*Indicates that confidential
portion has been omitted and
filed separately with the
Securities and Exchange Commission
MANUFACTURING AND SUPPLY AGREEMENT
THIS MANUFACTURING AND SUPPLY AGREEMENT (the "Agreement") is made as of
the 21st day of December, 1996 (the "Effective Date") by and between ROYAL GRIP,
INC., a Nevada corporation ("Purchaser"), having its principal executive offices
at 000 Xxxx Xxxxxx, Xxxxx, Xxxxxxx 00000, and ACUSHNET RUBBER COMPANY, INC., a
Massachusetts corporation, ("Vendor"), having its principal executive offices at
000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxxxxx 00000-0000.
RECITALS
A. Under this Agreement Vendor will become the exclusive supplier of
non-cord golf grips ("Grips") to Purchaser and it is intended will become the
exclusive supplier of cord grips to Purchaser.
B. Vendor is willing to supply Grips to Purchaser and Purchaser is
willing to purchase Grips from Vendor upon the terms and conditions hereinafter
set forth.
C. As of the date hereof, Purchaser and Vendor are also entering into a
capital lease agreement (the "Lease Agreement") pursuant to which Vendor will
lease from Purchaser manufacturing equipment useful in producing Grips.
D. This Agreement and the Lease Agreement have been negotiated by
Purchaser and Vendor at arm's length and in good faith for the purpose of
achieving the parties' commercial expectations.
NOW, THEREFORE, in consideration of the covenants and mutual agreements
set forth herein and in the Lease Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in reliance upon the representations and warranties contained herein, the
parties agree as follows:
ARTICLE I
SUPPLY AND PURCHASE OF GRIPS
1.1 Supply and Purchase of Grips.
(a) During the term hereof, Purchaser shall purchase Grips from Vendor
and Vendor shall sell Grips to Purchaser in accordance with the terms and
conditions contained herein. The Grips will be resold as products of Purchaser
and will not, without Purchaser's and Vendor's written consent, bear the name of
or any logo or trademark of Vendor.
(b) Subject to the terms hereof, Purchaser hereby agrees to purchase
from Vendor 100% of its requirements of Grips during the term of this Agreement.
* Confidential portion has been
omitted and filed separately
with the Commission
(c) Subject to the terms hereof, and except as set forth in Section 6.5
hereof, Vendor hereby agrees to sell 100% of the Grips it produces during the
term of this Agreement to Purchaser.
(d) The parties hereby acknowledge and agree that there will be a
transition period during which production of Grips will be transferred from
Purchaser to Vendor. During this period, Purchaser will continue to produce
Grips.
ARTICLE II
FORECASTS; ORDERS; AND SHIPMENT
2.1 1997 Purchase Obligations. Subject to Section 7.3(d) hereof, Purchaser
hereby agrees to purchase Grips from Vendor in each calendar year of this
Agreement at the annualized rate of [ * ] per year from the beginning of the
first full month in which Vendor achieves full production. Vendor estimates that
it will achieve full production by February 1, 1997 and commits to achieve full
production levels no later than February 15, 1997. By way of example, if Vendor
achieves full production by February 1, 1997, Purchaser will be obligated to
purchase 11/12 x [ * ] Grips, or [ * ] Grips in 1997 (plus any Grips produced by
and purchased from Vendor in January 1997). Thereafter, during each year of the
Agreement, Purchaser shall purchase a minimum of [ * ] Grips.
2.2 Rolling Forecasts; Firm Orders.
(a) Purchaser agrees that during the term of this Agreement it shall
provide Vendor with a rolling forecast of its purchase requirements of Grips for
each of the following three months. This forecast shall be provided on or before
the first day of the month immediately preceding the first month included in
such forecast. Within five (5) days from the date when Vendor has received a
forecast from Purchaser, Vendor shall confirm such forecast by facsimile to
Purchaser.
(b) Forecasts shall be deemed to be firm orders with respect to the
first month included in such rolling three month forecasts (unless notified in
writing to the contrary at least a month prior to the first month of the
forecast). With respect to the second and third months included in such
forecasts, such forecasts shall not be considered binding commitments on the
part of Purchaser to order the quantity of Grips specified therein, but are to
be given solely for the purpose of enabling Vendor to make preliminary plans for
its manufacturing operations during the applicable period. By way of example, a
forecast for the three months April to June of a given year shall be supplied on
or before March 1 of such year; the forecast for April shall be deemed to be a
firm order (unless modified prior to March 1). A copy of Purchaser's initial
forecast/firm order has been provided to Vendor.
(c) Reasonable notice will be given by Purchaser to Vendor if it
anticipates significant differences in its forecast and by Vendor to Purchaser
if it anticipates significant differences in production capabilities to
forecast.
2
* Confidential portion has been
omitted and filed separately
with the Commission
(d) By written notice to Vendor, Purchaser may increase the quantities
or vary scheduled delivery dates for Grips subject to firm orders, and Vendor
agrees to use its reasonable best efforts to accommodate such changes. Vendor
may charge Purchaser for incremental costs incurred in connection with any
material changes to firm orders.
2.3 Shipping and Delivery. Vendor hereby agrees as follows:
(a) Vendor shall preserve, package, handle, pack and insure all Grips
so as to protect the Grips from loss or damage, in conformance with good
commercial practice, government regulations, and other applicable standards.
(b) All Grips shall be shipped F.O.B. Vendor's production facility in
New Bedford, Massachusetts. Title and risk of loss or damage to any shipment of
Grips sold by Vendor to Purchaser hereunder shall pass to Purchaser upon
delivery by Vendor to the common carrier for delivery to customers of Purchaser.
(c) Vendor hereby guarantees that a minimum of ninety percent (90%) of
all shipments of Grips to customers of Purchaser in a given month will be made
by Vendor in the specified quantity and within the time for such delivery
specified by Purchaser on at least two business days notice with respect to
Grips that are subject to firm orders. Vendor will use its reasonable best
efforts to provide Grips in the quantities and within the time period requested
by Purchaser to the extent such quantities vary from those provided for in a
firm order. In the event Vendor fails to make any delivery of Grips within the
required time period for firm orders, Vendor shall ship all Grips applicable to
such order via a premium shipping method and shall pay all shipping costs
associated therewith.
ARTICLE III
PRICING
3.1 Initial Purchase Price for Grips. Purchaser and Vendor hereby agree that the
purchase price per Grip ordered by Purchaser hereunder shall be a base price of
[ * ] per Grip for 1997 and 1998, and [ * ] thereafter, which shall include all
applicable shipping and packaging charges. The parties hereby acknowledge that
the minimum volume requirements set forth in Section 2.1 and the initial price
provisions set forth in this Section 3.1, together with the terms of the Lease
Agreement, have been negotiated between the parties hereto at arm's length and
are integral elements of the transactions between Purchaser and Vendor.
3.2 Price Changes.
(a) Notwithstanding Section 3.1 hereof, the parties agree that: (i)
Vendor will use its reasonable best efforts to continually improve its Grip
manufacturing operations, will share with Purchaser equally in all cost savings
that result in a cost of goods sold (i.e., the cost of raw materials, cost of
direct labor, and incremental overhead added due to this supply contract) below
3
the base price per Grip set forth in Section 3.1, in the form of reductions in
the base price of Grips, and will make available to Purchaser such data and
other information as Purchaser may periodically request to assess Vendor's cost
of goods sold, and (ii) the purchase price for Grips will, pursuant to mutual
agreement not to be unreasonably withheld, be adjusted for material increases or
decreases in the prices of raw materials which, in the case of raw materials
increases, are not offset by production efficiencies. A material change in the
prices of raw materials shall mean an increase or decrease of 5% over a 12 month
period in overall raw material costs.
(b) Purchaser hereby grants to Vendor options to purchase its common
stock upon the terms set forth in Schedule 3.2(b)(A). In this connection, Vendor
acknowledges that as the supplier of Purchaser's Grips it will have access to
Purchaser's production forecasts and other confidential or proprietary
information. Accordingly, Vendor agrees that for so long as it is a supplier of
products to Purchaser, it will comply with Purchaser's xxxxxxx xxxxxxx policy
attached as Schedule 3.2(b)(B), as the same may be amended from time to time by
Purchaser, together with all applicable securities and other laws, in connection
with any purchase or sale of Purchaser's options or common stock underlying such
options (collectively, "Securities"). In addition, Vendor represents, warrants,
and agrees as follows: (i) Vendor is an "accredited investor" within the meaning
of Regulation D promulgated under the Securities Act of 1933, as amended (the
"Act"); (ii) Vendor has such knowledge and experience in financial and business
matters that it is capable of understanding and evaluating the merits and risks
of an acquisition of Securities, and is financially capable of bearing the risk
of its investment in such Securities; (iii) Vendor understands and acknowledges
that an investment in the Securities of Purchaser involves a high degree of
risk; (iv) Vendor has received from Purchaser and has carefully reviewed and
understands all reports filed by the Purchaser with the Securities and Exchange
Commission (the "Commission") under the Securities and Exchange Act of 1934 (the
"Exchange Act") since December 31, 1995, and such other documents as Vendor has
requested (collectively referred to as the "Purchaser Disclosure Materials");
(v) Vendor has had an opportunity to ask questions of and to receive answers
from Purchaser concerning the Purchaser Disclosure Materials and the affairs and
prospects of Purchaser in general, and desires no further information pertaining
to Purchaser; and (vi) Vendor is purchasing the shares of common stock for its
own account, for investment purposes only and not with a view to immediate
resale or distribution either in whole or in part. Furthermore, Vendor
understands and agrees that (x) the Securities cannot be resold in whole or in
part unless they are registered or sold pursuant to an exemption from
registration; and (y) a legend will be placed on the certificates representing
the Securities indicating that such Securities have not been registered under
federal or state securities laws and are subject to restrictions on sale until
they are so registered. Any requests for transfer prior to registration by
Vendor must be accompanied by an opinion of counsel in form and substance and
from counsel acceptable to Purchaser.
(c) Purchaser shall cause the shares underlying the options to be
registered for resale under the Securities Act of 1933, as amended, as promptly
as reasonably practicable.
4
3.3 Payment of Invoices.
(a) Purchaser shall pay all shipping and rigging costs associated with
the shipment of the equipment to Vendor's plant pursuant to the Lease Agreement;
provided, that Vendor acknowledges that Purchaser shall receive a credit against
initial invoices under this Agreement for 50% of such costs and that the
remaining 50% of such costs shall be added to the initial lease balance under
the Lease Agreement.
(b) The invoiced value of each shipment of Grips shall be determined
upon delivery of such shipment of Grips to Vendor's shipment department. All
invoices shall be due and payable by Purchaser net ten (10) days from the date
of invoice through June 30, 1997, and net forty-five (45) days thereafter.
(c) The amount due Vendor for each order of Grips supplied by Vendor
hereunder shall be determined by multiplying the total number of Grips covered
in Vendor's invoice(s) therefor by the applicable base prices. Purchaser shall
be responsible for all freight, insurance, taxes, and other charges.
ARTICLE IV
QUALITY AND WARRANTY
4.1 Conformance to Specifications.
(a) All Grips will be produced at Vendor's plant at New Bedford,
Massachusetts, or at any other location acceptable to Purchaser, which
acceptance will not be unreasonably withheld.
(b) Vendor warrants to Purchaser that it will maintain an objective
quality program with respect to the production of all Grips supplied pursuant to
this Agreement, which program will be in accordance with the technical and
aesthetic specifications (the "Specifications") established by Purchaser and
delivered to Vendor within two business days following the date hereof, as the
same may be amended from time to time by written agreement of the parties
hereto.
(c) Purchaser shall have the right to inspect, at Vendor's plant, Grips
and manufacturing processes for Grips. Any inspection of Grips shall be prior to
shipment; manufacturing processes may be inspected at any time during the term
of this Agreement. Purchaser's inspection may be for any reason reasonably
related to this Agreement, including to assure Vendor's compliance with the
Specifications. Vendor shall provide adequate space and other facilities to
Purchaser at its plant to oversee the production and shipment of Grips and to
facilitate research and development as provided in Section 6.1.
(d) Grips that are deemed by Purchaser to be defective shall be
returned immediately by Purchaser to Vendor. Vendor shall, as soon as reasonably
practical, but not more than ten (10) days from receipt of the defective Grips,
replace such Grip shipment with a substitute
5
shipment that meets the Specifications. Purchaser shall be credited for any
returned Grips which are defective.
4.2 Warranties. Seller warrants that all Grips shall: (i) be manufactured,
processed, and assembled by Seller at its New Bedford, Massachusetts facilities;
(ii) conform to the Specifications; (iii) be free from defects in design,
material, workmanship, and performance; and (iv) be free and clear of all liens,
encumbrances, and other claims against title. All warranties specified in the
preceding sentence shall survive any inspection, delivery, acceptance, or
payment by Purchaser and be in effect for the longer of Vendor's normal warranty
period or one year from the date of acceptance of the Grips by Purchaser.
ARTICLE V
OWNERSHIP AND CONFIDENTIALITY
5.1 Ownership of Grip-related Assets.
(a) Vendor acknowledges and agrees that all equipment transferred
pursuant to the Lease Agreement (unless and until purchased by Vendor
thereunder), all Grips produced in connection with this Agreement, all compounds
and related formulae pertaining to golf grips, grip designs and tooling designs,
cavities and anything of a similar nature which relates to the production of
golf grips (but excluding Vendor's own manufacturing processes and techniques),
in each case whether in existence or developed or conceived by Purchaser or
Vendor during the term of this Agreement, and all intellectual property rights
in such material, including, without limitation, any copyrights, patents, trade
secrets, trademarks, inventions, ideas and know-how, and the derivative use of
and rights in and to such material, as well as the confidential information
embodied in any such material, are and shall be the sole and exclusive property
of Purchaser.
(b) Without Purchaser's prior written consent, Vendor hereby agrees
that, except as may be provided under Section 6.5, all compounds, formulae or
designs relating to golf grips or tooling for golf grips created or developed by
Vendor in connection with and during the term of this Agreement and all
equipment leased under the Lease Agreement or used by Vendor to fulfill its
obligations hereunder shall be used by Vendor only in connection with the
production of Grips for Purchaser pursuant to this Agreement.
(c) Purchaser grants to Vendor the right to use Purchaser's design or
other patents and trademarks, and the trademarks of Purchaser's customers,
solely to the extent necessary to fulfill its obligations to Purchaser under
this Agreement.
(d) With respect to the items set forth in (a) above, Purchaser shall
have the sole and exclusive right to register and hold in Purchaser's name
copyrights, trademark registrations, patents, or whatever protection Purchaser
may deem appropriate. Vendor shall execute any documents, including assignments
of any existing patent or trademark rights or other forms of
6
protection, and provide any assistance as is necessary, at Purchaser's expense,
to protect the rights set forth herein.
(e) The parties agree that items described in (a) above developed
during the term of this Agreement shall be deemed works made for hire as defined
by the laws of the United States regarding copyrights and therefor owned by
Purchaser. In the event and to the extent that they are deemed not to constitute
works made for hire, Vendor hereby sells, assigns, and transfers to Purchaser
all right, title and interest in and to all such items without the need for
consideration additional to the consideration paid to Vendor by Purchaser
hereunder. Vendor shall obtain from its personnel any assignment to the Vendor
required to make the foregoing assignment to Purchaser of all right, title, and
interest in all such items and Vendor shall retain no rights therein and agrees
not to contest or challenge Purchaser's rights therein. This assignment and
transfer includes all causes of action for all infringements of the rights
assigned and transferred and the rights to use and retain the proceeds
therefrom.
5.2 Confidential and Proprietary Information. Vendor and Purchaser hereby
acknowledge and agree that in connection with the performance of their
obligations herein, a party may be provided with or shall otherwise be exposed
to or receive certain confidential and proprietary information of the other (or
of third parties, such as Purchaser's customers). In Purchaser's case, such
confidential and proprietary information may include, but shall not be limited
to, information concerning customers, customer orders, specifications and
designs relating to golf grips and tooling and other information concerning
Purchaser's grips and products, and, in Vendor's case, information concerning
its manufacturing and production techniques (all of the foregoing shall be
deemed "Proprietary Information" for purposes of this Agreement). Each party
agrees that any and all Proprietary Information which is disclosed to the other
party or to which the other party has access to based upon this Agreement shall
be and shall remain the sole and exclusive property of such party, and that the
other party shall not in any way reveal, disclose or use such information other
than in accordance with this Agreement or except as specifically directed by the
disclosing party. The term "Proprietary Information" does not include
information which: (i) becomes generally available to the public other than as a
result of a disclosure by a party contrary to the terms of this Agreement; (ii)
was available on a nonconfidential basis prior to its disclosure; or (iii)
becomes available on a non-confidential basis from a source other than the other
party, provided such source is not contractually obligated to keep such
information confidential.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Cord Grips. The parties acknowledge and agree that this Agreement covers the
purchase and sale of rubber injected golf grips, and that Purchaser also markets
and sells cord grips. Vendor desires to have the opportunity to produce such
grips for Purchaser. Purchaser hereby agrees to consider enabling Vendor to
produce the cord grips on behalf of Purchaser once full production of Grips has
been achieved and subject to other appropriate factors, such as preexisting
supplier relationships.
7
6.2 Research and Development; Tooling.
(a) The parties acknowledge and agree that one of Purchaser's principal
purposes for entering into this Agreement is to have access to Vendor's research
and development capabilities, and that Vendor will essentially perform research
and development activities on Purchaser's behalf during the term of this
Agreement. Vendor hereby agrees that, during the term of this Agreement, it will
actively pursue and fund research and development efforts related to the
development of compounds, Grips, manufacturing processes and similar matters,
and will supply all technical, engineering, and quality control support
necessary to develop or produce new Grip compounds and products, including, on
an as needed basis (which Vendor acknowledges may be full time), a chemist.
(b) During the term of this Agreement Vendor shall be responsible for
procuring all necessary equipment, tooling, facilities, employees and other
items necessary for it to fulfill its obligations hereunder.
(c) Notwithstanding the foregoing, Purchaser agrees to pay for all
product profile design expenses and the cost of all prototype and production
cavities used in the development or production of new Grip products; provided,
however, that Vendor agrees to procure on behalf of Purchaser at mutually agreed
upon prices all such cavities.
6.3 Management Information Systems. Vendor will provide to Purchaser all
software, formats and other resources necessary to enable Purchaser and Vendor
to communicate in real time via computer link-up.
6.4 Training. Purchaser agrees to provide necessary training to Vendor's
shipping personnel as well as all computer hardware and peripherals related to
product shipping.
6.5 Sales of Grips and Golf Products to Third Parties. During the term of this
Agreement, Purchaser agrees that Vendor may sell golf grips to third parties
with Purchaser's prior written consent, which consent may not be unreasonably
withheld. Any agreement with respect to sales of golf grips to third parties
shall provide for Purchaser to receive a royalty of 3 to 5% of the base price of
such grips as may be mutually agreed upon. Any such royalty shall terminate upon
any termination of this Agreement by Vendor arising out of a material breach of
this Agreement by Purchaser, or upon expiration of this Agreement, and three (3)
years after any termination by Purchaser by reason of material breach by Vendor.
Vendor further agrees that, during the term of this Agreement, (i) if it is
approached by any third party about producing grips it will direct the
prospective customer to Purchaser to determine whether it would be appropriate
for such prospective customer to sell grips under Purchaser's trademarks and
through its distribution channels on terms mutually agreed upon, and (ii) in the
event Vendor determines to develop and/or produce any other golf products it
will consult with Purchaser first to determine whether it would be appropriate
for those products to be marketed and sold under Purchaser's trademarks and
through its distribution channels.
8
6.6 Insurance.
(a) Without in any way limiting any of the obligations of Vendor set
forth herein, Vendor hereby agrees to maintain all insurance that may be
required under the laws, ordinances, and regulations of any governmental
authority, together with the following: (i) workers' compensation insurance as
prescribed by applicable law and employer's liability insurance with limits of
liability not less than $100,000 per employee; (ii) comprehensive general
liability insurance with limits of liability not less than $1,000,000, with
umbrella coverage of $20,000,000, including coverage for its inventory of Grips,
supplementary coverages for contractual liability assumed under this Agreement,
personal injury liability with the "employee" and "contractual" exclusions
deleted, and broad form property damage liability; (iii) in addition, if
automobiles are to be used in the performance of Vendor's obligations hereunder,
Vendor shall maintain automobile bodily injury and property damage liability
insurance with limits of liability not less than $1,000,000 extending to owned,
non-owned, and hired automobiles used in the performance of this Agreement which
is in compliance with all applicable laws, rules, and regulations; and (iv)
business interruption insurance with limits of liability not less than
$1,000,000 with umbrella coverage of $20,000,000.
(b) The insurance specified in (a)(i) above shall contain an assignment
of statutory lien. The insurance specified in (a)(ii), a(iii), and (a)(iv) above
shall: (i) name Purchaser, its directors, agents, and employees as additional
insureds in matters covered by this Agreement; (ii) provide that such insurance
is primary coverage with respect to all insureds; (iii) contain a standard cross
liability endorsement that provides that the insurance applies separately to
each insured and that the policies cover claims or suits by one insured against
another; and (iv) not be terminated, canceled, or substantially changed without
thirty (30) days prior written notice to Purchaser.
(c) Upon Purchaser's request, Vendor shall provide Purchaser with
certification by a properly qualified representative of the insurer of the names
of insureds, the type and amount of coverage, the location and operations to
which the insurance applies, the expiration date, and the insurer's agreement to
provide written notice to Purchaser at least thirty (30) days prior to the
effective date of any termination, cancellation, lapse, or material change in
the policy.
(d) All insurance policies required shall be issued by companies
licensed to transact business in the state of Massachusetts who hold a current
rating of not less than A according to Best's Insurance Reports.
(e) Vendor's obligations to maintain the insurance required herein, and
to provide evidence of same, shall survive for a period of three (3) years
beyond the termination, cancellation, or expiration of this Agreement.
9
6.7 Financial Information. Purchaser and Vendor agree to provide the other with
the following information:
(a) As soon as available but in any event within forty-five (45) days
after the end of each of the first three calendar quarters in each fiscal year,
unaudited consolidated financial statements, including statements of operations
and cash flows for such quarter and for the period from the beginning of the
fiscal year to the end of such quarter and balance sheets as of the end of such
quarter, setting forth in each case comparisons to the corresponding period in
the preceding fiscal year, and all such statements will be prepared in
accordance with generally accepted accounting principles, consistently applied,
subject to normal year-end audit adjustments and excluding footnote disclosures;
(b) As soon as available but in any event within ninety (90) days after
the end of each fiscal year, audited consolidated financial statements,
including statements of operations and cash flows for such fiscal year and
balance sheets as of the end of such fiscal year, setting forth in each case
comparisons to the corresponding period in the preceding fiscal year, and all
such statements will be prepared in accordance with generally accepted
accounting principles, consistently applied.
(c) With reasonable promptness, such other information and data
concerning such party as the other party may reasonably request.
ARTICLE VII
TERM AND TERMINATION;
MATERIAL BREACH
7.1 Term of Agreement. This Agreement shall commence on the Effective Date and
continue for an initial term of ten (10) years. Thereafter, Purchaser shall have
the right to renew this Agreement for three additional terms of five (5) years.
7.2 Certain Breaches by Vendor. The following sets forth specific remedies for
certain breaches of this Agreement by Vendor as follows. With respect to any
shipment of Grips that is not delivered within the guarantee set forth in
Section 2.3(c) above or that fails to meet the Specifications referenced in
Section 4.1(b) above, Vendor shall promptly reimburse Purchaser for any loss in
gross margin arising therefrom, whether pursuant to a cancellation of the
customer's order, a reduction in the price of Grips to the customer or
otherwise. If Vendor fails to meet delivery schedules or Specifications with
respect to Grips representing more than 10% of the aggregate dollar value of all
Grips shipped in any given calendar quarter, such failure shall constitute a
material breach pursuant to which Purchaser, at its option, may terminate the
Agreement and/or seek damages or other relief against Vendor pursuant to the
provisions of Section 9.2 hereof.
7.3 Certain Breaches by Purchaser. The following sets forth specific remedies
for certain breaches of this Agreement by Purchaser as follows:
10
* Confidential portion has been
omitted and filed separately
with the Commission
(a) If Purchaser fails to pay for any shipment of Grips within the time
set forth in Section 3.3(b) above following written notice thereof, it shall pay
interest on any outstanding overdue balance at the rate of 12% simple interest
per annum (other than overdue balances with respect to which a bona fide dispute
exists).
(b) Purchaser shall have a grace period of ten (10) days with respect
to the provision of forecasts and firm orders required pursuant to Section
2.2(a) of this Agreement. Thereafter, it shall pay a penalty of $500 per day
with respect to late forecasts or firm orders.
(c) If Purchaser fails to provide a firm order or forecast prior to the
expiration of any grace period provided under Section 2.2(b) more than two times
within any given calendar year, or more than $200,000 of invoices become overdue
at any given time, such failure shall constitute a material breach pursuant to
which Vendor, at its option, may terminate the Agreement and/or seek damages or
other relief against Purchaser pursuant to the provisions of Section 9.2 hereof.
(d) If, during the term of this Agreement, Purchaser purchases more
than [ * ] Grips but less than [ * ] Grips on an annualized basis in any
calendar year, Purchaser shall pay to Vendor promptly following the end of such
calendar year an amount equal to [ * ] minus the number of Grips actually
purchased multiplied by the average gross margin that Vendor realized on Grips
which it sold to Purchaser during the calendar year; provided, however, that
Purchaser's failure to purchase at least [ * ] Grips in any two calendar years,
or at least [ * ] Grips in any one calendar year, shall constitute a material
breach pursuant to which Vendor, at its option, may terminate the Agreement
and/or seek damages or other relief against Vendor pursuant to the provisions of
Section 9.2 hereof.
7.4 Termination. Notwithstanding Section 7.1, either party may terminate this
Agreement immediately and at any time if the other party commits a material
breach of this Agreement, and such party fails to cure the breach within thirty
(30) days after receiving a notice of such breach from the non-breaching party
(or such other specific period as is set forth herein). In addition to those
described in Section 7.2 and 7.3 above;
(a) A material breach of this Agreement with respect to Vendor shall
include, but not be limited to, the following: (i) Vendor fails to achieve full
production of Grips by February 15, 1997; (ii) Vendor makes an assignment for
the benefit of creditors or files any petition or action under any bankruptcy,
reorganization, insolvency or moratorium law, or any other law or laws for the
relief of, or relating to, debtors; or (iii) Vendor materially breaches or
commits an event of default under the Lease Agreement; and
(b) A material breach of this Agreement with respect to Purchaser shall
include, but not be limited to, the following: (i) Purchaser makes an assignment
for the benefit of creditors or files any petition or action under any
bankruptcy, reorganization, insolvency or moratorium law, or any other law or
laws for the relief of, or relating to, debtors, or (ii) Purchaser materially
breaches the Lease Agreement.
11
(c) Upon any termination of this Agreement by Purchaser arising out of
a material breach by Vendor or upon expiration of the term of this Agreement,
Vendor agrees to promptly and fully assist Purchaser in the orderly transition
of Grip production operations to Purchaser or another third party, as Purchaser
may determine, and, upon Purchaser's request, to sell or transfer to Purchaser
or to assist Purchaser in selling or transferring to a third party designated by
Purchaser all equipment used by Vendor in its Grip production operations at the
fair market value thereof, as determined by a third party appraiser mutually
agreed upon by the parties, or in the absence of such agreement, selected by the
mediator designated in Schedule 9.2.
7.5 Force Majeure. In the event of any failure by Vendor in the performance of
this Agreement as a result of actions or events not under the control of Vendor
(including, but not limited to, acts of God, regulation or law or other action
of any government, war or insurrection, civil commotion, destruction of
production facilities or materials by earthquake, fire, flood, or storm, labor
disturbances, epidemic, or failure of suppliers, public utilities, or common
carriers), Vendor agrees to employ reasonable best efforts to fully resume its
performance hereunder and, during any period in which Vendor's performance
hereunder is delayed or interrupted by reason of force majeure events, to use
reasonable best efforts to establish temporary facilities and to provide
necessary equipment or personnel to enable Vendor to fulfill Purchaser's
requirements for Grips, or to cooperate in enabling Purchaser or another third
party to fulfill Purchaser's requirements for Grips, as Purchaser shall
determine. Nothing herein shall relieve Vendor of its obligations under this
Agreement, nor affect Purchaser's rights or remedies, in the case of a force
majeure event.
7.6 Voluntary Termination by Purchaser. Purchaser shall have the right to
terminate this Agreement with Vendor at any time by giving Vendor written notice
of termination and paying to Vendor a termination fee determined in accordance
with Schedule 7.6.
7.7 Exercise of Rights of Termination. Neither Vendor nor Purchaser shall,
solely by reason of the bona fide exercise of rights to terminate or suspend
this Agreement, be liable to the other for compensation, reimbursement, or
damages either on account of present or prospective profits on sales or
anticipated sales or on account of expenditures, investments, or commitments
made in connection therewith, provided, that, such termination shall not affect
the rights or liabilities of the parties with respect to any amounts owing by
either party to the other prior to termination.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Each party hereto represents and warrants to the other party hereto:
8.1 Organization and Qualification. The party is a corporation duly organized,
validly existing, and in good standing under the laws of its state of
incorporation, and has the requisite corporate power and authority to own and
operate its properties and to carry on its business as
12
now conducted in every jurisdiction where the failure to do so would have a
material adverse effect on its business, properties, or ability to conduct the
business currently conducted by it.
8.2 Authority Relative to this Agreement. The party has the requisite power and
authority to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement by such party and the
consummation by such party of the transactions contemplated hereby have been
duly authorized by such party, and no other corporate proceedings on the part of
such party are necessary to authorize this Agreement and such transactions. This
Agreement has been duly executed and delivered by such party and constitutes a
valid and binding obligation of such party, enforceable in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, or other similar laws relating to the enforcement of
creditors' rights generally and by general principles of equity.
8.3 No Conflicts. The party is not subject to, or obligated under, any provision
of (i) its Certificate of Incorporation or Bylaws, (ii) any material agreement,
arrangement, or understanding, (iii) any material license, franchise, or permit,
or (iv) any law, regulation, order, judgment, or decree, which would be breached
or violated, or in respect of which a right of termination or acceleration would
arise, or pursuant to which any encumbrance on any of its or any of its
subsidiaries' material assets would be created, by its execution, delivery, and
performance of this Agreement and the consummation by it of the transactions
contemplated hereby.
8.4 No Consents. No authorization, consent, or approval of, or filing with, any
public body, court, or authority is necessary on the part of the party for the
consummation by such party of the transactions contemplated by this Agreement.
8.5 Financial Statements. The party has provided to the other party unaudited
financial statements for and as of the period ended September 30, 1996, and
audited financial statements for and as of the period ended December 31, 1995,
all of which financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved and fairly present the financial position of
such party as of the dates thereof and the results of its operations and cash
flows for the periods then ended, subject in the case of unaudited financial
statements to normal year-end adjustments in the absence of complete footnote
disclosure.
8.6 No Litigation. The party is not subject to any legal, administrative,
arbitration or other suit, proceeding, claim, action, investigation, or inquiry
pending or, to the knowledge of such party, threatened against or involving such
party which could have a material adverse effect upon its ability to perform
this Agreement or upon its results of operations or financial condition, or
which questions the validity of this Agreement or any action taken or to be
taken by such party pursuant to this Agreement and, to the knowledge of such
party, there is no valid basis for any such suit, proceeding, claim, action,
investigation or inquiry.
13
ARTICLE IX
MISCELLANEOUS
9.1. Notices.
(a) All notices and demands of any kind which either party may be
required or desire to serve upon the other under the terms of this Agreement
shall be in writing and shall be sent by registered mail, return receipt
requested, or by facsimile with confirming copy by registered mail to the
receiving party at the address of the receiving party set forth below:
If to Purchaser: Royal Grip, Inc.
--------------- 000 X. Xxxxxx
Xxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: President
If to Vendor: Acushnet Rubber Company, Inc.
------------ 000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Chief Operating Officer
(b) Either party may change such address upon written notice to the
other party hereto in the manner set forth in this Section 9.1. All notices or
demands shall be deemed to have been given when received by the party to whom
such notice is sent as evidenced by a receipt signed and dated by a
representative of the receiving party.
9.2 Dispute Resolution. Any dispute among the parties hereto shall be resolved
in accordance with the dispute resolution procedures attached hereto as Schedule
9.2; provided, that, nothing herein shall preclude any party from seeking or
obtaining equitable relief, such as an injunction, or from enforcing any order
or judgement of an arbitrator through judicial process.
9.3 Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the state of Massachusetts (excluding its, or any
other jurisdiction's, choice of law principles).
9.4 Effect of Waiver. No delay or omission to exercise any right, power or
remedy accruing to a party upon any breach or default of the other party
hereunder shall impair any such right, power, or remedy nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein or of or in any similar breach or default thereafter occurring, nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default
14
theretofore or thereafter occurring. Any waiver, permit, consent, or approval of
any kind or character on the part of a party hereto of any breach or default
under this Lease must be in writing specifically set forth.
9.5 Severability. Should any part of any provision of this Agreement be held
invalid or unenforceable, the invalid or unenforceable part or provision shall
be replaced with a provision which accomplishes, to the extent possible, the
original business purpose and economic intent of such part or provision in a
valid and enforceable manner, and the remainder of this Agreement shall remain
binding upon the parties hereto.
9.6 Assignment and Transferability. Neither party may assign its rights and/or
obligations under this Agreement or any interest therein to any other party
without the prior written consent of the other party. Subject to the foregoing,
this Agreement shall be binding upon and inure to the benefit of the permitted
assignees, transferees, or successors of Purchaser and Vendor, respectively.
9.7 Survival. The provisions of Sections 5.1, 5.2, 9.2, and 9.3 shall survive
termination or expiration of this Agreement (as the case may be) and shall
remain at all times in full force and effect.
9.8 Captions. The captions of this Agreement are solely for the convenience of
reference and shall not affect its interpretation.
9.9 Entire Agreement.
(a) This Agreement embodies the entire understanding as of the date of
execution hereof between the parties hereto with respect to the subject matter
hereof, and supersedes any and all prior agreements, negotiations,
understandings, representations statements and writings between the parties. No
modification, alteration, waiver or change in any of the terms of this Agreement
shall be valid or binding upon the parties hereto unless made in writing and
duly executed by both of the parties hereto.
(b) Purchaser and Vendor agree that the supply of Grips hereunder shall
be subject to and governed by the terms and conditions hereof, and none of the
terms and conditions set forth on any purchase order or order form, or any
invoice relating thereto, shall affect or modify the terms and conditions
hereof.
9.10 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
9.11 Time of Essence. Time is of the essence in this Agreement.
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives on the date and year first
written above.
"PURCHASER" "VENDOR"
ROYAL GRIP, INC. ACUSHNET RUBBER COMPANY, INC.
By:/s/ Xxxxxx X.X. Xxxx, XX By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------- ---------------------------
Name: Xxxxxx X.X. Xxxx, XX Name: Xxxxxx X. Xxxxxxxxx
Title: President Title: Executive Vice President and
Chief Operating Officer
16
-SCHEDULE 3.2(A)
----------------
OPTIONS
Total: 250,000 shares subject to option
Exercise
Price: 50,000 shares at closing sale price on the date of this Agreement
200,000 shares at $1.00 above such closing sale price
Vesting
Schedule: Fully vested immediately
Term: 3 years from the date hereof
17
SCHEDULE 3.2 (b)(B)
ROYAL GRIP, INC.
POLICY STATEMENT
SECURITIES TRADING BY COMPANY PERSONNEL
GENERAL
As a general rule, it is against the law to buy or sell any securities
while in possession of material non-public information relevant to that security
(sometimes called "inside information"), or to communicate such information to
others who trade on the basis of such information (known a "tipping"), In recent
years, Congress has toughened the penalties for trading on or tipping materia
inside information and the Securities and Exchange Commission ("SEC") and U.S.
Attorneys have aggressively prosecuted such trades and tippers. Until recently,
their efforts have concentrated on individuals directly involved in trading
abuses. To further deter xxxxxxx xxxxxxx violations, Congress has expanded the
authority of the SEC and the United States Justice Department, adopting the
Insiders Trading and Securities Fraud Enforcement Act and the Securities
Enforcement Remedies Act. In addition to increasing the penalties for xxxxxxx
xxxxxxx and other securities law violations, these laws put the onus on
companies and possible other "controlling persons" for violations by company
personnel. Accordingly, companies which do not take active steps to adopt
preventative policies and procedures covering securities trades by company
personnel could face severe consequences.
In addition to responding to the requirements of the federal securities
laws, Royal Grip, Inc (the "Company") is adopting this Policy Statement to avoid
even the appearance of improper conduct on the part of anyone employed by or
associated with, the Company (not just so-called insiders). We have all worked
hard over the years to establish our reputation for integrity and ethical
conduct. We cannot afford to have it damaged.
The consequences of xxxxxxx xxxxxxx violations can be staggering:
For individuals who trade on inside information (or tip information to
others)
o A civil penalty of up to three times the profit gained or loss
avoided;
o A criminal fine (no matter how small the profit) of up to $1
million;
o A jail term of up to ten years; and
o Prohibition from serving as an officer or director of the
Company.
For a company (as well as possibly any supervisory person) that fails
to take appropriate steps to prevent illegal trading:
o A civil penalty of the greater of $1 million or three times
the profit gained or loss avoided as a result of the
employee's violations; and
o A criminal penalty of up to $2.5 million.
2
Moreover, if an employee violates the Company's xxxxxxx xxxxxxx policy,
Company-imposed sanctions, including dismissal for cause, could result from
failing to comply with the Company's policy or procedures. Needless to say, any
of the above consequences, even an SEC investigation that does not result in
prosecution, can tarnish one's reputation and irreparably damage a career.
GENERAL TRADING POLICY
If a director, officer or any employee has material non-public
information relating to the Company, it is our policy that neither that person
nor any related person may buy or sell securities of the Company or engage in
any other action to take advantage of, or pass on to others, that information.
This policy also applies to information relating to any other company, including
our customers or suppliers, obtained in the course o employment.
Transactions that may be necessary or justifiable for independent
reasons (such as the need to raise money for an emergency expenditure) are no
exception. Even the appearance of an improper transaction must be avoided to
preserve our reputation for adhering to the highest standards of conduct.
This Policy includes transactions within a 401K.
Material Information. Material information is any information that a
reasonable investor would consider important in a decision to buy, hold, or sell
stock, i.e., any information, positive or negative, which could reasonably
affect the price of the stock. Examples of events or developments that should be
presumed to be "material" in the context of the Company's stock would be events
such as the following that have not yet been fully disclosed to the public:
regulatory developments, knowledge of a trend in the Company's revenues or
earnings, a merger, major litigation, a purchase or sale of substantial assets,
changes in dividend policies, the declaration of a stock split, the offering of
additional securities, changes in management, significant new products or
developments, impending bankruptcy or financial liquidity problems, and the gain
or loss of a substantial customer or supplier, or any other significant
corporate transaction. These examples are illustrative only and are not intended
to be exhaustive examples of material information. Either positive or negative
information may be material.
Non-Public Information. Information is "non-public" until it has been
effectively communicated to the marketplace through appropriate news media. In
many cases, this may require the passage of several trading days after any
initial disclosure.
Twenty-Twenty Hindsight. Whether a particular item was "material" will
be judged with hindsight. Accordingly, when in doubt as to a particular item of
information, you should presume it to be material and not to have been disclosed
to the public.
3
Transactions by Family Members. The very same restrictions apply to
your family members and others living in your household (a "Family Member").
Employees are responsible for the compliance of their Family Members with the
Company's Policy Statement.
Tipping Information to Others. Whether the information is proprietary
information about our Company or information that could have an impact on our
stock price, employees must not pass that information on to others. The above
penalties apply, whether or not you derive any benefit from another's actions.
Inadvertent Disclosure. All employees, officers and directors are
reminded to use extreme care to assure that confidential information is not
inadvertently disclosed to others. Be particularly careful to avoid discussing
any matter that might be sensitive or confidential in public places, such as
lobbies, restrooms, airports or restaurants. Meetings in which confidential
information is discussed should be conducted behind closed doors. Even
inadvertent "leaks" of confidential information can create problems for the
Company and its employees, officers and directors.
Public Announcements. It is improper for an officer, director or
employee to enter a trade immediately after the Company has made a public
announcement of material information, including earnings releases. As a general
rule you should not engage in any transactions until the third day after the
information has been released. With respect to earnings releases, as a general
rule, you should not engage in any transactions during the period beginning the
first day of the last month of the quarter through the third business day after
the information has been released.
Violation. As with the Company's other employee policies, violation of
this Policy Statement by an employee of the Company or any of its subsidiaries
(or by any Family Member of the employee) is grounds for immediate disciplinary
action, including possible dismissal from employment.
III. SPECIFIC RESTRICTIONS ON TRADING IN ROYAL GRIP, INC. STOCK
Approval of Trades. To provide assistance in preventing inadvertent
violations and avoiding even the appearance of an improper transaction (which
could result, for example, where an employee engages in a trade while unaware of
a pending major development), all transactions in Company stock (acquisitions,
dispositions, transfers, etc.) by directors, officers and their Family Members,
must be pre-approved by Xxx Xxxxxxxxx. In addition, any employee or Family
Member of an employee contemplating a transaction that would result in an
aggregate of 250 shares or more of Company stock being traded (either purchased
or sold) by such person during any three-month period, must be pre-approved by
Xxx Xxxxxxxxx. If you contemplate a transaction requiring pre-approval, you
should give written notice to Xxx Xxxxxxxxx one week in advance.
These restrictions do not apply to exercises of stock options, which do
not require prior approval. Sales of shares of stock acquired from option
exercises, however, do require approval.
4
The foregoing restrictions apply to the purchase or sale of stock for
any fiduciary account (e.g., trustee, executor, custodian) with respect to which
the employee, officer, director or Family Member makes the investment decision,
regardless of whether the employee, officer, director or Family Member has any
beneficial interest in the account.
In addition, short sales, buying or selling puts or calls or purchases
on margin of the Company's stock by any employee, officer, director or Family
Member are absolutely prohibited. Any Company stock purchased in the open market
must be held for a minimum of six months and ideally longer. (Note that the
SEC's short-swing profit rule already prevents executive officers and directors
from selling any Company stock within six months of a purchase. We are simply
expanding this rule to all officers of the Company and its subsidiaries.
However, the rule does not apply to stock option exercises, except to the extent
required for officers and directors.)
IV. CONFIDENTIALITY
Serious problems could be caused for the Company by unauthorized
disclosure of internal information the Company, whether or not for the purpose
of facilitating improper trading in the stock. Company personnel should not
discuss internal Company matters or developments with anyone outside the
Company, except as required in the performance of regular corporate duties.
This prohibition applies specifically (but not exclusively) to
inquiries about the Company which may be by financial press, investment analysts
or others in the financial community. It is important that all such
communications on behalf of the Company be through an appropriately designated
officer under carefully controlled circumstances. Unless you are expressly
authorized to the contrary, if you receive any inquires of this nature, you
should decline comment and refer the inquirer to Xxx Xxxxxxxxx, Xxx Xxxx or
Xxxxx Xxxxxxx.
COMPANY ASSISTANCE
Any person who has any question about specific transactions may obtain
additional guidance from Xxx Xxxxxxxxx. Remember, however, that the ultimate
responsibility for adhering to the Policy Statement and avoiding improper
transactions rests with you. In this regard it is imperative that you use your
best judgement.
CERTIFICATIONS
Officers and directors will be required to certify their understanding
of, and intent to comply with this Policy Statement and may be required to
certify compliance on an annual basis. Remember, you are responsible for the
compliance of your Family Members with the Company's Policy Statement.
5
October 9, 1996
TO: Officers, Directors and Key Employees of Royal Grip, Inc. (the
"Company")
RE: Certification of the Company's Policy Statement on Securities
Trading by Company Personnel
Enclosed is a copy of the Company's new Policy Statement covering
securities trading by Company personnel. As you will see from the Policy
Statement, the consequences of an xxxxxxx xxxxxxx violation can be devastating
to both the individual involved and the Company.
Please take a few minutes to carefully read the enclosed Policy
Statement and then return the attached copy of this letter. If you have any
questions regarding the Policy Statement, do not hesitate to contact me.
Very truly yours,
/s/ Xxx Xxxxxxxxx
Xxx Xxxxxxxxx
Vice President - Finance
Certification:
The undersigned hereby certifies that he / she has read and understands,
and agrees to comply with, the Company's Policy Statement on Securities Trading
By Company Personnel, a copy of which was distributed with this letter.
Date:___________________________
Signature:____________________________________
Name:_________________________________
(please print)
Dept:_________________________________
6
SCHEDULE 7.6
------------
The termination fee contemplated by Section 7.6 of the Agreement shall
be the sum of the following:
(i) Vendor's up-front costs in establishing manufacturing operations
under this Agreement, as shall be mutually agreed upon within 60 days of
execution of this Agreement, plus (ii) the fair value of the equipment used by
Vendor in conjunction with the production of Grips, which shall be repurchased
by Purchaser at the fair value thereof as determined in accordance with Section
7.4(c), plus (iii) $2 million.
18
SCHEDULE 9.2
------------
DISPUTE RESOLUTION PROCEDURES
All claims, disputes and other matters in controversy (herein called
"dispute") arising directly or indirectly out of or related to this Agreement,
or the breach thereof, whether contractual or noncontractual, and whether during
the term or after the termination of this Agreement, shall be resolved
exclusively according to the procedures set forth in this Schedule 9.2.
A. Negotiation. The parties shall attempt to settle disputes arising
out of or relating to this Agreement or the breach thereof by a meeting of two
designated representatives of each party within five (5) days after a request by
either of the parties to the other party asking for the same.
B. Mediation. If such dispute cannot be settled at such meeting either
party within five (5) days of such meeting may give a written notice (a "Dispute
Notice") to the other party setting forth the nature of the dispute. The parties
shall attempt in good faith to resolve the dispute by mediation in Phoenix,
Arizona under the Commercial Mediation Rules of the American Arbitration
Association ("AAA") in effect on the date of the Dispute Notice. The parties
shall select a person who will act as the mediator under this Paragraph B within
60 days of the date of the Agreement. If the dispute has not been resolved by
mediation as provided above within thirty (30) days after delivery of the
Dispute Notice, then the dispute shall be determined by arbitration in
accordance with the provisions of Paragraph C hereof.
C. Arbitration. Any dispute that is not settled through mediation as
provided in Paragraph B above shall be resolved by arbitration in Phoenix,
Arizona, governed by the Federal Arbitration Act, 9 U.S.C. ss. I et seq, and
administered by the AAA under its Commercial Arbitration Rules in effect on the
date of the Dispute Notice, as modified by the provisions of this Section C, by
a single arbitrator. The arbitrator selected, in order to be eligible to serve,
shall be a lawyer with at least 15 years experience specializing in either
general commercial litigation or general corporate and commercial matters. In
the event the parties cannot agree on a mutually acceptable single arbitrator
from the list submitted by the AAA, the AAA shall appoint the arbitrator who
shall meet the foregoing criteria. The arbitrator shall base the award on
applicable law and judicial precedent and, unless both parties agree otherwise,
shall include in such award the findings of fact and conclusions of law upon
which the award is based. Judgment on the award rendered by the arbitrator(s)
may be entered in any court having jurisdiction thereof. The award may only be
made for compensatory damages, and if any other damages (whether exemplary,
punitive, consequential, statutory or other) are included, the award shall be
vacated and remanded, or modified or corrected, as appropriate to promote this
damage limitation.
Notwithstanding the foregoing:
(a) Upon the application by either party to a court for an
order confirming, modifying or vacating the award, the court shall have the
power to review whether, as a matter of law based on the findings of fact
determined by the arbitrator, the award should be confirmed, modified or vacated
in order to correct any errors of law made by the arbitrator.
19
In order to effectuate such judicial review limited to issues of law, the
parties agree (and shall stipulate to the court) that the findings of fact made
by the arbitrator shall be final and binding on the parties and shall serve as
the facts to be submitted to and relied on by the court in determining the
extent to which the award should be confirmed, modified or vacated.
(b) Either party shall have the right to apply to any court
for an order to enforce any of the ownership and confidentiality provisions
contained in the Agreement.
D. Costs and Attorneys' Fees. If either party fails to proceed with
mediation or arbitration as provided herein or unsuccessfully seeks to stay such
mediation or arbitration, or fails to comply with any arbitration award, or is
unsuccessful in vacating or modifying the award pursuant to a petition or
application for judicial review, the other party shall be entitled to be awarded
costs, including reasonable attorneys' fees, paid or incurred by such other
party in successfully compelling such arbitration or defending against the
attempt to stay, vacate or modify such arbitration award and/or successfully
defending or enforcing the award.
E. Tolling of Statute of Limitations. All applicable statutes of
limitations and defenses based upon the passage of time shall be tolled while
the procedures specified in this Schedule 9.2 are pending. The parties will take
such action, if any, required to effectuate such tolling.
20
