[GOLDEN BEAR LOGO]
June 15, 1998
Family Golf Centers, Inc.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Golden Bear International, Inc.
00000 X.X. Xxxxxxx #0, Xxxxx 000
Xxxxx Xxxx Xxxxx, Xxxxxxx 00000
Re: Independent Marketing Agreement
-------------------------------
Gentlemen:
This letter will set forth the agreements and understandings between
Golden Bear Golf, Inc. ("GB Golf"), Golden Bear International, Inc. ("GBI") and
Family Golf Centers, Inc. ("FGC") regarding the certain strategic marketing
efforts to be conducted by the parties in connection with the pending sale by
GB Golf to FGC of the capital stock of [Name of Newco], f/k/a Golden Bear Golf
Centers, Inc. ("Old GBGC") and the grant of that certain "Sublicense Agreement"
of even date herewith by Golden Bear Golf Centers, Inc., f/k/a [Name of Newco]
to Old GBGC and Orient Associates International, Inc. ("OAI"). Pursuant to the
Stock Purchase Agreement dated June 12, 1998, between GB Golf and FGC, the
parties hereby agree as follows, commencing upon closing of the purchase of Old
GBGC by FGC:
1. GB Golf shall have the right to market sponsorships for the golf
teaching and practice facilities operated by FGC and its affiliates as an
independent representative to existing endorsement and licensing customers of
GB Golf, GBI and their affiliates, including Xxxx Xxxxxxxx, and to such other
business or personal contacts of GB Golf, GBI and their affiliates as may be
identified to FGC and approved in writing, which approval will not be
unreasonably withheld (collectively, the "GB Golf Prospects"). GB Golf will
introduce FGC's designated representatives to appropriate representatives of
the GB Golf Prospects, and will provide such reasonable sales support as may be
requested from time to time by FGC to develop, introduce and follow-up on
sponsorship proposals for such persons. GB Golf shall not have authority to
bind or commit FGC or any of its affiliates to any sponsorship agreement, but
shall participate with FGC's personnel in the review and negotiation of any
such agreement if requested by FGC. In the event that FGC and/or any of its
affiliates enters into any sponsorship agreement for a golf facility with a GB
Golf Prospect under this Section, FGC agrees to pay GB Golf a commission equal
to thirty-five percent (35%) of the total sponsorship revenues generated from
such agreement during its base term and any renewal options granted under such
agreement. Such commissions shall be reported and paid to GB Golf as and when
the corresponding sponsorship revenues are received by FGC or its affiliates.
2. FGC shall have the right to offer and sell stand-alone retail golf
school packages offered to the general public by GB Golf's Nicklaus/Flick Golf
School division (the "School") to
Family Golf Centers, Inc.
Golden Bear International, Inc.
June 15, 1998
page 2
customers of golf facilities operated by FGC and its affiliates (the "FGC
Customers"), including those facilities operated under the Sublicense and under
the Family Golf Centers(R) trademarks. The operators of such facilities will
act as independent sales representatives, and GB Golf will provide them with
reasonable supplies of advertising and promotional materials for use in selling
the School to FGC Customers, and the School will also provide coded
applications and/or telephone fulfillment codes to be used by such operators so
that the School can track bookings received from FGC Customers. GB Golf agrees
to pay FGC a commission in the amount of ten percent (10%) of the revenues
generated from retail golf school programs sold to the FGC Customers, which
commissions shall be reported and paid to FGC monthly based upon the School's
receipts during the prior month.
3. FGC shall have the right to market golf course design services of GBI's
Nicklaus Design division as an independent representative to existing corporate
sponsors of FGC and its affiliates, and to such other business or personal
contacts of FGC, Xxxxxxx Xxxxx and their affiliates as may be identified to GBI
and approved in writing, which approval will not be unreasonably withheld
(collectively, the "FGC Prospects"). FGC will introduce GBI's designated
representatives to appropriate representatives of the FGC Prospects, and will
provide such reasonable sales support as may be requested from time to time by
Nicklaus Design to develop, introduce and follow-up on golf course design
proposals for such persons. FGC shall not have authority to bind or commit GBI
or any of its affiliates to any golf course design agreement, but shall
participate with Nicklaus Design's personnel in the review and negotiation of
any such agreement if requested by GBI. In the event that GBI and/or any of its
affiliates enters into any agreement to design a golf course facility with an
FGC Prospect under this Section, GBI agrees to pay FGC a commission equal to
five percent (5%) of the total design fees generated from such agreement. Such
commissions shall be reported and paid to FGC as and when the corresponding
design fees are received by GBI or its affiliates.
4. In order to facilitate the marketing efforts of the parties under
Sections 1 and 3, above, GB Golf, GBI and FGC agree to prepare, exchange and
review lists of the GB Golf Prospects and FGC Prospects as soon as practicable
after the effective date of this Agreement, and prior to the time any such
prospects are contacted by the respective parties. GB Golf shall be responsible
for notifying FGC in writing of additional GB Golf Prospects which GB Golf
wishes to pursue under Section 1 and securing FGC's approval of such prospects
prior to contacting them to market sponsorships. FGC shall be responsible for
notifying GBI in writing of additional FGC Prospects which FGC wishes to pursue
under Section 2 and securing GBI's approval of such prospects prior to
contacting them to market golf course design services.
5. In support of their marketing activities under this Agreement, FGC and
GB Golf agree that they will jointly own all customer and prospect names
generated from the operation of those golf facilities operated as Golden Bear
Golf Centers(R) under the Sublicense by FGC's affiliates, including Old GBGC
and OAI. FGC and GB Golf agree that both of them may utilize such names for
their respective marketing activities, including joint marketing activities
with sponsors, major customers, licensees and strategic marketing partners,
upon payment of reasonable out of pocket duplication costs and the costs of any
sorting required in connection
Family Golf Centers, Inc.
Golden Bear International, Inc.
June 15, 1998
Page 3
with such use. GB Golf and FGC will share equally in any revenues derived from
list rentals or similar payments received from unaffiliated third parties for
use of names or other information maintained on customers of the Golden Bear
Golf Centers(R).
6. The initial term of this Agreement shall commence at the closing of
FGC's purchase of Old GBGC and shall continue until the expiration or earlier
termination of the Sublicense Agreement. After expiration of the initial term,
any party may terminate the rights of the other parties to engage in any
authorized marketing activities on such party's behalf on sixty (60) days'
prior written notice, provided that no such termination shall (i) terminate any
of the marketing relationships of the other parties under this Agreement, or
(ii) terminate the right of any party to earn commissions with respect to
authorized transactions in process as of the date notice of such termination is
received. Upon termination of all remaining marketing activities by the parties
under this Agreement, this Agreement shall thereafter terminate and be of no
further force and effect. In the event the Stock Purchase Agreement is
terminated prior to the closing of FGC's acquisition of Old GBGC, this
Agreement will be null and void, and none of the parties will be authorized or
obligated to perform any of the marketing activities described hereunder or to
make any payments with respect thereto.
7. Each party will act as an independent contractor hereunder, and no
party shall have the right to bind another party to any matter, cause or thing
without the prior written consent of the party to be charged. Each party shall
be responsible for payment of its own overhead, expenses and taxes in
connection with any marketing activities undertaken by such party under this
Agreement, and each party shall be responsible for directing its respective
employees and agents and for selecting the manner, methods and means selected
to accomplish the purposes of this Agreement.
If the foregoing accurately sets forth the terms of our Agreement, please
sign the counterparts of this letter to indicate your acceptance of the above
terms, subject to completion of the contemplated acquisition by FGC, and retain
one of the signed counterparts for your files.
Very truly yours,
ACCEPTED AND AGREED TO: Xxxxxx X. Xxxxxx
GOLDEN BEAR INTERNATIONAL, INC. FAMILY GOLF CENTERS, INC.
By: By:
---------------------------------- --------------------------------
Name: Name:
Title: Title:
Its Authorized Officer Its Authorized Officer
