LICENSE AGREEMENT
(PGA TOUR - HOME FURNISHINGS PROGRAM)
This is an Agreement between ▇▇▇▇▇▇ Manufacturing Company, Inc., a
corporation organized under the laws of the state of Indiana, having its
principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
("Licensee"), and PGA TOUR Licensing, a Georgia partnership, having a principal
place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
("PGA TOUR Licensing").
WHEREAS PGA TOUR Licensing represents licensing interests of the PGA
TOUR, Inc. ("PGA TOUR") and has exclusive domestic rights, as representative, to
license for commercial purposes the use of certain indicia.
WHEREAS Licensee desires to be licensed to utilize certain indicia in
connection with the manufacture, distribution and sale of certain products, and
PGA TOUR Licensing is willing, subject to certain conditions, to grant such a
license.
NOW, THEREFORE, in consideration of the parties' mutual covenants and
undertakings, and other good and valuable consideration the receipt and
sufficiency of which are acknowledged, the parties agree as follows:
1. DEFINITIONS
(a) The "Licensed Indicia" means the names, trademarks, service marks,
abbreviations, slogans, designs, logos and other symbols associated with or
referring to PGA TOUR, including any registrations that may exist therefor.
Licensed Indicia includes those in Appendix B.
(b) "Licensed Articles" means the products listed in Appendix C and
bearing Licensed Indicia.
(c) "Territory" extends to the United States of America, its
territories and possessions, and the Commonwealth of Puerto Rico. Licensee
shall not distribute or sell Licensed Articles outside the Territory, or to
any person or entity that Licensee knows or has reason to know intends or
is likely to resell Licensed Articles outside the Territory, without prior
approval of PGA TOUR.
(d) "Premium" means any product bearing Licensed Indicia sold or given
away for the purposes of increasing the sale, promoting, or publicizing any
other product, service or establishment, including incentives for sales
force, trade or consumer promotions.
(e) "Retail Sales" means the sale of Licensed Articles directly to or
for approved retail outlets, mail order, or catalogs, where the Licensed
Articles are ultimately sold to consumers. Retail Sales does not include
the sale or distribution of Licensed Articles as Premiums, which requires
separate agreements executed by PGA TOUR Licensing with both the
manufacturer and user of the Premium.
(f) "Net Sales" means the total gross invoice amounts of the Licensed
Articles billed customers or payments received, whichever is greater,
including the royalty amount, less lawful quantity discounts actually
allowed and taken as such by customers and shown on the invoice, less any
credits for returns actually made as supported by credit memoranda issued
to customers, and less sales taxes and prepaid transportation charges on
Licensed Articles if shipped by Licensee. No deduction shall be made for
direct or indirect costs incurred in the manufacturing, selling,
advertising (including cooperative and promotional allowances) or
distributing the Licensed Articles, nor shall any deduction be made for
uncollectible accounts, cash discounts, similar allowances or any other
amounts.
2. GRANT OF LICENSE
(a) Grant: PGA TOUR Licensing grants to Licensee the nontransferable
license to use the Licensed indicia on the Licensed Articles for Retail
Sales in the Territory during the Term. The rights granted herein shall be
exclusive regarding Case Goods, including bedroom, dining room and casual
dining; and nonexclusive regarding Occasional Furniture (e.g., cocktail
tables, end tables, entertainment centers, etc.). This license applies only
to:
(1) The Licensed Indicia in Appendix B.
(2) The Licensed Articles described in Appendix C.
(b) Term: This Agreement shall be in effect on the last date of
signature below and shall expire on December 31, 2001, unless terminated
sooner or extended in the manner provided in this Agreement.
(c) Renewal: Upon expiration, Licensee shall have the option to renew
this Agreement for an additional three (3) year term, subject to Licensee's
satisfactory performance of all obligations under this Agreement and mutual
agreement of the parties.
(d) Limitation on License: This license is subject to the following
additional limitations.
(1) Licensee shall not use the Licensed Indicia for any purpose
other than upon or in connection with the approved Licensed Articles
listed in Appendix C. Any additions to the Licensed Articles and/or
new deigns shall be submitted in writing to PGA TOUR Licensing and
samples shall be submitted to PGA TOUR Licensing for prior written
approval. Licensee shall, upon request by PGA TOUR Licensing,
immediately recall any unauthorized products or designs from the
marketplace, and destroy or submit to PGA TOUR Licensing at Licensee's
expense said products or designs, at PGA TOUR Licensing's option.
(2) Licensee shall not provide any method of application of
Licensed Indicia to any party unless PGA TOUR Licensing authorizes
Licensee to provide said application under the terms of an authorized
manufacturer's agreement.
(3) Licensee shall not contract with any party for the production
of Licensed Articles or application of Licensed Indicia by that party
("Manufacturer") without PGA TOUR Licensing's written authorization.
In the event that Licensee desires to have a Manufacturer produce one
or more Licensed Article, or any component thereof which bears the
Licensed Indicia, Licensee shall provide PGA TOUR Licensing with the
name, address, telephone number and name of the principal contact of
the proposed Manufacturer. PGA TOUR Licensing must approve any
Manufacturer, in writing, and the Manufacturer must execute an
authorized manufacturer's or supplier's agreement provided by PGA TOUR
Licensing prior to use of the Licensed Indicia. In addition, Licensee
shall take the steps necessary to ensure the following: Manufacturer
produces the Licensed Articles only as and when directed by Licensee,
which remains fully responsible for ensuring that the Licensed
Articles are manufactured in accordance with the terms herein
including approval; Manufacturer does not distribute, sell or supply
the Licensed Articles to any person or entity other than Licensee;
Manufacturer does not delegate in any manner whatsoever its
obligations with respect to the Licensed Articles. Licensee's failure
to comply with this Paragraph may result in termination of this
Agreement and/or confiscation and seizure of Licensed Articles by PGA
TOUR Licensing in its sole discretion. PGA TOUR Licensing hereby
reserves the right to terminate in its sole discretion the engagement
of any Manufacturer at any time.
(4) Licensee shall not engage in the direct shipment of off-shore
manufactured Licensed Articles to distributors, wholesalers,
retailers, etc. Licensee must take receipt of Licensed Articles at the
applicable U.S. port of entry.
(5) Licensee shall not manufacture, sell, or distribute articles
bearing Licensed Indicia as Premiums, for publicity purposes, for fund
raising, as giveaways, in combination sales, or for disposal under
similar methods of merchandising. Licensee shall not use any of the
Licensed Indicia in connection with any sweepstake, lottery, game of
chance or any similar promotional or sales program. In the event
Licensee desires to use Licensed Articles for acceptable promotional
purposes, Licensee shall obtain written approval from PGA TOUR
Licensing.
(6) Licensee shall not use the Licensed Indicia in connection
with names, marks or likenesses of PGA TOUR or Senior PGA TOUR
players, or any other person or entity unless Licensee has obtained
written authorization to use the same in connection with the Licensed
Indicia, and such use has been approved in writing by PGA TOUR
Licensing.
(7) PGA Tour Licensing will have the right to approve Licensee's
opening wholesale price points, which approval will not be
unreasonably withheld.
3. EXCLUSIVITY
Except with regard to the Licensed Articles as specified in Paragraph 2(a)
and Appendix C, nothing in this Agreement shall be construed to prevent PGA TOUR
Licensing from granting any other licenses for use of the Licensed Indicia.
4. PERFORMANCE / DISTRIBUTION
Licensee agrees to use its best efforts to provide for the broadest
possible distribution of Licensed Articles throughout the Territory, consistent
with its marketing and distribution plans. Licensee agrees to maintain adequate
inventories of Licensed Articles as an essential part of its distribution
program. Licensee shall obtain prior approval of its marketing plan and
anticipated distribution channels and outlets through PGA TOUR Licensing.
5. PAYMENTS
(a) Rate: Licensee shall pay to PGA TOUR Licensing the applicable
royalty rate set forth in Appendix A. The royalties paid ("Royalty
Payments") shall be based upon Net Sales, as defined in Paragraph 1(f), of
all items containing the Licensed Indicia sold during the Term and any
renewal, and during the period allowed pursuant to Paragraph 17.
(b) For purposes of determining the Royalty Payments, sales shall be
deemed to have been made at the time of invoicing or billing for Licensed
Articles or at the time of delivery thereof, whichever comes first.
(c) Royalty Payments shall be (i) paid by Licensee to PGA TOUR
Licensing on all Licensed Articles (including without limitation any
seconds, irregulars, etc. distributed by Licensee pursuant to the
provisions of Paragraph 11(c) of this Agreement) distributed by Licensee or
any of its affiliated, associated or subsidiary companies even if not
billed or billed at less than the usual Net Sales price for such Licensed
Articles, and (ii) based upon the Net Sales price for such Licensed
Articles generally charged the trade by Licensee.
(d) In the event Licensee sells or distributes Licensed Articles at a
special price directly or indirectly to itself, including without
limitation, any subsidiary of Licensee, or to any other person, firm or
corporation related in any manner to licensee or its officers, directors or
major stockholders, or to an exclusive distributor, Licensee shall pay
Royalty Payments with respect to such sales or distribution based upon the
Net Sales price generally charged the trade by Licensee.
(e) Advance and Minimum Payments: Licensee shall pay to PGA TOUR
Licensing an Advance and a Minimum Guarantee. The Advance is the
nonrefundable amount which Licensee shall pay to PGA TOUR Licensing upon
execution of this Agreement, which will be credited against the Minimum
Guarantee. The Minimum Guarantee is the minimum amount of royalties
Licensee shall pay to PGA TOUR Licensing during the Term. The Advance and
Minimum Guarantee schedules are listed in Appendix A.
6. MULTIPLE ROYALTIES
PGA TOUR Licensing recognizes that Licensee may be subject to other license
agreements which, together with this Agreement, would subject certain Licensed
Articles to one or more additional royalty payments. Royalty Payments required
to be paid to PGA TOUR Licensing for Licensed Articles may be reduced by
mutually agreed upon amounts set forth in writing.
7. STATEMENT, PAYMENTS AND PENALTIES
(a) On or before the twentieth (20th) day of each month, Licensee
shall submit to PGA TOUR Licensing, in a format agreed upon by PGA TOUR
Licensing, full and accurate statements showing the quantity, description,
and Net Sales of the Licensed Articles distributed and/or sold during the
preceding month, and including any additional information kept in the
normal course of business by the Licensee which is appropriate to enable an
independent determination of the amount due hereunder. All Royalty Payments
then due PGA TOUR Licensing shall be made simultaneously with the
submission of the statements. Such statements shall be submitted whether or
not they reflect any sales.
(b) Failure to submit timely or accurate statements and/or Royalty
Payments shall result in an additional charge of 1 1/2% per month on any
balance unpaid as of the applicable reporting period.
(c) The receipt and/or acceptance by PGA TOUR Licensing of the
statements furnished or Royalty Payments, or the cashing of any royalty
checks paid hereunder, shall not preclude PGA TOUR Licensing from
questioning the correctness thereof at any time. In the event that any
inconsistencies or mistakes are discovered in such statements or payments,
they shall immediately be rectified by the Licensee and the appropriate
payment shall be made by the Licensee.
(d) Licensee shall, unless otherwise directed in writing by PGA TOUR
Licensing, send all Royalty Payments and accounting reports to:
▇▇▇▇ ▇▇▇▇▇▇
PGA TOUR Licensing
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
8. OWNERSHIP OF LICENSED INDICIA AND PROTECTION OF RIGHTS
(a) Licensee acknowledges and agrees that PGA TOUR owns or has the
right to use the Licensed Indicia in Appendix B and any registrations
therefor, as well as any indicia adopted and used or approved for use by
PGA TOUR, and that each of the Licensed Indicia is valid, and that PGA TOUR
has the exclusive right to use each of its Licensed Indicia subject only to
the revocable license to use the Licensed Indicia. Licensee acknowledges
the validity of the state and federal registrations PGA TOUR owns, obtains
or acquires for its Licensed Indicia. Licensee shall not, at any time, file
any trademark application with the United States Patent and Trademark
Office, or with any other governmental entity, anywhere in the world, for
the Licensed Indicia, whether or not such Licensed Indicia are identified
in Appendix B. Licensee shall not use any of the Licensed Indicia, in whole
or in part, or any similar ▇▇▇▇ as, or as part of, a trademark, service
▇▇▇▇, trade name, fictitious name, company or corporate name anywhere in
the world. Any trademark or service ▇▇▇▇ registration obtained or applied
for that contains the Licensed Indicia or any similar ▇▇▇▇ shall be
transferred to PGA TOUR without compensation, and at the expense of
Licensee.
(b) Licensee shall not oppose or seek to cancel or challenge, in any
forum, including, but not limited to, the United States Patent and
Trademark Office, any ▇▇▇▇, application or registration of PGA TOUR.
Licensee shall not object to, or file any action or lawsuit because of, any
use by PGA TOUR of any Licensed Indicia for any goods or services, whether
such use is by PGA TOUR directly or through different licensees or
authorized users.
(c) Licensee recognizes the great value of the good will associated
with the Licensed Indicia and acknowledges that such good will belongs to
PGA TOUR, and that such Licensed Indicia have inherent and/or acquired
distinctiveness. Licensee shall not, during the term of this Agreement or
thereafter, attack the property rights of PGA TOUR, attack the validity of
this Agreement, or use the Licensed Indicia or any similar ▇▇▇▇ in any
manner other than as licensed hereunder.
(d) Licensee agrees to assist PGA TOUR Licensing in the protection of
the Licensed Indicia and shall provide, at reasonable cost to be borne by
PGA TOUR Licensing or PGA TOUR, any evidence, documents, and testimony
concerning the use by Licensee of any one or more of the Licensed Indicia,
which PGA TOUR Licensing may request for use in obtaining, defending, or
enforcing rights in any Licensed Indicia or related application or
registration. Licensee shall notify PGA TOUR Licensing in writing of any
infringements or imitations by others of the Licensed Indicia of which it
is aware. As between Licensee and PGA TOUR Licensing, PGA TOUR Licensing
shall have the sole right to determine whether or not any action shall be
taken on account of any such infringements or imitations. Licensee shall
not institute any suit or take any action on account of any such
infringements or imitations without first obtaining the written consent of
PGA TOUR Licensing to do so. Licensee agrees that it is not entitled to
share in any proceeds received by PGA TOUR Licensing or PGA TOUR (by
settlement or otherwise) in connection with any formal or informal action
brought by PGA TOUR Licensing, PGA TOUR or other entity.
(e) Nothing in this Agreement gives Licensee any right, title, or
interest in any Licensed Indicia except the right to use in accordance with
the terms of this Agreement. Licensee's use of any Licensed Indicia inures
to the benefit of PGA TOUR.
(f) Licensee acknowledges that any original designs, artwork or other
compilations or derivatives ("Works") created by it pursuant to this
Agreement that contain the Licensed Indicia are compilations or derivatives
as those terms axe used in Section 103 of the Copyright Act. Therefore, any
rights, including copyrights, that Licensee might have in those original
Works do not extend to any portion or aspect of the Licensed Indicia or any
derivatives thereof, and do not in any way dilute or affect the interests
of PGA TOUR in the Licensed Indicia or any derivatives thereof.
Accordingly, Licensee shall not copy, use, assign or otherwise transfer any
rights in any Works with any portion or aspect of the Licensed Indicia or
any derivatives thereof included, except in accordance with this Agreement.
Licensee shall not affix a copyright notice to any product bearing Licensed
Indicia, or otherwise attempt to obtain or assert copyright rights in any
artwork or design which contains Licensed Indicia, without the express
written authorization of PGA TOUR Licensing.
(g) Licensee acknowledges that its breach or threatened breach of this
Agreement win result in immediate and irremediable damage to PGA TOUR
Licensing and/or PGA TOUR and that money damages alone would be inadequate
to compensate PGA TOUR Licensing and/or PGA TOUR. Therefore, in the event
of a breach or threatened breach of this Agreement by Licensee, PGA TOUR
Licensing and/or PGA TOUR may, in addition to other remedies, immediately
obtain and enforce injunctive relief prohibiting the breach or threatened
breach or compelling specific performance. In the event of any breach or
threatened breach of this Agreement by Licensee or infringement of any
rights of PGA TOUR, if PGA TOUR Licensing and/or PGA TOUR employ attorneys
or incur other expenses, Licensee shall reimburse PGA TOUR Licensing and/or
PGA TOUR for their reasonable attorney's fees and other expenses.
9. DISPLAY AND APPROVAL OF LICENSED INDICIA
(a) Licensee shall use the Licensed Indicia properly on all Licensed
Articles, as well as labels, containers, packages, tags, and displays
(collectively "Packaging"), and in all print advertisements and promotional
literature, television and radio commercials, and press releases
(collectively "Advertising"). On all visible Packaging and Advertising, the
Licensed Indicia shall be emphasized in relation to surrounding material by
using a distinctive type face, color, underlining, or other technique
approved by PGA TOUR Licensing. Wherever appropriate, the Licensed Indicia
shall be used as a proper adjective, and the common noun for the product
shall be used in conjunction with the Licensed Indicia. The proper symbol
to identify the Licensed Indicia as a trademark (i.e., the circled "R"
symbol if the Licensed Indicia is registered in the United States Patent
and Trademark Office or the "TM" symbol if not so registered) shall be
placed adjacent to each Licensed Indicia.
(b) PGA TOUR Licensing will provide to Licensee guidance on the proper
use of the Licensed Indicia, including the guidelines set forth in Appendix
D. A true representation or example of any proposed use by Licensee of any
of the Licensed Indicia listed, in any visible or audible medium, and all
proposed products, Packaging and Advertising containing or referring to any
Licensed Indicia, shall be submitted at Licensee's expense to PGA TOUR
Licensing for approval prior to such use. Licensee shall not use any
Licensed Indicia in any form or in any material disapproved or not approved
by PGA TOUR Licensing.
(c) Licensee shall display on each Licensed Article or its Packaging
and Advertising the trademark and license notices required by PGA TOUR
Licensing's written instructions in effect as of the date of manufacture.
10. DISPLAY OF OFFICIAL TAG
(a) Licensee shall, prior to distribution or sale of any Licensed
Article, affix to each Licensed Article, its Packaging and Advertising an
"Officially Licensed Products" tag in the form prescribed by PGA TOUR
Licensing ("Official Tag"). In addition, Licensee shall affix its name to
each Licensed Article, its Packaging and Advertising. Licensee shall obtain
Official Tags from one or more suppliers authorized by PGA TOUR Licensing
to produce those tags.
(b) Licensee is responsible for affixing the Official Tag to each
Licensed Article, its Packaging and Advertising. Licensee shall not provide
Official Tags to any third party for any purpose whatsoever, without prior
written approval by PGA TOUR Licensing.
(c) Licensee agrees to defend, indemnify and hold harmless PGA TOUR
Licensing, PGA TOUR, and those Indemnified Parties set forth in Paragraph
14 from a liability claims, costs or damages, including but not limited to
any liability for the conversion or wrongful seizure of any of the Licensed
Articles not containing the Official Tag and Licensee's name as required by
this Paragraph. This provision is in addition to and in no way limits
Paragraph 14.
11. PROCEDURE FOR PRODUCT SUBMISSION AND APPROVAL
(a) Licensee understands and agrees that it is an essential condition
of this Agreement to protect the high reputation enjoyed by PGA TOUR, and
that the products and designs sold, promoted, or advertised in association
with any of the Licensed Indicia shall be of high and consistent quality,
subject to the approval and continuing supervision and control of PGA TOUR
Licensing. All products, Packaging and/or designs containing the Licensed
Indicia must receive written quality control approval by PGA TOUR Licensing
as provided herein.
(b) The description of each Licensed Article to be sold under each of
the Licensed Indicia are set out in Appendix C, or in an attachment to
Appendix C; and guidelines regarding the Licensed Indicia are set out in
Appendix D. Licensee agrees to adhere strictly to the descriptions and
guidelines for each Licensed Article sold under each of the Licensed
Indicia.
(c) Prior to the manufacture, distribution or sale of any product,
Packaging, or design containing the Licensed Indicia, Licensee shall submit
to PGA TOUR Licensing, at Licensee's expense, pictures, illustrations or
other renderings, and product specifications, of each product, Packaging
and/or design, and shall submit or make available for inspection a mutually
agreed-upon number of actual products as they would be produced for sale.
If PGA TOUR Licensing approves in writing the product, Packaging and/or
design, the same shall be accepted to serve as an example of quality for
that product, Packaging and/or design, and production quantities may be
manufactured by Licensee in strict conformity with the approved sample.
Licensee shall not depart from the approved quality standards in any
material respect without the prior written approval of PGA TOUR Licensing.
Products not meeting those standards, including seconds, irregulars, etc.,
shall not be sold or distributed under any circumstances without PGA TOUR
Licensing's prior written consent.
(d) Licensee may only use the Licensed Indicia as depicted in Appendix
B and approved in the manner set forth herein. Licensee may not modify the
Licensed Indicia without the express written approval of PGA TOUR
Licensing. The use of the Licensed Indicia in conjunction with original
artwork supplied by the Licensee requires the express written approval of
PGA TOUR Licensing. Licensee may submit sketches of proposed artwork for
preliminary approval before submitting finished samples; provided, however,
that such preliminary approval shall not relieve Licensee from its product
and design approval obligations as stated in this Agreement.
(e) Upon request by PGA TOUR Licensing at any other time, in addition
to any other requirement, Licensee shall submit or make available for
inspection such mutually agreed-upon number of each product, Packaging
and/or design sold under the Licensed Indicia as may be necessary for PGA
TOUR Licensing to examine and test to assure compliance with the quality
and standards for products, Packaging and/or designs approved herein.
(f) If PGA TOUR Licensing notifies Licensee of any defect in any
product or Packaging, or of any deviation from the approved use of any of
the Licensed Indicia, Licensee shall have fifteen (15) days from the date
of notification from PGA TOUR Licensing to correct every noted defect or
deviation. Defective products, Packaging and/or designs in Licensee's
inventory shall not be sold or distributed and shall, upon request by PGA
TOUR Licensing, be immediately recalled from the marketplace and destroyed
or submitted to PGA TOUR Licensing, at PGA TOUR Licensing's option and at
Licensee's expense. However, if it is possible to correct all defects in
the products, Packaging and/or designs in Licensee's inventory, such
products, Packaging or designs may be sold after all defects are corrected.
PGA TOUR Licensing and/or its authorized representatives shall have the
right at reasonable times without notice to inspect Licensee's plants,
warehouses, storage facilities and operations related to the production of
Licensed Articles.
(g) Upon request by PGA TOUR Licensing and by mutual consent, Licensee
shall provide a mutually agreed-upon number of Licensed Articles to be used
by PGA TOUR Licensing and PGA TOUR staff for promotional purposes.
(h) PGA TOUR Licensing and/or PGA TOUR shall have the right to
purchase Licensed Articles at most favored customer wholesale pricing
levels, at any time during the Term or any renewals.
12. NO JOINT VENTURE OR ENDORSEMENT OF LICENSEE
Nothing herein contained shall be construed to place the parties in the
relationship of partners, joint venturers, or agents, and Licensee shall have no
power to obligate or bind PGA TOUR Licensing or PGA TOUR in any manner
whatsoever. Although PGA TOUR Licensing retains the right to approve the use of
the Licensed Indicia and the quality of the Licensed Articles, neither PGA TOUR
Licensing nor PGA TOUR is in any way a guarantor of the quality of any product
produced by Licensee. Licensee shall neither state nor imply, directly or
indirectly, that the Licensee or its activities, other than under this license,
are supported, endorsed or sponsored by PGA TOUR Licensing or by PGA TOUR and,
upon direction of PGA TOUR Licensing or PGA TOUR, shall issue express
disclaimers to that effect.
13. INFRINGEMENT
Licensee represents and warrants to PGA TOUR Licensing that all designs and
products submitted for approval are not subject to any valid patent, copyright,
trademark or any other proprietary rights of any non-consenting third party.
Neither PGA TOUR Licensing nor PGA TOUR shall be liable as the result of
activities by Licensee under this Agreement for infringement of any patent,
copyright, trademark or other right belonging to any third party, or for damages
or costs involved in any proceeding based upon any such infringement, or for any
royalty or obligation incurred by Licensee because of any patent, copyright, or
trademark held by a third party.
14. INDEMNIFICATION AND INSURANCE
(a) Licensee is solely responsible for, and will defend, indemnify and
hold harmless PGA TOUR Licensing, PGA TOUR, each of their affiliated
entities, and their respective officers, agents, and employees
(collectively "Indemnified Parties") from any claims, demands, causes of
action or damages, including reasonable attorney's fees, arising out of (i)
any unauthorized use of or infringement of any patent, copyright, trademark
or other proprietary right by Licensee in connection with the designs and
Licensed Articles covered by this Agreement, (ii) alleged defects or
deficiencies in said Licensed Articles or the use thereof, or false
advertising, fraud, misrepresentation or other claims related to the
Licensed Articles not involving a claim of right to the Licensed Indicia,
(iii) the unauthorized use of the Licensed Indicia or any breach by
Licensee of this Agreement, (iv) libel or slander against, or invasion of
the right of privacy, publicity or property of, or violation or
misappropriation of any other right of any third party, and/or (v)
agreements or alleged agreements made or entered into by Licensee to
effectuate the terms of this Agreement. The indemnifications hereunder
shall survive the expiration or termination of this Agreement.
(b) Prior to the first sale of any Licensed Article, Licensee shall
obtain, and thereafter maintain, Commercial General Liability insurance,
including product and contractual liability insurance, providing adequate
protection for the Indemnified Parties as additional insured parties on
License's policy against any claims, demands, or causes of action and
damages, including reasonable attorney's fees, arising out of any of the
circumstances described in Paragraph 14(a) above. Such insurance policy
shall not be canceled or materially changed in form without at least thirty
(30) days written notice to PGA TOUR Licensing. PGA TOUR Licensing shall be
furnished with a certificate of such insurance and endorsements in the form
prescribed by PGA TOUR Licensing. Licensee agrees that such insurance
policy or policies shall provide coverage of one million dollars
($1,000,000) for personal and advertising injury, bodily injury and
property damage arising out of each occurrence, or Licensees standard
insurance policy limits, whichever is greater. However, recognizing that
the aforesaid amounts may be inappropriate with regard to specific classes
of goods, it is contemplated that PGA TOUR Licensing may make reasonable
adjustment to the foregoing amounts. Any adjustment must be confirmed in
writing by PGA TOUR Licensing.
(c) PGA TOUR Licensing and PGA TOUR are responsible for, and will
defend, indemnify and hold harmless Licensee and its respective officers,
agents, and employees from any claims, demands, causes of action or
damages, including reasonable attorney's fees, arising out of a claim by
any third party disputing PGA TOUR Licensing's rights to use or license the
Licensed Indicia, or alleging infringement of Licensed Indicia by Licensee
in connection with its production and distribution of Licensed Articles
authorized by this Agreement; provided, however, that Licensee notifies PGA
TOUR Licensing promptly in writing of the claim and permits PGA TOUR
Licensing and PGA TOUR to defend, compromise or settle the claim. The
indemnifications hereunder shall survive the expiration or termination of
this Agreement.
15. RECORDS AND RIGHT TO AUDIT
(a) Licensee shall, keep, maintain and preserve in its principal place
of business during the Term, any renewal periods and at least three (3)
years following termination or expiration, complete and accurate books,
accounts, records and other materials covering all transactions related to
this Agreement in a manner such that the information contained in the
statements referred to in Paragraph 7 can be readily determined including,
without limitation, customer records, invoices, correspondence and banking,
financial and other records in Licensee's possession or under its control.
PGA TOUR Licensing and/or its duly authorized representatives shall have
the right to inspect and audit all materials related to this Agreement,
which right to inspect and audit shall include the conduct of normal audit
tests of additional Licensee records including those covering
"non-licensed" sales to verify that they are not sales covered by this
Agreement. In addition to the materials required by normal accounting
practices, Licensee must retain detail of PGA TOUR licensed sales to the
invoice number level for audit purposes, and invoices must indicate the PGA
TOUR name beside each Licensed Article.
(b) Such materials shall be available for inspection and audit
(including photocopying) at any time during the Term, any renewal periods
and at least three (3) years following termination or expiration during
reasonable business hours and upon at least five (5) days notice by PGA
TOUR Licensing and/or its representatives. Licensee will cooperate and will
not cause or permit any interference with PGA TOUR Licensing and/or its
representatives in the performance of their duties of inspection and audit.
PGA TOUR Licensing and/or its representatives shall have free and full
access to said materials for inspection and audit purposes.
(c) Following the conduct of the audit, Licensee shall take immediate
steps to timely resolve all issues raised therein, including payment of any
monies owing and due. Should an audit indicate an underpayment of 10% or
more or an underpayment of $20,000 or more of the royalties due PGA TOUR
Licensing, the cost of the audit shall be paid by Licensee. Payment of the
audit cost is in addition to the full amount of any underpayment including
interest as provided in Paragraph 7(b), to be paid by Licensee. Licensee
must cure any contract breaches discovered during the audit, provide
amended reports if required, and submit the amount of any underpayment
including interest and, if applicable, the cost of the audit within thirty
(30) days from the date of the conduct of the audit.
16. TERMINATION
(a) PGA TOUR Licensing shall have the right to terminate this
Agreement without prejudice to any other rights it may have, whether under
the provisions of this Agreement, in law, in equity or otherwise, upon
written notice to Licensee at any time should any of the following defaults
occur:
(1) Licensee does not begin the bona fide manufacture,
distribution, and sale of Licensed Articles within one (1) year of the
date of this Agreement.
(2) Licensee fails to continue the bona fide manufacture,
distribution, and sale of Licensed Articles during the Term. If during
any calendar quarter of the Term, Licensee fails to sell any of the
Licensed Articles, PGA TOUR Licensing may terminate this Agreement
with respect to said Licensed Article by giving written notice.
(3) Licensee fails to make any payment due or fails to deliver
any required statement, and fails to cure this default within fifteen
(15) days from receipt of notice from PGA TOUR Licensing.
(4) The amounts stated in the periodic statements furnished
pursuant to Paragraph 7 are significantly or consistently understated.
(5) Licensee fails to resolve any issue raised in connection with
any audit.
(6) Licensee fails to pay its liabilities when due, or makes any
assignment for the benefit of creditors, or files any petition under
any federal or state bankruptcy statute, or is adjudicated bankrupt or
insolvent, or if any receiver is appointed for its business or
property, or if any trustee in bankruptcy shall be appointed under the
laws of the United States government or the several states.
(7) Licensee attempts to grant or grants a sublicense or attempts
to assign or assigns any right or duty under this Agreement to any
person or entity without the prior written consent of PGA TOUR
Licensing.
(8) Licensee or any related entity manufactures, distributes or
sells any product infringing or diluting the trademark, property or
any other right of any third party.
(9) Licensee fails to deliver to PGA TOUR Licensing or maintain
in full force and effect the insurance referred to in Paragraph 14(b).
(10) Any governmental agency or court of competent jurisdiction
finds that the Licensed Articles are defective in any way, manner or
form.
(11) Licensee discontinues its business as it is now conducted.
(12) Licensee manufactures, distributes or sells Licensed
Articles of quality lower than the samples approved, or manufactures,
distributes, sells or uses Licensed Articles or Licensed Indicia in a
manner not approved or disapproved by PGA TOUR Licensing, and fails to
cure this default within fifteen (15) days from receipt of notice from
PGA TOUR Licensing.
(13) Licensee breaches any provision in this Agreement, and fails
to cure this default within fifteen (15) days from receipt of notice
from PGA TOUR Licensing.
(14) Licensee fails to affix to each Licensed Article, its
Packaging and Advertising an Official Tag and Licensee name in the
manner provided in Paragraph 10, and fails to cure this default within
fifteen (15) days from receipt of notice from PGA TOUR Licensing.
(b) PGA TOUR Licensing shall have the right to modify Appendices B or
D of this Agreement upon written notice to Licensee. Any such modification
of Appendices will be subject to Licensee's right to dispose affected
inventory under Paragraph 17.
(c) The entire unpaid balance of all payments owing and due under this
Agreement shall immediately become due and payable upon termination.
17. EFFECT OF EXPIRATION OR TERMINATION / DISPOSAL OF INVENTORY
(a) Effect of Expiration or Termination: After expiration or
termination of this Agreement for any reason, Licensee shall refrain from
further use of any of the Licensed Indicia or any similar ▇▇▇▇, including
any geographic reference or depiction, directly or indirectly, or any
derivation of the Licensed Indicia or a similar ▇▇▇▇, except as provided in
Paragraph 17(b), or unless expressly authorized by PGA TOUR Licensing.
Until payment to PGA TOUR Licensing of any monies due it, PGA TOUR
Licensing shall have a lien on any units of Licensed Articles not then
disposed of by Licensee and on any monies due Licensee from any jobber,
wholesaler, distributor, or other third parties with respect to sales of
Licensed Articles.
(b) Disposal of Inventory: After expiration or termination of this
Agreement, Licensee shall have no further right to manufacture Licensed
Articles or other products utilizing the Licensed Indicia, but may continue
to distribute its remaining inventory of Licensed Articles in existence at
the time of expiration or termination for a period of ninety (90) days,
provided all statements (including Final Statement) and payments then due
have been delivered and that during the disposal period Licensee delivers
all statements and payments due in accordance with Paragraph 7 and complies
with all other terms and conditions of this Agreement. Licensee may request
an additional period of ninety (90) days to dispose of inventory if
necessary. Said request will not be unreasonably denied. Notwithstanding
the foregoing, Licensee shall not manufacture, sell or distribute any
Licensed Articles after the expiration or termination of this Agreement
because of (a) departure of Licensee from the quality and style approved by
PGA TOUR Licensing under this Agreement; (b) failure of Licensee to obtain
product or design approval; or (c) a default under Paragraph 16.
18. FINAL STATEMENT
Thirty (30) days before the expiration of this Agreement, Licensee shall
furnish to PGA TOUR Licensing a statement showing the number and description of
Licensed Articles on hand or in process. If this license is terminated for any
reason, such statement shall be furnished within fifteen (15) days after notice
of termination. PGA TOUR Licensing reserves the right to conduct physical
inventories to ascertain or verify the amount of remaining inventory.
19. SURVIVAL OF RIGHTS
(a) The terms and conditions of this Agreement necessary to protect
the rights and interests of PGA TOUR in its Licensed Indicia including, but
not limited to, Licensee's obligations under Paragraph 14, shall survive
the termination or expiration of this Agreement.
(b) The terms and conditions of this Agreement requiring Licensee to
furnish PGA TOUR Licensing with reports, statements, or accounts and
payment of monies due to PGA TOUR Licensing, and providing PGA TOUR
Licensing with the right to examine and make copies of Licensee's books and
records to determine or verify the correctness and accuracy of Licensee's
reports, statements, accounts or payments shall survive the termination or
expiration of this Agreement.
(c) The term and conditions of this Agreement providing for any
activity following the effective date of termination or expiration of this
Agreement shall survive until such time as those terms and conditions have
been fulfilled or satisfied.
20. NOTICES
All notices and statements to be given and all payments to be made, shall
be given or made to the parties at their respective addresses set forth herein,
unless notification of a change of address is given in writing. Any notice shall
be sent by first class mail, or by mailgram, telex, TWX, telegram, any
nationally recognized overnight delivery service or by telecopy, and shall be
deemed to have been given at the time it is mailed or sent.
21. CONFORMITY TO LAW
(a) Licensee shall comply with such guidelines, policies, and/or
requirements as PGA TOUR Licensing may announce from time to time,
including without limitation guidelines, policies and/or requirements
contained in periodic PGA TOUR Licensing bulletins. Licensee shall comply
with all laws, regulations and standards relating or pertaining to the
manufacture, sale, advertising or use of the Licensed Articles and shall
maintain the highest quality and standards. Licensee shall comply with the
requirements of any regulatory agencies (including without limitation the
United States Consumer Product Safety Commission) which shall have
jurisdiction over the Licensed Articles.
(b) Licensee undertakes and agrees to obtain and maintain all required
permits and licenses at Licensee's expense.
(c) Licensee shall pay all federal, state and local taxes due on or by
reason of the manufacture, distribution or sale of any Licensed Articles.
22. SEVERABILITY
The determination that any provision of this Agreement is invalid or
unenforceable shall not invalidate this Agreement, and the remainder of this
Agreement shall be valid and enforceable to the fullest extent permitted by law.
23. NON-ASSIGNABILITY
This Agreement is personal to Licensee, and Licensee shall not sublicense
or franchise any of its rights. Neither this Agreement nor any of Licensee's
rights shall be sold, transferred or assigned by Licensee without PGA TOUR
Licensing's prior written approval, and no rights shall devolve by operation of
law or otherwise upon any assignee, receiver, liquidator, trustee or other
party. Subject to the foregoing, this Agreement shall be binding upon any
approved assignee or successor of Licensee and shall inure to the benefit of PGA
TOUR Licensing its successors and assigns.
24. NO WAIVER, MODIFICATION, ETC.
This Agreement, including appendices, constitutes the entire agreement and
understanding between the parties and cancels, terminates, and supersedes any
prior agreement or understanding relating to the subject matter hereof between
Licensee, PGA TOUR Licensing and PGA TOUR. There are no representations,
promises, agreements, warranties, covenants or understandings other than those
contained herein. None of the provisions of this Agreement may be waived or
modified, except expressly in writing signed by both parties. However, failure
of either party to require the performance of any term in this Agreement or the
waiver by either party of any breach shall not prevent subsequent enforcement of
such term nor be deemed a waiver of any subsequent breach.
25. THIRD PARTY BENEFICIARY
PGA TOUR shall be deemed to have rights as a third party beneficiary of
this Agreement.
26. MISCELLANEOUS
When necessary for appropriate meaning, a plural shall be deemed to be the
singular and singular shall be deemed to be the plural. The attached appendices
are an integral part of this Agreement. Paragraph headings are for convenience
only and shall not add to or detract from any of the term or provisions of this
Agreement. This Agreement shall be construed in accordance with the laws of the
state of Georgia, which shall be the sole jurisdiction for any disputes. This
Agreement shall not be binding on PGA TOUR Licensing until signed by an officer
of PGA TOUR Licensing.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement.
LICENSEE: ▇▇▇▇▇▇ MANUFACTURING COMPANY, INC.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ [Seal]
(Signature of officer, partner, or individual
duly authorized to sign)
Title: Sr. V.P.
Date: 3/25/98
PGA TOUR LICENSING
By:___________________________________
(Signature of President or officer duly
authorized to sign)
Title:__________________________________
Date: 3/24/98
APPENDIX A
ROYALTY FEE SCHEDULE
LICENSED MINIMUM
PROPERTY ARTICLES ROYALTY GUARANTEE ADVANCE
See App. C 5% N/A N/A
PGA TOUR
SENIOR
PGA TOUR
APPENDIX B
LICENSED INDICIA
PGA TOUR owns or has the right to license the use of the following Licensed
Indicia.
VERBIAGE
--------
PGA TOUR
SENIOR PGA TOUR
GRAPHICS
--------
GRAPHIC I GRAPHIC II
[Insignia of the PGA Tour. [Insignia of the Senior PGA Tour.
Rectangular box with the term "Tour" Rectangular box with "PGA" and "TOUR"
written vertically along the left side and the written in the same manner as Graphic I.
term "PGA" written horizontally along the The term "SENIOR" is written horizontally
top. A silhouette image of a male golfer at about the term "PGA". A silhouette image
the top of his swing is beside the vertically of a male golfer at the top of his swing is
written "Tour"] beside the vertically written "TOUR" just as
in Graphic I, however, this image is in
knickers and wearing a hat whereas, the
image in Graphic I is in long pants and
hatless.]
Any additions to or derivations of the Licensed Indicia shown above must be
approved by PGA TOUR Licensing and added to the Agreement by addendum. Composite
logos (e.g., featuring sponsors such as Michelob, O'Douls, etc.) are not
included in the Agreement.
APPENDIX C
LICENSED
ARTICLES
--------
Exclusive
---------
Case Goods, including bedroom, dining room and casual dining
Nonexclusive
------------
Occasional Furniture (e.g., cocktail tables, end tables, entertainment centers,
etc.).
APPENDIX D
LICENSED INDICIA GUIDELINES
PGA TOUR
--------
1. Logo samples and PMS requirements are set forth in Appendix B. Uses of the
Licensed Indicia shall conform to the samples.
2. Prominent uses of the PGA TOUR Licensed Indicia include a "(R)" symbol,
denoting the same as a registered trademark.
3. Uses of the PGA TOUR name shall in all cases be styled in all capital
letters.
4. The PGA letters are not to be punctuated with periods (i.e., not P.G.A.
Tour).
5. All promotional and advertisement materials, using or incorporating the
Licensed Indicia shall be tasteful and professional, and shall not include
any claims which are inaccurate or deceptive in any way.
6. Any questions regarding proper usages of the Licensed Indicia should be
discussed in advance with the PGA TOUR Licensing staff.
SENIOR PGA TOUR
---------------
1. Logo samples and PMS requirements are set forth in Appendix B. Uses of the
Licensed Indicia shall conform to the samples.
2. Prominent uses of the SENIOR PGA TOUR Licensed Indicia shall include a
"(TM)" symbol, denoting the same as a trademark.
3. Uses of the SENIOR PGA TOUR name shall in all cases be styled in all
capital letters.
4. The PGA letters are not to be punctuated with periods (i.e., not P.G.A.
TOUR).
5. All promotional and advertisement materials using or incorporating the
Licensed Indicia shall be tasteful and professional, and shall not include
any claims which are inaccurate or deceptive in any way.
6. Any questions regarding the proper usages of the Licensed Indicia should be
discussed in advance with the PGA TOUR Licensing staff.