SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: February 29, 2000
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No.: 0-10093
GOLF ROUNDS.COM, INC.
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(Exact name of small business issuer as specified in its charter)
Delaware 22-3664872
- -------------------------------- --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
135 Kinnelon Road, Suite 104B, Kinnelon, New Jersey 07405
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(Address of principal executive offices)
(973) 492-3520
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(Issuer's telephone number)
N/A
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(Former name, former address and former fiscal year,
if changed since last report)
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date: As of May 22, 2000, the
issuer had 3,432,377 shares of common stock, par value $.01, per share,
outstanding.
Transitional Small Business Disclosure Format (check one): Yes __ No X
<PAGE>
PART I - FINANCIAL INFORMATION
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Item 1. - Financial Statements
GOLF ROUNDS.COM, INC.
BALANCE SHEET
(Unaudited)
<TABLE>
February 29,
2000
--------------------------
($000 Omitted)
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $1,881
Prepaid expenses 11
------
Total current assets 1,892
Intangible assets, net of accumulated amortization of $164 33
Equipment, net of accumulated depreciation of $2 6
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Total assets $1,931
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 51
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Total current liabilities 51
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Stockholders' equity:
Common stock, $.01 par value, 12,000,000 shares
authorized, 2,099,491 shares issued and outstanding 21
Additional capital in excess of par value 3,200
Accumulated deficit ( 1,341)
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Total stockholders' equity 1,880
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Total liabilities and stockholders' equity $1,931
======
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
GOL ROUNDS.COM, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
For the three months
ended February 29 & 28,
2000 1999
---- ----
($000 Omitted,
Except Per Share Data)
<S> <C> <C>
Revenues:
Interest $ 25 $ 21
Other 3 -
----- -----
Total revenues 28 21
----- -----
Expenses:
General, administrative and other 167 15
Amortization 50 -
----- -----
Total expenses 217 15
----- -----
Net income (loss) $( 189) $ 6
==== =====
Basic and diluted net income (loss) per share $( .09) $ -
=====
Weighted average number of shares outstanding (in 000's) 2,099 1,958
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</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
GOLF ROUNDS.COM, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
For the six months
ended February 29 & 28,
2000 1999
---- ----
($000 Omitted,
Except Per Share Data)
<S> <C> <C>
Revenues:
Interest $ 47 $ 45
Other 4 -
----- -----
Total revenues 51 45
----- -----
Expenses:
General, administrative and other 244 31
Amortization 99 -
----- -----
Total expenses 343 31
----- -----
Net (loss) income $(292) $ 14
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Basic and diluted net (loss) income per share $ (.14) $ .01
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Weighted average number of shares outstanding (in 000's) 2,099 1,963
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</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
GOLF ROUNDS.COM, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
For the six months
ended February 29 & 28,
2000 1999
---- ----
($000 Omitted,
Except Per Share Data)
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (292) $ 14
Adjustments:
Increase in prepaid expenses ( 3) -
Amortization and depreciation 101 -
Increase in accounts payable
and accrued expenses 42 -
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Net cash provided by
operating activities (152) 14
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Cash flows from investing activities -
Purchase of equipment ( 3) -
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Net cash used in investing activities ( 3) -
----- -------
Cash flows from financing activities -
Repurchase of common stock - ( 21)
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Net cash used in
financing activities - ( 21)
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Net (decrease) in cash and cash (155) ( 7)
equivalents
Cash and cash equivalents at beginning
of period 2,036 2,151
------ ------
Cash and cash equivalents at end of period $1,881 $2,144
====== ======
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
GOLF ROUNDS.COM, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying unaudited financial statements of Golf Rounds.com, Inc.
(the "Company") as of February 29, 2000 and for the six month periods ended
February 29, 2000 and February 28, 1999 reflect all material adjustments that,
in the opinion of management, are necessary for a fair presentation of results
for the interim periods. Certain information and footnote disclosures required
under generally accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations of the Securities and Exchange Commission,
although the Company believes that the disclosures are adequate to make the
information presented not misleading. These financial statements should be read
in conjunction with the year-end financial statements and notes thereto included
in the Company's Annual Report on Form 10-KSB for the year ended August 31,
1999, as filed with the Securities and Exchange Commission.
The results of operations for the three- and six-month periods ended
February 29, 2000 and February 28, 1999 are not necessarily indicative of the
results to be expected for the entire fiscal year or for any other period. Prior
year's financial statements have been reclassified to conform to the current
year's presentation.
2. Income Per Share
Income per common share is based on the weighted average number of shares
outstanding. Excluded from the income per share calculations for the three and
six months ended February 29, 2000 are contingently issuable shares that, if
included, would have an antidilutive effect.
6
<PAGE>
Item 2. - Management's Discussion and Analysis of Financial Condition and
- ------- ---------------------------------------------------------------
Results of Operations
---------------------
This Form 10-QSB contains forward-looking statements that may involve known
and unknown risks, uncertainties and other factors that may cause the Company's
actual results and performance in future periods to be materially different from
any future periods or performance suggested by these statements.
Overview
The Company had been engaged in the wholesale distribution of aluminum
alloys, steel and other specialty metals until it liquidated its assets in the
fourth quarter of its fiscal year of 1992. In May 1999, the Company became a
publisher of Internet websites through its acquisition of PKG Design, Inc., the
developer and owner of two Internet websites: golf rounds.com and skiingusa.com.
Prior to the acquisition, PKG Design had entered into an agreement with Lycos,
Inc. ("Lycos"), a major Internet guide. Under the agreement, Lycos incorporated
golf rounds.com into the Lycos website so that its customers could use Lycos to
obtain information about golf (the "Lycos Agreement"). The non-interest revenues
have been insignificant and almost all were derived from selling advertisements,
often called banners, to reach Lycos customers. The Lycos Agreement was canceled
by Lycos effective December 5, 1999. On December 2, 1999, the Company entered
into a content licensing and distribution agreement with TicketMaster OnLine -
CitySearch, Inc. ("TMCS"). Under the agreement, TMCS will include the Company's
golf content on the TMCS Internet websites. In exchange, the Company will
receive a portion of net receipts generated from advertising banners,
sponsorships or other devices on the TMCS sites. There can be no assurance that
these revenues will be significant.
The Company's business is characterized by rapid technological change, new
product development and evolving industry standards. Inherent in the Company's
business are various risks and uncertainties, including its limited operating
history, unproven business model and the limited history of commerce on the
Internet.
The Company's success may depend in part upon the emergence of the Internet
as a communications medium, prospective product development efforts and
acceptance of the Company's brand name and products in the marketplace.
The Company was incorporated in 1968 under the laws of the State of
Florida. Its executive offices were located in Miami, Florida until September
1992 when such offices were relocated to Bedminster, New Jersey. In June 1999
the Company reincorporated in the state of Delaware. In April 2000 the Company's
executive offices were relocated to Kinnelon, New Jersey.
Effective on February 3, 2000, Paul O. Koether, John W. Galuchie, Jr. and
Thomas K. Van Herwarde resigned as directors of the Company and Robert H.
Donehew, Larry Grossman and John F. McCarthy, III took office as the new
directors of the Company. The change in composition of the board occurred in
connection with the sale on January 24, 2000 by Messrs. Koether, Galuchie and
Van Herwarde and certain other sellers of 500,000 shares of the Company's common
stock to seven purchasers. Mr. Van Herwarde remains President of the Company. In
connection with the sale, Mr. Koether and several entities he controls gave a
designee of the purchasers irrevocable proxies to vote an additional 449,690
shares of common stock owned by Mr. Koether and the entities he controls.
7
<PAGE>
Results of Operations
Available cash is invested in U.S. Treasury Securities with original
maturities of less than three months. For the six months ended February 29, 2000
interest income was $47,000 compared to $45,000 for the comparable period of the
prior fiscal year.
General, administrative and other expenses were $244,000 for the six months
ended February 29, 2000. Until March 31, 2000, a management fee of $12,500 per
quarter was paid to a company with which the Company was formerly affiliated for
accounting, financial and administrative management. The fee was based on the
former affiliate's estimated costs. On a going-forward basis, management will be
handling these tasks internally and such management fee will no longer be paid.
The remaining general and administrative expenses for the six-month period ended
February 29, 2000 consisted primarily of salary expenses of $62,000, health
insurance expenses of $65,000, legal expenses of $30,000 and stockholder
services expenses of $21,000. Amortization expense of $99,000 was incurred in
connection with the acquisition of PKG Design, Inc. for the six months ended
February 29, 2000.
Until September 1, 1999, the Company self-insured the first $20,000 of
employee medical claims per employee per year. From September 1, 1999 until
March 31, 2000, the Company self- insured the first $50,000 of employee medical
claims per employee per year. Effective as of March 31, 2000, the Company no
longer self-insures its employees' medical claims.
Liquidity and Capital Resources
At February 29, 2000, cash and cash equivalents and working capital were
approximately $1,881,000. U.S. Treasury Securities of approximately $1,766,000
mature at various dates through May 4, 2000 and bear interest rates ranging from
5.11% to 5.7%.
On March 16, 2000, the Company sold an aggregate of 1,333,005 shares of
common stock in a private placement that resulted in $1,566,672 of additional
capital for the Company.
Year 2000 Compliance
The Year 2000 problem is the result of certain computer programs being
written using two digits, rather than four digits, to define the applicable
year. Any computer programs that have time- sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000, or not recognize the
date at all. If not corrected, this could result in system failures or
miscalculations that could result in service or other interruptions. To date, we
have not experienced any significant Year 2000 problems.
Testing and compliance monitoring as part of our Year 2000 program will
continue into 2000 to ensure that system changes and additions are Year 2000
compliant.
8
<PAGE>
PART II - OTHER INFORMATION
Item 2. - Changes in Securities
On March 13, 2000, the Company issued five year options to purchase 20,000
shares of its common stock, par value $.01 per share, at a price of $2.5625 per
share, to each of its directors - Robert H. Donehew, John F. McCarthy III, and
Larry Grossman. Also on March 13, 2000, the Company issued 15,000 shares of its
common stock to Robert H. Donehew in consideration for his agreement to serve as
Vice President and Treasurer of the Company. The Company relied upon Section
4(2) of the Securities Act for an exemption from registration for these private
transactions.
On March 16, 2000, the Company sold 1,333,005 shares of common stock, par
value $.01 per share, of the Company, at a purchase price of $1.375 per share
(for aggregate gross proceeds of approximately $1,833,000), to 29 accredited
investors in a private placement offering. M.H. Meyerson & Co., Inc. acted as
the placement agent for the offering and was paid commissions of $128,301.60 and
a non-accountable expense allowance of $54,986.40. M.H. Meyerson also received
five year options to purchase 200,251 shares of the Company's common stock at a
price of $1.50 per share. The Company relied on Section 4(2) of the Securities
Act of 1933 and Rule 506 of Regulation D thereunder for an exemption from
registration for this offering and the issuance of options to M.H. Meyerson.
Item 6. - Exhibits and Reports on Form 8-K
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(a) Exhibits
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10.1* Content Licensing and Distribution Agreement, dated
December 2, 1999, between the Company and TicketMaster
OnLine - CitySearch, Inc.
10.2** Form of option agreement for options issued as of March
13, 2000.
10.3** Form of subscription agreement for private offering.
10.4** Form of agency agreement for private offering.
10.5** Form of placement agent's purchase option for private
offering.
10.6** Form of registration rights agreement between the Company
and certain security holders.
27** Financial Data Schedule.
- ------------------------------
* Confidential treatment has been requested for portions of this exhibit
pursuant to an application under Rule 24b-2 under the Securities Exchange
Act of 1934, as amended, and filed separately with the Securities and
Exchange Commission.
** Previously filed.
9
<PAGE>
(b) Reports on Form 8-K
On January 19, 2000, the Company filed a report on Form 8-K
to announce, pursuant to Item 1 of Form 8-K, that agreements
had been signed relating to a pending change of control of
the Company.
On February 8, 2000, the Company filed a report on Form 8-K
to announce, pursuant to Item 1 of Form 8-K, that a change
of control of the Company had occurred.
10
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant
caused this amendment to be signed on its behalf by the undersigned, thereunto
duly authorized.
GOLF ROUNDS.COM, INC.
Dated: May 23, 2000 By: /s/ Robert H. Donehew
----------------------
Robert H. Donehew
Vice President and Treasurer
(Principal Financial and
Accounting Officer)
11
<PAGE>
EXHIBIT INDEX
Number Description
- ------ -------------
10.1* Content Licensing and Distribution Agreement, dated December 2, 1999,
between the Company and TicketMaster OnLine - CitySearch, Inc.*
10.2** Form of option agreement for options issued as of March 13, 2000.
10.3** Form of subscription agreement for private offering.
10.4** Form of agency agreement for private offering.
10.5** Form of placement agent's purchase option for private offering.
10.6** Form of registration rights agreement between the Company and certain
security holders.
27** Financial Data Schedule.
- ------------------------------
* Confidential treatment has been requested for portions of this exhibit
pursuant to an application under Rule 24b-2 under the Securities Exchange
Act of 1934, as amended, and filed separately with the Securities and
Exchange Commission.
** Previously filed.
12
Confidential Treatment Requested for Portions of this Exhibit
CONTENT LICENSING AND DISTRIBUTION AGREEMENT
This Content Licensing and Distribution Agreement (this "Agreement") is entered
into as of December 2, 1999 (the "Effective Date") between Golf Rounds.com, Inc.
("Golf Rounds"), a Delaware corporation with offices at 376 Main Street, P.O.
Box 74, Bedminster, New Jersey 07921 Attn: Thomas Van Herwarde, and Ticketmaster
Online - CitySearch, Inc. ("TMCS"), with offices at 790 East Colorado Boulevard,
Suite 200, Pasadena, California 91101 Attn: General Counsel.
1. License: Golf Rounds shall grant to TMCS a non-exclusive, non-transferable
(except as otherwise provided in this Agreement), world-wide license to the
Golf Rounds.com content in order to use, modify, reproduce, distribute,
display and transmit (defined herein as the "Content") on the TMCS Internet
web sites featuring the brands of TMCS either alone or together with the
brands of any third parties, developed in whole or in part by TMCS and
distributed or made available by TMCS through its web sites for the sole
purpose of permitting visitors of the TMCS web sites to download, view, and
print portions of the Content for personal use of the visitors of the TMCS
web sites (defined herein as the "TMCS Sites").
2. As used in this Agreement, the Content shall mean the following only:
a. The golf courses database;
b. Specific information related to individual golf courses, including
golf photographs, images, text and descriptions;
c. Information on golf related news and editorial features, including
golf photographs, images, text and headlines;
d. Once every other week, one new golf course or golf resort will be
profiled, featuring detailed information, for each TMCS cityguide
market (defined herein as the "Spotlight"). Each TMCS cityguide
market's Spotlight shall feature a new golf course or golf resort in
that market. In selecting the Spotlight, TMCS may request that Golf
Rounds feature a specific golf course or golf resort by providing Golf
Rounds with at least thirty (30) days notice of the golf course or
golf resort to be selected. In no event will TMCS be entitled to
select more than twenty (20) new golf courses, golf resorts, or TMCS
cityguide markets as Spotlights within any thirty (30) day period;
and,
e. Other golf related content that the parties mutually agree to include
on the TMCS Sites during the Term (as defined below) of this
Agreement.
3. Golf Rounds Presence on TMCS: The Content shall be featured, in TMCS's sole
discretion, in an area of the TMCS Sites dedicated to information on golf
courses, golf resorts, golf tournaments and other golf related information
("TMCS Golf Center"). The Content may also be featured, in TMCS's sole
discretion, in other contextually relevant areas of any TMCS Sites. On
every "content page" within the TMCS Sites, TMCS shall feature notice below
the sponsor, if any, but above an article's title or by-line that features
the Content that states the following: "SOURCE: Golf Rounds.com" (defined
herein as the "Credit Line"). The size of the Credit Line is subject to
TMCS' sole discretion, and shall be consistent with other notices or Credit
Lines provided by TMCS for other content providers. For the purposes of
this Agreement, a "Content Page" shall mean any web page within the TMCS
Golf Center that features Golf Rounds' Content and is hosted by TMCS.
Notwithstanding the foregoing, a Content Page shall not include any web
page on the TMCS Sites that features only teaser or introductory
information selected from the Content, with the primary purpose of driving
users to a Content Page. In addition, TMCS shall have the right, in TMCS's
sole discretion, to not include Content on the TMCS Sites.
<PAGE>
4. Delivery of Golf Rounds Content: The Content shall be made available to
TMCS in a mutually agreeable format beginning no later than ten (10)
business days following the parties' execution of this Agreement. Moreover,
Golf Rounds agrees that XML is one acceptable format for the delivery of
Content hereunder. With the exception of the Spotlight, which shall be
updated once each week, the Content shall be updated as follows:
a. Every twenty-four (24) hours for Content that includes daily golf
related news and reports (the "Daily News");
b. Content that is designated as an extraordinary newsworthy event the
parties may agree to update such Content more frequently than Daily
News (the "Breaking News");
c. During golf tournaments, the Content shall be updated as often as
possible to remain current, subject only to technological limitations
of Golf Rounds, including but not limited to delays beyond Golf
Rounds' control (the "Tournament News"); and,
d. All other Content no less frequently than is offered to any other Golf
Rounds content distribution partner.
4.1 Golf Rounds also shall provide TMCS with at least thirty (30) days
prior written notice of any significant updates, improvements, or
modifications that generally affect the appearance, updating, delivery or
other elements of the Content (defined herein as "Enhancements"), and shall
make such Enhancements available to TMCS at no charge.
5. Advertising and Sponsorship Revenue: The front page of the TMCS Golf Center
and each Content Page shall feature at least one advertising banner. In
addition, TMCS shall use commercially reasonable efforts to sell a
sponsorship for the TMCS Golf Center (a "Title Sponsorship") and a
sponsorship for the Content, to the extent that such Content is featured on
the TMCS Sites (a "Feature Sponsorship"). Notwithstanding the foregoing,
the parties agree and acknowledge that TMCS shall have the right to sell
additional advertising banners and/or sponsorships on the TMCS Sites, the
TMCS Golf Center and the Content Pages without any additional obligation of
payment due to Golf Rounds. TMCS shall have the sole right to host and sell
any and all advertising banners, sponsorships, or other devices on the TMCS
Sites, including the TMCS Golf Center and the Content Pages. The pricing of
the all advertising and sponsorships shall be subject to TMCS's reasonable
discretion.
5.1 TMCS shall pay to Golf Rounds * * * of TMCS's Net Receipts, as
defined below, from revenue generated from the sale of advertising banners
and the Title Sponsor on the front page of the TMCS Golf Center, provided
that the front page of the TMCS Golf Center features a portion of the
Content.
5.2 Except for the front page of the TMCS Golf Center, TMCS shall pay
to Golf Rounds * * * of TMCS's Net Receipts from revenue from the sale of
advertising banners, Title Sponsorships and Feature Sponsorships on any or
all Content Pages.
- --------
* Text deleted pursuant to an application for confidential treatment under
Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and filed
separately with the Securities and Exchange Commission.
<PAGE>
5.3 "Net Receipts" shall mean all revenue from the sale advertising
banners, Title Sponsorships and Feature Sponsorships on the Content Pages
or the front page of the TMCS Golf Center, as applicable, less any
commercially reasonable advertising commissions.
5.4 All barter or other non-cash revenue or exchanges received by TMCS
for advertising banner or sponsorships on the Content Pages or the front
page of the TMCS Golf Center shall be included as Net Receipts equal to the
reasonable commercial value of such advertising or sponsorship for similar
content on similarly trafficked web pages. Notwithstanding the foregoing,
no barter or other non-cash revenue will be included in the definition of
Net Receipts relating to banners, ads or sponsorships run by TMCS on behalf
of its own properties or those of its affiliates nor will such revenue be
included in the definition of Net Receipts to the extent that TMCS has open
(unsold and unallocated inventory) and runs ads on behalf of third parties
who have not purchased such ads, i.e. freebies. Notwithstanding the
foregoing, TMCS shall run such "freebies" on the TMCS Golf Center and
Content Pages only to the same extent and under similar terms as TMCS runs
such freebies on the other pages of the TMCS Sites.
6. Payment: All payments from TMCS to Golf Rounds under this Agreement shall
be payable within thirty (30) days of the end of each month. In addition,
together with any payment due to Golf Rounds, TMCS shall submit to Golf
Rounds a written report setting forth in reasonable detail for the previous
period the amount of advertising or sponsorships on a TMCS Golf Site.
7. Audit: Not more than once per year during the term of this Agreement, and
for a period of one (1) years after termination expiration of this
Agreement, upon reasonable notice, Golf Rounds.com may enter the premises
of TMCS and perform reasonable audit and inspection procedures to confirm
that TMCS is in compliance with Section 5 and Section 6 of this Agreement.
TMCS shall cooperate in any such inquiry by Golf Rounds.com. Golf
Rounds.com shall have the right to access and make physical and electronic
copies of physical and electronic information for sole and limited purposes
of determining TMCS's compliance with Sections 5 and 6 of this Agreement.
8. Golf Rounds Performance Levels: In addition to making available the Content
to TMCS Sites, Golf Rounds will provide on-going assistance to TMCS with
regard to technical, administrative and service-oriented issues relating to
the utilization, transmission and maintenance of the Content, as TMCS may
reasonably request. Golf Rounds will use its best efforts to ensure that
the Content is accurate, comprehensive and updated consistent with the
terms of this Agreement. Golf Rounds shall provide telephone support and
electronic mail ("Support") to TMCS no less than twenty-four (24) hours per
day, seven (7) days per week. TMCS shall have the right to terminate this
Agreement upon ten (10) business days prior written notice in the event
that the Content is not available or incomplete at least 99% of any
calendar month according to the Content availability schedule set forth
herein, provided that Golf Rounds has been given prompt notice of any
delays or incomplete Content during such calendar month, and a reasonable
opportunity to cure is provided to Golf Rounds. Golf Rounds shall notify
TMCS: (a) at least twenty-four (24) hours prior to any scheduled downtime
that would prevent or delay the delivery to TMCS of the Content; and (b)
within twenty-four (24) hours when Golf Rounds is aware of any cause that
may result in the delivery of unusable or materially incomplete Content.
Golf Rounds shall also respond to any notification from TMCS that any of
the Content is unusable or incomplete within twenty-four (24) hours. Golf
Rounds shall follow up in electronic mail form or telephone to any problem
reported by TMCS detailing the diagnosis of the problem and the action
taken to resolve the problem.
9. Term: The term of the Agreement shall be six (6) months from the date that
the Golf Rounds Content is first available on a Golf Center Home Page or
Content Pages to visitors of at least one (1) TMCS Site ("Term"). This
Agreement shall automatically renew for additional one (1) month terms,
unless either party notifies the other in writing at least thirty (30) days
prior to the end of the then current term that it does not wish to renew
the Agreement.
<PAGE>
10. Termination: This Agreement may be terminated: (a) By either party upon a
material breach by the other party of any representation, covenant,
warranty or term of this Agreement that is not cured within thirty (30)
days after written notice thereof by the non-breaching party; or (b) by
either party immediately in the event that (i) the other party files a
petition for bankruptcy or is adjudicated a bankrupt, (ii) a petition in
bankruptcy is filed against the other party, (iii) the other party becomes
insolvent or makes an assignment for the benefit of its creditors or an
arrangement for its creditors pursuant to any bankruptcy law, (iv) an
action is instituted by or against the other party seeking its dissolution
or liquidation of such party's assets or seeking the appointment of a
trustee, interim trustee, receiver or other custodian for such party's
property or business and such action is not dismissed within sixty (60)
days after the date upon which it was instituted; or (v) a receiver is
appointed for the other party or its business.
11. Effect of Termination: Upon termination or expiration of this Agreement for
any reason, TMCS shall discontinue use of the Content on the TMCS Sites
including any TMCS Golf Site. However, TMCS shall continue to pay, any and
all amounts owing or owed up to the effective date of termination or
expiration. Termination of this Agreement shall not act as a waiver of any
breach of this Agreement or as a release of either party from any liability
for breach of such party's obligations under this Agreement.
12. Ownership of Intellectual Property: Each party shall own and retain all
right, title and interest in and to its own content, domain names,
hyperlinks, and web sites, including all trademarks, service marks,
copyrights, patents, trade secrets, and other intellectual property therein
("Branding"). Any rights not expressly granted hereunder to the other party
are reserved for the original party.
13. Publicity: Except as required by law or regulations such as disclosures for
the SEC by publicly traded companies, neither party shall make any public
statement about this Agreement or statement including the name or Branding
of the other party without the other party's prior written consent, not to
be unreasonable withheld or delayed.
14. Copyright Notice: For Content placed on a web page of a TMCS Site, TMCS
shall identify Golf Rounds or its licensors as the provider of the Content
and shall incorporate Golf Rounds' and/or its licensors' name and copyright
designation reasonably requested by reproducing the following notice: (C)
1999 All rights reserved, Golf Rounds.com, or in the case of a licensor,
(C) 1999 All rights reserved, LICENSOR's NAME. The location of such notice
shall be placed in reasonable close proximity with the Content. Golf Rounds
shall notify TMCS of any third party notice requirements under this
Agreement at least ten (10) days prior to the third party's content's
availability on the TMCS Sites.
15. Representation and Warranties:
15.1 Each party hereto represents and warrants to the other party
that: such party is an entity duly organized, validly existing and in good
standing in the jurisdiction of its formation; such party has full
authority to enter into this Agreement, to grant the rights granted herein,
and to perform the obligations assumed hereunder; and that this Agreement,
when executed by both parties, represents such party's valid and binding
obligation, enforceable against it in accordance with its terms, subject to
certain general legal enforceability exceptions. Each party also represents
and warrants that the grant of rights herein, does not violate the rights
of any third parties and complies with all applicable Federal, State and
Local law and regulation.
<PAGE>
15.2 Each party represents and warrants that their respective web
sites and the content contains software, hardware and/or source code or
object code hereunder will: (1) correctly store, calculate, sort,
manipulate and output multi-century and 21st century dates together with
20th century dates; and (2) not cause an abnormal abort within such product
or services or result in the generation of incorrect values or invalid
outputs involving such dates. Specifically excluded from this
representation and warranty are third party products and services,
databases, data, operating systems, hardware, etc. not provided by the
warranting party.
15.3 TMCS represents and warrants that it owns, controls, or has
licensed the necessary right, title, and interest in and to the TMCS Sites
and Branding, including but not limited to the TMCS Golf Sites and the
right to license and distribute advertising banners, sponsorships, and
other devices on the web pages as provided for under this Agreement. In
addition, TMCS represents and warrants that it has the authority to enter
into this Agreement and to fully perform all of its obligations hereunder.
15.4 Golf Rounds represents and warrants that it owns, controls, or
has licensed the necessary right, title and interest in and to any and all
of the Content, Branding and materials provided to TMCS hereunder,
including the right to license and distribute the news, images and
editorial information and the name and related information of each of the
golf courses as provided for under this Agreement. In addition, Golf Rounds
represents and warrants that it has the authority to enter into this
Agreement and to fully perform all of its obligations hereunder.
15.5 Golf Rounds represents and warrants that all golf courses, golf
information, rates, tee times and availability will be offered to TMCS
users to the same or greater extent as offered to Golf Rounds most favored
business partners or are offered directly by Golf Rounds itself.
15.6 Golf Rounds represents and warrants that any Content delivered to
TMCS during the Term of this Agreement shall not contain any content that:
o Is patently offensive to the online community, such as content
that promotes racism, bigotry , hatred or physical harm of any
kind against any group or individual;
o Harasses or advocates harassment of another person;
o Promotes information that you know is false, misleading or
promotes illegal activities or conduct which is abusive,
threatening, obscene, defamatory or libelous;
o Is or promotes an illegal or unauthorized copy of another person
or entity's copyrighted work, without authorization by the
copyright owner;
o Displays pornographic or sexually explicit material of any kind;
o Provides material that exploits people under the age of 18 in a
sexual or violent manner, or solicits personal information from
anyone under 18;
o Provides instructional information about illegal activities such
as making or buying illegal weapons; violating someone's privacy;
or providing or creating computer viruses; and
o Contains any computer viruses of any kind.
16. LIMITATIONS.
16.1 Limited Warranties. OTHER THAN AS EXPRESSLY STATED IN THIS
AGREEMENT, GOLF ROUNDS AND TMCS MAKE NO WARRANTIES, EXPRESS OR IMPLIED,
WITH RESPECT TO THEIR SERVICES AND SITES, AND THE PARTIES SPECIFICALLY
DISCLAIM ALL OTHER WARRANTIES OR CONDITIONS REGARDING THEIR SERVICES AND
SITES, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR NONINFRINGEMENT.
<PAGE>
16.2 Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE
TO THE OTHER OR ANY THIRD PARTY, WHETHER IN CONTRACT, TORT (INCLUDING
NEGLIGENCE) OR OTHERWISE, FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR
INDIRECT DAMAGES, (INCLUDING, BUT NOT LIMITED TO, LOST PROFIT OR BUSINESS
INTERRUPTION EVEN IF NOTIFIED IN ADVANCE OF SUCH POSSIBILITY), HOWEVER
CAUSED AND ON ANY THEORY OF LIABILITY, ARISING OUT OF THIS AGREEMENT,
WHETHER OR NOT SUCH PARTY IS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES,
AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
NOTWITHSTANDING THE FOREGOING, THIS SECTION IS NOT INTENDED TO LIMIT AND
DOES NOT LIMIT THE PARTIES' OBLIGATIONS REGARDING CONFIDENTIALITY, BREACH
OR VIOLATION OF THE OTHER PARTY'S INTELLECTUAL PROPERTY RIGHTS AND ANY
SECTIONS REGARDING INDEMNITY IN THIS AGREEMENT.
17. Indemnification:
17. 1 Indemnification by TMCS. TMCS will defend, indemnify and hold
harmless Golf Rounds, its successors, assigns, parent, subsidiaries,
affiliates, and their respective officers, directors, agents and employees,
from and against any action, suit or claim (including reasonable attorneys'
fees) arising out of or in any way connected with (a) any claim that the
TMCS Branding or content at TMCS Sites, including advertising banners,
sponsorships, or other devices on such web pages, infringes any
intellectual property rights or other rights of any third party, or (b) any
breach by TMCS of the covenants, warranties, representations or agreements
of this Agreement. Golf Rounds will give TMCS prompt notice of any such
claim or threatened claim.
17.2 Indemnification by Golf Rounds. Golf Rounds will defend,
indemnify and hold harmless TMCS, its successors, assigns, parent,
subsidiaries, affiliates, and their respective officers, directors, agents
and employees, from and against any action, suit or claim (including
reasonable attorneys' fees) arising out of or in any way connected with (a)
any claim that the Branding or Content, or legal notices required by any
third party licensor of a portion of the Content, provided to TMCS by Golf
Rounds, infringes any intellectual property rights or other rights of any
third party, or (b) any breach by Golf Rounds of the covenants, warranties,
representations or agreements of this Agreement. TMCS will give Golf Rounds
prompt notice of any such claim or threatened claim.
17.3 Procedure. The indemnified party will: (a) promptly notify the
indemnifying party of any claim, suit or proceeding for which defense or
indemnity is claimed; (b) cooperate reasonably with the indemnifying party
at the latter's expense; and (c) allow the indemnifying party to control
the defense or settlement thereof; provided, however, that the indemnifying
party may not consent to entry of any judgment or enter into any settlement
without the prior written consent of the indemnified party (which consent
shall not be unreasonably withheld or delayed), unless such judgment or
settlement provides solely for money damages or other money payments which
the indemnifying party actually pays on behalf of the indemnified party and
includes as an unconditional term thereof a release of the indemnified
party from all liability in respect of the claim, suit or proceeding giving
rise to the claim for indemnification. The indemnified party will have the
right to participate in any defense of a claim and/or to be represented by
counsel of its own choosing at its own expense.
<PAGE>
18. General Terms:
18.1 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California, without regard to conflict of
laws. In any action or proceeding to enforce rights under this Agreement,
the prevailing party shall be entitled to recover reasonable costs and
attorneys' fees.
18.2 Survival. Provisions of this Agreement that by reasonable
construction should survive the expiration or termination of this Agreement
shall so survive.
18.3 Assignment. Either party shall have the right to transfer this
Agreement, and assign all of its rights and delegate all of its obligations
hereunder, to any affiliate of such party, and to any successor by way of
merger or consolidation or in connection with the sale or transfer of
substantially all of its business and assets relating to this Agreement,
unless the merger, acquisition or sale is to a party whose business
interests are in conflict with those of the other party. Except as
otherwise expressly provided in this Agreement, neither party may transfer
or assign its rights or delegate its obligations hereunder (whether
voluntarily or by operation of law) without the prior written consent of
the other party, which consent shall not be withheld or delayed
unreasonably.
18.4 Notices. All notices under this Agreement shall be in writing and
delivered personally or by e-mail, facsimile, commercial overnight courier,
or certified or registered mail, return receipt requested, to a party at
its respective address set forth herein.
18.5 Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter herein and
merges and supersedes all prior discussions between them.
18.6 Severability. If the application of any provision or provisions
of this Agreement to any particular facts or circumstances shall be held to
be invalid or unenforceable by any court of competent jurisdiction, then:
(i) the validity and enforceability of such provision or provisions as
applied to any other particular facts or circumstances and the validity of
other provisions of this Agreement shall not in any way be affected or
impaired thereby; and (ii) such provision or provisions shall be reformed
without further action by the parties hereto and only to the extent
necessary to make such provision or provisions valid and enforceable when
applied to such particular facts and circumstances.
18.7 Independent Contractors. The parties are independent contractors,
and nothing in this Agreement shall be construed to create a joint venture
or partnership.
18.8 Force Majeure. A party will not be deemed to have materially
breached this Agreement to the extent that performance of its obligations
or attempts to cure any breach are delayed or prevented by reason of an act
of God, fire, natural disaster, accident, act of government, or shortage of
equipment, materials or supplies beyond the reasonable control of such
party (a "Force Majeure Event"); provided that the party whose performance
is delayed or prevented promptly notifies the other party of the nature and
duration of the Force Majeure Event.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the Effective Date by the undersigned duly authorized.
Ticketmaster Online - CitySearch, Inc. Golf Rounds.com, Inc.
By: /s/ Brad Serwin By: /s/ Thomas K. Van Herwarde
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Name: Brad Serwin Name: Thomas K. Van Herwarde
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Title: Vice President Title: President
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Date: 12/2/99 Date: 12/02/99
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