EXHIBIT 10.16
October 27, 1998
Xx. Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
Sport Maska, Inc.
0000 Xxxx. Xx Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxx
X0X 0X0
RE: Amendment to NHL License and Sponsorship Agreement and
Team Allocation Letter
---------------------------------------------------------
Dear Xxxxx:
This letter, when executed by the parties (the "Letter Amendment"),
shall amend the following agreements, in accordance with the terms and
conditions set forth herein: (a) that certain Letter Agreement, dated
September 25, 1998 (the "Letter Agreement"), between Sport Maska, Inc. and
Maska U.S., Inc. (collectively, "CCM"), on the one hand, and the NHL
Enterprises entities named below (collectively, "NHLE"), on the other hand,
concerning the grant by NHLE to CCM of the right to supply authentic jerseys
and other products to certain NHL member teams and the terms and conditions
of an NHL license and sponsorship agreement; and (b) that certain Letter
Agreement, dated September 25, 1998 (the "Team Allocation Letter") between
CCM and NHLE concerning the allocation to CCM of the CCM Teams pursuant to
the Letter Agreement. All capitalized terms used herein without definition
shall have the meanings ascribed to such terms in the Letter Agreement and
the Team Allocation Letter.
This Letter Amendment is entered into by the parties in contemplation of
NHLE's granting the right, beginning in Year One, to manufacture, supply and
sell authentic jerseys ("Jersey Rights"), among other products, to a total of
two licenses, including CCM.
A. LETTER AGREEMENT The Letter Agreement is hereby amended as follows:
1. The first sentence of the second grammatical paragraph of the
Letter Agreement is hereby deleted in its entirety and replaced with the
following sentence:
"CCM will receive an allocation of fifteen (15) NHL member teams (the
"CCM Teams"), effective as of July 1, 1999, which allocation will be
fair and equitable and shall be determined by NHLE, in its sole
discretion."
2. All reference in the Letter Agreement to the term "Centre Ice" are
hereby deleted and replaced with the term "Center Ice."
3. Paragraph 5.A(i) of the Letter Agreement is hereby deleted in its
entirety and replaced with the following:
"Year One: $-;
Year Two: $-;
Year Three: $-;
Year Four: $-;
Year Five: $-; and
If applicable, Year Six: $-.
Total: $- (includes Year Six)."
Paragraph 5.A(ii) of the Letter Agreement is hereby deleted in its entirety.
4. The sixth sentence of paragraph 5.C of the Letter Agreement is
hereby deleted in its entirety and replaced with the following sentence:
"Notwithstanding anything contained herein to the contrary, nothing
in this Letter Agreement shall relieve CCM of its obligations to
pay Minimum Guarantees during the Term aggregating $- (or $- if
there is a Year Six)."
5. The minimum amount which CCM will spend on NHL Marketing in Year
Three, as set forth in paragraph 7.A of the Letter Agreement, is hereby
changed from $- to $-.
6. A new subparagraph C is hereby added to paragraph 8 of the Letter
Agreement as follows:
"C. To the extent that, during the Term, a CCM Team shall order
equipment from CCM or its affiliates in addition to the
equipment provided to such CCM Team pursuant to paragraph 6
hereof, CCM and such CCM Team may agree to allocate a portion
of the CCM Team Marketing Minimum to cover the cost of such
additional equipment."
7. Paragraph 9.A of the Letter Agreement is hereby deleted in its
entirety and replaced with:
"A. CCM acknowledges that NHLE has entered into an agreement with
another supplier of authentic jerseys (the "Other On-Ice
Jersey Supplier") for rights with respect to NHL Teams other
than the CCM Teams (the "Non-CCM Teams"). Notwithstanding the
foregoing, NHLE agrees that, without the prior written consent
of CCM, it will not grant the right to manufacture, supply
and/or sell authentic, authentic named/numbered jerseys,
replica jerseys or replica named/numbered jerseys to more than
two licensees, including CCM, during the Term. CCM further
acknowledges that such Other On-Ice Jersey Supplier has been
granted non-exclusive rights to promote, manufacture,
distribute and sell replica and replica named/numbered jerseys
for all NHL Teams."
8. Paragraph 9.E of the Letter Agreement is hereby deleted in its
entirety and replaced with the following:
"E. CCM understands and agrees that the right to supply NHL
players with equipment on-ice bearing the CCM brand name, or
the name of any CCM sub-brand incorporating the CCM brand
name, during NHL games will not be subject to a separate fee
but will be subject to the terms of the NHL's standard form of
On-Ice Equipment License Agreement (the "On-Ice Agreement").
All other equipment supplied to NHL players on-ice (other than
equipment bearing the CCM brand name or the name of a CCM
sub-brand incorporating the CCM brand name) will be subject to
a separate fee and terms as set forth in the On-Ice Agreement;
provided, however, that NHLE hereby agrees that it will charge
CCM or its affiliate an aggregate fee of $- per year of the
Term for equipment on-ice bearing the Canadien, Xxxxxx, Jofa,
Koho or Titan brand names (collectively, the "Jofa Brand
Names"); provided further, however, that such $- annual fee
shall apply only to equipment bearing the Jofa Brand Names in
the equipment categories for which a fee was paid for the
1998-1999 NHL season, as set forth in Exhibit E attached
hereto and made a part hereof."
9. Paragraph 9.G of the Letter Agreement is hereby deleted in its
entirety and replaced with the following:
"G. CCM acknowledges and agrees that the rights set forth in the
Agreement will apply to the CCM brand name only, except as set
forth in paragraph 9.E hereof."
10. A new paragraph 9.N is added to the Letter Agreement as follows:
"N. If at any time during the Term, the Jersey Rights of the Other
On-Ice Jersey Supplier are terminated, NHLE shall provide CCM
with written notice of such termination. NHLE agrees that for
ten (10) days following the delivery of such notice to CCM,
NHLE (a) will not solicit proposals from or negotiate with any
third party for the Jersey Rights of such Other On-Ice Jersey
Supplier, and (b) will negotiate in good faith with CCM for
such Jersey Rights."
11. Exhibit A of the Letter Agreement is hereby deleted in its entirety
and replaced with Exhibit A attached hereto. Exhibit B attached hereto is
added to the Letter Agreement as a new Exhibit E.
B. TEAM ALLOCATION LETTER The Team Allocation Letter is hereby amended as
follows:
1. The third grammatical paragraph of the Term Allocation Letter is
hereby deleted in its entirety and replaced with the following:
"Pursuant to the Letter Agreement, effective as of July 1, 1999,
the CCM Teams will be the NHL member teams, and their successors,
set forth on Exhibit A attached hereto and made a part hereof.
NHLE agrees that for so long as NHLE has granted the right to
manufacture authentic and replica jerseys to only two licensees,
including CCM, the NHL member
teams allocated to CCM shall consist of at least half of all the NHL
member teams."
2. Exhibit A of the Team Allocation Letter is hereby deleted in its
entirety and replaced with Exhibit C attached hereto. Exhibit B of the Team
Allocation Letter is hereby deleted in its entirety.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
If the terms set forth above reflect your understanding, please
countersign this Letter Amendment in the space provided below and forward
five (5) fully-executed originals to me. I will then have the terms of the
Letter Agreement and the Team Allocation Letter, as each is amended hereby,
incorporated into the NHL's standard retail and export license agreement form
and forward a copy to you for execution. Until then, the Letter Agreement
and the Team Allocation Letter, as amended, shall each constitute a binding
contract enforceable against the parties in accordance with its terms.
Sincerely yours,
NHL Enterprises, L.P.
By: NHL Enterprises, Inc., its general partner
By: (signed)
-------------------------------------
Xxxxx Xxxxxxxx
Vice President, Consumer Products Marketing
NHL Enterprises Canada, L.P.
By: National Hockey League Enterprises Canada,
Inc., its general partner
By: (signed)
-------------------------------------
Xxxxx Xxxxxxxx
Vice President, Consumer Products Marketing
NHL Enterprises B.V.
By: NHL Enterprises, Inc., its Managing Director
By: (signed)
-------------------------------------
Xxxxx Xxxxxxxx
Vice President, Consumer Products Marketing
Agreed and Accepted this
27th Day of October, 1998:
Sport Maska, Inc.
By: (signed)
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chairman, President & Chief Executive Officer
Maska U.S., Inc.
By: (signed)
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chairman, President & Chief Executive Officer
Attachment
c.c. Ms. Xxxxxxx Xxxx (w/att.)
Xxxxxx Xxxxxxx, Esq. (w/att.)
Xxxxxx Xxxxxxx, Esq. (w/att.)
Xx. Xxxxx Xxxxxx (w/stt.)
Ms. Xxxx XxXxxxxx (w/att.)
Mr. Xxxxx Xxxxxxx (w/att.)
Xxxxxxx Xxxxx, Esq. (w/att.)
EXHIBIT A
EXHIBIT A
Examples of Refunds to CCM
1. OVERAGES EXCEED SHORTFALLS - REFUND EQUALS SHORTFALLS If in Year Two
CCM earns royalties of $-, CCM shall have experienced a Shortfall of $-
under the Minimum Guarantee of $-. Notwithstanding such Shortfall, CCM
shall pay to NHLE the full amount of the Minimum Guarantee in equal
monthly installments from October through April of such year. If in
Year Three CCM earns and pays to NHLE $- (an Overage of $- over the
Minimum Guarantee of $-) and in Year Four earns and pays to NHLE $-),
CCM will have earned and paid to NHLE an aggregate Overage ($-) which
exceeds the aggregate Shortfall, it has experienced ($-). In such an
event, at the expiration of the Term, the termination of the Agreement
or the occurrence of any event set forth in paragraph 9.K(i) or (iii) of
the Letter Agreement, whichever occurs first, NHLE shall pay to CCM a
refund equal to the aggregate Shortfall, or $-.
2. OVERAGES ARE LESS THAN SHORTFALLS - REFUND EQUALS OVERAGES If in Year
Two CCM earns $-, CCM shall have experienced a Shortfall of $- under the
Minimum Guarantee of $-. If in Year Three CCM earns $-, CCM shall have
experienced a Shortfall of $- under the Minimum Guarantee of $-.
Notwithstanding such Shortfalls, CCM shall pay to NHLE the full amount
of the Minimum Guarantee for each of such years in equal monthly
installments from October through April of the applicable year. If in
Year Four CCM earns and pays to NHLE $- (an Overage of $- over the
Minimum Guarantee of $-), CCM will have earned and paid to NHLE an
aggregate Overage ($-) which is less than the aggregate Shortfall it has
experienced ($-). In such an event, upon the expiration of the Term,
the termination of the Agreement or the occurrence of any event set
forth in paragraph 9.K(i) or (iii) of the Letter Agreement, whichever
occurs first, NHLE shall pay to CCM a refund equal to the aggregate
Overage, or $-.
EXHIBIT B
EXHIBIT E
Equipment Categories for Jofa Brands
For 1998-1999 NHL Season
Equipment Category: Brand(s):
------------------- ---------
Helmets Jofa
Hockey Sticks Canadien, Heaton, Koho, Titan
Goalie Equipment Xxxxxx, Koho
Gloves Koho, Jofa
Player Pants Koho
EXHIBIT C
EXHIBIT A
CCM TEAM ALLOCATION
Atlanta Thrashers
Carolina Hurricanes
Dallas Stars
Detroit Red Wings*
Los Angeles Kings
Nashville Predators*
New York Islanders
Ottawa Senators
Philadelphia Flyers*
San Xxxx Sharks*
St. Louis Blues
Tampa Bay Lightning
Toronto Maple Leafs*
Vancouver Canucks
Washington Capitals
*denotes team previously allocated to NIKE, Inc., or its successor, before the
1999 - 2000 NHL season.
NHLamendment
