LICENSE AGREEMENT
This LICENSE AGREEMENT ("Agreement") is dated as of November
17, 1999 ("Effective Date"), between GolfGear International,
Inc., a Nevada corporation, 0000X Xxxxxxxxxx Xxxxx, Xxxxxxxxxx
Xxxxx, Xxxxxxxxxx 00000 ("Licensor"), and PowerBilt Golf, a
division of the Xxxxxxxxx & Xxxxxxx Co., 000 X. Xxxx, Xxxxxxxxxx,
Xxxxxxxx 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
attached Schedule 1, which is incorporated as an integral part of
this Agreement. and any continuations, continuities-in-part,
divisions, reissues, re-examination. extensions, additions, and
foreign or other counterparts thereof. Schedule I shall be
updated as necessary by Licensor by providing notice to Licensee
as continuations, continuations-in part, divisions, reissues, re-
examinations, extensions, additions, and foreign or other
counterparts thereof issue as patents. Further, Licensor shall
provide a copy of any such newly issuing, patent to Licensee.
1.3 "Licensed Product" shall mean a golf club, component of a
golf club, or golf club or component made by a method coming within
a claim of any patent or patent application which issues into a
patent 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 Licensee a non-exclusive license
to sell, offer to sell, use, and otherwise dispose of Licensed
Products utilizing the Licensed Patent Rights in all non-Asian
countries and in Korea (this specifically excludes Japan,
Singapore, Hong Kong, the Philippines, Malaysia, Indonesia, and
Taiwan). Licensor hereby further grants to Licensee a non-
exclusive license to make or have made Licensed Products
utilizing the Licensed Patent Rights anywhere. Such license of
Licensed Patent Rights shall be subject to the royalties provided
in Section 3). Licensee shall have no right to grant sublicenses.
It is understood and agreed that Licensee's right to make, have
made, use, sell, offer to sell and otherwise dispose of Licensed
Products utilizing the Licensed Patent Rights includes, but is
not limited to, having club heads containing Licensee's
trademarks manufactured by a third party manufacturer; shipment
of the club heads by the third party manufacturer to Licensee or
Licensee's affiliates, subsidiaries, or licensees for club
assembly; and selling, or otherwise disposing of the Licensed
Products by them or their retailers or distributors. It is
further understood and agreed that Licensed Products containing
Licensee's trademarks may also be sold or otherwise disposed of
by The GolfWorks, a division of Xxxxx Xxxxxx Enterprises, Inc.,
of Newark, Ohio. Licensee will ensure that any promotional or
advertising materials for Licensed Products shall not present a
negative impression of insert technology.
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 the full power to enter into this Agreement and make
the grants set forth above. Licensor agrees to defend and hold
harmless Licensee from any claim by any third party based upon a
claim of right in any of the patents licensed under this
agreement.
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. None
3.2 Royalties. Licensee shall pay Licensor a royalty as
specified in attached Schedule 2, for each golf club or golf club
component made. used, sold or offered by Licensee or on its behalf
in a geographical area where such activity would constitute an
infringement of a Licensed Patent Right in that area and where
Licensor has identified that Licensed Patent Right on Schedule 1.
3.3 Minimum Royalties. None
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. The obligation to pay
royalties for Licensed Products payable under this agreement
shall also be terminated as to any specific Licensed Patent Right
when that specific patent expires normally or due to non-payment
of a maintenance fee or annuity to the appropriate Patent Office.
Notice shall be provided by Licensor to Licensee of any events
which affect Licensee's obligation to pay royalties.
3.6 Royalty Payments. Licensee shall pay the royalties required
hereunder within thirty (30) days following each calendar quarter
after the Effective Date of this Agreement. A club head shall be
considered a "Licensed Product sold" sixty days after shipment
from the club head manufacturer to the club assembler.
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 respecting 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
A2reement. If an underpayment of royalties is verified of more
than 5% of the amount due for any year, Licensee shall pay the
cost of the inspection.
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 for five years from
and after the Effective Date with Licensee's option to renew for
an additional five years.
4.3 This Agreement may be terminated by Licensor prior to its
expiration, by prior written notice to the Licensee, for failure
to comply with any obligation hereunder; provided, however, that
the Licensee shall have thirty 0) days from the date of delivery
of such notice within which to remedy such breach.
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.
5.2 Licensee shall have the right to sell or otherwise dispose
of Licensed products utilizing the Licensed Patent Rights
manufactured before Termination of the Agreement, subject to
payment of royalties as detailed herein.
6. Miscellaneous
6.1 Governing Law. This License Agreement shall be governed and
construed in accordance with the laws of the State of California.
6.2 Assignment. All rights of Licensor under this Agreement can
be assigned without prior notice or consent by the Licensee.
Licensee shall have no right to assign any of its rights or
obligations under this Agreement without prior written consent of
the Licensor, which consent shall not be unreasonably withheld,
except that, without Licensor's consent, Licensee may assign all
rights and obligations hereunder to a successor in interest of
the PowerBilt Division of the Xxxxxxxxx & Bradsby Company.
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 telex 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. 0000X Xxxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, XX 00000
Attention: President
Facsimile Telephone Number: (000) 000-0000
If to Licensee:
PowerBilt Golf
Xxxxxxxxx & Xxxxxxx Co.
000 X. Xxxx
Xxxxxxxxxx, XX 00000
Attention: 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 of 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 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.
6.9 Arbitration and Venue. Any dispute arising out of or in
connection with this Agreement between the parties shall be
handled in accordance with the rules and regulations of the
American Arbitration Association and shall be binding upon the
parties. Venue for such action shall be in Orange County,
California. The prevailing party to such action shall be
entitled to costs and reasonable attorneys' fees.
IN WITNESS WHEREOF, the parties to this Agreement have caused
this Agreement to be executed on the date first above written.
LICENSOR
GOLFGEAR INTERNATIONAL, INC.
Date: November 17, 1999 By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx, President
LICENSEE
POWERBILT GOLF
Date: November 17, 1999 By: /s/ Xxxx X. Xxxxxxxxx XX
Xxxx X. Xxxxxxxxx XX, President
SCHEDULE 1
LICENSED PATENT RIGHTS
Jurisdiction Title Number Date of Patent
United Golf Club Head and Method of 5,024,437 06/18/91
States Forming Same
United Golf Club Head and Method of 5,094,383 03/10/92
States Forming Same
United Golf Club 5,255,918 10/26/93
States
United Golf Club Head and Method of 5,261,663 11/16/93
States Forming Same
United Golf Club with Recessed Non- 5,261,664 11/16/93
States Metallic Outer Face Plate
United Golf Club Head and Method of 5,344,140 09/06/94
States Forming, Same
United Golf Club with recessed, Non- 5,417,419 05/23/95
States Metallic Outer Face Plate
United Structure and Process for 5,720,673 02/24/98
States Affixing, a Golf Club Head
Insert to a Golf Club Head
Body
SCHEDULE 2
PAYMENTS
Advanced Payment. None
Royalties. The royalty under paragraph ').2 per golf club or
golf club component is:
for irons:
$1.15/club for first 250,000 $.75/club for next 250,000
to 500,000 $.50/club for 500,000 up.
for Xxxxx:
$1.15/club for first 500,000 $.75/club for 500,000 up
Minimum Royalties. None
