EXCLUSIVE LICENSING AND
DISTRIBUTION AGREEMENT
THIS EXCLUSIVE
LICENSING AND DISTRIBUTION AGREEMENT (the “Agreement”)
is entered into on October 29, 2004, by and between
ProLink/ParView, LLC, a Delaware limited liability company
(“Supplier”), and Elumina Iberica SA; a company formed
and registered the country of Spain
(“Distributor”).
A. Supplier
develops, manufactures, markets and sells certain golf tournament
management hardware and software products designed to locate a golf
cart’s position relative to the applicable pin position and
provide the golf course with course management systems for use on
individual golf courses, which products are sold under the ParView
name and are made up of selected hardware as set forth on
Exhibit A and software (the “Product”). In
addition products covered under section 2.6 of this agreement will
also be identified as developed and new schedules regarding pricing
and material will be added as created.
B. The
parties desire to enter into this Agreement to establish a
distribution arrangement through Product in United Kingdom, Europe,
United Arab Emirates, (the “Territory”) on the terms
and conditions set forth in this Agreement.
C. Supplier
licenses certain patents used in connection with the Product as
more fully set forth on Exhibit B to this Agreement
(the “Patents”).
D. Supplier
wishes to sublicense the Patents to Distributor for use in
connection with the marketing, sales and distribution of the
Product pursuant to this Agreement (the “Licensed
Services”), and Supplier desires to grant Distributor a
non-exclusive sublicense to use the Patents on the terms and
conditions set forth herein.
NOW, THEREFORE, in
consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
As used in this
Agreement, the following words and phrases shall have the following
meanings:
1.1 “Course
Equivalent” means a golf Course or the equivalent of a golf
Course, each of which must have at least 30 golf carts.
1 .2
“Course(s)” means golf course(s) in the
Territory.
1.3
“Distributor” has the meaning given to it in the
introductory paragraph of this Agreement.
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1.5 “Initial Term” means 3-year period
beginning on the date of this Agreement and ending on the third
anniversary, unless sooner terminated as provided in this
Agreement.
1.6
“Intellectual Property” means all data collection
associated with the Product, the Patents, the Trademark and
Supplier’s software, designs, business solutions and
back-office application “rapid server” used with the
Product.
1.7
“Loaded Manufacturing Cost” means all costs of
Supplier, including manufacturing overhead costs.
1.8
“Patents” has the meaning given to it in Recital
C.
1.9
“Product” has the meaning given to it in Recital
A.
1.10
“Renewal Term” has the meaning given that term in
Section 9.1.
1.11 “RF
Cards” means the radio card used in the Product, which is
currently a 900 MHz radio (although is subject to change during the
Term).
1.12
“Supplier” has the meaning given to it in the
introductory paragraph of this Agreement.
1.13
“Term” means the Initial Term plus any Renewal
Terms.
1.14
“Territory” has the meaning given to it in Recital
B.
1.15
“Trademark” means ProLink/ParView.
1.16
“Unit(s)” means the entire Product that is placed on
one golf cart.
1.17
“VDU” means the visual display computer unit of the
Product, which is installed in the roof of the golf
cart.
ARTICLE 2
MASTER DISTRIBUTOR APPOINTMENT
2.1 Grant of
Exclusive Right . Subject to the further provisions of this
Agreement, Supplier grants Distributor the exclusive right to
market, sell, distribute and service the Product in the Territory
during the Term. Distributor may not engage sub-distributors to
market, distribute, sell or distribute the Product without the
prior written consent of Supplier, which consent may be withheld in
Supplier’s sole discretion. Further, Distributor shall not
permit the Courses to service the Product.
2.2 Minimum
Distribution Requirements . The parties agree that Distributor
shall retain the exclusive right and license to market, sell and
distribute the Product in the Territory during the Term provided
that the minimum threshold requirements set forth in
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this
Section 2.2 are met. If such minimum threshold requirements
are not met, Supplier ma)~, in its sole discretion, retain other
distributors to market, sell and distribute the Product in the
Territory and/or terminate this Agreement. In such case these
distributors and Supplier may not contact or compete in the
existing Distributor’s customer base.
(a) During
the first 12 months (beginning January 1 2005) of the Term of
this Agreement, Distributor shall install the Product on at least
twenty five (25) Course Equivalents in the
territory;
(b) During
the second 12 months of the Term of this Agreement,
Distributor shall install the Product on at least thirty
(30) Course Equivalents in the Territory
(c) During
the third 12 months of the Term of this Agreement, Distributor
shall install the Product on at least thirty —six (36)
Course Equivalents in the Territory; and
(d) If the
parties extend this Agreement beyond the Term in accordance with
Article 9, then the parties shall determine the minimum
thresholds that are required each year in the additional Term(s);
provided, however, that if the parties can not agree to the minimum
thresholds within 90 days of the expiration of the applicable Term,
either party has the right to terminate this Agreement.
Agreement to
Provide Product Exclusively . In exchange for the sole rights granted to it
pursuant to this Agreement, Distributor agrees that it shall not
market, sell or distribute any product without the prior written
consent of Supplier (which consent may be withheld in
Supplier’s sole discretion), that is competitive with the
Product (as defined in recital A and section 2.6 of this agreement)
in the Territory during the Term, including but not limited to any
portable or cart-mounted global positioning systems used in
connection with golf.
2.3
Title to Product . The title and ownership of the Product
(excluding any Intellectual Property) shall pass to Distributor
upon payment and shipment of the Product.
2.4 Reporting
Requirements~ Audit Rights . During the Term, Distributor
agrees to provide to Supplier quarterly reports detailing
Distributor’s marketing, sales and distribution efforts and
results in the Territory. Such reports shall include the number of
Units installed to date the current inventory by Territory, the
repair parts in inventory, forecasts of prospective Courses, number
of golf carts upon which the Units are installed, including the
manufacturer and make of such carts, and current warranty issues on
the Product. Distributor shall have the right, upon reasonable
notice to Supplier and during normal business hours, to
(a) examine the books and records of Supplier related to its
obligations under this Agreement only to verify the accuracy of
information contained in the reports,
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2.5 Right to
Use Additional Applications . The parties acknowledge that
Supplier is in the process of developing new applications inclusive
of advertising model for the Product. If Supplier finalizes such
applications including the advertising model, it shall provide
Distributor with the option to sell such applications inclusive of
advertising model in its marketing efforts in the Territory during
the Term on terms and conditions to be agreed upon by the parties.
There will be no additional inventory or stocking requires or
licensing fee for such applications.
2.7 Rights to
the Use of the ProLink/ParView Branding
The Supplier
recognizes the need for the Distributor to market the products of
the Supplier and as such grants the Distributor full and unfettered
rights to use the brands and collateral of the Supplier subject to
the terms of sections 4.4, 4.5. and 4.6 of this agreement.
The full cost of any brand or name change of the Supplier will be
carried by the Supplier.
ARTICLE 3
INVENTORY, REPLACEMENT PARTS AND SERVICE
3.1 Inventory Requirement . The parties agree that Distributor shall have
an initial inventory of 60 Units, which shall be shipped to
Distributor as follows: 60 Units by December 31, 2004. Upon
the delivery of 60 Units by January 30, 2005,
Distributor shall at all times thereafter during the Term maintain
an inventory of 60 Units These requirements may change based on
mutual agreement.
3.2 Replacement Parts . Distributor shall have the right to purchase
replacement Rh Cards at cost to Supplier plus 5%.
Distributor shall purchase all other replacement parts at the
manufacturer’s price plus 35%. Distributor agrees that
it shall only use replacement parts from Supplier in servicing the
Product.
3.3 Service
Requirements . In connection with the rights granted to it
pursuant to this Agreement, Distributor shall provide maintenance
services and all other necessary services to the Product installed
on the Courses in the Territory. Distributor shall respond timely
(within 24 hours of a service call from a Course) to a request to
service the Product. If Distributor is unable to service the
Product, it shall immediately contact Supplier’s customer
service representatives to seek assistance on the correct procedure
to repair the Product. In connection with providing the service
required by this Agreement, Distributor agrees that it shall not
modify the Product in any way without the prior written consent of
Supplier. Additionally, Distributor agrees that in connection with
servicing the Product, it will follow Supplier’s service,
installation and troubleshooting procedures, which are set forth on
Exhibit C . If Supplier is required to repair any
Product (other than as set forth below in Section 3.4)
installed by Distributor, Distributor shall reimburse Supplier for
all costs affiliated with such repairs, including travel expenses,
labor, time and parts.
Limited
Warranty . Supplier will warrant the VDU’s for one year
after shipment, and if Distributor experiences any service issues
with the VDU’s during such period of time, it
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may return the
VDU to Supplier’s United States factory and Supplier will
repair or replace such VDU. Supplier shall pay all shipping costs
associated with the shipment of VDU’s during the warranty
period. All sell through parts will carry the manufacture warranty
as provided. Notwithstanding the foregoing, the limited warranty
set forth in this Section 3.4 shall be immediately void if
Distributor uses any replacement parts other than those provided by
Supplier on the Product. Any product found to be defective within
4 weeks of delivery will be replaced by Supplier at no cost
(including shipping). Supplier represents and warrants that the VDU
are manufactured in a way that will not cause catastrophic failures
due to changes in daily weather environments. If a catastrophic
failure occurs due to swings in weather conditions then the
supplier will extend its warranty to repair such failures
subject to adjustments for normal wear and tear and depreciation.
This limited extension of the warranty will only be applicable if
the Distributor and the course owners take protective measures to
follow specific cold weather procedures, standard operating
procedures (per schedule C) limit the damage and promptly notify
the supplier of such failures .
4.1 License
. Supplier hereby grants to Distributor a non-exclusive license to
the Intellectual Property during the Term for use in connection
with the marketing, sales, distribution and repair of the Product
in connection with this Agreement. All enhancements to the
Intellectual Property developed or acquired by Supplier shall be
deemed part of the Intellectual Property and subject to the terms
and conditions in this Agreement. Distributor agrees that it will
sell the Product under the ~ParView” brand.
4.2 License
Fee . In consideration of the license granted in this
Agreement, Distributor agrees to pay Supplier (excluding Alicante
order) a one-time license fee equal to $2500 per installation of a
Course, which fee shall be payable upon the shipping of a
course.
4.3
Confidentiality . Distributor acknowledges that the
Intellectual Property includes or embodies certain confidential
information of Supplier relating to Supplier’s business,
plans, customers, services, technology, trade secrets, products or
other information held in confidence by Supplier
(‘~Confidential Information”). Confidential Information
will include all information in tangible or intangible form that is
marked or designated as confidential or that, under the
circumstances of its disclosure, should be considered confidential.
Distributor agrees that it will not use in any way except as
expressly permitted by, or required to achieve the purposes of,
this Agreement, nor disclose to any third party (except as required
by law) the Confidential Information and will take reasonable
precautions to protect the confidentiality of such information,
which precautions, in any event, will be at least as stringent as
it takes to protect its own Confidential Information.
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4.4 Use of
Intellectual Property . Distributor will use the Trademarks in
the form and the manner designated in writing by Supplier as
Supplier may establish from time to time. Distributor shall
attribute ownership of the Trademarks to Supplier, in a form
approved by Supplier, in connection with Distribu
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