EXHIBIT 10.1
LIMITED LIABILITY COMPANY AGREEMENT
OF
DIVOT - RFG JOINT VENTURE, L.L.C.
This Limited Liability Company Agreement of DIVOT - RFG JOINT VENTURE,
L.L.C. (the "Company") is made as of ______________, 1998 and is effective as of
_______________, 1998 (this "Agreement") by and between EAGLE GOLF ENTERPRISES,
INC., a Florida corporation ("EAGLE"), and DIVOT GOLF CORPORATION, a Florida
corporation ("DIVOT"), as members (collectively, the "Members").
WHEREAS, the Members desire to operate the Company as a limited
liability company under the Florida Act for the purposes set forth herein.
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Members hereby agree as
follows:
ARTICLE 1
DEFINED TERMS
Section 1.1 Definitions. Unless the context otherwise requires, the
terms defined in this Article I shall, for the purposes of this Agreement, have
the meanings herein specified.
"Affiliate" means with respect to a specified Person, any entity or other
Person that directly or indirectly controls, is controlled by, or is under
common control with, the specified Person. As used in this definition, the term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of an entity, whether
through ownership of voting securities, by contract or otherwise.
"Agreement" means this Limited Liability Company Agreement, as amended,
modified, supplemented or restated from time to time. References in the Florida
Act to "regulations" shall mean this Agreement.
"Articles" means the Articles of Organization of the Company and any and
all amendments thereto and restatements thereof filed on behalf of the Company
with the office of the Secretary of State of the State of Florida pursuant to
the Florida Act.
"Capital Account" means, with respect to any Member, the capital account
maintained for such Member in accordance with the provisions of Section 4.4
hereof.
"Capital Contribution" means, with respect to any Member, the aggregate
amount of money and the initial Gross Asset Value of any property (other than
money) contributed to the Company pursuant to Section 4.1 hereof with respect to
such Member's Interest.
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"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any corresponding federal tax statute enacted after the date of this
Agreement.
"Company Minimum Gain Chargeback Allocation" means the allocations
required by ss.1.704-2(f) of the Treasury Regulations.
"Covered Person" means a Member; any Affiliate of a Member; the Management
Committee or any member thereof; any officers, directors, shareholders,
partners, employees, representatives or agents of a Member, any Affiliate of a
Member, or the Management Committee; any employee or agent of the Company or its
Affiliates; any Tax Matters Member of the Company; or the President of the
Company.
"Depreciation" means, for each Fiscal Year or other period, an amount
equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such Fiscal Year or other period;
provided, however, that if the Gross Asset Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of such Fiscal
Year or other period, Depreciation shall be an amount that bears the same ratio
to such beginning Gross Asset Value as the federal income tax depreciation,
amortization or other cost recovery deduction with respect to such asset for
such Fiscal Year or other period bears to such beginning adjusted tax basis; and
provided further, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such Fiscal Year or other period is zero,
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the Management Committee.
"Fiscal Year" means (i) the period commencing upon the formation of the
Company and ending on December 31, 1998, (ii) any subsequent twelve (12) month
period commencing on January 1 and ending on December 31.
"Florida Act" means Chapter 608, Florida Statutes, as amended from time to
time.
"▇▇▇▇▇ Identification" means the name "▇▇▇▇▇," "▇▇▇ ▇▇▇▇▇" or "▇▇▇▇▇▇▇
▇▇▇▇▇", the likeness, image and endorsement of ▇▇▇▇▇, the facsimile signature of
▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Eagle Design ▇▇▇▇, and also including without limitation
the "▇▇▇▇▇ Collection Marks" and "▇▇▇ ▇▇▇▇▇ Collection," all as more
specifically defined or provided for in the License Agreement.
"Gross Asset Value" means, with respect to any asset, such asset's
adjusted basis for federal income tax purposes, except as follows:
(a) the initial Gross Asset Value of any asset contributed by a
Member to the Company shall be the gross fair market value of such asset, as
reasonably agreed to by the contributing Member and the Management Committee;
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(b) the Gross Asset Value of all Company assets shall be adjusted to
equal their respective gross fair market values, as reasonably determined by the
Management Committee and all Members, as of the following times: (a) the
acquisition of an additional interest in the Company by any new or existing
Member in exchange for more than a de minimis Capital Contribution; (b) the
distribution by the Company to a Member of more than a de minimis amount of
Company assets as consideration for an interest in the Company; and (c) the
liquidation of the Company within the meaning of Treasury Regulation
ss.1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to Clause
(a) and Clause (b) of this sentence shall be made only if the Management
Committee and all Members reasonably determine that such adjustments are
necessary or appropriate to reflect the relative economic interests of the
Members in the Company; and
(c) the Gross Asset Value of any Company asset distributed to any
Member shall be the gross fair market value of such asset on the date of
distribution, as reasonably determined by the Management Committee and such
Member.
If the Gross Asset Value of an asset has been determined or adjusted
pursuant to Paragraph (a) or Paragraph (b) above, such Gross Asset Value shall
thereafter be adjusted by the Depreciation taken into account with respect to
such asset for purposes of computing Profits and Losses.
"Interest" means a Person's share of the allocations of the Company and a
Person's rights to receive distributions of the Company's assets in accordance
with the provisions of this Agreement and the Florida Act, whether as a Member
or an assignee of a Member's Interest.
"License Agreement" means that certain License Agreement between ▇▇▇
▇▇▇▇▇ Enterprises, Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Company dated even date
herewith.
"Management Committee" has the meaning set forth in Section 6.1 hereof.
"Member" means any Person named as a member of the Company on Schedule A
hereto and includes any Person admitted as an Additional Member or a Substitute
Member pursuant to the provisions of this Agreement, in such Person's capacity
as a Member of the Company, and "Members" means two (2) or more of such Persons
when acting in their capacities as Members of the Company. For purposes of the
Florida Act, the Members shall constitute one (1) class or group of members.
"Member Minimum Gain Chargeback Allocations" mean the allocations required
by ss.1.704-2(i)(3) of the Treasury Regulations.
"Member Nonrecourse Deduction Allocations" mean the allocations required
by ss.1.704-2(i)(2) of the Treasury Regulations.
"▇▇▇▇▇▇ Products" means the products listed in the current ▇▇▇▇▇▇ Golf
Catalog (titled "▇▇▇▇▇▇ Golf 1998 Retail Catalog", containing 49 pages) and
attached to this Agreement as Exhibit "I", and incorporated herein by reference.
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"Net Cash Flow" means, for each calendar month, Fiscal Year or other
period of the Company for which it must be determined, the gross cash receipts
of the Company from all sources other than Capital Contributions, less: (i) all
amounts actually paid by or for the account of the Company during the same
period pursuant to budgets, models, expense policies and business plans approved
by all the Members from time to time; (ii) reasonable reserves for reasonably
foreseeable expenses and other contingencies described in budgets and business
plans approved by all the Members; and (iii) payments of principal and interest
on any Company borrowings from Members or their Affiliates and expenses
reimbursed to Members or Affiliates, provided they are approved in advance by
all of the Members. Net Cash Flow shall not be reduced by depreciation,
amortization, cost recovery deductions, depletion, similar allowances or other
non-cash items, but shall be increased by any reduction of reserves previously
established.
"Nonrecourse Deduction Allocations" means the nonrecourse deductions as
defined in ss.1.704-2(c) of the Treasury Regulations.
"Percentage Interest" means a Member's Percentage Interest (from Schedule
A). The Percentage Interest of EAGLE shall not be diluted without its prior
written consent. Voting shall at all times be based upon the Members' Percentage
Interests (including times when the Capital Accounts of all Members is negative
or zero), except as provided in this Agreement.
"Person" includes any individual, corporation, association, partnership
(general or limited), joint venture, trust, estate, limited liability company,
or other legal entity or organization.
"Profits" or "Losses" means, for each Fiscal Year, an amount equal to the
Company's taxable income or loss for such Fiscal Year, determined in accordance
with ss.703(a) of the Code (but including in taxable income or loss, for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to ss.703(a)(1) of the Code), with the following
adjustments:
(a) any income of the Company exempt from federal income tax and not
otherwise taken into account in computing Profits or Losses pursuant to this
definition shall be added to such taxable income or loss;
(b) any expenditures of the Company described in ss.705(a)(2)(B) of
the Code (or treated as expenditures described in ss.705(a)(2)(B) of the Code
pursuant to Treasury Regulation ss.1.704-1 (b)(2)(iv)(i)) and not otherwise
taken into account in computing Profits or Losses pursuant to this definition
shall be subtracted from such taxable income or loss;
(c) in the event the Gross Asset Value of any Company asset is
adjusted in accordance with Paragraph (b) or Paragraph (c) of the definition of
"Gross Asset Value" above, the amount of such adjustment shall be taken into
account as gain or loss from the disposition of such asset for purposes of
computing Profits or Losses;
(d) gain or loss resulting from any disposition of any asset of the
Company with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Gross Asset Value of the asset
disposed of, notwithstanding that the adjusted tax basis of such asset differs
from its Gross Asset Value;
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(e) in lieu of the depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such Fiscal Year or other period,
computed in accordance with the definition of "Depreciation" above; and
(f) notwithstanding any other provisions of this definition, any items
which are specially allocated pursuant to Section 8.2 hereof shall not be taken
into account in computing Profits or Losses.
"Substitute Member" means a Person who is admitted to the Company as a
Member pursuant to Section 14.1 hereof, and who is named as a Member on an
amended Schedule A to this Agreement.
"Tax Matters Member" has the meaning set forth in Section 11.1 hereof.
"Treasury Regulations" means the income tax regulations, including
temporary regulations, promulgated under the Code, as such regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).
ARTICLE 2
FORMATION AND TERM
Section 2.1 Formation.
(a) The Members hereby agree to form the Company as a limited
liability company pursuant to the provisions of the Florida Act, and agree that
the rights, duties and liabilities of the Members shall be as provided in the
Florida Act, except as otherwise provided herein.
(b) The name and mailing address of each Member and the amount
contributed to the capital of the Company shall be listed on Schedule A attached
hereto. The Management Committee shall be required to update Schedule A from
time to time as necessary to accurately reflect the information therein. Any
amendment or revision to Schedule A made in accordance with this Agreement shall
not be deemed an amendment to this Agreement. Any reference in this Agreement to
Schedule A shall be deemed to be a reference to Schedule A as amended and in
effect from time to time.
(c) The Members, or an authorized person on their behalf, shall
execute, deliver and file the Articles and any and all amendments thereto and
restatements thereof.
Section 2.2 Name. The name of the Company formed and continued is
DIVOT - RFG JOINT NEW VENTURE, L.L.C., or such other name as in available under
the Florida Act and agreed upon by all of the Members. The business of the
Company may be conducted upon compliance with all applicable laws under any
other name designated by the Management Committee, provided that any name
containing "Eagle" or "▇▇▇▇▇" or any part of the ▇▇▇▇▇ Identification shall
require prior written consent of EAGLE.
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Section 2.3 Term. The term of the Company shall commence on the date
the Articles are filed in the office of the Secretary of State of the State of
Florida and shall continue until December 31, 2058, unless the Company is
dissolved before such date in accordance with the provisions of this Agreement.
Section 2.4 Registered Agent and Office. The Company's registered
agent and office in Florida shall be ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. At any time, the Management Committee may
designate another registered agent and/or registered office.
Section 2.5 Principal Place of Business. The principal place of
business of the Company shall be ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. At any time, the Management Committee may
change the location of the Company's principal place of business.
Section 2.6 Qualification in Other Jurisdictions. Subject to Section
2.2, the Management Committee shall cause the Company to be qualified, formed or
registered under assumed or fictitious name statutes or similar laws in any
jurisdiction in which the Company transacts business. The President of the
Company shall execute, deliver and file any certificates (and any amendments
and/or restatements thereof) necessary for the Company to qualify to do business
in a jurisdiction in which the Company may wish to conduct business.
ARTICLE 3
PURPOSE AND POWERS OF THE COMPANY
Section 3.1 Purpose. The purpose of the Company shall be to distribute
and market on an exclusive basis various golf products manufactured by DIVOT (or
by its subsidiaries and other Affiliates, including without limitation, ▇▇▇▇▇▇
Golf, Inc., a Massachusetts corporation, or any successor business entity of
▇▇▇▇▇▇ Golf, Inc. (hereinafter "▇▇▇▇▇▇")), such products as are agreed upon in
writing by EAGLE and DIVOT from time to time, including the Licensed Products so
agreed upon and described in the License Agreement signed on even date herewith,
and such additional Licensed Products as may hereafter be agreed upon from time
to time pursuant to the terms and conditions of the License Agreement. DIVOT
(and its subsidiaries and other Affiliates, including without limitation,
▇▇▇▇▇▇) shall cause all business developments, enterprises, ventures, alliances
and other undertakings or opportunities relating to the manufacture,
distribution, marketing and sale of golf accessories and golf apparel (including
but not limited to clothing, shoes, socks and other footwear, gloves, belts,
hats and headwear, luggage and carry-alls or travel bags, golf bags and covers,
bag tags, golf-related gifts, divot tools eyewear/sunglasses, club head covers,
towels, umbrellas and golf jewelry and other golf collectibles) to be directed
to and undertaken by the Company for its exclusive profit and benefit,
irrespective of the fact that certain representatives, employees, agents and
other resources of DIVOT and such subsidiaries and other Affiliates may be
separately involved in developing such business undertakings and opportunities;
provided, however, that, notwithstanding anything in this Agreement to the
contrary, nothing herein shall prevent, limit, or restrict DIVOT or ▇▇▇▇▇▇ or
any of their Affiliates) in its or their manufacture, distribution, or sale of
the ▇▇▇▇▇▇ Products.
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The Company and its business shall be operated, developed and advanced in
a manner consistent with the reasonable business judgement and commercial
standards that an experienced and prudent manager would exercise and be governed
by when controlling and administering a comparable start-up venture. The
Company's purposes and business plan shall be implemented and advanced by DIVOT
and the Management Committee on a best efforts basis, with the primary goals of
successfully growing its business and maximizing the value of the Members'
Interests.
Section 3.2 Powers of the Company. The Company shall have the power
and authority to take any and all actions necessary, appropriate, proper,
advisable, incidental or convenient to or for the furtherance of the purpose set
forth in Section 3.1, including, but not limited to, the power:
(a) to conduct its business, carry on its operations and have and
exercise the powers granted to a limited liability company by the Florida Act in
any state, territory, district or possession of the United States, or in any
foreign country that may be necessary, convenient or incidental to the
accomplishment of the purpose of the Company;
(b) to acquire by purchase, lease, contribution of property or
otherwise, own, hold, operate, maintain, finance, improve, lease, sell, convey,
pledge, mortgage, transfer, demolish or dispose of any real or personal property
that may be necessary, convenient or incidental to the accomplishment of the
purpose of the Company;
(c) to enter into, perform and carry out contracts of any kind
(including contracts with any Member or Affiliate thereof, subject to Section
6.4) necessary to the accomplishment of the purpose of the Company;
(d) to ▇▇▇ and be sued, make claims and defend, and participate in
administrative or other proceedings, in its name;
(e) to appoint employees and agents of the Company, and define
their duties and fix their compensation;
(f) subject to the provisions of Article 12, to indemnify certain
Persons in accordance with the Florida Act and to obtain any and all types of
insurance;
(g) to borrow money and issue evidences of indebtedness (including
loans from any Member or Affiliate thereof, subject to Section 6.4) and to
secure any of the same by a mortgage, pledge or other lien on the assets of
the Company;
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(h) to pay, collect, compromise, litigate, arbitrate or otherwise
adjust or settle any and all other claims or demands of or against the
Company or to hold such proceeds against the payment of contingent
liabilities; and
(i) to make, execute, acknowledge and file any and all documents or
instruments necessary, convenient or incidental to the accomplishment of the
purpose of the Company.
ARTICLE 4
CAPITAL CONTRIBUTIONS, MEMBER INTERESTS,
CAPITAL ACCOUNTS AND FUTURE CAPITAL REQUIREMENTS
Section 4.1 Capital Contributions.
(a) As set forth on Schedule A hereto, the Members shall make Capital
Contributions in cash or other property to the Company described therein, and
shall have original Capital Account balances equal to the amount of such Capital
Contributions.
(b) No Member shall be required to make additional Capital
Contributions without the prior written consent of such Member. The parties
acknowledge that EAGLE shall not be required to make any additional Capital
Contributions, or make any loans or advances to the Company, and that the Member
Interest of EAGLE shall not be diluted without its prior written consent.
Section 4.2 Additional Contributions, Advances and Efforts of
DIVOT.
(a) DIVOT shall also contribute to the Company the full sales,
distribution, marketing, communications, information systems, financial and
accounting services (including systems and controls), all production and
manufacturing, distributing and other resources of DIVOT (and its subsidiaries
and other Affiliates, including without limitation, ▇▇▇▇▇▇), including the time
services and other benefits of management and administrative personnel of DIVOT
and its Affiliates. Such resources shall be provided to the Company on an
as-needed basis, but nevertheless at such times and in a manner consistent with
the reasonable business judgement and commercial standards that an experienced
and prudent manager would exercise and be governed by when controlling and
administering a comparable start-up venture, and with the primary goals of
successfully growing the Company's business and maximizing the value of the
Members' Interests.
(b) The direct incremental costs of providing such services and resources
to the Company shall be reimbursed by the Company to DIVOT (or ▇▇▇▇▇▇ or the
other Affiliate providing the same) the from time to time as sufficient revenue
is available to the Company. Notwithstanding the foregoing, DIVOT or ▇▇▇▇▇▇
shall provide all executive and management services to the Company at no cost;
provided, however that after the Company's systems and operations have been
substantially developed and implemented, and the Management Committee believes
it to be in the Company's best interest to fully dedicate all of the services of
one or more persons to the management or administration of the Company, then the
direct costs of providing such dedicated services to Company shall be a
reimbursable expense (as hereinafter provided).
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(c) The determinations of the type and amount of such expenses that are
reimbursable (and the time for payment thereof by the Company to DIVOT, ▇▇▇▇▇▇
or their Affiliates) shall be made according to a written reimbursement plan,
policy or model to be jointly developed and agreed upon by the Management
Committee and all Members, and which in any event shall permit reimbursement of
expenses related only to the incremental increase in the direct costs (rather
than indirect costs, such as employee benefits, rent, taxes, professional fees
not directly related to the Company's business), of providing such services and
other resources. If the parties cannot agree on such a plan, policy or model
within 45 days after the date of this Agreement, the Company will retain a
nationally recognized accounting firm (the fees and costs of which shall be
borne by the Company) mutually agreeable to the Members, and such accounting
firm shall develop it for them. The Management Committee and the Members shall
be bound by such accounting firm's determination.
(d) The Company shall also enter into such management, services and
manufacturing agreements with ▇▇▇▇▇▇, and any other subsidiaries or Affiliates
of DIVOT that are to provide services or other resources to the Company
hereunder (and containing customary and normal terms reasonably acceptable to
both DIVOT and EAGLE) setting forth the terms of their relationship with the
Company, and also restricting usage of the ▇▇▇▇▇ Identification and any other
licensee rights under the License Agreement rights exclusively to the Company.
Section 4.3 Member's Interest. Each Member shall have the Percentage
Interest and Interest set forth in Schedule A. A Member's Interest shall for all
purposes be personal property. A Member has no interest in specific Company
property, unless and until distributed to such Member.
Section 4.4 Status of Capital Contributions.
(a) Except as otherwise provided in this Agreement, the amount of a
Member's Capital Contributions may be returned to it, in whole or in part, at
any time, but only with the unanimous consent of the Members.
(b) No Member or Affiliate thereof shall receive any interest, salary
or drawing with respect to its Capital Contributions or its Capital Account or
for services rendered or resources provided on behalf of the Company, except as
otherwise specifically provided in this Agreement.
(c) Except as otherwise provided in this Agreement, no Member shall be
required to lend any funds or make Capital Contributions to the Company or,
after a Member's Capital Contributions or advances of other resources have been
fully paid pursuant to Sections 4.1 and 4.2 hereof, to make any additional
Capital Contributions or advances to the Company. No Member shall have any
personal liability for the repayment of any Capital Contribution or advances of
any other Member.
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Section 4.5 Capital Accounts.
(a) A separate Capital Account shall be established and maintained for
each Member. The original Capital Account established for any Member who
acquires an Interest by virtue of an assignment in accordance with the terms of
this Agreement shall be in the same amount as, and shall replace, the Capital
Account of the assignor of such Interest, and, for purposes of this Agreement,
such Member shall be deemed to have made the Capital Contributions made by the
assignor of such Interest (or made by such assignor's predecessor in interest).
To the extent such Member acquires less than the entire Interest of the assignor
of the Interest so acquired by such Member, the original Capital Account of such
Member and its Capital Contributions shall be in proportion to the Interest it
acquires, and the Capital Account of the assignor who retains a partial
Interest, and the amount of its Capital Contributions, shall be reduced in
proportion to the Interest it retains.
(b) The Capital Account of each Member shall be maintained in
accordance with the following provisions:
(i) to such Member's Capital Account there shall be credited
such Member's Capital Contributions, such Member's distributive share of
Profits, special allocations of income and gain, and the amount of any
Company liabilities that are assumed by such Member or that are secured by
any Company assets distributed to such Member;
(ii) to such Member's Capital Account there shall be debited
the amount of cash and the Gross Asset Value of any Company assets
distributed to such Member pursuant to any provision of this Agreement, such
Member's distributive share of Losses, special allocations of loss and
deduction, and the amount of any liabilities of such Member that are assumed
by the Company or that are secured by any property contributed by such Member
to the Company; and
(iii) in determining the amount of any liability for
purposes of this Section (b), there shall be taken into account ss.752(c) of
the Code and any other applicable provisions of the Code and the Treasury
Regulations.
ARTICLE 5
MEMBERS
Section 5.1 Powers of Members. The Members shall have the power to
exercise any and all rights or powers granted to the Members pursuant to the
express terms of this Agreement.
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Section 5.2 Annual Budget and Business Plan. From time to time, but at
least annually, the Company's officers shall prepare or shall cause to be
prepared an updated business plan and operating, financing and capital budget
for the Company, commencing with the first partial Fiscal Year of the Company.
Each such business plan and budget shall be circulated to the Members for review
and comment, and upon approval by the Management Committee shall constitute the
business and budget of the Company for such Fiscal Year. In addition to such
other limitations as are contained therein, the Company's officers shall make no
disbursement and shall enter into no binding agreement, without the approval of
the Management Committee, if such disbursement or binding agreement would be
inconsistent with (or in light of all available facts and circumstances would
likely be inconsistent with) the then applicable business plan or budget.
Section 5.3 Resignation. Except as expressly provided in this Agreement,
a Member may not withdraw from the Company prior to the dissolution and winding
up of the Company. If a Member withdraws in violation of the foregoing
prohibition, such Member shall not be entitled to receive any distributions and
shall not otherwise be entitled to receive the fair market value of its Interest
except as otherwise expressly provided for in this Agreement.
ARTICLE 6
MANAGEMENT
Section 6.1 Management of the Company.
(a) The Management Committee shall consist of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
("▇▇▇▇") and four (4) other individuals, all four (4) of whom shall be appointed
by DIVOT after consultation with all Members. Such four (4) additional members
of the Management Committee may be removed and replaced at any time and from
time to time by DIVOT after consultation with all Members. ▇▇▇▇ shall each serve
on the Management Committee until he dies, resigns, or is removed by the written
consent of all of the Members. If ▇▇▇▇ dies, resigns or is removed by such
written consent of all Members, then his successor shall be mutually agreeable
to and appointed by written consent of all of the Members; and the same process
for written consent to removal/appointment shall continue to apply to all
successors of ▇▇▇▇ serving as a member of the Management Committee. The
authority to vote on actions affecting the Company shall be shared equally among
the individuals serving on the Management Committee. The Management Committee
shall meet as often as may be reasonably necessary, as determined in the
reasonable discretion of the Management Committee members, or at any time upon
the written demand of a Member. The actions of the Management Committee shall
bind the Company except as provided herein.
(b) No decision of the Management Committee shall be made except upon
majority vote of all of its members at a meeting duly called with at least five
(5) days notice, specifying the agenda for the meeting (which notice may be
waived by any of its members, and will be deemed to have been waived if the
member participates in the meeting and has been provided with an agenda for the
meeting). Meetings may be held telephonically whereby each of the members
participating can hear each of the other members. Action by the Management
Committee may also be taken and represented by a unanimous written consent. The
Management Committee shall appoint a Secretary who shall be responsible for
taking minutes of the meetings and safekeeping them on behalf of the Company.
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(c) ▇▇▇▇ shall serve as the initial Chief Executive Officer and
President of the Company ("CEO"), and the CEO shall at all times be responsible
for the execution of the management actions and decisions and the day-to-day
operations of the Company, until removed by the written consent of all of the
Members. If the CEO dies, resigns, or is removed by written consent of all
Members, then his successor (and all successors in such office succeeding him)
shall be mutually agreeable to and appointed by the written consent of all of
the Members. The Management Committee may appoint other individuals to serve as
officers of the Company, with such titles as it may select, including the titles
of Vice President, Treasurer and Secretary, to act on behalf of the Company with
such power and authority as the Management Committee may delegate in writing to
any such individual, subject to the restrictions and terms of this Agreement;
provided that no other officer so appointed shall have executive decision-making
or managerial authority senior to the CEO of the Company (including without
limitation, the Chairman, if one is appointed), without the written consent of
all Members.
(d) A member of the Management Committee may resign at any time by
giving at least thirty (30) days written notice to the other members of the
Management Committee (or such shorter time period acceptable to such members).
The resignation of any member of the Management Committee shall take effect upon
the expiration of said 30-day period or at such earlier time as determined by
the Management Committee. Unless otherwise specified in such notice, the
acceptance of such resignation shall not be necessary to make it effective. His
successor shall be appointed in the manner provided in Section 6.1(a).
Section 6.2 Powers of the Management Committee. Except as otherwise
specifically provided in this Agreement, the Management Committee shall have
full, exclusive and complete discretion, right, power, and authority to manage,
control and make all decisions affecting the business and affairs of the Company
and to do or cause to be done any and all acts, at the expense of the Company on
the terms provided herein, deemed by the Management Committee to be necessary or
appropriate to effectuate the business of the Company purposes and objectives of
the Company as set forth in this Agreement. Except as otherwise specifically
provided in this Agreement, and without limiting the generality of the
foregoing, the Management Committee shall have the power and authority to
execute all documents or instruments, perform all duties and powers and do all
things for and on behalf of the Company in all matters necessary, desirable,
convenient or incidental to the business of the Company.
The expression of any power or authority of the Management Committee in
this Agreement shall not in any way limit or exclude any other power or
authority which is not specifically or expressly set forth in this Agreement
provided the exercise of any such other power or authority is consistent with
this Agreement and the Florida Act.
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Section 6.3 No Management by Other Persons. No Person other than the
Management Committee members and the duly appointed officers of the Company and
its authorized agents shall take part in the management, or the operation or
control of the business and affairs of the Company. All such members, officers
and agents shall at all times comply with the terms and conditions of the
License Agreement. Except as expressly delegated by the Management Committee or
as required by the Florida Act, no Person other than the Management Committee
and the duly appointed officers or other authorized agents of the Company shall
be an agent of the Company or have any right, power or authority to transact any
business in the name of the Company or to act for or on behalf of or to bind the
Company.
Section 6.4 Restrictions on Authority of the Management Committee and
President. Notwithstanding anything to the contrary in this Article 6, neither
the Management Committee nor the President shall have any authority to take any
of the following actions without the unanimous written consent of all Members:
(i) To take any action that would cause a breach of or otherwise be
inconsistent with the License Agreement (or the stock registration rights
agreement relating to the DIVOT stock issued to Licensor or its Affiliates
thereunder);
(ii) To admit any additional Members at any time;
(iii) To cause the dissolution or liquidation of the Company, the
sale of substantially all of its business or assets, or the merger,
consolidation or other reorganization of the Company; or
(iv) To take any action requiring the consent or agreement of all
Members pursuant to this Agreement.
The President and the Management Committee shall also disclose in
writing to all Members any and all transactions between the Company and
Affiliates of any Member, Management Committee member, and officer or agent
of the Company before such transactions are implemented. The other Members,
the President and other officers, and the Management Committee shall take no
actions that would cause the Company to impair any of EAGLE's (or ▇▇▇▇▇▇▇
▇▇▇▇▇'▇ or his Affiliates') commercial alliances, agreements, endorsement
arrangements or other gainful commitments with other Persons, including
without limitation those commitments set forth in the list of "Eagle or ▇▇▇
▇▇▇▇▇ Commitments" attached as Schedule B hereto, and any renewal of such
commitments.
Section 6.5 Reliance by Third Parties. Any Person dealing with the
Company or the Management Committee may rely upon a certificate signed by the
Management Committee as to:
(i) the identity of the Management Committee or any
member hereof;
(ii) the existence or non-existence of any fact or facts which
constitute a condition precedent to acts by the Management Committee or in
any other manner germane to the affairs of the Company;
24
(iii) the Persons who are authorized to execute and
deliver any instrument or document of or on behalf of the Company; or
(iv) any act or failure to act by the Company or as to any
other matter whatsoever involving the Company or any Member.
ARTICLE 7
AMENDMENTS AND MEETINGS
Section 7.1 Amendments. Any amendment to this Agreement or the
Articles shall be adopted and be effective as an amendment thereto only if it
receives the affirmative vote of all of the Members, or such amendment is in
writing and executed by all of the Members.
Section 7.2 Meeting of the Members.
(a) Meetings of the Members may be called at any time by the
Management Committee or any Member. Each Member shall in writing authorize an
individual to represent and act for it by proxy on all matters in which a Member
is entitled to participate, including waiving notice of any meeting, voting or
otherwise participating at a meeting, and to provide such consents, approvals or
agreements of a Member as required in this Agreement. Every such proxy shall be
signed by the Member.
(b) Each meeting of Members shall be conducted by the President, and
such a meeting shall be called with at least five (5) days but not more than
thirty (30) days notice, specifying the agenda for the meeting. Such notice may
be waived by any of the Members at any time, and will be deemed to have been
waived if the Member participates in the meeting and has been provided with a
written agenda for the meeting. Meetings may also be held telephonically whereby
each of the Members can hear each of the other Members. The Management
Committee, in its sole discretion, shall establish all other provisions relating
to meetings of Members, including the time, place or purpose of any meeting at
which any matter is to be voted on by any Members, voting in person or by proxy
or any other matter with respect to the exercise of any such right to vote;
provided, however, any Member shall have the right to introduce agenda items for
each meeting. Except as expressly provided in this Agreement or the License
Agreement (concerning matters affecting the License Agreement), decisions of the
Members shall be made upon the vote of a majority in Interest of the Members.
Action by the Members may also be taken and represented by a unanimous written
consent. The Company's Secretary shall be responsible for taking minutes of the
Member meetings and safekeeping them on behalf of the Company.
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ARTICLE 8
ALLOCATIONS
Section 8.1 Profits and Losses.
(a) For each Fiscal Year of the Company, after giving effect to the
allocation rules of Section 8.2 hereof, net Profits for any Fiscal Year shall be
allocated as follows:
(i) First, between the Members in proportion to and in the inverse
order to which Losses were allocated to them pursuant to Section 8.1(b) below
until the cumulative Profits allocated pursuant to this Section 8.1(a)(i) equal
the cumulative Losses allocated pursuant to Section 8.1(b); and
(ii) Second, between the Members in proportion to their
Percentage Interests.
(b) For each Fiscal Year of the Company, after giving effect to the
allocations required by Section 8.2 hereof, net Losses for any Fiscal Year shall
be allocated as follows:
(i) First, between the Members in proportion to and to extent of
their positive Capital Account balances; and
(ii)Second, between the Members in proportion to their Percentage
Interests; provided that no Member shall be allocated Losses in excess of the
amount of the "economic risk of loss" it bears for the Company's indebtedness,
as determined under Treasury Regulation 1.752-2 (in which case, the excess Loss
shall be reallocated to the Member who bears such economic risk of loss for the
indebtedness, to the extent of the respective amounts of such economic risk of
loss it bears).
Section 8.2 Special Allocations.
(a) The Company shall make the qualified income offset allocation
required by the alternate test for economic effect under ss.1.704-1(b)(2)(ii)(d)
of the Treasury Regulations.
(b) In the event any Member has a deficit Capital Account at the end
of any Fiscal Year that is in excess of the sum of (i) the amount such Member is
obligated to restore to the Company pursuant to ss.1.704-1(b)(2)(ii)(c) of the
Treasury Regulations, (ii) the amount such Member is deemed to be obligated to
restore pursuant to the next to the last sentence of ss.1.704-2(g)(1) of the
Treasury Regulations and (iii) the amount such Member is deemed to be obligated
to restore pursuant to the next to the last sentence of ss.704-2(i)(5) of the
Treasury Regulations, such Member shall be specially allocated items of Company
income and gain in the amount of such excess as quickly as possible, provided
that an allocation pursuant to this Section 8.2(ii) shall be made if and only to
the extent that such Member would have a deficit Capital Account in excess of
such sum after all other allocations provided in this Article 8 have been
tentatively made as if Section 8.2(a) and this Section 8.2(b) were not in the
Agreement.
26
(c) The Company shall make all (1) Member Nonrecourse Deduction
Allocations; (2) Member Minimum Gain Chargeback Allocations; and (3) Company
Minimum Gain Chargeback Allocations.
(d) The Company shall make all Nonrecourse Deduction Allocations to
the Members in proportion to their Percentage Interests.
(e) To the extent an adjustment to the adjusted tax basis of any
Company asset pursuant to Code ss.734(b) or Code ss.743(b) is required, pursuant
to ss.1.704-1(b)(2)(iv)(m) of the Treasury Regulations, to be taken into account
in determining Capital Accounts, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis) and such
gain or loss shall be specially allocated to the Members in a manner consistent
with the manner in which their Capital Accounts are required to be adjusted
pursuant to such Section of the Treasury Regulations.
(f) The allocations set forth in this Section 8.2 (collectively the
"Regulatory Allocations") are intended to comply with certain requirements of
ss.1.704-1 and -2 of the Treasury Regulations. Notwithstanding any other
provisions of this Article 8 (other than the Regulatory Allocations), the
Management Committee shall, with the advice and assistance of the Company's tax
accountants, take the Regulatory Allocations into account in allocating other
Profits, Losses, and items of income, gain, loss, deduction and Code
ss.705(a)(2)(B) expenditures among the Members so that, to the extent possible,
the net amount of such allocations of other Profits, Losses, and other items and
the Regulatory Allocations to each Member shall be equal to the net amount that
would have been allocated to each such Member if the Regulatory Allocations had
not occurred.
Section 8.3 Allocation Rules.
(a) In the event Members are admitted to the Company pursuant to this
Agreement on different dates, the Profits (or Losses) allocated to the Members
for each Fiscal Year during which Members are so admitted shall be allocated
among the Members in proportion to their Percentage Interests during such Fiscal
Year in accordance with ss.706 of the Code, using any convention permitted by
law and selected by the Management Committee.
(b) For purposes of determining the Profits, Losses or any other items
allocable to any period, Profits, Losses and any such other items shall be
determined on a daily, monthly or other basis, as determined by the Management
Committee using any method that is permissible under ss.706 of the Code and the
Treasury Regulations thereunder.
(c) Except as otherwise provided in this Agreement, all items of
Company income, gain, loss, deduction and any other allocations not otherwise
provided for shall be divided among the Members in the same proportions as they
share Profits and Losses for the Fiscal Year in question.
27
(d) The Members are aware of the income tax consequences of the
allocations made by this Article 8 and hereby agree to be bound by the
provisions of this Article 8 in reporting their shares of Company income and
loss for income tax purposes.
(e) Solely for purposes of determining a Member's proportionate share
of the "excess nonrecourse liabilities" of the Company within the meaning of
Treasury Regulations ss.1.752-3(a)(3), the Members' interests in Company Profits
shall be in accordance with their Percentage Interests.
(f) The Management Committee shall have reasonable discretion, with
respect to each Fiscal Year, to request from the Commissioner of the Internal
Revenue Service a waiver, pursuant to ss.1.704-2(f)(4) or 1.704-2(i)(4) of the
Treasury Regulations, of the minimum gain chargeback requirement of ss.
1.704-2(f) of the Regulations or the member minimum gain chargeback requirement
of ss.1.704-2(i)(4) of the Treasury Regulations, respectively, if the
application of such chargeback would cause a permanent distortion of the
economic arrangement of the Members.
Section 8.4 Other Tax Allocations: Section 704(c) of the Code.
(a) In accordance with ss.704(c) of the Code and the Treasury
Regulations thereunder, income, gain, loss and deduction with respect to any
property contributed to the capital of the Company shall, solely for income tax
purposes, be allocated among the Members so as to take account of any variation
between the adjusted basis of such property to the Company for federal income
tax purposes and its initial Gross Asset Value (computed in accordance with the
definition in Section 1.1 hereof).
(b) In the event the Gross Asset Value of any Company asset is
adjusted pursuant to Paragraph (ii) of the definition of "Gross Asset Value"
contained in Section 1.1 hereof, subsequent allocations of income, gain, loss
and deduction with respect to such asset shall take account of any variation
between the adjusted basis of such asset for federal income tax purposes and its
Gross Asset Value in the same manner as under ss.704(c) of the Code and the
Treasury Regulations thereunder.
(c) Any elections or other decisions relating to allocations under
this Section 8.4, including the selection of any allocation method permitted
under Treasury Regulation ss.1.704-3, shall be made by the Management Committee
in any manner that reasonably reflects the purpose and intention of this
Agreement. Allocations pursuant to this Section 8.4 are solely for purposes of
federal, state and local taxes and shall not affect, or in any way be taken into
account in computing, any Member's Capital Account or share of Profits, Losses,
other items or distributions pursuant to any provision of this Agreement.
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ARTICLE 9
DISTRIBUTIONS
Section 9.1 Net Cash Flow. Except as otherwise provided in Article 15
hereof (relating to the dissolution of the Company), any distribution of the Net
Cash Flow during any Fiscal Year shall be made to the Members in proportion to
their Percentage Interests.
Section 9.2 Distribution Rules.
(a) Net Cash Flow shall be distributed at such times as the Management
Committee decides in its reasonable discretion, giving consideration to the
investment expectations of the Members and customary rates of return for
participation in similar types of business ventures; provided, however, that at
a minimum, the Management Committee shall distribute Net Cash Flow on a
quarterly basis (and in a manner that will allow the Members to timely submit
estimated federal and state income tax payments utilizing such funds) to the
extent necessary to cover the federal and aggregate state income taxes
applicable to the taxable Profits of the Company for the quarter to which the
quarterly distribution of Net Cash Flow relates. For purposes of computing the
amount of these minimum distributions, the highest marginal individual tax
brackets for both federal and state income tax purposes shall be used (and
including each state where the Company's taxable Profits are subject to income
tax).
(b) All amounts withheld pursuant to the Code or any provision of any
foreign, state or local tax law or treaty with respect to any payment,
distribution or allocation to the Company or the Members shall be treated as
amounts distributed to the Members pursuant to this Article 9 for all purposes
of this Agreement, provided that such amounts are calculated in accordance with
Section 9.2(a). The Management Committee is authorized to withhold from
distributions to the Members and to pay over to any federal, foreign, state or
local government any amounts required to be so withheld pursuant to the Code or
any provision of any other federal, foreign, state or local law or treaty, and
shall allocate such amounts to those Members with respect to which such amounts
were withheld.
Section 9.3 Limitations on Distribution. Notwithstanding any provision
to the contrary contained in this Agreement, the Company shall not make a
distribution to any Member on account of its Interest in the Company if (a)
there has been no agreement by the Management Committee and the Members relating
to the plan, policy or model providing for reimbursement of certain expenses of
DIVOT or its Affiliates as contemplated in Section 4.2 of this Agreement, or (b)
such distribution would violate the solvency standards under Section 608.426 of
the Florida Act or other applicable insolvency or fraudulent conveyance laws.
ARTICLE 10
BOOKS AND RECORDS
Section 10.1 Inspection Rights Pursuant to Law. Without limiting any
right which the Members enjoy under the Florida Act, it is agreed that the
Company shall have obligations to the Members as set forth in Sections 10.2
through 10.3 respecting books, records and financial statements of the Company.
29
Section 10.2 Books, Records and Financial Statements.
(a) At all times during the continuance of the Company, the Company
shall maintain, at its registered office and principal place of business all
records and materials referred to in Florida Act Section 608.4101, including
without limitation, separate books of account for the Company that shall show a
true and accurate record of all costs and expenses incurred, all charges made,
all credits made and received and all income derived in connection with the
operation of the Company business in accordance with generally accepted
accounting principles consistently applied ("GAAP"), and, to the extent
inconsistent therewith, in accordance with this Agreement. Such books of
account, together with a certified copy of this Agreement and of the
Certificate, shall at all times be maintained at the principal place of business
of the Company and shall be open to inspection, examination and audit at
reasonable times by each Member and its duly authorized representatives for any
purpose reasonably related to such Member's interest in the Company. This
provision shall be in addition to and not in substitution of any approval,
examination, verification, audit and other rights EAGLE or its Affiliates may
have under the License Agreement.
(b) The Management Committee shall prepare and maintain, or shall
cause to be prepared and maintained, the books of account of the Company. Not
later than thirty (30) days after the close of each month, the Management
Committee shall prepare (or shall cause to be prepared) in accordance with GAAP
financial statements (including balance sheets, income statements and statements
of cash flows) fairly presenting the financial position, results of operations
and changes in financial position of the Company as of the end of such calendar
month or, in the case of calendar months which end coincident with the end of a
calendar quarter or the end of a Fiscal Year, such calendar quarter or Fiscal
Year, as the case may be.
Section 10.3 Accounting Method. For both financial and tax reporting
purposes and for purposes of determining Profits and Losses, the books and
records of the Company shall be kept on the accrual method of accounting applied
in a consistent manner and shall reflect all Company transactions and be
appropriate and adequate for the Company's business.
ARTICLE 11
TAX MATTERS
Section 11.1 Tax Matters Member.
(a) DIVOT is hereby designated as "Tax Matters Member" of the Company
for purposes of ss.6231(a)(7) of the Code and shall have the power to manage and
control, on behalf of the Company, any administrative proceeding at the Company
level with the Internal Revenue Service relating to the determination of any
item of Company income, gain, loss, deduction or credit for federal income tax
purposes.
30
(b) The Tax Matters Member shall, within five (5) business days of the
receipt of any notice from the Internal Revenue Service in any administrative
proceeding at the Company level relating to the determination of any Company
item of income, gain, loss, deduction or credit, mail a copy of such notice to
each Member.
Section 11.2 Right to Make Section 754 Election. The Tax Matters
Member may, upon receiving the written consent of each other Member, make or
revoke, on behalf of the Company, an election in accordance with ss.754 of the
Code, so as to adjust the basis of Company property in the case of a
distribution of property within the meaning of ss.734 of the Code, and in the
case of a transfer of a Company Interest within the meaning of ss.743 of the
Code. Each Member shall, upon request of the Tax Matters Member, supply the
information necessary to give effect to such an election.
Section 11.3 Taxation as Partnership. The Company shall be
treated as a partnership for U.S. federal income tax purposes.
ARTICLE 12
LIABILITY, EXCULPATION, INDEMNIFICATION
AND BUSINESS OPPORTUNITIES
Section 12.1 Liability.
(a) Except as otherwise provided by the Florida Act, the debts,
obligations and liabilities of the Company, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the
Company, and no Covered Person shall be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being a Covered
Person.
(b) Except as otherwise expressly required by law, a Member, in its
capacity as Member, shall have no liability in excess of (a) the amount of its
Capital Contributions, (b) its share of any assets and undistributed profits of
the Company, (c) its obligation to make other payments expressly provided for in
this Agreement, and (d) the amount of any distributions wrongfully distributed
to it.
Section 12.2 Exculpation.
(a) No Covered Person shall be liable to the Company or any other
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Covered Person in good faith on behalf of
the Company and in a manner reasonably believed to be within the scope of
authority conferred on such Covered Person by this Agreement, except that a
Covered Person shall be liable for any such loss, damage or claim incurred by
reason of such Covered Person's gross negligence or willful misconduct.
31
(b) A Covered Person shall be fully protected in relying in good faith
upon the records of the Company and upon such information, opinions, reports or
statements presented to the Company by any Person as to matters the Covered
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Company, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, Profits, Losses or Net Cash Flow or any
other facts pertinent to the existence and amount of assets from which
distributions to Members might properly be paid.
Section 12.3 Indemnification. To the fullest extent permitted by
applicable law, a Covered Person shall be entitled to indemnification from the
Company for any loss, damage or claim incurred by such Covered Person by reason
of any act or omission performed or omitted by such Covered Person provided
that: (i) any such action was undertaken in good faith on behalf of the Company
and in a manner reasonably believed to be in, or not opposed to, the best
interests of the Company, (ii) any such action was reasonably believed to be
within the scope of authority conferred on such Covered Person by this
Agreement, and (iii) with respect to any criminal action or proceeding, such
Covered Person had no reasonable cause to believe his action or omission was
unlawful, except that no Covered Person shall be entitled to be indemnified in
respect of any loss, damage or claim incurred by such Covered Person by reason
of gross negligence or willful misconduct with respect to such acts or
omissions; provided, , that any indemnity under this Section 12.3 shall be
provided out of and to the extent of Company assets only (including the proceeds
of any insurance policy obtained pursuant to Section 12.5 however hereof), and
no Covered Person shall have any personal liability on account thereof.
Section 12.4 Expenses. To the fullest extent permitted by applicable
law, expenses (including legal fees) incurred by a Covered Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Company prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Company of an undertaking by or
on behalf of the Covered Person to repay such amount if it shall be determined
that the Covered Person is not entitled to be indemnified as authorized in
Section 12.3 hereof.
Section 12.5 Insurance. The Company shall purchase and maintain
insurance, to the extent and in such amounts as the Management Committee shall,
in its sole discretion, deem reasonable, on behalf of Covered Persons and such
other Persons as the Management Committee shall determine, against any liability
that may be asserted against or expenses that may be incurred by any such Person
in connection with the activities of the Company or such indemnities, regardless
of whether the Company would have the power to indemnify such Person against
such liability under the provisions of this Agreement. The Management Committee
and the Company may enter into indemnity contracts with Covered Persons and such
other Persons as the Management Committee shall determine and adopt written
procedures pursuant to which arrangements are made for the advancement of
expenses and the funding of obligations under Section 12.4 hereof and containing
such other procedures regarding indemnification as are appropriate.
32
Section 12.6 Ancillary Opportunities; Right of First Offer. In the event
DIVOT or any of its subsidiaries or other Affiliates, either alone or with
another Person or group (for this purpose, a "Venturer") desire to engage in any
business similar to that of the Company, the Company shall have the prior right
to consider such proposed business opportunity, and to instead undertake such
opportunity for the benefit of Company, either for itself or as a joint venturer
with a capital partner, joint venturer or other Person. Before such business
opportunity may be undertaken by any Venturer, the Members shall be provided
with a written plan for the proposed business opportunity, with sufficient
detail for them to make an informed decision as to whether the Company should
accept or reject the opportunity. The opportunity may be rejected only if all
Members agree in writing to reject it. It shall be accepted by the Company if
any Member votes to accept it. If the opportunity is so rejected, then the
Venturer shall be entitled to proceed with the plan and pursue the business
opportunity without further involvement by the Company or any liability
hereunder; provided, however, that, notwithstanding anything in this Agreement
to the contrary, nothing herein shall prevent, limit, or restrict DIVOT or
▇▇▇▇▇▇ (or any or their Affiliates) in its or their manufacture, distribution,
or sale of the ▇▇▇▇▇▇ Products.
Section 12.7 Additional Golf Professional Endorsements. In the event the
Company or a Venturer, as defined in Section 12.6, desires to engage in any
business opportunity employing or utilizing in any manner the endorsement, name,
likeness, image or other persona of any other professional golfer (female or
male), the business opportunity shall be presented to the Management Committee
in the same manner as described in Section 12.6, and in any event prior to any
commitment being made to the professional golfer in question by the Company or a
Venturer. EAGLE shall have the right, in EAGLE's sole and absolute discretion,
to decide whether the Company should accept or reject such business opportunity,
and the other Members hereby agree to vote their Interests and to take such
other actions as may be appropriate or necessary to cause such acceptance or
rejection to occur, and to formalize such determination.
ARTICLE 13
ADDITIONAL MEMBERS
Section 13.1 Admission. By approval of all of the Members, the Company
is authorized to admit any Person as an additional member of the Company (each,
an "Additional Member" and collectively, the "Additional Members"). Each such
Person shall be admitted as an Additional Member at the time such Person (i)
executes this Agreement or a counterpart of this Agreement and (ii) is named as
a Member on an amended Schedule A hereto.
Section 13.2 Allocations. Additional Members shall not be entitled to
any retroactive allocation of the Company's income, gains, losses, deductions,
credits or other items; provided that, subject to the restrictions of ss.706(d)
of the Code, Additional Members shall be entitled to their respective share of
the Company's income, gains, losses, deductions, credits and other items arising
under contracts entered into before the effective date of the admission of any
Additional Members to the extent that such income, gains, losses, deductions,
credits and other items arise after such effective date. To the extent
consistent with ss.706(d) of the Code and Treasury Regulations promulgated
thereunder, the Company's books may be closed at the time Additional Members are
admitted (as though the Company's tax year had ended) or the Company may credit
to the Additional Members pro rata allocations of the Company's income, gains,
losses, deductions, credits and items for that portion of the Company's Fiscal
Year after the effective date of the admission of the Additional Members.
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ARTICLE 14
ASSIGNABILITY OR INTERESTS
Section 14.1 Assignability of Interests.
(a) Except as otherwise provided in this Article 14, no Member may
assign the whole or any part of its Interest without the prior written consent
of all other Members, which consent may be given or withheld in the sole and
absolute discretion of such other Members. If the prior written consent of the
other Members is obtained for any such assignment, such assignment shall,
nevertheless, not entitle the assignee to become a Substitute Member or to be
entitled to exercise or receive any of the rights, powers or benefits of a
Member other than the right to receive distributions to which the assigning
Member would be entitled, unless the assigning Member designates, in a written
instrument delivered to the other Members, its assignee to become a Substitute
Member and all of the other Members consent to the admission of such assignee as
a Member; and provided further, that such assignee shall not become a Substitute
Member without having first executed an instrument reasonably satisfactory to
the other Members accepting and agreeing to the terms and conditions of this
Agreement, including a counterpart of this Agreement, and without having paid to
the Company a fee sufficient to cover all reasonable expenses of the Company in
connection with such assignee's admission as a Substitute Member.
(b) Notwithstanding the foregoing, EAGLE (and any assignee or
Substitute Member that is a "Permitted Assignee" as defined below, and which
hereafter acquires its Interest from EAGLE or another Permitted Assignee) shall
be permitted to assign, at any time and from time to time, all or any part of
its Interest to a Permitted Assignee. For this purpose "Permitted Assignee"
means a Person that is (i) an Affiliate of ▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇, (ii) a
natural or adoptive lineal ancestor or descendant of either of ▇▇▇▇▇▇▇ or ▇▇▇▇▇
▇▇▇▇▇, (iii) a trust, estate, guardianship or custodianship, including those
established under any the Uniform Gifts to Minors Act of any state, for an
individual described in the preceding clause (ii), and (iv) entities under the
control of ▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇ and one or more other Permitted Assignees;
provided, however, that no transfer shall be made under this section if such
transfer or transfers would result in EAGLE. ▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇, and any
Affiliate of EAGLE and ▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇ to own a Percentage Interest or
Percentage Interests, in the aggregate, of less than 2%. EAGLE shall have the
right to designate that any Permitted Assignee shall be admitted as a Substitute
Member.
(c) Notwithstanding the foregoing, DIVOT shall have the right to
assign, at any time and from time to time, all or part of its Interest to any
corporation or other entity in which DIVOT is a majority owner, determined by
both its voting rights or voting power, and its economic rights aggregating all
ownership interests, whether common or preferred, DIVOT shall have the right to
designate that any such assignee shall be admitted as a Substitute Member.
34
(d) If a Member assigns all or part of its Interest in the Company
and the assignee is entitled to become a Substitute Member, such assignee shall
be admitted to the Company effective immediately prior to the effective date of
the assignment (as defined in Section 14.3 hereof), and, immediately following
such admission, the assigning Member shall cease to be a Member of the Company
to the extent of the portion of the Interest assigned hereunder. In such event,
the Company shall not dissolve if the business of the Company is continued
without dissolution in accordance with Section 15.2(g) hereof. For purposes of
this Article 14, "assignment" shall include any sale, transfer, conveyance,
pledge or grant of a security interest in an Interest, and any "involuntary
transfer" such as a sale of an Interest in connection with any bankruptcy or
similar insolvency proceedings, or a divorce or other marital settlement
involving any Member, or any other disposition or encumbrance of an Member
Interest.
Section 14.2 Recognition of Assignment by Company or Other Members. No
assignment, or any part thereof, that is in violation of this Article 14 shall
be valid or effective, and neither the Company nor the Management Committee or
any Member shall recognize the same for any purpose of this Agreement, including
the purpose of making distributions of Net Cash Flow pursuant to Section 9.1
hereof with respect to such Interest or part thereof. Neither the Company nor
the Management Committee shall incur any liability as a result of refusing to
make any such distributions to the assignee of any such invalid assignment.
Section 14.3 Effective Date of Assignment. Any valid assignment of a
Member's Interest, or part thereof, pursuant to the provisions of this Article
14 shall be effective as of the close of business on the day preceding the
closing of the transaction evidencing the assignment, unless all consents have
not been obtained, in which case the effective date shall be on such date all of
the written consents to such assignment have been obtained, or such other date
as the assigning Member and all Members agree upon. The Company shall, from the
effective date of such assignment, thereafter pay all further distributions on
account of the Interest (or part thereof), so assigned, to the assignee of such
Interest, or part thereof. As between any Member and its assignee, Profits and
Losses for the Fiscal Year of the Company in which such assignment occurs shall
be apportioned for federal income tax purposes in accordance with any convention
permitted under ss.706(d) of the Code and selected by the Management Committee.
35
Section 14.4 Right of First Refusal.
(a) Except in the case of a transfer involving a Permitted Assignee or
an assignee approved by all of the Members, in the event of any proposed
assignment of all or any part of an Interest, the Member proposing to make such
assignment, or the third party foreclosing upon the Interest succeeding thereto
as a result of an "involuntary transfer," shall give to the Members a written
notice ("assignment notice") stating the terms of the proposed assignment and
the name, address and a resume for the Person(s) to whom the proposed assignment
would be made; the assignment notice shall be accompanied by sufficiently
detailed information relating to the fair market valuation of the Interest, and
such other information reasonably requested by the Members. Upon receiving the
assignment notice, the other Members shall have the option, for a period of 60
days from the date that it receives the assignment notice, to vote that the
Company acquire all of that portion of the Interest subject to the assignment
notice, for the same consideration and other terms and conditions contained in
the assignment notice. If this right of first refusal is exercised by the other
Members (and the Company), the closing shall occur within 30 days of the
exercise of such option.
(b) If the other Members (and the Company) fail to exercise their
right of first refusal within the 60 day period, the Interest covered by the
assignment notice may then be assigned to the Person(s) described in the
assignment notice, for exactly the same consideration and other terms and
conditions provided therein; provided however, that such Person acquiring the
Interest in question shall not become a Substitute Member unless the assignee
has been approved in such capacity under Section 14.1. In the event that the
other Members (and the Company) do not exercise this right of first refusal, the
proposed assignment shall be closed within 60 days following the 60-day period
described in subsection (a) above. If such closing does not occur within that
time period, then the Interest in question shall once again become subject to
the restrictions of this Article 14 and this Agreement.
Section 14.5 "Tag-along" Rights of EAGLE.
(a) Sale of Company Interest. In the event DIVOT or its Affiliates, acting
either alone or with any other Members or assignees that previously acquired an
Interest from DIVOT, proposes to assign more than 51% in aggregate of the total
membership Interests owned by them in a transaction other than one contemplated
in Section 14.1(c) (a "Block Sale"), such Block Sale transfer shall not be
effectuated unless, and until, EAGLE has been provided with the opportunity to
sell all or any part of its Interest at the same time and for the same
consideration and same terms and conditions that apply to the Block Sale. The
obligations of the Block Sale participants under this Section 14.5 to afford
EAGLE the ability to exercise its "tag-along" rights shall be discharged if (i)
EAGLE is provided with written notice to participate in the Block Sale
transaction, together with a detailed description of the terms and conditions
thereof, including the computation and proposed letter of understanding or
definitive agreement describing the purchase price and all of the other terms
and conditions of the transaction, and such other due diligence materials EAGLE
may reasonably request; and (ii) EAGLE thereafter fails to exercise its rights
36
to participate in the proposed transaction within 30 days after receiving such
written notice. For purposes of computing the purchase price or other
consideration in any such Block Sale transaction, any securities or other
property to be received by the assigning Members of their Affiliates shall be
valued at their fair market value, and any compensation to be paid to any
officers, directors, owners or other principals or Affiliates of such Members,
shall also be taken into account in computing the amount of consideration to be
received by the assigning Members, and the corresponding amount that EAGLE shall
be entitled to receive if it elects to exercise his "tag-along" rights and
participate in the Block Sale transaction.
(b) Sale of ▇▇▇▇▇▇. In the event that (i) DIVOT proposes to sell,
transfer, exchange, assign or otherwise dispose of stock or other securities of
▇▇▇▇▇▇, whether by separate sale or by merger, consolidation, share exchange,
recapitalization or other reorganization involving ▇▇▇▇▇▇, or (ii) ▇▇▇▇▇▇, DIVOT
and/or any other shareholders or security holders of ▇▇▇▇▇▇, issue, enter into
or participate in any agreements, options, warrants, debentures, convertible
securities or similar instruments the effect of which is to provide for
contingent or future ownership of stock or other securities of ▇▇▇▇▇▇
(collectively "Investment Instruments"); and the effect of such transaction
would cause DIVOT to own stock or other securities of ▇▇▇▇▇▇ that entitles DIVOT
to own less than 51% of both the voting rights and economic participation in
▇▇▇▇▇▇'▇ outstanding stock and other securities (when assuming maximum issuance
of shares and exercise of rights under all Investment Instruments); then a
"▇▇▇▇▇▇ Sale" will be deemed have occurred for purposes of this Agreement. DIVOT
agrees that if EAGLE shall elect, DIVOT shall not permit a ▇▇▇▇▇▇ Sale to be
effectuated unless, and until, DIVOT's Interest in the Company are sold to the
same Persons that would own and control ▇▇▇▇▇▇ as the result of the ▇▇▇▇▇▇ Sale.
The fair price of DIVOT's Interest and the other customary terms and conditions
of the transfer of DIVOT's Interest to such Persons acquiring ownership of
▇▇▇▇▇▇ shall be as DIVOT and such Persons reasonably agree upon. The obligations
of DIVOT to afford EAGLE the ability to exercise its election rights hereunder
shall be discharged if (i) EAGLE is provided with written notice of the ▇▇▇▇▇▇
Sale transaction, together with a detailed description of the terms and
conditions thereof, including the computation and proposed letter of
understanding or definitive agreement describing the purchase price and all of
the other terms and conditions of the transaction, and such other due diligence
materials EAGLE may reasonably request; and (ii) EAGLE thereafter fails to
exercise its election to have DIVOT sell its Interest to participate in the
proposed transaction within 30 days after receiving such written notice.
Section 14.6 Put Option of EAGLE. In the event that a "Eagle Withdrawal
Event" occurs, as defined below, EAGLE shall have the right to cause the Company
to purchase the entire Interest of EAGLE, together with the Interest of any
Permitted Assignee ("Eagle Interest"), upon giving written notice of such event
to the Management Committee, and providing the Company with a reasonable
opportunity to cure the circumstances giving rise to the Eagle Withdrawal Event
within a reasonable cure period agreed upon by both the Company and EAGLE, but
in no event shall the cure period continue for more than thirty (30) days
without the consent of EAGLE. In the event that EAGLE exercises this put option,
the Company shall be required to purchase the entire Eagle Interest, for cash,
within thirty (30) days of receiving the put option notice (or if applicable,
within fifteen (15) days after the cure period elapses). The Eagle Interest
shall be valued at its aggregate book value as of the month end immediately
37
preceding the events giving rise to EAGLE's rights to exercise the put option.
The purchase price shall be allocated among the holders of the Eagle Interest in
proportion to the relative Interests held by each holder of a Eagle Interest.
For purposes of this Agreement, a Eagle Withdrawal Event shall mean any of the
following: (i) breach of this Agreement by another Member; (ii) intentional
misconduct or gross negligence by representatives of DIVOT or other members of
the Company's management causing a material and adverse effect on the Company
business (except acts involving EAGLE or its Shareholders, directors or
officers); (iii) the commission of a morally reprehensible crime or other
socially unacceptable conduct causing ill repute to the Company by any Person
having significant involvement in the management of the Company; or (iv) the
Company has not achieved gross revenues of $1,000,000 or more for the twelve
(12) month period ending on the second anniversary of the date hereof and for
each Fiscal Year commencing thereafter, except in this case the 30-day period
set forth above shall be increased to sixty (60) days, during which 60-day
period EAGLE agrees to meet with DIVOT in good faith to discuss the Company and
its business opportunities, this Agreement, and the propriety of EAGLE'S taking
action under this Section 14.6(iv).
ARTICLE 15
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 15.1 No Dissolution. The Company shall not be dissolved by the
admission of Additional Members or Substitute Members in accordance with the
terms of this Agreement.
Section 15.2 Events Causing Dissolution. The Company shall be
dissolved and its affairs shall be wound up upon the occurrence of any of the
following events:
(a) the expiration of the term of the Company, as provided in
Section 2.3 hereof;
(b) the written consent of all Members;
(c) at such time as there are no Members;
(d) the entry of a decree of judicial dissolution under of the
Florida Act.
(e) the termination of the License Agreement;
(f) the breach of that certain stock registration rights agreement to be
entered into by DIVOT and an Affiliate of EAGLE pursuant to the License
Agreement, or the failure of DIVOT to register and maintain the registration of
the DIVOT stock issued pursuant thereto within the time and for the period set
forth in section C.2. of such registration rights agreement, unless DIVOT cures
such breach by entering into an agreement with the holders of such DIVOT stock
to purchase such stock for a price in cash equal to its then fair market value
(which shall not be less than the public market price per share thereof), as
determined by an appraiser mutually agreed upon by DIVOT and such holders (the
cost of which appraiser shall be borne by DIVOT and the Company);
38
(g) upon the bankruptcy or dissolution of a Member, unless all remaining
Members agree in writing within 30 days after such event to continue the
business of the Company; provided, however, that the Company shall nonetheless
be dissolved if the License Agreement is terminated upon the happening of or in
connection with either of such events; or
(h) EAGLE's election to dissolve in the event the Company has not achieved
gross revenue of $1,000,000 or more for the twelve (12) month period ending on
the second anniversary of the date hereof and for each Fiscal Year commencing
thereafter, if it has not elected to exercise its put option pursuant to Section
14.6; provided, however, that EAGLE agrees that it shall not elect to dissolve
the Company hereunder, without first giving DIVOT sixty (60) days prior written
notice, during which 60-day period EAGLE agrees to met with DIVOT in good faith
to discuss the Company, its business opportunities, this Agreement, and the
propriety of EAGLE'S taking action under this section.
Section 15.3 Notice of Dissolution. Upon the dissolution of the
Company the Management Committee shall promptly notify the Members of such
dissolution.
Section 15.4 Liquidation. Upon dissolution of the Company, the
Management Committee (in such capacity, the "Liquidating Trustee") shall carry
out the winding up of the Company and shall immediately commence to wind up the
Company's affairs; provided, however, that a reasonable time shall be allowed
for the orderly liquidation of the assets of the Company and the satisfaction of
liabilities to creditors so as to enable the Members to minimize the normal
losses attendant upon a liquidation. The Members shall continue to share Profits
and Losses and other items during liquidation in the same manner, as specified
in Article 8 hereof, as before liquidation. The proceeds of liquidation shall be
distributed in the following order and priority:
(a) to creditors of the Company, including Members who are creditors,
to the extent otherwise permitted by law, and consistent with the subordination
or other terms and conditions therein pertaining to priority of satisfaction of
such indebtedness, in full satisfaction of the liabilities of the Company
(whether by payment or the making of reasonable provision for payment thereof);
and
(b) to the Members in accordance with their Percentage Interests.
Section 15.5 Termination. The Company shall terminate when all of the
assets of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company, shall have been distributed to the
Members in the manner provided for in this Article 15 and the Certificate shall
have been canceled in the manner required by the Florida Act.
Section 15.6 Claims of the Members. The Members and former Members
shall look solely to the Company's assets for the return of their Capital
Contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations of the Company are
insufficient to return such Capital Contributions, the Members and former
Members shall have no recourse against the Company or any other Member;
provided, however, that nothing contained herein shall be deemed to limit the
rights of a Member under applicable law.
39
ARTICLE 16
MISCELLANEOUS
Section 16.1 Notices. All notices provided for in this Agreement shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail or by recognized
overnight delivery service, as follows:
(a) if given to the Company, in care of the Management Committee at
the principal place of business of the Company set forth in Section 2.5
hereof.
(b) if given to any Member, at the address set forth under its name on
Schedule A attached hereto, or at such other address as such Member may
hereafter designate by written notice to the Company.
Section 16.2 Failure to Pursue Remedies. The failure of any party to
seek redress for violation of, or to insist upon the strict performance of, any
provision of this Agreement shall not prevent a subsequent act, which would have
originally constituted a violation, from having the effect of an original
violation.
Section 16.3 Cumulative Remedies. The rights and remedies provided by
this Agreement are cumulative and the use of any one right or remedy by any
party shall not preclude or waive its right to use any or all other remedies.
Said rights and remedies are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.
Section 16.4 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of all of the parties and, to the extent permitted by this
Agreement, their successors, legal representatives and assigns.
Section 16.5 Interpretation. Throughout this Agreement, nouns,
pronouns and verbs shall be construed as masculine, feminine, neuter, singular
or plural, whichever shall be applicable. All references herein to "Articles,"
"Sections" and "Paragraphs" shall refer to corresponding provisions of this
Agreement.
Section 16.6 Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provision were omitted.
Section 16.7 Counterparts. This Agreement may be executed in any
number of counterparts with the same effect as if all parties hereto had signed
the same document. All counterparts shall be construed together and shall
constitute one instrument.
40
Section 16.8 Integration. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.
Section 16.9 Governing Law. This Agreement and the rights of the
parties hereunder shall be interpreted in accordance with the laws of the State
of Florida, and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
MEMBERS:
DIVOT GOLF CORPORATION
By:
------------------------------------------
Name:
Title:
EAGLE GOLF ENTERPRISES, INC.:
By:
------------------------------------------
Name:
Title :
41
SCHEDULE A
MEMBERS
Member's
Capital Percentage
Name Contribution Interest
---------------------- -------------- -------------
DIVOT GOLF CORPORATION $80 CASH 80%
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
EAGLE GOLF
ENTERPRISES, INC., $20 CASH 20%
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
42
SCHEDULE B
EAGLE OR ▇▇▇▇▇▇▇ ▇▇▇▇▇ COMMITMENTS
American Home Products and any renewals thereof
Black Ice Golf - Equipment and club coating. Non-exclusive, RFG holds equity
position with royalties.
Blockbuster Entertainment - Instructional video, Cuttin' Strokes (1996).
Non-exclusive, RFG has right to source and distribute.
Bridgestone Sports USA and any renewals thereof - Golf ball (Precept brand) and
glove. Exclusive to category. License and endorsement fee, with performance
bonuses.
Capital Mercury - Apparel and any renewals thereof. Exclusive to shirt,
windshirt, vest and short category, guaranteed minimum, plus royalties.
Corporate Express, Inc. - Joint ventures, alliances and other endorsement
arrangements with a NYSE company to target Fortune 1000 corporate market with
corporate merchandise catalogs for employees, customers and award programs.
Cyber Ad - Web site and real time catalog. Exclusive to category, percentage of
proceeds.
▇▇▇▇▇▇ Art - Gold theme greeting cards.
Electronic Arts - Video golf game featuring stars of the Senior PGA Tour.
Golf Clubs - with any party - Exclusive.
Golf Day - Day planner with golf theme featuring ▇▇▇▇▇▇▇. Exclusive to category.
Guarantee and royalty and distribution rights to corporate markets.
Gustbuster Umbrella - High end, patented golf and fashion umbrellas. Exclusive
to category.
Hyatt Hotel and Resorts and any renewals thereof
Inpro - Shotmaster hand held computer teaching device. Non-exclusive to
category.
Lexus and any renewals thereof
Neckwear - High end ties featuring the ▇▇▇▇▇ eagle logo. Non-exclusive.
OCC Sports - Instructional video, 60 Yards In.
43
Pro Tour Memorabilia - Signed framed photographs, club heads and balls.
Non-exclusive. Signing session fee and royalties on sales.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Belts - Signature belt collection. Exclusive, guaranteed minimum
and royalty. Price points to be two-tiered for green grass and lower retail.
Thirty or so SKU's to start. Three years with automatic renewal.
SBC Catalog - Employee catalog distributed to 200,000 employees with merchandise
bearing logo's; RFG has 2 pages with various products. Non-exclusive to
category. Makes margin on sale to catalog entry.
Sikorsky - alliance or other endorsement arrangements
Simon & ▇▇▇▇▇▇▇▇ - Instructional Book, The Elements of Scoring, to be released
September '98.
▇▇▇▇▇▇▇ - Golf shop retailer in specialty niches such as airports. Exclusive to
category. Equity and guaranteed royalties.
Softspikes - Alternative golf spike. Exclusive to category. Equity.
Southwestern ▇▇▇▇ and any renewals thereof
Statue Masters - High end statues and busts of RLF. Exclusive to category.
Royalty percentage and distribution rights.
Stromgren - Lycra support and magnetic therapy for athletes. Exclusive to
category. Equity, royalties.
Sunglasses - endorsement contract to wear and endorse signature line of
sunglasses --- non-exclusive to category
West Sports Marketing - Master's collectable card.
44