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Exhibit 10.2
MARKETING AND DISTRIBUTION AGREEMENT
THIS AGREEMENT is made this 21st day of August, 1996, by
and between THE XXXXXX XXXXXX GOLF COMPANY, a Tennessee corporation having its
principal place of business at 0000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxx, Xxxxxxxxx
00000 ("APGC"), and NEVADA BOB'S PRO SHOP, INC., a Delaware corporation having
its principal place of business at 0000 X. Xxxxxxx, Xxx Xxxxx, Xxxxxx 00000
("Distributor"), under the following circumstances:
APGC is engaged in the manufacture, marketing and
distribution of golf products, including Xxxxxx Xxxxxx golf equipment and Hot-Z
golf bags and luggage. The Distributor is the owner and franchisor of Nevada
Bob's retail golf shops ("Nevada Bob's"), in which the Distributor and its
franchisees sell golf clubs, bags and related products. On the terms and
conditions hereinafter set forth, APGC desires to appoint Distributor to market
and sell the products described on Schedule 1 attached hereto (the "Products")
(as such Schedule shall be amended from time to time by APGC and Distributor,
it being acknowledged that APGC will offer to add to such Schedule such golf
products as it makes generally available to its other distributors) and
Distributor desires to be appointed a distributor for the marketing and sale of
the Products.
NOW, THEREFORE, in consideration of the mutual covenants
and obligations contained in this Agreement the parties hereto, intending to be
legally bound, do hereby agree as follows:
ARTICLE I
GRANT AND ACCEPTANCE OF RIGHTS
1.1 Grant and Acceptance. On the terms and conditions
provided in this Agreement, APGC grants to Distributor, and Distributor hereby
accepts such grant, the right to sell the Products to customers at Nevada Bob's
that are owned or franchised by Distributor and to conduct all activities
reasonably related thereto including the advertising and promotion of the
Products. APGC will grant the same rights to franchisees of Distributor who
place orders with APGC for Products. APGC acknowledges that Distributor's
rights include the right to sell Products through catalogs and mail
solicitation on a worldwide basis. In addition and without limitation to the
rights otherwise granted herein, Distributor shall have the non-exclusive right
to create Web sites other types of sites now or hereafter known or developed
for the purpose of promoting, advertising, merchandising, selling and offering
for sale Products through on-line means or through other electronic means now
or hereafter known or developed provided that Distributor shall furnish APGC
draft copies of its Web site pages or material for other types of sites, or
permit APGC to access such
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Web site pages or material for other types of sites in beta format prior to
making them available to the public, for approval in accordance with the
provisions of Section 2.2 hereof.
1.2 Market. APGC's grant of the rights herein to
Distributor to market and sell the Products is only for Nevada Bob's that are
owned or franchised by Distributor and for no other market, and shall be for
anywhere in the world that Distributor or its franchisees operate Nevada Bob's
stores, except as expressly provided herein.
1.3 Non-Exclusivity. Nothing in this Agreement shall
either preclude Distributor from marketing, distributing or selling products
that are similar to the Products or APGC from marketing, distributing or
selling the Products through distributors other than Distributor.
ARTICLE II
APGC'S OBLIGATIONS
2.1 Support and Information. APGC shall at its own
expense provide sales and marketing support as reasonably requested by
Distributor and so generally made available to its other distributors
throughout the term of this Agreement, including:
(a) assistance and advice for the employees of
Distributor in the demonstration and sales of the Products;
(b) marketing advice and assistance;
(c) prompt response to all inquiries and
reasonable requests for assistance from Distributor; and
(d) making available for Distributor's use such
advertising and publicity material and Product literature which may have been
generated by APGC.
2.2 Advertising. APGC shall permit Distributor and its
franchisees to advertise the Products utilizing the registered trademarks of
APGC and offer sales promotions within guidelines and restrictions approved in
advance by APGC.
2.3 Delivery of Products. Subject to availability (short
stock situations to be reasonably allocated among all distributors), APGC shall
accept orders and promptly supply the Products to the Distributor and its
franchisees in accordance with orders received from the Distributor and the
terms set forth in Article IV hereof.
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ARTICLE III
DISTRIBUTOR'S OBLIGATIONS
3.1 Commercially Reasonable Efforts. The Distributor
shall at all times use commercially reasonable efforts to market, promote and
sell the Products at Nevada Bob's that are owned by Distributor in order to
stimulate and increase interest in the Products by appropriate means,
including:
(a) development of a marketing program, which
shall include but not be limited to advertisement of the Products in golf
magazines, newspapers, other periodicals and media;
(b) maintaining an inventory of the Products
reasonably anticipated to satisfy the demand therefor;
(c) prominently featuring the Products within
each Nevada Bob's owned by Distributor; and
(d) employment and training of qualified sales
personnel to ensure that the Products are aggressively promoted and sold by the
Distributor.
3.2 Installation of Kiosks. The Distributor shall install
in each Nevada Bob's owned by the Distributor no later than 90 days following
the date of this Agreement and in each Nevada Bob's constructed by Distributor
during the term of this Agreement a free standing kiosk (the Distributor's cost
of which kiosk will be borne equally by the parties up to a maximum in the case
of APGC of $900 (which can be adjusted at Nevada Bob's request on each
anniversary of this Agreement based upon any increases in the Department of
Labor's announced cost of living index, Atlanta area), each of which shall
comply with the following requirements:
(a) the kiosk will include a minimum of 24 square
feet and shall be of a shape agreed upon by the parties, which may vary with
each Nevada Bob's store;
(b) the kiosk will be dedicated exclusively to
display of the Products, including a prominent display of the Xxxxxx Xxxxxx
name;
(c) the kiosks shall be fully stocked with a
representative mix of the Products, which shall be displayed in an orderly and
appealing manner;
(d) the kiosk will be located "left center" upon
a customer's entry into a Nevada Bob's or, if in Distributor's reasonable
discretion, "left center" is not available, a site reasonably determined by
Distributor to be of equal prominence.
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(e) the kiosk will be free-standing and not built
into or on a wall, and will be located within close proximity to the putting
green in each Nevada Bob's store;
(f) the construction of the kiosk will be from
materials approved in writing by APGC; and
(g) the kiosk will be in the form of the
schematic attached hereto as Schedule 2.
3.3 Franchisees of Nevada Bob's. Distributor shall
strongly recommend and encourage that its franchisees install kiosks in their
Nevada Bob's in conformity with the requirements of Section 3.2 hereof and
market and sell the Products, including, without limitation participation in
all programs and campaigns for the promotion, marketing and sale of the
Products. Orders for Products by such franchisees will be placed directly by
such franchisees with APGC, and Distributor will have no responsibilities
associated with same.
ARTICLE IV
TERMS AND CONDITIONS OF SALE
4.1 Standard Terms. All sales of Products to Distributor
by APGC shall be subject to the terms and conditions of this Agreement in
effect at the time of such sale. Any purchase orders issued by Distributor that
contain provisions that are in addition to or inconsistent or conflict with any
provisions of this Agreement or any of APGC's standard terms and conditions of
sale as they may exist from time to time are hereby rejected by APGC and shall
have no force or effect unless APGC specifically consents to such provision in
writing.
4.2 Reports and Orders. Distributor shall submit orders
for the Products to APGC for acceptance at mutually satisfactory periods. Such
orders shall be subject to acceptance by APGC. Accepted orders for any Products
not shipped during the month for which delivery was scheduled will remain in
effect unless canceled in whole or in part by either party upon written notice
to the other.
4.3 Prices.
(a) Distributor shall pay APGC for each shipment
of the Products at the lowest distributor prices (including any applicable
discounts and promotions) established by APGC and in effect at the time of the
order. Distributor shall be responsible for the payment of all excise, sales,
use, property and other taxes levied with respect to the Products sold to
Distributor hereunder, other than taxes imposed or measured by APGC's income.
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(b) APGC has the right at any time to change its
lowest distributor prices and specifications applicable to the Products and to
issue new applicable price lists or bulletins. If APGC changes the prices or
specifications applicable to any of the Products and such change is a result of
circumstances beyond APGC's control such as raw material or components
shortages, such changed prices or specifications shall apply to the Products
ordered by Distributor and not shipped by APGC at the time such change is made
effective by APGC; otherwise, the prices and specifications in effect on the
date of the order shall be honored. APGC shall give written notice to
Distributor of any change increasing the price to be paid by Distributor before
shipping any Products to which such change is applicable. Upon receipt of such
notice, Distributor may cancel or modify orders for the Products to which any
such change applies, provided written notice of cancellation is delivered to
APGC within 15 days after receipt by Distributor of APGC's notice. All
undelivered orders not canceled as provided herein shall remain in effect for
delivery in accordance with said change. Decreases in lowest distributor prices
after order, but prior to shipment, will be applied to the relevant orders.
4.4 Payment. Payment for the Products purchased by
Distributor shall be net 30 days from the invoice date, or terms otherwise
agreed upon by the parties in writing. A penalty of 1.5% per month or, if less,
the maximum permitted by applicable law per month shall be added to any overdue
amounts owed to APGC over 30 days. Distributor shall pay all collection
charges.
4.5 Title and Risk of Loss. Title to the Products shall
pass to Distributor and delivery is deemed to occur upon APGC's delivery of the
Products (or are otherwise agreed in writing by the parties) FOB factory. APGC
shall not be liable to Distributor for any loss or damage to any of the
Products purchased hereunder after delivery thereof by APGC to Distributor or
to a carrier for shipment to Distributor, whichever shall first occur, and
Distributor shall be responsible for filing all claims for loss of or damage to
any of the Products purchased hereunder while in the possession of any carrier.
APGC shall, however, provide reasonable assistance to Distributor in processing
all such claims.
4.6 Shipments
(a) APGC will endeavor, whenever practicable, to
follow Distributor's requests with regard to route and method of shipment. When
Distributor does not specify a route and method of shipment, APGC reserves the
right to ship the Products purchased by Distributor hereunder by whatever mode
of transportation by whatever route and from whatever point it reasonably may
select.
(b) Distributor will be invoiced by APGC for all
charges, including transportation charges, for the delivery of conforming
Products made to Distributor hereunder.
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(c) Distributor shall be responsible for and
shall pay any and all charges for demurrage, storage, or other charges accruing
after arrival of such shipment at destination.
(d) If diversions of shipments are made upon
Distributor's request or are made by APGC as a result of Distributor's failure
or refusal for any reason to accept shipments made pursuant to Distributor's
orders, Distributor agrees to pay the additional charges and expenses incident
to such diversions, but in no event shall Distributor pay APGC an amount in
excess of the charges or expenses incident to returning shipments to their
original shipping points.
4.7 Product Changes. APGC may change the design or
specifications of any of the Products at any time without notice to Distributor
and without obligation to make the same or any similar change upon any Products
previously purchased by or shipped to Distributor. However, there will be no
changes, without Distributor's reasonable approval, in Products that are part
of so-called "Special Make-Up Programs" (i.e. Products devised by mutual
agreement for exclusive distribution by Distributor and through Distributor's
franchisees).
4.8 Delayed Payments. Notwithstanding anything to the
contrary contained in this Agreement, APGC reserves the right to cease
accepting orders from and supplying Products to the Distributor in the event of
any delay in payment by the Distributor to APGC of any uncontested money due to
APGC and 30 days have elapsed since a notice to that effect has been served on
the Distributor.
ARTICLE V
WARRANTIES
5.1 Warranty. APGC warrants that the Products sold
pursuant to this Agreement shall be free from defects in material and
workmanship under normal use and service when delivered to Distributor and for
a period of 12 months from the date of sale of the Products by Distributor to
its customer unless otherwise specified in writing on a particular Product. The
Products (including their sale by Distributor) and the packaging and trademarks
used therewith do not infringe any third party intellectual property rights,
and comply with all applicable laws and regulations. All labelling of the
Products is correct and complete.
5.2 No Other Warranties. Except as expressly provided in
this Agreement, APGC makes no warranties with respect to the Products, either
express or implied, including without limitation, the implied warranties of
merchantability and fitness for a particular purpose.
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5.3 Limitation of Liability. In no event shall either
party be liable for any special, incidental, consequential or exemplary damages
in connection with, or arising out of, the performance of this Agreement or for
breach of warranty.
ARTICLE VI
TERM AND TERMINATION
6.1 Term. Subject to the termination provisions of this
Agreement, this Agreement will continue in effect from the date hereof for a
period of five years, and will be automatically renewed for successive one-year
periods thereafter unless terminated in accordance with the provisions of this
Agreement.
6.2 Termination.
(a) APGC or Distributor may notify the other
party that this Agreement will terminate as of the end of the term of this
Agreement or any annual renewal thereof by giving the other party at least 90
days prior written notice of such termination.
(b) If a party shall fail to fulfill or comply
with any term or provision of this Agreement, the other party may terminate
this Agreement following written notice of such termination and opportunity to
cure. Such notice of termination shall be delivered to Distributor not less
than 30 days prior to the effective date of termination.
(c) Either APGC or Distributor may terminate this
Agreement immediately by delivering to the other party written notice of such
termination in the event of the happening of any of the following:
(1) liquidation or dissolution of
Distributor or APGC, as the case may be;
(2) insolvency; filing of voluntary
petition in bankruptcy; filing of a petition to have such party
declared bankrupt, provided it is not vacated within thirty (30)
days from date of filing; appointment of a receiver or trustee,
provided such appointment is not vacated within thirty (30) days
from date of filing; or execution of an assignment for benefit of
creditors; or
(3) any assignment or attempted
assignment of any interest in this Agreement (other than in
connection with the sale of all or substantially all of the assets
or more than 50% of the equity interest of such party other than to
a "competitor", as defined herein of the other party) without the
other party's written consent. A competitor for purposes of this
Section 6.2 shall mean a
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company that manufactures and sells golf equipment and related
products.
ARTICLE VII
TERMINATION CONSEQUENCES
7.1 Obligations of Distributor. On the termination of
this Agreement, the Distributor undertakes:
(a) to return to APGC all Product samples and
advertising material used in connection with the sale of the Products provided
to Distributor by APGC for promotion of the Products pursuant to the terms of
this Agreement except to the extent used in the sale of Products as permitted
pursuant to clause (c) below;
(b) to return to APGC all originals and copies of all
documents and information in any form containing or covering in any way any
part of APGC's intellectual property except to the extent used in the sale of
Products as permitted pursuant to clause (c) below; and
(c) to cease carrying on the marketing and sale of
the Products under the terms of this Agreement (other than sales of existing
inventory of the Products that are not repurchased pursuant to Section 7.3
hereof).
7.1A Obligations of APGC. On the termination of this
Agreement, APGC undertakes to return to Distributor all originals and copies of
all documents and information in any form containing or covering in any way any
part of Distributor's intellectual property.
7.2 Final Accounting; Payment. Not later than 30 days
after the receipt of notice terminating this Agreement, APGC or Distributor
shall pay to the other party any sums due under this Agreement, and the
termination or expiration of this Agreement shall not relieve either party from
its obligations to make payment of any sums then owing to the other.
7.3 Unsold Products. APGC shall have the option to
purchase from the Distributor all unsold Products then in the ownership of the
Distributor which it desires to purchase by notifying the Distributor of its
decision within 15 days of termination. The purchase price for APGC's
repurchase of such Products shall be the purchase price at which such Product
was purchased from APGC (determined on a FIFO basis) less all prior refunds,
credits, rebates, allowances, discounts and other payments made by APGC with
respect thereto. Delivery by Distributor of all the Products repurchased by
APGC shall be in accordance with APGC's instructions and at APGC's cost.
Notwithstanding the above,
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Distributor will have the right after termination to fill any orders received
from its customers prior to APGC effecting its rights to purchase Distributor
inventory and to fill any orders as required by applicable law.
ARTICLE VIII
INDEMNITY
The parties shall indemnify and hold each other harmless
from any and all loss or expenses including reasonable attorneys fees, incurred
or suffered as a result of any claim of loss or damage made against the other
which shall arise from or be the result of a breach of this Agreement or the
negligent acts or omissions of the other.
ARTICLE IX
TRADE SECRETS
Except with the express written consent of the other party,
Distributor and APGC each agree that it will not, either during the term of
this Agreement or anytime thereafter, directly or indirectly, use or disclose
for its own benefit or the benefit of any other person, firm or entity, any of
APGC's or Distributor's legally protectible trade secrets, as the case may be,
whether or not said information was acquired, learned, obtained or developed by
APGC or Distributor, as the case may be, alone or in conjunction with others.
For purposes of this Agreement, trade secrets shall be, and those employees or
other agents to whom it has been confided, and is by law the property of APGC
or Distributor, as they include all trade secret information relating to design
and manufacturing procedures, techniques, programs, processes, methods, and
marketing studies. It is the intent hereof that APGC and Distributor shall not
divulge or use except for the purposes hereof any such information of the other
party which is unpublished or not otherwise readily available to the public or
which is not general information in the golf club and products industry.
ARTICLE X
MISCELLANEOUS
10.1 Representation as to Authority. Each of the parties
warrants its power and authority to enter into this Agreement and that it has
obtained all necessary approvals to do so.
10.2 Entire Agreement. This Agreement together with the
Schedules and other documents referred to herein contain the entire agreement
between the parties concerning the subject matter hereof, and supersedes any
prior agreement between the parties whether written or oral concerning its
subject matter.
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10.3 Modification. No addition or modification of this
Agreement shall be binding upon APGC or Distributor unless made in writing and
signed by a duly authorized representative.
10.4 Force Majeure. Neither party shall be liable for
delays in performance due to acts of God, acts of national emergency, wars,
strikes, riots, prohibitive governmental regulations or any other cause beyond
the control of the parties which prevents, hinders or delays the performance of
such party.
10.5 Severability. In the event that any provision of
this or any other agreement entered into contemporaneously with this Agreement
is declared by any judicial or other competent authority to be void, voidable,
illegal or otherwise unenforceable, the remaining provisions of this Agreement
shall remain in full force and effect.
10.6 Notices. Any notice to be served on either of the
parties by the other shall be delivered by hand or be sent by registered or
certified mail return receipt requested, to the addresses indicated in the
preamble to this Agreement (or to such other addresses as the parties shall
specify by written notice). If mailed, notices shall be deemed to have been
received by the addressee within 72 hours after mailing, postage prepaid.
10.7 No Partnership. The parties are not partners or
joint venturers nor is the Distributor able to act as agent of APGC.
10.8 Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto. This Agreement or any part of this
Agreement may not be assigned by either party without the prior written consent
of the other party, which consent shall not be unreasonably withheld.
10.9 Controlling Law and Jurisdiction. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware.
10.10 Rights Cumulative. All rights granted to either of
the parties shall be cumulative and no exercise by either of the parties of any
right under this Agreement shall restrict or prejudice the exercise of any
other right granted or otherwise available to it.
10.11 Waiver. The failure by APGC or the Distributor to
enforce at any time or for any period any one or more of the terms or
conditions of this Agreement shall not be a waiver of them or of the right at
any time subsequently to enforce all terms and conditions of this Agreement.
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10.12 Arbitration. In the event of a dispute between the
parties hereto, such parties agree to submit the matter to binding arbitration
to be conducted under the auspices of the American Arbitration Association
(hereinafter referred to as "AAA").
(a) The dispute shall be resolved in accordance with
the Commercial Arbitration Rules in effect for AAA, which form of rules
pertaining on the date of the demand for arbitration shall apply and govern the
arbitration proceeding.
(b) The arbitration shall be held in the State of
Delaware at such place as shall be designated by the arbitrator. Delaware law,
both substantive and procedural, shall govern the proceedings.
(c) All procedural rules for arbitration shall be
strictly followed in resolving disputes under this Agreement, whether by the
arbitrator, or by a court of competent jurisdiction in enforcing such
provisions.
(d) The dispute shall be resolved by a single
arbitrator. The arbitrator shall be a member of the Delaware State Bar,
actively engaged in the practice of law for at least ten (10) years, with
expertise in the process of deciding disputes and/or interpreting contracts (in
the particular field of law involving the subject controversy). If the parties
cannot agree on an arbitrator after having been presented with three (3) lists
of potential candidates by AAA, AAA shall select an arbitrator from among its
commercial arbitration panel members who are retired Delaware judges.
(e) The parties may resort to the courts for
injunctive relief pending arbitration, without thereby waiving arbitration.
(f) The arbitration shall be conducted in the English
language in Delaware, according to the rules of evidence contained in Delaware
law.
(g) In rendering the award, the arbitrator shall
determine the rights and obligations of the parties according to the
substantive and procedural laws of Delaware, as though the arbitrator was a
court of competent jurisdiction in Delaware.
(h) The award must be accompanied by a written
statement of decision. The award will be final and binding in the absence of
manifest mistake or fraud. Judgment on the award may be entered in any court of
competent jurisdiction.
(i) The arbitrator shall have the discretion to order
a pre-hearing exchange of information by the parties,
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including, without limitation, production of requested documents, exchange of
summaries of testimony of proposed witnesses, an examination by deposition of
parties and third-party witnesses.
(j) Any prevailing party is entitled to recover costs
(and expenses) which shall include reasonable attorneys' fees as well as the
fees and expenses of the arbitrators and the administrative fees of AAA. A
"prevailing party" shall be a party in whose favor any portion of the award is
rendered and that is determined by the arbitrator to be the prevailing party.
(k) The arbitrator shall have the authority to employ
the law and motion process and to award any remedy or relief that a court of
the State of Delaware could order or grant, including, without limitation,
rescission, specific performance of any obligation created under the agreement,
the awarding of punitive damages, the issuance of an injunction, or the
imposition of sanctions for abuse or frustration of the arbitration or judicial
process.
(l) The issue of fraud is the inducement of a
contract containing an arbitration clause, such as this contract, may be
decided by the arbitrator and not by the court, unless it is alleged that fraud
permeated the entire contract.
IN WITNESS WHEREOF, the parties have signed this Agreement
to be effective as of the date first above written.
APGC:
THE XXXXXX XXXXXX GOLF COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
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Title: President
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DISTRIBUTOR:
NEVADA BOB'S PRO SHOP, INC.
By: /s/ Xxxx X. Xxxxxxx
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Title: President and CEO
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