[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: June 16, 1999
ADDRESS: 5410 Wilshire Boulevard, Suite 611 NO(S).: 300-440220-492
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). 31064
MARKETING PROGRAM: NFL PUBLISHING
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 58309 COMIC BOOK ADVENTURE STORIES *
YEAR II 9/1/01-8/31/02 58309 COMIC BOOK ADVENTURE STORIES *
60203 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 CLUB MARKS AND THE FOLLOWING LEAGUE MARKS: "NATIONAL
FOOTBALL LEAGUE", "NFL", "NATIONAL FOOTBALL CONFERENCE", "AMERICAN"
LICENSED PRODUCT(S): FOOTBALL CONFERENCE", "NFC", "AFC", "SUPER BOWL" AND
THE NFL SHIELD DESIGN.
DISTRIBUTION CHANNELS FOR INTERNET, STADIUM SHOPS/STADIUM CONCESSIONAIRES,
BOOK STORES, TEAM SALES, HOBBY SHOPS, TOY STORES, DISCOUNT STORES,
LICENSED PRODUCT(S): DIRECT MAIL, SPONSORED PREMIUMS, NEWSSTANDS, SPORTING
GOODS STORES, HOME SHOPPING CHANNELS
RENEWAL REQUEST DATE: SEPTEMBER 1, 2001
PROMOTIONAL PRODUCTS:
FISCAL YEAR LICENSED PRODUCTS NUMBER OF UNITS
YEAR I EACH LICENSED PRODUCT ONE HUNDRED (100)
YEAR I/ EACH LICENSED PRODUCT ONE HUNDRED (100)
COOPERATIVE FUND: N/A
ADVERTISEMENTS: NIA
SPONSORSHIPS: NIA
ADDITIONAL TERMS:
LICENSEE SHALL HAVE THE RIGHT TO EXTEND THE CONTRACT FOR TWO (2) YEARS WITH
NFLPS CONSENT.
LICENSEE DOES NOT HAVE THE RIGHT TO SELL ANY APPROVED PROMOTIONAL MATERIALS.
31064 ULTIMATE SPORTS ENTERTAINMENT, INC. TERM SHEET
I
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, INC. DATE: June 16,1999
ADDRESS: 5410 Wilshire Boulevard, Suite 611 No(s).:300-440220-492
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"). 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
As 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 To 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).
1. "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 other indicia of the NFL or its Member Clubs 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. "RENEWAL REQUEST DATE": The date by which NFLP must receive notification
from Licensee of Licensee's desire to renew the License.
s. "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.
t. "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.
u. "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).
v. "TERM": The time period for which this License shall be effective.
w. "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.
x. "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. 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 (iv) 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 ofthe 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 including,
without limitation, materials involving gambling, lotteries or other games
inconsistent with the image of the NFL, the Member Clubs, 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 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 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,
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 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 ("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, 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, 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, or its Member Clubs during the Term or thereafter.
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 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, and its Member Clubs.
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 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. 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 N FLP, free of cost, twelve (112)
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 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 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 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;
(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, 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 two million dollars
($2,000,000) for each occurrence. Licensee shall ensure that such policies:
(i) will list the NFL, its Member Clubs, NFLP, 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.
c. 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.
d. 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;
1. 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, 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;
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 acknowledges that such goodwill belongs to the Member Clubs and
the NFL, and that such NFL Marks have secondary meaning in the minds of the
public. The nature of the business of NFLP, the NFL, and its Member Clubs,
requires public respect for and trust in the reputation and integrity of
the NFL and its Member Clubs. NFLIP 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 as determined by NFLP in its sole discretion. In the
event of such termination, Licensee shall payto 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 thirty 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 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 NFLIP 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. 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, NFLIP 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 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 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, 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:
31064 June 16,1999 ULTIMATE SPORTS ENTERTAINMENT, INC.
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.
31064 June 16,1999 ULTIMATE SPORTS ENTERTAINMENT.ING.
<PAGE>
