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EXHIBIT 10.11
DIRECT MARKETING AGREEMENT
BY AND AMONG
GOLF ONE INDUSTRIES, INC.
AND
XXXX XXXXXX GOLF EQUIPMENT, INC.
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DIRECT MARKETING AGREEMENT
DIRECT MARKETING AGREEMENT dated this 1st day of November, 1996 by and
among Xxxx Xxxxxx Golf Equipment, Inc., a Florida corporation ("GPGE"), whose
address is 0000 XXX Xxxxxxxxx, Xxxxx 0000, Xxxx Xxxxx, Xxxxxxx, 00000, and Golf
One Industries, Inc., a Delaware corporation ("GOLF ONE"), whose address is 0000
Xxxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000. Capitalized terms used in the
Recitals shall have the meanings set forth in this Agreement.
WHEREAS, Golf One is in the business of manufacturing, marketing and
selling golf clubs on a Direct Marketing Basis;
WHEREAS, GPGE has the exclusive right to use the name "Xxxx Xxxxxx" in
the Exploitation on a Direct Marketing Basis of Direct Marketing Products;
WHEREAS, GPGE desires that Golf One manufacture, market and sell and
otherwise Exploit a line of golf clubs incorporating the words "by Xxxx Xxxxxx"
in conjunction with a specific name or names and related symbols, designs and
logos;
WHEREAS, GPGE may desire to assign its rights and obligations under
this Agreement to Xxxx Xxxxxx Holdings, an entity to be formed.
NOW THEREFORE, in consideration of the premises and the mutual promises
contained herein, the parties hereto do hereby agree as follows:
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1. GRANT OF RIGHTS; DEFINITIONS
(a) GPGE hereby grants to Golf One, effective immediately, the
exclusive right and license (the "RIGHT") for the Term to use the Xxxx in the
Exploitation on a Direct Marketing Basis of Direct Marketing Products, in the
Licensed Territory; provided, however, that the right to market and distribute
Golf Accessories shall be limited to promotional purposes only. The Right shall
include and encompass without limitation each and every Intellectual Property
Right arising or existing in connection with, with respect to, or embodied in,
the Xxxx and the Direct Marketing Products. Notwithstanding anything herein to
the contrary, it is understood that GPGE retains the rights to use the name
"Xxxx Xxxxxx" (other than in combination with the words, names or symbols
constituting a Xxxx hereunder) in the Exploitation on a Direct Marketing Basis
of products, goods and services other than golf clubs; provided, however, that
the foregoing shall not be deemed to authorize GPGE to Exploit (and GPGE agrees
not to Exploit) the Xxxx for any purpose other than as contemplated by Section
17 hereunder.
(b) For purposes of this Agreement, the following terms shall have the
meanings set forth below:
"AFFILIATE" shall mean, with respect to any specified Person, (a) any
other Person who, directly or indirectly, owns or controls, is under common
ownership or control with, or is owned or controlled by, such specified Person
and/or, (b) any other Person who is a 10% equity holder, director, officer,
partner or trustee of the specified Person or a Person described in clause (a)
of this definition or any spouse or relative of the specified Person or any such
other Person.
"ARTWORK" shall mean photographs, film footage and video footage.
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"COMPONENT COST" with respect to a set of golf clubs shall mean the
purchase price paid by Golf One for the components of such golf clubs,
including, without limitation, heads, shafts and grips; "Component Cost" shall
include, in addition to the purchase price for the components, taxes, shipping,
handling, insurance and other payments to third parties in connection with the
purchase of such components; provided, however, that the Component Cost shall
not include any compensation expense or overhead of Golf One.
"CONFIDENTIAL INFORMATION" with respect to Golf One shall mean any
information which is provided to or made available to any GPGE Representative in
connection with this Agreement and the transactions contemplated hereby, except
information which is generally available to the public other than as a result of
disclosure by a GPGE Representative or was otherwise available to GPGE on a
non-confidential basis prior to disclosure to a GPGE Representative.
"DIRECT MARKETING BASIS" shall mean, in the context of marketing and
sales of Direct Marketing Products, marketing and sales through infomercials,
telemarketing, Internet or other computer systems, direct mail, CD-ROM, and
other direct response marketing channels.
"DIRECT MARKETING PRODUCTS" shall mean (i) golf clubs, including, but
not limited to Xxxxx, Irons and Specialty Clubs, including Drivers, Wedges,
Chippers and Putters, which incorporate the Xxxx; and (ii) Golf Accessories
which incorporate the Xxxx.
"EXHIBIT" shall mean to produce, transmit, broadcast, telecast, cable
cast, display, exhibit, project, perform, reproduce, publicize, or otherwise
use.
"EXPLOIT" shall mean use, promote, advertise, affix, copy, Exhibit,
distribute, manufacture, sell, market, rent, modify, create derivative works
from, practice or otherwise
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exploit in all forms in any and all media.
"FULLY DILUTED SHARES OUTSTANDING" as of any date shall mean the sum of
(a) the number of shares of Common Stock of Golf One outstanding on such date,
plus (b) the number of shares of Common Stock of Golf One subject to options or
warrants which are outstanding as of such date; and (c) the number of shares of
Common Stock of Golf One which may be issued upon conversion of securities
outstanding on such date.
"GOLF ACCESSORIES" shall mean any product used in connection with golf
including, without limitation, hats, clothing, towels, umbrellas, bags, balls
and videos relating to golf.
"GPGE REPRESENTATIVE" shall mean GPGE, Player, any Affiliate of GPGE or
Player, and all officers, directors, employees, agents, advisors,
representatives and attorneys for GPGE, Player or any Affiliate of GPGE or
Player.
"INITIAL PUBLIC OFFERING" shall be the initial public offering by Golf
One of Common Stock pursuant to a registration statement filed with and declared
effective by Securities and Exchange Commission under the Securities Act.
"INITIAL QUARTER" shall mean the earlier of the calendar quarter
commencing April 1, 1997 and ending June 30, 1997 or the calendar quarter in
which Golf One first has Net Receipts.
"INTELLECTUAL PROPERTY RIGHTS" shall mean each and every right now or
hereafter recognized and enforced under the trademark, service xxxx, copyright,
patent, trade secret and all other intellectual and/or industrial property laws,
whether existing by statute and/or at common law, of each jurisdiction within
the Licensed Territory.
"LICENSED TERRITORY" shall mean the United States and Canada and such
other territories
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which may be added pursuant to Section 4 of this Agreement.
"XXXX" shall mean the words "by Xxxx Xxxxxx" used in combination with
one or more other words, derivatives of such combinations, and those certain
other names, symbols, designs, logos, trademarks and service marks which are
deemed part of the "Xxxx" pursuant to Section 5 of this Agreement.
"MINIMUM ROYALTY" for any Royalty Year shall mean the following: (i)
$200,000 for the first Royalty Year; and (ii) for each successive Royalty Year,
an amount equal to 120% of the Minimum Royalty for the prior Royalty Year;
provided, however, that the Minimum Royalty for any year shall not exceed $2.5
million. For example, the Minimum Royalty for the second Royalty Year shall be
120% multiplied by $200,000, or $240,000. There is no Minimum Royalty prior to
the first Royalty Year.
"MINIMUM SALES REQUIREMENT" for any Royalty Year shall mean Net
Receipts equal to or greater than the Minimum Royalty for such Year divided the
applicable Royalty Rate.
"NET RECEIPTS" during any period shall mean all amounts received by
Golf One from the sale of Direct Marketing Products during such period excluding
amounts attributable to actual out-of-pocket payments for taxes and shipping,
less Refunds received during such period.
"PACKAGING" shall mean any packaging, wrapping, advertising,
promotional or other materials associated with Direct Marketing Products.
"PERSON" shall mean individual, corporation, partnership, association,
limited liability company, trust or other entity.
"REFUNDS" shall mean amounts refunded by Golf One for product returns,
damaged
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products, cancelled orders or otherwise relating to Direct Marketing Products.
"ROYALTY QUARTER" shall mean a calendar quarter commencing with the
Initial Quarter.
"ROYALTY RATE" shall mean 7% with respect to the first $5,000,000 of
Net Receipts, and 6% with respect to Net Receipts in excess of $5,000,000.
"ROYALTY STATEMENT" shall mean a Royalty Statement as defined in
Section 2(c) of this Agreement.
"ROYALTY YEAR" shall mean a one-year period during the Term which
commences on the first day of the Initial Quarter or any annual anniversary
thereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"TERM" The term of the License shall be for a period stated as the Term
on Schedule A to this Agreement.
"TRANSFER" shall mean sell, assign, transfer, pledge, grant a security
interest in, or otherwise dispose of, with or without consideration.
2. CONSIDERATION
(a) Golf One shall pay to GPGE a non-recoupable marketing fee equal to
$25,000 each quarter during the Term, commencing with the date of this
Agreement.
(b) Golf One shall pay to GPGE royalties based on Net Receipts, as
described in this Section 2. Within 30 days following the end of each Royalty
Quarter commencing with the Initial Quarter, Golf One shall pay to GPGE as
royalties an amount equal to:
(i) the greater of (A) an amount equal to (I) the applicable Royalty
Rate multiplied by 100% of Net Receipts for such Royalty Year through the end of
such Royalty Quarter, minus
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(II) as a reserve, the applicable Royalty Rate multiplied by 35% of Net Receipts
during such Royalty Quarter; or (B) the Minimum Royalty for such Royalty Year
multiplied by a fraction, the numerator of which is the number of Royalty
Quarters during such Royalty Year which have passed through the end of such
Royalty Quarter and the denominator of which is 4; minus
(ii) all royalties paid prior to that date by Golf One to GPGE with
respect to such Royalty Year.
An example of the royalty calculation is set forth in Exhibit B to this
Agreement.
(c) Golf One shall send to GPGE a complete and detailed royalty statement
("ROYALTY STATEMENT") together with any payment for the amount of royalties due
to GPGE shown on such Statement within 30 days following the end of each
calendar quarter during the Term. Each such Royalty Statement shall set forth
the applicable Royalty Rate, quantities sold and Net Receipts (or range of Net
Receipts) for each type of Direct Marketing Product sold during such period and
the amounts of Refunds by type of Direct Marketing Product during such period.
Each Royalty Statement shall be certified by a principal officer of Golf One as
being true, accurate and complete and Golf One shall simultaneously therewith
pay to GPGE such sums as indicated in the Statement for the period to which the
Statement refers as may be due and payable to GPGE. In the event, however, GPGE
desires and so notifies Golf One, Golf One shall make any and all of such
payments by wire and cable transfer to such bank account(s) or similar
institutional banking association in the United States and United Kingdom as
GPGE may designate in writing from time to time. Each such statement and payment
shall be conclusive and binding upon GPGE unless GPGE shall object within two
years following receipt of such statement.
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(d) As further consideration for the Right, upon the Company issues and
sells its Common Stock in its Initial Public Offering by Golf One, Golf One
agrees to issue to GPGE a number of shares of its Common Stock equal to $300,000
divided by the initial public offering price (rounded to the nearest whole
share), provided, however, that in no event shall the number of shares of Common
Stock exceed 3% of the number of Fully Diluted Shares Outstanding as of such
date. GPGE makes the representations, warranties and covenants set forth in
Exhibit C to this Agreement in connection with its acquisition of the Common
Stock. GPGE agrees not to Transfer any of such shares prior to the end of one
year from the date of the Initial Public Offering.
(e) Golf One shall be solely responsible for and shall pay all taxes and
duties of whatsoever nature (except for income taxes payable by GPGE in respect
of monies received under this Agreement including any estimated income tax
payment) and GPGE shall have no responsibilities or liability therefor.
3. BOOKS AND RECORDS
(a) Golf One agrees to keep accurate books and records covering all
transactions relative to this Agreement. At any time within two (2) years after
any Royalty Statement is rendered to GPGE hereunder, upon reasonable prior
notice, GPGE shall have the right to examine Golf One's books and records to the
extent reasonably necessary to determine the accuracy and completeness of the
information on such Statement or sales invoice and compliance by Golf One with
the Agreement. Such examination shall be made during Golf One's usual business
hours at the place where such books and records are maintained. Except as
provided in
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Section 3(b), such examination shall be at the cost and expense of GPGE. In no
event, however, shall GPGE have the right to examine Golf One's books and
records more than one time per six-month period.
(b) In the event that any such examination and inspection for any quarter
or quarters (the "EXAMINED PERIOD") shall indicate that Golf One shall have
underpaid GPGE's royalties by an amount in excess of three percent (3%) of the
royalties which should have been paid to GPGE for the Examined Period (an
"ERROR"), Golf One shall pay the reasonable costs of such inspection and
examination, up to $10,000 per examination. Golf One shall have the right to
retain its own independent third party arbitrator to make a separate and
independent inspection and examination. In the event that either GPGE's
examination or Golf One's third party examination reveals no Errors, GPGE shall
be solely responsible for all costs of the inspection and examination.
Acceptance of any sum by or on behalf of GPGE from Golf One shall not in any
manner be construed as a waiver by GPGE of any claim pertaining to the validity
of the computation of such payment nor a waiver of any breach by Golf One of any
provision of this Agreement.
(c) GPGE agrees, on behalf of itself and each GPGE Representative, that
each GPGE Representative (i) will treat confidentially all Confidential
Information, (ii) will not disclose any Confidential Information to any other
Person except other GPGE Representatives who are necessary to assist in the
examination, and (iii) will not use any of the Confidential Information for any
reason or purpose other than to determine compliance by Golf One with the
provisions of this Agreement. GPGE agrees to be responsible for, and indemnify
and hold Golf One harmless
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from, any consequences from failure of any GPGE Representative to comply with
the requirements of this Section 3(c).
4. RIGHT OF FIRST REFUSAL
(a) GPGE may not license the right to use the Xxxx in the Exploitation of
Direct Marketing Products on a Direct Marketing Basis in any territory (an
"ADDITIONAL TERRITORY") outside of the Licensed Territory without first offering
to Golf One such license. Such offer shall be made by written notice from GPGE
to Golf One, which notice shall set forth the principal terms and conditions of
such license, including, without limitation, the royalty rate and any minimum
royalty. Golf One shall have 30 days from receipt of such notice to advise GPGE
whether it desires to accept such license and must demonstrate to the reasonable
satisfaction of GPGE that it (either alone or with one or more partners) will be
able to Exploit the Xxxx in such Additional Territory. If Golf One indicates
that it desires to accept such license, the parties shall execute and amendment
to this Agreement reflecting any material terms and conditions of such license,
provided, however, that the term of such license shall be the "Term" of the
Right under this Agreement. If Golf One does not notify GPGE within such 30-day
period that it desires to accept such license, GPGE may, at any time within 90
days following such 30-day period, grant to another Person the license to use
the Xxxx in connection with the Exploitation on a Direct Marketing Basis of
Direct Marketing Products in such additional territory on terms and conditions
not less favorable to GPGE than set forth in such notice; provided, however,
that such license agreement shall contain appropriate safeguards and other
protections which prohibit such licensee from using the Xxxx in any capacity
other than through the Exploitation of Direct
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Marketing Products on a Direct Marketing Basis in such Additional Territory and
shall give GPGE the right to terminate such license if such prohibitions are
violated (and GPGE agrees to terminate such license in such event). Promptly
following the grant of any such license, GPGE shall notify Golf One of the
license, the name of the licensee, the Additional Territory covered by the
license and the terms and conditions of the license.
5. THE XXXX
(a) The parties shall agree on such logos, symbols, designs, service marks
and trademarks as may be appropriate to fully Exploit the use of the words "by
Xxxx Xxxxxx" in connection with Direct Marketing Products, all of which logos,
symbols, designs, service marks and trademarks shall be deemed to be part of the
"Xxxx."
(b) The parties recognize and acknowledge that consumer preferences for
golf clubs change over time, as a result of changing golf club technology,
changing preferences for appearance (size, weight, style, color, etc.) and other
factors. The parties presently anticipate that Golf One and GPGE shall respond
to these changing preferences by modifying the golf clubs (and, as necessary,
Golf Accessories). To promote such modifications, and to distinguish the "old"
from the "new" line of golf clubs, Golf One may use derivations of any existing
name which indicate new models or versions of such clubs. These derivations are
all deemed to be part of the "Xxxx".
(c) GPGE and Golf One also recognize and agree that to changes in consumer
preferences for the reasons described above may be so significant that a name
may lose its marketing appeal as being associated with obsolete, outdated or
technologically inferior golf
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clubs. In such circumstances, a derivative name as contemplated by Section 5(b)
above may not be sufficient to distinguish the existing line of clubs from a new
line. In such circumstances, the parties agree to identify and utilize another
name including the name "by Xxxx Xxxxxx," including related symbols, designs,
logos, service marks and trademarks for the Direct Marketing Products. GPGE will
not unreasonably withhold its approval of any new name selected by Golf One.
Under no circumstances shall any new name, logo, symbol, design, service xxxx or
trademark be a name, symbol, logo, design, service xxxx or trademark which is
otherwise used by GPGE.
(d) GPGE and Golf One acknowledges that they contemplate creating a new
line of golf clubs incorporating the Xxxx at least every 18 months during the
Term of this Agreement.
(e) Golf One may, but shall not be obligated to, at its cost and expense
cause each Xxxx to be registered in the name of GPGE in the United States at the
United States Patent and Trademark Office and in any other country or
jurisdiction in the Licensed Territory. GPGE shall cooperate with Golf One in
such registrations (including executing all such filings).
6. RESTRICTIONS
(a) Golf One recognizes the great value of the goodwill associated with the
Xxxx and acknowledges that it has no rights with respect to such Xxxx except as
set forth herein. Other than as set forth herein, all use thereof shall inure to
the benefit of GPGE. All rights with respect to the Xxxx not licensed hereunder
are expressly reserved by, and for, GPGE.
(b) Other than for reasonable and necessary use of the Xxxx in connection
with Exploitation on a Direct Marketing Basis of Direct Marketing Products, Golf
One will not enter
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into any agreement relating to the Xxxx and/or GPGE for commercial tie-ups
relating to the Direct Marketing Products, nor will Golf One give away any
Direct Marketing Products as premiums or otherwise except in the normal course
of business without GPGE's prior written consent. It is understood that the
normal course of business includes the creation and distribution of Golf
Accessories. Notwithstanding the foregoing sentence of this sub-paragraph, in
the event Golf One is unable to sell the Direct Marketing Products through
normal wholesale or retail commercial channels by virtue of the Direct Marketing
Product(s) being damaged goods (i.e. smoke, flood or similar catastrophe), Golf
One and GPGE shall mutually agree on an appropriate method of disposition of
such goods; provided, that the appropriate royalties are computed and paid to
GPGE as elsewhere herein provided on sales of such damaged goods; and provided,
further, that such method of disposition shall not unreasonably disparage the
Xxxx.
(c) Golf One, pursuant to this Agreement, shall manufacture Direct
Marketing Products which conform to the standards and specifications required by
this Agreement. Any golf clubs constituting Direct Marketing Products shall
conform to U.S.G.A. specifications. Golf One and GPGE agree to develop a
standard form for GPGE's approval of components and suppliers which shall
include, but not be limited to, specifications and manufacturing standards. GPGE
shall not unreasonably withhold its approval in any circumstance. GPGE shall
cooperate with Golf One in identifying appropriate sources for components of
Direct Marketing Products and Golf Accessories and shall assist where possible
and reasonable in the design of golf clubs constituting Direct Marketing
Products; provided, however, that Golf One shall be primarily responsible for
sourcing. In the event Golf One breaches the foregoing provisions of this
Section
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6, GPGE shall deliver written notice of same to Golf One, setting forth in
reasonable detail the alleged violation by Golf One. Golf One shall thereupon
have thirty (30) days in which to cease such violation or completely cure such
breach in accordance with the provisions of Section 16(b) below. It is
specifically understood and agreed that Golf One's provision of notification to
the manufacturer of its product regarding any of the foregoing alleged
violations constitutes immediate cessation of production and cure of any such
breach by Golf One.
7. GOLF ONE'S ADDITIONAL RESPONSIBILITIES
(a) It is the essence of this Agreement that Golf One shall manufacture,
distribute and sell the Direct Marketing Products in an ethical manner and in
accordance with the provisions and the intent of this Agreement, and shall not
willfully engage in unfair or anti-competitive business practices. The Direct
Marketing Products shall be manufactured, distributed and sold in accordance in
all material respects with all applicable international, national, federal,
state and local laws, treaties and government orders and regulations. Golf One's
policy of sale, distribution, and exploitation shall be of a high standard and
such policy shall in no manner reflect materially adversely upon GPGE.
(b) Golf One shall not cause or permit any expenses to be charged to GPGE
without GPGE's prior approval in writing in each instance.
(c) Golf One shall exercise its best efforts to manufacture sufficient
quantities of the Direct Marketing Products to meet the market demand for them
and shall diligently and continuously distribute and offer for sale the Direct
Marketing Products to fulfill the orders for them; provided, however, that this
shall not prevent Golf One from determining not to
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manufacture or offer for sale certain Products for reasons deemed advisable by
Golf One, including, without limitation, that the Products are outdated or
obsolete or that it is not economic to continue to carry that line in light of
weak product demand, increasing manufacturing, marketing and sale costs and/or
the profit margin is not consistent with Golf One's general requirements or
opportunity costs.
(d) Golf One shall not have the Direct Marketing Products manufactured for
it by a third party unless said third party enters into an agreement with Golf
One making it subject to the terms of Section 6(c) of this Agreement.
(e) Golf One hereby indemnifies and agrees to hold GPGE and its successors
and affiliates harmless from any and all claims, losses, costs, damages,
liabilities and expenses (including attorneys' fees and court costs) suffered or
incurred by GPGE arising out of breach by Golf One of any warranty,
representation or covenant hereunder. GPGE shall give Golf One prompt notice of
any third party claim or suit for which Golf One may incur indemnity liability
hereunder. Golf One shall have the option to undertake and conduct the defense
of any claim made or suit so commenced. GPGE shall not settle any such claim or
suit without Golf One's prior written consent. Golf One may not settle any claim
or suit without GPGE's prior written consent, which written consent will not be
unreasonably withheld, unless such settlement involves only the payment of
money, which payment is made by Golf One.
8. PROTECTION OF THE XXXX
Golf One shall take all action reasonably necessary or desirable to protect
the Xxxx in accordance with this Section 8. Each party hereto shall notify the
other in writing of any
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infringement or imitation of the Direct Marketing Products and/or the Xxxx which
come to such party's attention. At GPGE's reasonable request Golf One shall
take, at Golf One's expense, all reasonable steps short of litigation to stem
the flow of material infringements on the Direct Marketing Products and/or the
Xxxx. Golf One shall have the right to commence or prosecute any products,
suits, actions or proceedings in its and/or GPGE's name and shall notify GPGE in
writing of any infringements or imitations by others of the Xxxx or any elements
thereof which may come to Golf One's attention and upon which Golf One desires
to litigate. GPGE shall also have such right. If both parties desire to litigate
such infringement, they shall cooperate and each shall bear and pay one-half of
the expense. GPGE shall from time to time at the request of Golf One execute,
file and/or record such notices, applications or documents with various
governmental agencies (such as the United States Copyright Office and United
States Patent and Trademark Office) which would enable Golf One to maintain such
actions in its own name. Golf One shall not enter into any settlement of any
claim, suit, action or proceeding without GPGE's approval which shall not be
unreasonably withheld. All monetary recoveries of any such claim, suit, action
or proceeding commenced or prosecuted by Golf One, GPGE or Golf One and GPGE
together shall be applied first to reimburse the parties for their actual
out-of-pocket costs and expenses in connection with such claim, action, suit or
proceeding, and then shall be shared based on the actual costs and expenses
incurred by each party in such claim, action, suit or proceeding.
Notwithstanding the foregoing, in the event of any matter arising out of
misrepresentation by GPGE, GPGE shall bear all costs and expenses of such
proceeding and shall be entitled to any monetary recovery.
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9. GPGE'S WARRANTIES AND COVENANTS
(a) GPGE warrants and represents as follows: (i) GPGE has all right, power
and authority to enter into this Agreement and grant the Right; (ii) GPGE has
all rights to use the Xxxx in the Exploitation of Direct Marketing Products;
(iii) except pursuant to the Right, no Person has any right to use the Xxxx in
the Exploitation of Direct Marketing Products or to Exploit the Direct Marketing
Products, and there are no licenses presently outstanding for the use of the
Xxxx in the Exploitation of the Direct Marketing Products; (iv) the Exploitation
of the Xxxx and Direct Marketing Products as contemplated by this Agreement will
not violate or infringe upon the rights (including, but not limited to, the
Intellectual Property Rights) of any Persons in the Licensed Territory,
including, but not limited to, North America and any other territory in which
GPGE or any licensee of GPGE has previously Exploited the Xxxx and/or Direct
Marketing Products and, to the best knowledge of GPGE, any other territory; (v)
all existing Direct Marketing Products were developed, produced and manufactured
in accordance with all laws and regulations and do not infringe upon or violate
the rights (including Intellectual Property Rights and rights of privacy) of any
Person, (vi) except as set forth in Schedule A with respect to Xxxx Xxxxxx, the
Exploitation of any existing Direct Marketing Products as contemplated by this
Agreement, including the use of the Artwork in connection therewith, will not
require any payments to GPGE, Player, any Affiliate of GPGE or Player, or any
director, officer or employee of GPGE; and (vii) set forth in Schedule A is a
true and correct list of all registrations of the Xxxx and the jurisdictions in
which the Xxxx is registered.
(b) GPGE agrees that from and after the date hereof until the expiration or
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termination of this Agreement, GPGE shall not directly or indirectly use the
Xxxx in the Exploitation of any Direct Marketing Products, or Transfer any right
to use the Xxxx in the Exploitation of Direct Marketing Products.
(c) GPGE hereby indemnifies and agrees to hold Golf One and its successors
and affiliates harmless from any and all claims, losses, costs, damages,
liabilities and expenses (including attorneys' fees and court costs) suffered or
incurred by Golf One arising out of breach by GPGE of any warranty,
representation or covenant hereunder or any action or inaction of Player or any
Affiliate of GPGE if such action or inaction would have constituted a breach of
any warranty, representation or covenant had such member been a party to this
Agreement and made the representations, warranties and covenants of GPGE
hereunder. Golf One shall give GPGE prompt notice of any third party claim or
suit for which GPGE may incur indemnity liability hereunder. GPGE shall have the
option to undertake and conduct the defense of any claim made or suit so
commenced. Golf One shall not settle any such claim or suit without GPGE's prior
written consent. GPGE may not settle any claim or suit without Golf One's prior
written consent, which written consent will not be unreasonably withheld, unless
such settlement involves only the payment of money, which payment is made by
GPGE.
(d) Subject to medical impairments rendering Player unable to perform, GPGE
agrees to cause Player to appear in a minimum number of videos, infomercials and
Programs as set forth in Schedule A attached hereto. GPGE represents that it has
the power and authority to cause Player to be so available and that Player is
not presently subject to any medical impairment or condition which could result
in a medical impairment rendering him unable to perform.
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(e) Under no circumstances whatsoever during the Term of this Agreement, or
any extensions, will GPGE, either itself or in conjunction with any other party,
directly or indirectly, compete with, or circumvent or infringe upon, Golf One"s
direct marketing and/or Exploiting of any Direct Marketing Products and/or the
Xxxx.
10. SAMPLES
(a) Golf One shall submit to GPGE no less than three (3) prototype samples
of each Direct Marketing Product together with Packaging for GPGE's written or
faxed approval. GPGE's response to said request for approval shall occur within
fifteen (15) business days after receipt of samples; failure to disapprove such
request within such 15-day period shall be deemed approval. Golf One shall not
manufacture, distribute, advertise, or sell any type of Direct Marketing Product
unless and until GPGE shall have approved (or been deemed to approve) said type
of Direct Marketing Product and type of Packaging in writing in each instance,
which approval shall not be unreasonably withheld.
(b) Golf One shall provide GPGE with up to an aggregate of ten (10) samples
of each type of Direct Marketing Product and the Packaging at no charge to GPGE.
(c) Golf One shall sell GPGE additional quantities of Direct Marketing
Products, not to exceed five (5) sets of golf clubs during every six-month
period, upon receipt of GPGE's written request therefor, at the Component Cost
plus Ten Percent (10%); such sales shall not be subject to royalties under this
Agreement.
11. RESERVATION OF RIGHTS
GPGE reserves all rights pertaining to the Xxxx except as specifically
granted to Golf
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One hereunder. GPGE acknowledges that it has not reserved any rights except
following expiration or termination of the Right and as contemplated by Section
17 of this Agreement.
12. ARTWORK
(a) GPGE shall furnish Golf One all necessary Artwork for Exploitation of
Direct Marketing Products. Golf One shall have the right to use the Artwork to
Exploit the Right on a royalty-free basis except for the royalties expressly
provided in Section 2 of this Agreement. All Artwork of any celebrities which
may be furnished to Golf One hereunder and not embodied in Direct Marketing
Products or utilized for advertising purposes shall be returned to GPGE. GPGE
shall own and retain the common-law and statutory, if any, copyright in each and
all Artwork furnished. Golf One shall not make or cause to be made any
additional prints for any purpose whatsoever without approval from GPGE, which
approval shall not be unreasonable withheld, and upon GPGE's request, Golf One
shall deliver to GPGE the negatives of all such unused photographs.
(b) In the event GPGE produces or causes the production of, or otherwise
creates or causes the creation of, Artwork and related designs and layouts for
the use and at the prior written request of Golf One, then Golf One shall
reimburse GPGE for all reasonable costs incurred, including but not limited to,
insurance and shipping of any such items, and the reproduction of such items by
GPGE, within 30 days of written request therefor by GPGE.
13. COPYRIGHT/TRADEMARK NOTICES
Golf One shall print, stamp or mold such notices of trademark, service xxxx
and copyright which GPGE may reasonably from time to time designate on each
Direct Marketing
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Products newly produced hereunder, each package or container used in connection
therewith and all advertisements pertained thereto.
14. INSURANCE
GPGE represents that it maintains standard product liability insurance with
an aggregate coverage of not less than $5,000,000, providing reasonable
protection against any all claims, demands and causes of action arising out of
defects or failure to perform, alleged or otherwise, of products. GPGE shall
cause Golf One to be a named insured under such policy, and shall provide to
Golf One evidence thereof. Such policy or binder shall provide that the policy
may not be canceled, or Golf One deleted as a named insured, without at least 30
days prior written notice to Golf One. Within 30 days following receipt of such
evidence and a copy of the premium notice, Golf One shall reimburse GPGE for the
additional premium which GPGE must pay as a result of causing Golf One to be a
named insured under GPGE's policy for aggregate coverage of $5,000,000. Golf One
may, by written notice to GPGE, at any time during the Term, advise GPGE that it
has obtained product liability insurance for coverage of not less than
$5,000,000, in which case GPGE may remove Golf One as a named insured and shall
reimburse Golf One for any premium which Golf One paid which is returned by the
insurance company or would have been returned had GPGE caused the insurance
company to remove Golf One as a named insured.
15. INVENTORY ON TERMINATION
Upon the expiration or earlier termination of this Agreement, Golf One
shall provide GPGE with a statement indicating the remaining Direct Marketing
Products in inventory, in
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process of manufacture or subject to non-cancelable orders as of said expiration
or termination date ("REMAINING PRODUCTS") and Golf One's cost or estimated cost
of the Remaining Products including shipping. Golf One shall have the right to
sell any Remaining Products for a period of six (6) months after expiration or
earlier termination of this Agreement and shall account to GPGE for any such
sales during said sell-off period in the manner provided in this Agreement.
Notwithstanding the foregoing, Golf One shall not have the right, other than
with respect to Remaining Products, to manufacture any additional items of
Direct Marketing Product or issue any further licenses with respect to said
Direct Marketing Products. Golf One shall account for and pay royalties to GPGE
for any income collected as a result of sales of the Direct Marketing Products
which income may be received or otherwise paid or collected by Golf One
subsequent to said sell-off period. Upon the expiration of such sell-off period,
Golf One shall destroy any remaining inventory and shall certify same by sworn
affidavit executed by the appropriate officer of Golf One.
16. TERMINATION
(a) Golf One shall have the right, upon thirty (30) days prior written
notice to GPGE, to terminate this Agreement in the event that governmental
regulations or other causes arising out of a state of national emergency or war,
or causes beyond Golf One's control, render Golf One's performance under this
Agreement materially impaired. In the event of such termination, the sell-off
provisions of Section 15 above shall apply.
(b) In the event that either party defaults in any material respect under
any of the material terms or conditions set forth herein, including but not
limited to payments, the injured
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party shall send a thirty (30)-day notice (ten (10)-day notice if the alleged
default is non-payment of money) to cure by either certified or registered mail
return receipt requested to the defaulting party. Failure by the defaulting
party to cure the default within thirty (30) days (or ten(10) days if the
alleged default is non-payment of money) of receipt of the notice to cure shall
give the right to the injured party, in its sole discretion, to terminate this
Agreement in its entirety.
(c) If Golf One does not meet the Minimum Sales Requirement for two
consecutive Royalty Years, GPGE shall have the right to terminate this Agreement
by written notice to Golf One within 60 days following the end of the second
such Royalty Year.
(d) The termination of this Agreement for any reason will not have any
effect on: (i) the legal rights of GPGE to collect any amounts due and owing
under this Agreement or to collect royalties for all components sold by Golf One
subsequent to termination of this Agreement in the event the GPGE is not the
defaulting party and there are no offsets in favor of Golf One against such
amounts; and (ii) the rights of Golf One to sell its remaining inventory in
accordance with Section 15 hereof or Golf One"s rights to indemnification under
Section 7 hereof.
(e) Notwithstanding any termination of this Agreement, Golf One shall
continue to account to GPGE pursuant to the provisions of this Agreement, for
all sums which may be due and payable to GPGE.
(f) If GPGE files a petition in bankruptcy or is adjudicated bankrupt, or
becomes insolvent or makes an assignment for the benefit of creditors or other
similar arrangement or discontinues business, or if a receiver is appointed for
it or its business, this Agreement shall not
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terminate upon the occurrence of any such event and GPGE shall not have the
authority to Transfer any rights of any nature for the use of the Xxxx or any
Direct Marketing Product in conflict with this Agreement or to reject any rights
hereunder.
(g) If Golf One files a petition in bankruptcy or is adjudicated bankrupt,
or becomes insolvent or makes an assignment for the benefit of creditors or
other similar arrangements or discontinues business, or if a receiver is
appointed for it or its business, this Agreement shall terminate upon the
occurrence of such event.
17. RETAIL SALES BY GPGE
(a) The parties acknowledge that they contemplate developing a new line of
golf clubs containing the Xxxx at least every 18 months during the term of this
Agreement, as set forth and contemplated in Section 5 of this Agreement. GPGE
shall have the right, but not the obligation, to market and sell on a retail
basis each line of golf clubs containing the Xxxx (a "LINE") on the later to
occur of: (i) with respect to the first Line (A) the earlier to occur of June
30,1998 or 18 months following the date Golf One first has Net Receipts from
sales of such Line; and (B) the date Golf One first has Net Receipts from a
second line of golf clubs containing the Xxxx; and (ii) with respect to each
subsequent Line (A) 18 months following the date Golf One first has Net Receipts
from sales of such Line; and (B) the date Golf One first has Net Receipts from a
subsequent line of golf clubs containing the Xxxx. GPGE acknowledges that none
of such clubs may be sold directly or indirectly by GPGE or Persons purchasing
for GPGE on a Direct Marketing Basis. Notwithstanding the foregoing, GPGE shall
have the right to market and sell a line of golf clubs 18 months after the date
Golf One first has Net Receipts with respect to such line if Golf One has not
proposed a new line of golf clubs prior to the end of such 18-month period
(regardless of whether GPGE approves such line or the xxxx or name proposed for
such
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line).
(b) At any time after the date GPGE has the right to effect retail sales of
a Line of golf clubs, GPGE may place an order to purchase clubs from Golf One.
Golf One agrees to sell each set of clubs to GPGE at a price equal to the sum
of: (i) lesser of: (A) the Component Cost of such clubs divided by 70%, or (B)
30% of the latest suggested retail sales price of the clubs as published by Golf
One, and (i) all shipping and insurance charges in connection with delivery of
such clubs.
(c) GPGE shall pay the purchase price for each set of clubs which it orders
no later than 45 days from the later to occur of: (i) the date Golf One delivers
an invoice for the set of clubs; and (ii) the date the set of clubs is shipped
to GPGE.
(d) Golf One shall be entitled to offset against all amounts due GPGE under
this Agreement, the amount of any outstanding invoices for golf clubs purchased
by GPGE which are more than 45 days past due, provided that such clubs have been
shipped to GPGE prior to the date of such offset.
18. NOTICES
Notices by either party to the other shall be given by certified or
registered mail, return receipt requested, by telegram with proof of delivery,
by confirmation, all charges prepaid, by overnight delivery service charges
prepaid, or by facsimile transmission. All statements, payments and notices
shall be given at the respective addresses of GPGE and Golf One as set forth in
the first page of this Agreement unless written notice of change of address is
given. Courtesy copies of any notice to GPGE shall be sent to law offices of
Holland & Knight, Orlando, Florida. Any notice shall be deemed effective upon
receipt.
19. INDEPENDENT RELATIONSHIP
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This Agreement does not constitute and shall not be construed to constitute
an agency, a partnership, a joint venture or employment agreement between GPGE
and Golf One. Golf One shall not have authority to obligate or bind GPGE in any
manner whatsoever, subject to the provisions stated herein and only as GPGE may
specifically approve in writing prior thereto. GPGE and Golf One shall be deemed
independent contractors in all respects.
20. ASSIGNMENTS
GPGE 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 GPGE herein and which shall
be obligated to all of the terms of this Agreement as GPGE and which shall enter
into a binding written agreement with Golf One to that effect; provided,
however, that GPGE may assign its rights to payments under this Agreement; and
provided further that any such assignment shall not act to relieve GPGE of its
obligations and duties under this Agreement. Notwithstanding the foregoing, none
of Player's obligations hereunder may be assigned as all such obligations are
unique and personal and the parties agree that they cannot be performed by
anyone other than Player. Golf One shall not assign to anyone the right to
manufacture, market and sell any Direct Marketing Product without the prior
written consent of GPGE, which consent will not unreasonably be withheld and
provided that such Person enters into such agreements as are contemplated by
this Agreement. Notwithstanding the foregoing, all rights and obligations of
Golf One under this Agreement may be assigned to any subsidiary, to any entity
controlled directly or indirectly by the Person(s) in control of the Person
holding the Right, or in connection with the merger or the sale of all or
substantially all of the assets by the Person(s) holding the Right; provided,
however, that in connection with any such merger or sale the surviving party in
the merger, if other than such
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Person, or the purchaser in connection with the sale, is not an Excluded
Purchaser. For purposes of this Agreement, an "EXCLUDED PURCHASER" is a Person:
(i) whose sales of golf clubs in the United States exceeded 10% of the total
sales of golf clubs in the United States during the calendar year prior to the
sale or merger date, based on industry reports (or, if no such report is
available for such prior calendar year, the most recent prior calendar year for
which such report is available); (ii) whose corporate name includes the name of
any recognized professional golfer; or (iii) which has over 25% of its capital
stock owned by a recognized professional golfer. Any assignee permitted pursuant
to the terms of this Section 20 must be capable of fulfilling all terms of this
Agreement and, further any such assignment shall not act to relieve the assignor
of its obligations and duties under this Agreement.
21. APPROVALS
Any approvals required by GPGE or requested of GPGE pursuant to the terms
hereof shall be given by facsimile or certified mail to Golf One within a
reasonable time from date of receipt by GPGE of the materials required for it to
determine whether or not approval shall be rendered. In the event no response by
GPGE is made within thirty (30) days from receipt of said materials, the
approval requested by Golf One shall be deemed given by GPGE.
22. CONSTRUCTION
This Agreement shall be governed and construed under and in accordance with
the laws of the State of Florida. Each party hereto agrees to submit itself to
the jurisdiction of the Federal or State courts located in Palm Beach and
Florida in any action which may arise out of this Agreement and said courts
shall have exclusive jurisdiction over all disputes between GPGE and Golf One
pertaining to this Agreement and all matters related thereto. In this regard,
any process in any action or proceeding commenced in the courts of the State of
California or the Federal
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Courts therein arising out of any claim, dispute or disagreement under this
Agreement may, among other methods, be served upon any party by delivering or
mailing the same, via registered or certified mail, addressed to either party at
the address provided herein for notices; and such delivery or mail service shall
be deemed to have the same force and effect as personal service within the State
of California or the State of Florida.
23. CUMULATIVE REMEDIES
The rights and remedies granted hereunder are cumulative and the exercise
of any one or more of said remedies shall not act to waive any right of GPGE to
exercise any other remedies available to it herein or otherwise as a matter of
law.
24. COUNTERPARTS
This Agreement may be signed in counterparts by the parties and when each
party has executed an identical copy of this Agreement, the Agreement shall
become a binding and enforceable instrument with the same force and effect as if
all parties hereto had executed the same copy of the Agreement.
25. MISCELLANEOUS
This Agreement constitutes the entire understanding between the parties
hereto and shall not be modified or amended unless in writing signed by both
parties hereto. The delay or failure of either party to enforce any of said
party's rights under this Agreement shall not be deemed a continuing waiver of
such rights and said party may, within such as is provided by applicable law,
commence appropriate suits, actions or proceedings to enforce any or all such
rights.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the date first above written.
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XXXX XXXXXX GOLF EQUIPMENT, INC.
By:_____________________________
Its:____________________________
GOLF ONE INDUSTRIES, INC.
By:__________________________
Its:______________________
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31
SCHEDULE A TO DIRECT MARKETING AGREEMENT
BETWEEN
XXXX XXXXXX GOLF EQUIPMENT, INC. AND GOLF ONE INDUSTRIES, INC.
1. TERM - Five (5) years with options to renew for three (3) successive five
(5) year terms (provided that the Agreement has not been terminated by GPGE
because of breach or default by Golf One). In connection with each renewal, Golf
One and GPGE shall in good faith consider each other's requests for
modifications of the terms of this Agreement designed to improve the operation
and overall effectiveness of the Exploitation of the Right; provided, however,
that neither party shall be obligated agree to any change.
2. VIDEOS, INFOMERCIALS AND PROGRAMS:
GPGE represents that Xxxx Xxxxxx ("Player") agrees to be available for and
appear in (and GPGE will so cause Player to be available for and appear in) a
minimum of two (2) Infomercials in the first 12 months following the execution
of this Agreement and a minimum of one (1) Infomercial in each 12 month period
thereafter for the Term of this Agreement, for up to a maximum of two (2) days.
Player shall also be available for up to one day (or at Player's election, two
half days) per year for videos for the promotion of Direct Marketing Products.
Player shall be available during normal business hours for the requisite amount
of time at some time within 90 days of request therefor from Golf One, if such
availability can be anywhere in the world, or within six months of request
therefor from Golf One, if such availability is required to be in the United
States. The need for subsequent promotional videos and Infomercials shall be
determined on a mutual basis.
Golf One shall have final script approval for any and all videos and
Infomercials provided, however, that Golf One shall permit GPGE to review all
scripts and shall revise scripts pursuant to reasonable objections from GPGE.
Videos and Infomercials produced hereunder shall be produced and distributed in
accordance with and adhere to policies, procedures and standards established by
Golf One in consultation with GPGE, including, but not limited to, methods of
telemarketing, which shall include verification procedures to ensure consistent
and professional delivery of services which are equal to or greater than the
minimum standard acceptable in the respective industry. The copyright to all
videos and Infomercials shall be owned by Golf One.
Player shall be entitled to $25,000 for the two days of service ($12,500
per day) during the first 12 months following the execution of the Agreement,
and shall be entitled to the Daily Fee for each additional day of service during
the Term. The Daily Fee, which shall be payable on the day of service, shall be
$25,000 for each day during the first three years of the Term, $35,000 for each
day during the second three years of the Term, $50,000 for each day during the
third three years of the Term and $70,000 for each day during the fourth three
years of the Term
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and $90,000 for each day during any additional years of the Term. In addition,
if Golf One requires such service to be performed in a location (the "Services
Location") which is more than 100 miles from the location Player was otherwise
scheduled to be, Player shall be entitled to first class transportation to and
from the Services Location and first class accommodations at the Services
Location during the period he is required to perform the services.
For these purposes, a "day" shall be considered 8.5 hours, and shall
include two 15 minute breaks and a one-hour lunch break.
3. COPYRIGHT REGISTRATIONS, TRADEMARK REGISTRATIONS AND PATENTS (OR PATENTS
PENDING)
None
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EXHIBIT B TO DIRECT MARKETING AGREEMENT
BETWEEN
XXXX XXXXXX GOLF EQUIPMENT, INC. AND GOLF ONE INDUSTRIES, INC.
Hypothetical Calculation of Royalty Payments Assume:
Net Receipts Cumulative
------------ ----------
Q1 $500,000 $500,000
Q2 $1,000,000 $1,500,000
Q3 $2,000,000 $3,500,000
Q4 $1,000,000 $4,500,000
Royalty Calculation:
Q1 Greater of 7% ($500,000) - (7% x 35% x $500,000) $22,750
or 1 x $50,000 50,000
------
50,000
Minus Prior Royalties 0
------
Royalties paid Q1 $50,000
======
Q2 Greater of 7% ($1,500,000) - (7% x 35% x $1,000,000) $ 80,500
or 2 x $50,000 100,000
-------
100,000
Minus Prior Royalties 50,000
------
Royalties Paid Q2 $ 50,000
========
Q3 Greater of 7% ($3,500,000) - (7% x 35% x $2,000,000) $196,000
or 3 x $50,000 150,000
-------
196,000
Minus Prior Royalties 100,000
------
Royalties Paid Q3 $ 96,000
======
Q4 Greater of 7% ($4,500,000) - (7% x 35% x $1,000,000) $290,500
or 4 x $50,000 200,000
-------
290,500
Minus Prior Royalties 196,000
-------
Royalties Paid Q4 $ 94,500
========
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EXHIBIT C TO DIRECT MARKETING AGREEMENT
BETWEEN
XXXX XXXXXX GOLF EQUIPMENT, INC. AND GOLF ONE INDUSTRIES, INC.
Representations in connection with acquisition of right to receive Common Stock
of Golf One.
GPGE represents, warrants and agrees as follows:
(i) it has such knowledge and experience in business and financial
matters as to be capable of evaluating the merits and risks of an investment in
the shares (the "SHARES") of Common Stock of Golf One and has the capacity to
protect its own interest in connection with the purchase of the Shares;
(ii) it has the financial ability to bear the economic risk of its
investment, has adequate means for providing for its current needs and
foreseeable contingencies, has no need now, and anticipates no need in the
foreseeable future, to sell the Shares and is able to hold the Shares for an
indefinite period of time;
(iii) it is purchasing the Shares for its own account and not with a
view to or for sale in connection with any resale or distribution of such Shares
in violation of the Securities Act;
(iv) at no time was it presented with or solicited by any leaflet,
public promotional meeting, circular, newspaper or magazine article, radio or
television advertisement or any other form of general advertising or
solicitation for the purchase of the Shares;
(v) it understands that the Shares it acquires must be held
indefinitely unless the Transfer of such Shares is registered under the
Securities Act and that transferability of the Shares will be limited as
provided by this Agreement and applicable federal and state securities laws;
(vi) it is an "accredited investor" as that term is defined in
Regulation D promulgated under the Securities Act;
(vii) it and its representatives have been afforded full and free
access to corporate books, financial statements, records, contracts, documents,
and other information concerning the Golf One and its offices and facilities,
have been afforded an opportunity to ask such questions of Golf One's officers
and employees concerning Golf One's business, operations, financial condition,
assets, liabilities and other relevant matters as it has deemed necessary or
desirable, and have been given all such information as has been requested, in
order to evaluate the merits and risks of the prospective investment
contemplated herein;
(viii) it agrees not to Transfer the Shares, or any interest therein,
except pursuant to an effective registration statement under the Securities Act
or unless Golf One shall have received a
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written opinion of counsel, in form and substance satisfactory to Golf One, to
the effect that the Transfer may be effected without registration under the
Securities Act; as a further condition to any such disposition, except in the
event that such disposition is made pursuant to an effective registration
statement under the Securities Act, if in the opinion of Golf One's counsel any
disposition of the Shares by the contemplated transferee thereof would not be
exempt from the registration and prospectus delivery requirements of the
Securities Act, Golf One may require the contemplated transferee to furnish it
with an investment letter setting forth such information and agreements as may
be reasonably requested by it to insure compliance by such transferee with the
Securities Act;
(ix) It understands and agrees that the following statement will be affixed
as a legend on all certificates representing the Shares:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND NEITHER THE SECURITIES NOR ANY
INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND
SUCH LAWS WHICH, IN THE OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL
AND OPINION ARE REASONABLY SATISFACTORY TO THE ISSUER, IS AVAILABLE.
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TABLE OF CONTENTS
1. Grant of Rights; Definitions.............................................................................. 2
2. Consideration............................................................................................. 6
3. Books and Records......................................................................................... 8
4. Right of First Refusal.................................................................................... 10
5. The Xxxx.................................................................................................. 11
6. Restrictions.............................................................................................. 12
7. Golf One's Additional Responsibilities.................................................................... 14
8. Protection of the Xxxx.................................................................................... 15
9. GPGE's Warranties and Covenants........................................................................... 16
10 Samples .................................................................................................. 18
11. Reservation of Rights..................................................................................... 19
12. Artwork................................................................................................... 19
13. Copyright/Trademark Notices............................................................................... 20
14. Insurance................................................................................................. 20
15. Inventory on Termination.................................................................................. 21
16. Termination............................................................................................... 22
17. Retail Sales by GPGE...................................................................................... 23
18. Notices................................................................................................... 25
19. Independent Relationship.................................................................................. 25
20. Assignments............................................................................................... 25
21. Approvals................................................................................................. 27
22. Construction.............................................................................................. 27
23. Cumulative Remedies....................................................................................... 27
24. Counterparts.............................................................................................. 28
25. Miscellaneous............................................................................................. 28
37
ASSIGNMENT AND ASSUMPTION AGREEMENT
FEBRUARY 28, 1997
Reference is made to that certain Direct Marketing Agreement (the
"Agreement") dated October 31, 1996 by and between Golf One Industries, Inc.
("Golf One") and Xxxx Xxxxxx Golf Equipment, Inc. Golf One does hereby assign
all of its right, title and interest in and to the Agreement to Gran Prix
Marketing, Inc., a California corporation (a wholly owned subsidiary of Golf
One), and Gran Prix hereby assumes all of the duties and obligations of Golf
One under the Agreement.
GOLF ONE INDUSTRIES, INC.
By: /s/ illegible signature
-------------------------------
Its: President
-------------------------------
GRAN PRIX MARKETING, INC.
By: /s/ illegible signature
-------------------------------
Its: President
-------------------------------
