EXHIBIT 10.12
LICENSING AGREEMENT
THIS AGREEMENT, made and entered into as of the first day of March 1999, by and
between XXXX XXXXXX GROUP, INC., dba Xxxx Xxxxxx Golf Equipment (hereinafter
referred to as "Licensor") having an address at 0000 XXX Xxxx., Xxxxx 0000, Xxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000, XXX and AJAY LEISURE PRODUCTS, INC., (hereinafter
referred to as "Company") having an address at 0000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxx, XX 00000.
WITNESSETH:
WHEREAS, Company desires to use the name, logo, image, and likeness of Xxxx
Xxxxxx in connection with the design, manufacture, advertisement, promotion,
distribution, and sale of Company's "Licensed Products" (hereinafter defined);
WHEREAS, Licensor is willing to grant such rights to Company, upon the terms and
conditions hereinafter set forth;
NOW, therefore, for and in consideration of the premises and of the mutual
promises and conditions herein contained, the parties do hereby agree as
follows:
1. Definitions
As used herein, the following terms shall be defined as set forth
below:
(a) "Player Identification" shall mean the name XXXX XXXXXX, Black Knight, and
Xxxx Xxxxxx'x Black Knight logo as detailed in schedule A, together with
the image, pictures, photos, likeness, and signature, etc. of Xxxx Xxxxxx,
and any combination of the foregoing as may be approved in advance by
Licensor.
(b) "Products" shall mean the full range of golf gloves, bags, pull handcarts,
and golf accessories in the nature of those listed on schedule B,
including packaging.
(c) "Licensed Products" shall mean all the Products of Company which have any
part of the Player Identification affixed or attached thereto in any
permanent, non-removable manner, or which are sold in packages which bear
the Player Identification.
(d) "Initial Period" shall mean that period of time which shall be deemed to
have commenced March 1, 1999 which shall continue until June 30, 2004.
(e) "Renewal Period" shall mean all Contract Years added as a result of the
automatic renewals provided for in Paragraph 25.
(f) "Contract Period" shall mean the Initial Period and the Renewal Period
collectively.
(g) Initial "Contract Year" shall mean the period of sixteen (16) successive
months commencing on 1st of March during the Contract Period, provided
that the first Contract Year shall be deemed to have commenced on March 1,
1999 and shall continue until June 30, 2000.
(h) "Contract Territory" shall mean the United States of America only.
2. GRANT OF RIGHTS
(a) Licensor hereby grants to Company, during the term of the Contract
Period hereof, subject to all of the terms and conditions of this
Agreement, including without limitation the provisions of subparagraph
(b) immediately below, (i) the exclusive right and license to use the
Player Identification throughout the Contract Territory (only) in
connection with the design, manufacture, advertisement, promotion,
distribution, and sale of Licensed Products, (ii) from time to time
with the prior written approval of Licensor, which approval will not be
unreasonably withheld, the non-exclusive right and license to use the
Player Identification in connection with the design, manufacture,
advertisement, promotion, distribution and sale of Licensed Products
through Xxxxxxxx World Trade, Inc. and/or Amity Manufacturing SDN.BHD
in territories outside of the Contract Territory; and (iii) a first
right of refusal to negotiate and obtain additional future licenses for
the Player Identification in other categories within the Contract
Territory and in the same or other categories in territories outside of
the Contract Territory. Licensor hereby agrees that the right to use
Player Identification will not be granted to any third party (any party
other than Company) for use anywhere in the Contract Territory (and
Licensor, itself, will not use the Player Identification or
manufacture, distribute, market or endorse any products directly
competitive with the Company's products anywhere in the Contract
Territory) during the Contract Period in connection with the design,
manufacture, promotion, distribution, or sale of any other items of
"Products" (as hereinafter defined).
(b) The foregoing rights granted to Company shall be limited to the right to
use the full and complete name of Xxxx Xxxxxx and the Company acknowledges
and agrees that
no rights have been granted to Company to use (and Company agrees that
unless Licensor
shall otherwise specifically approve in advance and in writing, that
Company will not use) the simple name "Player" on or in connection with
Licensed Products or in the advertising or promotion of Licensed Products.
(c) Company hereby acknowledges and agrees that the foregoing rights
granted by Licensor to Company to advertise, distribute, and sell
Licensed Products shall be limited to the distribution and sale of
Licensed Products only through: Golf Course Pro Shops, Golf Specialty
Shops, Sporting Goods Stores, Department Stores, major mass market
chain stores such as K-Mart, Target, Wal-Mart and xxxxxxxxxx.xxx and
pre-approved E-commerce Internet sites, and Company agrees not to
distribute or sell Licensed Products to discount mass market
liquidators, except with the prior written approval of Licensor, which
approval shall not be unreasonably withheld; provided, that, prior to
making any sales to liquidators, the Company shall notify Licensor in
writing and, in lieu of permitting the Company to sell a liquidator,
Licensor may elect to assist the Company in the sale of the Licensed
Product within 60 days of receipt of notice of the Company's
intention. With respect to any permitted sales to liquidators under
this provision, the quantity of Licensed Products per Product class
sold to the liquidator shall not exceed the average of the Company's
unit sales in the applicable Product class during the last two calendar
quarters.
3. Diligent Efforts
Company agrees that it will use diligent efforts to actively and
aggressively promote the sale of Licensed Products throughout the Contract
Territory. In this connection, each Contract Year, Company agrees that it
will budget and spend for the advertising and production of catalogs used
in promotion of Licensed Products an amount which is no less than the
annual "Advertising Budget" as hereafter described. Each annual
"Advertising Budget" shall be an amount equal to a minimum of three
percent (3%) of the Gross Wholesale Sales (as hereafter defined in
Paragraph 12) of Licensed Products achieved by Company during each
Contract Year. Examples of appropriate advertising media would include,
but not be limited to: Corporate product catalogs, hang tags, labels,
packaging, public relations expenditures directly related to the promotion
of the Licensed Products, dealer co-op advertising, trade show expenses,
Internet site maintenance of the licensed product, golf outings in support
of the Licensed Products and direct mail.
Company hereby acknowledges and agrees that it will produce, at its sole
cost and expense, a new catalog and point of sale material each Contract
Year which will detail the Licensed Products offering photographically
with text descriptions in a manner, style, and
quality consistent with the name, image, and likeness of the Player
Identification to be approved subject to Paragraph 7.
4. Promotional Assistance
(a) Provided that the Company supplies to Licensor the necessary quantities
of Licensed Products in such styles as are reasonably acceptable to
Licensor, Licensor agrees that it will use Licensed Products supplied,
whenever Licensor participates in any photo sessions for the production
of advertising materials on behalf of Licensed Products to be
distributed and sold in the Contract Territory. Licensor will confine
its annual dollar amount of promotional assisted product to US $1,000
based upon the Company's 1999 cost of goods.
(b) Throughout the duration of the Contract Period, on those occasions when
Licensor makes arrangements to take booth space at either the Orlando,
Florida PGA Merchandise Show, the Las Vegas, Nevada PGA International
Show, and/or any other such trade show for golf-related merchandise
held inside or outside of the Contract Territory, Licensor agrees to
use its reasonable efforts to make available to Company the opportunity
to include a representative display of Company's Licensed Products in
the booth display. Company agrees to be responsible for a
contribution, not to exceed US $3,000 per show, to the overall expenses
incurred from participation in the two major US trade shows mentioned
above.
(c) Throughout the duration of the Contract Period, on those occasions when
Licensor makes arrangements to take booth space at golf-related trade
shows held at locations outside the Contract Territory, Licensor may,
at Licensor's discretion, incorporate as a part of Licensor's display
at such a booth a representative display of Company's Licensed
Products. It is understood that those trade shows at which Licensor
makes this opportunity available to Company shall be selected in
advance by Licensor, in Licensor's sole discretion, and, if the Company
agrees to participate, to be responsible for a contribution, not to
exceed $1,000 per show unless a different amount is agreed to in
advance, to the cost of the booth and related expenses for any such
trade show at which Company's Licensed Products are so displayed.
Licensor guarantees to promote Company's products whenever possible at all
events, such as trade shows and sports shows, where Xxxx Xxxxxx makes
appearances. During each Contract Year, Licensor will make available Xxxx Xxxxxx
(a) for a photo shoot, and (b) upon the Company achieving a combined annual
remuneration of US $50,000 to the Licensor, which the Company may elect to
advance and apply against future remuneration owed to Licensor under Paragraphs
8 through 11 below, for two key account visitations, and a Company sponsored
golf outing in which several significant and competitive buyers of the Licensed
Products are in attendance. The aforementioned appearance commitments must be
scheduled during convenient times arranged dependent on Xxxx Xxxxxx'x
professional playing schedule and worldwide travel & business commitments, and
the availability of his photographs, slides, positives, logo artwork, etc. to
Company for advertising and promotional purposes. Licensor will provide sales
and distribution assistance for distribution of Company's products to existing
network of distributors, agents, and clients, etc., including locations of Xxxx
Xxxxxx Golf Academies and Xxxx Xxxxxx Design projects where possible within the
Contract Territory.
(d) Licensor will notify the Company of new ideas related to the products
which are presented to Licensor from time to time and will afford the
Company the first opportunity to review such product ideas to enable
the Company the earliest opportunity to negotiate a license or other
rights to bring new products to market utilizing the Player
Identification. Upon receipt of any notice of a new product idea, the
Company shall have 30 days to review information presented and notify
Licensor of its election to pursue the new product idea.
5. Buying Agent
The Licensor elects to utilize the services of an international trading
company to facilitate its global trading business. At this time, the
Licensor has appointed Nissho Iwai American Corporation (NIAC) as its
buying agent. As Buying Agent, NIAC will coordinate logistics and ordering
communication and make payments to the Company in accordance with those
terms and conditions negotiated between Licensor and the Company. If the
Company desires to sell Licensed Products outside of the Contract
Territory and Licensor approves the sales thereof in writing, Company
agrees to conduct any and all sales of Licensed Products in overseas
markets through NIAC, except for Licensed Products sold by Company in the
Contract Territory or as otherwise provided in subparagraph 2(a)(ii)
above; provided, that, the Company shall not be required to pay a sales
commission or other remuneration to NIAC for any sales made through NIAC
as required by this Paragraph. Company shall refer all matters relating to
and arising from ordering, shipment, and payment of Company's products to
NIAC at 0000 Xxxx 0xx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000;
Tel: (000) 000 0000, Fax: (000) 000 0000. A copy of all correspondence
with NIAC shall be submitted simultaneously to Xxxx Xxxxxx Golf Equipment
at the address provided in Paragraph 17 below.
6. Quality of Licensed Products
Company agrees that Licensor shall have the right to approve or disapprove
any endorsement, trademark, or trade name used in connection therewith.
Licensor agrees that any item submitted for approval as provided herein
may be deemed by Company to have been approved hereunder if the same is
not disapproved in writing within fourteen (14) business days after
receipt thereof. Licensor agrees that any item submitted will not be
unreasonably disapproved and, if it is disapproved, that Company will be
advised of the specific grounds thereof.
7. Approval of Advertising
Company agrees that no use of Player Identification nor any item used in
connection with the Player Identification will be made hereunder unless
and until the same has been approved by Licensor herein currently
represented by Xxxx X. Player. Licensor agrees that any material,
advertising, or otherwise, submitted for approval as provided herein may
be deemed by Company to have been approved hereunder if the same is not
disapproved in writing within fourteen (14) business days after receipt
thereof. Licensor agrees that any material submitted hereunder will not be
unreasonably disapproved, and if it is disapproved, that Company will be
advised of specific grounds therefor. Company agrees to protect,
indemnify, and save harmless Licensor and Licensor's authorized agent, or
either of them, from and against any and all expenses, damages, claims,
suits, actions, judgements, and costs whatsoever, arising out of, or in
any way connected with, any advertising material furnished by, or on
behalf of, Company.
8. Annual Rights Fee
As compensation for the right of the use of the "Player Identification",
Company shall pay to Licensor, with respect to each Contract Year during
the Contract Period, a rights fee equivalent to US $25,000. The Annual
Rights Fee for the Initial Contract Year shall be paid to Licensor based
on the following payment schedule:
Payment: Date: US $:
-------- ------- --------
1st half March 1, 1999 $12,500
2nd half August 1, 1999 $12,500
Subsequent Annual Rights Fees shall be paid to Licensor based on the
following payment schedule:
Payment: Date: US$:
-------- ------- --------
1st half June 1 $12,500
2nd half December 1 $12,500
9. Guaranteed Royalties/Sales Forecasts
As compensation to Licensor for the grant to Company of the above
exclusive rights, Company shall pay to Licensor guaranteed minimum
non-refundable royalties for each
Contract Year as detailed below:
Contract Year Guaranteed Royalties (US$)
-------------- --------------------------
Year 1 $ 5,000
Year 2 $10,000
Year 3 $15,000
Year 4 $20,000
Year 5 and each Contract Year $25,000
thereafter
Guaranteed Royalties shall be paid in four equal quarterly installments
during each Contract Year, namely: 30 September, 31 December, 31 March,
and 30 June. If Licensor does not receive the full amount of the
Guaranteed Royalties from Company during any Contract Year as provided
above, Licensor, at its sole option, shall have the right, upon sixty (60)
days prior written notice to Company, to convert the Company's rights
under this Agreement from exclusive to non-exclusive status.
Set forth below is the Company's initial five-year forecast for sales of
Licensed Products:
Sales Period Gross Sales (US$)
------------- -----------------
August 1, 1999-July 31, 2000 $ 500,000
August 1, 2000-July 31, 2001 $ 900,000
August 1, 2001-July 31, 2002 $1,300,000
August 1, 2003-July 31, 2004 $2,000,000
August 1, 2004-July 31, 2005 $2,500,000
The Company shall provide Licensor with an updated five-year forecast for
sales of Licensed Products within 30 days after the end of each sales
period. Future sales forecasts shall reflect anticipated sales by Product
category instead of based on gross sales amounts as provided above.
If, for two consecutive annual sales periods, the Company does not achieve
sales of Licensed Products substantially in accordance with the annual
updated five-year sales forecasts provided to Licensor hereunder, Licensor
may give Company ninety (90) days' prior written notice of its intent to
terminate this Agreement under Paragraph 23 below, which termination will
become effective at the end of the notice period if the Company has not
taken adequate measures to improve its sales of Licensed Products.
10. Earned Royalties
As additional compensation to Licensor for the rights hereinbefore
granted, Company agrees to pay Licensor earned royalties at the rate of
three percent (3%) of the "Gross Wholesale Sales" (as that term is defined
in Paragraph 12 of all Licensed Products sold hereunder by Company during
the Contract Period; provided, however, that the full amount of the
guaranteed non-refundable royalty payable to Licensor by Company as
described in Paragraph 9 above shall first be credited against the payment
of any earned royalty with respect to sales of Licensed Products made
during each Contract Year. Earned royalties shall be due and payable
within twenty-five (25) days of the last day of each calendar quarter with
respect to sales (as defined in Paragraph 12 below) made during such
calendar quarter.
11. Commissions
With respect to Licensed Products manufactured by the Company which are
sold through distribution channels arranged for by Licensor and not
otherwise available to the Company, in addition to the royalties provided
for in Paragraphs 9 and 10 above, the Company will pay Licensor a sales
commission of not less than five percent (5 %), the exact amount of which
shall be negotiated in good faith between the parties on a case by case
basis.
12. Definition of Gross Wholesale Sales
Company's "Gross Wholesale Sales" for Licensed Products shall mean
Company's invoiced billing price less discount to its customers or
distributors, less only shipping charges, freight, duties, insurance,
sales taxes, value-added taxes, and credits allowed for defective
merchandise, markdowns and returns (but no reserve for returns). All
royalties due Licensor shall accrue upon the sale of the Licensed Products
regardless of the time of
collection by Company. Licensed Products shall be considered "sold" as of
the date Licensed Products are billed, invoiced, or shipped (whichever
first occurs) or the date on which such Licensed Products are paid for,
whichever first occurs. For sales by Company directly to customers in
retail outlets, the "Gross Wholesale Sales" value for the US market shall
be used for the calculation of royalties payable. There shall be no
deduction from "Gross Wholesale Sales" for uncollectible accounts.
13. Licensor reserves the right to re-elect the Company as the exclusive
licensee or appoint an additional licensee in the Contract Territory if
this agreement reverts to a non-exclusive agreement as permitted under the
terms of Paragraph 9 above.
14. Payments
Payments may be made by Company check, certified check, wire transfer or
bank transfer. All payments shall be made hereunder by Company to Licensor
in US currency to the account of XXXX XXXXXX GOLF EQUIPMENT and shall be
delivered to the address of Licensor as follows:
XXXX XXXXXX GROUP, INC.
Attn: Accounting Department
0000 XXX Xxxxxxxxx
Xxxxx 0000
Xxxx Xxxxx Xxxxxxx, XX 00000
Past due payments hereunder shall bear interest at the rate of one and
one-half percent (1.5%) per month.
15. Sales Reports
Company shall supply Licensor with a sales report with respect to all
sales of Licensed Products sold by Company during each calendar month
during the Contract Period, said sales reports to be delivered to Licensor
within twenty-five (25) days following the conclusion of each calendar
quarter. Such sales report shall indicate by customer and in total the
number of each item of Licensed Products sold during such month and the
gross sales price of each such item.
16. Books and Records
Company shall keep and maintain books and records with respect to all
sales of Licensed Products and computation of earned royalties with
respect thereto, which books and records shall be available for inspection
and copying by Licensor upon prior receipt of written permission from the
Company, or his authorized agents or representatives during ordinary
business hours prior to the conclusion of a two-year period following the
conclusion of the relevant Contract Year quarter. If any examination of
Company's books and records reveals that Company has failed properly to
account for and pay royalties owing to Licensor hereunder, and the amount
of any royalties which Company has failed properly to account for and pay
for any Contract Year quarter exceeds, by five percent (5%) or more, the
royalties actually accounted for and paid to Licensor for such period,
then Company shall, in addition to paying Licensor such past due
royalties, reimburse Licensor or his authorized representatives for their
direct out-of-pocket expenses incurred in conditioning such examination
together with interest on the overdue royalty amount at the rate set forth
in Paragraph 14 above.
17. Notices and Submissions
All notices or submissions to be made or delivered pursuant to this
Agreement shall be delivered as follows:
If to the Licensor, to:
XXXX XXXXXX GROUP, INC.
c/o Xx. Xxxxxx X. Xxxxx
0000 XXX Xxxx., Xxxxx 0000
Xxxx Xxxxx Xxxxxxx, XX 00000
If to Company, to:
AJAY LEISURE PRODUCTS, INC.
Attn: Xxxxxxxx X. Xxxx, President
0000 X. Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
All such materials shall be delivered postage prepaid and, in the case of
materials sent by Company to Licensor, free of all charges such as, for
example, shipping charges or custom charges. In the event that any such
charges are paid by Licensor, Company agrees to make prompt reimbursement.
The foregoing notwithstanding, this Agreement may not be changed or
modified except as provided herein.
18. Licensor's Advisory Designee
Licensor agrees to designate and appoint one individual executive
(hereinafter referred to as "Licensor's Designee") to whom Licensor shall
designate principal responsibility for communications and liaison between
Licensor and Company. Licensor agrees to make Licensor's Designee
available to meet with representatives of Company on a quarterly basis
to review, discuss, and analyze sales results for Licensed Products,
possible future advertising and promotional plans for Licensed Products,
and other matters relating to the subject matter of the Agreement. Company
agrees to use its diligent efforts to provide Licensor's Designee with
up-to-date and complete financial and marketing information concerning the
distribution and sale of Licensed Products. Licensor agrees that said
meetings will take place in Palm Beach Gardens, Florida with
representatives of Company.
19. Products for the Personal Use of Xxxx Xxxxxx
During each Contract Year during the Contract Period, Company agrees to
supply to Licensor's chosen location, at no charge, and at no cost or
expense, with representative samples of Licensed Products (25 items each
Contract Year), in such sizes, styles, and designs as Xxxx Xxxxxx shall
request (provided that such items are then available for shipment from
Company's inventory) for the use of Xxxx Xxxxxx and for such other
purposes as Xxxx Xxxxxx may determine.
20. Trademarks
Licensor warrants that it has all right, title and interest in and to the Player
Identification and the right to license the Player Identification. Licensor
shall maintain all trademark and other registrations of the Player
Identification as in effect on the date of this Agreement. Should Licensor, at
any time or times during the Contract period, desire to register a trademark or
trademarks which include the Player Identification, or which have been used to
identify Licensor or to make reference to Licensor, and/or to register Company
as a user thereof, Company shall execute any and all documents which Licensor
reasonably believes to be necessary or desirable for registration or protection
of such trademark or trademarks in the name of Player. Licensor agrees to
reimburse Company for all reasonable expenses incurred by Company in this
connection. Upon registration of any such trademark, Licensor shall grant to
Company a license for the use of such registered trademark on or in connection
with the advertisement, promotion, and coterminous with the rights granted
thereunder with respect to Player Identification and shall require no increase
in the payments set forth, but shall contain such additional provisions as
Licensor reasonably believes are necessary for the protection of such trademark
in the name of Player, which Licensor shall thereafter maintain during the
remainder of the Contract Period. Company agrees that it will not file, during
the Contract Period or thereafter, any application for trademark registration or
otherwise obtain or attempt to obtain ownership of any trademark or trade name
in any country of the world which consists of the Player Identification or any
xxxx, design, or logo which identifies Licensor or which makes reference to
Licensor. Any products, designs, or inventions developed by Company other than
the "Player Identification" shall belong to Company, and Company shall have sole
proprietary rights to them, with exception that the trademarks belong to
Licensor.
21. Packaging and Labels
Company agrees that each Licensed Product advertised, promoted,
distributed, and sold by Company shall have affixed thereto a permanent
label or hangtag on the product, container, or packaging for Licensed
Products which includes the inscription "Distributed under License for
Xxxx Xxxxxx Group Incorporated", followed by the address of the Licensor.
All packaging and labeling is subject to review in accordance with
Paragraph 7 above.
22. Indemnification/Licensor's Duty to Defend
(a) In addition to the indemnities provided in Paragraphs 7 and 30 hereof,
the Company hereby indemnifies and agrees to save and hold harmless
Licensor and its employees, agents, officers, directors and controlling
persons from and against any and all expenses, damages, claims, suits,
actions, judgments and costs whatsoever, including reasonable
attorney's fees, arising out of, or in any way connected with, any
claim or action involving Licensed Products for alleged defects, and
intellectual property, copyright, design or patent infringement of the
rights of persons other than Licensor that are not based primarily on
the Company's use of the Player Identification under this Agreement and
any breach by the Company of any statutory or regulatory law or order;
provided that Company shall be given prompt notice of any such action
or claim that comes to the attention of Licensor. Notwithstanding the
foregoing, nothing contained in this subparagraph 22(a) shall diminish
or relieve Licensor from its its indemnification obligations contained
in subparagraph 22(b) below
(b) In addition to the indemnity provided in Paragraph 30 below, and
subject to the provisions of subparagraph (c) below, Licensor shall
have the duty, at its expense, to police, protect and enforce the
intellectual and other proprietary rights associated with the Player
Identification within the Contract Territory. Licensor indemnifies, and
agrees to save and hold harmless Company and its respective employees,
agents, officers, directors, controlling persons and those of its
parent company and other subsidiaries of the parent company, from and
against any and all expenses, damages, claims, suits, actions,
judgments, and costs whatsoever, including reasonable attorneys' fees,
arising out of, or in any way connected with, any claim or action for
alleged infringement of the intellectual or other proprietary property
rights of third persons with respect to the Player Identification and
any breach by Licensor of any statutory or regulatory law or order,
provided that Licensor shall be given prompt notice of any such action
or claim that comes to the attention of Company and Company shall be
obligated to provide all
information and assistance reasonably available to the Company to assist
Licensor in its obligations to police and enforce the intellectual and
other proprietary rights associated with the Player Identification.
(c) The Company shall have the right, but not the obligation, to police,
protect and enforce the intellectual and other proprietary rights
associated with the Player Identification within the Contract
Territory. If the Company elects to pursue any claim for alleged
infringement, Licensor shall take all reasonable actions necessary to
assist the Company in the pursuit thereof but the Company will bear all
costs related thereto and shall be entitled to retain all benefits
resulting from the action, including without limitation any and all
monetary damages awarded or otherwise received as a result of the
Company's
pursuit of the claim. If the Company becomes aware of any potential
infringement of the intellectual property rights associated with the
Player Identification by any third party within the Contract Territory and
the Company elects, for any reason, not to pursue the claim for
infringement, the Company shall notify Licensor of the details of the
potential infringement and Licensor shall have the duty to use all
commercially reasonable efforts to pursue the claim and to protect the
Company's rights to the Player Identification under this Agreement. If the
Licensor elects not to pursue the claim or otherwise protect the Company's
rights to the Player Identification under this Agreement, the Company
shall have a right to terminate this Agreement as provided in Paragraph 26
below.
23. Termination
Either party may terminate this Agreement as follows: if the other party
at any time during the Contract Period shall (a) fail to make any payment
of any sum of money herein specified to be made; provided that such
payment is not made within ten (10) days after the defaulting party shall
have received written notice of such failure to make payment, or (b) fail
to observe or perform any of the covenants, use of the "Player
Identification", agreements, or obligations hereunder (other than the
payment of money), provided that such default is not cured within thirty
(30) days after the defaulting party shall have received written notice
specifying such default, or (c) be declared bankrupt or makes an
assignment for the benefit of its creditors, or goes into liquidation or
receivership, in which case it shall advise the other party immediately;
provided, however, that the non-bankrupt party shall not have the right to
terminate this Agreement by virtue of the bankrupt party's entry into
proceedings under Chapter 11 of the Bankruptcy Act or receivership or
reorganization, unless, in any such case, the duties on the non-bankrupt
party, or its ability to exercise its rights under this Agreement, shall
be significantly more onerous as a result of those proceedings. Licensor
also shall have a right to terminate this Agreement if the Company fails
to achieve forecasted sales and fails to take adequate measures to improve
sales as provided in Paragraph 9. In addition, the Company shall have the
special rights of termination set forth in Paragraph 26 below.
Failure to terminate this Agreement pursuant to this paragraph shall not
effect or constitute a waiver of any remedies the non-defaulting party
would have been entitled to demand in the absence of this paragraph,
whether by way of damages, termination or otherwise. Termination of this
Agreement for whatever reason shall be without prejudice to the rights and
liabilities of either party to the other in respect of any matter arising
under this Agreement.
24. Prohibition on Premium Sales
Company agrees that Licensed Products will not be sold or otherwise
supplied to any third party if such Licensed Products are intended to be
given away free of charge or sold at a
substantial discount by such third party as a part of any plan intended to
promote the products, services, or business of any third party. If in any
instance Company desires to sell or supply Licensed Products to any third
party where such Licensed Products are intended to use as premiums as
aforesaid, the Company may submit such a request in writing to Licensor
setting forth all relevant information that may be requested by Licensor
concerning the nature of such proposed premium sale. Licensor shall have
the right to approve or disapprove any such proposed premium sale in
Licensor's sole and exclusive discretion.
25. Automatic Renewal
Unless and until this Agreement is terminated under Paragraphs 23 or 26
hereof, at the end of the Initial Contract Year and each Contract Year
thereafter, this Agreement shall renew automatically for an additional
year so that the Agreement will have a rolling five-year term.
26. Special Right of Termination
Company shall have the right to elect to terminate the Contract Period at
any time if, in the Company's discretion, the Company determines in good
faith that (a) the commercial value of the Player Identification is
materially impaired by reason of the commission by Player of any act which
shocks, insults, and offends the community and ridicules public morals and
decency; (b) that the Player Identification no longer is materially
beneficial to the Company's business and marketing plans.; provided,
however, that the disability or death of Xxxx Xxxxxx alone shall not be
deemed to diminish the value of the Player Identification to the Company
under this Agreement; or (c) as provided in Paragraph 22(c) above for
failure of the Licensor to protect the intellectual property rights
associated with the Player Identification in the Contract Territory.
Termination under this paragraph shall become effective on the thirtieth
(30th) day next following the date of receipt by Licensor of Company's
written notification of termination. Should Licensor disagree with Company
as to the existence of a condition affording Company the right to so
terminate the Contract Period, Licensor shall, within thirty
(30) days following the receipt of any such notice of termination, submit
the matter to arbitration at West Palm Beach, Florida, in accordance with
the rules and regulations then applicable of the American Arbitration
Association and any decision resulting from such arbitration shall be
binding upon the parties hereto and may be enforced in any court having
competent jurisdiction.
27. Player Identification After Termination
It is understood and agreed by Company that from and after the termination
of the Contract Period, all of the rights of Company to the use of the
Player Identification shall, except as hereinafter expressly provided in
the paragraph next following, cease absolutely, and
Company shall not thereafter manufacture or sell any item whatsoever with
the use of the Player Identification or use the Player Identification in
any way whatsoever.
28. Inventory of Licensed Products on Termination
Any Licensed Products that may have been manufactured by or for Company
prior to the termination of the Contract Period, or which were in the
process of manufacture by Company, or were required to fill purchase
orders from customers accepted by Company on or prior to date of
termination, may be sold by Company during the one hundred eighty (180)
day period next following the date of termination, provided that:
(i) Company is not in default of any term or condition of this Agreement;
(ii) the quantity of such Licensed Products in inventory at the time of such
termination is not in excess of a reasonable seasonal quantity taking into
account Company's two previous calendar sales requirements for Licensed
Products;
(iii) Company shall furnish to Licensor within thirty (30) days after the
effective date of the termination of the Contract Period a written
statement of the number and description of such Licensed Products in
inventory as of the effective date of termination;
(iv) Company shall continue to pay Licensor with respect to such sales an
earned royalty at the rate hereinafter specified; and
(v) Earned royalty amounts payable pursuant to this paragraph shall be paid
within thirty (30) days following the end of said sell-off period.
29. Waiver
The failure of either party at any time or times to demand strict
performance by the other of any of the terms, covenants, or conditions set
forth herein shall not be construed as a continuing waiver or
relinquishment thereof and each may at any time demand strict and complete
performance by the other of said terms, covenants, and conditions.
30. Brokers/Finders
Licensor has relationships with certain individuals who present business
opportunities to Licensor from time to time. To the extent that any
compensation is claimed by or determined to be due to any such individual,
Licensor shall be solely liable for the payment thereof and shall
indemnify and hold the Company harmless from and against any and all
liability and related expenses, including reasonable attorney's fees. The
Company did not
engage any broker or finder to introduce the Company to Licensor or
otherwise bring the parties together in connection with this Agreement. To
the extent that any third party (other than a third party with whom
Licensor has a relationship) makes a claim for compensation as a broker or
finder engaged by the Company, the Company will indemnify and hold
Licensor harmless from and against any and all liability and related
expenses, including reasonable attorney's fees.
31. Withholding Tax
All payments due and payable to Xxxx Xxxxxx Golf Equipment shall be paid
free of all deductions but shall be subject to deductions for withholding
tax and other such deductions which are required to be deducted by Company
pursuant to the law of the State of Florida. Company will use its best
efforts to obtain the maximum reduced rate of withholding available under
applicable tax treaties on all payments to Xxxx Xxxxxx Golf Equipment made
hereunder. If Company is required by law to withhold any tax, Company
shall send to Licensor without delay, an official government certificate
or government receipt of all tax withheld by Company hereunder.
32. Assignment
This Agreement shall bind and inure to the benefit of Licensor, and heirs
and personal representatives of Licensor. Licensor may assign its rights
under this Agreement to any person, firm, partnership, or corporation
which is able to, and does, warrant and represent ownership of all rights
warranted and represented by Licensor herein and which shall be obligated
to all of the terms of this Agreement as Licensor and which shall enter
into a
binding written agreement with Company to that effect, provided, however,
that Licensor may assign its rights to payments under this Agreement; and
provided further that any such assignment shall not act to relieve
Licensor of its obligations and duties under this Agreement. The rights
granted Company hereunder shall be personal to it and shall not, without
prior written consent of Licensor, be transferred or assigned to any other
party, which consent shall not be arbitrarily or unreasonably withheld.
33. Insurance
Licensor assumes no liability from Company or third parties with respect
to the performance of the Licensed Products manufactured or sold by
Licensee under the Trademark. Company shall maintain Comprehensive General
Liability insurance and the Product Liability Coverage in the amount of US
$2,000,000 on the Licensed Product and shall name Licensor as co-insured
on the policy. Company shall furnish to Licensor a certificate of said
insurance evidencing the above referenced coverage.
34. Significance of Headings
Section headings contained herein are solely for the purpose of aiding in
speedy location of subject matter and are not in any sense to be given
weight in the construction of this Agreement. Accordingly, in case of any
question with respect to the construction of this Agreement, it is to be
construed as though such section headings had been omitted.
35. Entire Agreement
This writing constitutes the entire agreement between the parties hereto
and may not be changed or modified except by a writing signed by the party
or parties to be charged thereby.
36. Joint Venture
This Agreement does not constitute and shall not be construed as
constituting a partnership or joint venture between Licensor and Company.
Neither party shall have any right to obligate or bind the other party in
any manner whatsoever, and nothing herein contained shall give, or is
intended to give, any rights of any kind to any third person.
37. Reservation of Rights
All rights not herein specifically granted to Company shall remain the
property of Licensor to be used in any manner Licensor deems appropriate.
Company understands that Licensor has reserved the right to authorize
others to use Player Identification during the Contract
Period in connection with all tangible and intangible items and services
other than Products themselves.
38. Governing Law
This Agreement shall be governed and construed according to the laws of
the State of Florida without regards to conflict of laws.
39. Arbitration
In the event a dispute arises under this Agreement (other than a dispute
as described in Paragraph 26 hereinabove) which cannot be resolved, such a
dispute shall be submitted to arbitration and resolved by three (3)
arbitrators (one of whom shall be a lawyer) in accordance with the
Commercial Arbitration Rules of the American Arbitration Association then
in effect. All such arbitration shall take place at the office of the
American Arbitration Association located in West Palm Beach, Florida. The
award or decision rendered by the
arbitrator shall be final, binding, and conclusive, and judgment may be
entered upon such award by any court.
40. Execution and Delivery Required
This instrument shall not be considered to be a binding agreement or
contract nor shall it create any obligation whatsoever on the part of
Licensor and Company, or either of them, unless and until it has been
signed by Licensor and by a representative of Company and delivery has
been made of a fully signed original.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
XXXX XXXXXX GROUP, INC. AJAY LEISURE PRODUCTS, INC.
By: \s\Xxxx X. Player By: \s\Xxxxxxxx X. Xxxx
---------------------- ------------------------
Title: C.E.O Title: President
------------------- ---------------------
Date: March 3, 1999 Date: March 8, 1999
-------------------- ----------------------
SCHEDULE A
FAIR TRADED BRANDS
---------------------
Green Grass Pro Shops
Golf Specialty Stores
LOGO Department Stores
Sporting Goods Stores
XXXX XXXXXX Mass Merchandise Stores
E-Commerce
OFFICIAL CORPORATE LOGO
-----------------------
Green Grass Pro Shops
LOGO Golf Specialty Shops
Better Department Stores
Sporting Goods Stores
DIRECT MARKETING BRAND
----------------------
LOGO E-Commerce
BLACK KNIGHT Tele Sales
Direct Mail
Infomercial
SCHEDULE A CONT=D
----------- -------
BLACK KNIGHT LOGO
----------------------
Selected use on its own
LOGO when in conjunction with
other brands.
SIGNATURE BRAND
-------------------------
Green Grass Pro Shops
LOGO Up-Market Department Stores
