PLAYER LICENSE AGREEMENT
This Agreement (this "Agreement") is made and entered into as of the
1st day of November, 1997 by and between ▇▇▇▇ ▇▇▇▇▇▇ ("Player"), an individual,
and ▇▇▇▇ ▇▇▇▇▇▇ Group, Inc., a Florida corporation ("GPG"), with reference to
the following facts:
A. Player is famous throughout the world as a champion professional
golfer, international celebrity and spokesperson whose endorsement of products
and services has great intrinsic and commercial value.
B. Player has the right to provide for the use of the Player Name (as
hereinafter defined) as provided for in this Agreement.
C. On the terms and subject to the conditions of this Agreement, Player
desires to grant to Licensee the sole and exclusive right and license to use the
Player Name in the Territory in the Exploitation of Endorsed Products (as such
terms are hereinafter defined).
NOW THEREFORE, in consideration of the premises and the mutual promises
contained herein, the parties hereto do hereby agree as follows:
1. Grant of Rights; Definitions
(a) On the terms and subject to the conditions in this Agreement,
Player hereby grants to Licensee the sole and exclusive right and license (the
"License") in perpetuity to use the Player Name in the Exploitation of Endorsed
Products throughout the Territory. The License shall commence as of the
Effective Date. The License shall include and encompass without limitation each
and every Intellectual Property Right arising or existing in connection with,
with respect to, or embodied in, the Player Name in connection with the use of
such Player Name in the Exploitation of Endorsed Products. The License shall
also include the right to use "▇▇▇▇ ▇▇▇▇▇▇" as part of Licensee's corporate
name, subject to approval of the full corporate name by Player, which approval
will not be unreasonably withheld (and Player hereby approves the name "▇▇▇▇
▇▇▇▇▇▇ Golf, Inc.").
(b) Player reserves the right to: (i) produce or cause to be produced,
in connection with the ▇▇▇▇ ▇▇▇▇▇▇ Golf Academy, instructional golf videos and
other golf instruction products and aids in any media incorporating the Player
Name ("Golf Instruction Products") and market and sell Golf Instruction Products
other than on a Direct Marketing Basis (except as provided below); and (ii)
produce, market and sell biographical videos and other biographical products
incorporating the Player Name. Except for the Existing DM Licenses, Player may
market and sell Golf Instruction Products on a Direct Marketing Basis only
through Licensee, in which event Licensee shall reasonably cooperate with
Player. Player and Licensee shall share on an equal basis all Net Revenues from
the sale of Golf Instruction Products on a Direct Marketing Basis. "Net
Revenues" from the sale of Golf Instruction Products shall mean revenues from
such sales less the related cost of goods sold, including sales commissions.
Player agrees not to renew or extend any Existing DM License, and will use
commercially reasonable efforts transfer such business to Licensee (but Player
shall not be obligated to breach any Existing DM License).
(c) For purposes of this Agreement, the following terms shall have the
meanings set forth below:
"Affiliate" shall mean, with respect to any specified Person,
(a) any other Person who, directly or indirectly, owns or controls, is under
common ownership or control with, or is owned or controlled by, such specified
Person, (b) any other Person who is a director, officer, partner or trustee of
the specified Person or a Person described in clause (a) of this definition or
any spouse of the specified Person or any such other Person, (c) any relative of
the specified Person or any other Person described in clause (b) of this
definition, or (d) any Person of which the Specified Person and/or any one or
more of the Persons specified in clause (a),(b) or (c) of this definition,
individually or in the aggregate, beneficially own 10% or more of any class of
voting securities or otherwise have a substantial beneficial interest.
"Agreement Year" shall mean a year period commencing with the
Effective Date or an annual anniversary of the Effective Date and terminating
one year thereafter.
"Artwork" shall mean photographs, film footage and video
footage of Player participating in golf tournaments, exhibitions and other
public appearances in his capacity as a golf professional.
"Asset Purchase Agreement" shall mean that certain Asset
Purchase Agreement dated as of the date hereof by and between GPG and Golf One
pursuant to which, among other things, GPG has agreed to sell, transfer and
assign certain assets, including its rights under this Agreement, to Golf One.
"Direct Marketing Basis" shall mean marketing and sales
through infomercials, telemarketing, Internet or other computer systems, direct
mail, CD-ROM, and other direct response marketing channels.
"Effective Date" shall mean date of the closing of the
purchase and sale of the assets contemplated by the Asset Purchase Agreement.
"Electronic Media" shall mean all forms of electronic,
magnetic, digital, optical and laser-based information storage and retrieval
systems, floppy diskette-based software, CD-ROM, interactive software and
compact discs, floptical disks, ROM Card, silicon chip, on-line electronic or
satellite-based data transmission and other such systems, and any other device
or medium for electronic reproduction, publication, distribution or
transmission, whether now or hereafter known or developed.
"Endorsed Products" shall mean (i) golf clubs, including, but
not limited to ▇▇▇▇▇, Irons and Specialty Clubs, including Drivers, Wedges,
Chippers and Putters; and (ii) Golf Accessories.
"Exhibit" shall mean to produce, transmit, broadcast,
telecast, cable cast, display, exhibit, project, perform, reproduce, publicize,
or otherwise use.
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"Existing DM Licenses" shall mean the licenses identified on
Exhibit B to this Agreement as "Existing DM Licenses."
"Existing Licenses" shall mean the licenses described in
Exhibit B to this Agreement other than Existing DM Licenses.
"Exploit" shall mean use, promote, advertise, affix, copy,
Exhibit, distribute, manufacture, sell, market, sublicense, rent, modify, create
derivative works from, practice or otherwise exploit in all forms in any and all
media.
"Golf Accessories" shall mean hats, apparel, towels,
umbrellas, bags, balls, audiotapes, videotapes and other products pertaining to
the playing of golf or the marketing, sale and distribution of golf clubs.
"Golf One" shall mean Golf One Industries, Inc., a Delaware
corporation.
"Initial Quarter" shall mean the period commencing the
Effective Date and terminating on the last day of the calendar quarter in which
the Effective Date occurs.
"Intellectual Property Rights" shall mean each and every right
now or hereafter recognized and enforced under trademark, service ▇▇▇▇,
copyright, patent, trade secret and all other intellectual laws, whether
existing by statute and/or at common law, of each jurisdiction within the world.
"Licensee" shall mean the Licensee under this Agreement, which
initially be GPG, and shall be Golf One and its successors and permitted assigns
from and after the Effective Date.
"License Fee" shall have the meaning set forth in Section 2(a)
of this Agreement.
"Marketing Materials" shall mean brochures, advertisements,
pictures, photos, films, infomercials, commercials, videos and similar materials
used to market, advertise and promote the Endorsed Products which utilize or
incorporate the Player Name.
"Media Production" shall mean television programs and
broadcasts, radio programs and broadcasts, television or radio series,
newscasts, documentaries, video productions, video tapes, video discs, sound
tracks, motion picture productions, and any other form of media production that
has been, or may in the future be, conceived, developed or invented, by any
process, instrumentation or device now known or hereafter developed.
"Net Receipts" during any period shall mean (i) gross revenues
of Licensee from the sale of Endorsed Products throughout the world during such
period less (ii) discounts, incentives, applicable advertising, freight, duty
and commissions, less (iii) all Refunds during such period which are not offset
against Return Reserves, less (iv) all Return Reserves established during such
period with respect to sales of Endorsed Products during such period, plus (iv)
all Return Reserves in effect at the beginning of such period which shall not be
used to offset Refunds
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during such period. With respect to sales of Endorsed Products by Licensee which
are not manufactured or produced by Licensee or sold only for the account of
Licensee, "gross revenues" shall mean only the selling commissions and fees
received by Licensee, and not the gross revenues from the sale of the Endorsed
Products. For example, if Licensee sublicenses to a third party the right to
incorporate the Player Name on golf hats, and then Licensee acts as sales,
distribution and/or marketing agent for such golf hats on a Direct Marketing
Basis (and collects the full price for such hats from customers), "gross
revenues" shall include only that portion of the sales price for such golf hats
as may be retained by Licensee in connection with the sale of such golf hats.
Net Receipts shall not include revenues from the sale of Golf Instruction
Products produced by or on behalf of Player which are sold by Licensee on a
Direct Marketing Basis, as contemplated by Section 1(b) of this Agreement.
"Person" shall mean an individual or a partnership,
corporation, trust, association, limited liability company, governmental
authority or other entity.
"Player Name" shall mean the name "▇▇▇▇ ▇▇▇▇▇▇," the initials,
voice, signature and likeness of Player, the Knight's Head Logo, the trademark
BLACK KNIGHT(TM) and any other trademark presently or hereafter used by Player
in connection with Endorsed Products.
"Player Percentage" for any Royalty Year shall mean the
percentage obtained by dividing the Subject Net Receipts for such Royalty Year
by the Net Receipts for such Year.
"Player/WSE License" shall mean that certain Memorandum of
Agreement dated as of January 1, 1967 between Player and WSE, as amended by that
certain Amendment Agreement dated January 1, 1987, that certain letter dated
January 1, 1997 and that certain letter dated April 17, 1998.
"Refunds" shall mean amounts refunded by Licensee to customers
for any reason, including for product returns, damaged products, canceled orders
or otherwise relating to Endorsed Products.
"Return Reserve" shall mean reserves reasonably maintained by
the Company from time to time for Refunds.
"Royalty Quarter" shall mean a calendar quarter, provided that
the first Royalty Quarter shall be Initial Quarter.
"Royalty Statement" shall mean a Royalty Statement as defined
in Section 2(b) of this Agreement.
"Royalty Year" shall mean a period commencing April 1 and
terminating the following March 31; provided that the first Royalty Year shall
be the period commencing on the Effective Date and ending on the following March
31 and the last Royalty Year (if any) shall be the period ending on the date
this Agreement terminates and commencing on the immediately prior April 1.
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"Subject Net Receipts" shall mean Net Receipts from sales in
the Territory.
"Territory" shall mean the United States of America and its
possessions, Canada, the Commonwealth of Puerto Rico and each country or
territory in the continent of Africa which is lies completely south of the
Equator.
"Transfer" shall mean sell, assign, transfer, pledge, grant a
security interest in, or otherwise dispose of, with or without consideration.
"WSE" shall mean World Services Establishment, a Liechtensein
corporation.
"WSE Agreement" shall mean that certain WSE License Agreement
dated the date hereof by and between GPG and WSE pursuant to which WSE has
granted to GPG the exclusive perpetual right to use the Player Name in the
Exploitation of Endorsed Products in the world except for the Territory.
2. Remuneration
(a) As full and complete consideration for the License as set forth
herein, and for the ancillary marketing services of Player to be performed
hereunder, Licensee shall pay to Player the following amounts set forth in
Sections 2(b) and 2(c).
(b) Licensee shall pay to Player the following license fees (the
"License Fees"):
Agreement Year Amount
----------------------------------- ----------------------------------
1 $37,500
2 $50,000
3 $62,500
4 $75,000
5-10 $87,500 (per year)
The obligation to pay License Fees shall terminate on the
earlier to occur of: (i) the first date that Player has not played in at least
10 internationally televised professional golf tournaments in the prior 12
months (the "Tournament Test") and is no longer the Chairman of the Board of
Golf One; and (ii) the tenth anniversary of the Effective Date; provided,
however, that if prior to the end of the fifth Agreement Year a Removal Event
occurs, Player shall be entitled to continue to receive the License Fees through
the end of the fifth Agreement Year following the Agreement Year immediately
prior to the Agreement Year in which the Removal Event occurs provided he
continues to meet the Tournament Test. A "Removal Event" shall be deemed to
occur if: (i) Player is removed by the shareholders of Golf One without cause as
Chairman of the Board of Golf One or (ii) at any shareholders' meeting at which
Player's position as director is up for election, Player is not re-elected by
the shareholders as a director of Golf One
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(assuming he has continued to serve through the date of such meeting). The
License Fee for each Agreement Year shall be paid in four equal installments on
a quarterly basis within 30 days following the end of each calendar quarter
during the Year, commencing with the first calendar quarter which ends in such
Year. The payment for any period which is not a full calendar quarter shall be
prorated other than the period in which this Agreement is terminated by Player
pursuant to Section 8(b) of this Agreement.
(c) In addition to the License Fee, each Royalty Year Licensee shall
pay to Player a royalty (the "Royalty") equal to the Player Percentage for such
Royalty Year multiplied by the sum of: (i) 3% of Net Receipts from sales of
Endorsed Products on a Direct Marketing Basis which are in excess of $10,000,000
and are less than or equal to $20,000,000; (ii) 2% of Net Receipts from sales of
Endorsed Products on a Direct Marketing Basis which are in excess of
$20,000,000; and (iii) 3% of Net Receipts from Net Sales of Endorsed Products
other than on a Direct Marketing Basis. The $10,000,000 and $20,000,000 amounts
shall be prorated for the first and last Royalty Years. The Royalty shall be
advanced on a quarterly basis, within 30 days from the end of each Royalty
Quarter, based on the good faith estimate of the Player Percentage determined
for the year-to-date. It is understood that notwithstanding any advances of the
Royalty, the actual Royalty for any Royalty Year shall be determined in
accordance with the formula set forth in first sentence of this Section 2(c),
and that the final payment of the Royalty for such Royalty Year shall be the
difference between the amount of the Royalty determined in accordance with such
first sentence and the amounts previously advanced. If the amount of advanced
for any Royalty Year shall exceed the actual Royalty determined in accordance
with such first sentence, Licensee shall offset such excess against future
Royalties or other obligations payable under this Agreement; provided, however,
that if the amount of overpayment exceeds 10% of the total Royalty for such
Royalty Year, the Company may demand the refund of such of excess from Licensor.
(d) Within 30 days following the end of each Royalty Quarter, Licensee
shall deliver to Player a royalty statement (a "Royalty Statement") setting
forth the Net Receipts for the Quarter and the calculation of the Royalty, which
Statement shall be certified by an executive officer of Licensee as being true
and complete. Each Royalty Statement shall be conclusive and binding upon Player
as to the amount of the Royalty for the Royalty Quarter covered by such
Statement unless Player shall object in writing within two years following
receipt of such Royalty Statement. Upon reasonable prior notice, Player shall
have the right to examine Licensee's books and records (but in no more than
twice each Royalty Year) to the extent reasonably necessary to determine the
accuracy and completeness of the information on such Statement. Such examination
shall be made during Licensee's usual business hours at the place where such
books and records are maintained. Unless such examination and inspection results
in a determination that Licensee underpaid the Royalty in either of the two
prior Royalty Years by more than the greater of 5% of the Royalty actually due
or $2,500, such examination shall be at the cost and expense of Player. If such
examination or inspection shows that the Royalty in either of the two prior
Royalty Years shall have underpaid by more than the greater of 5% of the Royalty
actually due or $2,500, all costs and expenses for such examination, up to
$10,000 per examination, shall be paid by Licensee.
6
(e) Licensee shall have the right to offset against any License Fee the
amount of any cash compensation and fees paid or payable to Player for serving
as director and/or officer of Licensee which have not previously been so offset.
3. Player Approvals
(a) Licensee agrees that all uses of the Player Name in connection with
the Exploitation of Endorsed Products in the Territory, including in connection
with Marketing Materials and the quality of the Endorsed Products, will be
subject to prior approval of Player, which approval will not be unreasonably
withheld. It is understood that, with respect to the use of the Player Name,
each approval shall relate to the use of the Player Name in connection with the
form and content of the Marketing Materials and/or the incorporation of the
Player Name on Endorsed Products, and that once given, no further approval shall
be required with respect to multiple uses of approved uses of the Player Name or
immaterial variances in the Marketing Materials (immateriality be determined by
reference to the materiality of such change to Player). Any approvals required
by Player or requested of Player pursuant to the terms hereof shall be given by
confirmed facsimile or certified mail to Licensee within a reasonable time from
the date of receipt by Player of the materials for which approval is requested.
In the event no response by Player is received by Licensee within 10 days from
receipt of such materials by Player, the approvals shall be deemed given. All
sublicenses, other than those in effect on the date hereof, must permit Licensee
(and indirectly Player) the same right of approval unless otherwise agreed in
writing by Player. Player may from time to time delegate to one person, or any
one of several persons, his approval rights by written notice to Licensee, in
which event until such delegation is withdrawn by written notice to Licensee,
all approvals may be granted by such person or persons.
(b) Licensee shall own the copyright to all Marketing Materials. Player
shall take any action reasonably requested by Licensee to confirm such
ownership. Licensee acknowledges that it does not own the Player Name.
4. Player's Warranties and Covenants
(a) Player warrants and represents as follows: (i) Player has all
right, power and authority to enter into this Agreement and grant the License;
(ii) Player has all rights to use the Player Name in the Exploitation of
Endorsed Products in the Territory; (iii) except pursuant to this Agreement, the
Existing Licenses and the Player/WSE License, no Person has any right to use the
Player Name in the Exploitation of Endorsed Products in the Territory and there
are no licenses or other rights presently outstanding for the use of the Player
Name in the Exploitation of the Endorsed Products in the Territory; (iv) the
Exploitation of the Player Name in connection with Endorsed Products
contemplated by this Agreement and the Player/WSE License will not violate or
infringe upon the rights (including, but not limited to, the Intellectual
Property Rights) of any Persons anywhere in the world; (v) the use of the Player
Name as contemplated by this Agreement will not require any payments to any
Person other than to Player pursuant to this Agreement; (vi) Player has provided
to Licensee a true and correct copy of the Player/WSE License; the Player/WSE
License is in full force and effect, constitutes a valid and legally binding
obligation of Player and WSE, enforceable against Player and WSE in accordance
with its terms, and neither Player nor WSE is in breach of or in default under
the Player/WSE License and in no
7
event has occurred or circumstance exists which, with notice or lapse of time or
both, would constitute a breach of or default under the Player/WSE License.
Licensee acknowledges that Player makes no representations with respect to the
use of any other Intellectual Property Rights in connection with any Marketing
Materials or the Exploitation of the Player Name.
(b) Player agrees that from and after the date hereof, Player shall not
directly or indirectly use the Player Name in the Exploitation of any Endorsed
Products, or Transfer any right or license to use the Player Name in the
Exploitation of Endorsed Products.
(c) Player has developed a valuable right in the Player Name which is
an integral part of this Agreement and is subject to the exclusive License
granted to Licensee hereunder. To facilitate Licensee's use of the License
pursuant to this Agreement, Player agrees to: (i) serve as spokesman for each
Endorsed Product; (ii) actively promote Endorsed Products and (iii) subject to
medical impairments rendering Player unable to perform, provide the services
described in Exhibit A to this Agreement. Licensee acknowledges that the
covenants under Sections 4(c)(i) and (ii) shall not require Player to perform
any specific amount of time of service.
(d) Notwithstanding anything to the contrary contained herein, it is
mutually understood that Player has no control over, and is not responsible for:
(i) the media, including without limitation, any news, media
photographs or other depictions of Player that may appear from time to time;
(ii) the content of the advertising or sponsorship portion not
directly involving Player of:
(A) any Media Production;
(B) any athletic tournament, game or outing; or
(C) any other event, including without
limitation, any live artistic, literary,
dramatic, theatrical or musical production
or charitable event, in which Player
participates or with which he is otherwise
associated.
(iii) the products and services endorsed, promoted, advertised
or publicized by any other team, league or association for which Player may play
or with respect to which he may become associated or by any of their respective
successors and assigns;
all or any of which may use Player's name, fame, nickname, initials, autograph,
voice, video or film portrayals, facsimile or original signature, photograph,
likeness and image or facsimile image, without Player's consent and in any or
all of which Player may appear or participate. Licensee agrees that Player shall
not be, and shall not be deemed to be, in contravention or breach of any of the
provisions hereof as a result of any or all of the foregoing or arising in
connection therewith.
8
(e) The restrictions set forth in this Agreement are not intended to
preclude and shall not preclude Player from appearing in the sports,
entertainment, news or information portion of:
(i) any form of Media Production; or
(ii) any professional golf tournament; or
(iii) any other entertainment event, including without
limitation, any live artistic, literary, dramatic, theatrical or musical
production;
in which or in connection with which products or services are advertised,
publicized, featured or otherwise dealt with that are the same as or similar to
or competitive with Endorsed Products or that are sponsored by competitors of
Licensee, provided that Player's participation is not for the endorsement of
such products or services.
(f) Player is not responsible for initiating action against, enjoining
or otherwise attempting to dissuade any Person not licensed by Player, including
without limitation, any former licensee of Player, the media or any advertiser,
promoter or other entity, which in contravention of this Agreement or otherwise
makes unauthorized use of anything, including without limitation, any
unauthorized use of the Player Name in promoting or advertising any product (or
products) or services whatsoever, including without limitation, any products
which are the same as or similar to or directly competitive with Endorsed
Products. Player shall not incur any liability to Licensee or any Person arising
out of any such activity by any such Person. Player agrees that at Licensee's
sole cost and expense, he shall give such reasonable assistance to Licensee as
may be required to cause any such Person to cease and desist from such
activities, or in connection with any lawsuit or other proceeding by Licensee
against such Person.
(g) To the extent that Player has (and has all necessary rights to) any
Artwork which Licensee believes would be useful in the Exploitation of Endorsed
Products, Player shall furnish such Artwork to Licensee on a royalty-free basis.
Licensee shall be responsible for all shipping and handling charges in
connection with such Artwork, shall safekeep such Artwork and be responsible for
it while in transit, and after use of such Artwork, Licensee shall return such
Artwork to Player. It is understood that such Artwork may not be reproduced for
sale but just used in connection with the advertisement and promotion of
Endorsed Products. Any such use of Artwork is subject to Player's prior approval
pursuant to Section 3(a) of this Agreement. To the extent that any Artwork is
owned by Persons other than Player, upon request of Licensee, Player shall
provide such consents or approvals to such other Persons as may be necessary for
Licensee to acquire (at no cost or expense to Player) the right to use such
Artwork.
5. Indemnification; Liability
(a) Player agrees to indemnify and hold Licensee and its successors and
permitted assigns, and their respective Affiliates ("Licensee Indemnified
Party") harmless from and against any and all claims, losses, costs, damages,
liabilities and expenses (including attorneys' fees and court costs) suffered or
incurred by any Licensee Indemnified Party arising out of breach by
9
Player of any warranty, representation or covenant hereunder or the use pursuant
to this Agreement by such Licensee Indemnified Party of the Player Name.
(b) Licensee agrees to indemnify and hold Player and his heirs and
permitted assigns, and their respective Affiliates ("Player Indemnified Party")
harmless from and against any and all claims, losses, damages, liabilities and
expenses (including attorneys fees and court costs) suffered or incurred by any
Player Indemnified Party arising out of a breach by Licensee of any warranty,
representation or covenant hereunder, from the Exploitation by Licensee of the
Endorsed Products, from Endorsed Products, from the services of Player
hereunder, from the use of the Player Name and from the violation of any law,
rule or regulation in connection with the Exploitation of the Player Name (other
than claims, losses, damages, liabilities and expenses (including attorneys fees
and court costs) related to a breach by Player of any of its representations,
warranties or covenants under this Agreement, such as an infringement claim
against Licensee for infringement of another Person's rights based solely on the
use by Licensee of the Player Name other than with the respect to use of other
Intellectual Property Rights in connection therewith).
(c) In no event shall any party to this Agreement be liable to the
other for punitive, indirect or special damages.
6. Insurance. From and after the Effective Date, Licensee shall provide
and maintain, at its own expense, commercial general liability insurance,
including product liability and advertising injury coverage, with limits of not
less than $5,000,000, and shall cause such policy to be endorsed to state that
Player is an additional named insured thereunder. A certificate of insurance
evidencing such coverage shall be furnished to Player within 30 days following
the Effective Date. Such insurance policy shall provide that the insurer shall
not terminate or materially modify such policy or remove Player as an additional
named insured without prior written notice to Player at least 30 days in advance
thereof.
7. Reservation of Rights
Player reserves all rights pertaining to the Player Name except as
specifically granted to Licensee hereunder. Without limiting the generality of
the foregoing, Player may Exploit the Player Name in all forms of Electronic
Media other than in connection with the Exploitation of Endorsed Products.
8. Termination
(a) Licensee shall have the right, upon 30 days prior written notice to
Player, to terminate this Agreement in the event that governmental regulations
or other causes arising out of a state of national emergency or war, or causes
beyond Licensee's control, render Licensee's performance under this Agreement
materially impaired.
(b) In the event that either party defaults in any material respect
under any of the material terms or conditions set forth herein, including but
not limited to payments, the non-defaulting party shall send a notice to cure by
either certified or registered mail return receipt
10
requested to the defaulting party. Failure by the defaulting party to cure the
default within 30 days of receipt of the notice to cure shall give the right to
the non-defaulting party, in its sole discretion, to terminate this Agreement.
(c) Licensee shall have the right to terminate this Agreement upon
written notice to Player in the event that the WSE Agreement shall be terminated
other than termination by WSE in accordance with the Agreement as a result of
the default by Licensee under the WSE Agreement.
(d) Player shall have the right to terminate this Agreement after the
Effective Date in the event of termination of the WSE Agreement by WSE as a
result of the default by Licensee under such Agreement following the Effective
Date.
(e) Promptly following termination of this Agreement, Licensee shall
provide Player with a statement indicating the remaining Endorsed Products in
inventory, in process of manufacture or subject to non-cancelable orders as of
the termination date ("Remaining Products"). Unless this Agreement is terminated
by Player pursuant to Section 8(b) or 8(d) hereof or by Licensee pursuant to
Section 8(a) or 8(h) hereof, Licensee shall have the right to sell any Remaining
Products for a period of six months after termination of this Agreement (the
"Sell-Off Period"). Notwithstanding the foregoing, Licensee shall not have the
right, other than with respect to Remaining Products, to manufacture any
additional Endorsed Products. No License Fee shall accrue during the Sell-Off
Period provided that the Royalty shall accrue during the Sell-Off Period and be
payable as contemplated by Section 2(b) of this Agreement. Upon the expiration
of the Sell-Off Period, or termination by Player pursuant to Section 8(b) or
8(d) of this Agreement, Licensee shall destroy any remaining inventory and shall
certify same by declaration executed by an executive officer of Licensee.
(f) The termination of this Agreement for any reason will not have any
effect on: (i) the rights of Player to collect any amounts due and owing under
this Agreement; (ii) the rights of Licensee to sell its remaining inventory in
accordance with Section 8(e) except as provided in Section 8(e) hereof; (iii)
the rights to indemnification pursuant to Section 5 of this Agreement; and (iv)
the rights to damages or other legal or equitable relief for breaches or
defaults occurring prior to the termination of the Agreement.
(g) If Player files a petition in bankruptcy or is adjudicated
bankrupt, or becomes insolvent or makes an assignment for the benefit of
creditors or other similar arrangement or discontinues business, or if a
receiver is appointed for it or its business, this Agreement shall not terminate
upon the occurrence of any such event and Player shall not have the authority to
Transfer any rights of any nature for the use of the Player Name or any Endorsed
Products in conflict with this Agreement or to reject any rights hereunder.
(h) If Licensee files a petition in bankruptcy or is adjudicated
bankrupt, or becomes insolvent or makes an assignment for the benefit of
creditors or other similar arrangements or discontinues business, or if a
receiver is appointed for it or its business, this Agreement shall terminate
upon the occurrence of such event.
11
(i) Upon termination of the License for any reason, if Licensee's
corporate name includes the Player Name or a derivative or variation thereof,
Licensee shall, as promptly as practicable, but in no event later than 90 days
following termination of the License, amend its corporate name to a name not
including the Player Name.
9. Miscellaneous.
(a) Notices. All notices, requests, demands and other communications
(collectively, "Notices") given pursuant to this Agreement shall be in writing,
and shall be delivered by personal service, courier, confirmed facsimile
transmission or by United States first class, registered or certified mail,
postage prepaid, addressed to the party at the address set forth on the
signature page of this Agreement. Any Notice, other than a Notice sent by
registered or certified mail, shall be effective when received; a Notice sent by
registered or certified mail, postage prepaid return receipt requested, shall be
effective on the earlier of when received or the fifth day following deposit in
the United States mails. Any party may from time to time change its address for
further Notices hereunder by giving notice to the other party in the manner
prescribed in this Section.
(b) Entire Agreement. This Agreement contains the sole and entire
agreement and understanding of the parties with respect to the entire subject
matter of this Agreement, and any and all prior discussions, negotiations,
commitments and understandings, whether oral or otherwise, related to the
subject matter of this Agreement are hereby merged herein.
(c) Waiver and Amendment. No provision of this Agreement may be waived
unless in writing signed by all the parties to this Agreement, and waiver of any
one provision of this Agreement shall not be deemed to be a waiver of any other
provision. This Agreement may be amended only by a written agreement executed by
all of the parties to this Agreement. This Agreement may not be amended prior to
the Effective Date without the prior written consent of Golf One unless and
until the Asset Purchase Agreement is terminated.
(d) Governing Law. This Agreement has been made and entered into in the
State of California and shall be construed in accordance with the laws of the
State of California without giving effect to the principles of conflicts of law
thereof.
(e) Severability. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be or become
prohibited or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
(f) Captions. The various captions of this Agreement are for reference
only and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
(g) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
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(h) Attorneys' Fees. If any action, suit, arbitration or other
proceeding is instituted to remedy, prevent or obtain relief from a default in
the performance by any party to this Agreement of its obligations under this
Agreement, the prevailing party shall recover all of such party's attorneys'
fees incurred in each and every such action, suit, arbitration or other
proceeding, including any and all appeals or petitions therefrom. As used in
this Section, attorneys' fees shall be deemed to mean the full and actual costs
of any legal services actually performed in connection with the matters involved
calculated on the basis of the usual fee charged by the attorney performing such
services and shall not be limited to "reasonable attorneys' fees" as defined in
any statute or rule of court.
(i) Further Assurances. The parties to this Agreement shall upon
request take any and all actions and execute any and all documents reasonably
necessary to effectuate the terms and intent of this Agreement.
(j) Judicial Interpretation. Should any provision of this Agreement
require judicial interpretation, it is agreed that a court interpreting or
construing the same shall not apply a presumption that the terms hereof shall be
more strictly construed against any Person by reason of the rule of construction
that a document is to be construed more strictly against the Person who itself
or through its agent prepared the same, it being agreed that all parties have
participated in the preparation of this Agreement.
(k) Independent Relationship. This Agreement does not constitute and
shall not be construed to constitute an agency, a partnership, a joint venture
or employment agreement between Player and Licensee. Licensee shall not have
authority to obligate or bind Player in any manner whatsoever, subject to the
provisions stated herein and only as Player may specifically approve in writing
prior thereto. Player and Licensee shall be deemed independent contractors in
all respects.
(l) Assignments. Player may not Transfer its rights or obligations
under this Agreement except that Player may assign its right to receive the
License Fee and the Royalty. Licensee may not Transfer its rights or obligations
under this Agreement except: (i) to a subsidiary or to a Person who controls
Licensee; and/or (ii) through a merger or consolidation of Licensee with another
Person (other than an Excluded Purchaser); and/or (iii) the sale by Licensee of
all or substantially all of its assets to another Person (other than an Excluded
Purchaser); and/or (iv) GPG may assign its rights and obligations to Golf One
pursuant to the Asset Purchase Agreement. For purposes of this Agreement, an
"Excluded Purchaser" is a Person: (i) whose sales of golf clubs in the United
States exceeded 10% of the total sales of golf clubs in the United States during
the calendar year prior to the sale or merger date, based on industry reports
(or, if no such report is available for such prior calendar year, the most
recent prior calendar year for which such report is available); (ii) whose
corporate name includes the name of any recognized professional golfer; or (iii)
which has over 25% of its capital stock owned by a recognized professional
golfer. Any assignee permitted pursuant to the terms of this Section 8(l) must
be capable of fulfilling all terms of this Agreement and, further, except for
the assignment from Licensee to Golf One, no such assignment shall act to
relieve the assignor of its obligations and duties under this Agreement. Upon
the request of Golf One following the assignment of this Agreement to Golf One,
Player and Golf One shall enter into a new contract, identical to this
Agreement, deleting references to GPG.
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(m) Force Majeure. If any party to this Agreement is delayed in the
performance of any of its obligations under this Agreement or is prevented from
performing any such obligations (other than, in all events, the payment of
money) due to causes or events beyond its control, including, without
limitation, acts of God, fire, flood, earthquake, strike or other labor problem,
injunction or other legal restraint, present or future law, governmental order,
rule or regulation, then such delay or nonperformance shall be excused and the
time for performance thereof shall be extended to include the period of such
delay or nonperformance.
(n) Arbitration. All disputes, controversies or differences which are
not settled by common accord shall be conclusively settled by arbitration in Los
Angeles, California, in accordance with the rules of the American Arbitration
Association, and judgment and the award rendered by the arbitration panel may be
entered in any court or tribunal of competent jurisdiction. In any arbitration
proceeding conducted pursuant to this Section, both parties shall have the right
to discovery, to call witnesses and to cross-examine the other party's witnesses
(either through legal counsel, expert witnesses or both). All decisions of the
arbitration panel shall be final, conclusive and binding upon all parties, and
shall not be subjected to judicial review. The arbitration provisions of this
Agreement shall not prevent any party from obtaining injunctive relief from a
court of competent jurisdiction to enforce the obligations for which such party
may obtain provisional relief pending any decision on such merits by an
arbitrator.
(o) Remedies. In the event either party materially breaches this
Agreement, Licensee and Player agree that, in addition to any and all other
remedies available at law or in equity, the non-breaching party shall be
entitled to injunctive relief to the extent permitted by law from further
violation of this Agreement, during any proceeding as well as on final
determination thereof, without prejudice to any other right of either party.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
▇▇▇▇ ▇▇▇▇▇▇ GROUP, INC.
By: /s/
-----------------------------
Its:
----------------------------
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
15
EXHIBIT A to AGREEMENT
Between
▇▇▇▇ ▇▇▇▇▇▇ Group, Inc. and ▇▇▇▇ ▇▇▇▇▇▇
Services:
Player agrees to provide to Licensee each Agreement Year the number of
days of Services requested by Licensee, up to six days per Agreement Year (the
"Maximum Days"). "Services" shall include, among other things, appearing in
infomercials, videos, commercials and other advertisements, appearing at or
playing in golf tournaments on behalf of Licensee and attending other
promotional functions for Endorsed Products in order to perform the ancillary
marketing services required by this Agreement. Except for night time promotional
activities, Player shall not be required to render Services except during normal
business hours.
Licensee shall give reasonable advance notice of any request for
Services, it being generally understood that at least 30 days advance notice
shall be required. Licensee acknowledges that Player often has other commitments
to play in golf tournaments, and Licensee shall schedule the taping or filming
of infomercials, videos and commercials to accommodate Player's professional and
personal schedule.
Licensee shall have final script approval for any and all videos,
infomercials and commercials; provided, however, the Licensee shall permit
Player to review all scripts and shall revise scripts pursuant to reasonable
objections from Player. Videos, infomercials and commercials produced hereunder
shall be produced and distributed in all material respects in accordance with
and adhere to policies, procedures and standards established by Licensee in
consultation with Player, which shall include verification procedures to ensure
consistent and professional delivery of services which are equal to or greater
than the minimum standard acceptable in the respective industry. The copyright
to all Marketing Materials (other than the Player Name) shall be owned by
Licensee.
Player shall provide the Maximum Days of Services per Agreement Year
without additional compensation from Licensee. If Licensee requires Services to
be performed in a location (the "Services Location") which is more than 100
miles from the location Player was otherwise scheduled to be, Player shall be
entitled to first class transportation (or the cash equivalent thereof) to and
from the Services Location and first class accommodations at the Services
Location during the period he is required to perform the services.
If Player and Licensee agree that Player will provide more than the
Maximum Days of Services in an Agreement Year, Player shall be paid a fee of
$25,000 for each additional day, payable one half no later than three business
days prior to the schedule date for such additional services, and one half on
the date of performance of such services.
Exhibit A - 1
For these purposes, a "day" shall be considered 8.5 hours, and shall
include two 15 minute breaks and a one-hour lunch break.
Player shall not be required to participate in any activities which (i)
would subject Player to federal or state securities laws, (ii) would impose a
fiduciary duty upon Player to Licensee's shareholders, (iii) would cause Player
to violate any laws, (iv) would cause injury to Player or (v) may subject Player
to public disrepute. Licensee further understands that Licensee's failure to
utilize services of Player hereunder shall not result in any reduction in
payments to Player hereunder, nor shall any unused appearances from one
Agreement Year be carried forward to another Agreement Year. The obligations of
Player to provide Services hereunder are subject to the condition that payments
to Player are current and up to date and Licensee is not otherwise in breach of
any material provisions of the Agreement; provided that if there is a good faith
dispute regarding whether payments are current or Licensee is in breach, Player
shall continue to provide services until such dispute is resolved. If Player
confirms his availability for any appearance and Player is unable to appear due
to illness, injury or other emergency beyond the control of Player, such
non-appearance is not a breach of this Agreement and Player shall not be
responsible for any expenses incurred due to such nonappearance. In such event,
Player and Licensee shall attempt in good faith to reschedule the appearance
date (which could be in a subsequent Agreement Year, at no additional charge to
Licensee).
If at any time during the term of the Agreement Licensee elects to
feature Player in a television commercial in connection with the advertisement,
promotion and sale of Endorsed Products, Licensee shall pay any pension, welfare
and other charges as may be levied by any union(s) having jurisdiction over
Player's appearance in such television commercial(s) which amounts shall be in
addition to any other amounts required to be paid hereunder.
Exhibit A - 2
EXHIBIT B
EXISTING LICENSES AND EXISTING DM LICENSES
Existing Licenses:
1. Agreement, dated January 1, 1996, by and between ▇▇▇▇ ▇▇▇▇▇▇ Golf
Equipment Inc. and YGM Marketing Pte Ltd.
2. Agreement, dated November 15, 1996, by and between ▇▇▇▇ ▇▇▇▇▇▇ Golf
Equipment Inc. and Toppoint Corporation Limited.
3. Licensing Agent Agreement, dated September 24, 1996, by and between
▇▇▇▇ ▇▇▇▇▇▇ Golf Equipment Inc. and International Apparel Marketing
Corporation.
4. Agreement, dated January 17, 1997, by and between ▇▇▇▇ ▇▇▇▇▇▇ Golf
Equipment Inc. and Scorpion Asia Pacific Pte., Ltd.
5. Agreement, dated October 1, 1996, by and between ▇▇▇▇ ▇▇▇▇▇▇ Golf
Equipment Inc. and Robern Skiwear Inc.
6. Licensing Agreement, dated July 1, 1997, by and between ▇▇▇▇ ▇▇▇▇▇▇
Group, Inc., dba ▇▇▇▇ ▇▇▇▇▇▇ Golf Equipment, and Cali-Fame of Los
Angeles, Inc.
7. Agreement, dated July 1, 1997, by and between ▇▇▇▇ ▇▇▇▇▇▇ Group, Inc.,
dba ▇▇▇▇ ▇▇▇▇▇▇ Golf Equipment, and PT. Bintoro Agung.
Existing DM Licenses:
1. Endorsement Agreement, dated August 1, 1997 by and between ▇▇▇▇▇▇▇
Innovative Corporation and ▇▇▇▇ ▇▇▇▇▇▇ Group, d.b.a. ▇▇▇▇ ▇▇▇▇▇▇ Golf
Equipment Inc.
Exhibit B - 1