EXHIBIT 10.35
XXX.XXX TOUR AGREEMENT
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THIS AGREEMENT ("Agreement") is made and entered into as of the 25th day of
October, 1999 (the "Effective Date") by and between PGA TOUR, INC., a Maryland
corporation ("TOUR"), and XXX.XXX, INC., a Delaware corporation ("XXX.XXX").
BACKGROUND FACTS
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A. TOUR is the organization of certain professional tournament golfers of
worldwide stature that, among other things, sanctions and co-sponsors certain
professional golf tournaments (the "PGA TOUR," "SENIOR PGA TOUR" and what is
currently referred to as the "NIKE TOUR").
B. XXX.XXX is recognized in the electronic commerce industry.
C. XXX.XXX and TOUR desire for XXX.XXX to become the umbrella sponsor of the
professional golf circuit currently known as the NIKE TOUR and to have such tour
be renamed the XXX.XXX TOUR.
D. Pursuant to the umbrella sponsorship of the XXX.XXX TOUR, XXX.XXX will
receive certain promotional rights, corporate hospitality benefits and media
exposure, subject to the terms and conditions set forth herein.
RECITAL OF CONSIDERATION
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NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, TOUR and XXX.XXX hereby agree as
follows:
AGREEMENT OF THE PARTIES
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1. ACCURACY OF RECITALS.
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To the best of the parties' knowledge, the statements set forth above in
the section labeled "Background Facts" are true and correct. Neither party is
aware of any fact or circumstance that would render such statements misleading.
2. UMBRELLA SPONSORSHIP.
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2.1 Name. XXX.XXX acknowledges the existence of the professional golf
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circuit owned and operated by TOUR which is currently known as the "NIKE TOUR"
(the "Professional Circuit"). TOUR and XXX.XXX hereby agree that as of the
Effective Date, (i) XXX.XXX shall become the exclusive umbrella sponsor of the
Professional Circuit, (ii) the Professional Circuit shall be renamed the XXX.XXX
TOUR, and (iii) each individual event which is part of the XXX.XXX TOUR (each a
"TOUR Event") shall include the XXX.XXX name (e.g., XXX.XXX Knoxville Open)
(such renamed Professional Circuit shall be referred to herein as the "XXX.XXX
TOUR").
2.2 Exclusivity. XXX.XXX shall have the exclusive right to have its name
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included in the title of the XXX.XXX TOUR and in the title of each TOUR Event.
No other sponsor shall have its name or other identification included in the
name of the XXX.XXX TOUR or in the name of any individual TOUR Event; provided
that, XXX.XXX acknowledges and agrees TOUR shall have the right to sell other
non-title sponsorships associated with individual or multiple TOUR Events,
including, without limitation, presenting sponsorships (e.g., XXX.XXX Knoxville
Open presented by Buick), so long as no such sponsors are "Competitors" (as such
term is defined in Exhibit A attached hereto), or are otherwise harmful to
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the image or reputation of XXX.XXX.
2.3 XXX.XXX TOUR Operation. XXX.XXX acknowledges and agrees that TOUR
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shall be solely responsible for all aspects of operating the XXX.XXX TOUR,
including, without limitation, promulgating and enforcing XXX.XXX TOUR
Tournament Regulations; provided that TOUR will solicit XXX.XXX's advice and
counsel on all major
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elements of the XXX.XXX TOUR, including feedback on issues including, but not
limited to, brand positioning, market scheduling, television strategy, and
promotion. Within fourteen (14) days of the Effective Date, a task force from
each party shall be created to oversee the initial transition and branding of
the XXX.XXX TOUR. Thereafter during the "Term" (as defined herein), this task
force will meet on a quarterly basis to address various issues associated with
the XXX.XXX TOUR. TOUR agrees to explore with XXX.XXX the possibility of XXX.XXX
selling newly created or existing but unsold sponsorship positions at TOUR
Events so long as any such arrangement results in a net increase in revenue for
the applicable TOUR Event.
2.4 Events and Markets.
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2.4.1 Number of Events. In 1999, the Professional Circuit consisted of
the thirty (30) annual events listed on Exhibit B. During the Term, the parties
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agree to maintain the XXX.XXX TOUR at a quality and number of events that is in
all respects comparable to or better than the 1999 Professional Circuit. TOUR
shall have the right to add new TOUR Events and extend the number of TOUR Events
on the XXX.XXX TOUR beyond the current annual schedule of thirty (30), provided
such additional TOUR Events are of comparable or better quality to the events on
the 1999 Professional Circuit. References herein to the XXX.XXX TOUR shall
include the thirty (30) TOUR Events on Exhibit B, any successors of such TOUR
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Events, and any new TOUR Events added to the XXX.XXX TOUR. TOUR and
XXX.XXX shall also analyze the possibility of establishing a number of "marquee"
events on the XXX.XXX TOUR (similar to THE PLAYERS CHAMPIONSHIP on the PGA
TOUR). If in any year during the Term the number of TOUR events changes, the
parties agree to follow the procedures set forth on Exhibit C.
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2.4.2 Markets. The parties hereto acknowledge and agree that TOUR
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Events will take place in a wide variety of markets, generally characterized as
"mid-sized," where there is typically not a PGA TOUR or SENIOR PGA TOUR
tournament presence. TOUR will solicit information regarding, and consider
XXX.XXX's objectives and desires with respect to, the markets in which the TOUR
Events are placed. Prior to the scheduling of all new TOUR Events, or the
relocation of an existing TOUR Event, TOUR will discuss with XXX.XXX all
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market options and use commercially reasonable efforts to accommodate XXX.XXX's
requests. The parties agree that they will focus their respective efforts
towards adding new TOUR Events of a caliber and quality that are comparable to,
or better than, TOUR Events played on the Professional Circuit in 1999.
Additionally, TOUR shall seek to increase the number of TOUR Events conducted at
Tournament Players Clubs.
2.4.3 International Market Expansion. In the event TOUR desires
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to expand the XXX.XXX TOUR to include TOUR Events outside the United States,
TOUR will so notify XXX.XXX in writing pursuant to the procedures set forth in
Exhibit D.
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2.4.4 Purse. TOUR agrees that during the Term, the purse levels
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for TOUR Events will be as set forth on Exhibit E.
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2.5 PGA TOUR Access. TOUR agrees that it will not decrease the number
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of opportunities for players on the XXX.XXX TOUR to earn the right to play on
the PGA TOUR from the number of opportunities that existed on the 1999
Professional Circuit.
3. XXX.XXX TOUR XXXX.
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3.1 Creation of XXX.XXX TOUR Logo. TOUR and XXX.XXX agree that the
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logo attached hereto as Exhibit F shall be the official logo of the XXX.XXX TOUR
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(the "XXX.XXX TOUR Logo"). The XXX.XXX TOUR Logo together with the word xxxx
XXX.XXX TOUR shall be collectively referred to herein as the "XXX.XXX TOUR
Xxxx". Neither party shall take any action to register the XXX.XXX TOUR Xxxx
without the prior written approval of the other party.
3.2 Use of XXX.XXX TOUR XXXX by TOUR. During the Term and subject to
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Sections 8 and 9, TOUR shall have the right to use, and shall use, the XXX.XXX
TOUR XXXX and/or XXX.XXX TOUR name in connection with all activities associated
with the XXX.XXX TOUR, including, but not limited to, marketing and media
materials. The parties acknowledge and agree that TOUR shall have the sole and
exclusive right to manufacture,
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distribute and sell XXX.XXX TOUR merchandise and to allow other third parties to
accomplish these tasks (the "Merchandise"), and TOUR shall be entitled to retain
all revenue associated therewith; provided that (i) XXX.XXX shall have the sole
and exclusive right to conduct all e-commerce sales or distribution of the
Merchandise, and to retain all revenues associated therewith, and (ii) TOUR
shall consider from time to time requests from XXX.XXX to source Merchandise
through third party vendors, if such vendors can produce Merchandise of equal
quality at a lower price. In addition, TOUR shall make the Merchandise available
to XXX.XXX, at prices equal to TOUR's cost for such merchandise, for electronic
distribution by XXX.XXX. TOUR agrees that XXX.XXX shall have a limited right to
sell Merchandise other than through on-line sales, subject to TOUR approval.
TOUR agrees that all uses of XXX.XXX TOUR Xxxx outside the promotion and
sponsorship by XXX.XXX TOUR or other than as expressly provided in this
Agreement shall be subject to XXX.XXX's prior written approval.
3.3 Rebranding Program. TOUR shall implement a rebranding campaign,
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regarding the XXX.XXX TOUR and the XXX.XXX TOUR XXXX, the specifics of which are
attached hereto as Exhibit G. As part of this rebranding effort, TOUR shall
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create a new television institutional advertisement regarding the new XXX.XXX
TOUR to be broadcast in a variety of TOUR television vehicles at TOUR's expense.
The schedule for television and other media spots for the first quarter of 2000
is also set forth on Exhibit G. Additionally, TOUR shall work closely with its
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broadcast rights holders to ensure continued and correct usage of
in-program graphics, announcer mentions, leaderboard signage, and on-course
signage related to XXX.XXX TOUR Events, players, and alumni, at TOUR's expense.
3.4 Quality of Operation. The parties acknowledge the goodwill which
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TOUR and XXX.XXX will develop in connection with the XXX.XXX TOUR XXXX.
Accordingly, the parties agree that each will not knowingly nor intentionally
take any actions which could adversely affect such goodwill as developed by TOUR
and XXX.XXX.
3.5 Quality Control. All promotional or advertising material
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containing the XXX.XXX TOUR XXXX shall be of a high quality that does not
derogate from or adversely affect the XXX.XXX TOUR XXXX or the goodwill and
reputation associated therewith.
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3.6 Termination. The parties acknowledge and agree that upon the
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expiration or the earlier termination of this Agreement for any reason, neither
party shall use the XXX.XXX TOUR XXXX in any manner (except by TOUR for
historical references to statistics, events, etc.).
4. MEDIA EXPOSURE.
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4.1 XXX.XXX TOUR Event Telecasts. XXX.XXX acknowledges that under
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TOUR's current television agreements, which are in effect through the year 2002,
The Golf Channel has the exclusive rights to all TOUR Events, with a minimum
obligation to provide broadcast coverage of ten (10) TOUR Events annually, with
the season-ending XXX.XXX TOUR Championship carried on The Golf Channel and Fox
Sports Net. The parties acknowledge that television coverage for the XXX.XXX
TOUR after 2002 will be subject to new broadcast television agreements, which
will be negotiated by TOUR in 2001; provided that TOUR shall consult with
XXX.XXX regarding ongoing negotiations and discussions for such television
coverage. TOUR will use its commercially reasonable best efforts in these
negotiations to maintain comparable, if not gain increased coverage of, the TOUR
Events. XXX.XXX shall have the option to purchase advertising units within the
XXX.XXX TOUR Event telecasts subject to the mutual agreement of XXX.XXX and the
applicable broadcaster.
4.2 Updates in PGA TOUR and SENIOR PGA TOUR Telecasts. XXX.XXX
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acknowledges that TOUR's current PGA TOUR television contracts and practice are
in effect through 2002 and SENIOR PGA TOUR television contracts and practice are
in effect through 2000. These existing television contracts provide for the
XXX.XXX TOUR to receive event updates and upcoming event promotions in the
television coverage during most every PGA TOUR and SENIOR PGA TOUR event
throughout the year as set forth on Exhibit H.
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4.3 International Television. The television broadcasts that provide
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XXX.XXX TOUR exposure through updates and promotions within PGA TOUR and SENIOR
PGA TOUR telecasts referenced in Section 4.2 above will continue to be
distributed
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internationally via TOUR's international television agreements. During the Term,
TOUR will ensure that this international exposure will continue for the term of
those agreements and any extensions, renewals or successor agreements. In
addition, TOUR will provide for such continued international exposure during the
Term by entering into new contracts, extensions or renewals of such
international television agreements.
4.4 PGA XXXX.XXX Exposure. TOUR shall ensure that the XXX.XXX TOUR
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XXXX will receive prominent, above-the-fold exposure on the XXXXXXX.xxx web site
(and any successor web site) (the "TOUR Site") during the Term, including,
without limitation, XXX.XXX TOUR XXXX utilization on the home page of the TOUR
Site; XXX.XXX TOUR XXXX utilization on all XXX.XXX TOUR player biography,
statistics and tournament pages; XXX.XXX TOUR XXXX utilization on the XXX.XXX
TOUR's live scoring pages; and XXX.XXX TOUR XXXX or name utilization in
substantial XXX.XXX TOUR editorial features and/or promotions undertaken on the
TOUR Site. The XXX.XXX TOUR XXXX will be a hot link to the home page of the
XXX.XXX TOUR section of the TOUR Site and TOUR and XXX.XXX will establish a
mutually acceptable reciprocal, above the fold link between such page and
XXX.XXX's web site.
4.5 TOUR Media. TOUR agrees that the XXX.XXX TOUR will be featured
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prominently in all TOUR owned and/or controlled media that may exist at any time
during the Term, which currently includes the "Inside the PGA TOUR" and "Inside
the SENIOR PGA TOUR" television shows, "PGA TOUR Partners Magazine," the annual
TOUR Magazine insert in "Golf Magazine," and TOUR Media Guides and applicable
press releases. During the Term in any TOUR media where there is currently a
feature referring to NIKE TOUR, that feature will reference the XXX.XXX TOUR,
including, without limitation, all of the "Inside the PGA TOUR" and "Inside the
SENIOR PGA TOUR" television shows which currently feature NIKE TOUR recaps
and/or promotions, shall continue as XXX.XXX TOUR recaps and/or promotions
during the Term.
4.6 Earned Media. The XXX.XXX TOUR will receive significant national
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and local media exposure through both television and print media during the
course of the
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XXX.XXX TOUR's editorial and news coverage by third parties. TOUR will develop a
transitional rebranding campaign to be launched no later than January 1, 2000
for the media to editorially ingrain XXX.XXX's position as the new umbrella
title sponsor.
4.7 Media Value. As set forth in this Section 4, certain facets of
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future XXX.XXX TOUR media exposure are subject to future negotiations between
TOUR and third parties. The parties acknowledge and agree that the maintenance
and expansion of such media exposure is in their mutual best interests. TOUR
shall use its commercially reasonable best efforts to obtain comparable or
superior media value for the XXX.XXX TOUR. In the event TOUR is unable to
provide comparable media value, TOUR will provide additional, comparable
exposure or value from its other media inventory. In the event TOUR is unable to
provide such additional value, TOUR shall provide an appropriate reduction in
the "Sponsorship Fee" (as defined herein), which shall be mutually agreed upon
by the parties.
5. ON-SITE EXPOSURE.
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5.1 XXX.XXX TOUR Tournament Elements. TOUR will place the XXX.XXX TOUR
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XXXX prominently on all publications, merchandise, advertising and other
marketing elements associated with each individual TOUR Event, and TOUR will
place the XXX.XXX TOUR XXXX on the electronic scoreboards, tournament signage,
tickets, publications, pairing sheets, caddie vests, hole flags and volunteer
uniforms for each TOUR Event. TOUR will use commercially reasonable best efforts
to use the XXX.XXX TOUR XXXX on concessions cups and the like.
5.2 Additional On-Site Opportunities. At XXX.XXX's election and
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expense, XXX.XXX shall have the right to showcase its products and services at
individual TOUR Event venues (including, without limitation, the opportunity to
present a XXX.XXX TOUR on-line store via kiosks to tournament fans, on-site
coupon distribution, product sampling, etc. ). XXX.XXX will choose the size and
location of such display areas (minimum size of 10' x 10'), subject to TOUR's
approval which shall not be unreasonably withheld.
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6. ADDITIONAL PROMOTIONAL VALUE FOR XXX.XXX.
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6.1 Tickets. Each year during the Term, XXX.XXX will receive two
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hundred (200) grounds credentials for each TOUR Event at no cost to XXX.XXX. In
addition, each year during the Term, XXX.XXX will receive, at no cost to
XXX.XXX, an aggregate of two hundred (200) tournament credentials (each such
credential providing access to a tournament for one (1) week) for use at PGA
TOUR Events and SENIOR PGA TOUR Events. No more than one hundred twenty (120)
such credentials may be used on any one (1) TOUR, and no more than ten (10)
tickets may be used at any one (1) event. Additional credentials will be
provided through TOUR at the price paid by TOUR for such credentials.
6.2 Pro-Am Spots. Each year during the Term, XXX.XXX will receive, at
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no cost, twelve (12) Pro-Am spots in the Official Wednesday Pro-Am of each TOUR
Event. XXX.XXX may use its Pro-Am spots for any amateur player of reasonable
capability, at the discretion of XXX.XXX. In addition, each year during the
Term, XXX.XXX will receive an aggregate of four (4) Pro-Am spots on each of the
PGA TOUR and SENIOR PGA TOUR. Selection of such Pro-Am spots will be determined
by TOUR, after consultation with XXX.XXX, provided that TOUR shall provide such
Pro-Am spots in at least two different events on each of the PGA TOUR and SENIOR
PGA TOUR. XXX.XXX may purchase additional Pro-Am spots, subject to availability,
at the price paid by TOUR for such additional Pro-Am spots.
6.3 TPC Club Membership. At no cost to XXX.XXX, XXX.XXX will receive
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one (1) corporate membership to the Tournament Players Club network providing
two (2) designees at any one (1) time who will be entitled to full membership
privileges at the Tournament Players Club at Sawgrass. Such membership
privileges shall permit the designees to play golf at the Tournament Players
Club at Sawgrass without the payment of initiation fees, annual membership fees
or greens fees and also allow the use of locker room facilities. The designees
may also bring or send guests to other Tournament Players Club facilities
worldwide, subject to the Bylaws of the Tournament Players Club at Sawgrass and
each other Tournament Players Club. Such corporate membership shall
automatically terminate and be deemed revoked
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as of the expiration or earlier termination of the Term. XXX.XXX shall have the
right to change the designees upon thirty (30) days written notice to TOUR.
6.4 Client Functions. Each year during the Term, TOUR shall invite
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certain XXX.XXX executives, at the discretion of TOUR, to TOUR's annual
client functions, so long as such functions remain in existence. The location
and activities of the client functions may change each year, but provide an
opportunity for networking with other TOUR sponsors.
6.5 XXX.XXX Hospitality. Each year during the Term, TOUR shall provide
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XXX.XXX, at no cost, with an 18th hole hospitality tent or skybox (generally for
groups of fifty (50) including Clubhouse credentials with VIP access (or similar
hospitality)) at each XXX.XXX TOUR Event. The specifics of each package is to be
determined by TOUR. Food and beverage for such hospitality area shall be at
XXX.XXX's expense. XXX.XXX may, from time to time, and subject to TOUR approval,
transfer or resell its hospitality inventory, XXX.XXX pro-am spots and/or TOUR
Event tickets to third parties, so long as such sales or transfers do not
adversely affect the applicable TOUR Event's sales of similar items.
6.6 World Golf Championships Hospitality. Each year during the Term,
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and at no cost to XXX.XXX, TOUR shall provide XXX.XXX an Embassy Row Hospitality
Tent (inclusive of food, beverages and forty (40) admission passes for each of
the following three (3) days (Wednesday, Friday and Sunday)) at the World Golf
Championships Xxxxxxxx Consulting Match Play Championship in Carlsbad,
California, for so long as that event shall continue to be played in Carlsbad
during the Term. If the tournament is not played in Carlsbad, California, TOUR
will provide comparable hospitality at a mutually acceptable alternative PGA
TOUR event.
7. CONSUMER PROMOTIONAL PROGRAMS. XXX.XXX shall have the right to conduct
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consumer promotions around a XXX.XXX TOUR theme, including print, radio,
television and Internet advertising. These promotions may include hospitality or
ticket giveaways, sweepstakes opportunities, etc. (all in accordance with
existing TOUR policies that have been previously provided to XXX.XXX and all
applicable laws). All such promotions are
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subject to TOUR's prior approval, such approval not to be unreasonably withheld.
XXX.XXX shall also have the right to use the designation "Official Online
Superstore of the PGA TOUR", or such other designation that is mutually agreed
upon by TOUR and XXX.XXX (the "Designation") solely in conjunction with the
XXX.XXX brand. Use of the Designation shall be subject to a separate mutually
acceptable license agreement.
8. USE OF XXX.XXX MARKS.
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8.1 License. For the Term of this Agreement, XXX.XXX hereby grants to
TOUR a fully-paid, nonexclusive, nontransferable, nonsublicensable, royalty-
free, worldwide license to use the trademarks of XXX.XXX attached hereto as
Exhibit I, for which XXX.XXX is the sole owner (the "XXX.XXX MARKS") alone and
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as part of the XXX.XXX TOUR XXXX and solely in accordance with this Agreement.
8.2 Proprietary Markings. TOUR hereby agrees to ensure that all
trademark and other proprietary notices of XXX.XXX affixed to or displayed on
the XXX.XXX MARKS will not be removed, obscured or modified; except that, with
respect to the XXX.XXX TOUR Xxxx only, such proprietary notices shall only be
included adjacent to the exterior of the XXX.XXX TOUR XXXX.
8.3 XXX.XXX Trademarks. TOUR acknowledges that XXX.XXX is the owner of
all right, title and interest in and to the XXX.XXX MARKS, together with any new
or revised names, designs or designations that XXX.XXX may adopt during the
Term, and TOUR agrees not to use the XXX.XXX MARKS in any manner whatsoever
except as expressly provided in this Agreement. In addition, XXX.XXX shall
provide TOUR with the specifications, style and other requirements for the use
of the XXX.XXX MARKS (the "Specifications"), attached hereto as Exhibit I. TOUR
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shall abide by the Specifications when using the XXX.XXX MARKS. TOUR
shall execute any documents reasonably requested by XXX.XXX to assist XXX.XXX in
the prosecution, maintenance, protection or defense of the XXX.XXX MARKS.
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8.4 Use Guidelines. Subject to the foregoing, BUY COM acknowledges and
agrees that TOUR shall not be required to obtain approval from XXX.XXX for any
day to day uses by TOUR of the XXX.XXX TOUR XXXX (provided they are used in
accordance with this Agreement and the terms and conditions of Section 9
herein). Any other use of the XXX.XXX MARKS is subject to the following: (a)
they must be used solely in accordance with the Specifications, and (b) such use
shall be subject to prior written approval of XXX.XXX, in accordance with the
procedures set forth below in this paragraph. In addition, in advance of any
dissemination or use by TOUR of any: (i) art work involving the XXX.XXX MARKS;
or (ii) advertising or promotional material or literature bearing the XXX.XXX
MARKS, TOUR, at its own expense, shall submit one (1) sample of each such art
work, advertising or promotional material or literature to XXX.XXX, at the
address specified by XXX.XXX in accordance with this Agreement, for its prior
approval. XXX.XXX shall have ten (10) business days after receipt of any such
sample during which to approve or disapprove the proposed use or design. If
XXX.XXX does not notify TOUR of its disapproval of any such proposed use or
design on or before the conclusion of such ten (10) business day period, XXX.XXX
shall be deemed to have approved such proposed use or design. XXX.XXX shall not
unreasonably withhold approval. If any such proposed usage is disapproved by
XXX.XXX, along with its notice of disapproval, XXX.XXX shall supply TOUR with
written notice of the specific reasons for such disapproval, but in any event
XXX.XXX's decision shall be final and TOUR shall abide by any such disapproval
of XXX.XXX. TOUR shall have the right to resubmit modified materials.
8.5 Quality of Operation. TOUR acknowledges the goodwill which XXX.XXX
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has developed in connection with the XXX.XXX MARKS. Accordingly, TOUR agrees
that it will not knowingly and intentionally take any actions which could
adversely affect such goodwill as developed by XXX.XXX.
8.6 Reservation of Rights. All right, title and interest to the XXX.XXX
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MARKS, and other intellectual property and proprietary rights associated
therewith other than those specifically granted herein, shall at all times
remain that of XXX.XXX for its own exclusive use and benefit, and all use of the
XXX.XXX name and XXX.XXX MARKS shall inure solely to the benefit of XXX.XXX.
TOUR understands and agrees that upon the expiration
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or the earlier termination of this Agreement for any reason, all of its rights
and interests granted herein in the XXX.XXX MARKS and any other intellectual
property of XXX.XXX shall cease, and all such rights and interests shall revert
to XXX.XXX.
8.7 Quality Control. All promotional or advertising material containing
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the XXX.XXX MARKS shall be of a high quality that does not derogate from or
adversely affect the XXX.XXX MARKS or the goodwill and reputation associated
therewith.
8.8 No Prejudice of Trademarks. TOUR agrees that it will not use at any
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time during the Term any other trademark, brand name, trade name, symbol, design
or the like that XXX.XXX reasonably believes is similar to or possibly may be
confused with the XXX.XXX MARKS. TOUR will not intentionally take any action
that will harm or prejudice the XXX.XXX MARKS or XXX.XXX's rights therein in any
way. TOUR agrees not to apply for registration anywhere in the world of any
trademarks of XXX.XXX, including the XXX.XXX MARKS or any xxxx confusingly
similar thereto, and TOUR also agrees not to use or contest, during or after the
term of this Agreement, the XXX.XXX Marks or any other trademark or logo adopted
by XXX.XXX, so long as such logos are not confusingly similar to any marks used
by TOUR.
8.9 Change of XXX.XXX MARKS. In the event XXX.XXX desires to change the
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XXX.XXX MARKS, XXX.XXX shall notify TOUR of the change (the "Change Notice").
TOUR shall implement the change within the XXX.XXX TOUR XXXX and all of its uses
where possible within twelve (12) months of TOUR's receipt of the Change Notice.
XXX.XXX shall reimburse TOUR for fifty percent (50%) of the actual costs of
implementing such change.
9. USE OF XXX.XXX TOUR XXXX. XXX.XXX agrees that all uses of the XXX.XXX
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TOUR XXXX by XXX.XXX shall be subject to the prior approval of TOUR, except that
specific uses, as well as categories or types of uses, that are approved once
will not require separate approval in each instance, and internal XXX.XXX uses
shall not require approval. In advance of any dissemination or use by XXX.XXX of
any: (i) art work involving
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the XXX.XXX TOUR XXXX; or (ii) advertising or promotional material or literature
bearing the XXX.XXX TOUR XXXX, XXX.XXX, at its own expense, shall submit one (1)
sample of each such art work, advertising or promotional material or literature
to TOUR at the address specified by TOUR in accordance with this Agreement. TOUR
shall have ten (10) business days after receipt of any such sample during which
to approve or disapprove the proposed use or design. If TOUR does not notify
XXX.XXX of its disapproval of any such proposed use or design on or before the
conclusion of such ten (10) business day period, TOUR shall be deemed to have
approved such proposed use or design. TOUR shall not unreasonably withhold
approval. If any such proposed usage is disapproved by TOUR, along with its
notice of disapproval, TOUR shall supply XXX.XXX with written notice of the
specific reasons for such disapproval, but in any event, TOUR's decision shall
be final and XXX.XXX shall abide by any such disapproval of TOUR. XXX.XXX shall
have the right to resubmit modified materials.
9.1 Quality of Operation. The parties acknowledge the goodwill which
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TOUR and XXX.XXX will develop in connection with the XXX.XXX TOUR XXXX.
Accordingly, the parties agree that each will not knowingly and intentionally
take any actions with could adversely affect such goodwill as developed by TOUR
and XXX.XXX.
9.2 Reservation of Rights. The parties understand and agree that upon
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the expiration or the earlier termination of this
Agreement for any reason, all of the rights and interests granted herein in the
XXX.XXX TOUR XXXX shall cease, and neither party shall have any rights to or use
in any manner the XXX.XXX TOUR XXXX.
9.3 Quality Control. All promotional or advertising material containing
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the XXX.XXX TOUR XXXX shall be of a high quality that does not derogate from or
adversely affect the XXX.XXX TOUR XXXX or the goodwill and reputation associated
therewith.
9.4 No Prejudice of Trademarks. XXX.XXX agrees that, after prior written
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notice from TOUR, it will not use at any time during the Term any other
trademark, brand name, trade name, symbol, design or the like that TOUR
reasonably believes is similar to or possibly may be confused with the XXX.XXX
TOUR XXXX, excluding the "XXX.XXX" portion
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thereof. XXX.XXX will not intentionally take any action that will harm or
prejudice the XXX.XXX TOUR XXXX or either party's rights therein in any way.
10. TERM.
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10.1 The term of this Agreement shall commence as of the date of this
Agreement, and terminate on December 31, 2004, unless sooner terminated or
extended in accordance with this Section 10 (the "Term"); provided, however, the
parties acknowledge and agree that the renaming of the XXX.XXX TOUR and the
operational aspects of this Agreement shall not begin until January 1, 2000.
10.2 This Agreement will automatically terminate upon the occurrence of
any one (1) of the following events:
(a) Upon the occurrence of certain events in accordance with
Section 11;
(b) Upon an Event of Default as described in Section 13 hereof; or
(c) Upon the termination or expiration of that certain E-Commerce
Agreement by and between TOUR and XXX.XXX of even date herewith (the "E-Commerce
Agreement").
10.3 Either party may terminate this Agreement immediately upon written
notice to the other party in the event that such other party is finally
adjudicated by a court of competent jurisdiction to have committed any act or
done anything which shall be an offense involving moral turpitude under federal,
state or local laws.
10.4 Effect of Termination. In the event of termination of this
---------------------
Agreement by XXX.XXX or TOUR, TOUR may only retain cash and common stock that in
the aggregate is equal to the Sponsorship Fees for the period that has expired
from January 1, 2000 until the
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effective date of termination (with part years pro-rated). For purposes of this
Section 10.4, the market value of the common stock shall be determined as
follows:
(a) If traded on a national securities exchange or through the
NASDAQ National Market, the value shall be deemed to be the average of the
last reported sale or closing prices of the securities on such exchange or
market over the last ten (10) trading days immediately prior to the
effective date of termination);
(b) If there is no active public market, the value shall be the
fair market value thereof, as determined in good faith by Williamette
Valuation (if separately engaged for this purpose) or such other
independent auditor as the parties may mutually agree.
Notwithstanding the foregoing, in the event of any termination by TOUR
pursuant to Section 11, the provisions of Section 11 shall control and this
Section 10 shall have no effect. Any repurchase of XXX.XXX stock by XXX.XXX
shall be in accordance with the terms of that certain Common Stock Issuance
Agreement between the parties of equal date herewith (the "Stock Issuance
Agreement").
11. SPONSORSHIP FEE.
----------------
Subject to the terms and conditions of this Agreement, the parties
agree that the total Sponsorship Fee due for the five year Term shall be funded
by XXX.XXX's issuance of 1,800,000 shares of XXX.XXX Common Stock, payment of
$8.5 million upon completion of XXX.XXX's initial public offering and securing a
$17 million letter of credit, all of which shall be subject to the terms and
conditions set forth on Exhibit J (the "Sponsorship Fee"). XXX.XXX acknowledges
---------
that TOUR's internal annual allocations of such funds are as set forth in
Exhibit K.
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12. REPRESENTATIONS AND WARRANTIES.
------------------------------
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12.1 By XXX.XXX. As a material inducement for TOUR to enter into this
----------
Agreement, XXX.XXX represents and warrants to TOUR (and unless otherwise
specified, such representations and warranties are true as of the date hereof
and will continue to be effective at all times, as if continuously reiterated
through the Term) that:
(a) XXX.XXX is a corporation, duly organized and in good standing
under the laws of the State of Delaware. XXX.XXX has full power and authority to
execute and deliver this Agreement and all documents now or hereafter to be
executed and delivered by it pursuant to this Agreement, and to perform all
obligations arising under this Agreement and under such other agreements. This
Agreement constitutes the legal, valid and binding obligation of XXX.XXX,
enforceable in accordance with its terms, covenants and conditions against
XXX.XXX; and
(b) This Agreement does not contravene any provision of the
corporate powers of XXX.XXX, any judgment, order, decree, writ or injunction, or
any provision of any applicable law or regulation, and the delivery of this
Agreement will not result in a breach of, constitute a default under, or require
consent pursuant to any credit agreement, lease, indenture, mortgage, deed of
trust, purchase agreement, guaranty or other instrument to which XXX.XXX is a
party or by which XXX.XXX or its assets are bound or affected.
12.2 By TOUR. As a material inducement for XXX.XXX to enter into this
-------
Agreement, TOUR represents and warrants to XXX.XXX (and unless otherwise
specified, such representations and warranties are true as of the date hereof
and will continue to be effective at all times, as if continuously reiterated
through the Term) that:
(a) TOUR is a corporation, duly organized and in good standing
under the laws of the State of Maryland. TOUR has full power and authority to
execute and deliver this Agreement and all documents now or hereafter to be
executed and delivered by it pursuant to this Agreement, and to perform all
obligations arising under this Agreement and under such other agreements. This
Agreement constitutes the legal, valid and binding obligation of TOUR,
enforceable in accordance with its terms, covenants and conditions against TOUR;
and
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(b) This Agreement does not contravene any provision of the
corporate powers of TOUR, any judgment, order, decree, writ or injunction, or
any provision of any applicable law or regulation, and the delivery of this
Agreement will not result in a breach of, constitute a default under, or require
consent pursuant to any credit agreement, lease, indenture, mortgage, deed of
trust, purchase agreement, guaranty or other instrument to which TOUR is a party
or by which TOUR or its assets are bound or affected.
13. EVENTS OF DEFAULT; RIGHTS AND REMEDIES. The occurrence of any one
--------------------------------------
(1) or more of the following events prior to the expiration of the Term hereof
shall constitute an "Event of Default" hereunder:
13.1 Default by either party in the performance or observance of any of
the material terms, agreements, covenants or conditions of this Agreement (other
than payment terms which are addressed in Section 11 above), which default
continues uncured for thirty (30) days after written notice thereof;
13.2 The application by either party hereto (or its corporate parent)
for, or consent to, the appointment of a receiver, trustee, liquidator or
custodian (or similar official) of it or of all or a substantial part of its
assets, or if either party (or its corporate parent) shall: (i) make a general
assignment for the benefit of creditors; (ii) be adjudicated a bankrupt or
insolvent; (iii) file a voluntary petition in bankruptcy or a petition or an
answer seeking reorganization or any arrangement with creditors or to take
advantage of any insolvency law; (iv) file an answer admitting the material
allegations of a petition filed against it in any bankruptcy, reorganization or
insolvency proceeding; or (v) if any corporate action shall be taken by it for
the purpose of effecting any of the foregoing; or if an order, judgment or
decree shall be entered by any court or tribunal of competent jurisdiction
approving a petition seeking reorganization or appointing a receiver, trustee,
liquidator or custodian (or other similar official) of either party hereto (or
its corporate parent) or of all or a substantial part of its assets, and such
order, judgment or decree shall continue unstayed and in effect for a period of
thirty (30) consecutive days;
Page 18
13.3 Any representation or warranty contained in this Agreement shall
be false or misleading in any material respect and remains uncorrected for
thirty (30) days after written notice thereof; or
13.4 The occurrence of a material breach under the E-Commerce Letter
Agreement with a material breach by XXX.XXX thereunder shall be deemed an Event
of Default by XXX.XXX hereunder, and a material breach by TOUR thereunder shall
be deemed an Event of Default by TOUR hereunder.
14. PGA TOUR PLAYERS. XXX.XXX acknowledges that TOUR does not have the
----------------
right to use the name, signature, photograph or likeness of any PGA TOUR, SENIOR
PGA TOUR or XXX.XXX TOUR player in connection with a commercial product or
service, including, without limitation, any product or service marketed by
XXX.XXX, unless so authorized by the player. XXX.XXX agrees that it will not
exercise the rights granted in this Agreement in any manner that constitutes an
endorsement of any commercial product or service by any PGA TOUR, SENIOR PGA
TOUR or XXX.XXX TOUR player without having obtained proper advance written
authorization from such player. XXX.XXX acknowledges that it shall be its
obligation to obtain any such written authorization.
15. INDEMNIFICATION.
---------------
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15.1 XXX.XXX covenants and agrees to indemnify and hold TOUR, and its
officers, directors, employees, agents and affiliated entities and their
respective officers, directors and employees (the "TOUR Indemnitees") harmless
from and against any and all losses, claims, damages, expenses, judgments,
awards, petitions, demands or liabilities (including, without limitation,
reasonable counsel and expert witness fees whether incurred in preparation for
trial, at trial, on appeal or in bankruptcy proceedings), joint or several, to
which any of the TOUR Indemnitees may become subject on account of any breach or
alleged breach or failure of any agreements, obligations, representations or
warranties of XXX.XXX under this Agreement or any other act, omission or
representation by XXX.XXX; provided that TOUR will notify XXX.XXX promptly in
writing upon receipt of notice of any such claim and will tender to XXX.XXX the
opportunity to defend and/or settle such claim at XXX.XXX's expense and will
reasonably assist and cooperate with XXX.XXX in defending and/or settling such
claim (so long as such settlement or culpability on the part of XXX.XXX includes
(x) a general release of XXX.XXX from all liability in connection therewith and
(y) does not contain any admission of wrongdoing or culpability on the party of
XXX.XXX). TOUR shall not agree to the settlement of any such claim, action or
proceeding without the prior written consent of XXX.XXX, which shall not be
unreasonably withheld.
15.2 TOUR covenants and agrees to indemnify and hold XXX.XXX, and its
officers, directors, employees, agents and affiliated entities and their
respective officers, directors and employees (the "XXX.XXX Indemnitees")
harmless from and against any and all losses, claims, damages, expenses,
judgments, awards, petitions, demands or liabilities (including, without
limitation, reasonable counsel and expert witness fees whether incurred in
preparation for trial, at trial, on appeal or in bankruptcy proceedings), joint
or several, to which any of the XXX.XXX Indemnitees may become subject on
account of any breach or alleged breach or failure of any agreements,
obligations, representations or warranties of TOUR under this Agreement or any
other act, omission or representation by TOUR; provided that XXX.XXX will notify
TOUR promptly in writing upon receipt of notice of any such claim and will
tender to TOUR the opportunity to defend and/or settle such claim at TOUR's
expense and will reasonably assist and cooperate with TOUR in defending and/or
settling such claim (so long as such settlement or culpability on the party of
TOUR includes (x) a general release of TOUR
Page 20
from all liability in connection therewith and (y) does not contain any
admission of wrongdoing or culpability on the part of TOUR). XXX.XXX shall not
agree to the settlement of any such claim, action or proceeding without the
prior written consent of TOUR, which shall not be unreasonably withheld.
16. CONFIDENTIALITY. Except to the extent otherwise required by
---------------
applicable law, neither TOUR nor XXX.XXX shall make any public disclosure of any
of the financial terms contained in this Agreement without the prior written
consent of the other party in each instance; provided, however, that either
party may, after providing advance written notice to the other party, disclose
the terms of this Agreement and/or the transactions contemplated hereby in any
filing made pursuant to the Securities Act of 1933 ( the "Securities Act") or
the Securities Exchange Act of 1934 (the "Exchange Act"), to the extent that
such party, after consultation with outside legal counsel, determines that such
disclosure is required under the Securities Act or Exchange Act, as applicable.
17. NO AGENCY OR JOINT VENTURE. This Agreement shall not be construed as
--------------------------
in any way establishing a partnership, joint venture, express or implied agency,
employer-employee or special fiduciary relationship between the parties hereto.
18. NOTICES.
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18.1 All notices, consents, requests and other communications hereunder
shall be in writing and shall be sent by hand delivery, by certified or
registered mail (return receipt requested), or by a recognized national
overnight courier service as set forth below:
If to XXX.XXX: XXX.XXX, INC.
00 Xxxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx
Copy: General Counsel
Page 21
If to TOUR: PGA TOUR, Inc.
000 XXX XXXX Xxxxxxxxx
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
Attn: Commissioner
18.2 Notices delivered pursuant to Section 18.1 shall be deemed given:
(i) at the time delivered, if personally delivered; (ii) at the time received,
if mailed; and (iii) one (1) business day after timely delivery to the courier,
if by overnight courier service.
18.3 Any party hereto may change the address to which notice is to be
sent by written notice the other party in accordance with this Section 18.
19. MISCELLANEOUS.
-------------
19.1 This Agreement including all Exhibits hereto (all of which are
incorporated herein by this reference), contains the entire agreement and
understanding concerning the subject matter hereof between the parties hereto.
19.2 No waiver, termination or discharge of this Agreement, or any of
the terms or provisions hereof, shall be binding upon either party unless
confirmed in writing. No waiver by either party hereto of any term or provision
of this Agreement or of any default hereunder shall affect such party's rights
thereafter to enforce such term or provision or to exercise any right or remedy
in the event of any other default, whether or not similar. This Agreement may
not be modified or amended except by a writing executed by both parties hereto.
19.3 If any provision of this Agreement shall be held void, voidable,
invalid or inoperative, no other provision of this Agreement shall be affected
as a result thereof, and, accordingly, the remaining provisions of this
Agreement shall remain in full force and effect as though such void, voidable,
invalid or inoperative provision had not been contained herein.
Page 22
19.4 This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
19.5 Neither party hereto may assign this Agreement, in whole or in
part, without the prior written consent of the other party, and any attempted
assignment not in accordance herewith shall be null and void and of no force or
effort, provided that, either party may assign this Agreement to another
subsidiary or affiliate as part of a corporate reorganization or restructure, so
long as no third party owns a part of or otherwise controls such subsidiary or
affiliate.
19.6 This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, representatives,
successors and permitted assigns.
19.7 Upon the reasonable request of the other party hereto, each party
agrees to take any and all actions, including, without limitation, the execution
of certificates, documents or instruments, necessary or appropriate to give
effect to the terms and conditions set forth in this Agreement.
19.8 This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute the same Agreement. Any signature page of any such counterpart, or
any electronic facsimile thereof, may be attached or appended to any other
counterpart to complete a fully executed counterpart of this Agreement, and any
telecopy or other facsimile transmission of any signature shall be deemed an
original and shall bind such party.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date and year first above written.
PGA TOUR, INC.
By:
W. Xxxxxxx Xxxxxx
Executive Vice President
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XXX.XXX, INC.
By:
Xxxx Xxxxxxx
Chairman and Chief Executive Officer
Page 24
