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LICENSE AGREEMENT
This License Agreement (the "Agreement") is made and entered into as of
this 4th day of January 2001 by and between MICHAEL JORDAN ("Jordan"), an
individual with an address care of SFX Sports Group, Inc., 5335 Wisconsin
Avenue, NW, Suite 850, Washington, DC 20015 (Attn: Curtis J. Polk) and PTN
MEDIA, INC. ("PTN Media"), a Michigan corporation, with an address of 455 East
Eisenhower Parkway, Suite 15, Ann Arbor, Michigan 48108.
RECITALS
WHEREAS, PTN Media is a Michigan-based company engaged in the
development, promotion, advertisement and sale of Palm, Inc. products;
WHEREAS, PTN Media desires to obtain, and Jordan is willing to grant,
an exclusive license to use Jordan's name, image, likeness and endorsement
(herein the "Licensed Property") (all as approved in writing by Jordan) in
connection with the proposed advertisement, promotion and sale of Palm, Inc.
products, including, without limitation, the Palm Pilot series (herein, the
"Palm Products").
NOW, THEREFORE, in consideration of the premises, the mutual covenants
of the parties hereinafter set forth and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties agree as
follows:
1. Definitions. As used herein, the terms set forth below shall be
defined as follows:
(A) "Licensed Property" shall include only the right to
use Jordan's name, image, likeness and endorsement of
Jordan, all as approved in writing by Jordan pursuant
to the terms of this Agreement;
(B) "Contract Territory" shall mean the entire world;
(C) "Contract Year" shall mean the twelve (12) month
period commencing on each first day of December
during the Term and concluding on the last day of
November during the Term;
(D) "Licensed Products" shall mean Palm, Inc. brand of
Palm Pilot electronic organizers including Palm III,
Palm IIIx, Palm V, Palm Vx and M100.
2. Grant of License.
(a) Subject to the terms and conditions of this Agreement,
Jordan hereby grants to PTN Media an exclusive license (the "License")
throughout the Contract Territory to use, distribute, display and transmit the
Licensed Property, as defined above in Section 1(A) only in the form, for the
purposes and in the manner, as expressly approved in writing in advance, by him
in connection with the proposed manufacture, advertisements in print media,
television and radio media, outdoor media and online media, distribution and
sale of certain approved Licensed Products, as defined above in Section 1(D),
and in the channels of distribution expressly approved in writing in advance by
Jordan. Subject to Palm's express acknowledgment of the terms and conditions of
this Agreement, PTN Media shall have the limited right to subcontract
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with Palm in connection with the License; provided, however, that in all events
any such subcontract or sublicense to Palm shall be subject to the express prior
written consent of Jordan.
(b) Any products approved as Licensed Products shall be listed
on Schedule 1 attached hereto and initialed by the parties. Any new item sought
to be included as a Licensed Product must be expressly approved and authorized
in writing by Jordan. Upon Jordan's approval, any such new items shall be set
forth in an updated Schedule 1 expressly authorized and executed by Jordan.
3. Retention of Licensed Rights. All rights to the Licensed Property
not specifically granted to PTN Media in this Agreement are reserved to Jordan,
and Jordan shall retain all rights in and to the Licensed Property, and whether
during the Term or any extension thereof, Jordan shall not be prevented from
using, or permitting others to use, the Licensed Property to in connection with
any product or service, including computer hardware, accessories and any
internet or handheld service in any manner whatsoever within the Contract
Territory. PTN Media further agrees that upon the expiration or other
termination of this Agreement, for any cause whatsoever, it and Palm will
immediately cease using the Licensed Property, Jordan's name, or any facsimile
thereof, for advertising, promotional, or any other purpose whatsoever.
(a) Subject to the terms of this Agreement, Jordan shall
continue to own all right, title and interest in and to the Licensed Property;
Jordan shall, however, have no right, title or interest in or to Palm Products
or any content therein, and PTN Media shall have sole contact with Palm in
connection with the development, format, contents and all other aspects in
connection with Licensed Products provided it is in compliance with the
provision hereof as to approval rights of Jordan.
4. Compensation and Royalties. In consideration for the License granted
herein and for the services to be performed by Jordan hereunder, PTN Media shall
pay to Jordan the following amounts:
(A) Annual Compensation. PTN Media shall pay Jordan
Minimum Annual Royalty Compensation ("Minimum Annual
Royalty Compensation") of the sum of One Million
Dollars ($1,000,000) for the First Contract Year
(December 1, 2000 through November 30,2001); One
Million Two Hundred and Fifty Thousand Dollars
($1,250,000) for the Second Contract Year (December
1, 2001 through November 30, 2002); and One Million
Two Hundred and Fifty Thousand Dollars ($1,250,000)
for the Third Contract Year (December 1, 2002 through
November 30, 2002). The payment schedule shall be as
follows: Fifty Percent (50%) of the Annual
Compensation for each Contract Year shall be paid to
Jordan on or before December 1 of the applicable
Contract Year; and Fifty Percent (50%) of the
remaining Annual Compensation for each such Contract
Year shall be paid to Jordan on or before June 1 of
the applicable Contract Year; provided, however, that
the first payment of $500,000 shall be paid to Jordan
upon the execution of this Agreement. The Minimum
Annual
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Royalty Compensation contemplated hereby shall be
treated as an advance against the royalty payments
due hereunder.
(B) Royalty Compensation. PTN Media shall pay Jordan
Royalty Compensation ("Royalty Compensation") equal
to twelve percent (12%) of "Gross Proceeds," as
defined herein, on the sale of Licensed Products
during each Contract Year of the Term. "Gross
Proceeds" shall mean the aggregate of all sales of
Licensed Products sold by or on behalf of PTN Media,
less any actual returns. However, in each Contract
Year, the Minimum Annual Royalty Compensation shall
first be credited against the Royalty Compensation;
provided, however, that for purposes of calculating
the Royalty Compensation for the First Contract Year,
the Minimum Annual Royalty Compensation to be
credited against the Royalty Compensation for the
First Contract Year shall be One Million One Hundred
and Twenty Five Thousand Dollars ($1,125,000). For
purposes of this Agreement, the quarters are as
follows: (1) August 1 to October 31; (2) November 1
to January 31; (3) February 1 to April 30; and (4)
May 1 to July 31.
(C) Statements. Within thirty (30) days following the
conclusion of each quarter of each Contract Year
("Quarter") during the Term, PTN Media shall submit
to Jordan and SFX Sports a written report ("Report")
itemizing the Gross Proceeds of Licensed Products and
the corresponding Royalty Compensation earned by
Jordan in such Quarter. Late payments shall accrue
interest at 1.5% per month.
(D) Right to Audit. PTN MEDIA further agrees that it
shall maintain accurate books and records in
connection with the sale of the Licensed Products, in
sufficient detail to enable royalties payable
hereunder to be determined, and shall retain books
and records which pertain to a particular Contract
Year for two (2) years after the end of that Contract
Year. Up to two (2) times per Contract Year, Jordan
shall have the right to inspect and make copies of
such books and records of PTN MEDIA as they relate to
the computation of royalties due and owing to Jordan
hereunder (each, an "Inspection"). Any Inspection
made by Jordan shall be at Jordan's sole cost and
expense; provided, however, should any Inspection
reveal a discrepancy in PTN Media's books and records
equal to or greater than ten percent (10%) of the
Royalty Payments (as computed by PTN MEDIA), then in
such instance PTN MEDIA shall reimburse Jordan for
the reasonable cost and expense of such Inspection.
(E) Minimum Guarantee. PTN Media and Jordan agree that in
the event the total Royalty Payments for any given
Contract Year are less than the Minimum Annual
Royalty Compensation for such Contract Year, PTN
Media's sole obligation in connection with the
Royalty Payments shall be to pay Jordan the Minimum
Annual Royalty Compensation for such Contract Year,
and provided PTN MEDIA makes all payments pursuant to
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this Agreement, Jordan shall have no right to
terminate this Agreement based upon a royalty
shortfall.
5. Promotional Services. In connection with the foregoing and in
accordance with the approval language contained hereunder, Jordan agrees to
cooperate with, and make himself reasonably available to, PTN Media for a
one-time, one hour photo shoot prior to the release of the Licensed Products,
which photos shall be used by PTN Media for advertising, promotion and public
relations purposes only. PTN Media agrees that the photo shoot shall be subject
to (a) Jordan's approval of location and venue, and (b) Jordan's schedule, all
in Jordan's absolute discretion. Furthermore, PTN Media agrees that it shall
reimburse Jordan for all necessary expenses relating to Jordan's participation
in such photo shoot, including the cost of a private jet for Jordan, if the
photo shoot is outside of Chicago, and the cost of first class air fare for a
representative of Jordan to attend such photo shoot. Other than the one-time
photo shoot, PTN Media and Palm agree and acknowledge that Jordan shall have no
other personal obligations to make any promotional appearances whatsoever under
the terms of this Agreement.
6. Products for Jordan. PTN Media agrees to donate, or cause Palm to
donate, in Jordan's name, an agreed upon number of M100 Jordan edition Palm
Pilots to such educational institution as shall be designated by Jordan. PTN
Media further agrees to provide Jordan and his wife with thirty-six (36)
complementary M100 Jordan edition Palm Pilots and to arrange for a training
session for Jordan and his wife at their home in Chicago.
7. Approvals. PTN Media and Palm agree to submit to Jordan and his
business representatives, SFX Sports, for their approval, a copy of all
packaging, advertising, promotional materials, product samples, and any plans
relating to the Licensed Products utilizing Jordan's likeness at least fourteen
(14) calendar days prior to their release to the general public. PTN Media and
Palm further agree that such packaging, advertising, promotional materials,
product samples and Licensed Products shall not be released without prior
written approval of Jordan and SFX Sports.
8. Warranties, Indemnification and Remedies.
(a) Jordan warrants and represents that he owns all right,
title and interest in and to the Licensed Property. Jordan further represents,
warrants and agrees that he has the full right, power and authority to enter
into this Agreement and to grant the rights granted herein without violating any
other agreement or commitment of any sort to which he is a party or by which he
is bound; and that to the best of his knowledge, the use of the Licensed
Property as contemplated in this Agreement does not and will not infringe or
constitute a misappropriation of any trademark, patent, copyright, trade secret
or other proprietary, publicity or privacy right of any third party, and PTN
Media's use of the Licensed Property in connection with the manufacture,
advertisement, distribution and sale of Licensed Products as provided herein
shall not (with respect only to the said Licensed Property) violate any rights
of any kind or nature of any third party. Excluded expressly herefrom are any
representations as to the Palm Products and any uses made of such items or any
matters not expressly approved in writing in advance by Jordan.
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(b) Jordan shall defend, indemnify and hold harmless PTN Media
and its successors, permitted assigns, affiliates, officers, directors, agents
and employees, from and against any action, suit, claim, damages, liability,
costs and expenses (including reasonable attorneys' fees), arising out of or in
any way connected with any breach of any representation, warranty or agreement
made by Jordan herein. PTN Media shall give Jordan prompt notice of any such
claim or of any threatened claim. Neither Jordan nor PTN Media shall agree to
the settlement of any such claim, demand or suit prior to final judgment
thereon, nor issue any statement or file any document that would increase the
risk of Jordan, without the written consent of Jordan.
(c) PTN Media hereby represents, warrants and agrees that it
has the full right, power and authority to enter into this Agreement and agrees
that it will not infringe or misappropriate any trademark, patent, copyright,
trade secret or other proprietary, publicity or privacy right of any third party
in connection with its use and/or marketing of the Licensed Property, and that
the manufacture, sale and distribution of Licensed Products shall comply with
all laws, regulations or other governmental requirements of all kinds, and that
the Licensed Products shall not cause injury or damage of any kind to any user
or other third party. PTN Media shall defend, indemnify and hold harmless Jordan
and his successors, assigns, agents and employees, from and against any action,
suit, claim, damages, liability, costs and expenses (including reasonable
attorneys' fees), arising out of or in any way connected with: (i) any breach of
any representation, warranty or agreement made by PTN Media herein; and (ii) any
product and/or service manufactured, sold, marketed, promoted or distributed by
PTN Media or any of its licensees, subcontractors or assigns. Mr. Jordan shall
give PTN Media prompt notice of any such claim or of any threatened claim.
Without limiting any obligations hereunder, PTN Media, itself or through Palm,
as a condition to the use of any of the Licensed Property hereunder, shall
obtain and maintain product liability insurance and comprehensive liability
insurance, covering and protecting, as additional insureds, Jordan and his
officers, directors, employees, agents and representatives, with coverage
amounts consistent with industry standards, but no less than five million
dollars ($5,000,000) per occurrence.
(d) The parties' indemnification obligations set forth in the
foregoing paragraphs shall survive the termination of this Agreement.
9. Term. The term of this Agreement shall be three (3) years from the
date hereof, commencing December 1, 2000 and concluding November 30, 2003,
unless sooner terminated pursuant to the terms of this Agreement.
10. Parties' Rights of Termination.
(e) This Agreement may be terminated by either party, upon
written notice to the other, if: (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 makes an assignment for the
benefit of its creditors or an arrangement for its creditors pursuant to any
bankruptcy law, (iv) the other party discontinues its business, (v) a receiver
is appointed for the other party or its business or (vi) the other party
breaches any material provision hereof and such breach is not cured within ten
(10) days after notice thereof.
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(f) Termination of this Agreement shall not extinguish any of
PTN Media's or Jordan's rights or obligations under this Agreement, which by
their express terms continue after the date of termination; provided, however,
that in the event Jordan terminates this Agreement, PTN Media's obligation to
pay Jordan shall remain in full force and affect, further provided that the
License shall immediately be terminated and neither PTN nor any of its licensees
or subcontractors shall have the right to use the Licensed Property in
connection with the Licensed Products in any manner whatsoever. Termination of
this Agreement shall be without prejudice to any other rights that either party
may have at law or in equity, and shall not affect the rights of end-users to
continue to use all distributed copies of Palm Products.
11. Assignment. This Agreement and the rights granted hereunder are
personal to the parties and shall not be assigned without the prior written
consent of the other party; provided, however, that Jordan may assign this
Agreement to any wholly or majority owned subsidiary or affiliated party.
Subject to the foregoing, this Agreement will bind the parties and their
respective successors and permitted assigns.
12. Independent Contractor. Each party shall be deemed to have the
status of an independent contractor, and nothing in this Agreement shall be
deemed to place the parties in the relationship of employer-employee,
principal-agent, partners or joint ventures. Accordingly, PTN shall not make any
withholding for tax purposes from any payment due or payable to Jordan
hereunder.
13. No Brokers. All negotiations relative to this Agreement have been
carried on by the parties directly, without the intervention of any person as a
result of any act of either party (and, so far as known to either party, without
the intervention of any such person) in such manner as to give rise to any valid
claim against the parties hereto for brokerage commissions, finder's fees or
other like payment.
14. Miscellaneous Provisions.
(a) Entire Agreement. This Agreement, and all other
documents expressly referred to herein, contains the
entire agreement of the parties with respect to its
subject matter and supersedes all prior negotiations,
agreements and understandings, written or oral, with
respect to such subject matter. The terms of this
Agreement shall be waived or amended only by the
written agreement of the parties. No delay or
omission of either party in exercising any right or
remedy hereunder shall constitute a waiver of such
right or remedy, and no waiver as to any obligation
shall operate as a continuing waiver or as a waiver
of any subsequent breach.
(b) Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the
State of New York, without regard to the conflicts of
laws rules thereof.
(c) Trademarks. In the event PTN Media or Palm desire to
register, at their own expense, at any time during
the Term of this Agreement a logo, trademark, service
mark, design or trade name ("Mark") in any party of
the Contract
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Territory which includes any part or all of the
Licensed Properties, PTN Media or Palm may do so only
with the express written consent of Jordan, and, if
Jordan grants his consent and is requested by PTN
Media, Jordan shall execute any and all documents
which PTN Media reasonably believes to be necessary
and/or desirable for the successful registration and
protection of such Mark; provided, however that such
registration shall be limited to those categories
which are directly related to the Licensed Products.
Upon termination or expiration of this Agreement, PTN
Media shall assign all of its rights in those
portions of the Marks that are part of the Licensed
Property to Jordan.
(d) Arbitration.
(ii) Any dispute or controversy between the parties
relating to or arising out of this Agreement or any amendment or
modification hereof shall be determined in arbitration in the City of
New York pursuant to the rules and then obtaining of the American
Arbitration Association. The arbitration award shall be final and
binding upon the parties and judgment may be entered thereon in the
Supreme Court of the State of New York the United States District Court
for the Southern District of New York or in any other court of
competent jurisdiction to which jurisdiction the parties hereby
expressly consent. The service of any notice, process, motion or other
document in connection with an arbitration under this Agreement or the
enforcement of any arbitration award hereunder may be effectuated by
either personal service upon a party or by overnight courier delivery
duly addressed to it, at the address or addresses of such party of such
party or parties as herein set forth.
(iii) Anything otherwise hereinabove provided to the
contrary notwithstanding any dispute between the parties which involves
a third party action or proceeding, including, but not limited to,
cross-claims and third party action or interpleader action or
proceeding, arising under the indemnification provisions hereof or
otherwise, shall not at the election of the party subject to such third
party action or proceeding, be subject to arbitration (even though the
same would have been arbitrable as between the parties and the action
or proceeding been initiated by one of them against the other), but
shall be resolved exclusively within the said action, and the other
party hereto expressly consents to the jurisdiction of and in the court
in which such action or proceeding is pending.
(e) Benefit. This Agreement is not intended to confer upon any
person or entity other than the parties hereto any rights or remedies
hereunder.
(f) Interpretation. Each party intends that this Agreement be
deemed and construed to have been jointly prepared by the parties. As a
result, the parties agree that any ambiguity or uncertainty existing
herein shall not be interpreted against either of them. The parties
also intend that the rights and remedies hereunder be cumulative, so
that exercise of any one or more of such rights or remedies shall not
preclude the later or concurrent exercise of any other rights or
remedies.
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(g) Notices. Whenever, under the terms of this Agreement, any
notice or other communication is required or permitted to be given by one party
to the other, such notice or other communication shall be in writing and shall
be deemed to have been sufficiently given if personally delivered, telecopied,
or sent by overnight courier addressed to the party to whom it is to be given,
at the address set forth at the end of this Agreement. Until further notice from
Jordan, any notices intended for him shall be sent contemporaneously to Estee
Portnoy, with an address care of SFX Sports Group, Inc., 5335 Wisconsin Avenue,
NW, Suite 850, Washington, DC 20015. A notice or other communication shall be
deemed received (i) upon receipt, if personally delivered, (ii) on the first
business day after dispatch, if sent by overnight courier, and (iii) on the
first business day after dispatch, if transmitted by telecopy. Either party
hereto may change their address by written notice in accordance with this
Section.
(h) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original.
(i) Severability. If any provision of this Agreement is
declared by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions of this Agreement shall continue in full
force and effect, and the invalid provision shall be replaced by the legal
provision which most clearly achieves the intent of the invalid provision.
(j) Confidentiality.
(i) Each party agrees that all information, trade
secrets of the party, product plans, designs, ideas, concepts, costs,
finances, market plans, business opportunities, personnel, research,
development or know-how and any other non-public technical or business
information of a party, including, but not limited to, financial data
and other data (collectively, the "Proprietary Information") is and
shall remain the property of the disclosing party. Each party agrees
that it shall hold the other's Proprietary Information in the strictest
confidence and shall use such Proprietary Information only in
connection with its performance under this Agreement. Each of them
further agrees that it shall not disclose the other's Proprietary
Information internally except to that minimum number of employees,
agents, attorneys and accountants to whom such disclosure is necessary,
with each such person to be advised of, and bound by, the
confidentiality requirements hereunder. Each party shall return the
other's Proprietary Information promptly upon the other's written
request.
(ii) The requirements of paragraph 14(a) above shall
not apply to (a) Proprietary Information previously known to the
receiving party free of any obligation to keep it confidential, (b)
Proprietary Information that has been or is subsequently made public
other than in breach of this Section or (c) any Proprietary Information
the disclosure of which is required under any applicable law.
(iii) Each party agrees that in the event of any breach
of this Section the non-breaching party would be irreparably and
immediately harmed and that money damages would not be a sufficient
remedy for any such breach. It is accordingly agreed that the
non-breaching party shall be entitled to equitable relief, including
injunction and
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specific performance, in the event of any breach of the provisions of
this Section 13, in addition to all other remedies available to such
party at law or in equity.
(k) Right of Sell Off. Upon the expiration or sooner termination of the
Term, PTN Media and Palm shall have the right to distribute and sell-off its
inventory of Licensed Products for a period of one-hundred and eighty (180) days
("Sell-Off Period") after expiration or termination of this Agreement; provided,
however, that PTN Media shall not have the right to use the Licensed Property to
promote or advertise the Licensed Products without the express written approval
of Jordan, in Jordan's sole and absolute discretion. Thereafter, PTN Media will
not distribute or sell any Licensed Product. The parties agree that the
distribution and sale or use by others of Licensed Products which were
distributed or disseminated by PTN Media or its licensees during the Term or
during such Sell-Off Period will not constitute a breach by PTN Media of this
Agreement. The provisions of this paragraph will survive termination of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by them or their duly authorized representatives as of the date first
written above.
/s/Michael Jordan
--------------------------------
MICHAEL JORDAN
Address:
Mr. Michael Jordan
c/o SFX Sports Group, Inc.
5335 Wisconsin Avenue, NW, Suite 850
Washington, DC 20015
PTN MEDIA, INC.
By:/s/Peter Klamka
-----------------------------
Title: Peter Klamka, President
Address:
PTN Media, Inc.
455 East Eisenhower Parkway, Suite 15
Ann Arbor, Michigan 48108
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SCHEDULE I
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