Exhibit 2.2
SUBLICENSE AGREEMENT FOR GOLDEN BEAR GOLF CENTERS(R)
SUBLICENSE AGREEMENT, dated as of June 20, 1998, by and between GOLDEN
BEAR GOLF CENTERS, INC., a Florida corporation, having its principal place of
business at ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ #▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Licensor"),
and GBGC FAMILY GOLF CENTERS, INC., f/k/a GOLDEN BEAR GOLF CENTERS, INC., a
Florida corporation, ("Old GBGC") and ORIENT ASSOCIATES INTERNATIONAL, INC.
("OAI"), (collectively, the "Licensees"), each of which is a wholly owned
subsidiary of FAMILY GOLF CENTERS, INC. ("Family Golf") having their principal
places of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, the original concepts for the Golden Bear Golf Center(R) golf
teaching and practice facilities were developed by Licensor's predecessor in
interest, Golden Bear International, Inc. ("GBI") and GBI's principal and
spokesman, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ("Nicklaus");
WHEREAS, pursuant to an Agreement for Golden Bear Golf Facilities dated
as of August 12, 1992, as amended (the "Original License"), OAI obtained the
right and license from GBI to develop and operate golf teaching and practice
facilities under the Golden Bear Golf Center(R) trademark and to utilize the
Golden Bear Endorsement (as defined in Section 2.5, below) in connection
therewith;
WHEREAS, Old GBGC succeeded to the interest of GBI as licensor to OAI
by virtue of an Assignment and Amendment dated February 16, 1994, of the
Original License, and Old GBGC continued to act in such capacity up to the date
of this Agreement;
WHEREAS, pursuant to certain agreements dated as of June 6, 1996,
between Old GBGC, GB Golf and GBI in connection with an initial public offering
made by GB Golf, Old GBGC became a wholly owned subsidiary of GB Golf, and GB
Golf and Old GBGC acquired from GBI the exclusive worldwide right to develop and
license golf teaching and practice facilities under the Golden Bear Golf
Center(R) trademark and to utilize the Golden Bear Endorsement (as defined in
Section 2.5, below) in connection therewith;
WHEREAS, prior to the date of this Agreement, Old GBGC owned and
operated those Golden Bear Golf Centers(R) identified in Schedule "1" annexed
hereto (the "Company Locations"), and OAI continued to operate as a licensee
under the Original License those additional Golden Bear Golf Centers(R)
identified in Schedule "2" annexed hereto (the "Licensed Locations");
-1-
WHEREAS, as of the date of this Agreement, Family Golf has acquired all
of the issued and outstanding stock of Old GBGC from GB Golf pursuant to a Stock
Purchase Agreement dated June 16, 1998, and has thereupon acquired Old GBGC's
ownership of and the right to continue operating the Company Locations under
this Agreement;
WHEREAS, under the Stock Purchase Agreement, the parties have mutually
agreed to terminate and discharge rights and obligations of the parties under
the Original License;
WHEREAS, pursuant to a Plan of Liquidation adopted by Old GBGC on July
__, 1998, as contemplated by Section 5.2 of the Stock Purchase Agreement, Old
GBGC has conveyed to Licensor its exclusive rights to own, operate, license and
franchise golf teaching and practice facilities worldwide under trademarks
licensed by GBI, including Old GBGC's contractual rights under all licenses and
franchises of such golf teaching and practice facilities and all future business
opportunities relating to the golf teaching and practice facilities;
WHEREAS, GBI has authorized Licensor to enter into this Agreement for
the purpose of authorizing Licensees to continue the operation of the Company
Locations and Licensed Locations subject to the terms and conditions set forth
herein;
NOW, THEREFORE, in accordance of the foregoing premises and the mutual
covenants and conditions set forth herein, the Parties hereto agree as follows:
SECTION 1: GRANT OF RIGHTS; STATUS OF PRIOR AGREEMENTS
1.1 GRANT OF RIGHTS. - For the term set forth in Section 5, below, and
subject to the limitations of Section 2 and 3 and the other terms and conditions
of this Agreement, Licensor hereby grants to Licensees the non-exclusive right
to operate the Company Locations and to continue the operation of the Licensed
Locations (all such Company Locations and Licensed Locations to be hereafter
referred to individually as a "Golf Facility" and collectively as "Golf
Facilities") using: (i) the service ▇▇▇▇ ▇▇▇▇▇▇ Bear Golf Centers(R) (the
"Facility Trademark") as a brand identity, (ii) the service ▇▇▇▇ ▇▇▇▇▇▇▇▇/Flick
Golf School(R) to describe golf instructional services utilizing the Teaching
Program and Coaching Studio (as defined in Sections 2.2 and 2.3, below) as a
non-exclusive method of golf instruction, subject to the terms and conditions
set forth in Section 2.2, below; and (iii) the related system of identification
and operations as heretofore developed by Old GBGC and currently utilized by the
Golf Facilities. Subject to the terms and limitations of its agreements with
GBI, Licensor shall be free during the term of this Agreement to make such
modifications to the system of identification and operation of facilities
identified with the Facility Trademark in the United States as Licensor may deem
appropriate to meet its objectives as an independent business. The parties agree
that the foregoing grant of rights to operate
-2-
and sublicense Golf Facilities shall also include the non-exclusive option to
utilize any additional products, services or techniques developed or approved by
Licensor for general use in the United States as part of the system of
identification and operation of golf facilities under the Facility Trademark
(such products, services or techniques to be known as the "Upgrades") during the
term of this Agreement, without amendment of this Agreement or payment of
additional compensation.
1.2 TERMINATION OF ORIGINAL LICENSE. - The parties acknowledge and agree that
all prior agreements between Old GBGC, Licensor and GBI with respect to the
licensing of golf teaching and practice facilities and all prior agreements
between Old GBGC, GBI and OAI in connection with the Original License have been
terminated and merged into this Agreement, and that the ongoing rights of
Licensees with respect to all of the Golf Facilities shall be controlled in all
respects by this Agreement from and after the effective date hereof. The parties
confirm the assignment to Licensor of Old GBGC's rights to collect the final
Royalty Fees earned under Section 4.2 the Original License prior to the
effective date of this Agreement, and OAI shall provide to Licensor the final
accounting and payment required under Section 5.3(d) of the Original License
within ninety (90) days of the effective date of this Agreement. Except for such
obligation of OAI, the parties agree that the Original License shall be deemed
fully performed as of the date of this Agreement and that each of GBI, Licensor,
Old GBGC and OAI shall be deemed released and discharged from any further
obligations or liabilities with respect thereto.
1.3 TERRITORIAL PROTECTION OF GOLF FACILITIES. - Notwithstanding Licensor's
reservation of its rights to operate or license the operation of golf teaching
and practice facilities other than the Golf Facilities under the Facility
Trademark, Licensor hereby covenants and agrees, for itself and for its
affiliates, that it will not operate, or license, franchise or authorize any
other person to operate, (i) any golf practice range facility under the Facility
Trademark or any confusingly similar trademark, or (ii) any practice facility
operated as part of a public golf course under the Facility Trademark, if such
golf practice range facility or teaching and practice facility is located within
a radius of ten (10) miles of the location of any Golf Facility which is
operated by Licensees under this Agreement, except as otherwise provided herein.
This covenant shall not restrict the rights of Licensor or its affiliates,
including GBI, to conduct any other golf related businesses, including the
design and construction of golf facilities, the operation of daily fee, public
or municipal golf course operations and related teaching and practice
facilities, and the conduct of golf events and educational programs, within such
protected areas without use of the Facility Trademark. In the event that the
rights of a Licensee to operate a Golf Facility under this Agreement are
subsequently terminated under Section 5.2, below, the provisions of this Section
shall forthwith terminate as to such Golf Facility, and Licensor and its
affiliates shall thereafter be entitled to operate or license the operation of a
competitive golf teaching and practice facility within the area surrounding such
Golf Facility which was formerly protected under this Section. The parties
acknowledge that Licensor is presently committed to license a golf teaching and
practice facility under the Facility Trademark at the "Ferry Point" site located
at the Whitestone Bridge in New York City, which would otherwise violate the
exclusivity granted to OAI hereunder. OAI hereby agrees to waive the operation
of this Section as
-3-
to such project, provided that in the event that Licensor elects to terminate
the licenses granted for such project during the term of this Agreement, such
waiver shall not apply to any future operator of the site unless otherwise
agreed by OAI.
SECTION 2: MAINTENANCE OF QUALITY STANDARDS
2.1 STANDARD OF QUALITY. - As a condition to maintaining the rights granted
under Section 1.1, above, Licensees shall be required to maintain the standards
of quality (in terms of facility utilization and maintenance, product and
service offerings, and customer service) established for the Golf Facilities by
GBI as owner of the Golden Bear Endorsement, which standards contemplate a golf
teaching and practice facility substantially in the form of the current Golf
Facilities which conforms with the requirements otherwise described in this
Section 2. The parties acknowledge that Licensor reserves the right, with the
consent of GBI as owner of the Facility Trademark, to modify and supplement the
standards of quality reflected in this Agreement as necessary during its term to
reflect modifications to the forms of teaching and practice facilities and
services offered to the public by Licensor, its affiliates and licensees under
the Facility Trademark. Additional standards of quality which are adopted by GBI
to cover Upgrades developed by Licensor during the term of this Agreement shall
become effective upon actual utilization by Licensees of any such Upgrades at
the Golf Facilities under the ongoing license granted under Section 1.1, above.
New standards which are adopted by GBI to cover facilities, equipment or
operations currently conducted at the Golf Facilities shall become applicable:
(i) upon written notice from Licensor, if the implementation of such standards
does not require any additional capital investment by Licensees or significantly
increase their operating expenses, or (ii) at such time, if any, as
non-conforming facilities and equipment are replaced by Licensees in the normal
course of business or conflicting operating standards are abandoned, provided
that Licensees may replace non-conforming facilities or equipment or conflicting
operating standards with reasonably comparable items or standards if
implementation of GBI's new standards would significantly increase the costs of
such replacement or Licensees' operating expenses. Without limiting the rights
of Licensor under this Agreement or the rights of GBI to protect the goodwill of
its trademarks under its master licensing agreements with Licensor, authorized
representatives of Licensor and/or GBI shall have the right to inspect any Golf
Facilities owned and operated by Licensees a reasonable number of times per year
on reasonable notice during reasonable hours to ensure that such Golf Facilities
are being maintained and operated in accordance with the quality standards of
GBI as reflected in this Agreement.
2.2 USE OF PROPRIETARY TEACHING PROGRAM. In conjunction with the sale of Old
GBGC to Family Golf, Licensor acquired all of Old GBGC's rights in connection
with the golf teaching program for the Golf Facilities originated by GBI and
developed and utilized by Old GBGC (the "Teaching Program"), which program is
based upon the concepts of Nicklaus and ▇▇▇ ▇▇▇▇▇ and principles approved by
them and is offered under GBI's Nicklaus/Flick Golf School(R) trademarks (the
"Program Trademarks"). Licensees agree that the Golf Facilities will continue to
actively market and utilize the
-4-
Teaching Program as a distinctive premium brand of golf instructional program,
and that neither Licensee shall offer any part of the Teaching Program to
customers of a Golf Facility unless such services are exclusively identified
with the Program Trademark. Licensor agrees that the Licensees may offer,
advertise or promote the teaching methods or systems offered by Family Golf
under its Colbert/▇▇▇▇▇▇▇(TM) trademark at any of the Golf Facilities during the
term of this Agreement (the "Family Golf School"), provided that Licensees shall
position and promote the Family Golf School as an entry level or lower level
program. No part of the teaching methods or materials of the Teaching Program
may be utilized by the Family Golf School or by independent instructors
providing services at the Golf Facilities, and Licensees will not permit their
instructors or sales personnel to state or imply that any such use is made. In
conjunction with its acquisition of the proprietary teaching program, Licensor
has obtained the right to publish a comprehensive instructional guide for
students of the Teaching Program developed by GBI and Old GBGC (the "Workbook")
and certain additional written training and reference materials for instructors
(the "Instructor Materials"), provided that Licensees have retained ownership of
all inventories of the Workbook on hand at the Golf Facilities and the right to
continue utilizing all inventories of the Instructor Materials heretofore
provided to the Golf Facilities subject to the terms and conditions of this
Section. When their current inventories are exhausted, Licensees will order as
necessary from Licensor or its designated source sufficient copies of the
Workbook to meet the requirements of Licensees for courses of the Teaching
Program offered by them at the Golf Facilities. Such Workbooks will be supplied
initially at the prices and terms currently in effect between Old GBGC and OAI
for the Licensed Locations, and Licensor agrees that such pricing will be
subject to adjustment based solely on cost increases to Licensor. Licensor will
also supply Licensees with reasonable additional quantities of the Instructor
Materials at no charge for use in training instructors for the Golf Facilities,
provided that all Instructor Materials now held by or subsequently delivered to
Licensees will remain the sole property of Licensor. Licensor reserves the sole
discretion to adopt or revise the Workbook and Instructor Materials from time to
time with the permission of the authors and copyright holder, provided that
Licensor will give reasonable prior notice to Licensees of any major revisions
to the Workbook in order to permit Licensees to manage their inventories of the
then current edition.
2.3 USE OF PROPRIETARY SWING ANALYSIS SYSTEM. The parties acknowledge that
Licensor has also acquired Old GBGC's interest in those proprietary methods and
systems developed by GBI, Old GBGC and their subcontractors, which have been
incorporated in a swing analysis system known as the ▇▇▇▇ ▇▇▇▇▇▇▇▇ Coaching
Studio(TM) (the "Studio Trademark"), which system is currently utilized at the
Golf Facilities and in other golf instructional facilities and programs operated
and licensed by Licensor and its affiliates. Licensees acknowledge that Licensor
and GB Golf shall have the sole right to: (i) pursue and/or authorize the
ongoing development and production of proprietary software, hardware and user
manuals for use in connection with the swing analysis systems currently marketed
under the Studio Trademark and any upgrades or replacements thereto (each such
system and all related hardware, software and manuals are known collectively as
a "Coaching Studio"), and (ii) establish system specifications and designated
vendors to be utilized by licensees and affiliates to
-5-
acquire their requirements of Coaching Studios. Licensees agree to utilize and
maintain in good working order at least that number of Coaching Studios
presently operating in each Golf Facility, and to assure that sufficient numbers
of Coaching Studios remain available to meet the needs of students enrolled in
the Teaching Program at the Golf Facilities during the term of this Agreement.
Licensees acknowledge that the existing Coaching Studios have been designed
using computer and video equipment which has a limited useful life, and that
Licensor reserves the right to modify and upgrade the proprietary technology of
the Coaching Studio units during the term of this Agreement to reflect advances
in video and computer technology. In the event of such modification or upgrade,
Licensees will have the opportunity to modify or upgrade their existing Coaching
Studios at the time such change is made, and they will be required to acquire
Coaching Studio units which incorporate such modification or upgrade at the time
an existing Coaching Studio is retired from service due to wear and tear or
obsolescence unless Licensees elect to replace the retired Coaching Studio with
a unit of the same model in good working order.
2.4 INSTRUCTOR TRAINING PROGRAM. In order to assure the quality of instructional
services provided under the Program Trademark, Licensor has acquired the right
to conduct the training and certification programs developed by GBI and Old GBGC
to enable golf teaching professionals to teach using the proprietary methods of
the Teaching Program and Coaching Studio. Licensees agree that all persons
providing golf instructional services to patrons at the Golf Facilities using
the Teaching Program will be certified as instructors in accordance with the
training program acquired by Licensor (the "Instructor Program"), which
certification will require them to successfully complete the training programs
and experience requirements heretofore established by Old GBGC for such
Instructor Program. Licensor agrees that the golf instructors currently employed
by the Golf Facilities shall receive credit for all training heretofore received
by them, and Licensor shall provide Licensees and Family Golf which such
additional training as may be required to complete Licensor's certification of
any existing instructional staff not fully certified as of the date of this
Agreement and any additional instructional staff hired by Licensees to provide
the Teaching Program at Golf Facilities during the term of this Agreement, which
training will be conducted according to training policies established by
Licensor for facilities operated under the Facility Trademark. Licensees agree
that they will complete the certification of any instructors employed by the
Golf Facilities who are partially or provisionally certified as soon as
practicable and will obtain the certification of sufficient additional and/or
replacement staff to meet the requirements of patrons of the Golf Facilities for
instruction using the Teaching Program. Licensor reserves the right to modify
the Instructor Program from time to time as necessary to provide patrons of
facilities operated under the Facility Trademark with competent instructional
staff, provided that such modifications will be implemented on the same basis
for all operators and licensees of such facilities. In order to maintain the
integrity of the Teaching Program, Licensees agree that they will not utilize
any of the instructors certified by Licensor under this Section to provide
instructional services for the Family Golf Program or permit such instructors to
teach independent lessons at the Golf Facilities.
2.5 PROPER USAGE OF GOLDEN BEAR ENDORSEMENT. - Licensees shall be authorized
-6-
to utilize the Facility Trademark only for the purpose of identifying and
marketing the Golf Facilities operated under this Agreement, and Licensees shall
not utilize any alternative service marks or any form of co-branding or
composite tradename or trademark for such purpose without the express written
consent of Licensor. Licensees shall be authorized to utilize the Program
Trademark and Studio Trademark only for the purpose of identifying and marketing
the Teaching Programs offered and Coaching Studios operated at Golf Facilities
licensed under this Agreement, and Licensees shall not utilize any alternative
trademarks or service marks or any form of co-branding or composite trademark
for such purpose without the express written consent of Licensor.
Notwithstanding the foregoing, Licensor has consented to Licensees'
participation in those marketing and operating activities identified in Schedule
"3" as Family Golf affiliates, and Licensees may associate the Facility
Trademark, Program Trademark and Studio Trademark with trademarks owned by
Family Golf to the limited extent required to conduct such activities subject to
the terms and conditions of Section 3.2, below. The license of the Facility
Trademark, Program Trademark and Studio Trademark shall carry with it the
additional, non-exclusive right to utilize the trademark, service ▇▇▇▇ and
related proprietary rights of GBI in the Golden Bear logo and the name, likeness
and signature of Nicklaus to promote the Golf Facilities owned and operated by
Licensees among members of the general public, which use shall be limited to
advertising and promotional materials developed to market the Golf Facilities
and approved under Section 3.2, below. For purposes of this Agreement, the
Facility Trademark, Program Trademark and Studio Trademark licensed under
Section 1.1, above, and the Golden Bear logo and name, likeness and signature of
Nicklaus, which are licensed on a more restrictive basis under this Section,
shall be known collectively as the "Golden Bear Endorsement". All uses of the
Golden Bear Endorsement authorized by this Agreement shall conform to the
specifications and forms of use established by GBI as the owner of the
trademarks and publicity rights included therein prior to the date of this
Agreement and such modifications thereto as may be communicated by Licensor to
Licensees during the approval process required in Section 3.2.
2.6 JOINT PROMOTIONAL ACTIVITIES; SERVICES OF ▇▇▇▇ ▇▇▇▇▇▇▇▇. - Licensor and
Licensees may, by mutual agreement in writing, elect to develop and implement
joint publicity, advertising and promotional events and campaigns for the Golf
Facilities on a local, regional or national basis which promote the Golf
Facilities in conjunction with other products or services marketed under the
Golden Bear Endorsement or personally endorsed by Nicklaus. Licensor agrees to
provide the personal services of Nicklaus for a minimum of one (1) promotional
or publicity event which promotes the Golf Facilities in each calendar year
during the term of this Agreement, which event will be scheduled by mutual
agreement of the parties at a time and Golf Facility location reasonably
convenient to Nicklaus in light of his other scheduled commitments and subject
to Licensees' commitment to pay any travel costs which Nicklaus is required to
pay in order to attend a scheduled event. The parties agree that Nicklaus shall
have the right to approve the form of any such event and the personal services
requested of him, and that no such event shall exceed six (6) hours in length
(including meals, breaks and local travel) unless otherwise agreed by Nicklaus
in his discretion.
2.7 CONTINUATION OF DESIGN AND MAINTENANCE CRITERIA. - Except for such
-7-
improvements to the Company Locations as were contemplated by Old GBGC prior to
the date of this Agreement, Licensees shall be required to maintain the Golf
Facilities in a manner consistent with their current design criteria, including
exterior design, interior lay-out and decoration themes, and signage. In the
event that any Golf Facility is redesigned during the term of this Agreement,
Licensor shall have the right to approve any substantial changes to or
substantial deviations from the existing design criteria and specifications for
such Golf Facility as currently operated in order to assure that the quality
standards adopted for the Golf Facilities are met by the Licensee, which
approval shall not be unreasonably withheld or delayed provided that such
quality standards are met. Licensees further acknowledge that the quality
standards adopted for the Golf Facilities require that the grounds, buildings,
equipment and customer service areas of each Golf Facility be maintained in a
manner consistent with current maintenance standards and schedules.
CLAUSE 3: LICENSE RIGHTS AND LIMITATIONS
3.1 OWNERSHIP OF INTANGIBLE RIGHTS. -The parties agree that, subject to the
rights of Licensees to utilize the Golden Bear Endorsement under this Agreement,
all common law trademark and other proprietary rights arising out of the use of
the Facility Trademark, the Program Trademark, and the Studio Trademark, or any
other element included in the Golden Bear Endorsement shall inure to the sole
and exclusive benefit of GBI as the Owner and ultimate licensor of the Golden
Bear Endorsement. The parties further agree that all common law trademark and
other proprietary rights arising out of any use of trademarks owned by Family
Golf or its affiliates, including use of the Colbert/▇▇▇▇▇▇▇(TM) trademark for
instructional services authorized under Section 2.2, above, or uses of Family
Golf trademarks or tradenames for those purposes permitted under Schedule "3"
annexed hereto shall inure to the sole and exclusive benefit of the owners of
such trademarks. In the event that Licensor authorizes the use of any
alternative trademarks, service marks, co-branding or composite marks to
identify, operate or promote the Golf Facilities under Section 2.5, above, any
additional trademarks shall be deemed owned by Family Golf or its designated
affiliate if developed by such persons and acknowledged by Licensor at the time
of their approval for use in the Golf Centers, and they will otherwise be deemed
to have become part of the Golden Bear Endorsement licensed under this Agreement
at the time of their first use by the Golf Facilities. The parties acknowledge
that Old GBGC has assigned to Licensor its entire right and title to and
interest in all proprietary rights in the Teaching Program, Coaching Studio, and
Instructor Program, and all written and electronically recorded materials
generated in connection therewith (collectively, the "Proprietary Materials")
including, without limitation (i) copyrights and trade secrets in the
Proprietary Materials, (ii) intellectual property rights embodied in the
Proprietary Materials, and (iii) any patent rights which may be granted with
respect to any inventions included in the Proprietary Materials. Licensees
acknowledge that Licensor and its affiliates shall be free to use or license
other persons to use any of the intangible rights retained or obtained by them
under this Section or any other agreements between them, and that they may
assign or otherwise transfer all or any part of such ownership rights to the
fullest extent permitted by law, subject in each case to the licenses granted by
this
-8-
Agreement. Upon the registration by Licensor or its affiliates of any copyright,
trademark or patent which would control use of any of the intangible rights
licensed hereunder pursuant to applications filed by the owner of such right,
the registered rights so granted will be deemed licensed to Licensees with
respect to the Golf Facilities operated hereunder without further action by the
parties or requirement of additional compensation.
3.2 APPROVAL OF PROMOTIONAL MATERIALS. Licensees acknowledge that it is
essential for the protection of the interests of Licensor and GBI in the Golden
Bear Endorsement that Licensor have continuing control over the manner in which
the Facility Trademarks and all other elements of the Golden Bear Endorsement
are used to advertise or promote the Golf Facilities licensed under this
Agreement.
(a) Licensees agree that Licensor shall have a right to approve or
disapprove of any of the following (collectively, the "Promotional Materials")
prior to any use by Licensees throughout the term of this Agreement: (i) any
paid print or broadcast media advertising for any Golf Facility or the Golf
Facilities in general, and any press release or other public relations materials
to be delivered to media to promote any Golf Facility or the activities of
Licensees and/or Family Golf with respect thereto, (ii) any brochures or other
printed materials describing any Golf Facility to be hand delivered to potential
customers or delivered by any form of direct response marketing, and (iii) any
special events or promotional activities to be conducted by or on behalf of
Licensees or Family Golf to generate interest in a Golf Facility.
(b) Licensees agree to submit to Licensor for approval prior to use a
copy or sample of each item of Promotional Materials which will appear in
written or printed form (including layouts or scripts and story boards as
appropriate) and a final edited copy or sample of any Promotional Materials
which will be broadcast or otherwise appear in electronic media or other
audiovisual form. If the Promotional Materials are part of a special event or
promotional activity, Licensees will submit to Licensor for approval prior to
announcing such event or activity a written description of the proposed event or
activity describing the intended use of the Golden Bear Endorsement in
connection therewith, together with any written or printed materials to be used
in connection with such event or activity. Licensor will use its best efforts to
notify the Licensee submitting such materials within ten (10) business days
after Licensor receives complete samples and descriptions of Promotional
Materials whether they are acceptable and, if they are not acceptable, any
objections which Licensor or GBI may have with respect to such materials.
(c) If, at any time after approval of a proposed use of the Golden Bear
Endorsement, it appears to Licensor or GBI that such use is not in keeping with
the desired public image of ▇▇▇▇ ▇▇▇▇▇▇▇▇, Licensor may so notify Licensees and
require the termination of such use, such notice to state the reasons why such
use is not acceptable. Licensees shall terminate any oral use forthwith upon
receipt of any such notice, and shall terminate any written or recorded use as
soon as reasonably practicable, and in no event later than the last advertising
run date irrevocably committed prior to Licensees' receipt of such notice.
-9-
(d) In reviewing Promotional Materials submitted by Licensees, Licensor
will give due consideration to the advertising standards established by GBI and
Old GBGC prior to the date of this Agreement, and any guidance provided by GBI
as to the permitted uses and required forms of use of various trademarks
licensed under this Agreement. Licensor hereby authorizes Licensees to continue
utilizing the current standard formats and guidelines for advertising developed
by Old GBGC and approved by GBI prior to the date of this Agreement, and
Licensees shall not require any further review or approval of Promotional
Materials which conform to such formats and guidelines until such time, if any,
as Licensees elect to make any material modification in standard forms approved
by Old GBGC. Licensor will also provide Licensees with the opportunity to secure
the approval of new formats for advertising under subsection (b) of this
Section, which formats may be used by Licensees without further review or
approval until further notice from Licensor by inserting appropriate references
to the name(s) and location(s) of an individual Golf Facility or group of Golf
Facilities in such standard forms.
3.3 PROTECTION OF INTANGIBLE RIGHTS. - Licensees agree that it will abide by the
reasonable directions of Licensor with respect to trademark, copyright and
patent notices required by law to protect the interest of Licensor and its
affiliates in the Golden Bear Endorsement and the Proprietary Materials.
Licensees agree not to authorize or participate in any conduct which would
result in a dilution or loss of distinctiveness of any of GBI's trademarks, or
which could result in any other protected materials being placed in the public
domain. Licensees further agree to hold any confidential business and
operational methods and quality standards developed by GBI and/or Old GBGC in
connection with the development or operation of Golf Facilities (including
information disclosed to Old GBGC during the period it was a licensee of GBI
and/or subsidiary of Licensor) in confidence, and not to disclose or otherwise
release any of such information without the prior consent of Licensor.
3.4 RETENTION OF MARKETING/MERCHANDISING RIGHTS. - Except for those activities
permitted under Schedule "3", Licensees acknowledge that the rights licensed
hereunder do not include the right to use, or to sublicense to Family Golf or
any other person the right to use, any of the following intangible rights to
manufacture, market, endorse or promote goods or services other than the Golf
Facilities licensed under this Agreement: (i) the Facility Trademark or any
other trademark of GBI included in the Golden Bear Endorsement, (ii) the name,
likeness or other identifying characteristics or personal endorsement of
Nicklaus, or (iii) any artwork, images, text or other creative work included
within the Proprietary Materials. Without limiting the foregoing restrictions,
it is understood that Licensees and Family Golf shall be prohibited from
affixing any of GBI's trademarks to, or incorporating such trademarks or any
other publicity rights or intellectual property licensed under this Agreement
into, any merchandise developed for use or sale at the Golf Facilities,
including golf equipment, accessories and apparel. Subject to the terms of
existing merchandise licensing agreements of GBI and Licensor, and such parties'
plans for additional products bearing the Golden Bear Endorsement in the United
States territory, Licensor shall use its best efforts to obtain reasonable
sourcing agreements for the Golf Facilities licensed under
-10-
this Agreement with existing product licensees and from additional licensees
identified by Licensor and its affiliates who are capable of reasonably
exploiting the sale of products bearing the Golden Bear Endorsement in the
United States market. If any of the Golf Facilities desire to purchase any
merchandise bearing the Golden Bear Endorsement, Licensees agree that they will
purchase their entire requirements of such merchandise from sources identified
in writing from time to time by Licensor as authorized licensees of GBI or
Licensor or such additional sources as may be approved by them in writing upon
request of Licensor.
SECTION 4: FEES AND EXPENSES
4.1 MINIMUM ANNUAL RETAINER PAYMENTS. In order to retain their rights to operate
the Golf Facilities under this Agreement, Licensees agree to pay Licensor a
non-refundable annual retainer (the "Minimum Annual Retainer") in the amount of
seven hundred ninety-five thousand dollars ($795,000) per full calendar year.
The Minimum Annual Retainer for calendar year 1998 shall be reduced by an amount
equal to four hundred ninety thousand dollars ($490,000) multiplied by a
fraction, the numerator of which is the number of days remaining in such
calendar year after the effective date of this Agreement and the denominator of
which is three hundred sixty-five (365). The full amount of such Minimum Annual
Retainer, as adjusted, shall be paid in advance by Licensees in two (2) equal
installments, with the first due within five (5) days after the effective date
of this Agreement and the second payable on or before October 1, 1998. Minimum
Annual Retainers for each remaining calendar year during the term of this
Agreement shall be paid without adjustment in four (4) equal installments due
and payable at the beginning of each calendar quarter during such year.
4.2 INCENTIVE COMPENSATION ON GROSS REVENUES. - In addition to the Minimum
Annual Retainer required under Section 4.1, above, Licensees agree to pay
incentive compensation to Licensor based upon the achievement of the following
annual Adjusted Gross Revenue targets by the Golf Facilities in each calendar
year during the term of this Agreement: (i) one percent (1%) of the amount by
which the aggregate annual Adjusted Gross Revenues of all Golf Facilities
exceeds thirty million dollars ($30,000,000); (ii) an additional one percent
(1%) of the amount by which the aggregate annual Adjusted Gross Revenues of all
Golf Facilities exceeds forty million dollars ($40,000,000); and (iii) an
additional one percent (1%) of the amount by which the aggregate annual Adjusted
Gross Revenues of all Golf Facilities exceeds fifty million dollars
($50,000,000). For purposes of determining the incentive fees due during
calendar year 1998 and during any year in which an early termination of this
Agreement occurs, the foregoing annual targets for aggregate Adjusted Gross
Revenues shall be prorated based upon the number of days this Agreement is
effective during such calendar year. In the event of a partial termination under
Section 5.2, below, the foregoing annual targets for aggregate Adjusted Gross
Revenues for the following calendar year shall be reduced by a percentage equal
to the percentage reduction in the number of Golf Facilities licensed under this
Agreement as a result of Golf Facilities terminated during the prior calendar
year. As used herein, "Adjusted Gross Revenues" of a Golf Facility shall mean
the total amount of "Net Revenues" received from food and
-11-
beverage sales, pro shop sales, and teaching fees from private lessons not using
the Teaching Program or Coaching Studio, plus its gross revenues received which
were generated from its customers on account of all other activities at the Golf
Facility, including without limitation, admission fees, membership sales,
membership dues, rental and use fees, driving range and playing fees, fees for
the use of batting cages, miniature golf and other recreational facilities, fees
from the Teaching Program and use of the Coaching Studio, and any other teaching
fees (except teaching fees from private lessons not using the Teaching Program
or Coaching Studio). "Net Revenues" from any sales or teaching activity shall
mean gross revenues received from such activity, less (a) the cost of goods sold
through any such sales, (b) labor costs directly related and allocable to any
such sales, (c) teacher labor costs directly related and allocable to any such
lessons, and (d) sales taxes collected by the operators of Golf Facilities and
paid over to the state and local governmental authorities having jurisdiction
over the Golf Facilities which are included in gross revenues. On or before the
January 31 of each calendar year during the term of this Agreement, commencing
on January 31, 1999, Licensees shall deliver to Licensor a statement setting
forth the operating results and calculation of Adjusted Gross Revenues of each
of the Golf Facilities for such preceding calendar year and Licensees shall
simultaneously make payment of all incentive fees due to Licensor as shown by
such statement. Licensees shall keep and maintain such books of account as shall
be necessary to record and preserve all revenue generating transactions of the
Golf Facilities and for the accurate computation of Adjusted Gross Revenues,
which books of account shall be open for inspection and copying on reasonable
notice a reasonable number of times per year during reasonable business hours by
Licensor and its representatives for a period of three (3) years following the
end of the calendar year in which such Adjusted Gross Revenues were generated.
4.3 OTHER COMPENSATION AND EXPENSES. - This Agreement shall not affect the
rights of the parties and their affiliates to receive commissions or other
compensation with respect to activities undertaken by them under such separate
agreements as may be in effect from time to time during the term of this
Agreement, including without limitation, agreements relating to the sponsorship
of Golf Facilities, the commercial exploitation of customer lists, or the sale
of products and services offered by a party or its affiliates, all of which
compensation shall be paid without regard to this Agreement according to the
terms and conditions agreed between the persons involved. Unless otherwise
agreed by the parties, Licensees shall be responsible for payment or
reimbursement of all out-of-pocket expenses incurred by Licensor in connection
with its performance of this Agreement, including communications and travel
expenses and fees of third parties retained by Licensor to carry out its
obligations hereunder, provided that Licensor shall not be entitled to seek
reimbursement of any such expense in excess of five thousand dollars ($5,000)
which has not been pre-approved by Licensees. Except as otherwise expressly
agreed in this Agreement or in any other agreements between the parties,
Licensor and Licensees will each be responsible for payment of the overhead and
out-of-pocket costs and expenses incurred by them in connection with their
performance of this Agreement out of the revenues derived by such parties
hereunder and under such other agreements as may be in effect from time to time
relating to the subject matter hereof.
-12-
SECTION 5: TERM AND TERMINATION
5.1 TERM OF AGREEMENT. - Unless sooner terminated in accordance with this
Section or with Section 5.2 of this Agreement, the term of this Agreement shall
commence on the date hereof and shall continue until December 31, 2008. Not
later than six (6) months before the scheduled expiration of the term of this
Agreement, the parties agree to evaluate their business circumstances and the
terms of this Agreement and reach a mutual determination as to their interest in
negotiating a renewal of this Agreement. The parties agree that Licensees shall
have the option to terminate this Agreement, without cause, effective December
31, 2000, by giving Licensor written notice of its exercise of such option on or
before October 1, 2000. In the event that Licensees fail to provide written
notice to Licensor of their election to exercise or waive their option right on
or before such date, this Agreement shall continue in force after December 31,
2000, and thereafter shall be terminable by Licensees on at least six (6) months
prior written notice to Licensor for the balance of the original term, except as
provided herein. Licensor shall have the right to make written demand upon
Licensees to either exercise or waive their termination option under this
Section if the termination option is not exercised by December 31, 2000. In the
event such demand is made by Licensor prior to the actual exercise of Licensees'
option right, Licensees shall have three (3) months from the date of such demand
to either waive or exercise their option to terminate. If such option is not
exercised by Licensees within such three (3) month period, this Agreement shall
continue in force for the balance of its original term.
5.2 TERMINATION OF INDIVIDUAL GOLF FACILITIES. - The parties agree that the
application of this Agreement to an individual Golf Facility may be terminated
without a termination of the entire Agreement under the following circumstances:
(a) Either Licensee may terminate the application of this Agreement to
any individual Golf Facility on not less than ninety (90) days prior written
notice to Licensor if the operation of such Golf Facility is terminated or
abandoned by such Licensee.
(b) Licensor may terminate the application of this Agreement to any
individual Golf Facility if such Golf Facility fails to meet the standards of
quality established under this Agreement and the Licensee responsible for such
Golf Facility fails to bring it into compliance with such standards of quality
within ninety (90) days after receipt of written notice from Licensor
identifying any violations of the standards of quality and specifying those
actions required to remedy such violations, unless the violation specified is
such as cannot be remedied within ninety (90) days, in which case no termination
may be made so long as such Licensee is proceeding in good faith and with
reasonable speed to cure such violation.
(c) In addition to such termination rights, the parties agree that the
application of this Agreement to any individual Golf Facility shall terminate
automatically unless otherwise mutually agreed by the parties in the event that
any third party successfully asserts conflicting trademark rights or
registrations which prevent a Licensee from using
-13-
the Facility Trademark in the trading area where such Golf Facility operates.
Licensor represents and warrants that it has no present knowledge of any such
conflicting rights or registrations.
(d) The termination of a Licensee's rights with respect to an
individual Golf Facility shall terminate the rights of such Licensee to operate
or authorize the operation of such Golf Facility under the licenses granted
under Section 1.1, above, and shall adjust the computation of incentive
compensation payable to Licensor as provided in Section 4.2, above, but such
termination shall not otherwise affect the rights and obligations of the parties
with respect to any other Golf Facility licensed under this Agreement. Licensees
shall be required to report and pay compensation with respect to the Gross Sales
generated by any terminated Golf Facility prior to the effective date of such
termination, which reports and payments shall be included in the annual
statements for all Golf Facilities required under Section 4.2, above. In the
event this Agreement is terminated pursuant to this Section, the parties agree
that the Minimum Annual Retainer payable for the calendar year following such
termination shall also be reduced by an amount equal to (i) fifty thousand
dollars ($50,000) per Golf Facility terminated if such termination occurs at the
Alley Pond, Greenburgh (Elmsford), or Skydrive Licensed Locations in New York
State or the ▇▇▇▇▇ Licensed Location in New Jersey, or (ii) thirty-five thousand
dollars ($35,000) per Golf Facility terminated if such termination occurs at any
other Licensed Location or at any of the Company Locations.
(e) Within thirty (30) days after the termination of any individual
Golf Facility hereunder, the Licensee responsible for such Golf Facility shall
remove all signage and other decorations using the Golden Bear Endorsement from
its premises and cease using and remove from the premises all Proprietary
Materials other than generic computer hardware and video equipment acquired by
such Licensee as part of the Coaching Studios operated at such Golf Facility,
which equipment shall be modified within such in the manner described in
Subsection 5.4(b), below. Unless otherwise agreed by the parties, any items so
removed from a terminated Golf Facility may be retained by Licensees for
utilization at one of the remaining Golf Facilities or otherwise shall be
returned to Licensor for reuse or destruction. The Licensee responsible for any
Golf Facility terminated by Licensor under Subsection (b) of this Section shall
be entitled to continue to promote and operate such facility under the Family
Golf trademarks and/or such other identification system as such Licensee may
elect, in its discretion, provided however, that such activities are continued
without further reference to or use of the Golden Bear Endorsement or any other
references to Licensor, GBI and/or ▇▇▇▇ ▇▇▇▇▇▇▇▇ (or any symbol associated in
the mind of the public with GBI or ▇▇▇▇ ▇▇▇▇▇▇▇▇), except to the extent that
other facilities operated by Family Golf or its affiliates which are not
licensed as Golf Facilities under this Agreement have been expressly authorized
by Licensor to make such a reference or use. The termination of a Golf
Facility's rights to utilize the Golden Bear Endorsement shall be deemed to
automatically terminate Licensees rights to utilize any Promotional Materials
showing such Golf Facility as one (1) of the locations authorized to operate
under the Facility Trademark. Licensees shall have the time period provided in
Section 3.2 (c) to wind up their use of such Promotional Materials, so long as
no such materials are utilized in the trading area of the terminated Golf
Facility and provided that all other requirements of this subsection
-14-
are met on a timely basis.
5.3 TERMINATION OF AGREEMENT. - Upon the occurrence of any of the following
Events of Default, the non-defaulting party shall have the option to terminate
this Agreement by written notice to the defaulting party:
(a) If Licensees shall fail to make any payment required to be made
under this Agreement when the same falls due;
(b) If the rights of Licensor to sublicense the rights granted to
Licensees under this Agreement are terminated by GBI, or by any third party
claiming an interest adverse to GBI with respect to the trademark and related
intangible rights which Licensor has agreed to provide in connection with the
Golf Facilities licensed under this Agreement;
(c) If Licensees have, collectively, terminated or suffered the
termination of this Agreement under Subsections 5.2(a) or (b), above, with
respect to more than two (2) of the Golf Facilities licensed under this
Agreement.
(d) If any party shall fail to observe or perform any other material
covenant, agreement, or obligation under this Agreement, and has not cured any
such failure within ninety (90) days of receiving written notice from the other
party;
(e) Proceedings are instituted by any party under any bankruptcy or
insolvency law or other law for the benefit of creditors or the relief of
debtors, or involuntary bankruptcy proceedings are commenced against either
party and such proceedings result in the entry of an order adjudicating such
party as bankrupt or such proceedings are not dismissed within one hundred
eighty (180) days after the commencement thereof;
(f) If a party makes or suffers an assignment or transfer of this
Agreement to any other party in violation of the requirements of Section 7.1,
below; or
(g) In the event that any circumstances arise under which the continued
association of the Golden Bear Endorsement with Licensees or Family Golf under
this Agreement would discredit, diminish or otherwise have a material adverse
affect upon the public image of Nicklaus, Licensor or GBI, and such event shall
be identified as an event of default by Licensor in a written notice given to
Licensees within six (6) months of the date of such event;
5.4 EFFECTS OF TERMINATION. - Following the effective date of the expiration or
earlier termination of this Agreement under Section 5.1 or 5.3, above:
(a) Licensees shall no longer utilize the Proprietary Materials or
Golden Bear Endorsement in connection with the operation, identification,
advertising or promotion of any Golf Facility, and all rights of Licensees in
and to the Proprietary Materials and Golden Bear Endorsement shall cease
absolutely. Licensees shall immediately
-15-
discontinue any further advertisement, promotion or use of the Teaching Program
by the instructors at all Golf Facilities then in existence.
(b) Licensees shall have a period of thirty (30) days (or such longer
period as may be approved by Licensor in its sole discretion on a case to case
basis) to remove all signage and other decorations using the Golden Bear
Endorsement from the premises of each and every remaining Golf Facility and to
remove and return to Licensor all Proprietary Materials other than generic
computer hardware and video equipment acquired by Licensees as part of the
Coaching Studio. Licensees shall remove any nameplates, trademarks or other
unique identifying features (including any proprietary cabinet designs for
equipment associated with the Studio Trademarks) from any Coaching Studio
hardware and equipment retained by Licensees in order to avoid confusion
regarding the source of such hardware and equipment or its association with the
Proprietary Materials. The sole purpose of the grace period set forth herein is
to permit Licensees to honor their obligations to make physical changes in the
Golf Facilities in an orderly manner, and this subsection shall not be deemed an
extension or continuation of the right to use the Golden Bear Endorsement or
Proprietary Materials beyond the termination of this Agreement.
(c) After the termination of this Agreement, Licensees and Family Golf
shall be entitled to continue to promote and operate all Golf Facilities then in
existence as a golf teaching and practice facility under the Family Golf
trademarks and/or such other identification system as such party may elect, in
its discretion, provided however, that such activities are continued without
further reference to or use of the Golden Bear Endorsement or any other
references to Licensor, GBI and/or ▇▇▇▇ ▇▇▇▇▇▇▇▇ (or any symbol associated in
the mind of the public with GBI or ▇▇▇▇ ▇▇▇▇▇▇▇▇).
(d) Within ninety (90) days after the date of termination of this
Agreement, Licensees shall provide Licensor with a final accounting of all
compensation earned by Licensor and paid by Licensees through the termination
date. Such accounting will be accompanied by a statement of Gross Revenues
generated by the Golf Facilities between the beginning of the last applicable
accounting period and the termination date and payment in full of all
compensation earned under Sections 4.1 and/or 4.2 of this Agreement which has
not been paid by Licensee prior to the time such accounting is furnished.
SECTION 6: RELATIONSHIP OF PARTIES
6.1 INDEPENDENT CONTRACTORS. - Nothing herein is intended nor shall be deemed to
create a joint venture, partnership, or agency relationship between or among
GBI, Licensor, Licensees or Family Golf, or to impose any liability or
responsibility on any such party for the debts or losses of any other party.
Neither Licensor nor either Licensee shall have the power to commit the other to
any matter or thing whatsoever without the prior express written consent of the
party to be charged. It is understood that each party and its affiliates are to
perform their obligations and exercise their rights hereunder as an independent
contractor with discretion and control as to the manner and timing of such
performance. Notwithstanding the foregoing, the parties
-16-
acknowledge that, except as otherwise stated in this Agreement, the Licensees
shall exercise their rights under this Agreement jointly, and they will be
jointly and severally liable for any obligations incurred or defaults committed
under this Agreement.
6.2 PARTICIPATION OF LICENSOR. - The parties acknowledge that the participation
of Licensor under this Agreement is that of a sublicensor of trademarks,
endorsement rights, and other proprietary rights and an independent contractor
of services under the specific terms and conditions of this Agreement. This
Agreement is not intended to release, enlarge or otherwise affect any of the
rights or obligations of Licensor with respect to the Company Locations under
the Stock Purchase Agreement between Family Golf and Licensor, or to subject
Licensor to the claims of any third parties with respect to the Golf Facilities
licensed under this Agreement by virtue of its agreement to provide the
trademark and related proprietary rights necessary to carry out this Agreement.
6.3 INDEMNIFICATION; INSURANCE. - Licensees agree to indemnify Licensor and its
affiliates (including Nicklaus) for and hold them harmless from and against any
and all obligations, losses, costs, expenses, damages, liabilities or claims,
including attorneys' fees, arising out of claims asserted by third parties which
are related in any way to Licensees' business of operating the Golf Facilities,
provided however, that the foregoing indemnification shall not apply to (i) any
obligations or liabilities of Licensor or its affiliates, and any obligations of
Old GBGC assumed by Licensor or chargeable to it under its Stock Purchase
Agreement with Family Golf, or (ii) any liability incurred by a party seeking
indemnification as a result of such party's own negligence or willful
misconduct. In the event that an indemnified party is joined as a party
defendant in any legal action instituted against a Licensee by a third party as
a result of such Licensee's activities, Licensees shall undertake to defend and
shall continue to defend against any such asserted liability and shall pay all
reasonable costs of defense related thereto, including, but not limited to, the
cost and expense of independent counsel, if any, retained by such indemnified
party in the event of a conflict which prevents joint defense of the claim, and
Licensees shall indemnify and hold the indemnified parties harmless in the event
of a settlement or adverse judgment against any of them. Licensor agrees to
notify Licensees promptly after receiving notice of any threat of proceedings
that would require the Licensees to indemnify Licensor or any affiliated party
hereunder, or of the commencement of any proceedings which would require such
indemnification, but the failure to notify the Licensees promptly shall not
relieve the Licensees of any obligations to indemnify Licensor or its affiliates
except to the extent that the failure to give prompt notice has jeopardized the
Licensees' ability to defend the pending claims. During the term of this
Agreement, Licensees shall maintain in force at all times general liability
insurance in an amount not less than two million dollars ($2,000,000) per
occurrence per Golf Facility, which insurance shall cover liabilities arising
out of the business activities of Licensees at such Golf Facilities and shall
insure Licensees' obligations to defend and indemnify Licensor and its
affiliates as provided herein. Licensor shall have the right to receive a copy
of each policy of insurance issued hereunder and shall be listed as a party to
receive notice from the insurer in the event of a cancellation or material
change in any such policy.
-17-
6.4 INJUNCTIVE RELIEF. - The parties recognize that Licensor and its affiliates
may suffer immediate and irreparable injury to their business and reputation in
the event of any unauthorized use of the Golden Bear Endorsement or Proprietary
Materials by Licensees or any person acting in concert with Licensees, including
without limitation, Family Golf, and that money damages alone would not
compensate Licensor for such injury. For that reason, it is understood and
agreed that Licensor, in addition to other remedies available to it and without
waiver or election of any such remedies, may obtain temporary restraining orders
and preliminary injunctive relief from any court having equity jurisdiction over
the parties, without requirement of a bond or other undertaking, and to obtain
such final orders granting permanent injunction or specific performance upon
full trial on the merits, including injunctive relief requiring Licensees or any
party purporting to claim by or through a Licensee under this Agreement to take
affirmative action to cure any such violation of this Agreement or ameliorate
its effects. It is understood that GBI and Nicklaus shall be entitled to the
benefit of this Section in the event that GBI is required to enforce its rights
as a trademark owner or Nicklaus is required to enforce his common law rights of
privacy or publicity by direct action against either Licensee or any party
purporting to claim by or through Licensees under this Agreement.
6.5 RIGHTS OF GBI. - Licensees acknowledge GBI's ultimate right, as owner of the
Facility Trademark and the Golden Bear Endorsement, to control the use of the
Golden Bear Endorsement under this Agreement and under the laws and regulations
of any jurisdiction applicable to the Golf Facilities. Licensor hereby agrees
that it will be responsible for taking those actions and securing those
approvals of GBI which are required in order to maintain the rights of Licensor
to grant the licenses set forth in this Agreement, and Licensees agree that
Licensor shall not be required to take any action or approve of any action
requested by Licensees under this Agreement where such action would be contrary
to the interests of GBI as a trademark owner or violate the terms of any
agreements between GBI and Licensor with respect to the Golden Bear
Endorsement or Proprietary Materials.
6.6 SOLE REMEDIES. - Other than the injunctive relief referred to above, the
right to terminate this Agreement, and the right to ▇▇▇ for money damages (but
not consequential, special, or punitive damages), Licensor shall have no other
legal remedies hereunder.
SECTION 7: GENERAL PROVISIONS
7.1 ASSIGNMENT. - Except as herein provided, neither party may assign any of its
rights under this Agreement without the prior written consent of the other
party.
(a) Licensor may assign its rights to receive payments under this
Agreement to any person, and may delegate any of its duties to a wholly owned
subsidiary established for the purpose of licensing golf teaching and practice
facilities to operate under the Golden Bear Endorsement or managing such
licensed golf facilities, provided that such assignment shall not relieve
Licensor of any of its obligations or effect a transfer of any other rights of
Licensor or its affiliates hereunder.
(b) Licensees may assign their right and/or delegate their duties with
respect to any individual Golf Facility to any wholly owned subsidiary of a
Licensee or Family
-18-
Golf which is created for the special purpose of owning and operating a single
Golf Facility. No such assignment or delegation shall relieve either Licensee
from its obligations under this Agreement, and Licensees shall remain jointly
and severally liable for the performance of all such obligations with respect to
all of the Golf Facilities.
(c) Licensees may assign or otherwise transfer this Agreement to Family
Golf or a wholly owned subsidiary of Family Golf having sufficient net worth and
personnel to carry out Licensees' responsibilities under this Agreement,
provided that such transfer shall not become effective until Licensor receives
written notice thereof and a written acknowledgment by the transferee of its
assumption of Licensees' obligations under this Agreement unless such assumption
is presumed by operation of law.
(c) Any party may assign or otherwise transfer this Agreement to a
party having sufficient net worth and personnel to perform the transferor's
obligations hereunder who simultaneous acquires all or substantially all of the
business conducted by such transferor, provided that such transfer shall not
become effective until the other party receives written notice thereof and a
written acknowledgment by the transferee of its assumption of the transferor's
obligations under this Agreement unless such assumption is presumed by operation
of law.
7.2 NON-WAIVER. - The failure of a party to demand strict performance of or
compliance with this Agreement or any provisions thereof at any time or under
any set of circumstances shall not be deemed a waiver by such party of its right
to demand such performance and compliance at any other time or under any other
circumstances. This Agreement may not be changed, modified, or terminated
orally, but only by a written instrument of change, modification, or termination
executed by the party against whom enforcement of any change, modification, or
termination is sought.
7.3 SEVERABILITY. - If any term or provision of this Agreement or the
application thereof to any particular person or circumstances shall to any
extent be invalid or unenforceable then such invalidity or unenforceability
shall not impair the remainder of this Agreement or the application of such term
or provisions to persons or circumstances other than those as to which it is
held invalid or unenforceable and each other term and provision of this
Agreement, not affected thereby, shall be valid and enforceable to the fullest
extent permitted by law.
7.4 GOVERNING LAW. - All questions pertaining to the validity, construction,
execution and performance of this Agreement shall be construed in accordance
with and governed by the internal laws of the State of Florida without regard to
principles of conflicts of law which might otherwise be applied.
7.5 NOTICES. - Any notice to be given under this Agreement shall be made in
writing and shall be sent to the address or facsimile number of the intended
recipient with copies provided as set forth below, or as such address or
facsimile number may be changed by a written notice meeting the requirements of
this subsection:
If to Licensor: Golden Bear Golf, Inc.
-19-
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ #▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
With a copy to: ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇, P.A.
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ #▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇, Esq.
If to Licensees: GBGC Family Golf Centers, Inc. and
Orient Associates International, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: Family Golf Centers, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
and: Squadron, Ellenoff, Plesent & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Any notice under this subsection shall be deemed to have been given: (i) if
mailed by certified mail, return receipt requested, three (3) days after the
date such notice and required copy are deposited, postage paid with the United
States Postal Service, as shown by its receipt for certified mail; (ii) if sent
via courier service or express delivery, upon the date of actual delivery as
endorsed by the carrier or person accepting such delivery for the recipient of
such notice and required copy, or (iii) if sent via facsimile to the telephone
numbers given by the recipients of such notice and required copies for such
purpose, on the first business day following the date of such transmission as
shown by the confirmation forms printed by the sending machine showing the
recipients' station identification and verification of error free transmission,
provided that confirmation copies of such notice and required copy are sent to
the recipients via certified mail or courier as provided above not later than
the first business day following
-20-
the date of such confirmed facsimile transmission.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
as of the date first set forth above.
GOLDEN BEAR GOLF, INC. GBGC FAMILY GOLF CENTERS, INC.
f/k/a Golden Bear Golf Centers, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ ---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Its Authorized Officer Senior Vice President
Its Authorized Officer
ORIENT ASSOCIATES
INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Senior Vice President
Its Authorized Officer
-21-
SCHEDULE "1"
LIST OF COMPANY LOCATIONS
-------------------------
GBGC AT CADDYSHACK GBGC AT OASIS
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ AT POLARIS
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GBGC AT COOL SPRINGS GBGC AT ROLLANDIA
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GBGC AT CYPRESS CREEK GBGC AT ROYAL OAK
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
GBGC AT THE HIGHLANDS GBGC AT SUNSET
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GBGC AT MCDAIN GBGC AT TOMS RIVER
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GBGC AT ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE "2"
LIST OF LICENSED LOCATIONS
--------------------------
GBGC AT ALLEY POND
▇▇▇-▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GBGC AT CLAY
▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GBGC AT ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GBGC AT HENRIETTA
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GBGC AT SKYDRIVE
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GBGC AT THE LAKES OF EL SEGUNDO
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GBGC AT WILLOWBROOK
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE "3"
PERMITTED CROSS-MARKETING ACTIVITIES
------------------------------------
Subject to the further requirements of Section 3.2 of the Sublicense
Agreement, Licensor has agreed to permit Licensees to take part in certain
cooperative marketing programs made available generally to golf teaching and
practice facilities operated by Family Golf and its affiliates, as more
particularly defined in this Schedule. This Schedule may be amended by mutual
written agreement of the parties during the term of the Agreement to authorize
additional programs which may be developed by Family Golf and its affiliates.
The following uses of the Facility Trademark are hereby permitted under
this Schedule:
1. Licensees may utilize the Facility Trademark to identify and promote any
individual Golf Facility or group of Golf Facilities as part of a larger group
of facilities operated by Family Golf's affiliates within a single local media
market or trading area in a common advertisement in such media as newspapers,
radio or phone book advertising. Any use of the Facility Trademark in a common
advertisement must be referenced specifically to the licensed Golf Facilities
included in such advertisement, and not placed in a manner to indicate
Licensor's approval or sponsorship of any golf facilities operated under
trademarks owned by Family Golf.
2. Licensees may maintain referral lists or signage on the premises of Golf
Facilities to promote a group of golf facilities in the local trading area
operated by Family Golf's affiliates as "associated" facilities, and include
Golf Facilities in such referral lists or signage which are placed on the
premises of other facilities within such groups to promote the Golf Facilities.
Any use of the Facility Trademark in a common referral list or group signage
must be referenced specifically to the licensed Golf Facilities included in such
list or signage, and must not placed in a manner to indicate Licensor's approval
or sponsorship of any golf facilities operated under trademarks owned by Family
Golf.
3. Licensees may include the Golf Facilities in master reference lists of
Family Golf affiliated golf facilities on a regional or national basis which are
published and distributed to patrons of such affiliated golf facilities. In any
such lists, the Golf Facilities shall be indentified by a separate grouping or
heading to distinguish them from other facilities operated under the Family Golf
trademarks.
4. The Golf Facilities may participate in reciprocal range card or customer
loyalty programs developed by Family Golf for all of its affiliated facilities,
and Licensees may authorize Family Golf to use of the Facility Trademark for the
limited purpose of advertising the participation of the Golf Facilities in such
programs. Licensees shall include an appropriate description and/or disclaimer
in its program materials to indicate that such programs will only be honored by
participating Golden Bear Golf Centers(R) owned and operated by Licensees.