DISTRIBUTOR AGREEMENT
THIS AGREEMENT is made and entered into this _____ day of __________,
2000, by and between PROFORMANCE RESEARCH ORGANIZATION, INC., doing business as
P.R.O. GOLF SCHOOLS, a Delaware corporation ("P.R.O.") and the undersigned
purchaser, ___________________ ("Distributor"). This Agreement does not
establish a franchise, sub franchise, agency or any relationship other than a
purchaser-seller/broker relationship defined herein as the "DISTRIBUTOR-P.R.O."
relationship. Neither P.R.O. nor Distributor has any authority to make
representations, warranties or agreements for or on behalf of the other party.
1. SCOPE OF AGREEMENT. P.R.O. is currently engaged in the business of
marketing golf products and services ("GOLF-RELATED MATERIALS"). Distributor is
desirous of participating in the furtherance of P.R.O.'S business objectives, in
a relationship more specifically defined herein. Distributor has the right, but
not the obligation to buy for resale P.R.O. "GOLF RELATED MATERIALS" as offered
generally to other distributors of P.R.O.
"GOLF RELATED MATERIALS" are products produced by P.R.O. including
but not limited to, Premium Links(TM) and any futurE P.R.O.
products which are produced or represented BY P.R.O. and may be
purchased for resale or brokered by Distributor. The Distributor
also has the right, but not obligation, to purchase P.R.O. sales
aids and promotional materials for the purpose of promoting
P.R.O.'s business. As an initial purchase, Distributor agrees to
purchase for $35,000 from P.R.O. the following:
a. $20,000 First year license fee for the rights
defined herein, including training;
b. $10,000 Premium Links(TM) Package; and
c. $ 5,000 2,000 shares of Performance Research, Inc.
restricted Common Stock, subject to SEC Rule
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2. PAYMENT AND SHIPPING. Payment will be made by Distributor at the
time of purchase by check, money order, wire transfer, certified or cashier
check. P.R.O. will use its best efforts to ship all orders within 15 days from
the date of receipt of payment. Reasonable shipping and handling charges will be
charged by P.R.O. All reorders and stocking orders will be treated in the same
manner.
3. NATURE OF THE RELATIONSHIP. The success or failure of the
Distributor's business is the responsibility of the Distributor and P.R.O. does
not make any projection or guarantee as to the success of the Distributor's
business. P.R.O. does not exercise control over Distributor's business methods
or offer advice on how to run Distributor's business.
P.R.O. does require that Distributor not affect P.R.O.'s goodwill,
copyrights, trademarks and valuable business reputation by acting in a
disreputable, illegal, immoral or unprofessional manner; and, Distributor hereby
agrees not to act in such a manner or make representations that are not within
the bounds provided by P.R.O. in any manner.
P.R.O. reserves exclusive rights to packaging, graphics, content,
materials and promotional materials, and all other design criteria, etc., used
to produce P.R.O. products. Prior written authorization for use of logos, etc.
is required.
Distributor is not granted an exclusive market. However, as long
as the Distributor is in compliance with the terms of this Agreement, P.R.O.
shall not appoint additional authorized "distributors" of Golf Related Materials
in the areas indicated in Addendum A attached hereto. This provision does not
exclude the Distributor from selling in other locations
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and does not prohibit other authorized "distributors" from selling within the
aforementioned areas. P.R.O. may directly or indirectly (including through
distributors, wholesalers, agents and persons similar to Distributor) sell any
products or services to any person (provision 6b to apply to Premium Links(TM)
sales only). Distributor is not authorized to make any additional
representations or warranties in connection with the sale or use of the
materials. If Distributor sells to other persons for resale, or otherwise has
other persons sell products provided by P.R.O. to Distributor, Distributor will
assure that such persons do not violate this Agreement and Distributor shall
consider a violation by such persons a violation.
4. CERTIFIED MEMBER INSTRUCTOR. The Distributor may secure a teaching
professional to instruct within the Territory. This instructor must have
attended and passed the P.R.O. Certification Process and, at the Company's
discretion, be appointed to the Distributor's Territory. The Company will
provide this Certification Training for two instructors at no charge to the
Distributor or to the Certified Instructor, however, the Distributor must cover
all travel and lodging.
5. FUTURE PRICES OF MATERIALS; ORDERS. P.R.O. will establish standard
list prices and sale conditions to persons similar to Distributor, which will be
published from time to time in P.R.O.'s price list, and in P.R.O.'s invoice or
purchase order form. P.R.O. will provide ninety (90) days written notice of
changes in the price list.
6. TERMS OF PAYMENT.
A. PAYMENT OF CONSIDERATION TO P.R.O. Distributor has
furnished a payment in the amount of $15,000 to secure the territory and this
payment will be applied to the purchase of the Distributorship defined herein.
An additional deposit of $20,000.00 will be paid to P.R.O. prior to attending
training. Upon execution of this contract, all deposits will convert to the
agreed upon consideration and the Distributor will have all rights as defined
herein. Nonpayment or default of any amounts due herein shall be construed as
Distributor forfeiting the within named territory and rescission of all terms
and conditions hereunder. The sixty-day (60) cure provision in Section 11(a)
does not apply to the payment schedule outlined in this section.
B. PAYMENT OF CONSIDERATION TO THE DISTRIBUTOR. The Company
will remit consideration to Distributor based on a twenty-five (25%) percent
override for sales of Premium Links(TM) [Premium Links(TM) defined herein as a
single sale, in an amount not less than $2,500.00, or one-half (1/2) of a
package] conducted by the Distributor on all cleared funds. The Company will
remit a ten (10%) percent override to the Distributor for retail sales accounted
for by the Distributor to individuals both within and outside of their assigned
territory. Such payments shall be calculated from the previous calendar months
sales volume, and shall be due on or before the 15th of each ensuing month.
(i) It is expressly agreed and understood that in the
event a Distributor conducts sales (knowingly or unknowingly) within the defined
boundary of another Distributor twenty (20%) percent of the total consideration
due to the Distributor shall be remitted directly by P.R.O. to the Distributor
appointed in the defined boundary.
(ii) It is further agreed and understood that if the
Company conducts sales (knowingly or unknowingly) within the defined boundary of
a Distributor, the Company shall pay to the said Distributor consideration
determined as follows:
o If the total annual sales for the Distributor in that year are
less than $200,000, then the consideration due Distributor for
the Company sale shall be twenty (20%) percent of the amount
of the consideration determined by the operation of Section
6(b) above;
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o If the total annual sales of the Distributor in that year are
equal to, or greater than $200,000, but less than $300,000,
then the consideration for that sale shall be thirty (30%)
percent of the amount of the consideration determined by the
operation of Section 6(b) above;
o If the total annual sales for the Distributor in that year are
equal to, or greater than $300,000, but less than $500,000,
then the consideration for that sale shall be forty (40%)
percent of the amount of the consideration determined by the
operation of Section 6(b); and
o If the total annual sales for the Distributor in that year are
equal to, or greater than $500,000 then the consideration for
that sale shall be fifty (50%) percent of the amount of the
consideration determined by the operation of Section 6(b).
(iii) During the first three (3) years of this Distributor
Agreement, the Distributor is eligible to participate in P.R.O.'s stock option
plan for any year in which the annual gross sales of the Distributor is equal
to, or greater than, $500,000. For any year in which the Distributor is
eligible, the plan provides that the Distributor will receive options to
purchase a number of shares of common stock of the Company determined by
multiplying the annual gross sales of the Distributor by five (5%) percent and
then dividing that result by eighty (80%) percent of the then market price of
the common stock. The exercise price for the options shall be the market price
on the date of the grant of the options. Each option shall have a five (5) year
term. For years after the first three (3) years of the Distributor Agreement,
the provisions of the options to be granted to Distributor shall be reasonably
determined by the Company.
(iv) One (1%) percent of Gross Retail Sales in the
Distributor's territory for every $100,000 Corporate Sales generated in a 12
month period, never to exceed five (5%). The first year commission would be
calculated upon the completion anniversary date of the Distributor.
Subsequently, commission on Retail Sales would be determined on a rolling,
12-month basis according to the same formula.
(v) Compensation terms and structure for additional
products and services to those defined herein shall be addressed in separate
addendum form from time to time.
7. RIGHT TO BUY BACK MATERIALS. If this Agreement is terminated, P.R.O.
has the option to buy back all unsold materials sold by it to Distributor at the
same price paid by Distributor (excluding tax, shipping and handling) less the
amount of any claims by P.R.O. against Distributor and damage to returned goods.
Distributor will ship the materials back to P.R.O. (shipping expense to be
determined) and P.R.O. will pay for such materials after prompt inspection by
P.R.O. A fifteen (15%) percent restocking fee will be deducted.
8. CONFIDENTIALITY. If Distributor receives any confidential
information from P.R.O., Distributor will not disclose the information to any
third party, and will use that information only in furtherance of the sale of
P.R.O. products, and will return the information upon request to P.R.O.
Distributor understands that P.R.O. has spent considerable time, effort and
money in developing the materials and Distributor will not copy, reproduce,
imitate or make or have made for them any similar materials. The materials are
copyrighted by P.R.O. A court of law shall enforce this provision to the maximum
extent and duration permitted under applicable law, and the court may modify
this provision to accomplish its intended purpose to the maximum extent. Upon
special request and prior written agreement with P.R.O., Distributor may be
permitted to use certain confidential materials. The authority to use
confidential materials shall remain the sole and absolute discretion of P.R.O.
Furthermore, it is expressly understood that the terms and conditions of this
Agreement shall remain confidential between P.R.O. and the Distributor named
herein.
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9. NO COMPETE. During the term of this Agreement, the Distributor
and/or his Certified Instructor may provide the following golf instruction:
a. Golf instruction not to exceed one-half (1/2) day as
described in the Certified Trainers Agreement; and
b. Promotional golf instruction at a Short School location
for the purposes of marketing the Premium Links(TM)
program to corporations.
In no case may the Distributor and/or the Certified Instructor provide
golf instruction to individuals or corporations that in any way
competes with the Company's Destination Golf Schools.
Any deviation from this No Compete clause, without prior written
authorization from the Company, is grounds for immediate termination of
this Agreement, with all subsequent damages and legal fees being paid
by the Distributor.
It is expressly understood that all expenses including but not limited
to administrative costs, instructor salaries, golf fees and/or site
fees, etc., for short schools only, will be the sole responsibility of
the Distributor unless otherwise stipulated in writing.
10. TRANSFERABILITY. Any Distributor in good standing maintains the
option to transfer rights of the Area to individuals or companies who meet the
qualifications and standards established by the terms of this Agreement. Such
transfers must be made in writing to P.R.O. and P.R.O. reserves first right of
refusal to match the transfer fees and arrangements. P.R.O. will have 15
business days to respond and will not unreasonably withhold the transfer. P.R.O.
may change a fee to evaluate any proposed assignee and prepare legal documents,
such fee not to exceed $250.00. Any and all fees paid to Distributor by any
third party for such transfer shall be the property of the Distributor.
11. TERMINATION. The non-defaulting party may terminate this Agreement:
(1) upon a breach hereof by the other party; and (2) if the other party is
generally not paying its debts as they become due, or has a petition in
bankruptcy filed by or against it. In addition, P.R.O. may terminate this
Agreement if Distributor does not provide to the Company, an annual License Fee
of $10,000.00 to be pro-rated, ($1,000 per $10,000 revenue). If the
Distributor's performance generates in excess of $100,000 in the previous year
in revenue, the License Fee is accounted for the forthcoming year. (however,
Distributor has no minimum performance obligation under this Agreement and this
is not a forecast of Distributor's actual sales as the individual efforts of
Distributor will determine the sales level). Distributor may terminate this
Agreement at any time by providing written notice to P.R.O. Termination by
either party of this Agreement shall not affect compensation due to the
Distributor.
A. CURE PROVISION. In the event P.R.O. shall have cause to
believe Distributor has violated a term or condition of
this Agreement, P.R.O. will submit in writing to
Distributor notification that Distributor is not in good
standing. Distributor will have sixty (60) days to respond
and cure any problems, issues, grievances or
non-compliance stated by P.R.O.
12. SALE OF P.R.O. If a majority interest in the company is sold during
the term of this Agreement, the company will provide for the continuation of all
rights granted herein to the Distributor.
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13. CHOICE OF LAW AND VENUE. This Agreement is governed by the laws of
the State of Colorado (including laws on the amount and type of damages that may
be awarded), excluding laws on choice of law. The federal and state courts
located in the City and County of Denver shall be the exclusive forum for any
suit or legal proceeding, and each party hereto hereby consents to the
jurisdiction of such courts; provided, however, that P.R.O. may elect to bring a
suit or proceeding against Distributor in another appropriate jurisdiction.
14. MISCELLANEOUS.
a. Distributor has all rescission rights, if any, provided by
state or federal law;
b. Notices hereunder will be given by first class mail to the
recipient's last known address;
c. Provisions, which by their sense should survive
termination of this Agreement, including the
confidentiality provisions and prohibitions on
reproduction of materials or production of similar
materials, shall survive termination;
d. A party shall not be liable for any delay or inability to
perform which is outside its reasonable control;
e. Distributor is responsible for collecting and remitting
all sales, use and other taxes on sales by Distributor;
and
f. This is an integrated Agreement. No promises or
representations have been made by one party to the other
that are not set forth in this Agreement.
15. CONTRACT TERMS AND DEFINITIONS:
a. I.G.O. (Introductory Golf Outing) A short Golf
School providing 1/2 day, (up to 2.5
hours of instruction).
b. Retail Sales The individual sale of school with
attendance by the individual for
individual days.
c. Premium Links The sale of golf school's to
corporations or individuals in bulk
number of school days in the
predetermined amounts as follows:
$2,500 1/2 package - 10 Days Included
$5,000 (22 Days Included)
$10,000 (46 Days Included)
$25,000 (123 Days Included)
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IN WITNESS WHEREOF, P.R.O. and Distributor hereby place their official
hands and seals on this Agreement effective the day and year first written
above.
DISTRIBUTOR:
------------------------------------ --------------------------
Name: Date
Title:
Company:
Address:
Telephone: _______________________
Social Security No.: ___________________
PROFORM GOLF, INC.
By: __________________________________ _________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Date
Title: Vice President
Address: ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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ADDENDUM A
AGREED UPON MARKETING AREA:
So long as the Distributor is in compliance with the terms of this
Agreement, the Company shall not appoint additional authorized distributors in
the area indicated as follows:
TERRITORY DEFINED AS FOLLOWS:
Please refer to attached map.
REMINDER: This provision does not exclude the Distributor from selling in other
locations and does not prohibit other authorized distributors from selling
within the aforementioned territory.
ADDENDUM B
PRO PROVIDES FOR:
A. A Destination Site within two (2) hours travel time to the
Distributor;
B. Regional and National advertising/promotional campaign;
C. Training Seminar at a location designated by P.R.O. at
Distributor's expense, except as provided for herein;
D. Providing Trade Show kits with reasonable notice;
E. All administrative operations and functions for the Destination
schools utilizing P.R.O.'S computerized reservation system;
F. Monthly account reports;
G. Toll Free Support and Order Line;
H. Customer Service for both Distributor and Distributor's customers,
etc.;
I. A Distributor Advisory Board consisting of one regional delegate to
provide P.R.O.'s executive committee with information to facilitate
Distributor's business. All final decisions to be made by P.R.O.
executive committee;
J. P.R.O. will disseminate all sales leads generated by P.R.O. to the
Distributor in accordance with territorial boundary; and
K. Camera-ready artwork and sales aids at cost plus ten (10%) in
accordance with P.R.O.'s standard collateral materials.
ADDENDUM C
THE DISTRIBUTOR PROVIDES FOR:
A. Best efforts to conduct local marketing and promotion of P.R.O.'s
golf related materials.
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