LICENSE AGREEMENT
This LICENSE AGREEMENT ("Agreement") is dated as of August 12,
1996 ("Effective Date"), between Pacific Golf Holdings, Inc., a
California corporation, 0000-X Xxxxxxxxxx Xxxxx, Xxxxxxxxxx
Xxxxx, Xxxxxxxxxx 00000 ("Licensor"), and Confidence Golf. Inc.,
00-000 Xxxxxx Xxxxxx, Xxxxx X, Xxxx Xxxxxx, Xxxxxxxxxx 00000
("Licensee").
RECITALS
WHEREAS, Licensor owns certain patent rights relating to golf
club technology;
WHEREAS, Licensor has agreed to grant a license to licensee to
use such technology covered by Licensor's patent rights under the
terms and conditions set forth in this Agreement.
THEREFORE, the Licensor and the Licensee agree as follows;
1. Definitions.
1.1 "Affiliate" shall mean any person or entity in which a party
or a direct or indirect parent of a party owns, directly or,
indirectly, stock or other indicia of ownership representing at
least 50% of the voting control over such person or entity.
1.2 "Licensed Patent Rights" shall mean the United States and
foreign patents and patent applications of the Licensor listed in
the attached Schedule 1, which Is Incorporated as an integral
part of this Agreement, and any continuations, continuations-in-
part, divisions, reissues, re-examinations, extensions, additions
and foreign or other counterparts thereof.
1.3 "Licensed Product" shall mean a golf club, component of a
golf club or component made by a method coming within a claim of
any patent or patent application under the Licensed Patent
Rights.
1.4 "Net Selling Price" shall mean Licensee's Invoiced price of
all Licensed Products to a customer who is not an Affiliate,
minus any returns.
2. License Grant.
2.1 Licensor hereby grants to Licenses a non-exclusive worldwide
license, with no right to grant sublicenses, to make, have made,
use, sell, Offer to sell and otherwise dispose of Licensed
Products utilizing the, Licensed Patent Rights. Such license of
Licensed Parent Rights shall be subject to the royalties provided
In Section 3.
2.2 Licensor warrants that It Is the exclusive owner of the
Licensed Patent Rights, which are not encumbered in any way, and
that it has full power to enter into this Agreement and make the
grants set forth above.
2.3 Licensor makes no warranties or representations that any
Licensed Products do not infringe any patents of third parties.
3. Compensation.
3.1 Advance Payment. Licensee shall make an advance payment to
Licensor upon the signing of this Agreement by both parties, of
$25,000. This, payment shall not be credited against any amounts
payable as royalties under paragraph 3.2 or paragraph 3.3.
3.2 Royalties. Licensee shall pay Licensor a royalty of $2.00
per iron and $2.50 per wood, for each golf club component made,
used, sold or offered by Licenses or on its behalf in a
geographical area where such activity would constitute an
infringement of a Licensed Patent Right in that area.
3.3 Minimum Royalties. In any year during which any Licensed
Patent Rights remain in effect and Licenses makes, uses, sells or
offers to sell any Licensed Products in a geographical area In
which such activity constitutes an infringement of a Licensed
Patent Right in that area, Licensee shall make a minimum annual
royalty payment of $25,000 to Licensor based upon the sale of
Licensed Products for such year at the applicable royalty rate
for Licensed Products (which minimum amount, shall be pro rated
for any partial year during which the minimum applies).
3.4 Royalties Not Refundable. Any payments or royalties paid by
Licensee under this Agreement shall not be refundable for any
reason,
3.5 Termination of Royalties. The obligation. to pay royalties
for Licensed Products payable under this Agreement shall be
terminated for a patent in the event that the United States
Patent and Trademark Office or a court of competent jurisdiction
holds that a patent under the Licensed Patent Rights is invalid
and/or unenforceable, in a decision from which no further rights
of appeal are available, and when such event occurs no further
royalties shall be due under that patent.
3.6 Royalty Payments. Licensee shall pay the royalties required
hereunder within thirty (30) days (allowing each calendar quarter
after the Effective Date of this Agreement, except for minimum
royalties, which shall be paid at the end of each calendar year.
3.7 Reports. On or before each royalty payment date, Licensee
shall render to Licensor a written statement setting forth the
quantity of Licensed Products sold during the previous royalty
period, together with a statement of the amount of royalties due
for such products. During any period that royalties are payable
hereunder, Licensee shall keep written records with respect to
such products so the royalties payable hereunder may be
accurately established and determined and Licensee shall permit
such records to be inspected no more than once during any
calendar year by a Certified Public Accountant appointed by the
Licensor at any reasonable time during regular business hours,
upon written notice to Licensee at least five (5) working days In
advance of the inspection, to verify compliance with this
Agreement. It an underpayment of royalties is verified of more
than 10% of the amount due for any year, Licensee shall pay the
cost of the inspection, not to exceed $5,000.
3.8 Future Products of Licensee. For future products of
Licensee, that (a) employ an Insert which uses a Licensed Patent
Right or (b) employ a forged metallic face with a cast body, If
Licensee believes such a product Is not a Licensed Product
because It does not come within a claim of any patent or potent
application under the Licensed Patent Rights, Licensee shall
identify such product and provide a detailed explanation of the
basis of its belief, A failure to comply with this section shall
constitute a material breach of this Agreement.
4. Term and Termination.
4.1 The terms, conditions and obligations of this Agreement
become effective as of the Effective Date of this Agreement.
4.2 This Agreement shall remain In effect from and after the
Effective Date and shall expire automatically upon the expiration
or termination of all patents and patent applications under
Licensed Patent Rights.
4.3 This Agreement May be terminated by Licensor prior to its
expiration, by prior written notice to the Licensee, for failure
to materially comply with any obligation hereunder; provided,
however, that the Licensee shall have sixty (60) days from the
date of delivery of such notice within which to remedy such
breach.
4.4 Not withstanding any other provisions of this Agreement,
this Agreement will automatically terminate prior to its
expiration in the event that Licensee falls to make the minimum
annual royalty payment set forth In paragraph 3.3 and paragraph
3.6 within thirty (30) days of the end of each calendar year.
5. Consequence of Termination.
5.1 Termination of the Agreement for any reason shall not
relieve Licensee of its obligation to pay royalties accrued, due
or payable up to the date of such termination.
6 Miscellaneous.
6.1 Governing Law. This License Agreement shall be governed and
construed accordance with the laws of the State of California.
6.2 Assignment. All rights of Licensor under this Agreement can
be assigned without, any prior notice to or consent by the
Licensee, Other than to an affiliate of Licensee, Licensee shall
have no right to assign any of its rights or obligations under
this Agreement without the prior written consent of the Licensor.
Subject to such restrictions, this Agreement shall be binding
upon and inure to the benefit of the parties, their successors
and assigns.
6.3 Notices. Any notice or other communication provided for
herein or given hereunder to a party hereto shall be in writing
and shall be hand-delivered or mailed by first class registered
or certified mail, postage prepaid, or sent by facsimile
telephone transmission or telegram addressed to the attention of
the person specified below, in each case addressed or sent as
follows:
If to Licensor:
Pacific Golf Holdings, Inc.
c/o GolfGear International, Inc.
0000 X Xxxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, XX 00000
Attention: President
Facsimile Telephone Number: (000) 000-0000
If to Licensee:
Confidence Golf, Inc.
00-000 Xxxxxx Xxxxxx
Xxxxx X
Xxxx Xxxxxx, XX 00000
Attn: President
Facsimile Telephone Number (000) 000-0000
or to such Other address, or number, or the attention of such
other person, with, respect to either party as such party shall
have Communicated to the other by written notice given in
accordance with this section.
6.4 Waiver and Other Action. No party may waive any of the
terms or conditions of this Agreement except by a duly signed
writing referring to the specific provisions to be waived.
6.5 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions of this
Agreement shall continue in full force and effect and shall in no
way be affected, impaired or invalidated.
6.6 Counterparts. This Agreement may be executed In two or more
counterparts, each, of which shall be deemed an original but all
of which shall constitute but one instrument. Telecopy versions
of signed documents shall be deemed to be original documents for
purposes for this Agreement.
6.7 Entire Agreement, This Agreement constitutes the entire
Agreement between the parties, or any of them, with respect to
the subject matter hereof and supersedes any and all prior
agreements or understandings with respect thereto.
6.8 Relationship. It is expressly agreed that the parties
intend by this Agreement to establish between Licensor and
Licensee the relationship of independent contractors. It is
further agreed that a party has no authority to create or assume
in the other party's name or on behalf of the other Party for any
Purpose whatsoever. Neither Licensor nor Licensee is the
employer, employee, agent, partner or co-venturer of or with the
other, each being independent.
IN WITNESS WHEREOF, the parties to this Agreement have caused
this Agreement to be executed as of the date first above written.
PACIFIC GOLF HOLDINGS, INC.
By: /s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx, President
CONFIDENCE GOLF, INC.
By: /s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx, President
Pacific Golf Holdings, Inc.
0000-X Xxxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxxxx. 00000
(000) 000-0000
March 17, 1998
Mr. Xxxxxx Xxxxxxxx, President
Confidence Golf, Inc.
00-000 Xxxxxx Xxxxxx, Xxxxx X
Xxxx Xxxxxx, Xxxxxxxxxx 00000
RE: Waiver of certain terms of License Agreement dated August 12,
1996 between Pacific Golf Holdings, Inc. and Confidence Golf,
Inc.
Dear Xx. Xxxxxxxx:
Pursuant to our recent conversations, this letter will formally
waive certain terms and conditions of the License Agreement dated
August 12, 1996 between Pacific Golf Holdings, Inc. and
Confidence Golf, Inc., as follows:
Paragraph 3.1 - Advance Payment: The advance payment of,
$25,000 is waived.
Paragraph 3.2 - Royalties: Royalties through December 31, 1997
are waived.
Paragraph 3.3 - Minimum Royalties: The minimum royalty
payments of $25,000 through December 31, 1997 are waived.
Please signify your acknowledgement of such waiver by signing
where indicated below.
Sincerely,
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx, President
Agreed and Acknowledged:
By: /s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx, President
Confidence Golf, Inc.
Date: March 20, 1998
SCHEDULE 1
LICENSED PATENT RIGHTS
Jurisdiction Title Number Date
USA Golf Club Head 5,024,437 06/18/91
USA Golf Club Head and Method of
Forming Same 5,094,383 03/10/92
USA Golf Club Head and Method of
Forming Same 5,261,663 11/16/93
USA Golf Club Head and Method of
Forming Same 5,261,664 11/16/93
USA Golf Club Head and Method of
Forming Same 5,255,918 10/26/93
USA Golf Club Head and Method of
Forming Same 5,344,140 09/06/94
USA Golf Club with Recessed Non
Metallic Outer Face Plate 5,417,419 05/23/95
USA Structure and Process for
Affixing a Golf Club Insert
to a Golf Club Head 5,720,673 02/24/98
