EXHIBIT 12
AMENDED AND RESTATED
LICENSING AGREEMENT
This Agreement is made this 1/st/ day of July 1996, by and between the
LADIES PROFESSIONAL GOLF ASSOCIATION, an Ohio nonprofit corporation with offices
at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("LPGA"), and
S2 GOLF INC., a New Jersey corporation having its principal place of business at
▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter, "Licensee").
WHEREAS, the LPGA owns all right, title and interest in, and has the
exclusive right to license the use of, its name and marks and the logo as
described and depicted in Exhibit A attached hereto (collectively, the "Logos");
WHEREAS, Licensee desires to obtain from the LPGA, and the LPGA desires to
grant to Licensee, a license to use the Logos in connection with the
manufacture, distribution and sale of the articles specified in Exhibit B
attached hereto in accordance with the terms and conditions of this Agreement;
WHEREAS, the LPGA and Licensee have previously entered into that certain
Licensing Agreement dated July 31, 1991 (the "Former Licensing Agreement"); and
WHEREAS, the LPGA and Licensee desire hereby to amend and restate the
Former Licensing Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows:
1. Definitions.
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(a) "Premium" shall mean any articles used or to be used
for the purpose of increasing the sale of or publicizing any other product or
service.
(b) "Net Sales" shall mean the dollar amount of gross sales of the
Licensed Products by Licensee or by any entity affiliated with Licensee, less
(i) quantity and cash discounts, (ii) returns actually made or allowed, and
(iii) a deduction for uncollectible accounts but without deduction for
commissions, taxes, manufacturing, marketing and distribution costs or any other
amount. For purposes of calculating Net Sales, Licensed Products distributed by
Licensee or by any entity affiliated with Licensee at less than the usual net
sales price for such Licensed Products shall be deemed to have been distributed
at the usual net sales price for such Licensed Product.
2. Grant of License.
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(a) The LPGA grants to Licensee (i) during the entire Term of this
Agreement the non-exclusive, worldwide license to use the Logos solely in
connection with the manufacture, distribution and sale of the Non-Exclusive
Articles described in Exhibit B attached hereto and made a part hereof and
(ii) during the Initial Term of this Agreement the
exclusive and during any Subsequent Term of this Agreement the non-exclusive,
worldwide license to use the Logos solely in connection with the manufacture,
distribution and sale of the Initially Exclusive Articles described in Exhibit B
attached hereto and made a part hereof (the Non-Exclusive Articles and Initially
Exclusive Articles set forth in Exhibit B attached hereto are collectively
referred to as the "Licensed Products").
(b) No license is granted hereunder for the use of the Logos for any
purpose other than upon or in connection with the Licensed Products. Except as
permitted under paragraph 2(b) above, no license is granted hereunder for the
manufacture, sale or distribution of the Licensed Products for publicity
purposes, in combination sales, as Premiums or giveaways, or in connection with
any similar method of merchandising. If the Initially Exclusive Articles of the
Licensed Products are required by the LPGA for Premium purposes, the LPGA shall,
by separate agreement, grant Licensee the right to manufacture and sell such
merchandise for such purposes, provided that such additional grant does not
conflict with other commitments of the LPGA and that Licensee is able to produce
the same in the quantities required at competitive prices. If Licensee is
unable to most such conditions, the LPGA shall have the right to obtain such
merchandise from other manufacturers.
3. Scope. Licensee shall be entitled to use the license granted
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hereunder on a worldwide basis. Notwithstanding the preceding sentence, Licensee
acknowledges that the LPGA has made no representations or warranties of any
nature pertaining to the use of the Logos outside the United States. Without
limiting the generality of the foregoing, the LPGA disclaims any representation
or warranty, express or implied, concerning the ownership, exclusivity, or the
right to the use of the Logos outside of the United States. Licensee hereby
acknowledges that the license granted to Licensee hereunder grants to Licensee
only such rights, if any, that Licensor has in and to the Logos outside of the
United States. If requested by Licensee, the LPGA agrees to cooperate with
Licensee to permit Licensee to procure and obtain, in the name and on behalf of
the LPGA, trademark, copyright, design patent or other property right protection
of the Logos, at Licensee's expense, in Jurisdictions outside the United States;
provided, however, that the LPGA agrees promptly to reimburse Licensee for its
expenses incurred in connection with obtaining such protection in an aggregate
amount not to exceed $2,000 for each calendar year during the Term of this
Agreement.
4. Term. The Initial Term of this Agreement shall commence as of June 1,
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1996, and shall continue through December 31, 2000. The first Subsequent Term
shall commence on January 1, 2001 and shall continue through December 31, 2003.
Licensee shall have the option (the "Option"), upon one hundred twenty (120)
days prior written notice received by the LPGA before the expiration hereof, to
renew this Agreement for a second Subsequent Term of two (2) years, the approval
of which renewal the LPGA shall withhold only if Licensee has substantially
failed to perform its material obligations hereunder to the reasonable
satisfaction of the LPGA. The Initial Term plus any and all Subsequent Terms
shall equal the entire Term of this Agreement. The Term of the Former Licensing
Agreement shall expire an May 31, 1996.
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5. Annual License Fee and Royalty Payments.
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(a) In consideration of the license granted herein to Licensee by the
LPGA, Licensee shall pay to the LPGA an annual license fee (the "Annual License
Fee"), payable as follows:
Calendar Year Annual License Fee
1996 & 1997 $175,000
1998, 1999, 2000, 2001,
2002 & 2003 $200,000
If Option is exercised:
2004 & 2005 $200,000
(b) In addition to the Annual License Fee payable by Licensee to the
LPGA pursuant to paragraph 5(a) above, Licensee hereby agrees to pay to the LPGA
an annual royalty payment (the "Annual Royalty Payment") calculated in the
following manner:
(i) During the Initial Term of this Agreement, In the event that
the sum of (A) five percent (5%) of the Net Sales of the Licensed Products up to
$1,000,000 in any calendar year and (B) two and one-half percent (2.5%) of the
Net Sales of the Licensed Products in excess of $1,000,000 in any calendar year
exceeds the Annual Licensee Fee paid by Licensee in such year pursuant to
paragraph 5 (a) above, the Annual Royalty Payment payable by Licensee with
respect to such year shall be the amount equal to such excess.
(ii) During any Subsequent Term of this Agreement, in the event
that the sum of (A) five Percent (5%) of the Net Sales of the Licensed Products
up to $1,000,000 in any calendar year, (B) two and one-half percent (2.5%) of
the Net Sales of the Licensed Products in excess of $1,000,000 and less than
$5,000,001 in any calendar year and (C) one percent (1%) of the Net sales of the
Licensed Products in excess of $5,000,000 in any calendar year exceeds the
Annual Licensee Fee paid by Licensee in such year pursuant to paragraph 5(a)
above, the Annual Royalty Payment payable by Licensee with respect to such year
shall be the amount equal to such excess.
(c) Licensee agrees to spend a minimum of $100,000 per year during the
entire Term of this Agreement advertising the Licensed Products in the United
States.
(d) Licensee shall make the Annual License Fee payments in equal
quarterly installments on January 1, April 1, July 1 and October 1 of each
subsequent year during the entire Term of this Agreement.
(e) On or before April 30 of each year during the Term of this
Agreement, Licensee shall furnish the LPGA full and accurate statements,
certified by the chief financial officer of Licensee, showing the number,
description and Net Sales of the Licensed Products
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distributed and/or sold by Licensee during the previous year, and simultaneously
therewith Licensee shall make all Annual Royalty Payments, if any, to the LPGA
which are due to the LPGA as a result of the sales made during the period
covered by such statements. Receipt or acceptance by the LPGA of any of the
statements furnished pursuant to this paragraph 5(e) shall not preclude the LPGA
from questioning the correctness thereof at any time within two (2) years of the
date of the respective statement and, in the event any inconsistencies or
mistakes are discovered in such statement in any such two (2) year period, they
shall be immediately rectified and appropriate adjustments made by the parties.
All information so furnished by Licensee shall be treated as confidential by the
LPGA.
(f) simultaneously with the April 30 statements specified in paragraph
5(e) above, Licensee shall furnish the LPGA an accounting of the dollar amount
and manner of advertising of the Licensed Products during the preceding calendar
year.
(g) Licensee's obligations under paragraphs 5(e) and 5(f) above shall
continue during the calendar year following the expiration of this Agreement and
shall not terminate because of Licensee's failure to exercise the option.
(h) If the LPGA fails to perform or is in breach of any material term
of this Agreement, Licensee shall be relieved of paying to the LPGA any
installment of the applicable Annual License Fee and Annual Royalty Payment
until such time as such failure to perform or material breach is corrected by
the LPGA, at which time any unpaid Annual License Fee or Annual Royalty Payment
shall become immediately due and payable.
6. Terms. (a) LPGA hereby agrees to provide the following promotional
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support of Licensee in consideration of the payment of the royalties hereunder:
(i) Through December 31, 1997, official exclusive designation on
all Initially Exclusive Articles of the Licensed Products specifically
including, but not limited to, official golf club(s) of the LPGA and the
exclusive golf club licensee of the LPGA;
(ii) From January 1, 1998 through the expiration of this
Agreement, "Official Sponsor of the LPGA";
(iii) Eight (8) pro-am playing spots in the aggregate at
tournaments sponsored or co-sponsored by the LPGA for each calendar year during
the term of this Agreement, such tournaments to be mutually agreed upon by the
Licensor and LPGA; provided however that one (1) position shall be guaranteed
for the LPGA Championship;
(iv) Ten (10) "Season Badges" at each LPGA sponsored or co-
sponsored event when requested by Licensee; and
(v) Designation as the "Official Sponsor of the LPGA Teaching and
Club Professionals Division".
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(b) LPGA hereby further agrees that during the Initial Term of this
Agreement Licensee shall annually be the "Title Sponsor" of the LPGA Teaching
and Club Professionals ("T&CP") Division Team Classic, with promotional benefit
as detailed in Exhibit C. In consideration of such title sponsorship, the
Licensee shall pay the following amounts to the T&CP Division:
Year Annual Amount
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1996 $25,000
1997 $30,000
1998 $32,500
1999 $35,000
2000 $37,500
(c) Licensee hereby agrees to extend through December 31, 2003 the
T&CP Division rebate programs that have been in effect since July 31, 1991, as
amended and restated in Exhibit D hereto.
(d) Subject to the conditions described in subparagraphs 6(d)(i) and
(ii), Licensee hereby further agrees to transfer to the LPGA any and all
intellectual property rights that Licensee may have to, and materials
comprising, the existing so-called "Square Two/LPGA Club Fitting Workshop
Program". Licensee's agreement to so transfer its rights is conditioned upon
(i) the LPGA's continued exclusive use of Licensee's products for this club
fitting workshop program held during the Term of this Agreement and (ii)
Licensee's prior approval of the LPGA's choice of instructors) for each such
club fitting workshop program. Licensee shall not unreasonably withhold such
approval.
(e) The LPGA hereby further agrees that during any Subsequent Term of
this Agreement the LPGA will not provide a non-exclusive license, with respect
to the type of products included in the Initially Exclusive Articles, to any
person or entity other than Licensee (a "Competing License") unless such person
or entity agrees to pay to the LPGA annually amounts that equal or exceed the
Annual License Fee and Annual Royalty Payment provided for herein.
7. Copyright and Trademark Protection.
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(a) The LPGA hereby represents and warrants to Licensee that it owns
all right, title and interest in and to the Logos in the United States, and to
the knowledge of the LPGA, the grant of the license hereunder will not violate
any agreement or license to which the LPGA may be subject.
(b) Except as otherwise set forth in Section 3 above, the LPGA shall
be solely responsible for taking such action as it deems appropriate to obtain
copyright, trademark or service ▇▇▇▇ registrations for the Logos. Licensee
shall perform all acts necessary and execute all necessary documents to effect
such registrations, and to register as a user of the Logos where such
registration is needed, and to otherwise assist the LPGA to the extent necessary
to protect the LPGA's rights to the Logos.
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(c) Licensee acknowledges and agrees that the LPGA owns the exclusive
right, title and interest in and to the Logos and any copyright, trademark or
service ▇▇▇▇ registrations that have issued or may issue thereon and that use of
the Logos shall inure to the benefit of the LPGA. Licensee shall not at any
time acquire or claim any right, title or interest of any nature whatsoever in
or to the Logos by virtue of this Agreement or licensee's use of the Logos, and
any right, title or interest in or relating to the Logos which comes into
existence as a result of, or during the exercise by Licensee of, any right
granted to it hereunder shall immediately vest in the LPGA.
(d) All uses of the Logos by Licensee shall include any designations
legally required or useful for enforcement of copyright, trademark or service
▇▇▇▇ rights, such as "(C)", "(R)", "(TH)" or ("SH"). The LPGA shall have the
right to revise the above designation requirements and to require such other
notices as shall be reasonably necessary to protect the rights and interests of
the LPGA in the Logos.
(e) Licensee shall notify the LPGA in writing of any infringements or
imitations of the Logos by others, and the LPGA, in its sole discretion and
expense, may commence or prosecute any claims or suits resulting from such
infringements or imitations in its name or in the name of Licensee or join
Licensee as a party thereto. Licensee shall not institute any suit or take any
action on account of any infringements or imitations of the Logos without the
prior written consent of the LPGA.
(f) In the event Licensee employs the services of photographers in
connection with the production, promotion, marketing or distribution of the
Licensed Products, Licensee shall require each such photographer to agree that
the photographic works produced for Licensee will be "works made for hire" for
the purposes of the copyright laws, and, to the extent such photographic works
may not qualify as "works made for hire", Licensee shall cause the copyright in
each such work to be assigned to the LPGA.
8. Indemnification.
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(a) Licensee shall indemnify and hold the LPR.A harmless from and
against any and all claims, actions, damages, liability, cost and expense,
including reasonable attorneys' fees and costs of suit or arbitration, arising
out of or in connection with (i) the design, manufacturing, promotion, sale,
distribution or use of the Licensed Products; or (ii) the unauthorized Use Of
the Logos.
(b) The LPGA shall indemnify and hold harmless Licensee from and
against any and all claims, actions, damages, liability, cost and expense,
including reasonable attorneys' fees and costs of suit or arbitration, arising
out of (i) licensee's use of the Logos in accordance with this Agreement, (ii)
Licensee's title sponsorship of the T&CP Division Team classic, and (iii) the
LPGA's post transfer use of the intellectual property rights and materials
transferred to the LPGA pursuant to subparagraph 6(d) hereof, provided that the
LPGA is given prompt written notification of, and shall have the option to
undertake and conduct the defense of, any such claim or action.
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(c) Each party agrees to indemnify and hold harmless the other party,
its directors, officers, employees, members and representatives, from and
against any and all claims, actions, damages, liability, cost and expense,
including reasonable attorneys, fees, arising out of or in connection with any
act or omission on the part of the indemnifying party in the performance or non-
performance of its duties under this Agreement.
(d) Licenses shall obtain, at its own expense, comprehensive general
liability insurance, including product liability insurance, providing adequate
protection for the LPGA and Licensee against any claims or suits, with coverage
on the basis of occurrences rather than claims made and in an amount no less
than $1,000,000 per incident or occurrence, or Licensee's standard insurance
policy limits, whichever is greater. Such insurance shall remain in force at
all times during the term of this Agreement and for a period of five (5) years
thereafter. Within thirty (30) days from the date hereof, Licensee shall submit
to the LPGA a certificate of insurance evidencing such coverage and naming the
LPGA as an additional insured party thereon. Licensee shall require the insurer
to provide the LPGA with at least thirty (30) days written notice prior to the
cancellation or material modification of such coverage.
9. Quality of Licensed Products. Licensee agrees that the Licensed
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Products shall be of high standards of style, quality and appearance. Prior to
their initial sale, Licensee shall furnish to the Commissioner of the LPGA, free
of cost, one (1) representative sample of each of the Licensed Products,
together with all labels, tags, cartons and containers (including packaging and
wrapping material) to be used therewith, for inspection by the LPGA. All
samples of the Licensed Products and materials sent to the Commissioner of the
LPGA pursuant to this Section 9 shall be accompanied by a cover letter (a copy
of which shall also be forwarded to the Deputy Commissioner of the LPGA) which
states that such samples and materials are being furnished pursuant to section 9
of this Agreement for the purpose of inspection and approval by the LPGA. All
Licensed Products and materials furnished to the LPGA pursuant to this Section 9
must be approved in writing by the LPGA prior to their initial sale,
distribution, advertisement or use. Once approved or deemed to be approved by
the LPGA, a Licensed Product or materials will continue to be approved, and the
LPGA may not withdraw its approval of such Licensed Product or material, unless
and until such Licensed Product or materials is modified in any significant or
material respect. Licensee shall not modify in any significant or material
respect, or sell or distribute irregulars or seconds of, any Licensed Product
approved by the LPGA pursuant to this Section 9, without the prior written
consent of the LPGA. Licensee shall, at the LPGA's written request,
periodically send samples of Licensed Products to the LPGA to confirm Licensee's
compliance with the requirements of this section 9. Any sample furnished to the
LPGA for its approval or consent pursuant to this Section 9 shall be deemed
approved and consented to by the LPGA unless Licensee is notified otherwise
within thirty (30) days after the LPGA's receipt of such sample.
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10. Promotional Material. All promotional displays and advertising
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materials for the Licensed Products shall (i) contain and prominently display
the Logos, (ii) use and conform to presentation suggested by the LPGA and (iii)
be gender specific with respect to the use by women of the Initially Exclusive
Articles of the Licensed Products. Licensee shall not use the Logos or any
reproductions thereof in any advertising, promotion, display material or in any
other manner whatsoever without the prior written approval of the LPGA. Samples
of any proposed use of the Logos shall be submitted to the LPGA (Attention:
General Counsel of the LPGA), and such samples shall be deemed approved and
consented to by the LPGA unless Licensee is notified otherwise within five (5)
business days after the LPGA's receipt of such samples. Under no circumstances
will Licensee use the Logos in connection with "lotteries" or "games of chance"
sponsored by Licensee.
11. Distribution. Licensee shall use its best efforts to manufacture,
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distribute and sell the Licensed Products in all price and quality brackets that
may be required to meet competition by reputable manufacturers of similar
articles. Licensee shall make and maintain adequate arrangements for the
distribution of the Licensed Products throughout the world.
12. Goodwill. Licensee recognizes the great value of the
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publicity and goodwill associated with the Logos and, in that
connection, acknowledges that (i) such goodwill belongs exclusively to
the LPGA, (ii) no such property or other right will vest in Licensee as
a result of this Agreement or of Licensee's use of the Logos permitted
hereunder, and (iii) the Logos have acquired a secondary meaning in the
mind of the public.
13. Specific Undertakings of Licensee. During the term of
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this Agreement and thereafter, Licensee agrees that;
(a) It will not do or cause to be done any act or thing contesting or
in any way impairing or tending to impair the right, title and interest of the
LPGA in and to the Logos, or any copyright, trademark or service ▇▇▇▇ pertaining
thereto, nor will it attack the validity of the license granted hereunder;
(b) It will not use the Logos in any manner other than as licensed
hereunder, nor will it at any time, without the prior written consent of the
LPGA, adopt or use any word or ▇▇▇▇ which is likely to be similar to or
confusing with the Logos;
(c) It will not harm, misuse or bring into disrepute the Logos;
(d) It will not create any expenses chargeable to the LPGA without the
prior written approval of the LPGA;
(e) It will not enter into any sublicense or agency agreement for the
manufacture, sale or distribution of the Licensed Products without the prior
written consent of the LPGA;
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(f) Except as otherwise provided in paragraph 2(b) above, it will not
use, or knowingly permit the use of, the Licensed Products as a giveaway or as a
Premium without the prior written consent of the LPGA;
(g) It will comply in all material respects with all applicable laws,
regulations and requirements relating or pertaining to the manufacture, sale,
advertising or use of the Licensed Products, including, without limitation, the
requirements of the United States Consumer Product Safety Commission;
(h) Except as otherwise provided in that certain letter agreement
between the parties hereto dated July 31, 1991 as amended and restated in
Exhibit D hereto, Licensee will offer the Licensed Products for sale to the LPGA
at prices not to exceed the lowest wholesale prices for such Licensed Products,
and shall promptly ship or deliver to the LPGA all Licensed Products purchased
by the LPGA;
14. Termination.
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(a) The occurrence of any one or more of the following events shall
constitute a Default by Licensee under this Agreement:
(i) If Licensee fails to deliver to the LPGA or to maintain in
full force and effect the insurance referred to in paragraph 8(d) above; or
(ii) If Licensee fails to make any payment due hereunder on the
date due; or
(iii) If Licensee fails to deliver any of the statements required
pursuant to paragraph 5(e) above or to provide the LPGA or its authorized
representatives with access to Licensee's premises and/or records and accounts
pursuant to Section 17 below; or
(iv) If any governmental agency or court of competent jurisdiction
finds that a Licensed Product is defective in any way, manner or form that, in
the reasonable opinion of the LPGA, brings into disrepute the Logos; or
(v) If Licensee is unable to pay its debts when due, or makes any
assignment for the benefit of creditors or an arrangement pursuant to any
bankruptcy law, or files or has filed against it any petition under the
bankruptcy or insolvency laws of any jurisdiction, county or place, or shall
have or suffer a receiver or trustee to be appointed for its business or
property, or be adjudicated a bankrupt or an insolvent; or
(vi) If Licensee does not commence in good faith to manufacture,
distribute and sell the Licensed Products in accordance with the terms of this
Agreement within three (3) months from June 1, 1996; or
(vii) If Licensee shall discontinue its business as it is now
conducted: or
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(viii) If, in the periodic statements furnished pursuant to
paragraph 5(e) above, the amounts owed to the LPGA are significantly or
consistently understated; or
(ix) If Licensee shall fail to perform or shall be in breach of
any material term of this Agreement; or
(b) In the event Licensee has failed to cure a Default within thirty
(30) days of receipt of written notice from the LPGA specifying such Default,
the LPGA shall have the right to terminate this Agreement.
(c) In the event that the LPGA grants, during the Term of
this Agreement, a Competing License, Licensee shall have the right to Terminate
this Agreement. Upon Licensee's election to so terminate this Agreement
Licensee(other than as described in sections 14(d) and 15 below) shall have no
further obligations to the LPGA.
(d) Upon termination of this Agreement pursuant to this Section 14,
Licensee shall pay the LPGA any and all payments then due from Licensee
hereunder, and Licensee shall have no further right to use, manufacture,
advertise, distribute, sell or otherwise deal in any products which use the
Logos. The LPGA's exercise of its right to terminate this Agreement pursuant to
this Section 14 shall be without prejudice to any other rights and remedies
available to it at law or in equity.
15. Disposal of Stock. Except as otherwise provided in this Section 15,
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after the termination or expiration of this Agreement, Licensee shall have no
further right to manufacture, distribute, sell, exploit or otherwise deal in any
articles which utilize the Logos. Within thirty (30) days after the expiration
or termination of this Agreement, Licensee shall deliver to the LPGA a statement
indicating the number and description of the Licensed Products on hand or in
process as of the date of such statement. During the period of three hundred
sixty (360) days immediately following the expiration or termination of this
Agreement, Licensee may dispose of products or materials which are on hand or in
process at the time of such expiration or termination, but only in the normal
course of business and at regular or reasonably discounted selling prices. All
such sales shall be subject to the terms and conditions of this Agreement.
Licensee may remove the Logos from any such products or materials and shall be
free to sell or dispose of such products or materials in any manner it sees fit
as long as identification of the LPGA is not possible.
16. LPGA Representations. The LPGA agrees, warrants and represents the
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following:
(a) It has and will have throughout the term of this Agreement the
exclusive right to license the Logos to Licensee in the United States.
(b) The making of this Agreement by the LPGA and the fulfillment of
its obligations hereunder does not violate the
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Constitution or By-Laws of the LPGA or, to the knowledge of the LPGA, any
agreements, rights or obligations existing between the LPGA and others.
(c) The LPGA will be throughout the term of this Agreement the sale
owner of all right, title and interest in and to the Logos hereinabove
described, for use in connection with the manufacture, development, promotion,
sale or distribution of the Licensed Products in the United States.
(d) The LPGA has the exclusive right to register in the United States
the name "Ladies Professional Golf Association" and its present logo as
trademarks on the public register of the United States Patent and Trademark
Office, for use in connection with the Licensed Products herein.
(e) The LPGA has the exclusive right to obtain appropriate United
States copyright registration respecting all existing and any new art work in
connection with the Logos licensed herein.
17. Books and Records.
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(a) Licensee shall keep, maintain and preserve at Licensee's place Of
business, for at least two (2) years following termination or expiration of
this Agreement, complete and accurate records and accounts including, but not
limited to, invoices, correspondence, banking and financial and other records
pertaining to the various items required to be shown on the statements to be
submitted by Licensee pursuant to paragraph 5(e) above. Such records and
accounts shall be available to the LPGA or its representatives for inspection
and for purposes of making extracts therefrom and copies thereof and for audit
at any time or times during reasonable business hours and upon reasonable
notice by the LPGA.
(b) Licensee further agrees, in order to facilitate inspection of its
books and records by the LPCA, that it will designate a symbol or number which
shall be used by Licensee on all books and records to denote activity relating
to the Licensed Products.
18. Reservation of Rights. The LPGA retains all rights not expressly and
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exclusively conveyed herein, and the LPGA may grant to third parties the right
to use the Logos in connection with other products, including products identical
to the (i) Non-Exclusive Articles and (ii) during any Subsequent Term, Initially
Exclusive Articles of Licensed Products set forth in Exhibit B attached hereto.
19. Confidentiality. All records and accounts, and statements
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thereof, and other information furnished or made available by one party to the
other hereunder shall be kept confidential by the other party and shall not be
disclosed to any third party, or to any person without need to know, without the
prior written consent of the party furnishing such information.
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20. Notices. All notices, requests, consents and other communications
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required or permitted hereunder, if any, shall be in writing and hand-
delivered, telecopied or mailed by first class mail, certified, return receipt
requested and, if hand delivered, shall be deemed to be received when so
delivered, if telecopied, shall be deemed to be received when transmission is
confirmed or, if mailed, shall be deemed to be received two (2) days after the
date of mailing and shall be addressed as follows:
The LPGA: Ladies Professional Golf Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Commissioner
Copy to: ▇▇ ▇. ▇▇▇▇▇, Esq.
General Counsel
Ladies Professional Golf Association ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Licensee: S2 Golf Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇
Suite 16 South
Three Gateway Center
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or telephone numbers as either party hereto shall have
designated to the other in writing.
21. Entire Agreement. This Agreement, together with the Exhibits attached
----------------
hereto, constitutes the entire agreement of the parties hereto as to the matters
stated herein, and no amendment or modification shall be binding unless reduced
to writing and signed by the parties.
22. Waiver. The failure of any party at any time to demand strict
------
performance by another of any of the terms, covenants or conditions set forth
herein shall not be construed as a continuing waiver or relinquishment thereof,
and any party may, at any time, demand strict and complete performance by
another of the terms, covenants and conditions hereof.
23. Relationship of the Parties. Nothing herein contained shall be
---------------------------
construed to place the LPGA and Licensee in an agency, partnership or joint
venture relationship. Neither party shall have the right to obligate or bind
the other in any manner whatsoever, and nothing herein
12
contained shall give or is intended to give any rights of any kind to any third
persons.
24. Assignment. This Agreement and any rights granted herein are personal
----------
to Licensee and shall not be assigned, sub-licensed or encumbered by Licensee
without the prior written consent of the LPGA. This Agreement shall be binding
upon and shall inure to the benefit of the parties' permitted successors and
assigns.
25. Governing Law. This Agreement shall be governed by, and construed in
-------------
accordance with, the laws of the State of Ohio, and the applicable trademark and
copyright laws of the United States, without regard to the conflicts of law
principles thereof.
26. Severability. In the event any one or more provisions of this
------------
Agreement shall be declared invalid, illegal or unenforceable in any respect.
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
27. Acceptance by LPGA. This instrument, when signed by Licensee, shall
------------------
be deemed an application for a license and not a binding agreement unless and
until signed by the LPGA.
28. Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall together constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above:
LADIES PROFESSIONAL GOLF ASSOCIATION
_______________________________
Name: ▇▇▇ ▇▇▇▇▇
Title: Commissioner
S2 GOLF, INC.
________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President
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Exhibit A
LOGOS
-----
[LPGA Logo]
Registered in the United States Patent and Trademark Office, Registration Number
1790756 and Dated August 31, 1993.
The term Logos also refers to any other marks or logos developed and utilized by
the LPGA during the term of this Agreement, other than any marks and logos
developed and utilized by the LPGA in conjunction with LPGA co-sponsored events
and/or tournaments.
14
EXHIBIT B
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LICENSED PRODUCTS
-----------------
Initially Exclusive Articles:
-----------------------------
Women's golf clubs (woods, irons, putters and utility clubs).
Non-Exclusive Articles:
-----------------------
Golf bags, golf balls, golf gloves, carryalls, visors, caps, hats and umbrellas.
15
================================================================================
EXHIBIT C
Square Two [LPGA
LPGA Teaching and Club Professional Logo]
Team Classic
-----------------
SQUARE TWO GOLF
TITLE SPONSORSHIP BENEFITS
1996 - 2000
-----------------
Ladies
Professional
Golf
Association
================================================================================
16
================================================================================
[LPGA SQUARE TWO
Logo] LPGA TEACHING AND CLUB PROFESSIONAL
TEAM CLASSIC
TITLE SPONSORSHIP
. Exclusive designation of Square Two Golf as the title sponsor of the Square
Two LPGA Teaching and Club Professional Team Classic from May, 1996 to
December 31, 2000.
HOST SITE
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. 1996 Team Classic: December ▇▇ - ▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ - 2000: Sites to be Determined
MEDIA BENEFITS
--------------
. Production and distribution of a national and international LPGA press
release announcing the title sponsorship relationship sent to 2,400 media
points as weal as LPGA sponsors, members and other LPGA affiliated
organizations.
. Listing in the annual Rolex LPGA Schedule (300,000 - 350,000 printed and
distributed to LPGA members, sponsors, licensees, tournaments and fans).
. Title sponsorship credit and tournament history in the annual Player Guide
within the LPGA Teaching and Club Professional Division Section (13,000 -
20,000 printed and distributed to LPGA members, sponsors, licensees,
tournament, media and fans).
. Listing in the annual Kodak Calendar (15,000 - 20,000 printed and distributed
to LPGA members, sponsors, licensees, tournaments and fans).
. Feature article in an upcoming LPGA T&CP Division national newsletter
announcing the title sponsorship relationship (2,000 printed quarterly and
distributed to LPGA T&CP and Tour members, sponsors, licensees and
tournaments)
. Pre-tournament and post-tournament articles annually in the LPGA T&CP
Division national newsletter.
================================================================================
17
[LPGA
Logo]
. Title sponsorship credit, tournament history and one full page, black and
white advertisement in the annual LPGA Teaching and Club Professional
Membership Guide and Directory (1,200 printed and distributed to LPGA
members, sponsors and other LPGA affiliated organizations).
TOURNAMENT LOGO
---------------
. Development of a tournament logo which communicates the Square Two Golf -
LPGA partnership. Inclusion of the logo on all tournament print promotion
pieces, press releases, registration materials, on-course-signage.
. Square Two Golf granted the use of the tournament logo and title in all
promotional materials.
ENTERTAINMENT BENEFITS
----------------------
. Two pro-am spots including gift packs for the Members Pro-Am. Square Two Golf
has first choice of professionals. Four pro-am luncheon invitations.
. Nine pro-am spots including gift packs for the Team Classic Pro-Am. Square
Two Golf has first choice of professionals. Eighteen pro-am reception
invitations.
. Six Team Classic Banquet invitations.
DISPLAY AND PROMOTION
---------------------
. Prominent Square Two Golf signage at the Team Classic scoreboard, clubhouse,
driving range, first and tenth tees and all food and beverage events.
. Square Two Golf title sponsorship recognition on the official scorecard of
the event.
. Square Two Golf demo area set on the driving range throughout tournament
week-
. Square Two Golf demo day or promotional activity on days prior to the
tournament for facility members and general public. LPGA Teaching and Club
Professional Division members chosen by Square Two Golf will participate.
. Square Two Golf promotional materials distributed to all pro-am participants
and Team Classic participants.
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. Opportunity to have Square Two Golf promotional activity during Team Classic
Pro-Am (i.e. closest-to the-pin contest).
. Promotional involvement in Team Classic Shoot-Out to be jointly developed by
Square Two Golf and the LPGA.
. One time annual usage of the LPGA Teaching and Club Professional Division
membership mailing list. (All materials must be pre-approved by the LPGA).
SPONSORSHIP FEE
---------------
1996 - $25,000
1997 - $30,000
1998 - $32,500
1999 - $35,000
2000 - $37,500
Nine pro-am prizes (three teams) donated by Square Two Golf.
Other Square Two Golf product for pro-am participants and players to be
decided upon by Square Two Golf.
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Exhibit D
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LPGA Teaching Division Sales Program
------------------------------------
Any member of the Teaching Division whose principal place of employment is at a
recognized golf club, course or range as such terms are defined in the LPGA
Teaching Division Constitution (a "Teaching Member") will have the opportunity
through the LPGA Teaching Division Sales program to sell any Square Two product
to the public. Square Two shall pay a fee of 3% on net sales to the LPGA
Teaching Division for any Square Two product sold provided the product is
ordered directly from Square Two Golf
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