[Material marked with an asterisk has been
omitted from this document pursuant to a
request for confidential treatment and has
been filed separately with the Securities and
Exchange Commission.]
NATIONAL FOOTBALL LEAGUE PROPERTIES, INC.
280 Park Avenue, New York, New York 10017
Area Code (212) 450-2000 FAX (212) 681-7599
PUBLISHING AGREEMENT TERM SHEET
LICENSEE: ULTIMATE SPORTS ENTERTAINMENT, INC. DATE: July 19,1999
ADDRESS: 5410 Wilshire Boulevard, Suite 611
440220-568
Los Angeles, CA 90036
THE FOLLOWING TERMS ARE MADE PART OF AND ARE SUBJECT TO ALL DEFINITIONS, TERMS
AND CONDITIONS SET FORTH IN LICENSE
NO(S). 31107
MARKETING PROGRAM: NFL QUARTERBACK CLUB
TERM: SEPTEMBER 1, 1999 - AUGUST 31, 2001
TERRITORY: THE UNITED STATES AND SUCH OTHER COUNTRIES THAT NFLP MAY
DESIGNATE IN WRITING.
LICENSED PRODUCTS: COMIC BOOK ADVENTURE STORIES FEATURING NFL QUARTERBACK
CLUB MEMBERS AS HEROES; SUPER BOWL SPECIALS
FISCAL YEAR LICENSED PRODUCT ROYALTY%
YEAR I 9/1/00-8/31/01 58308 COMIC BOOK ADVENTURE STORIES *
YEAR II 9/1/00-8/31/01 58308 COMIC BOOK ADVENTURE STORIES *
60205 SUPER BOWL SPECIALS *
FISCAL YEAR MINIMUM GUARANTEE
YEAR I 9/1/00-8/31/01 $* (DUE NO LATER THAN 3/31/00
NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED
IN THE LICENSE.)
YEAR II 9/1/01-8/31/02 $* (DUE NO LATER THAN 3/1/01
NOTWITHSTANDING ANYTHING TO
THE CONTRARY CONTAINED IN
THE LICENSE.)
AUTHORIZED BRANDS FOR
LICENSED PRODUCT(S): ULTIMATE SPORTS, INC.
LICENSED MARK(S) FOR
LICENSED PRODUCT(S): QB CLUB MARKS AND THE QB MEMBER MARKS OF THE QBC MEMBERS
LISTED ON THE ATTACHED EXHIBIT FL.
DISTRIBUTION CHANNELS FOR INTERNET, STADIUM SHOPS/STADIUM CONCESSIONAIRES, BOOK
STORES, TEAM SALES, HOBBY SHOPS, TOY STORES,
LICENSED PRODUCT(S): DISCOUNT STORES, DIRECT MAIL, SPONSORED PREMIUMS,
NEWSSTANDS, SPORTING GOODS STORES, HOME SHOPPING
CHANNELS
RENEWAL REQUEST DATE: SEPTEMBER 1, 2001
PROMOTIONAL PRODUCTS: N/A
COOPERATIVE FUND: N/A
ADVERTISEMENTS: N/A
SPONSORSHIPS: N/A
ADDITIONAL TERMS:
NFLP SHALL HAVE THE RIGHT TO CHANGE THE QB MEMBER MARKS IN ITS SOLE
DISCRETION PROVIDED THAT NFLP SHALL NOTIFY LICENSEE OF ANY CHANGE IN THE QB
MEMBER MARKS.
WITHOUT LIMITING THE RIGHTS OF NFLP OR THE QB CLUB IN ANY WAY, NOTHING
CONTAINED IN THIS LICENSE SHALL PREVENT OR IN ANY WAY LIMIT NFLPS AND/OR THE
QB CLUB'S RIGHTS TO ENTER INTO AGREEMENTS INVOLVING THE USE OF CHARACTERS
DEPICTING, BASED ON OR DERIVED FROM ANY OF THE QBC MEMBERS ANDLOR THE QB
MARKS OTHER THAN THE QB CHARACTERS AS SET FORTH IN PARAGRAPH II OF THIS
LICENSE.
LICENSEE DOES NOT HAVE THE RIGHT TO SELL ANY APPROVED PROMOTIONAL MATERIALS.
31107 ULTIMATE SPORTS ENTERTAINMENT, INC. TERM SHEET
National Football League Properties, Inc.
280 Park Avenue,
New York, New York 10017
Area Code (212) 450-2000 FAX (212) 681-7599
PUBLISHING AGREEMENT
LICENSEE: ULTIMATE SPORTS ENTERTAINMENT DATE: July 19,1999
ADDRESS: 5410 Wilshire Boulevard, Suite 611 No(s).: 300-440220-568
Los Angeles, CA 90036
National Football League Properties, Inc. ("NFLP") has the exclusive right to
license for commercial purposes the trademarks of the National Football
League ("NFL") and the thirty-one professional football teams that comprise
the NFL ("Member Clubs") and the NFL Quarterback Club ("QB Club") and its
Members ("QBC Members") when used in groups of three (3) or more. Licensee,
whose name and address are set forth above, desires to use certain of these
trademarks in accordance with the terms and conditions of this agreement
("License"). In consideration of the mutual premises, covenants and
undertakings contained in this License, the parties to this License agree as
follows:
I. Definitions used in this License, the terms listed on the attached Term
Sheet or Term Sheets and elsewhere in this License have the following
meanings:
a. "ADVANCE ROYALTY PAYMENT": The amount to be credited to Royalty payments
due for the corresponding Fiscal Year payable to NFLP upon the execution
of this License for Fiscal Year I and on or before April 15 for each
successive Fiscal Year.
b. "ADVERTISEMENTS": Advertising space in designated NFLP publications to be
purchased by Licensee in accordance with this License.
c. "AFFILIATE": Any person or entity in which Licensee or any owner, majority
shareholder, officer or director of Licensee has any direct or indirect
beneficial or ownership interest or is a joint venture partner.
d. "AUTHORIZED BRANDS": The only brand names Licensee may use in association
with the Licensed Products.
e. "CLUB MARKS": The full team names, nicknames, helmet designs, uniform
designs, logos, slogans and other identifying symbols and indicia adopted
for commercial purposes by the Member Clubs.
f. "COOPERATIVE FUND": The amount payable to NFLP during each Fiscal Year for
use by NFLP in connection with the designated Cooperative Program.
g. "DISTRIBUTION CHANNELS": The channels of trade in the Territory in which
Licensee may distribute for sale or sell each Licensed Product as defined
in Exhibit I attached to this License or the attached Term Sheet.
h. "FISCAL YEAR": The period beginning on April 1 of any year and ending on
March 31 of the following year except for Fiscal Year 1, which will begin
on the date this License is fully-executed and will end on March 31 of the
following year.
i. "LEAGUE MARKS": "National Football League", "NFL", "National Football
Conference", "American Football Conference", "NFC", "AFC", "Super Bowl",
"Pro Bowl", the NFL Shield design, and other identifying symbols, slogans
and indicia adopted for commercial purposes by the NFL.
j. "LICENSED MARKS": The trademarks for which Licensee is granted certain
limited, non-exclusive rights under this License.
k. "LICENSED PRODUCTS": All products for which Licensee may use the Licensed
Marks in association with the Authorized Brands, if applicable. This
license will refer to each distinct type of product as a "Licensed Product"
since more than one product may be licensed (e.g. T-shirts and jackets
would each be a Licensed Product).
l. "MARKETING PROGRAM": The program established by NFLP in connection with
which Licensee may use the Licensed Marks as authorized under this License.
Licensee shall abide by all rules, guidelines and policies established by
NFLP for such Marketing Program, if applicable, which are deemed part of
this License.
m. "MINIMUM ROYALTY GUARANTEE": The minimum amount of Royalty payments payable
to NFLP on or before the 15th day following the end of each Fiscal Year.
n. "NET SALES": Gross sales of all Licensed Products sold or distributed for
sale at the greater of Licensee's invoiced selling price or Licensee's
normal domestic wholesale warehouse price or, in the case of Direct
Retailer sales by Licensee only, the retail price less sales derived from
returns received and credited and less reasonable quantity discounts as
actually calculated on the invoice provided that the total returns in any
Fiscal Year in which Licensee desires to deduct quantity discounts from
Net Sales may not exceed ten percent (10%) of Net Sales for the
corresponding Fiscal Year without NFLP's prior written consent only.
Licensee shall not credit any return at a rate greater than the original
invoiced selling price for such Licensed Products. There shall be no other
deductions allowed including, without limitation, deductions for
manufacturing costs, selling costs, distribution costs, advertising and
promotional costs, freight, non-collected or uncollectable accounts,
commissions, taxes, cash discounts, close out sales, distress sales, sales
to employees, or any other costs. For purposes of this Agreement, Net
Sales and all other referenced sales occur when Licensee invoices or ships
any Licensed Product, whichever is earlier. If Net Sales are made to an
Affiliate, the dollar amount of gross sales will be the greater of
Licensee's regular price to unaffiliated accounts or the Affiliate's gross
sales price to an unaffiliated account.
o. "NFL MARKS": All League Marks and Club Marks, collectively.
p. "PREMIUMS": Any products, including the Licensed Products, bearing the NFL
Marks or QB Marks other indicia of the NFL or its Member Clubs, the QB
Club or its Members that Licensee sells or gives away for the purposes of
promoting, publicizing or increasing the sale of its own products or
services other than the Licensed Products, or that Licensee sells or gives
away to any other party whom Licensee knows or should reasonably know
intends to use such products for the purposes of promoting, publicizing or
increasing the sale of any other party's products or services. Promotions
include, without limitation, combination sales, incentives for sales
force, and trade or consumer promotions.
q. "PROMOTIONAL PRODUCTS": The quantity of each Licensed Product that Licensee
shall provide to NFLP at no cost during each Fiscal Year for use in
connection with NFLP's Promotional Programs, as defined in Paragraph 5 of
this License.
r. "QB MARKS": All QB Club Marks and QB Member Marks, collectively.
s. "QB CLUB MARKS": The names, logos, symbols, emblems, and designs of the
NFL Quarterback Club and other indicia, logos, nicknames and identifying
slogans adopted by the QB Club;
t. "QB MEMBER MARKS": The names, likenesses, portraits, pictures, photographs,
voices, signatures, facsimile signatures, and biographical information of
the members of the QB Club.
u. "RENEWAL REQUEST DATE": The date by which NFLP must receive notification
from Licensee of Licensee's desire to renew the License.
v. "ROYALTY": The amount of Net Sales Licensee shall pay to NFLP for all
sales of the Licensed Products. Licensee shall calculate all Royalty
payments according to Net Sales based on Licensee's normal domestic
wholesale warehouse price. NFLP reserves the right to increase the rate
of the Royalty during the Term, provided that it gives Licensee at least
six (6) months written notice before such increase takes effect.
w. "SPONSORSHIP": The designated events for which Licensee will participate
as a sponsor during each Fiscal Year of the Term subject to the execution
of an NFLP Sponsorship Agreement.
x. "STYLE": A distinct prototype of a Licensed Product that differs from
any other prototype of that same Licensed Product in any form or manner
with respect to design, material, pattern, size, shape, Licensed Marks,
editorial content or any other distinguishing characteristic involving the
specifications for the production of all or any portion of that Licensed
Product (e.g. T-shirts bearing the San Francisco 49ers logo and T-shirts
bearing the San Diego Chargers logo would each be a Style of Licensed
Product).
y. "TERM": The time period for which this License shall be effective.
z. "TERRITORY": The geographic area in which Licensee shall have the right to
sell the Licensed Products. Licensee is prohibited from selling Licensed
Products F.O.B. outside the Territory without the prior written approval
of NFLP.
aa. "UNIT": A single Licensed Product (e.g. one T-shirt and one jacket would
each be a Unit).
2. GRANT OF LICENSE
Subject to all of the terms and conditions of this License, NFLP grants
Licensee the non-exclusive right to use the Licensed Marks in connection with
the manufacture, publication, distribution, sale, and advertising of the
Licensed Products under the Authorized Brand in the Distribution Channels in
the Territory in accordance with all policies, rules and regulations of the
Marketing Program, if applicable, and NFLP, which are deemed part of this
License. Except as expressly provided on the Term Sheet, Licensee shall have
no right to use any of the QB Marks in connection with the Licensed Products
or otherwise. Unless otherwise indicated on the Term Sheet, Licensee shall
have no right to distribute the Licensed Products directly to consumers as a
Direct Retailer or otherwise. Licensee shall have no right to sell or
distribute any Premiums unless Licensee receives a separate Premium License
from NFLP and pays NFLP the applicable Royalty under such Premium License.
Licensee shall not use the Licensed Products as Premiums or permit the use of
the Licensed Products as Premiums by any party whom Licensee knows or should
reasonably know intends to use the Licensed Products as Premiums.
3. TERMS OF PAYMENT
a. Licensee shall pay NFLP the Royalty on all sales of the Licensed Products.
Regardless of whether any sales occur during any Fiscal Year, Licensee
shall also pay NFLP the applicable Advance Royalty Payment and Minimum
Royalty Guarantee for each Fiscal Year during the Term. Advance Royalty
Payments and any payments made to satisfy the Minimum Royalty Guarantee are
not refundable. Licensee may credit the Advance Royalty Payment and Royalty
payments made to NFLP during each Fiscal Year to the Minimum Royalty
Guarantee for the corresponding Fiscal Year only. Licensee may not credit
such amounts to the Advance Royalty Payment, Minimum Royalty Guarantee or
any other payment required under this License for any other Fiscal Year. If
the Term Sheet assigns a per-product Advance Royalty Payment and Minimum
Royalty Guarantee, then Licensee may only credit the Advance Royalty
Payment for such product and Royalty payments from the sales of such
product toward the corresponding Minimum Royalty Guarantee for such product
in the corresponding Fiscal Year. If NFLP terminates this License, for the
Fiscal Year in which termination occurs
("Termination Fiscal Year") Licensee shall pay NFLP the Royalty on all
sales of the Licensed Products made during the Termination Fiscal Year or
a pro rated portion of the Minimum Royalty Guarantee owed in excess of the
Advance Royalty Payment ("Termination Guarantee"), whichever is greater.
For purposes of this paragraph the pro rated Minimum Royalty Guarantee
will be calculated as follows:
TERMINATION GUARANTEE X NO. OF DAYS COMPLETED IN TERMINATION FISCAL YEAR
1 365
b. On or before the 15th day of each calendar quarter, Licensee shall make all
Royalty payments to NFLP due on sales of the Licensed Products during the
preceding calendar quarter. Simultaneously with the Royalty payment,
Licensee shall furnish full and accurate statements of the Net Sales of
each Licensed Product sold and distributed during such calendar quarter on
forms provided by NFLP. The statements will include the quantity and
description of each Licensed Product itemized by Member Club if applicable,
the gross sales price, itemized deductions from the gross sales price, any
returns made during the preceding quarter, and the resulting Net Sales on
which Licensee calculated the Royalty amount. Licensee shall furnish such
statements for each Licensed Product regardless of whether it sold any such
Licensed Product during the preceding quarter. NFLP's receipt or acceptance
of any statement or Royalty payment or the cashing of a Royalty check will
not preclude NFLP from questioning the correctness of such statements or
payments at any time. Upon discovery of any verifiable inconsistency or
mistake in such statements or payments, Licensee shall immediately rectify
such inconsistency or mistake.
c. Licensee shall pay NFLP all other amounts listed on the Term Sheet
attached to this License, if applicable, in accordance with the dates
provided in such Term Sheet.
d. Licensee shall pay NFLP an additional charge of one and one-half percent
(1.5%) per month on any payment due under this License that remains unpaid
fifteen (15) days after such payment becomes due.
4. QUALITY CONTROL
a. Prior to making any use of any Style of any Licensed Product, Licensee
shall submit to NFLP for its approval at Licensee's sole cost and expense
at the following applicable stages: (i) finished artwork or final proofs;
(ii) pre-production samples or strike-offs for such proposed Style;
(iii) a preliminary draft of the complete text and (iii) a sample Unit of
the finished version of such Style, including the final complete text,
together with all packaging, cartons, containers, hangtags and wrapping
materials related to such Unit ("Related Materials"). For Styles that
differ solely with respect to the Licensed Marks, Licensee may submit a
sample Unit of one Style along with artwork of the Styles bearing the
other Licensed Marks for approval purposes unless NFLP requests a sample
Unit of each such Style. NFLP shall use its best efforts to promptly
evaluate all such submissions and provide Licensee, if applicable, with
quality standards and specifications for the finished Units of each
Style. Upon approval of the finished version of a sample Unit of a Style,
NFLP shall execute a Product Approval Form that will contain any applicable
quality standards and specifications. License shall not manufacture,
publish, sell, distribute or advertise any Style of a Licensed Product
unless NFLP has executed a Product Approval Form for such Style.
b. All Product Approval Forms are effective for one Fiscal Year only and
Licensee must resubmit to NFLP each Style of each Licensed Product
previously approved by NFLP for
quality control approval each Fiscal Year. From time to time, NFLP may
request additional sample Units of any Style of any Licensed Product to
confirm continued compliance with NFLP's quality control guidelines and
any applicable quality standards and specifications. NFLP shall have the
right to withdraw its approval of any Style of any Licensed Product if, in
NFLP's sole judgment, such sample Units cease to conform to such
guidelines, standards or specifications or otherwise deviate in quality
from the previously approved sample Units. Upon notice by NFLP to Licensee
that the Product Approval Form for a Style of a Licensed Product has been
withdrawn, Licensee shall immediately cease to manufacture, publish,
distribute, sell or advertise any further Units of such Style until such
time as a new Product Approval Form has been executed and delivered by
NFLP.
c. Licensee shall not make any modification to any Style for which NFLP has
issued a Product Approval Form or depart from any applicable quality
standards and specifications for any Style unless NFLP has approved such
modification for such Style and issues a new Product Approval Form.
Licensee acknowledges that the manufacture, publication, use, sale,
distribution, or advertising of any Style that deviates from the Style
approved by NFLP will constitute a material breach of this License. Upon
such breach, NFLP may terminate this License immediately.
d. Licensee represents and warrants that it shall not use any design created
in connection with the Licensed Products on any product which is of the
same grade and quality as the Licensed Products but does not bear the
Licensed Marks.
5. ADVERTISING AND PROMOTIONAL MATERIALS
a. Licensee will not use the Licensed Marks or any reproduction of them,
including without limitation, Photographs or Computer Art, as defined in
Paragraph 10a, in any advertising, promotion, publicity or display
materials (collectively "Promotional Materials") without receiving NFLP's
prior written approval executed on a Promotional Approval Form supplied
to Licensee by NFLP. Licensee may use such approved Promotional Materials
only in conjunction with the Styles of Licensed Products that NFLP has
approved. Licensee shall submit to NFLP all Promotional Materials at the
following applicable stages appropriate to the medium used: (i) conceptual
stage, pre-production art or rough cuts; (ii) layout, storyboard and
script; (iii) finished materials; and (iv) at any other time as reasonably
requested by NFLP. Licensee shall ensure that it submits all proposed
Promotional Materials and any modifications to previously approved
Promotional Materials to NFLP in a timely fashion that will ensure NFLP has
adequate time to review such materials prior to the date of their proposed
use by Licensee. NFLP shall use best efforts to evaluate all such
Promotional Materials' submissions within ten (10) business days of their
receipt by NFLP. NFLP shall execute a Promotional Approval Form for all
Promotional Materials that it approves. Licensee shall notify its
retailers and/or Third Party Distributors that NFLP must approve all
Promotional Materials involving or using in any form or manner the
Licensed Marks. Licensee shall use best efforts to ensure that its
retailers and/or Third Party Distributors do not publish, display or
otherwise distribute such Promotional Materials without NFLP's prior
written approval.
b. NFLP has the exclusive right, in its sole discretion, to approve or
disapprove any Promotional Materials' submissions. Licensee acknowledges
that NFLP may disapprove Promotional Materials that, in NFLP's opinion,
reflect unfavorably upon NFLP, the NFL or its Member Clubs, the QB Club or
the QBC Members including, without limitation, materials
involving gambling, lotteries or other games inconsistent with the image
of the NFL, the Member Clubs, the QB Club or the QBC Members, or the
Licensed Products.
c. NFLP may withdraw its approval of any Promotional Materials if: (i) the
Promotional Materials have been altered without the prior written approval
of NFLP; (ii) the Style and/or the Licensed Product promoted in the
Promotional Materials ceases to be approved under this License; or (iii)
an event occurs that, in NFLP's opinion, causes NFLP's relationship with
Licensee or any Licensed Product to adversely reflect upon the
professional or business reputation of the NFL, its Member Clubs, the QB
Club, the QBC Members or NFLP.
d. Licensee represents that NFLP has the right to conduct promotions and
special events in its sole discretion and to print catalogs, sales sheets
and brochures involving representative merchandise from NFLP's licensees
("Promotional Programs"). Licensee shall supply within ten (10) business
days of any request by NFLP, at no charge to NFLP, all or any portion of
the quantity of Promotional Products specified on the Term Sheet required
by NFLP for use, in NFLP's sole discretion, in such Promotional Programs.
e. Licensee shall pay NFLP the designated amounts for the Advertisements,
Sponsorship, and Cooperative Fund, if applicable, on or before the
corresponding dates listed on the Term Sheet attached to this License.
NFLP shall use such payments in a manner determined by NFLP in its sole
discretion.
f. During each Fiscal Year of the Term in which NFLP publishes the NFL
Merchandise Catalogue, Licensee shall purchase a full-page advertisement
in such catalogue at the rate established in NFLP's then-existing rate
card. Licensee shall make such payment within fifteen (15) days from
receiving an invoice from NFLP.
6. DISTRIBUTION REQUIREMENTS
Licensee shall distribute for sale and sell each Licensed Product only
in the authorized Distribution Channels. Prior to distribution of any
Licensed Product, Licensee shall submit to NFLP a list of its retail accounts
for the Licensed Products for the purpose of determining which accounts fall
within the Distribution Channels. NFLP shall determine, in its sole
discretion, whether such retail accounts fall within the Distribution
Channels and shall provide Licensee with a list of the approved retail
accounts. Licensee shall manufacture, publish, distribute, sell and maintain
inventory of sufficient quantities of each Style of each Licensed Product to
meet the reasonable market demand in the Distribution Channels. Licensee
shall not sell Licensed Products to any third party that Licensee knows or
should reasonably know intends to sell the Licensed Products outside of the
authorized Distribution Channels. If Licensee sells or distributes for sale
other merchandise that does not bear the Licensed Marks but is of the same
grade and quality as the Licensed Products, Licensee shall not discriminate
in the granting of commissions and discounts to salespersons, dealers and
distributors for the sale of the Licensed Products. If the Licensed Marks are
Club Marks, Licensee acknowledges that it shall manufacture, publish,
distribute and sell a commercially significant quantity of Units bearing the
trademarks of each Member Club individually in each Style. Licensee shall
have no right to distribute the Licensed Products via computer on-line
services unless expressly indicated on the Term Sheet.
7. AUTHORIZED BRANDS
Licensee shall only use the Authorized Brands, if applicable, in
connection with the manufacture, publication, distribution, sale, and
advertising of each Licensed Product. NFLP shall have the right, in its sole
discretion, to remove or change any of the Authorized Brands, if
applicable, during the Term. Licensee must receive the prior written approval
of NFLP to use any other trademarks on the Licensed Products.
8. NFLP'S PURCHASE OF LICENSED PRODUCTS
In addition to the Promotional Products provided at no cost by Licensee,
NFLP, the NFL and its Member Clubs, the QB Club and the QB Members shall have
the right to purchase any of the Licensed Products in any quantity at the
minimum wholesale price, excluding Royalty payments, that Licensee charges to
its best customer, provided that NFLP will not require Licensee to pay a
Royalty on such sales.
9. THIRD PARTY RELATIONSHIPS
a. Licensee shall not assign, transfer, grant a security interest in the
Licensed Products, or otherwise encumber any of its rights under this
License to any Affiliate or other third party without NFLP's prior
written consent. If Licensee assigns, transfers, grants a security
interest in the Licensed Products, or encumbers any portion of this
License without such consent, NFLP shall have the right to terminate
this License immediately. Among other things, NFLP will consider the
License assigned and subject to the requirements of this subparagraph
if: (i) the beneficial ownership or control of fifty percent (50%) or
more of Licensee's capital stock is transferred or otherwise conveyed;
(ii) Licensee becomes part of any merger or consolidation; or (iii) the
sale or transfer of all or substantially all of Licensee's assets occurs.
b. Licensee must receive NFLP's prior written consent to use a domestic or
foreign third party manufacturer or publisher of any Licensed Product or
any portion of any Licensed Product, including patches, labels and emblems
made by any party that is not already a licensee of NFLP ("Third Party
Manufacturer"). NFLP shall have the right to approve or disapprove any
Third Party Manufacturer in its sole discretion. NFLP's approval of any
Third Party Manufacturer, if granted, will be contingent on the execution
of an agreement between NFLP and the approved Third Party Manufacturer.
Notwithstanding such agreement, Licensee shall at all times remain
primarily obligated to NFLP under this License and shall take all necessary
efforts to ensure that such Third Party Manufacturer uses the Licensed
Marks only to manufacture or publish the designated Licensed Product and
for no other purpose including, without limitation, promoting or selling
the Licensed Product. If such Third Party Manufacturer has made an
unauthorized use of the Licensed Marks, Licensee shall fully cooperate
with NFLP to ensure that such unauthorized use ceases promptly. Licensee
shall be primarily obligated to ensure that each Licensed Product produced
by such Third Party Manufacturer complies with the requirements of
Paragraph 4 of this License.
c. Licensee shall not make any payments to any Member Club or to any
shareholder, officer, director, employee, agent or representative of any
Member Club, or to any employee, agent or representative of the NFL or its
affiliates in such person's individual capacity, in connection with the
use of any Licensed Marks under this License or otherwise as a direct
result of sales of any Licensed Product. Licensee shall disclose to NFLP
all existing agreements or agreements being negotiated by Licensee or its
agent between Licensee and any Member Club or any shareholder, officer,
director, employee, agent or representative of any Member Club, or any
employee, agent or representative of the NFL or any of its affiliates in
such person's individual capacity.
d. In the event that NFLP consents to any third party relationship under this
Paragraph 9 or otherwise under this License, Licensee acknowledges that
such approval will be contingent on the execution of an appropriate form
or agreement supplied by NFLP.
10. COMPUTER ARTWORK AND PHOTOGRAPHS
a. Subject to the requirements of Paragraph 4, if Licensee wishes to use
computer artwork incorporating graphic depictions of the Licensed Marks
owned and/or controlled by NFLP ("Computer Art") or photographs
incorporating graphic depictions of the Licensed Marks owned and/or
controlled by NFLP ("Photographs"), Licensee shall request such Computer
Art or Photographs in a Use Application provided to Licensee by NFLP. If
NFLP, in its sole discretion, approves such application, NFLP shall
provide Licensee with Computer Art or Photographs at a rate established
by NFLP in its sole discretion provided that, in the case of Photographs,
Licensee must first sign NFLP's standard Photo Use Agreement. Licensee
shall make any payment for the Computer Art or Photographs within thirty
(30) days of receiving an invoice from NFLP. Licensee shall only use the
Computer Art or Photographs in accordance with the terms and conditions
of this License including, without limitation, Paragraph 11, and, in the
case of Photographs, the Photo Use Agreement. The terms of the executed
Photo Use Agreement will govern in the event of any conflict between the
terms of this License and the terms of the Photo Use Agreement.
b. Licensee shall not make copies of the Computer Art or Photographs without
the express written approval of NFLP and shall not use the Computer Art or
Photographs for any purpose other than the purpose set forth in Licensee's
Use Application. Licensee shall not provide the Computer Art or
Photographs to any other party including a manufacturer or publisher,
unless NFLP approves such party in accordance with Paragraph 9 of this
License. Licensee shall take all steps necessary to prevent the
unauthorized copying or use of the Computer Art or Photographs by third
parties.
c. Upon the expiration or termination of this License, Licensee shall
immediately deliver to NFLP all Computer Art and Photographs provided by
NFLP and all copies and duplications of such Computer Art or Photographs
and all related materials.
d. Licensee acknowledges that it has no right, title or interest in or to any
of the Photographs, including, without limitation, copyrights in the
Photographs. Licensee represents that it will not assert any rights in or
to the Photographs during the Term of thereafter.
11. PROTECTION OF RIGHTS
a. Licensee acknowledges that, as between NFLP and Licensee, NFLP exclusively
owns the NFL Marks and QB Marks and all copyrights, trademarks and other
proprietary rights in and to them. Licensee further acknowledges that NFLP
shall own worldwide in perpetuity: (i) all artwork produced under this
License bearing the NFL Marks and QB Marks ("Artwork") and all copyrights
and other proprietary rights in such Artwork; (ii) all secondary marks
and/or promotional concepts developed for use and used in connection with
any Licensed Product ("Secondary Marks") and all copyrights and other
proprietary rights in such Secondary Marks; (iii) all derivative works
based on any of the NFL Marks, QIB Marks, Secondary Marks, Computer Art,
or Artwork ("Derivative Works") and all copyrights and other proprietary
rights in such Derivative Works; and (iv) all Computer Art and all
copyrights and other proprietary rights in such Computer Art as well as
duplicates and copies of it. Licensee's use of the Licensed Marks,
Computer Art, Artwork, Secondary Marks and Derivative Works is for NFLP's
benefit and Licensee will not acquire any rights in any of them by such
use. Licensee acknowledges that NFLP will have the right to terminate this
License if Licensee asserts any rights in or to any of the NFL Marks, QB
Marks, Computer Art, Artwork, Secondary Marks and Derivative Works other
than those granted under this License. Licensee shall not attack the
trademarks, copyrights or other proprietary rights of NFLP, the NFL, its
Member Clubs, the QB Club, or its Members during the Term or thereafter.
Licensee and NFLP shall jointly own any and all characters in the Licensed
Products created by Licensee depicting and/or based on or derived from
any of the QBC Members and/or the QB Marks ("QB Characters"). Upon the
expiration or termination of this License, neither party shall use any of
the QB Characters without the other party's prior written approval.
b. Licensee hereby irrevocably assigns and transfers to NFLP all right, title
and interest, including all copyrights and extensions and renewals thereof,
in and to the Artwork, the Secondary Marks, the Derivative Works, the
Computer Art, and all related proprietary rights (collectively the
"Proprietary Materials"). At the request of NFLP, Licensee shall execute
all documents confirming NFLP's rights in and to the NFL Marks, QB Marks
and Proprietary Materials including an assignment of copyright in form
and substance satisfactory to NFLP. Licensee shall cause each third party
who makes or contributes to the creation of the Proprietary Materials to
agree that all rights, including the copyrights, in his or her work shall
be owned by NFLP and to execute necessary documents.
c. Licensee shall only display or use the Licensed Marks in the form and
manner that NFLP has specifically approved in writing. Licensee shall
cause to be irremovably and legibly printed or affixed in a clearly
visible location approved by NFLP on every Unit of each Licensed Product,
and all Related Materials, Proprietary Materials, and Promotional
Materials the following:
(i) Trademark Notices as directed and specified by NFLP, including a
legend indicating that the NFL Marks are trademarks of the NFL or the
Member Clubs, and are being used by Licensee under License from NFLP;
(ii) Copyright Notices as directed and specified by NFLP;
(iii) The Marketing Program symbol, if applicable;
(iv) Hangtags, inserts, the officially Licensed Product hologram label or
hangtag, which must be used on all Licensed Products, and other
identifying material required by NFLP;
(v) A permanent label displaying Licensee's name and the Authorized
Brand;
(vi) Licensee's name, trade name and address; and
(vii) All other notices required by NFLP to protect the interests of NFLP,
the NFL, its Member Clubs, the QB Club and its Members.
d. Licensee will not use any Trademark or Copyright Notices on the Licensed
Products, Related Materials, Proprietary Materials, and Promotional
Materials that conflict with, negate or cause confusion with any notices
required under this Paragraph 11. Licensee represents that, except for
the Authorized Brands, if applicable, or as otherwise authorized in
writing by NFLP, it will not associate other licensed properties, names,
symbols, or designs with the Licensed Marks on any of the Licensed
Products, Related Materials, Promotional Materials, and Proprietary
Materials. Licensee will not use the Licensed Marks, QB Marks or NFL Marks
on any business sign, business card, invoice, sales sheet, brochure,
catalog, or other form, or as part of the name of Licensee's business
except as authorized by NFLP in writing prior to such usage.
e. NFLP shall have the right to secure trademark and/or copyright
registrations for the NFL Marks and QIB Marks. Upon request by NFLP, in
addition to any other quantity of Licensed Products that Licensee must
submit to NFLP under this License, Licensee shall deliver to NFLP, free
of cost, twelve (12) Units of each Licensed Product with their Related
Materials for such registration purposes provided that Licensee shall not
owe any Royalty for such Units. Licensee shall provide NFLP with the date
of first use of each Licensed Product in interstate and intrastate
commerce. NFLP shall have the right to secure trademark and/or copyright
registrations in NFLP's name for any Proprietary Materials created by
Licensee or its agents for use in connection with any Licensed Product. By
execution of this License, Licensee appoints NFLP as Licensee's
attorney-in-fact coupled with an irrevocable interest to execute,
acknowledge, deliver and record all registrations and all documents
referred to in this Paragraph 11.
f. Licensee shall assist NFLP, at NFLP's expense, in the procurement,
protection, and maintenance of NFLP's rights in and to the NFL Marks, QB
Marks and the Proprietary Materials. NFLP may, in its sole discretion,
commence or prosecute and control the disposition of any claims or suits
relative to the imitation, infringement and/or unauthorized use of the
NFL Marks, QB Marks or the Proprietary Materials either in its own name,
or in the name of Licensee, or join Licensee as a party in the prosecution
of such claims or suits. Licensee shall cooperate fully with and provide
full assistance to NFLP in connection with any such claims or suits.
Licensee shall promptly notify NFLP in writing of any infringement,
imitations, or unauthorized use of the NFL Marks, QB Marks or Proprietary
Materials by others. NFLP shall, in its sole discretion, determine whether
to take action and the type of action, if any, to take against such
infringement. Licensee shall not institute any suit or take any action on
account of such infringements, imitations or unauthorized uses unless it
receives NFLP's prior written consent. NFLP will receive the full amount of
any settlement made or damages awarded in connection with any action taken
against such infringement.
12. REPRESENTATIONS AND WARRANTIES
a. Licensee warrants and represents that:
(i) All of the illustrations and text in the Licensed Products are
original and have not been published previously in whole or in
part;
(ii) Licensee is the sole owner of all rights, including the copyright, in
the illustrations and text in the Licensed Products separate and apart from any
material depicting the NFL Marks and QB Marks;
(iii) Licensee at its own expense has obtained or will obtain and
deliver to NFLP immediately any and all permissions and/or releases from third
parties required for publication of any material provided by Licensee or for the
exercise of any other rights conferred by this
License;
(iv) Licensee will not manufacture or publish any derivative work based on
any Licensed Product during the Term or thereafter without a separate license
executed by NFLP;
(v) The Licensed Products do not contain libelous, defamatory, obscene, or
otherwise unlawful matter, and do not infringe on the
privacy, publicity, proprietary, copyright or other rights of any third party;
(vi) Licensee has the full power, free or any prior contract, lien or
other right, to enter into this License;
b. NFLP shall have no obligation to make an independent investigation to
determine whether the foregoing warranties and representations are true
and any such investigation by or for NFLP shall not constitute a defense
to Licensee in any action based upon a breach or alleged breach of any of
the foregoing warranties and representations. If NFLP determines that a
substantial risk of liability to any third party exists, without relieving
Licensee's of its obligations under this License, NFLP may undertake an
investigation, verification and analysis of the Licensed Products and
implement such revisions to the Licensed Products at Licensee's cost that
NFLP determines may eliminate or lessen such risk. Licensee acknowledges
that NFLP shall have no obligation to publish all or any portion of the
Licensed Products.
13. INDEMNIFICATION AND INSURANCE
a. During the Term and thereafter, Licensee shall be solely responsible for,
defend, indemnify and hold harmless NFLP, the NFL, its Member Clubs, the QB
Club, its Members and each of their respective affiliates, shareholders,
officers, directors, agents and employees for, from and against any claims,
demands, causes of action, damages, costs and expenses, including
reasonable attorneys' fees, judgments, and settlements arising out of or
in connection with: (i) Licensee's breach or alleged breach of any of its
representations, warranties, covenants or obligations contained in this
License; (ii) Licensee's use of the Licensed Marks except as provided in
subparagraph (c) below; (iii) Licensee's noncompliance with any applicable
federal, state, or local laws or regulations; or (iv) the manufacture,
publication, distribution, sale, advertising or use of any Licensed
Product. Licensee acknowledges that NFLP's approval of any Licensed
Product pursuant to Paragraph 4 of this License or Promotional Materials
or promotional concepts pursuant to Paragraph 5 of this License shall not
relieve Licensee of its indemnification obligations under this Paragraph.
b. Licensee shall obtain and maintain at its own expense from a licensed
and admitted insurance carrier with a rating not less than A from Best, a
publisher's liability insurance policy and an advertising liability
insurance policy that will each provide coverage of three million dollars
($3,000,000) for each occurrence. Licensee shall ensure that such policies:
(i) will list the NFL, its Member Clubs, NFLP, the QB Club, the QBC
Members, and each of their respective affiliates, shareholders, officers,
directors, agents, and employees as additional insureds; and (ii) will
each provide that they can not be canceled without at least thirty (30)
days written notice to NFLP. Simultaneously with the execution of this
License, Licensee shall submit to NFLP the fully paid policies or
certificates of insurance. Compliance with this subparagraph (b) will not
relieve Licensee of its other obligations under this Paragraph 13. The
insurance coverage required under this License is not cumulative and will
not extend to any other License or Agreement between Licensee and NFLP
unless otherwise authorized by NFLP in writing.
c. During the Term and thereafter, NFLP shall indemnify and hold harmless
Licensee, its officers, directors, agents and employees for, from and
against any claims, demands, causes of action, damages, and reasonable
attorneys' fees for trademark infringement arising out of the use of the
Licensed Marks as strictly authorized under this License, provided that
NFLP is given immediate notice of and shall have the option to undertake
and conduct the defense of any such claim, demand or cause of action and
further provided that Licensee shall cooperate in the defense of such
claim as reasonably required by NFLP.
14. FINANCIAL INFORMATION
a. Upon NFLP's request, Licensee shall provide NFLP with a statement from an
independent certified public accountant attesting to Licensee's solvency.
For the purposes of this License, "solvency" shall mean that Licensee is
able to pay its obligations as they become due in the regular course of
business.
b. On or before the 15th day of each month, Licensee shall provide NFLP with
Licensee's Fiscal Year projections for sales and income for its overall the
Licensed Products. Upon request by NFLP, Licensee shall provide NFLP with
a list ranking its Licensed Products sales by retailer and/or Third Party
Distributors for its top twenty-five (25) retail accounts or by retail
accounts comprising seventy-five percent (75%) of its Net Sales, whichever
is greater, and itemizing for each such retailer and/or Third Party
Distributors a description and the number of Units of each Licensed Product
sold.
c. Licensee shall notify NFLP in writing of any adverse material change in
Licensee's financial condition that will likely affect its performance
under this License at the time such material change occurs or when
Licensee learns of the possibility of such a change, whichever is sooner,
including, but not limited to, any possible adverse material change in
Licensee's ability to make timely payments or keep accurate records due to
any inability to process date/time data from, into or between the
twentieth and twenty-first centuries.
15. AUDITS AND INSPECTIONS
a. During the Term and for at least three (3) full Fiscal Years after the
expiration or termination of the License, Licensee shall keep, maintain and
preserve complete and accurate books of account and records covering all
transactions relating to this License, including, without limitation,
invoices, correspondence, inventory accounting, banking and financial
records ("Records"). Licensee shall designate a symbol or number that will
be used exclusively on Records relating to the Licensed Products and with
no other articles that Licensee manufactures, publishes, distributes or
sells. Licensee shall ensure that all invoices for the sale of Licensed
Products to its retailers and/or Third Party Distributors will include the
quantity and description of each Licensed Product itemized by Marketing
Program, if applicable, Style and Member Club, if applicable.
b. During the Term and for at least three (3) full Fiscal Years after the
expiration or termination of the License, NFLP and its duly authorized
representatives will have the right during reasonable business hours to
inspect and audit all Records and conduct a physical examination of
Licensee's premises including its warehouses and manufacturing facilities
and those of Third Party Distributors and Third Party Manufacturers. NFLP
shall provide Licensee with no less than five (5) business days' written
notice prior to such inspection, audit or examination; provided however,
if compelling circumstances exist, as determined by NFLP in the exercise
of its reasonable business judgment, NFLP may conduct an immediate
inspection, audit or examination with no prior notice to Licensee. Licensee
represents that it will fully cooperate with the inspection, audit or
examination and will not cause or permit any interference with NFLP or its
representatives during any inspection, audit or examination. During an
inspection, audit or examination, NFLP shall have the right to make copies
or extracts of Licensee's Records.
c. Licensee shall pay NFLP for the cost of any audit that discloses a payment
deficiency of more than two percent (2%) between the amount due to NFLP
pursuant to the audit and the amount Licensee actually paid or reported to
NFLP. Licensee shall pay NFLP any deficiency amount together with interest
on the deficiency amount pursuant to the provisions in Paragraph 3d of
this License. Licensee shall pay NFLP the amount of any additional costs
beyond the cost of the audit incurred by NFLP due to a change in an audit
date scheduled by NFLP made at Licensee's request. Licensee shall pay such
amounts within ten (10) days of invoicing by NFLP.
16. TERMINATION
Without prejudice to any other rights it may have in law, equity or
otherwise, NFLP shall have the right to immediately terminate this License
upon written notice to Licensee at any time if:
a. Licensee fails to generate Net Sales during any Fiscal Year satisfying the
corresponding Minimum Royalty Guarantee or fails to generate Net Sales on
any Licensed Product with a separate Minimum Royalty Guarantee satisfying
the corresponding per-product Minimum Royalty Guarantee;
b. Licensee fails to deliver to NFLP or to maintain in full force and effect
the insurance coverage referred to in Paragraph 13b of this License;
c. Licensee fails to make available its premises, Records or other business
information to NFLP or its representatives or fails to provide full and
complete information as required in Paragraphs 14 and 15 of this License;
d. Licensee manufactures, publishes, sells, distributes, advertises or uses
any Style of any Licensed Product, or any Promotional Materials, or
Proprietary Materials without the prior written approval of NFLP as
required in this License, or after such written approval has been
withdrawn by NFLP or has expired;
e. Licensee distributes or sells any Licensed Product outside the Territory
or sells any Licensed Product to a third party that Licensee knows or
should reasonably know intends to sell such Licensed Product outside the
Territory;
f. Licensee distributes any Licensed Product outside the corresponding
Distribution Channels, or sells any Licensed Product to any third party
that Licensee knows or should reasonably know intends to sell such
Licensed Product outside the corresponding Distribution Channels;
g. Licensee fails to obtain NFLP's written approval prior to assigning,
transferring, granting a security interest in the Licensed Products or
otherwise encumbering the License or prior to using a Third Party
Manufacturer, Sublicensee, or any approved Third Party Manufacturer
engages in conduct that would entitle NFLP to terminate the License if
Licensee had engaged in such conduct;
h. Any sales representative of Licensee produces, inventories, warehouses or
distributes any of the Licensed Products;
i. Licensee fails to satisfy the distribution requirements in Paragraph 6 of
this License or otherwise fails to make timely and complete delivery of
orders it has taken for any Licensed Product to seventy percent (70%) or
more of its retail accounts and/or Third Party Distributors that
collectively account for eighty percent (80%) of its Net Sales on one or
more occasion during any Fiscal Year;
j. Licensee makes a material misrepresentation or omission in its license
application form;
k. Licensee fails to make any payment or deliver any statement required under
this License and fails to correct such default within ten (10) days of
written notice of such default;
l. Licensee breaches any other agreement in effect between Licensee and NFLP;
m. Licensee makes or agrees to make a payment to any Member Club or any
shareholder, officer, director, employee, agent, or representative of a
Member Club, or to any agent, representative or employee of the NFL or
its affiliates in such person's individual capacity, in connection with
the use of any Licensed Marks under this License or otherwise as a direct
result of the sales of any Licensed Product, or Licensee fails to disclose
to NFLP any existing agreement or agreement being negotiated by Licensee
or Licensee's agent between Licensee and a Member Club or any shareholder,
officer, director, employee, agent, or representative of a Member Club,
or any agent, representative or employee of the NFL or its affiliates in
such person's individual capacity;
n. Licensee disparages NFLP, the NFL, any of its Member Clubs, the QB Club,
any of the QB Members or any of their respective shareholders, officers,
directors and employees as determined by NFLP in its sole discretion, or
otherwise engages in conduct that NFLP deems detrimental to the NFL or
any of its Member Clubs the QB Club, any of the QB Members;
o. Licensee fails to comply with any applicable federal, state or local law or
regulation in connection with this License;
p. Licensee breaches any representation or warranty contained in Paragraph 12;
or
q. Licensee fails to comply with any other material term or condition of this
License.
17. GOODWILL AND REPUTATION
Licensee recognizes the great value of the goodwill associated with the NFL
Marks and QB Marks and acknowledges that such goodwill belongs to the
Member Clubs and the NFL, the QB Club or the QBC Members as the case may be
and that such NFL Marks and QB Marks have
Secondary meaning in the minds of the public. The nature of the business of
NFLP, the NFL, and its Member Clubs, and the QB Club requires public
respect for and trust in the reputation and integrity of the NFL and its
Member Clubs, the QB Club and the QBC Members. NFLP may, at its sole
option, terminate this License or withdraw some or all Product Approval
Forms or Promotional Approval Forms by written notice to Licensee if any
unanticipated factor, development or event causes NFLP's continued
association with any one or more Licensed Product or Licensee to adversely
reflect upon NFLP, the NFL or its Member Clubs, the QB Club and the QBC
Members as determined by NFLP in its sole discretion, the QB Club or the
QBC Members. In the event of such termination, Licensee shall pay to NFLP
the Royalty on all sales of the Licensed Products made during the
Termination Fiscal Year or the Termination Guarantee as defined in
Paragraph 3a, whichever is greater, and all other amounts due to NFLP.
Upon receipt of such payment, NFLP will reimburse Licensee for its salvage
expenses or, in the case of unsalvageable Licensed Products,
Licensee's manufacturing costs if NFLP does not permit Licensee to
distribute the remaining inventory of Licensed Products.
18. RENEWAL REQUEST
NFLP must receive a written request from Licensee by no later than the
Renewal Request Date, if applicable, listed on the Term Sheet or Term
Sheets if Licensee desires to renew the License. If Licensee has complied
with all terms and conditions of this License during the
Term and NFLP desires, in its sole discretion, to negotiate a renewal
License, NFLP shall negotiate with Licensee for the terms and conditions of
a renewal License for a period of no more than sixty (60) days following
NFLP's receipt of Licensee's renewal request notice. This License
automatically expires at the end of the Term if NFLP does not receive
Licensee's written request by the Renewal Request Date, Licensee has failed
to comply with all terms and conditions of this License, NFLP elects not
to negotiate a renewal License, or the parties are unable to reach an
agreement within said sixty day negotiation period. Licensee acknowledges
that NFLP has no express or implied obligation to renew the License. NFLP
will have no liability to Licensee for any expenses incurred by Licensee in
anticipation of any renewal or extension of this License.
19. EFFECT OF EXPIRATION OR TERMINATION OF THE LICENSE
a. Sixty (60) days before the expiration of this License, Licensee will
furnish to NFLP a statement showing the number of Units and description
of such Units for each Style of each Licensed Product, Promotional
Materials, and Proprietary Materials on hand or in process in Licensee's
inventory. If this License is terminated by NFLP, Licensee shall furnish
such statement within ten (10) days after notice of termination is given
by NFLP.
b. After expiration or termination of this License for whatever reason, all
rights granted under this Licensee will revert to NFLP and Licensee
shall refrain from further use of, simulation of or reference to any and
all of the NFL Marks and QIB Marks except as provided in this paragraph.
Except for termination of this License by NFLP, Licensee will have
ninety (90) days to dispose of the Licensed Products ("Sell-Off Period")
that are on hand or in process at the time of such expiration, provided
all statements and payments then due to NFLP are first made, Licensee is
otherwise in compliance with all terms and conditions of the License,
and such Sell-Off occurs at Licensee's regular selling price and within
the Distribution Channels. During the Sell-Off Period, Licensee shall
submit all payments and statements required under this License in
accordance with the terms and conditions of the License.
c. If Licensee has remaining inventory of the Licensed Products upon the
termination of this License or after the Sell-Off Period, if applicable,
NFLP may, at its option: (i) purchase such inventory at Licensee's cost;
(ii) require Licensee to deliver such inventory to NFLP for destruction
at Licensee's expense; or (iii) require Licensee to destroy such
inventory at Licensee's expense and furnish NFLP with an affidavit
signed by an officer of Licensee attesting to such destruction. NFLP
will have the right at any time before expiration or termination of this
License and during the Sell-Off Period to conduct a physical inventory
to, among other things, verify the quantity and Style of the Licensed
Products in Licensee's inventory. If Licensee refuses to permit such
physical examination of the inventory or fails to provide NFLP with the
statement required in subparagraph a above, Licensee will forfeit its
right to any Sell-Off Period.
d. Upon the termination of this License or immediately after the Sell-Off
Period, Licensee shall deliver to NFLP all Proprietary Materials and all
related materials, including software, created or used by Licensee in
connection with this License and shall, at NFLP's option, destroy or
sell to NFLP at Licensee's cost, any molds, plates and other items used
to reproduce the Licensed Marks.
20. PLAYERS AND COACHES
Licensee acknowledges that this License does not grant Licensee any rights
with respect to the name, likeness, signature, or other attributes of any
player, coach, or other employee of the NFL except with respect to the QBC
Members if such rights are expressly granted on the Term Sheet.
Licensee shall be responsible for securing whatever rights may be
required for the use of such names, likeness, signatures, or other
attributes. Licensee represents that it will not exercise the rights
granted in this License in any manner that will imply that Licensee has
obtained any such rights without separate written authorization from the
appropriate player, coach, or employee.
21. NFL FILMS
Licensee understands and acknowledges that this License does not grant
Licensee any rights with respect to film or videotape footage of NFL
game action and that Licensee must obtain such footage directly from NFL
Films, Inc. ("NFL Films") on terms and conditions to be mutually agreed
upon by Licensee and NFL Films. If Licensee desires to use such footage
in connection with this License, NFLP must approve the proposed usage
and subject matter of such footage in writing prior to its usage.
22. INFORMATION TRANSMISSION
If NFLP obtains the capacity to receive computer transmissions of any or
all information required from Licensee under this License during the
Term, Licensee shall begin to provide such information by such computer
transmission as soon as practicably possible.
23. NOTICES
The parties to this License shall send all notices and statements required
under this License to the respective addresses of the parties set forth
above unless notification of a change of address is given in writing.
Licensee shall direct all notices to NFLP to the Senior Director of
Publishing with a copy to the General Counsel of NFLP. All notices
required under this License must be in writing, must be sent by
registered or certified mail, facsimile, or an overnight delivery
service generally accepted in the industry that provides evidence of
delivery, and shall be deemed to have been given at the time they are
sent.
24. RELATIONSHIP OF PARTIES
The parties to this License are not partners, joint venturers, or agents
and nothing in this License shall be construed to place them in any
such relationship. Neither party will have the power to obligate or bind
the other in any manner whatsoever. NFLP, the NFL, and its Member Clubs,
the QB Club and the QBC Members in no way endorse, certify or guarantee
the quality of the Licensed Products.
25. GOVERNING LAW AND DISPUTES
This License and any dispute arising under it shall be governed by and
construed in accordance with the laws of the State of New York without
regard to conflict of law principles. All disputes pertaining to this
License shall be decided by a state or federal court located in the
City of New York and Licensee consents to personal jurisdiction in such
courts.
26. WAIVER
Neither party to this License can waive or modify any provision of this
License unless such waiver or modification is in a writing signed by both
parties. Licensee acknowledges that NFLP's prior forbearance of any
requirement of this License will not prevent NFLP from subsequently
requiring full and complete compliance with such requirement or from
exercising its rights under this License.
27. CONFIDENTIALITY
The parties to this License acknowledge that the terms of this License are
confidential and each warrant that neither shall disclose such terms to any
third party other than the disclosing party's accountants, agents or
attorneys or as required by law, without the other party's prior written
consent.
28. SEVERABILITY
If any paragraph or clause of this License is illegal or invalid or void
for any reason, the remaining paragraphs and clauses of the License will
remain in full force and effect.
29. RELEASE
In Consideration of the rights granted under this License, Licensee
releases NFLP, the NFL, its Member Clubs, the QB Club, the QBC Members, and
each of their respective affiliates, shareholders, officers, directors,
agents and employees from any claims, demands, losses, expenses or damages,
whether known or unknown, arising out of or in connection with or in
any manner related to the manufacture, publication, distribution or sale of
products bearing the Licensed Marks. Nothing in this paragraph will relieve
NFLP of its obligations under Paragraph 12 (c) of the License.
30. PUBLIC OR PRIVATE OFFERINGS
Licensee shall not refer to this License or NFLP, the NFL or its Members
Clubs or affiliates in any public or private offering, or other securities
or financing document, without NFLP's prior written consent and then only
on such conditions as NFLP deems appropriate in its discretion.
31. MULTIPLE TERM SHEETS
In the event that this License has multiple Term Sheets attached to it, the
terms and conditions of this License will apply to each individual Term
Sheet.
32. ENTIRE AGREEMENT
This License constitutes the entire agreement and understanding between the
parties to this License with respect to the subject matter of this License
and cancels, terminates, and supersedes any prior or contemporaneous
agreement or understanding, whether oral or written, on this subject
between Licensee and the NFL, its affiliates or Member Clubs, the QB Club,
the QBC Members or NFLP. The headings in this License are for reference
purposes only and have no legal effect.
33. EXECUTION
Licensee will make an offer to enter into this License by having a duly
authorized officer or representative sign below and return the License
with a check payable to NFLP for the Advance Royalty Payment required for
Fiscal Year 1. An acceptance of the offer will occur and a binding
agreement will exist only after an authorized officer or duly authorized
representative of NFLP signs this License and delivers a fully-executed
copy to Licensee. Licensee acknowledges that this Licensee will be deemed
to have been executed in New York City.
LICENSEE: ULTIMATE SPORTS ENTERTAINMENT, INC.
BY: DATE:
(Signature of officer, partner or individual duly authorized to sign)
TITLE:
NATIONAL FOOTBALL LEAGUE PROPERTIES, INC.
BY: DATE:
(Signature of officer, partner or individual duly authorized to sign)
TITLE:
NFL QUARTERBACK CLUB
BY: DATE:
(Signature of officer, partner or individual duly authorized to sign)
TITLE:
31107 ULTIMATE SPORTS ENTERTAINMENT
EXHIBIT I
DISTRIBUTION CHANNELS
The following definitions shall apply to this License:
1 . AIRPORT/HOTEL SHOP: A separate retail store located in an airport or
hotel.
2. AUTOMOTIVE STORE: A retail store that carries as its primary retail items
automotive supplies.
3. BOOK STORE: A retail store that carries as its primary items books and
periodicals. Examples include, without limitation, Walden Books, and Barnes
and Noble.
4. CARD/PARTY SHOP: A retail store that carries as its primary retail
items cards or party products. Examples include, without limitation,
Hallmark Stores.
5. COMPUTER/ELECTRONIC Store: A retail store that carries as its primary
retail items computers, software, and computer accessories or electronic
equipment and appliances. Examples include, without limitation, CompUSA
and Computer City.
6. COMPUTER ON-LINE: Licensee, and no other organization, making the
Licensed Product available for sale to consumers on the Internet or through
a computer on-line service provided that Licensee may not distribute the
Licensed Product via such media.
7. AMUSEMENT/CONVENIENCE Venues: Restaurants, convenience stores, gas
stations, car and truck stops, amusement venues, recreation centers and
any other business venue in which the sale of the Licensed Products would
constitute a subsidiary business.
8. CRAFT STORE: A retail store that carries as its primary retail items arts
and crafts supplies.
9. DEPARTMENT STORE: A retail store that operates several departments
carrying higher-priced brands of apparel and non-apparel. Examples include,
without limitation, Macy's, Dillards, Nordstrom, Woodward and Lothrop, JC
Penney, Boscov's, Sears, May Co., Federated Group, Carson Pirie Scott,
Dayton Hudson, Bon Ton, Belks, Strawbridge & Clothier, Jacobson and
Bloomingdales.
10. DIRECT RETAILER: An organization that markets products directly to
consumers without using retail space through the mediums of television or
catalog.
11. DISCOUNT STORE: A retail store that operates several departments
carrying lower-priced brands of apparel and nonapparel with limited
service. Examples include, without limitation, Wal-Mart, Kmart, Bradlees,
Roses, Hills, Caldor, Venture, Target, Shopko, and Ames.
12. DISTRIBUTOR: Defined as Third Party Distributor in Paragraph 9c of the
License.
13. DRUG STORE: A retail store that carries as its primary retail items
pharmaceuticals, health and beauty aids, and convenience items. Examples
include, without limitation, OSCO, Walgreen, and Eckert.
14. FAN SHOP: A retail store that carries as its primary retail item
licensed products of the NFL, National Basketball Association, National
Hockey League, Major League Baseball, and the National Collegiate Athletic
Association. Examples include, without limitation, Pro Image, Team Spirit
and Stadium Stuff.
15. FOOTWEAR SPECIALTY STORE: A retail store that carries as its primary
retail item athletic footwear and also carries, in limited quantities,
licensed apparel and headwear. Examples include, without limitation, Foot
Locker, FootAction, and Athletes Foot.
16. FUND RAISING: An organization, including Licensee, that markets
products through various channels such as schools for the purpose of
raising money for educational or charitable causes. NFLP must approve each
educational or charitable cause.
17. GALLERY: A retail store that carries as its primary retail item artwork.
18. GIFT/FLOWER SHOP: A retail store that carries as its primary retail items
gifts, novelties or flowers.
19. GROCERY STORE: A retail store that carries as its primary retail items
food and household products. Examples include, without limitation, A & P,
Shop Rite, Vons, Jewel, and Food Town.
20. HARDWARE: A retail store that carries as its primary retail items hardware
products. Examples include, without limitation, True Value, Ace and Cotter.
21. HOBBY STORE: A retail store that carries as its primary retail item
collectible products.
22. HOME SPECIALTY STORE: A retail store that carries as its primary retail
items furniture and home products. Examples include, without limitation,
Home Place, Home Depot, Linens'N Things, and Bed Bath and Beyond.
23. JEWELRY STORE: A retail store that carries as its primary retail item
jewelry. Examples include, without limitation, Adler Jewelers.
24. MEMBERSHIP CLUB WAREHOUSE STORE: A retail store that markets products
to members only. Examples include, without limitation, BJ's Wholesale Club.
25. MILITARY BASE: The military bases of the United States and its territories
and possessions.
26. OFFICE SUPPLY: A retail store that carries as its primary retail items
office supplies. Examples include, without limitation, Office Max and
Staples.
27. SPORTING GOODS Store: A retail store that carries as its primary retail
items licensed apparel, athletic footwear and sporting goods equipment.
Examples include, without limitation, Champ's, Herman's, Koenig's, The
Sports Authority, Sportmart, Gart Brothers, and Modells.
28. STADIUM SHOP/STADIUM CONCESSIONAIRE: A store or vendor that carries as
its primary retail item Licensed Products of the NFL and is located at the
training facilities or stadium of a Member Club.
29. TOY/CHILDREN'S STORE: A retail store that carries as its primary retail
items toys. Examples include, without limitation, Toys'R Us, Kids'R Us,
and Babies'R Us.
<PAGE>
