Exhibit 99.1
SECOND AMENDED AND RESTATED
EXCLUSIVE LICENSING AND DISTRIBUTION AGREEMENT
THIS
SECOND AMENDED AND RESTATED EXCLUSIVE LICENSING AND DISTRIBUTION
AGREEMENT (the “Agreement”) is entered into as of
April 9, 2007 (the “Effective Date”), by and
between ProLink Solutions, LLC, a Delaware limited liability
company (“Supplier”), and Elumina Iberica, S.A., a
company formed and existing under the laws of Spain
(“Distributor”).
RECITALS
A. Supplier develops, manufactures, markets
and sells certain golf course management hardware and software
products for use on individual golf courses, which products are
sold under the ProLink, GameStar and ProStar name and are made up
of selected hardware as set forth on Exhibit A and
software (the “Product”).
B. The parties desire to amend and restate
that certain Amended and Restated Exclusive Licensing and
Distribution Agreement dated as of May 8, 2006 (the
“Former Agreement”) in order to amend the exclusive
distributor arrangement of the Distributor with respect to the
Product in the territories as set forth on Exhibit B
(the “Territory”) and further amend the terms and
conditions set forth in the Former Agreement.
C. Supplier licenses certain patents used
in connection with the Product as more fully set forth on
Exhibit C 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:
ARTICLE 1
DEFINITIONS
As
used in this Agreement, the following words and phrases shall have
the following meanings:
1.1
“Castastrophic Failure” means failure of more than
[Information omitted and filed separately with the Commission
under Rule 24b-2] % of the Units placed on any one Course
within the Territory that is not cured within 30 days of written
notice to Supplier by Distributor.
1.2 In
China and Singapore a “Course Equivalent” means a
Course or the equivalent of a Course, each of which must have at
least 72 golf carts. In all other locations within the Territory,
Course Equivalent means a Course or the Equivalent of a Course,
each of which must have at least 30 golf carts.
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1.3
“Course(s)” means golf course(s) in the
Territory.
1.4
“Distributor” has the meaning given to it in the
introductory paragraph of this Agreement.
1.5
“Earnest Deposit” has the meaning given that term in
Section 5.2.
1.6
“Initial Term” means 5-year period beginning on the
”Effective Date”and ending on the fifth anniversary
thereof, unless sooner terminated as provided in this
Agreement.
1.7
“Intellectual Property” means all data collection
associated with the Product, the Patents, the Trademark and
Supplier’s software, designs and business solutions used with
the Product.
1.8
“Loaded Manufacturing Cost” means all costs of
Supplier, including manufacturing overhead costs.
1.9
“Patents” has the meaning given to it in Recital
C.
1.10
“Product” has the meaning given to it in Recital
A.
1.11
“Renewal Term” has the meaning given that term in
Section 9.1.
1.12
“RF Cards” means the radio card used in the
Product.
1.13
“Supplier” has the meaning given to it in the
introductory paragraph of this Agreement.
1.14
“Term” means the Initial Term plus any Renewal
Terms.
1.15
“Territory” has the meaning given to it in Recital
B.
1.16
“Trademark” means ProLink, ProLink Solutions, ProLink
Holdings, ProStar, GameStar, Pay-for-Play or any derivations
thereof.
1.17
“Unit(s)” means the entire Product that is placed on
one golf cart.
1.18
“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 Courses to service the
Product.
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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 this
Section 2.2 are met. If such minimum threshold requirements
are not met, Supplier may, in its sole discretion, retain other
distributors to market, sell and distribute the Product in the
Territory and/or terminate this Agreement.
(a) During the period from May 1, 2006
through April 30, 2007, Distributor shall install the Product
on at least the greater of Twenty-one (21) Course Equivalents
or 1,500 Units in the Territory;
(b) During the period from May 1, 2007
until expiration of the Initial Term, Distributor shall install the
Product on at least the greater of Forty (40) Course
Equivalents or 2,000 Units in the Territory;
(c) During any Renewal Term, Supplier and
Distributor shall agree in writing as to minimum requirement for
the Renewal Term; 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
cannot agree to the minimum thresholds within 90 days of the
expiration of the applicable Term, either party has the right to
terminate this Agreement.
2.3
Agreement to Provide Product Exclusively . In exchange for
the 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 any product sold by Supplier during the Term, including but
not limited to any portable or cart-mounted global positioning
systems used in connection with golf. To the extent that
Distributor wishes to sell any GPS golf related product, Supplier
must receive the written consent of Supplier, which consent may be
withdrawn at any time that Supplier begins to carry a competitive
product.
2.4
Title to Product . The title and ownership of the Product
(excluding any Intellectual Property) shall pass to Distributor
upon shipment of the Product. Distributor bears all risk of loss
following passing of title at the Supplier’s point of
manufacture.
2.5
Reporting Requirements; Audit Rights . During the Term,
Distributor agrees to provide to Supplier monthly 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. Supplier shall have the right, upon reasonable notice
to Distributor and during normal business hours, to (a) audit
the books and records of Distributor related to its obligations
under this Agreement to verify the information contained in the
reports, and (b) perform physical inspections of
Distributor’s physical locations to verify the information
contained in the reports.
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2.6
Cooperative Advertising . The parties acknowledge that both
Supplier and Distributor are in the process of developing or have
developed advertising models for the Product. The parties agree to
work in a cooperative manner in such advertising efforts to include
joint efforts to develop global advertising clients, sharing of
advertising customer contacts and introductions to same and
development of consistent advertising client messages.
2.7
Rights to the Use of the ProLink Branding . The Supplier
recognizes the need for the Distributor to market the Products of
the Supplier and, as such, grants the Distributor limited 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 by the Supplier will be carried by the
Supplier.
ARTICLE 3
INVENTORY, REPLACEMENT PARTS AND SERVICE
3.1
Inventory Requirement . Distributor shall at all times
during the Term maintain an inventory of Units satisfactory to meet
its obligations to its customers, in Distributor’s
commercially reasonable judgment.
3.2
Replacement Parts . Distributor shall have the right to
purchase replacement RF Cards at cost to Supplier plus
[Information omitted and filed separately with the Commission
under Rule 24b-2] %. Distributor shall purchase all other
replacement parts at the manufacturer’s price plus
[Information omitted and filed separately with the Commission
under Rule 24b-2] %. Distributor agrees that it shall use
only parts from Supplier in servicing and installation of the
Product or parts approved and properly licensed by
supplier
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 [Information omitted and filed separately
with the Commission under Rule 24b-2] 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 D . If Supplier is required to repair any
Product (other than as set forth below in Section 3.4)
installed by Distributor or install Product on behalf of
Distributor, Distributor shall reimburse Supplier for all costs
affiliated with such repairs, including travel expenses, labor,
time and parts.
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3.4
Limited Warranty . Supplier will provide a limited warranty
on the VDU’s for one year after shipment (the “Warranty
Term”), and if Distributor experiences any
manufacturing-related service issues with the VDU’s during
such period of time, it may return the VDU to Supplier’s
United States factory and Supplier will repair or replace such VDU.
Each party shall pay its own shipping costs associated with the
shipment of VDU’s. 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 or if the Distributor fails to
follow Supplier’s service, installation and troubleshooting
procedures as set forth on Exhibit D . 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 its VDU’s are manufactured in a
way that will not cause catastrophic failures due to changes in
daily weather environments. [Information omitted and filed
separately with the Commission under
Rule 24b-2]
ARTICLE 4
LICENSE
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
“ProLink” brand.
4.2
Confidentiality .
(a) 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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(b) Distributor acknowledges that the
Supplier is a public reporting company in the United States and
that Distributor will be, at most times, in possession of material,
nonpublic information (as those terms are defined in the Securities
Exchange Act of 1934, as amended, and the rules promulgated
thereunder) and that as such, it will be forbidden from trading in
the securities of the Supplier when in possession of such
information. Distributor agrees to inform the Supplier at any time
that it or its affiliates seek to trade in the securities of the
Supplier and agrees to refrain from trading if Supplier, upon the
advice of counsel, informs the Distributor that it cannot
trade.
4.3
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 Distributor’s use of
the Trademarks on any web site or in any printed materials
distributed publicly. The quality of services provided by
Distributor for which the Trademarks are associated must equal or
exceed the quality of serv
