Document:

EMPLOYMENT AGREEMENT

This Employment Agreement (this "Agreement") is made effective as of August 1, 2011 (the “Effective Date”), by and between Performance Sports Brands, Inc., a Nevada corporation (the “Company"), and Matthew E Molloy (“Employee”) (collectively sometimes referred to herein as the “Parties” and individually sometimes referred to as a “Party”). Unless otherwise indicated, all references to Sections are to Sections in this Agreement.

 

WITNESSETH:

WHEREAS, the Company desires to obtain the services of Employee, and Employee desires to be employed by the Company upon the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the premises, the agreements herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as of the date hereof as follows:

1. Employment. The Company hereby agrees to employ Employee, and Employee hereby agrees to serve the Company, as  its Chief Operating Officer and VP of Global Distribution (“Employment”) for a period of three years (3) years beginning on the Effective Date.  This Agreement is automatically renewable for successive one-year terms.  Employee or the Company shall provide the other with written notice of non-renewal at least thirty (30) days, but not more than sixty (60) days, before the end of the period of Employment.

2. Scope of Employment.

(a)  During the Employment, Employee will serve as Chief Operating Officer  & VP of Global Distribution of the Company. In that capacity, Employee will (i) devote his full-time, attention, and energies to the business of the Company and will diligently and to the best of his ability perform all duties incident to his employment hereunder; (ii) use his best efforts to promote the interests and goodwill of the Company; and (iii) perform such other duties commensurate with his office as the Board of Directors of the Company may from time-to-time assign to him.

(b)  Section 2(a) shall not be construed as preventing Employee from (i) serving on corporate, civic or charitable boards or committees, or (ii) making investments in other businesses or enterprises; provided that in no event shall any such service, business activity or investment require the provision of substantial services by Employee to the operations or the affairs of such businesses or enterprises such that the provision thereof would interfere in any respect with the performance of Employee's duties hereunder; and subject to Section 6.

3. Compensation and Benefits During Employment. During the Employment, the Company shall provide compensation to Employee as follows.

(a)           The Company shall pay Employee a monthly base salary of $10,416.67 and No/100s US Dollars ($125,000.00 USD (the “Base Salary”), payable in arrears in 26 semi-monthly installments and No/100s US Dollars ($5208.33.00 USD), payable on the 15th day and last day of each calendar month.

  

 

  

(b)           All customary withholding taxes and other employment taxes which the company is required by law to withhold and pay with respect to compensation paid by an employer to an employee shall be subtracted and withheld from all compensation paid by the company to Employee for services rendered by Employee to the Company.

(c)           In the event that the Company’s audited annual financial statements report Net income attributable to Performance Sports Brands, Inc. of $1 or more, The Company shall pay Employee an annual bonus equal to 10% of the employee’s annual base salary. The bonus shall be paid as a lump sum amount no later than 30 days subsequent to the audit report date.

(d)           The company shall issue to Employee 1,000,000 shares of the Company’s common stock, $.001 par value per share (the “Common Stock”) upon execution of this agreement. The shares are non-returnable and fully vested on the effective date of this agreement

(e)           The Company shall reimburse Employee for business expenses incurred by Employee in connection with the Employment in accordance with the Company’s then-current policies.

(f)           Employee will be entitled to participate in any health insurance or other employee benefit plan which the Company may adopt in the future.

(g)          As an officer of the Company, the Employee is not subject to the Company’s vacation, holiday or sick leave policies. However, Employee is entitled to un-accrued paid vacation per year and to such sick leave and paid holidays as are generally made available to the Company’s executive employees upon the discretion of the Board of Directors.

(h)           Employee will be entitled to participate in any stock option plan of the Company which may be approved in the future by the Board of Directors.

 

4. Confidential Information.

(a)  The term “Confidential Information” shall mean any and all information concerning the business of the Company which Employee may receive or develop as a result of the provision of Services.  All documents, procedures, policies, programs, reports, plans, proposals, technical information, know-how, systems and other information unique to the Company, its customers or principals, received or developed by Employee shall be the property of the Company and/or such parties.  Employee shall not make any unauthorized disclosure or use of and shall use his best efforts to prevent publication or disclosure or use of Confidential Information.

(b)  Employee shall acknowledge that any unauthorized disclosure or use of Confidential Information by Employee may result in material damages to the Company and Employee shall consent to the issuance of an injunction or other equitable remedy to prohibit, prevent or enjoin unauthorized disclosure or use of Confidential Information by Employee.

(c)  Except as authorized by the Company, Employee will not: (a) duplicate, transfer or disclose nor allow any other person to duplicate, transfer or disclose any of the Company’s Confidential Information; (b) use the Company’s Confidential Information without the prior written consent of the Company; or (c) incorporate, in whole or in part, within any domestic or foreign patent application any proprietary or Confidential Information disclosed by the Company.

  

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(d)  Employee will safeguard all Confidential Information at all times so that it is not exposed to or used by unauthorized persons, and will exercise at least the same degree of care to protect all Confidential Information whether or not developed by Employee.

(e)  The restrictive obligations set forth above shall not apply to the disclosure or use of information which: (a) is or later becomes publicly known under circumstances involving no breach of this Agreement by Employee; (b) is lawfully made available to Employee by a third party having the right to disclose it to Employee without violation of any obligation to the Company; or (c) is required to be disclosed by Employee pursuant to legal process (e.g., a subpoena), provided that Employee notifies the Company immediately upon receiving or becoming aware of the legal process in question.

(f)  If Employee contends that any such information disclosed to him by the Company is in the public domain or was in the possession of Employee prior to such disclosure and not under an obligation of confidence, Employee will, within ten days of receipt by Employee of such disclosure give written notice of such contention to the Company, which written notice shall include a complete identification of the information in question and the derivation thereof, including particulars of any contract in which Employee or any other person has made use of such concept or information.  If Employee has not within ten days of receipt by Employee of such disclosure given such written notice to the Company, then it shall be conclusively presumed that all information communicated by the Company to Employee concerning the development originated with the Company and constitutes secret and confidential information and know-how.

(g)  Employee hereby certifies that he has not brought and will not bring with Employee to the Company or use while performing his duties for the Company any materials or documents of a former client of Employee which are not generally available to the public except the know-how to which the right to use has been duly licensed to the Company by such former client.  Employee understands that while engaged by the Company, Employee is not to breach any obligation of confidence or duty and Employee shall agree that he will fulfill all such obligations during his engagement with the Company.

(h)  No patent right or licenses shall be guaranteed by this Agreement and patent rights or licenses now or developed during the term of this Agreement shall be the property of the Company.  The disclosure of Confidential Information under this Agreement shall not result in any obligation for either party to grant any rights in its patent rights or confidential information, and no other obligations of any kind shall be assumed by or implied against either Party, except for those stated in this Agreement.

(i)  The provision of this section 4 shall survive the termination of this Agreement.

5.  Ownership of Intellectual Property.

(a)  The Company will be the sole owner of any and all of Employee’s Inventions that are related to the Company’s business, as defined in more detail below.

  

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(b)  For purposes of this Agreement, “Inventions” means all inventions, discoveries, and improvements (including, without limitation, any information relating to manufacturing techniques, processes, formulas, developments or experimental work, work in progress, or business trade secrets), along with any and all other work product relating thereto.

(c)  An Invention is “related to the Company’s business” (“Company-Related Invention”) if it is made, conceived, or reduced to practice by Employee (in whole or in part, either alone or jointly with others, whether or not during regular working hours), whether or not potentially patentable or copyrightable in the U.S. or elsewhere, and it either: (i) involves equipment, supplies, facilities, or trade secret information of the Company; (ii) involves the time for which Employee was or is to be compensated by the Company; (iii) relates to the business of the Company or to its actual or demonstrably anticipated research and development; or (iv) results, in whole or in part, from work performed by Employee for the Company.

(d)  Employee will promptly disclose to the Company, or its nominee(s), without additional compensation, all Company-Related Inventions.

(e)  Employee will assist the Company, at the Company’s expense, in protecting any intellectual property rights that may be available anywhere in the world for such Company-Related Inventions, including signing U.S. or foreign patent applications, oaths or declarations relating to such patent applications, and similar documents.

(f)  To the extent that any Company-Related Invention is eligible under applicable law to be deemed a “work made for hire,” or otherwise to be owned automatically by the Company, it will be deemed as such, without additional compensation to Employee.   In some jurisdictions, Employee may have a right, title, or interest (“Right,” including without limitation all right, title, and interest arising under patent law, copyright law, trade-secret law, or otherwise, anywhere in the world, including the right to sue for present or past infringement) in certain Company-Related Inventions that cannot be automatically owned by the Company.  In that case, if applicable law permits Employee to assign Employee’s Right(s) in future Company-Related Inventions at this time, then Employee hereby assigns any and all such Right(s) to the Company, without additional compensation to Employee; if not, then Employee agrees to assign any and all such Right(s) in any such future Company-Related Inventions to the Company or its nominee(s) upon request, without additional compensation to Employee.

6.  Non-competition.  During the term of this Agreement, conditioned upon the Company’s performance of all of its obligations including but not limited to compensation obligations, Empoyee shall not directly or indirectly: (a) own, operate, manage, control, invest, participate in any manner or have any interest in; (b) act as an officer, director, agent, employee, advisor or consultant of; or (c) assist in any way or in any capacity, any person, firm, association, partnership, corporation or other entity which is, a business that is the same or substantially similar to and/or competes with the business then engaged in by the Company (the “Competitive Entity”) anywhere in the United States (the “Territory”).  The restriction set out in the previous sentence shall not apply to the collective, direct or indirect, ownership by Employee of less than an aggregate of ten percent (10%) of the securities of any Competitive Entity, but only if such investment is of a totally passive nature and does not involve Employee devoting time to the management or operations of such Competitive Entity and Employee is not otherwise involved in the business of such Competitive Entity.

  

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7. Legal Fees and Expenses.  In the event of a lawsuit, arbitration, or other dispute-resolution proceeding between the Company and Employee arising out of or relating to this Agreement, the prevailing party, in the proceeding as a whole and/or in any interim or ancillary proceedings (e.g., opposed motions, including without limitation motions for preliminary or temporary injunctive relief) will be entitled to recover its reasonable attorneys’ fees and expenses unless the court or other forum determines that such a recovery would not serve the interests of justice.

8.  Successors.

(a)  This Agreement shall inure to the benefit of and be binding upon (i) the Company and its successors and assigns; and (ii) Employee and Employee’s heirs and legal representatives, except that Employee’s duties and responsibilities under this Agreement are of a personal nature and will not be assignable or delegable in whole or in part.

(b)  The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, acquisition or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "the Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

9.  Arbitration.

(a)         Except as set forth in paragraph (b) of this Section 9 or to the extent prohibited by applicable law, any dispute, controversy or claim arising out of or relating to this Agreement will be submitted to binding arbitration before a single arbitrator in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association in effect on the date of the demand for arbitration.  The arbitration shall take place before a single arbitrator, who will preferably but not necessarily be a lawyer but who shall have at least five years’ experience in working in or with the golfing or video productions industry.  Unless otherwise agreed by the parties, the arbitration shall take place in the city in which the Company’s principal office space is located at the time of the dispute or was located at the time of Termination of the Employment (if applicable).  The arbitrator is hereby directed to take all reasonable measures not inconsistent with the interests of justice to expedite, and minimize the cost of, the arbitration proceedings.

(b)         To protect inventions, trade secrets, or other confidential information of Section 4, and/or to enforce the non-competition provisions of Section 6, the Company may seek temporary, preliminary, and/or permanent injunctive relief in a court of competent jurisdiction, in each case, without waiving its right to arbitration.

(c)         At the request of either party, the arbitrator may take any interim measures s/she deems necessary with respect to the subject matter of the dispute, including measures for the preservation of confidentiality set forth in this Agreement.

(d)         Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction.

  

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10.

	
Termination.

This Agreement and the employment relationship created hereby will terminate (i) upon the disability or death of Employee under Section 11 (a) or 11(b); (ii) with cause under Section 11 (c); or (iii) without cause under Section 11(d).

(a)         Disability.  Company shall have the right to terminate the employment of Employee under this Agreement for disability in the event Employee is permanently disabled or disabled for a period exceeding ninety (90) consecutive days or ninety (90) days calculated on a cumulative basis during the term of this Agreement upon the Company giving at least thirty (30) days written notice of termination. In the event of termination upon disability Employee shall receive compensation pursuant to paragraph 12 (b) below.

(b)         Death. This Agreement will terminate on the Death of the Employee.

(c)         With Cause.  Company may terminate this Agreement at any time because of (i) the conviction of Employee of an act or acts constituting a felony or other crime involving moral turpitude, dishonesty or theft or fraud; or (ii) Employee’s gross negligence in the performance of his duties hereunder. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by Employee in good faith and in the best interests of the Company and thus shall not be deemed grounds for Termination for Cause.  The Company shall be responsible for the withholding of all taxes to the Internal Revenue Service as well as any and all other taxes payable in the United States including taxes payable to any state or local jurisdiction.

(d)         Without Cause.  (i) Employee may terminate this Agreement without cause upon thirty (30) days written notice to the Company; and (ii) the Company may terminate this Agreement without cause upon thirty (30) days written notice to Employee.

(e)         Relocation.  Employee will not be required or expected to relocate during the term of this Agreement.  If the Employee is required to relocate during the term of this agreement, or during any subsequent agreement, by the Company, or its Successors, the Employee shall be entitled to receive the compensation as stated in paragraph 12 (b).  For the purposes hereof, the word “relocate” shall be defined as meaning that the Company shall require the Employee to purchase, rent or lease a permanent residence more than fifty (50) miles from Employee’s current residence.

12.  Obligations of Company Upon Termination.

(a)         In the event of the termination of Employee’s employment pursuant to Section 11 (a), (b), (c) or (d)(i), Employee will be entitled only to the Cash and Common Stock earned by Employee hereunder as of the date of such termination.

(b)         In the event of termination of Employee’s employment pursuant to Section 11(d)(ii), Employee will be entitled to receive as severance pay, an amount equal to $62,500 for a termination at any time that this Agreement is in effect in addition to the Cash and Common Stock.

  

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13.  Right to use Employee’s Name and Likeness.  Employee hereby grants the Company the right to use Employee’s name which is “Matthew E Molloy” and Employee’s likeness and/or biography in connection with the Services performed by Employee under this Agreement and in connection with the advertising or exploitation of any project with respect to which Employee performs services for the Company.

14.  Other Provisions.

(a)         All notices and statements with respect to this Agreement must be in writing.  Notices to the Company shall be delivered to the Secretary of the Company.  Notices to Employee may be delivered to Employee in person or sent to Employee’s then-current mailing address as indicated in the Company’s records.

(b)         This Agreement sets forth the entire agreement of the Parties concerning the subjects covered herein; there are no promises, understandings, representations, or warranties of any kind concerning those subjects except as expressly set forth in this Agreement.

(c)         Any modification of this Agreement must be in writing and signed by all Parties; any attempt to modify this Agreement, orally or in writing, not executed by all Parties will be void.

(d)         If any provision of this Agreement, or its application to anyone or under any circumstances, is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability will not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and will not invalidate or render unenforceable such provision or application in any other jurisdiction.

(e)         This Agreement will be governed and interpreted under the laws of the United States of America and the laws of the State of California as applied to contracts made and carried out in California by residents of California.

(f)          No failure on the part of any party to enforce any provisions of this Agreement will act as a waiver of the right to enforce that provision.

(g)         Section headings are for convenience only and shall not define or limit the provisions of this Agreement.

(h)         This Agreement may be executed in several counterparts, each of which is an original.  It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.  A copy of this Agreement signed by one party and faxed to another party shall be deemed to have been executed and delivered by the signing party as though an original.  A photocopy of this Agreement shall be effective as an original for all purposes.

This Agreement contains provisions requiring binding arbitration of disputes.  By signing this Agreement, Employee acknowledges that Employee (i) has read and understood the entire Agreement; (ii) has received a copy of it (iii) has had the opportunity to ask questions and consult counsel or other advisors about its terms; and (iv) agrees to be bound by it.

  

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Executed to be effective as of the Effective Date.

	
PERFORMANCE SPORTS BRANDS, INC.

	  	
EMPLOYEE

	  	  	  
	
/s/ Michael F. Abram

	  	
/s/ Mathew E. Molloy

	
Michael F. Abram

	  	
Matthew E. Molloy

	
President

	
  

	  

 

  

Page 8 of 8PATENT AND TRADEMARK LICENSE AGREEMENT

 

This Agreement is entered into effective August 10, 2009, between Martin J. and Stacey R. Chuck, of 20361 Penhollow Lane, Bend, Oregon 97702 (“Licensor”) and Tour Striker-TGA, LLC, (“Licensee”) a Colorado company, with offices at 1130 Garden Street, Suite A, San Luis Obispo, California 93401.

 

Whereas, Licensee has requested that Licensor grant License an exclusive license under (i) Licensee’s pending U.S. patent application directed to a Golf teaching tool and (ii) Licensee’s “TOUR STRIKER” marks and registration application.

 

Whereas, Licensor is willing to grant such a license under terms and conditions as set forth herein;

 

NOW, THEREFORE, the parties agree as follows:

 

ARTICLE ONE – DEFINITIONS

 

	
1.1

	
Fair Market Value: with respect to any product sold or leased by Licensee shall mean the gross sales proceeds actually obtained and received by the Licensee for such product in the form in which it is sold, whether or not assembled (and without excluding any components or subassemblies that are included in such selling price) in arm’s-length transactions and with respect to non-arm’s length transactions, the selling price that Licensee would realize from an unaffiliated buyer in an arm’s length sale of an identical product in the same quantity and at the same time and place as such sale, lease or putting into use. In determining “gross sales proceeds” the following shall be excluded: (a) usual trade discounts actually allowed to unaffiliated persons or entities; (b) costs of insurance and transportation; (d) import, export, excise, sales, and value added taxes, and custom duties; and (e) any shipping and handling charges.

 

	
1.2

	
Licensed Golf Tool Product: any product embraced by, or for which an ordinary use of the product would fall within, the scope of any claim issued or pending in the Licensed Patents.

 

	
1.3

	
Licensed Marks: the mark TOUR STRIKER and the Tour Striker logo (as shown in Exhibit A hereto), including without limitation pending U.S. trademark registration application Serial No. 77578174, filed September 24, 2008, for “Tour Striker” and design.

 

	
1.4

	
Licensed Patents: pending U.S. patent application Serial No. 61/097,118, filed September 9, 2008, entitled “Golf Swing Training Device and Methods of Use” and all patent applications and patents or similar governmental intellectual property rights claiming priority through any such U.S. patent application.

 

	
1.5

	
Licensed Product: all Licensed Golf Tool Products and all other products to which the parties have agreed as set forth in Section 3.1 of this Agreement.

 

CONFIDENTIAL

  

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ARTICLE TWO – PATENT LICENSE

	
2.1

	
Subject to the terms of this Agreement, Licensor grants the Licensee a world-wide, exclusive, personal, royalty-bearing license under the Licensed Technology to make, use, offer for sale, and sell, import, and otherwise distribute Licensed Golf Tool Products provided the Licensed Golf Tool Products (i) are prominently marked with the Licensor’s Tour Striker logo mark as shown in Exhibit A hereto and (ii) are marked with no other marks or other indicia without the Licensor’s approval in writing in advance, which approval shall not be unreasonably withheld or delayed. In the event that the Licensor’s sales of Licensed Golf Tool Products do not exceed 250 units in any two succeeding quarters after September 30, 2009, the Licensor shall have the right to convert this exclusive license in this section 2.1 to a non-exclusive license on written notice to the Licensee within ninety days thereafter; and in the event that Licensor’s sales of Licensed Golf Tool Products do not exceed 500 units in any three succeeding quarters after September 30, 2009, the Licensor shall have the option to terminate this Agreement on written notice to the Licensee within ninety days thereafter. For purposes of this Agreement, the term “quarter” shall mean a calendar quarter, commencing January 1st, April 1st, July 1st, and October 1st of each calendar year.

 

ARTICLE THREE – TRADEMARK LICENSE

 

	
3.1

	
Subject to the terms of this Agreement, Licensor grants the Licensee a world-wide, exclusive, personal, royalty-bearing license to utilize the Licensed Marks in connection with the Licensed Golf Tool Products and any other golfing products mutually agreed by the parties in a written addendum to this Agreement. In the event that the Licensor’s sales of Licensed Golf Tool Products do not exceed 250 units in any two succeeding quarters after September 30, 2009, the Licensor shall have the right to convert this exclusive license in this section 3.1 to a non-exclusive license on written notice to the Licensee within ninety days thereafter; and in the event that Licensor’s sales of Licensed Golf Tool Products do not exceed 500 units in any three succeeding quarters after September 30, 2009, the Licensor shall have the option to terminate this Agreement on written notice to the Licensee within ninety days thereafter.

 

	
3.2

	
The Licensee shall not use any marks in connection with Licensed Products other than the Licensed Marks unless approved in advance in writing by the Licensor, which approval shall not be unreasonably withheld or delayed. Licensor may, however, not approve of use of any marks in connection with the Licensed Products unless a Licensed Mark is the most prominent used in connection with the Licensed Products.

 

	
3.3

	
The Licensee shall not utilize any marks that are, or are likely to be, confusingly similar to any of the Licensed Marks, nor shall the Licensee directly or indirectly seek to register, or aid or support any third party in registering, any Licensed Mark or any mark confusingly similar to any Licensed Mark. All use of any Licensed Mark shall inure strictly to the benefit of the Licensor.

 

CONFIDENTIAL

  

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3.4

	
Licensor shall apply a Licensed Mark only to products as authorized herein and, with respect to any products for use, sale, or distribution to third party, that are of the same high quality in design, workmanship, and materials of those products sold or distributed on behalf of Licensor prior to the execution of this License Agreement (“Standards of Quality”). Licensor shall have the right at any time to conduct, during regular business hours at the Licensee’s offices as set forth above, an examination of products manufactured by or for the Licensee (including those assembled or tested) to determine compliance of such products with this provision. If at any time any such products shall, in the reasonable opinion of Licensor, fail to conform to the Standards of Quality, Licensor or its authorized representative shall so notify the Licensee. Upon such notification the Licensee shall promptly cease to use all Licensed Marks on such products and not sell or distribute such nonconforming products until the Standards of Quality have been met to the reasonable satisfaction of Licensor. Licensee agrees to send to Licensor a sample of each of Licensee’s products bearing a Licensed Mark, as the Licensor may request from time-to-time (not more than once per year), for inspection and testing to assure conformance of the products with this section 3.4. The transportation costs for shipment of the samples to Licensor shall be borne by Licensee.

 

	
3.5

	
The appearance of any Licensed Mark on any product (including without limitation any Licensed Product), promotional or instructional material, web site, communication, trade show display, or other place, file, or object shall be subject to prior approval in writing by the Licensor prior to granting any third party access to any such appearance. Licensor shall not unreasonably withhold such approval. In the event Licensee requests the approval of Licensor for use of the Licensed Mark for advertising, marketing and promotional purposes, Licensor shall promptly respond to such request for approval. Any failure by Licensor to respond to a request for approval within 10 days of Licensor’s receipt of such request shall be deemed an approval.

 

ARTICLE FOUR – OTHER MARKING

 

	
4.1

	
Licensee shall mark the packaging for all Licensed Golf Toll Product prominently with the Licensor’s Tour Striker logo mark as shown in Exhibit A hereto and with no other trademarks without the Licensor’s approval in writing in advance, which approval shall not be unreasonably withheld or delayed.

 

	
4.2

	
Licensee shall further mark all Licensed Products with any further patent or proprietary markings (such as without limitation patent pending, patent number(s), ®, or TM), or revisions thereto, as reasonably required by Licensor by written notice to Licensee, in order to comply with, or to protect Licensor’s rights under, any patent, trademark, unfair competition, or related laws.

 

ARTICLE FIVE – ROYALTIES, PAYMENTS, RECORDS, AUDIT

 

	
5.1

	
Licensee shall pay Licensor a royalty 3% of the Fair Market Value of all Licensed Products by Licensee during each calendar quarter. Such royalty shall be net of any returns of Licensed Products or bad debts incurred within such calendar quarter. Licensee shall be entitled to use a reasonable number of Licensed Product units for purposes of advertising, promotions and marketing without compensation to Licensor.

 

CONFIDENTIAL

  

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5.2

	
Upon execution of this Agreement, Licensee shall pay Licensor a nonrefundable up-front advance royalty payment in the amount of $78,000 as follows: $5,000 per month until the Licensee has raised $250,000 in capital from third party investors, at which time the Licensee shall pay the Licensor the entire balance of such up-front, advance royalty payment. The Parties agree that up to $75,000 of the amount of the up-front advance royalty payment actually paid by Licensee to Licensor shall be credited against and reduce future royalty payments to Licensor pursuant to Section 5.1, but only to the extent such up-front advance royalty payments are actually paid to Licensor as set forth in the prior sentence. Licensee shall show the application of such credit in the applicable royalty reporting to Licensor set forth in Section 5.3 herein. As a result, there is no such credit to reduce royalty payments when otherwise due hereunder (i.e., as if there were no such credit) unless and only to the extent that Licensee has earlier paid the Licensor up-front advance royalty exceeding the amount of royalty payments otherwise due hereunder.

 

	
5.3

	
Within thirty days of the conclusion of each calendar quarter hereunder, the Licensee shall deliver to the Licensee a written report stating the number of each type or model number of Licensed Product sold, shipped, used, or distributed by or for the Licensee during such concluded calendar quarter, the total Fair Market Value of all such reported Licensed Products along with a detailed explanation of how such total was calculated, and payment in full to the Licensor for all royalties due to the Licensor for such calendar quarter.

 

	
5.4

	
Late payments, though not permitted hereunder, shall incur interest payable to Licensor at 1.5% per month or the highest amount permitted by law, whichever is lower. All royalties paid hereunder are nonrefundable except to the extent of credits expressly provided for in Section 5.1 herein.

 

	
5.5

	
The Licensee shall maintain at its offices set forth above full and accurate records of all activities under this Agreement or related to (i) any making, having made, use, sale, or distribution of any Licensed Product or (ii) any use of any Licensed Mark. The Licensor shall have the right to audit such records at such offices during normal business hours upon at least one week notice in advance but no more than twice per year. In the event that any such audit reveals under-reporting of royalties to the Licensor in an amount exceeding 10% or that any two such audits each reveal under-reporting of royalties to the Licensor in an amount exceeding 5%, the Licensee shall pay the Licensor’s actual out-of-pocket costs of conducting of the audit. The Licensee shall maintain such records for five years from time of first generation.

 

	
5.6

	
In the event that the Licensor irrevocably abandons all Licensed Patents or they are all held invalid or unenforceable, the royalty of Section 5.1 shall be reduced from 3% to 2% for all products bearing any Licensed Mark on the products or their packaging.

 

CONFIDENTIAL

  

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ARTICLE SIX – LIMITED WARRANTIES, INDEMNITY

 

	
6.1

	
Licensor represents and warrants that it (i) owns the Licensed Patents and the pending federal trademark registration application identified above, (ii) owns the Licensed Marks to its knowledge, (iii) has the right to grant the license granted by this Agreement, and (iv) is unaware that any Licensed Patent is invalid or unenforceable or that the subject matter covered by any of same would infringe any third party patent or other intellectual property. Licensor further represents and warrants that Licensor owns the patent application (not the invention) and that neither Licensor has any knowledge of any prior art that could invalidate Licensor’s patent application, or of any third party intellectual property that would be infringed by making, selling, offering for sale, importing, or using of the subject matter of Licensor’s patent application. Except as set forth above, Licensor makes no other representations or warranties, express or implied. The Parties agree that Licensor shall be, in its sole discretion, responsible for the payment of all costs and expenses incurred in securing the issuance of Licensed Patents and the Licensed Marks. In the event Licensor, in its sole discretion, does not pay all of the costs and expenses to secure the issuance of the Licensed Patents and the Licensed Marks, Licensee may, without any obligation to do so, pay such expenses without any right of offset against the royalties otherwise due and payable hereunder.

 

	
6.2 

	
Licensee represents and warrants that has the right to enter to this Agreement.

 

	
6.3

	
Licensee shall defend, indemnify, and hold Licensor and its authorized representatives harmless against all claims, suits, costs, damages, and judgments incurred, claimed, or sustained by third parties, whether for personal injury or otherwise, because of the manufacture, marketing, use, distribution, or sale of any Licensed Product, including without limitation any product or service bearing any Licensed Mark and sold, used, or distributed by, or made by or for Licensee, and shall indemnify Licensor for all damages due to any improper or unauthorized use of any Licensed Mark by, for, or as authorized by the Licensee except to the extent caused by the Licensor. In the alternative, in the event any such claim, suits, costs, damages and judgment relates to or arise as a result of a claim of a patent infringement or other intellectual property infringement, Licensee shall have the right to terminate this License and cease selling any of the Licensed Products. Licensee shall maintain at its own expense in full force and effect at all times during which product bearing a Licensed Mark is being sold, used, or distributed by or for the Licensee, with a responsible insurance carrier acceptable to Licensor, at least a Two Million Dollar (One Million Per Claim) products liability insurance policy with respect to all such products. This insurance policy shall expressly name the Licensor as an additional beneficiary, and the Licensee shall provide for at least ten days prior written notice to Licensor and Licensee of the cancellation or any substantial modification of the policy. This insurance policy may be obtained for Licensor by Licensee in conjunction with a policy that covers products other than the Licensed Products. Licensee shall, from time to time upon reasonable request by Licensor, promptly furnish or cause to be furnished to Licensor evidence in form and substance satisfactory to Licensor in its reasonable discretion, of the maintenance of the insurance required by this Section 6.3, including, but not limited to, originals or copies of policies, certificates of insurance (with applicable riders and endorsements), and proof of premium payments.

 

CONFIDENTIAL

  

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6.4

	
Provided the Licensee is not otherwise in breach of this License through no prior material fault and breach of this License by the Licensor, and further provided that WG Chase, LLC, d/b/a The Golf Agency, a Delaware limited liability company is not in breach of the Operating Agreement of Tour Striker-TGA, LLC dated August 10, 2009, through no prior material fault and breach of that Operating Agreement by Tour Striker, Inc., an Oregon corporation and related party to the Licensor, Licensor agrees not to take any action or fail to take any action as the manager or member of Licensee which will cause the Licensee to violate or breach the terms of this Agreement. The purpose of this paragraph is to ensure that Licensor’s principals, Martin and Stacey Chuck or its related party, Tour Striker, Inc., will not take any actions or fail to take any actions as a Manager or Member, respectively, of Licensee so as to cause Licensee to violate or breach the terms of this Agreement, provided, however, this paragraph will in no way otherwise limit or modify Licensor’s rights and remedies under this Agreement in the event of a violation or breach by Licensee.

 

ARTICLE SEVEN – TERMINATION

 

	
7.1

	
Unless earlier terminated as provided in this Article or in Sections 2.1 or 3.1 of this Agreement, this Agreement is perpetual.

 

	
7.2

	
If a party materially breaches any term of this Agreement, the other party may provide written notice to the breaching party specifying the breach. If the breaching party fails to cure the breach within 30 days of receiving such notice, the other party may terminate this Agreement by written notice of termination to the recipient. Any termination under this Section 7.2 is in addition to any other remedy to which the party not in breach may be entitled.

 

	
7.3

	
The Licensor may terminate this Agreement on written notice to the Licensee if Licensee (i) is unable to pay its bills as they come due for three succeeding months; (ii) files a petition in bankruptcy, (iii) is made the subject of an involuntary bankruptcy proceeding that remains un-dismissed ninety days after its commencement, (iv) is declared bankrupt by a court, (v) makes an assignment for the benefit of creditors, (vi) has a receiver or trustee appointed for it; or (vii) undergoes a significant change in ownership without the prior written consent of the Licensor other than an ownership change consented to by the Licensor in writing or an ownership change caused by Licensor.

 

	
7.4

	
Upon termination, unless Licensor elects to purchase the inventory of Licensed Products owned by Licensee at the time of the termination, Licensee shall have the right to sell and liquidate any remaining reasonable inventory of such products not purchased in contemplation of termination of this License. In the event and to the extent that Licensor elects to purchase such remaining inventory, upon the effective date of such termination, Licensor shall purchase such inventory for cash or other immediately available funds at the Licensee’s actual costs for the Licensed Product being purchased plus costs to ship the purchased Licensed Product to Licensor, and no such royalties shall be due to the Licensor hereunder. For purposes of this paragraph “actual costs” shall include only Licensee’s costs to acquire and ship the Licensed Product to Licensee’s U.S. warehouse and shall not include any overhead or marketing costs of Licensee.

 

CONFIDENTIAL

  

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7.4

	
Licensee shall provide the Licensor with at least 90 days advance written “Notice” of any intent to challenge, in whole or in part, the validity or enforceability of any claim of any Licensed Patent, in any court or administrative agency, including but not limited to, the United States Patent and Trademark Office. Such Notice shall set forth the identity of any claim being challenged and an identification of any “prior art” and/or argument upon which Licensee relies for its assertion, as well as the date upon which the Licensee learned of such “art” or argument and all evidence, documentation, written, oral, electronic or otherwise that relates to such “art” or argument. Failure to timely provide such Notice shall be considered a material breach for which Licensor may, at its option, terminate this agreement. However, it is agreed that the giving of such Notice, by itself, shall not be deemed to create a case or controversy justifying litigation between the parties. In the event that Licensee shall fail to establish the invalidity or unenforceability of any claim, as asserted, Licensee will pay the reasonable expenses and attorney fees associated with the defense of all claims by Licensor, together with interest thereon from the date of Licensee’s payment. In addition, Licensee’s royalty obligations hereunder shall increase by 100% to reflect the additional value of any claim(s) that has successfully weathered such a challenge.

 

ARTICLE EIGHT — MISCELLANEOUS PROVISIONS

 

	
8.1

	
This Agreement will be binding upon, and will inure to the benefit of, the successors and permitted assigns of the parties. This Agreement may not be assigned by any party without the written consent in advance of the other party, which consent will not be unreasonably withheld or delayed. The Licensor may, however, assign this Agreement to any party acquiring the entire intellectual property rights of the Licensor licensed hereunder.

 

	
8.2

	
Any notice may be given in writing, by any form of delivery requiring a return receipt and addressed and delivered to a party at the address for the party set forth above

 

	
8.3

	
Licensee will pay any tax (and any related interest or penalty), however designated, imposed as a result of this agreement, including any tax which Licensee is required to withhold from payments to Licensor, except: any income tax imposed upon Licensor by the United States or any governmental entity within the United States.

 

	
8.4

	
This Agreement and any disputes under it will be governed by the substantive laws of the State of Colorado, USA, without regard to conflict of law principles. Jurisdiction and venue for any legal proceeding commenced by either party to enforce this Agreement or resolve any dispute arising under it will lie exclusively in the courts in City and County of Denver, Colorado, USA, and both parties hereby consent to such jurisdiction and venue.

 

CONFIDENTIAL

  

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8.5

	
This Agreement sets forth the entire agreement between the parties as to its subject matter. It extinguished and merges all prior discussions between them. Neither party will be bound by any warranties, understandings, or representations with respect to such subject matter other than as expressly provided herein or in a writing signed with or subsequent to execution hereof by an authorized representative of the party to be bound.

 

	
8.6

	
In the event that a Court of competent jurisdiction finds any provision of this Agreement to be invalid or unenforceable, the balance of this Agreement shall remain valid and enforceable, and the Court shall revise the invalid or unenforceable provision to the extent required to render it valid and enforceable as applicable consistent with the intent and objectives of the parties set forth in this Agreement.

 

	
8.7

	
In the event of a dispute hereunder, within one month of one party’s receipt of written notice from the other party specifying a request to meet hereunder, at least one executive from each party with full authority to resolve the matter shall meet in person in Portland, Oregon, in order to seek to resolve the matter amiably.

 

	
8.8

	
No waiver of any right or obligation under this Agreement shall constitute or be urged to constitute a waiver or any subsequent right or obligation hereunder.

 

	
8.9

	
Time is of the essence for each party’s obligations hereunder.

 

Wherefore, the parties have indicated their agreement to be bound by the terms of this Agreement by the execution of their authorized agents as set forth below.

 

	
Licensor:

	 	
Licensee:

	 	 	 	 	 
	
By

	
/s/ Stacey R. Chuck

	 	
By:

	 /s/ Richard Massey
	  	
Stacey R. Chuck

	 	
Name:

	 Richard Massey
	  	  	 	
Title:

	 Manager
	
By:

	
/s/ Martin J. Chuck

	 	
Date of Signature:  8-10, 2009

	  	
Martin J. Chuck

	 	  	  
	
Date of Signature:  Aug 10, 2009

	 	  	  

 

CONFIDENTIAL

  

8

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