ENDORSEMENT AGREEMENT
THIS AGREEMENT, made and entered into as of this 1st day of January,
2000, by and between MOSSIMO, INC., 0000 Xxxxx Xxxx, 0xx Xxxxx, Xxxxxx,
Xxxxxxxxxx 00000 ("Company"), and XXXXX XXXXX ENTERPRISES, INC. c/o
International Management, Inc., IMG Center, 0000 Xxxx 0xx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxx 00000 ("Licensor"):
WITNESSETH:
WHEREAS, Xxxxx Xxxxx ("Xxxxx") is recognized as a highly skilled
professional golfer.
WHEREAS, Company desires to obtain the rights to use the name, fame,
image and athletic renown of Xxxxx in connection with the advertisement and
promotion of its products as provided herein;
WHEREAS, Xxxxx has licensed all such rights to Licensor, along with the
right to sublicense such rights to third parties.
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS. As used herein, the following terms shall be
defined as set forth below:
(a) "Contract Period" shall mean that period of time commencing on
January 1, 2000 and concluding December 31, 2003, unless
terminated sooner as provided herein.
(b) "Contract Year" shall mean the consecutive 12-month period
beginning on any January 1st during the Contract Period.
(c) "Products" shall mean casual apparel consisting of men's
pants, shirts, sweaters, windshirts and raingear.
(d) "Xxxxx Identification" means the right to use, subject to the
provisions hereof, Xxxxx'x name, fame, nickname, initials,
autograph, voice, video or film portrayals, facsimile
signature, photograph, likeness and image or facsimile image,
and any other means of endorsement by Xxxxx used in connection
with the advertisement and promotion of Company's Products.
(e) "Contract Territory" shall mean worldwide.
(f) "Outerwear" shall mean the golf shirts, sweaters, windshirts
and raingear worn by Xxxxx when he plays professional golf.
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(g) "Exempt Status" shall mean Xxxxx has earned full playing
privileges on the PGA Tour each year of the contract term.
2. GRANT OF RIGHTS. In consideration of the remuneration to be paid to
Licensor pursuant hereto, Licensor grants to Company the right and license
during the Contract Period to use the Xxxxx Identification solely in connection
with the advertisement and promotion of Company's Products within the Contract
Territory as set forth herein. Licensor agrees not to grant the right to use the
Xxxxx Identification to anyone other than Company in connection with the
advertisement and promotion of Products. It is understood that Company may not
use the Xxxxx Identification in connection with any items for sale or resale,
other than Company Products as specified herein.
3. PRIOR APPROVAL. Company agrees that no use of the Xxxxx
Identification nor any item used in connection with the Xxxxx Identification
will be made hereunder unless and until the same has been approved by Licensor.
Licensor agrees that any material, advertising or otherwise, submitted for
approval as provided herein may be deemed by Company to have been approved
hereunder if the same is not disapproved in writing within ten (10) business
days after receipt thereof. Licensor agrees that any material submitted
hereunder will not be unreasonably disapproved and, if it is disapproved, that
Company will be advised of the specific grounds therefor. If Company desires
immediate approval of advertising material hereunder, Company shall have the
right to directly contact Licensor's authorized agent to obtain such approval.
Company agrees to protect, indemnify and save harmless Licensor, Xxxxx and their
authorized agent, or any 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, Company.
4. REMUNERATION. (a) In consideration of the rights herein granted
hereunder, Company shall pay to Licensor the annual fee set forth in the
schedule below (the "Annual Fee").
Year Annual Fee
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2000 $850,000
2001 $850,000 plus amounts paid under Section
5 in 2000
2002 $850,000 plus amounts paid under Section
5 in 2000 and 2001
2003 $850,000 plus amounts paid under Section
5 in 2000-2002
One-half of the Annual Fee will be due on or before January 1 and July 1 of each
Contract Year.
(b) As additional remuneration hereunder, Company agrees to pay
Licensor an Additional License Fee of One Million Five Hundred Thousand Dollars
($1,500,000) to be paid
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in quarterly installments on or before January 1, April 1, July 1 and October 1
of the first Contract Year.
(c) Licensor agrees that Xxxxx must achieve and maintain Exempt
Status on the PGA Tour throughout each Contract Year and must
participate as a player in a minimum of fifteen (15) official
PGA Tour events each Contract Year (Minimum Annual Performance
Requirements). Licensor also agrees that the Additional
License Fee set forth in Section 4 (b), is an advance payment
earned at a rate of $375,000 on each annual anniversary date
beginning December 31, 2000. In the event Xxxxx does not meet
the Minimum Annual Performance Requirements for a Contract
Year, $375,000 of the Additional License Fee will be deemed to
be unearned. Any unearned Additional License Fee is fully
refundable and due Company no later then January 31st of the
following year. In the event the Company terminates the
Agreement in accordance with Section 16, any unearned
Additional License Fee will be fully refundable and due the
Company as set forth in Section 16.
5. ADDITIONAL REMUNERATION. It is agreed that should Xxxxx achieve any
of the accomplishments set forth in the following schedule during the Contract
Period, then Company will pay Licensor the additional remuneration set forth
below for each such accomplishment due to the increased value in the Xxxxx
Identification.
Accomplishment Additional Remuneration
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PGA Tour Win $25,000
PGA Tour 2-5 place finish $10,000
World Championship Event Win $40,000
World Championship Event 2-5 place finish $15,000
Major Win (Masters, U.S. Open, British Open, PGA Championship) $100,000
Major 2-5 place finish $25,000
Named to Ryder Cup or President's Cup Team $15,000
Player of the Year $40,000
All additional remuneration will be due within thirty (30) days of each such
accomplishment. Company agrees that all additional remuneration earned by
Licensor during each Contract Year will be added to the Annual Fee for each
remaining Contract Year during the Contract Period.
6. PAYMENTS. Licensor may elect to have payments made by check, wire
transfer, or bank transfer. Unless such election has been made in writing, all
payments shall be made by check drawn to the order of "Xxxxx Xxxxx Enterprises,
Inc." and delivered to c/o IMG Center,
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0000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Treasurer. Past due
payments hereunder shall bear interest at the rate of (a) one and one-half
percent (1-1/2%) per month, or (b) the maximum interest rate permissible under
law, whichever is less. All amounts herein are in United States Dollars.
7. MARKETING COMMITMENT. Company agrees that it will aggressively
promote Xxxxx and his association with Company and Company Products each
Contract Year during the Contract Period.
8. SERVICES OF XXXXX. (a) If Company desires to utilize the services of
Xxxxx as a model in connection with Company advertising to promote its products
or for personal appearances to promote Company, Licensor agrees, at the request
of Company to provide the services of Xxxxx upon a reasonable number of days as
mutually agreed upon and at places reasonably convenient to his schedule.
Company agrees that it will reimburse Licensor for all reasonable travel,
lodging and meal expenses incurred by Licensor or Xxxxx in connection with such
services. Company further understands that failure to utilize services of Xxxxx
pursuant to this section shall not result in any reduction in payments to
Licensor hereunder nor may the obligation to provide services be carried forward
or backward to any Contract Year. The obligations of Licensor to provide
services of Xxxxx hereunder are subject to the condition that payments to
Licensor are current and up to date.
(b) Should Company use Xxxxx in television advertising to promote
Company's Products, Company will make all applicable required union scale and
pension and welfare payments. Company and Licensor will mutually agree on the
portion of the Annual Fee that shall be allocated for such broadcast services.
(c) Licensor agrees to cause Xxxxx to wear Company's Products sold by
Company when playing professional golf, and while participating in golf
exhibitions and outings, upon the condition that Company supply Xxxxx with such
amounts of properly fitting Products, in fabrics and styles approved by Xxxxx
and Company, as Xxxxx may reasonably request which are suitable for his use in
tournament competition. Company agrees to pay all charges in connection with the
delivery of such Products to Xxxxx, including shipping charges, air freight
charges and customs charges. Company agrees to reimburse Licensor's authorized
agent for all such expenses incurred by it in connection with the transfer of
such Products to Xxxxx.
(d) Licensor agrees that Xxxxx will consult with Company as reasonably
requested regarding the development of a Company golf line of Products or a
Xxxxx Signature Line of Products as mutually agreed upon. Company agrees that
Licensor will receive additional remuneration in connection with such golf line
or signature line, whether as a royalty or otherwise, as mutually agreed upon.
9. COMPANY IDENTIFICATION. (a) It is agreed that the logo or name of
Company (or Company's subsidiaries as mutually agreed upon) (the "Company Logo")
shall be affixed to mutually agreed upon locations of Xxxxx'x Outerwear,
excluding the right sleeve which is reserved for one of Licensor's other
sponsors, which he wears when he plays professional golf.
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Company agrees that it will be responsible for, and the cost of, affixing the
Company Logo on all such Outerwear. Furthermore, Company understands that if
Xxxxx participates in a special team event where there is an official uniform,
then Xxxxx is permitted to wear such uniform during such event (e.g. Ryder Cup,
President's Cup, etc.).
(b) Company shall provide and maintain, at its own expense, commercial
general liability insurance and advertising injury coverage, with limits of not
less than One Million Dollars ($1,000,000.00), and shall cause such policy to be
endorsed to state that Xxxxx is an additional named insured thereunder. A
certificate of insurance evidencing such coverage shall be furnished to Xxxxx
within thirty (30) days of the full execution of this Agreement. Such insurance
policy shall provide that the insurer shall not terminate or materially modify
such policy or remove Xxxxx as an additional named insured without prior written
notice to Xxxxx at least twenty (20) days in advance thereof.
10. AUTHORIZED AGENT. Licensor hereby designates International
Management, Inc., IMG Center, 0000 Xxxx 0xx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxx
00000, Attention: Xxxxxxx Xxxxx as its authorized agent for all purposes
hereunder. All notices or submissions to be made or delivered by Company to
Licensor pursuant to this Agreement shall be delivered to said address free of
all charges such as, for example, shipping charges and customs charges. In the
event that any such charges are paid by Licensor or by its authorized agent,
Company agrees to make prompt reimbursement.
11. DEFAULT. (a) If either party at any time during the Contract Period
shall (i) fail to make any payment of any sum of money herein specified to be
made, or (ii) fail to observe or perform any of the covenants, agreements or
obligations hereunder (other than the payment of money), the nondefaulting party
may terminate this Agreement as follows: as to (i) if such payment is not made
within ten (10) days after the defaulting party shall have received written
notice of such failure to make payment, or as to (ii) if such default is not
cured within thirty (30) days after the defaulting party shall have received
written notice specifying in reasonable detail the nature of such default. In
order to be a sufficient notice hereunder, any such written notice shall specify
in detail each item of default and shall specify the provision of this Agreement
which applies to each item of default, and shall specify in detail the action
the defaulting party is required to take in order to cure each item of default.
The termination rights set forth in this section shall not constitute the
exclusive remedy of the nondefaulting party hereunder, however, and if default
is made by either party hereunder, the other may resort to such other remedies
as said party would have been entitled to if this section had been omitted from
this Agreement, subject to the terms of this Agreement. Termination under the
provisions of this section shall be without prejudice to any rights or claims
which the terminating party may otherwise have against the defaulting party, and
if Company is the defaulting party, Company shall be responsible for any and all
payments due under the terms of this Agreement in addition to other liabilities
set forth above.
(b) If Company shall become bankrupt or insolvent, or if Company's
business shall be placed in the hands of a receiver, assignee or trustee,
whether by voluntary act of Company or otherwise, the Contract Period shall, at
the election of Licensor, immediately terminate.
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12. USE OF XXXXX IDENTIFICATION AFTER TERMINATION. From and after the
termination of the Contract Period all of the rights of Company to the use of
the Xxxxx Identification shall cease absolutely and Company shall not thereafter
use or refer to the Xxxxx Identification in advertising or promotion in any
manner whatsoever. It is further agreed that following termination of the
Contract Period, Company shall not advertise, promote, distribute or sell any
item whatsoever in connection with the use of any name, figure, design, logo,
trademark or trade name similar to or suggestive of the Xxxxx Identification.
13. TRADEMARKS. Company agrees that it will not file, during the
Contract Period or thereafter, any application for trademark registration or
otherwise obtain or attempt to obtain ownership of any trademark or trade name
within the Contract Territory or in any other country of the world which
consists of the Xxxxx Identification or any xxxx, design or logo intended to
make reference to Xxxxx or to identify products endorsed by Xxxxx. In the event
that, prior to commencement of the Contract Period, Company has filed one or
more applications for registration of any such trademark, or otherwise has
obtained any rights to such trademark, Company agrees to cause such applications
and/or trademarks to be assigned and transferred to Licensor forthwith.
14. RESERVATION OF RIGHTS. All rights not herein specifically granted
to Company shall remain the property of Licensor to be used in any manner
Licensor deems appropriate. Company understands that Licensor has reserved the
right to authorize others to use Xxxxx Identification within the Contract
Territory and during the Contract Period in connection with all tangible and
intangible items and services other than Products themselves.
15. INDEMNITY. Company agrees to protect, indemnify and save harmless
Licensor, Xxxxx and their authorized agent, or any of them, from and against any
and all expenses, damages, claims, suits, actions, judgments and costs
whatsoever, including reasonable attorneys' fees, arising out of, or in any way
connected with, actions or omissions of Company, any advertising material
furnished by, or on behalf of, Company or any claim or action for personal
injury, death or other cause of action involving alleged defects in Company's
Products or services. Company agrees to provide and maintain, at its own
expense, general commercial and product liability insurance with limits no less
than Three Million Dollars ($3,000,000) and naming Licensor and Xxxxx as
additional named insureds. Within thirty (30) days from the date hereof, Company
will submit to Licensor evidence of such policy, requiring that the insurer
shall not terminate or materially modify such without written notice to Licensor
at least twenty (20) days in advance thereof.
16. SPECIAL RIGHT OF TERMINATION. Company shall have the right to
terminate this Agreement upon written notice to Licensor if the commercial value
of the Xxxxx Identification is substantially reduced because Xxxxx (i) has
engaged in illegal or immoral conduct resulting in a felony conviction; or (ii)
fails an officially sanctioned drug test or is criminally convicted of any drug
related offense. Any termination pursuant to this paragraph shall become
effective on the 30th day next following the date of receipt by Licensor of
Company's written notice to so terminate.
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17. LIMITED LIABILITY. Notwithstanding anything to the contrary herein,
in the event Company incurs any expenses, damages or other liabilities
(including, without limitation, reasonable attorneys' fees) in connection with
the performance or non-performance of any term or provision hereof, Licensor's
liability to Company shall not exceed the remuneration, excluding reimbursement
of expenses, actually paid to Licensor by Company. In no event will Licensor be
liable for any indirect, incidental, reliance, special or consequential damages
arising out of the performance or non-performance of this Agreement, whether or
not Licensor had been advised of the possibility of such damages. It is
understood that Xxxxx is not a party hereto and has no liability hereunder but
is an intended specific third party creditor beneficiary hereof.
18. WAIVER. The failure of either party at any time or times to demand
strict performance by the other of any of the terms, covenants or conditions set
forth herein shall not be construed as a continuing waiver or relinquishment
thereof and each may at any time demand strict and complete performance by the
other of said terms, covenants and conditions. Any waiver of such rights must be
set forth in writing.
19. SEVERABILITY. If any provision of this Agreement shall be declared
illegal, invalid, void or unenforceable by any judicial or administrative
authority, the validity of any other provision and of the entire Agreement shall
not be affected thereby.
20. ASSIGNMENT. This Agreement shall bind and inure to the benefit of
Licensor, and the successors and assigns of Licensor. The rights granted Company
hereunder are personal to it, shall be used only by it or its affiliate and
shall not without the prior written consent of Licensor be transferred or
assigned to any other party. In the event of the merger or consolidation of
Company with any other entity, Licensor shall have the right to terminate the
Contract Period by so notifying Company in writing within sixty (60) days
following Licensor's receipt of notice of such merger or consolidation.
21. ARBITRATION/GOVERNING LAW. This agreement shall be governed by, and
its provisions enforced in accordance with, the laws of the State of Ohio,
without regard to its principals of conflicts of laws. In the event a dispute
arises under this agreement which cannot be resolved, such dispute shall be
submitted to arbitration and resolved by a single arbitrator (who shall be a
lawyer not employed by or associated with either party to this agreement) in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. All such arbitration shall take place at the office
of the American Arbitration Association located in Cleveland, Ohio. Each party
is entitled to depose one (1) fact witness and any expert witness retained by
the other party, and to conduct such other discovery as the arbitrator deems
appropriate. The award or decision rendered by the arbitrator shall be final,
binding and conclusive and judgment may be entered upon such award by any court.
22. SIGNIFICANCE OF HEADINGS. Section headings contained herein are
solely for the purpose of aiding in speedy location of subject matter and are
not in any sense to be given weight in the construction of this Agreement.
Accordingly, in case of any question with respect to the
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construction of this Agreement, it is to be construed as though such section
headings had been omitted.
23. NO JOINT VENTURE. This Agreement does not constitute and shall not
be construed as constituting an association, partnership, joint venture or
relationship of principal and agent or employer and employee between Licensor
and Company. Neither party shall have any right to obligate or bind the other
party in any manner whatsoever, and, except as expressly set forth herein,
nothing herein contained shall give, or is intended to give, any rights of any
kind to any third person.
24. ENTIRE AGREEMENT. This writing constitutes the entire agreement
between the parties hereto and may not be changed or modified except by a
writing signed by the party or parties to be charged thereby.
25. EXECUTION AND DELIVERY. This instrument shall not be considered to
be an agreement or contract nor shall it create any obligation whatsoever on the
part of Licensor and Company, or either of them, unless and until it has been
personally signed by a representative of Licensor and by a representative of
Company and delivery has been made of a fully signed original. Acceptance of the
offer made herein is expressly limited to the terms of the offer.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
MOSSIMO, INC. XXXXX XXXXX ENTERPRISES, INC.
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx Name: Xxxxx Xxxxx
Title: President and CEO
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