THIS AGREEMENT, made and entered into as of this 15th day of July, 2003, by and between CUTTER & BUCK INC., Cutter & Buck Inc., 701 North 34th Street, Suite
400, Seattle, Washington 98103 (the "Company"), and ESCH & STAM, INC., c/o IMG Worldwide, Inc., IMG Center, 1360 East 9th Street, Suite 100, Cleveland, Ohio 44114 ("Licensor"):
WHEREAS, Annika Sorenstam ("Sorenstam") is recognized as a highly skilled professional golfer;
WHEREAS, Company desires to obtain the exclusive rights to use the name, fame, image and athletic renown of Sorenstam in connection with the advertisement and promotion of certain of its products as provided herein; and
WHEREAS, Sorenstam has licensed all such rights to Licensor, along with the right to sublicense such rights to third parties.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. As used herein, the following terms shall be defined as set forth below:
(a) "Contract Period" shall mean that period of time commencing on January 1, 2004 and concluding December 31, 2006, unless terminated sooner as provided herein.
(b) "Contract Territory" shall mean worldwide.
(c) "Contract Year" shall mean the consecutive 12-month period beginning on any January 1st during the Contract Period.
(d) "Distributors and Sublicensees" shall mean the distributors and sublicensees listed on the attached Exhibit A, and any additional distributors and sublicensees approved in accordance with Section 2 below.
(e) "Gross sales" shall mean total revenues, under generally accepted accounting principles, from sales of the Licensed Products, but does not include any revenue from sales, use or other transaction taxes, duties, handling, graphics, embroidery or shipping, returns, trade discounts, allowances, markdowns and customer chargebacks.
(f) "Net Sales" shall mean Gross Sales less revenue from Company sales force samples, value added services, and liquidation sales (Licensed Product sales at substantially discounted prices and out of their ordinary distribution channel) of Licensed Products.
(g) "Licensed Products" shall mean the "Tournament Collection by Annika", the "Annika Collection by Cutter & Buck" line of Products, or other similarly named Product lines using the Sorenstam Identification on the Products' affixed labels, hang tags or logos.
(h) "Products" shall mean women's apparel, including women's shirts, pants, sweaters, jackets and rainwear.
(i) "Sorenstam Identification" means the right to use, subject to the provisions hereof, Sorenstam's name, fame, nickname, initials, autograph, voice, video or film portrayals, facsimile signature, photograph, likeness and image or facsimile image, and any other means of endorsement by Sorenstam used in connection with the advertisement and promotion of the Company and the Products (including the Licensed Products).
2. Grant of Rights. In consideration of the remuneration to be paid to Licensor pursuant hereto, Licensor grants to Company and to its authorized Distributors and Sublicensees the right and license during the Contract Period to use the Sorenstam Identification solely in connection with the advertisement, marketing and promotion of the Products within the Contract Territory as set forth herein. Licensor agrees not to grant the right to use the Sorenstam Identification to anyone other than Company in connection with the advertisement and promotion of Products. It is understood that Company, its authorized Distributors and Sublicensees may not use the Sorenstam Identification in connection with any items for sale or resale, other than the Products as specified herein. The foregoing rights to use the Sorenstam Identification is limited to television, radio and print advertising, advertising published over the Internet (provided such material is limited to advertising or Product promotion only), public relations and marketing materials, point-of-sale displays, free standing inserts, videos shown to customers and consumers, catalogs for customers and consumers, direct mail (including e-mail) and billboards. Company shall ensure that all uses of Sorenstam Identification comply with applicable law. The Company shall obtain Licensor's approval for any additional distributor and sublicensee, which approval will not be unreasonably withheld.