EXHIBIT 10.1
[UTIX LOGO] EXPERIENCES
ABOVE ALL ELSE(TM)
July 14, 2006
PGA TOUR
000 XXX XXXX Xxxxxxxxx
Xxxxx Xxxxx Xxxxx, XX 00000
Attn: Xxx X. XxXxxxxxx, Vice President
Marketing & Retail Licensing, Worldwide
Re: Distribution and License Agreement
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Dear Xx. XxXxxxxxx:
This binding letter of intent sets forth the principal terms of a
distribution and licensing agreement between PGA TOUR, Inc. ("TOUR") and Utix
Group, Inc. ("Utix") involving the exclusive use of the PGA TOUR brand and/or
logo in the development, marketing and sale of prepaid golf experience tickets
products. The following terms will serve as the basis upon which we will proceed
towards a definitive agreement.
1. LICENSE. TOUR shall grant to Utix, during the Term, a license and right to
use the PGA TOUR mark set forth on Exhibit A (the "TOUR Mark") for the
development, sales and marketing of prepaid golf experience ticket products and
services (the "Licensed Products") [ * ]. All uses of the TOUR Mark must be
approved in advance by TOUR. In addition, Xxxx acknowledges and agrees that TOUR
currently has an official marketing relationship with [ * ] whose rights to use
the TOUR Mark are exclusive within a large category including, without
limitation, credit cards, charge cards, debit cards, gift cards and prepaid
cards. The parties acknowledge and agree that TOUR's ability to enter into this
Agreement shall be contingent upon TOUR's official card (currently [ * ])
partner's prior approval of TOUR entering into this relationship. Utix shall not
have any sublicensing rights.
2. DISTRIBUTION RIGHTS. TOUR shall grant to Utix the right (the "DISTRIBUTION
RIGHTS") to distribute, market, and sell the Licensed Products in the United
States for all sales channels, including but not limited to, Corporate Business
to Business, Direct marketing, Sponsorship, Events, Catalogue, Retail, Online
and any other form of distribution methods as approved by TOUR in advance. Utix
shall submit to TOUR for its written approval, which approval shall not be
unreasonably withheld or delayed, all potential Utix Retail distribution
opportunities.
3. ROYALTIES. In consideration of the License and Distribution Rights, Utix
shall pay TOUR the following:
* The omitted information is confidential and is being filed separately with the
Securities and Exchange Commission.
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a Minimum Guarantee, recoupable against actual earned royalties of
[ * ] paid quarterly as follows:
Contract Year 1 - $[ * ]
Contract Year 2 - $[ * ]
Contract Year 3 - $[ * ]
Contract Year 4 - $[ * ]
Contract Year 5 - $[ * ]
[ * ]
b Royalties due in a Contract Year shall be credited against the
Minimum Guarantee payments for the applicable Contract Year only (i.e., if
royalty payments exceed the Minimum Guarantee payments in any one quarter, the
excess may be carried forward to the next quarter within the same Contract Year,
but no excess may be carried forward between Contract Years).
c Utix shall provide TOUR an additional royalty equal [ * ].
d Royalties: Utix shall pay TOUR a royalty payment of [ * ].
4. [ * ].
5. DATA COLLECTION. In addition, Utix shall provide TOUR access to the names of
all users/purchasers of the Licensed Products for inclusion in the TOUR's
consumer data base. Utix shall provide all users an opt in to provide TOUR such
consumer information.
6. UTIX RESPONSIBILITIES. Utix shall be responsible for the following: (i)
development, marketing, distribution, fulfillment and sale of the Licensed
Products; and (ii) manufacturing, distribution, operations, customer service and
venue management. Utix shall have the right to subcontract aspects of the
distribution, fulfillment and operation of the Licensed Products, subject to
TOUR's prior approval, which approval shall not be unreasonably withheld.
7. TOUR RESPONSIBILITIES. TOUR will provide: (i) introductions related to TOUR
corporate partners; and (ii) will provide the necessary introductions for the
inclusion of the Licensed Products in all of the TOUR retail locations.
* The omitted information is confidential and is being filed separately with the
Securities and Exchange Commission.
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8. INTELLECTUAL PROPERTY RIGHTS.
a PGA TOUR shall retain all right, title and interest in the PGA TOUR
name, logo and related intellectual property rights.
b Utix shall retain all right, title and interest in the Utix
technology, process, logo and all other intellectual property rights. Utix shall
own all customers, venue and all other information (subject to Section 5 above)
related to the development, sales and marketing of the Licensed Products (other
than any TOUR Mark or intellectual property included in such materials).
9. TERM; TERMINATION.
a Unless sooner terminated in accordance with the provisions of this
letter of intent, the term of this letter of intent shall commence on full
execution of this letter of intent, become effective as of August 1, 2006, and,
subject to Section 1, shall continue through July 31, 2011. Both parties agree
to negotiate in good faith toward the finalization of the definitive agreement
by no later than December 31, 2006.
b Either party may terminate this Agreement upon written notice to
the other party if the other party fails to comply with any material term of
this Agreement and fails to correct such default or if such default can not be
corrected in such time, fails to diligently take steps to correct such default,
within thirty (30) days of written notice of such default. In the event the TOUR
gives such notice, this Agreement and all rights, duties and obligations of TOUR
and Utix hereunder, except any which expressly survive termination, shall
terminate on the termination date. Additionally, Utix shall immediately return
any confidential information (as hereinafter defined) to TOUR.
10. KEY CONTACTS. PGA TOUR shall appoint a project manager to act as the focal
point of contact to Utix. Utix will similarly appoint a project manager to act
as the focal point of contact to PGA TOUR.
11. DEFINITIVE AGREEMENT. Upon the acceptance of this binding letter of intent,
the parties will proceed to negotiate and execute a definitive written agreement
generally on the terms and conditions set forth in this letter and containing
other terms customary for transactions of this scope and nature.
12. PRESS RELEASES; CONFIDENTIALITY AGREEMENT. All public notices to third
parties and all other publicity concerning the transactions contemplated by this
letter of intent shall be jointly planned and coordinated by the parties hereto
and no party shall act unilaterally in this regard without the prior written
approval of the other party (such approval not to be unreasonably withheld).
Except for the issuance of any such public notice, the parties agree to keep
confidential, by and between the parties, the existence of and/or particulars of
any negotiations contemplated hereby, including, but not limited to, the terms,
conditions, and consideration to be paid or other facts related to the
transactions contemplated hereby, except as required by any applicable law, rule
or regulation. Notwithstanding the foregoing, the parties may disclose the
existence and terms of the proposed transaction to its legal and financial
advisors, directors, principal stockholders and prospective distributors,
investors, strategic partners or acquirers on a need to know basis, provided
that such parties are bound by confidentiality obligations.
13. COSTS. Each of the parties hereto shall be responsible for all costs and
expenses incurred by such party in connection with this binding letter of
intent, including, without limitation, fees and disbursements of legal counsel,
financial advisors and consultants engaged by the respective parties hereto.
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14. LEGAL EFFECT OF LETTER AND BINDING PROVISIONS. The parties agree that this
binding letter of intent is intended as a binding summary of the intentions of
each party with respect to the transaction and is intended to create an
enforceable legal obligation. The binding provisions shall be legally binding
upon and enforceable against the parties' hereto and their respective successors
and assigns according to the terms. Sections 12, 13 and 14 shall survive any
termination of this binding letter of intent in accordance with its terms. This
letter of intent will be interpreted, construed, and enforced in all respects in
accordance with the laws of the State of Florida, without regard to any
conflicts of laws principles. The provisions of the definitive agreement shall
supersede this letter and all other prior or contemporaneous understandings,
written and oral, between the parties with respect to the subject matter
thereof. This letter may be executed in one or more counterparts and via
facsimile, each of which will be deemed to be an original of this letter and all
of which, when taken together, will be deemed to constitute one and the same
instrument.
If you are in agreement with the foregoing, please sign in the
space indicated below and return one fully executed copy to us as soon as
practicable. Please call with any questions or comments you may have.
UTIX GROUP, INC.
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx Xxxx
Title: President and Chief Executive Officer
Date: July 14, 2006
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The terms of this letter of intent are hereby acknowledged and agreed to on this
17 day of July, 2006.
PGA TOUR, INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Senior Vice President and
Chief Financial Officer
Date: July 17, 2006
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