EXHIBIT 10.15
SPONSORSHIP AND DEVELOPMENT AGREEMENT
This Agreement is made as of August 6, 2004 (the "Effective Date") by and
between TEKNIK DIGITAL ARTS INC., a Nevada corporation with offices at 0000 X.
Xxxxxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000 ("TDA") and XXXX
XXXXX ENTERPRISES ("Xxxxx"), c/o GAYLORD SPORTS MANAGEMENT, 00000 X. Xxxxxxxx
Xxxx., Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000 Attention: Xxxxx Xxx.
RECITALS
TDA is in the business of developing and publishing interactive
entertainment software products. TDA desires to have Xxxxx assist in the
development, endorsement and publicizing of TDA's golf instruction related
software products.
THEREFORE, TDA and Xxxxx agree as follows:
1. DEVELOPMENT, PRODUCTION, COMMERCIAL AND PUBLICITY SERVICES
1.1 General. Xxxxx agrees to cooperate, consult with and aid TDA in
connection with the development of TDA's "Golf Instruction Related Product"
(hereinafter defined) and the advertising, marketing and publicity thereof. As
used herein, the term "Golf Instruction Related Product" shall mean any
interactive entertainment software product related to golf instruction which is
produced and released during the "Term" (hereinafter defined in Section 5.1) and
which may be published in multiple versions (e.g., versions for play on handheld
mobile devices (including cell phones), for sale in any and all territories.
2. GRANT OF RIGHTS; COOPERATIONS
2.1 Publicity Rights. Xxxxx hereby grants to TDA the following rights (the
"Rights"):
(a) the right to use and reuse Xxxxx'x name, voice, likeness,
facsimile signature, personal statistics, biographical information and any
reproduction or simulation thereof ("Xxxxx'x Likeness") in TDA's Golf
Instruction Related Products and on packaging for TDA's Golf Instruction
Related Products in any fashion, said grant of rights being limited to the
world (the "Contract Territory")";
(b) the right to use and reuse Xxxxx'x Likeness in TDA's general
internal, non-public corporate promotional materials (such as TDA's Annual
Report), corporate advertising and in other forms of publicity;
(c) the right to use and reuse Xxxxx'x Likeness in and in connection
with the marketing, advertising, promoting and publicizing of TDA's Golf
Instruction Related Products, by any and all means now known or hereafter
developed;
(d) the exclusive right to use and reuse the results and proceeds of
the in connection with TDA's Golf Instruction Related Products; and
(e) with Xxxxx'x prior reasonable approval, the right to license to
third parties any of the foregoing rights but only in connection with or
directly related to the marketing and sale of TDA's Golf Instruction
Related Products.
Xxxxx agrees to cooperate in good faith with TDA in connection with TDA's
exercise of the Rights in accordance with the terms of this Agreement.
2.2 Limitations of License
(a) The Rights granted in Section 2.1 above will only be used by TDA
in connection with its Golf Instruction Related Products. TDA does not
have the right to use the Rights in any product whatsoever released before
or after the Term.
(b) TDA shall not utilize Xxxxx'x Likeness in a manner that would
constitute an endorsement of any product or service other than TDA's Golf
Instruction Related Products.
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2.3 Xxxxx as Featured Swing Instructor. TDA agrees that Xxxxx will be the
featured Instructor on all packaging of, and promotional materials related to,
TDA's Golf Instruction Related Product.
2.4 No Obligation to Use. Except as set forth in Section 2.3 above, the
payment to Xxxxx of the sums required under this Agreement shall fully discharge
all obligations of TDA to use Xxxxx'x Likeness under this Agreement.
2.5 Approvals. TDA agrees that no use of Xxxxx'x Likeness in connection
with advertisements, promotions and other related/similar materials
(specifically excluding, however, TDA's Golf Instruction Related Products) will
be made hereunder unless and until the same has been approved by Xxxxx in
writing. Xxxxx agrees that any material, advertising or otherwise, submitted for
approval as provided herein may be deemed by TDA to have been approved hereunder
if the same is not disapproved in writing within fourteen (14) days after
receipt thereof. Xxxxx agrees that any material submitted hereunder will not be
unreasonably disapproved and, if it is disapproved, that TDA will be advised of
the specified grounds therefore. TDA agrees to protect, indemnify and save
harmless Xxxxx and Smith's agents, or either of them, from and against any and
all expenses, damages, claims, suits, actions, judgments and costs whatsoever,
arising out of, or in any way connected with, any advertising material furnished
by, or on behalf of, TDA.
3. EXCLUSIVITY
3.1 Exclusivity Period. During the Term (the "Exclusivity Period"), Xxxxx
hereby represents, warrants and agrees that he will not: (i) render any services
in commercials or advertisements on behalf of any computer game or videogame
sports software product or service, or (ii) authorize the use of Xxxxx'x
Likeness in connection with any computer game or videogame golf instruction
related sports software product or service. These exclusivity obligations will
not limit Xxxxx'x right to appear in any of the entertainment fields or in the
entertainment portion of any television, film or video program; provided,
however, that Xxxxx may not appear in, or provide services in connection with,
advertisements for any computer game or videogame sports products.
Notwithstanding anything herein to the contrary, this Section 3.1 is
specifically subject to the provisions of Section 2.2 above. Xxxxx'x obligations
set forth in this Section 3.1, and as limited by Section 2.2, will be referred
to elsewhere in this Agreement as the "Exclusivity Obligations". Notwithstanding
anything herein to the contrary, TDA explicitly agrees that nothing herein shall
preclude Xxxxx from participating in, or in any way limit Xxxxx'x participation
in, any current or future PGA PLAYERS and/or PGA TOUR group licensing
arrangements.
4. COMPENSATION
4.1 Products. TDA will provide to Xxxxx, free of all costs whatsoever
(including without limitation, taxes, duties, shipping and/or handling fees) (a)
fifty (50) copies each of TDA's "Xxxx Xxxxx Golf instruction related" game
mobile, handheld devices promptly after TDA's release thereof and (b) fifty (50)
copies of any other TDA products selected by Xxxxx.
4.2 Compensation for Rights and Services. TDA agrees to pay Xxxxx, as a
consideration for the Rights and Services.
1) 25,000 Restricted common shares of TDA,
a. As of the date of this agreement, Company has sold stock at
$2.50/share.
b. Par Value is $.0001 per share.
2) 25% royalty of net TDA net sales price.
3) Option to convert annual royalties to TDA common stock at a $10 of
stock for every $1 of Royalty converted.
a. TDA stock conversion price based on the previous six month
average daily price
b. Option is limited to 50% of TDA outstanding stock and if the
option is exercised, it must be exercised when the agreement
is in effect.
All payments due under this Agreement shall be made in the form of a check drawn
to the order of "Xxxx Xxxxx" and delivered to Xxxxx'x agent at the following
address: Xxxxxxx Sports Management, l4646 X. Xxxxxxxx Xxxx., Xxxxx 000,
Xxxxxxxxxx, Xxxxxxx 00000, Attn: Xxxxx Xxx. Payments shall be made 15 days from
the end of each
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quarter. Xxxxx'x net payment after any such charges or deductions shall equal
the amount set forth above. Past due payments hereunder shall bear interest at
the rate of (i) one and one-half percent (1-1/2%) per month, or (ii) the maximum
interest rate permissible under law, whichever is less.
4.3 Expenses. First-class round-trip air transportation, hotel room meal
expenses, local limousine service and miscellaneous expenses (e.g., telephone
and overnight courier charges) incurred by Xxxxx and a guest designated by Xxxxx
will be paid by TDA or reimbursed by TDA to Xxxxx where necessary in the
performance of Xxxxx'x Services under this Agreement; provided, however, that
such expenses are required and reasonable for a celebrity of Xxxxx'x stature.
5. AUDIT
5.1 Licensee shall keep accurate books of account and records at its
principal place of business covering all transactions relating to the License
granted herein. Xxxxx shall have the right to engage an independent accounting
firm to examine the Licensee's sales information and all other books and records
necessary to establish the accuracy and timeliness of the royalty statements
required hereunder. Such examination shall be at the premises of Licensee on ten
(10) working days written notice and during normal business hours. The
information provided to Xxxxx by the accounting firm will be the net sales and
the application of the appropriate royalty rate to calculate royalties due. The
accounting firm shall be required to take reasonable steps to hold all Licensee
information confidential. Details of the review and all work papers and related
supporting data pertaining to the review will be held confidential by the
accounting firm and will not be shown, divulged, or delivered directly or
indirectly to Xxxxx or any third party. The accounting firm shall be bound by a
non-disclosure agreement in the form to be provided by Licensee to ensure
compliance with this paragraph. The examination may be conducted not more than
once a year. If it is determined that Licensee has made any Royalty underpayment
which is greater than five percent (5%) for any Royalty Period, the Licensee
shall reimburse Xxxxx for the costs and expenses of such audit.
5.2 Upon request by Xxxxx, but not more than once each year, Licensee
shall, at its own cost, furnish to Xxxxx within thirty (30) days after such
request a detailed statement, prepared by Licensee's Chief Financial Officer,
setting forth the number of Products manufactured from the later of the
commencement of this Agreement or the date of any previous such statement up to
and including the date of Xxxxx'x request therefore and also setting forth the
pricing information for all Products (including the number and description of
the Products) shipped, distributed and sold by Licensee during the
aforementioned time period.
5.3 All books of account and records of Licensee covering all transactions
relating to the Licensee shall be retained by the Licensee until at least two
(2) years after the expiration or termination of the Term for possible
inspection by Xxxxx.
6. TERM
6.1 Term. The term of this Agreement (the "Term") shall commence on the
Effective Date and terminate at the end of the Exclusivity Period (i.e., a
three (3) year period commencing on the Effective Date).
6.2 Post-Term Sales. Upon expiration of this Agreement, TDA shall cease
all uses of the Rights and/or Xxxxx'x Likeness with respect to advertising,
endorsing and/or promoting TDA, but TDA shall be free to continue to distribute
and sell its Golf Instruction Related Products which incorporate Xxxxx'x
Likeness for up to 180 days after the expiration of the Term (although TDA may
not use the Rights or Xxxxx'x Likeness to promote or advertise TDA or any of
TDA's non-Golf Instruction Related Products when selling the Golf Instruction
Related Products, nor can TDA highlight Xxxxx'x Likeness in its packaging or
sales efforts); provided, however, that TDA shall have no such right of
post-Term sales unless TDA is not in default of any of its obligations hereunder
as of the date of expiration or termination.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1 Representations and Warranties.
(a) Xxxxx represents and warrants that:
(i) Xxxxx has full right to enter into this Agreement and to
perform all of his obligations hereunder without, to his knowledge,
violating the legal or equitable rights of any person, firm or
entity and that TDA shall not be under any obligation for the
payment of any
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commissions or fees to any person, firm or entity on account of this
Agreement, other than advances, compensation, royalties and expenses
expressly payable to Xxxxx by TDA under this Agreement;
(ii) Xxxxx will perform the Services in a professional and
workmanlike manner, to the extent of Xxxxx'x professional abilities.
(b) TDA represents and warrants that:
(i) TDA has full right to enter into this Agreement and to
perform all of its obligations hereunder without, to its knowledge,
violating the legal or equitable rights of any person, firm or
entity and that Xxxxx shall not be under any obligation for the
payment of any commissions or fees to any person, firm or entity
related to or connected with TDA on account of this Agreement.
(c) Notwithstanding anything herein to the contrary, TDA agrees that
nothing contained herein shall be construed to convey to TDA any rights to
use the trademarks, logos or uniform of the PGA TOUR ("PGA"), any other
professional or amateur golf instruction related association (including
any member players of such association) in conjunction with the rights
granted hereunder. All rights to the use of such trademarks, logos or team
identification must be acquired from the PGA or any other appropriate
rights holder.
7.2 Further Assurances and Execution of Documents. Xxxxx will, if
requested and reasonable, furnish affidavits and other appropriate documentation
that may be required, in TDA's reasonable judgment and at TDA's expense, to
comply with any applicable governmental or other regulations, broadcast
clearance procedures, or sports/entertainment industry guidelines relating to
product endorsement. Furthermore, Xxxxx hereby agrees to execute any and all
documents which are required by any guild or union having jurisdiction over any
of the services to be provided by Xxxxx under this Agreement.
7.3 Confidential Information and Non-Disparagement. Neither party will
disclose or use any confidential or proprietary information that such party
obtains from or about the other or its products. Both parties agree that the
existence and results of any arbitration held pursuant to this Agreement will be
treated confidentially. Xxxxx will not authorize or release advertising matter
or publicity nor give interviews which make reference to the details of the
material terms of this Agreement, without TDA's prior written approval, although
Xxxxx may, during interviews, respond, discuss and comment in a non-disparaging
manner that Xxxxx is associated with TDA and its Golf Instruction Related
Products.
8. OWNERSHIP OF PROPRIETARY RIGHTS
8.1 All right, title and interest in and to TDA's Golf Instruction Related
Products shall be and remain the absolute property of TDA forever (it being
understood that after the Term TDA may continue to manufacture, promote, sell
and/or distribute its other golf instruction related interactive entertainment
sports products which are separate and distinct from the Golf Instruction
Related Products incorporating Xxxxx'x Likeness on the packaging without being
subject to any of the limitations or restriction herein, provided that the
Rights are not (directly or indirectly) utilized by or incorporated in such
other golf instruction related interactive sports products. All right, title and
interest in and to the Results and Proceeds and to the Advertising Materials (as
defined below) shall be and remain the absolute property of TDA forever (but
which may only be used during the Term and, subject to the limitations and
conditions set forth in this Agreement, thereafter). Without limiting the
foregoing, TDA shall, during the Term (and, Subject to the limitations and
conditions on the Rights as set forth in this Agreement, thereafter) have the
full and complete right to revise, telecast, broadcast, use, distribute,
reproduce, record, publish, print, license, copyright and exhibit the contents
of any Results and Proceeds, the Golf Instruction Related Products and any
Advertising Materials and any versions or revisions thereof and, in TDA's sole
discretion, the Results and Proceeds, the Golf Instruction Related Products and
Advertising Materials may be make by any process, instrumentation or device now
known or hereafter developed and may be made or adapted for use in any and all
media now known or hereafter developed (although it is acknowledged and agreed
by TDA that multi-media usage (except, of course, as incorporated into TDA's
Golf Instruction Related Products) shall be strictly limited to advertising)
provided that any and all such uses are directly related to the marketing,
development and sale of TDA's Golf Instruction Related Products. Xxxxx further
acknowledges that TDA may adapt and use, and protect by
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any means including registration with the appropriate authorities, a trademark
or trade name incorporating Xxxxx'x Likeness, and that Xxxxx shall, until after
the Term, have no right, title or interest in or to any such trademark, trade
name or related goodwill. As used in this Agreement, "Advertising Material"
means any commercials, print materials, copy, advertising, promotional and
publicity materials published under this Agreement which include or make
reference to Xxxxx'x Likeness and all elements thereof.
8.2 Notwithstanding anything herein to the contrary, TDA agrees not to
remove, airbrush or otherwise alter the trademarks and logos of Xxxxx'x
equipment manufacturer (currently Mission) from the packaging of TDA's Golf
Instruction Related Products and/or the Advertising Materials, provided that,
upon TDA's written request, Xxxxx secures for TDA, at no cost to TDA, all
necessary written permissions or grants of rights from any such equipment
manufacturer or third party.
9. INDEMNITY
9.1 By TDA. TDA shall indemnify and hold harmless Xxxxx, Xxxxx'x agent,
and Xxxxx'x heirs, executors and legal representatives from and against any and
all damages, costs, judgments, penalties and expenses of any kind (including
reasonable legal fees and disbursements) which may be obtained against, imposed
upon or suffered by any of them as a result of (a) any claims or representations
made by Xxxxx in any Advertising Materials produced or used by TDA hereunder,
(b) TDA's default, breach, negligence, errors and/or misconduct hereunder,
and/or (c) any claim arising from any third party's use or association with
TDA;s products.
10. GENERAL
10.1 Taxes. Xxxxx represents and warrants that, in performing its
obligations under this Agreement, Xxxxx does so as an independent contractor
and, without limiting the foregoing, Xxxxx assumes exclusive responsibility for
the collection and payments of all employer and employee contributions and taxes
under all applicable laws now in effect or hereafter enacted and Xxxxx further
agrees to file any returns or reports necessary in connection therewith. TDA
shall have the right to deduct from any amounts payable hereunder such portion
thereof as are required to be deducted under applicable statute, regulation,
treaty or other law, and Xxxxx shall promptly execute and deliver to TDA such
forms and other documents as may be required in connection therewith.
Notwithstanding anything herein to the contrary, it is agreed and acknowledged
that TDA remains liable for the payment of all pension and health welfare
contributions required of any guild or labor organization (i.e., SAG, AFTRA,
etc.).
10.2 Notices. All notices and statements hereunder required to be given to
TDA shall be sent to TDA at its address stated at the beginning of this
Agreement, to the attention of the General Counsel, and all notices to Xxxxx
shall be sent to Xxxxx at the address stated at the beginning of this Agreement,
unless either party notifies the other party in writing if a change of address
in accordance with the provisions of this Section. Notices are deemed to be
received by the addressee of the notice on the earlier or the date the notice is
actually delivered to the addressee and: (i) three (3) days after the notice is
sent by certified mail, postage prepaid, return receipt requested; (ii) the next
business day after the notice is sent by confirmed fax transmission; or (iii) on
the date of guaranteed delivery if the notice is sent by recognized national or
international express courier.
10.3 Right of Offset. Notwithstanding any provision contained in this
Agreement, neither party will be prohibited from exercising any right of offset
that may be available at law.
10.4 Governing Law. This Agreement will be deemed entered into in Arizona
and will be governed by and interpreted in accordance with the internal
substantive laws of the State of Arizona without reference to conflicts of law
provisions.
10.5 Entire Agreement. This Agreement constitutes the entire understanding
between the parties hereto with respect to the subject matter hereof, and all
prior agreements and understandings, whether oral or written, are hereby
superseded in their entirety. No waiver, modification or addition to this
Agreement shall be valid unless in writing and signed by the party sought to be
charged therewith.
10.6 Assignment. This Agreement may be assigned by Xxxxx and TDA with the
other party's prior written approval. Except with Xxxxx'x prior written
approval, this Agreement may not be assigned by TDA: (i) in connection with a
merger, a sale of all or substantially all of the assets of TDA or other similar
corporate reorganization, or the sale of substantially all of TDA's rights to
all of its Golf Instruction Related Products; or (ii) to
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an affiliated, parent, subsidiary, related company (or in the case of the
production of Advertising Materials to an advertising agency representing TDA)
so as to effectuate the intent of this Agreement and the subject matter hereof,
although TDA will continue to be liable for all financial obligations hereunder.
10.7 Severability. Should any provision of this Agreement be held to be
void, invalid or inoperative, such provision will be enforced to the extent
permissible and the remaining provisions of this Agreement will not be affected.
10.8 Attorney's Fees. In any suit, arbitration or other proceeding under
this Agreement, the prevailing party will be entitled to recover its reasonable
fees and expenses of attorneys and other professionals, including all fees and
expenses of appeal and enforcement.
10.9 Liability. In no event (including, but not limited to, Xxxxx'x
default hereunder) shall Xxxxx be liable to TDA (or any entity claiming through
TDA) for any amount in excess of the amounts actually received by Xxxxx
hereunder, excluding the reimbursement of expenses. Under no circumstances xxxx
Xxxxx be liable to TDA or any other entity for any special, consequential,
indirect, exemplary and/or punitive damages, or for loss of good will or
business profits.
10.10 Applicable Law and Disputes. This Agreement shall be governed by the
laws of the State of Arizona applicable to agreements fully executed and
performed therein. Any claims arising hereunder or relating hereto shall be
prosecuted only in the appropriate court or the State of Arizona or in the
applicable United States District Court and neither party shall make any claim
or demand in any other jurisdiction forum. Each party waives its right to a
trial by jury and agrees to the jurisdiction of the judge in the appropriate
court as governed by the State of Arizona. The parties consent to the personal
jurisdiction of such courts and to the service of process by mail.
10.11 Force Majeure. If at any time during this Agreement, Xxxxx or TDA is
prevented from or hampered or interrupted or interfered with in any manner
whatever in fully performing their respective duties hereunder by reason of any
present or future statute, law, ordinance, regulation, order, judgment or
decree, whether legislative, executive or judicial (whether or not valid), act
of God, earthquake, flood, fire, epidemic, accident, explosion, casualty,
lockout, boycott, strike, labor controversy (including, but not limited to
threat of lockout, boycott or strike), riot, civil disturbance, war or armed
conflict (whether or not there has been an official declaration of ___ or
official statement as to the existence of a state of war), invasion, occupation,
intervention or military forces, act of public enemy, embargo, delay of a common
carrier, inability without fault of such party to obtain sufficient material,
labor, transportation, power or other essential commodity required in the
conduct of business; or by reason of any event beyond any of the foregoing
parties' reasonable control (e.g., illness, family emergency, etc.); or by
reason of any other cause or causes of any similar nature (all of the foregoing
being herein referred to as an "event of force majeure"), then the applicable
party's obligations hereunder shall be suspended as often as any such event of
force majeure occurs and during such periods of time as such events of force
majeure exist and such non-performance shall not be deemed to be a breach of
this Agreement.
10.12 Reservation of Rights. All rights not herein specifically granted to
TDA shall remain the property of Xxxxx to be used in any manner Xxxxx deems
appropriate. TDA understands that Xxxxx has reserved the right to authorize
others to use Xxxxx'x Likeness within the Contract Territory and during the Term
in connection with all tangible and intangible items and services other than
TDA's Golf Instruction Related Products as specifically set forth herein.
IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the
Effective Date by signing below.
TEKNIK DIGITAL ARTS INC. XXXX XXXXX
By: /s/ Xxxx Xxxx By: /s/ Xxxx Xxxxx
-------------------------- ---------------------------------
Name: Xxxx Xxxx
Title: Chairman
Date: August 6, 2004 Date: August 6, 2004
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AMENDMENT
4. COMPENSATION
4.1 Products. TDA will provide to Xxxxx, free of all costs whatsoever
(including without limitation, taxes, duties, shipping and/or handling fees) (a)
fifty (50) copies each of TDA's "Xxxx Xxxxx Golf instruction related" game
mobile, handheld devices promptly after TDA's release thereof and (b) fifty (50)
copies of any other TDA products selected by Xxxxx.
4.2 Compensation for Rights and Services. TDA agrees to pay Xxxxx, as a
consideration for the Rights and Services.
1) 25,000 Restricted common shares of TDA,
a. As of the date of this agreement, Company has sold stock at
$2.50/share.
b. Par Value is $.0001 per share.
2) 33% royalty of net TDA net sales price.
a. Handheld products 33% or $1 per subscription whichever is
greater
3) Option to convert annual royalties to TDA common stock at a $10 of
stock for every $1 of Royalty converted.
a. TDA stock conversion price based on the previous six month
average daily price
b. Option is limited to 25,000 shares of TDA common stock and if
the option is exercised, it must be exercised when the
agreement is in effect.
c. This one-time option would cease all future royalties.
All payments due under this Agreement shall be made in the form of a check drawn
to the order of "Xxxx Xxxxx" and delivered to Xxxxx'x agent at the following
address: Xxxxxxx Sports Management, l4646 X. Xxxxxxxx Xxxx., Xxxxx 000,
Xxxxxxxxxx, Xxxxxxx 00000, Attn: Xxxxx Xxx. Payments shall be made 15 days from
the end of each quarter. Xxxxx'x net payment after any such charges or
deductions shall equal the amount set forth above. Past due payments hereunder
shall bear interest at the rate of (i) one and one-half percent (1-1/2%) per
month, or (ii) the maximum interest rate permissible under law, whichever is
less.
4.3 Expenses. First-class round-trip air transportation, hotel room meal
expenses, local limousine service and miscellaneous expenses (e.g., telephone
and overnight courier charges) incurred by Xxxxx and a guest designated by Xxxxx
will be paid by TDA or reimbursed by TDA to Xxxxx where necessary in the
performance of Xxxxx'x Services under this Agreement; provided, however, that
such expenses are required and reasonable for a celebrity of Xxxxx'x stature.
This Section Amended: December 10, 2004
/s/ RS
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/s/ JW
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