports Imprints Waive Attorney's Fees.
Harley-Davidson and Sports Imprints agree that each waives any right to recover
from the other any attorney's fees, disbursements or other legal costs and
expenses which have been incurred in reaching this Settlement Agreement.
6. Breach of Settlement Agreement and Enforcement. Sports Imprints
acknowledges that in reliance upon Sports Imprints termination and resignation
of its License Agreement, Harley-Davidson is proceeding with its plan to upgrade
the quality of apparel associated with its trademarks, trade dress and designs
and to sell these licensed products through second-tier department stores
rather than mass merchandisers. Sports Imprints further acknowledges and
agrees that any attempt by it to revoke its resignation and termination of the
License Agreement or to continue selling licensed products to mass
merchandisers after December 31, 1996 will be a material breach of this
Settlement Agreement and result in immediate and irreparable damage to
Harley-Davidson and the good will it has in its trademarks, trade dress and
designs. Sports Imprints therefore agrees that should a court determine that
it attempted to revoke its resignation or termination of the license agreement
or continued selling licensed products after December 31, 1996, in violation
of this Settlement Agreement, Harley-Davidson shall be entitled to specific
performance and equitable relief including, without limitation, temporary
restraining orders and preliminary and permanent injunctions, at nominal bond,
enjoining
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Sports Imprints from revoking its resignation and termination of the License
Agreement and from continuing to sell licensed products after December 31,
1996. Sports Imprints further agrees that in the event that it materially
breaches this Settlement Agreement, Sports Imprints shall and hereby does
indemnify Harley-Davidson against all claims, damages, losses or expenses
(including reasonable attorneys' fees, expenses and costs of defense) arising
as a consequence of the breach. The resort by Harley-Davidson to any remedy
referred to in this paragraph shall not be construed as a waiver of any other
rights and remedies Harley-Davidson is entitled to under this Settlement
Agreement, the License Agreement or otherwise.
7. Principal Place of Performance. The parties acknowledge that the
principal obligations of the License Agreement as amended by this Settlement
Agreement are intended to be performed by Licensee within the state of Ohio,
which also shall be deemed to be the state in which the License Agreement and
this Settlement Agreement were entered into.
8. Harley-Davidson and Sports Imprints Do Not Admit Any Liability. This
Settlement Agreement, and the consideration rendered by Harley-Davidson and
Sports Imprints in accordance herewith, are not to be construed as or deemed
evidence of any admission or concession on the part of either party of any
liability to the other party.
9. Complete Agreement. This Settlement Agreement constitutes the complete
agreement, compromise and accord and satisfaction between Harley-Davidson and
Sports Imprints, and replaces all other agreements, obligations or
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understandings of any kind as to the matters dealt with herein. If any
material part of this Settlement Agreement is determined to be invalid, the
party adversely affected shall have the option to rescind this Settlement
Agreement and recover all consideration it provided hereunder together with its
attorney fees, disbursements and other legal costs and expenses. This
Settlement Agreement is binding upon and inures to the benefit of
Harley-Davidson and Sports Imprints, their heirs, personal representatives,
successors and assigns, however designated.
10. Modification or Amendment of Settlement Agreement. The terms of this
Settlement Agreement may be modified or amended only upon the written agreement
of both Harley-Davidson and Sports Imprints.
11. Headings and Interpretation. The subject headings of the sections of
this Settlement Agreement are included for purposes of convenience only, and
shall not affect the construction or interpretation of any of its provisions.
Both Harley-Davidson and Sports Imprints participated in the negotiation and
drafting of this Settlement Agreement. Neither party shall be considered the
drafter of this Settlement Agreement when construing or interpreting any
ambiguity in the terms of this Settlement Agreement.
12. Consultation With Counsel. Harley-Davidson and Sports Imprints have
reviewed this Settlement Agreement with their respective counsel and understand
it. They are entering into this Settlement Agreement voluntarily and of their
own free will. Each party has entered into this Settlement Agreement based on
its own investigation and analysis, and no representations or warranties have
been
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<PAGE> 8
made or relied on by any party in connection with this Settlement-Agreement or
its making.
13. Execution in Counterpart and Exchange By Facsimile. This Settlement
Agreement may be signed in counterpart and exchanged by facsimile for
signature, and when so signed and exchanged shall become enforceable.
Sports Imprints, a Division of
Littlefield, Adams & Company,
d/b/a Funwear
BY /s/ David M. Simmonds
------------------------------
ITS President & CEO
------------------------------
David M. Simmonds
Harley-Davidson Motor Company
BY /s/ Jeffrey Bleustein
------------------------------
ITS President
------------------------------
Jeffrey Bleustein
8
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EXHIBIT 1
LICENSE AGREEMENT
HARLEY-DAVIDSON MOTOR
COMPANY
AND
SPORTS IMPRINTS, INC.
D/B/A
FUNWEAR
<PAGE> 10
TABLE OF CONTENTS
Paragraph Page
1. Definitions 2
a. Licensed Properties 2
b. Licensee's Goods 2
c. Licensed Articles 2
d. Territory 2
e. Sale 2
f. Net Sales 2
g. Premium 3
h. Packaging 3
i. Promotional Materials 3
2. Grant of License 3
a. Grant 3
b. Licensed Product Designation 3
c. Territory 4
d. Scope of Non-Exclusive Grant 4
e. Term 5
f. Limitations on License 5
3. Royalty Rate and Terms of Payment 5
a. Rate 5
b. Minimum Payment 5
c. Statements and Payments 5
4. Quality and Approvals 6
5. Distribution Limitations and Requirements 9
6. Records 9
7. Termination 10
8. Post-Termination 12
9. Remedies 13
10. Indemnification and Insurance 14
11. Notices 16
<PAGE> 11
PARAGRAPH PAGE
12. No Joint Venture 16
13. Acknowledgement of Rights in Licensed Properties 17
14. Ownership of Marks and Copyrights 18
15. Protection of Property 19
16. Government Approvals 20
17. Combination and Premium Sales 20
18. Assignment 20
19. Choice of Law; Disputes 21
20. Severability 21
21. Miscellaneous 21
22. Rights of Owner 22
23. Survivorship of Provisions 22
<PAGE> 12
AGREEMENT
AGREEMENT made this 12th day of January, 1995, by and between
HARLEY-DAVIDSON MOTOR COMPANY, a Wisconsin corporation, with its principal place
of business at 3700 W. Juneau Avenue, Milwaukee, Wisconsin 53208 U.S.A.
(hereinafter referred to as "Licensor") and SPORTS IMPRINTS, INC., d/b/a
FUNWEAR, an Ohio corporation, with its principal place of business at 6254
Executive Boulevard, Huber Heights, Ohio 45424 (hereinafter referred to as
"Licensee");
WITNESSETH
WHEREAS, H-D Michigan, Inc., a Michigan corporation with its principal
place of business at 315 W. Huron Street, Ann Arbor, Michigan 48103
(hereinafter referred to as "Owner") owns the Licensed Properties, as defined
in Paragraph 1(a) below; and
WHEREAS, Owner has granted Licensor the exclusive right to use and
sublicense the use of the Licensed Properties in the Territory as defined in
Paragraph 1 (d) below; and
WHEREAS, Licensee desires to utilize the Licensed Properties in connection
with the manufacture and sale of certain articles of merchandise; and
WHEREAS, Licensor is willing to grant to Licensee, with the approval of
Owner, the right so to utilize the Licensed Properties;
NOW THEREFORE, in consideration of the above premises and the mutual
promises and covenants herein contained, the parties hereto agree as follows:
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<PAGE> 13
1. Definitions. For the purposes hereof:
a. "Licensed Properties" means and shall be deemed to include the
following: The trademarks identified and displayed on the attached Exhibit A;
the trade dress and/or product appearance of Harley-Davidson motorcycles and
parts thereof; and the LICENSED BY HARLEY-DAVIDSON design mark identified and
displayed on the attached Exhibit B.
b. "Licensee's Goods" means the following products or merchandise:
screened or direct-embroidered T-shirts, tank tops, and muscle shirts; knit
shorts; fleece tops and pants; and embroidered baseball caps.
c. "Licensed Articles" means Licensee's Goods which bear or display
one or more of the Licensed Properties or are sold or distributed in association
with one or more of the Licensed Properties, pursuant to this Agreement.
d. "Territory" means the following: the United States, its territories
and possessions.
e. "Sale" means (i) the sale or other permitted distribution by
Licensee or any outlet related to or affiliated with Licensee of Licensed
Articles directly to wholesale outlets unrelated and unaffiliated with Licensee,
for resale; or (ii) the sale of Licensed Articles directly to ultimate consumers
through retail outlets.
f. "Net Sales" means the total receipts paid or otherwise owing to
Licensee from the Sale of Licensed Articles, less any credits for returns
actually made or allowed. In computing Net Sales, no costs incurred in
manufacturing, selling, advertising, promoting, or distributing the Licensed
Articles covered by this Agreement shall be
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deducted, nor shall any deduction be made for uncollectible accounts, cash
discounts, or similar allowances.
g. "Premium" means any product or article of merchandise used or
intended to be used for the purpose of promoting, publicizing, or increasing the
sale of any goods or services, including, but not limited to, incentives for
sales forces, the trade and/or consumers.
h. "Packaging" means any cartons, boxes, containers, packaging, and
wrapping material used or intended to be used in association with any Licensed
Articles.
i. "Promotional Materials" means any advertising or promotional
materials bearing or displaying any of the Licensed Properties or otherwise
relating to the Licensed Articles, including, but not limited to, brochures,
flyers, photographs, point-of-purchase displays, advertisements, banners, and
public relations releases and kits.
2. Grant of License.
a. Grant: Subject to the limitations set forth in this Agreement,
Licensor hereby grants to Licensee the right to use the Licensed Properties, on
a non-exclusive basis, solely in connection with the manufacture and Sale of
Licensee's Goods in the Territory.
b. Licensed Product Designation: Licensee shall use the LICENSED BY
HARLEY-DAVIDSON design mark as shown in the attached Exhibit B, or such other
identification as Licensor may approve or designate in writing, directly on the
Licensed Articles or tags affixed thereto and on Packaging and Promotional
Materials therefor.
3
<PAGE> 15
Licensee shall not use the LICENSED BY HARLEY-DAVIDSON design mark in
Promotional Materials in a manner that would lead to the public to believe that
unlicensed products also set forth in the Promotional Materials are Licensed
Articles. Licensor, in its sole discretion, may also require Licensee to place
additional indicia or symbols on Licensed Articles, as well as Packaging and
Promotional Materials therefor, as a means of further identifying Licensee
and/or the Licensed Articles. Any change required by Licensor pursuant to
this Paragraph 2(b) shall not affect Licensed Articles already
manufactured or in process of manufacture.
c. Territory: The grant made pursuant to this Agreement extends only
to Licensee's use of the Licensed Properties, as herein prescribed, within the
Territory. Licensee agrees that it will not make nor authorize any use, direct
or indirect, of the Licensed Properties in any other territory anywhere in the
world and that it will not sell any Licensed Articles to persons who intend to
resell or distribute Licensed Articles outside the Territory.
d. Scope of Non-Exclusive Grant: Nothing in this Agreement shall be
construed to prevent or restrict Licensor in any manner from: (i) granting any
other licenses for the use of the Licensed Properties in connection with any
goods or services whatsoever, including goods identical to Licensee's Goods; or
(ii) utilizing the Licensed Properties in connection with any goods or services
whatsoever, including goods identical to Licensee's Goods, that Licensor in its
sole discretion may elect to sell to its dealers, distributors, and any other
customers; or (iii) utilizing the Licensed Properties in any other manner
whatsoever.
4
<PAGE> 16
e. Term: This Agreement shall be effective as of January 1, 1995, and
shall expire automatically on December 31, 1995, unless sooner terminated in
accordance with the provisions hereof.
f. Limitations On License: No license is granted hereunder for the use
of the Licensed Properties for any purpose other than in connection with the
manufacture and Sale of Licensed Articles in the Territory.
3. Royalty Rate and Terms of Payment.
a. Rate: Licensee agrees that it will pay Licensor an amount equal
[CONFIDENTIAL MATERIAL OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
b. Minimum Payment: Licensee agrees that it will pay Licensor, during
the Term of this Agreement, Royalty Payments of no less than [CONFIDENTIAL
MATERIAL OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] (hereinafter
referred to as the "Minimum Royalty Payments"). The Minimum Royalty Payments
shall be paid to Licensor in accordance with Schedule 1, attached hereto and
made a part hereof.
c. Statements and Payments: On or before the 15th day after the end of
each calendar month during the term of this Agreement, whether or not Sales of
any Licensed Articles have been made, Licensee shall submit to Licensor a full
and accurate statement showing the quantity, description, Sales, and Net Sales
of all Licensed Articles distributed and/or sold during the preceding calendar
months and, simultaneously therewith, Licensee shall make all Royalty Payments
owed to Licensor on account of such
5
<PAGE> 17
Net Sales together with any other payments required by this Agreement accrued
during such time period.
4. Quality and Approvals.
a. Licensee agrees that the Licensed Articles shall be of high
standard and of such style, appearance, and quality as to be suited to their
exploitation to the best advantage and to the protection and enhancement of the
Licensed Properties and the goodwill pertaining thereto. Licensee's policies of
Sale, distribution, advertising, and promotion of the Licensed Articles shall
also be of high standard and shall in no manner reflect adversely upon the good
name of Owner or Licensor or any of their products or services or the Licensed
Properties. Licensee agrees to use the Licensed Properties in a form and manner
which may be prescribed by Licensor to promote and foster the goodwill
represented thereby. Licensee shall manufacture, sell, distribute, advertise,
and promote the Licensed Articles in accordance with all applicable federal,
state, and local laws, regulations, and industry codes and standards.
b. Before selling or distributing any Licensed Articles, Licensee
shall furnish to Licensor, without cost, two (2) samples of each Licensed
Article and each item of Packaging for each Licensed Article, and shall furnish
to Owner, without cost, one sample of each such Licensed Article and item of
Packaging. Licensee shall furnish any additional samples of the Licensed
Articles and Packaging to Licensor and Owner as Licensor may reasonably request.
It is a material requirement of this Agreement that, within sixty (60) days of
the beginning of the Term of this Agreement, Licensee shall submit to Licensor
and Owner designs and/or samples of the Licensed Articles and
6
<PAGE> 18
Packaging. The quality, appearance, and style of the Licensed Articles and
Packaging must be approved by Licensor before any advertising, Sales,
distribution, or other use of the same. Any of the Licensed Articles or
Packaging submitted to and not disapproved by Licensor within thirty days after
its receipt of such items shall be deemed to have been approved. After samples
of such Licensed Articles or Packaging have been approved pursuant to this
Paragraph, Licensee shall not change any aspect thereof without the prior
written consent of Licensor.
c. From time to time after Licensee has commenced selling the Licensed
Articles, and upon Licensor's written request, Licensee shall furnish without
cost to Licensor and Owner a reasonable number of additional random samples of
each Licensed Article being manufactured and sold by Licensee hereunder,
together with any Packaging used in connection therewith. In the event Licensor
determines there is a material departure from the approved sample of any such
items, Licensor shall have the right upon written notice to revoke immediately
its approval of such item(s) and/or to terminate this Agreement upon thirty days
prior written notice; provided, however, that if Licensee cures any such breach
of its duties under this Paragraph to sell or use only approved items within
thirty days of Licensor's notice of termination, if any, then such termination
shall not be effective.
d. Any methods of promoting or advertising the Licensed Articles must
be approved in writing by Licensor prior to its adoption and use by Licensee.
Samples of all Promotional Materials shall be submitted to Licensor and Owner at
the earliest time practicable, and, in any event, prior to the production and
distribution of any
7
<PAGE> 19
such Promotional Materials. Licensee shall not display, use, or distribute any
Promotional Materials until the same has been approved by Licensor. Any such
material submitted to and not disapproved by Licensor within thirty days after
its receipt shall be deemed to have been approved. After samples of such items
have been approved pursuant to this Paragraph, Licensee shall not change any
aspect thereof without the prior written consent of Licensor.
e. Licensor and Owner, or duly appointed agents or representatives
thereof; shall have the right, upon request and with reasonable notice to
Licensee, to inspect the facilities used by Licensee in manufacturing the
Licensed Articles, in order to ascertain whether the terms of this Agreement are
being followed, including, without limitation, observing Licensee's
manufacturing operations, inspecting the Licensed Articles in stock and in
process of manufacture, and inspecting the labeling, marking, and packing
methods and practices used by Licensee.
f. Licensee agrees that it (or any person controlled by Licensee or
any entity in which Licensee has a majority or controlling interest) will not,
during the term of this Agreement, make commercial use of any motorcycle-related
name, image, symbol, or trademark other than the Licensed Properties without the
prior written approval of Licensor. Furthermore, no secondary business
identification, nor any names or trademarks other than those identified on
Exhibit A and B shall appear on the Licensed Articles without the prior written
approval of Licensor.
8
<PAGE> 20
5. Distribution Limitations and Requirements.
a. Sales of the Licensed Articles shall be solely through
national and regional chains of low overhead retail stores, such as Wal-Mart
and J.C. Penney, and other mass merchandisers, specifically excluding
Harley-Davidson dealerships, convenience stores, and gift stores, and, for
Licensed Articles consisting of embroidered baseball caps, also excluding
specialty stores.
b. Subject to the limitations herein, Licensee agrees to and shall use
its best efforts to sell, distribute, supply, advertise, and promote each of
the Licensed Articles in all areas of the Territory during the term of this
Agreement. Licensee further undertakes to establish and maintain facilities
for the broadest possible distribution of Licensed Articles throughout the
Territory, in accordance with the terms of this Agreement. Notwithstanding the
foregoing, Licensee agrees it shall not use direct marketing methods to sell or
promote the Licensed Articles.
c. Licensee shall submit to Licensor and Owner during the term of this
Agreement, on an annual or more frequent basis as Licensor may request,
marketing, advertising, and promotional plans, with appropriate budgets and
financial information, respecting Licensee's efforts and fulfillment of its
obligations under this Paragraph 5. All such plans shall be in writing and shall
be reasonably satisfactory to Licensor in both form and content.
6. Records.
a. Licensee agrees to keep accurate books of account and records
covering all transactions relating to the Licensed Articles. Licensor and its
duly authorized
9
<PAGE> 21
representatives shall have the right at all reasonable hours of the day and
during reasonable times of the year considering Licensee's business to examine
such books of account and records in Licensee's possession or under its control
with respect to the Licensed Articles and terms of this Agreement, and shall
have free and full access thereto for such purposes and for the purpose of
making extracts therefrom. All such books of account and records shall be kept
available for at least two (2) years after the termination or expiration of
this Agreement. To facilitate Licensor's examination of its books and records,
Licensee further agrees to designate a symbol or number which will be used
exclusively in connection with transactions relating to the Licensed Articles
and with no other products or services which Licensee may manufacture, provide,
sell, or distribute.
b. In the event a discrepancy between the total of Royalty Payments
received by Licensor and Royalty Payments due Licensor under the terms of this
Agreement of five percent (5%) or more is discovered pursuant to any
examination by Licensor, Licensee, upon demand, shall pay Licensor the total
cost for such examination, together with such Royalty Payments due Licensor.
Any Royalty Payments that have not been timely paid by Licensee, the cost of
any such examination and interest due on the foregoing shall accrue interest
daily from the original due date of each sum until the date of actual payment,
at the rate of three percentage points above the then-prevailing federal
discount rate for 90-day U.S. Treasury Bills.
7. Termination.
a. Licensor shall have the right to terminate this Agreement at any
time prior to its expiration upon sending written notice to Licensee: (i) if
Licensee shall
10
<PAGE> 22
fail to make or deliver any payments or statements required hereunder, and if
such failure shall continue for a period of ten days after written notice of
such failure is sent by Licensor to Licensee; (ii) if Licensee transfers or
attempts to transfer any interest in or right, privilege, or obligation under
this Agreement; (iii) if any of the principal assets of Licensee that are
required for the conduct of its business are transferred, by operation of law
or otherwise; (iv) if the direct or indirect ownership or operating management
of Licensee is changed, however accomplished, without Licensor's prior written
consent; or (v) if Licensee shall fail to comply with or perform any other term
or condition of this Agreement, and if such failure shall continue for a period
of ten (10) days after written notice of such failure is sent by Licensor to
Licensee.
b. This Agreement shall terminate automatically if Licensee files a
petition in bankruptcy, is adjudicated a bankrupt or files a petition or
otherwise seeks relief under or pursuant to any bankruptcy, insolvency or
reorganization statute or proceeding, or if a petition in bankruptcy is filed
against it or it becomes insolvent or makes an assignment for the benefit of
its creditors or a custodian, receiver, or trustee is appointed for all or a
substantial portion of its business or assets, provided such circumstance shall
not be cured within thirty (30) days of the commencement of the above-stated
event. No assignee for the benefit of creditors, custodian, receiver, trustee
in bankruptcy, sheriff, or any other officer of the court or official charged
with taking over custody of Licensee's assets or business shall have any right
to continue this Agreement or to exploit or in any way use the Licensed
Properties if this Agreement terminates pursuant to this Paragraph.
11
<PAGE> 23
Nothing contained herein shall be deemed to preclude or impair any rights which
Licensor may have as a creditor in any bankruptcy proceeding.
c. Licensor shall be under no obligation to terminate this Agreement on
the happening of any or all of the events set forth in this Paragraph 7, and
its failure to do so in any instance shall not be deemed a waiver of its right
to do so. Licensor's rights under this Paragraph 7 are in addition to all
rights which Licensor otherwise may have
against Licensee.
d. In the event Licensor terminates this Agreement pursuant to Paragraph
7, the entire unpaid balance, if any, of the Minimum Royalty Payment shall
become due and payable immediately.
8. Post-Termination.
a. After the expiration or termination of this Agreement, Licensee shall
immediately cease utilizing the Licensed Properties and will not adopt or use
in connection with any product or service whatsoever any trademark confusingly
similar to any of the Licensed Properties or to any other mark of Owner; and
Licensee shall not manufacture, sell, distribute, advertise, promote, or
otherwise deal in any Licensed Articles except as hereinafter provided.
Notwithstanding the foregoing, upon such expiration or termination, Licensee
shall furnish Licensor with a statement identifying its inventory of Licensed
Articles on hand and may sell such Licensed Articles for a period of ninety
(90) days after the date of termination or expiration; provided, however, that
all Royalty Payments with respect to such Sales during this ninety (90) day
period are made in accordance with Paragraph 3 hereof. Licensee shall have no
such rights under this
12
<PAGE> 24
Paragraph to sell off Licensed Articles in inventory after termination or
expiration of this Agreement if this Agreement is terminated by Licensor for
any of the following reasons: Licensee's nonpayment of any amounts due Licensor
pursuant to Paragraph 3 hereof; Licensee's failure to submit royalty reports
pursuant to Paragraph 3(d) hereof; Licensee's failure to comply with any of the
provisions of Paragraphs 2(b) or 4 hereof; or Licensee's failure for any reason
to maintain the insurance required by Paragraph 10 hereof. Licensee agrees it
shall use its sell-off rights granted under this Paragraph in good faith and
shall not, for example, increase its inventory during the three-month period
prior to termination or expiration in an unreasonably excessive manner, in
relation to all prior periods of time during the Term hereof.
b. Upon the expiration or termination of this Agreement or any
ninety-day sell-off period allowed hereunder, Licensee shall immediately ship
and deliver to Licensor, without charge to Licensor, all existing inventory of
Licensed Articles and all materials bearing the Licensed Properties or related
to the Licensed Articles, including, but not limited to, artwork,
transparencies, negatives, dies, tooling, molds, screens, Packaging and
Promotional Materials for disposition by Licensor, along with copies of all
inventory records relating thereto. Licensor's receipt of such inventory,
records and other materials shall not constitute a waiver by Licensor of its
right to recover any amounts due Licensor pursuant to Paragraph 3 hereof or a
waiver of its right to exercise any other remedies which are provided by law or
this Agreement.
9. Remedies. Licensee acknowledges that its failure (except as
otherwise provided herein) to cease the manufacture, sale, distribution,
advertising, or
13
<PAGE> 25
promotion of the Licensed Articles and that its use of the Licensed Properties
or any marks confusingly similar thereto upon the termination or expiration of
this Agreement will result in immediate and irreparable damage to Owner and
Licensor. Licensee acknowledges and admits that there is no adequate remedy at
law for failure to cease such manufacture, sale, distribution, advertising,
promotion, or use, and Licensee agrees that in the event of such failure, the
Licensed Articles and any other materials bearing the Licensed Properties shall
be deemed counterfeit, and Licensor and/or Owner shall be entitled to equitable
relief including, without limitation, temporary restraining orders and
preliminary and permanent injunctions, at nominal bond, to enjoin the
manufacture, sale, distribution, advertising, or promotion of the Licensed
Articles or use of the Licensed Properties and such other and further relief as
any court with jurisdiction may deem just and proper. Resort to any remedy
referred to hereinabove shall not be construed as a waiver of any other rights
and remedies to which Licensor or Owner is entitled under this Agreement or
otherwise.
10. Indemnification and Insurance.
a. Licensee shall be solely responsible for, and defend and indemnify
Licensor and Owner, their respective affiliates, and the officers and directors
and employees of the foregoing (hereinafter collectively referred to as
"Indemnitees"), and hold such Indemnitees harmless from, any and all claims,
demands, causes of action, damages, costs and expenses whatsoever (including
but not limited to reasonable attorneys' fees and product warranty and recall
expenses, if any) arising directly or indirectly from or out of Licensee's use
of the Licensed Properties and, sale, design, manufacture, sale, distribution,
advertising, promotion, use, or misuse of the Licensed Articles or otherwise
14
<PAGE> 26
arising directly or indirectly from or out of any alleged action or omission of
Licensee, its agents, or its customers.
b. Licensee shall, at its own expense, obtain and maintain at all times
product liability insurance for the Licensed Articles in the amount of coverage
specified below. Such product liability insurance shall be in form and
substance acceptable to Licensor and shall cover any claims, demands, causes of
action, or damages, including reasonable attorneys' fees, arising from or out
of any alleged defects in the Licensed Articles or from or out of any use or
misuse of the Licensed Articles or the Licensed Properties. A copy of said
policy, along with the name, address, and telephone number of the insurance
underwriter, shall be sent to Licensor. Such insurance policy shall name the
Indemnitees as additional insureds and shall provide that it may not be
cancelled without at least thirty (30) days prior written notice to Licensor.
Licensee shall furnish Licensor with a certificate of such insurance showing
compliance with the foregoing requirements. Licensee agrees that such
insurance policy or policies for the first year of this Agreement shall contain
combined single limits of no less than one million dollars ($1,000,000) for
bodily injuries and property damage arising out of each occurrence. Licensee
further agrees that, for any subsequent years of this Agreement, Licensor shall
have the right to require Licensee from time to time to cause the limits of
such insurance policy or policies to be increased by an amount deemed
reasonable to Licensor. Licensee shall give immediate notice to Licensor of
all occurrences that might reasonably be expected to result in any claim
against it or any one or more of the Indemnitees or which could impose any
liability upon any one or more of the Indemnitees.
15
<PAGE> 27
11. Notices. All payments, notices, statements, and other
communications to be made or given hereunder shall be given or made at
the respective addresses of Licensor, Owner, and Licensee as set forth below
unless notification of a change of address is given in writing. All notices
and statements shall be in writing and shall be sent by hand delivery,
facsimile machine, telex, mailgram, or registered or certified mail. Any
notice which is posted in the United States and forwarded by registered or
certified mail, or mailgram, shall be deemed to have been given at the time it
is mailed. Any other form of notice shall be deemed given at the time of
receipt.
If to Licensor: Harley-Davidson Motor Company
3700 W. Juneau Avenue
Milwaukee, WI 53208 U.S.A.
Attention: Vice President
Marketing/Brand Management
With copies to: Harley-Davidson Motor Company
3700 W. Juneau Avenue
Milwaukee, WI 53208
Attention: Vice President and
General Counsel
If to Owner: H-D Michigan, Inc.
315 W. Huron Street
Ann Arbor, MI 48103
If to Licensee: Sports Imprints, Inc., d/b/a Funwear
6254 Executive Blvd.
Huber Heights, OH 45424
Attention: Jerry Luloff
12. No Joint Venture. Nothing herein contained shall be construed
by either party hereto or any third party as creating a relationship of
principal and agent,
16
<PAGE> 28
partnership, or joint venture, and Licensee shall have no power or right to
obligate or bind Licensor or Owner in any manner whatsoever.
13. Acknowledgement of Rights in Licensed Properties.
a. Licensee recognizes and acknowledges that the Licensed Properties
and all rights therein and goodwill pertaining thereto belong exclusively to
Owner, and that the Licensed Properties are distinctive trademarks of Owner
and have a strong secondary meaning in the minds of the public. Licensee
further acknowledges that all use of the Licensed Properties shall inure to the
benefit of Owner. Licensee agrees that it will not, during the Term of this
Agreement or thereafter, either directly or indirectly, attack or contest the
validity or ownership in Owner of the Licensed Properties or any registrations
thereof anywhere in the world. Licensee further agrees it win not, during the
Term of this Agreement or thereafter, attack or dispute Licensor's rights to
sublicense the right to use the Licensed Properties or the validity of this
Agreement.
b. It is agreed that nothing contained in this Agreement shall be
construed as an assignment or grant to Licensee of any right, title, or
interest in or to the Licensed Properties, or any registration or application
therefor, it being understood that all rights relating thereto are owned and
reserved by Owner and/or Licensor, except for Licensee's right to use the
Licensed Properties as expressly provided in this Agreement. Licensee hereby
agrees that it shall not at any time acquire any rights in the Licensed
Properties by virtue of any use it may make of the Licensed Properties.
Licensee shall not attempt to register any of the Licensed Properties, either
alone or in combination with any
17
<PAGE> 29
other mark, or any mark confusingly similar to any of the Licensed Properties
anywhere in the world.
c. Licensee agrees to cooperate with and assist Licensor and Owner
fully and in good faith for the purposes of securing and preserving Owner's
and/or Licensor's rights in and to the Licensed Properties. Licensee shall
assist in any actions in furtherance of the foregoing, including the following:
registering any of the Licensed Properties with the United States Patent and
Trademark Office or any other trademark or service mark register in the world,
in the name of Owner or, if Owner so requests, in the name of Licensor or
Licensee; recording this Agreement, registered user agreements, or any other
agreements with any governmental authority in the Territory; or performing any
other act with respect to the Licensed Properties that in the judgment of Owner
or Licensor may be necessary or desirable under any law, regulation, or decree
in the Territory. Licensee hereby grants to Owner and Licensor an irrevocable
power of attorney to sign, on behalf of Licensee, any applications, and other
documents for the purposes of the foregoing.
14. Ownership of Marks and Copyrights.
a. Licensee agrees and understands that all designs, drawings, and
graphics incorporating all or any part or variation of any of the Licensed
Properties and any stylized forms or representations thereof approved by
Licensor for use in connection with the Licensed Articles shall belong to
Owner. Licensee agrees it will upon request of Licensor or Owner execute any
document presented to it that Licensor or Owner may considerable desirable,
without further consideration other than the mutual covenants set
18
<PAGE> 30
forth in this Agreement, to assign and transfer to Owner all rights in any such
designs, drawings, graphics, and representations.
b. Licensee hereby assigns and transfers to Owner the copyrights,
worldwide, in all works of authorship created and in the future to be created,
in whole or in part, by or for Licensee that are used in connection with the
Licensed Articles and approved by Licensee pursuant to Paragraph 4 hereof,
including all designs, drawings, pictures, logos, symbols, graphics,
photographs, visual works, and/or any artwork used on or comprising the
Licensed Articles or used in connection with the Licensed Properties,
Packaging, and Promotional Materials (hereinafter collectively referred to as
the "Works"). Licensee shall execute and shall cause other persons or entities
creating such Works, in whole or in part, to execute any additional assignments
or other documents deemed necessary or desirable by Owner or Licensor to enable
Owner to register, secure, and protect in its own name such copyrights
worldwide. Upon request by Licensor, Licensee will affix to any of the Works
copyright notices in the name of Owner and use in connection with any of the
Licensed Properties an indication of trademark rights, such as the symbol
"(TM)".
15. Protection of Property.
a. Licensee shall notify Licensor in writing of any infringements,
possible infringements, or any imitations by others of the Licensed Properties
or the Works which may come to Licensee's attention. Licensor shall have the
sole right to determine whether or not any further action shall be taken on
account of any such infringements or imitations. Licensee shall not institute
any suit or take any action on account of any such
19
<PAGE> 31
infringements or imitations without first obtaining the written consent of
Licensor. Licensee shall not have any rights against Licensor by reason of
Licensor's failure to prosecute any alleged infringements or imitations of the
Licensed Properties or the Works by others.
b. If Licensor or Owner so desires, at their expense, they may
commence or prosecute any claims or suits based on infringement of rights in
the Licensed Properties or the Works in their own name or in the name of
Licensee, or join Licensee as a party thereto with Licensee's written consent,
which consent shall not be unreasonably withheld.
16. Government Approvals. Licensee agrees to make or obtain, at its
expense, all necessary or appropriate governmental filings, approvals,
applications, and/or registrations with respect to Licensee's use of the
Licensed Properties, Sale, and advertising of Licensed Articles, and rights to
manufacture, sell, distribute, advertise, and promote the Licensed Articles
throughout the Territory. Licensee shall promptly furnish copies of all such
filings, approvals, applications, and/or registrations to Licensor.
17. Combination and Premium Sales. Licensee warrants it will not use the
Licensed Articles for combination sales, premiums, giveaways, or any similar
method of merchandising without the prior written consent of Licensor, and will
refrain from distributing Licensed Articles for purposes other than their Sale
without the prior written consent of Licensor.
18. Assignment. This Agreement and all rights and duties herein are
personal to Licensee and shall not, without Licensor's prior written approval,
be assigned,
20
<PAGE> 32
mortgaged, sublicensed, or otherwise encumbered by Licensee or by operation of
law. Any attempt by Licensee to grant a sublicense or to assign or part with
possession or control of the agreement or any of Licensee's rights or duties
hereunder shall be void ab initio and shall constitute a material breach of
this Agreement. This Agreement and any or all rights and duties may be
assigned by Licensor without the consent of Licensee.
19. Choice of Law; Disputes.
a. This Agreement shall be deemed to have been accepted and
signed Milwaukee, Wisconsin, and shall be construed in accordance with the laws
of the State of Wisconsin, U.S.A.
b. In the event of any dispute arising from or in connection with this
Agreement, Licensee consents and agrees to in personam jurisdiction and to
venue exclusively in either the Circuit Court for Milwaukee County, Wisconsin,
or the United States District Court for the Eastern District of Wisconsin,
located in Milwaukee, Wisconsin.
20. Severability. The provisions of this Agreement are severable, and if
any clause or provision shall be held invalid and unenforceable in whole or in
part, then such invalidity or unenforceability shall affect only such clause or
provision or part thereof.
21. Miscellaneous.
a. This Agreement constitutes the entire agreement and
understanding between the parties hereto and terminates and supersedes any
prior agreement or understanding, written or oral, relating to the subject
matter hereof between
21
<PAGE> 33
Licensor and Licensee. There are no representations, promises, agreements,
warranties, covenants, or undertakings other than those expressly contained in
this Agreement.
b. None of the provisions of this Agreement can be waived or modified
except in a written document signed by both parties.
c. The headings on any paragraph hereof are for convenience purposes
only and shall not be used to construe or affect the meaning or interpretation
of this Agreement.
22. Rights of Owner. To the extent that any rights are granted to Owner
under any of the provisions of this Agreement, Owner shall be entitled to
enforce and protect those rights against the parties hereto and their
successors and assigns.
23. Survivorship of Provisions. Notwithstanding the expiration or
termination of this Agreement, all rights, obligations, and remedies which
accrued prior to the termination or expiration hereof shall survive such
termination or expiration. In addition, Paragraphs 1, 3, 6, 8, 9, 10, 13, 14,
15, 19, 20, 21, and 22 shall survive termination or expiration thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement through
authorized officers as of the date set forth above.
HARLEY-DAVIDSON SPORTS IMPRINTS, INC.,
MOTOR COMPANY d/b/a FUNWEAR
By /s/ ANNE M. TYNION By /s/ JERROLD LULOFF
------------------------------- ------------------------------
Title VP MARKETING/BM Title PRESIDENT
---------------------------- ---------------------------
22
<PAGE> 34
This Agreement is approved by Owner this 13th day of
January, 1995.
H-D MICHIGAN, INC.
By /s/ Thomas P. Arden
--------------------------------
Title: Vice President
23
<PAGE> 35
SCHEDULE 1
[CONFIDENTIAL MATERIAL OMITTED PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT]
EXHIBIT A
PROPERTY
HARLEY-DAVIDSON
HARLEY
HD
[HARLEY-DAVIDSON MOTORCYCLES LOGO]
[HARLEY-DAVIDSON MOTORCYCLES LOGO]
<PAGE> 36
EXHIBIT B
[LICENSED BY HARLEY-DAVIDSON (R) LOGO]
SCHEDULE 2
[TEN (10) PAGES OF CONFIDENTIAL MATERIAL
OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
<PAGE> 1
EXHIBIT 10.8
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
LITTLEFIELD, ADAMS & COMPANY,
A NEW JERSEY CORPORATION,
PLAINTIFF,
V. CIVIL ACTION NO. SA-95-CA-0425
JEFFERS, BROOK, KREAGER &
GRAGG, INC., DAVID YLITALO, AND
MICHAEL KREAGER,
DEFENDANTS.
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