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EXHIBIT 10.41.1
MEMBER ADMISSION AGREEMENT
Purchaser's Name: Vans, Inc.
Issuer: Board Wild LLC, an Oregon limited liability company
Units: Voting Units of Issuer
Dated: April 1, 1998
In consideration of (1) the agreement of Board Wild, LLC, an Oregon
limited liability company (the "Company") to admit the above-named purchaser
(the "Investor") as a member of the Company; and (2) the agreement of the
Company to provide to the Investor the benefits described on the attached
Exhibit A, the Investor hereby subscribes for 250 Units of the Company's voting
ownership interests (the "Units"), which the Company represents and warrants
equals twenty percent (20%) of the outstanding Units.
The Company acknowledges that the Investor has provided valuable
contributions to the Company, including a $215,500 equity contribution pursuant
to a letter agreement dated August 4, 1997 (the "Letter Agreement") and a
$150,000 loan pursuant to a promissory note dated as of the date of this
Agreement. The Company acknowledges that the past equity contribution and the
contemporaneous loan constitute adequate consideration and full payment for the
Units to be issued pursuant to this Agreement. In connection with this
subscription, investor acknowledges and represents to the Company as follows:
1. I have both knowledge and experience in financial and
business matters, and have available legal and financial
advisors who are capable of evaluating the merits and
risks of my purchase of the Units. I am aware that the
purchase of the Units involves a high degree of risk, and
I have sufficient economic resources to bear the economic
risk of the complete loss of my investment in the Units. I
am aware of the business affairs of Issuer, and its
financial condition, and have acquired sufficient
information about the Issuer to reach an informed and
knowledgeable decision to acquire the Units. I am
purchasing the Units for my own account for investment
purposes only and not with a view to, or for the resale in
connection with, any "distribution" thereof for purposes
of the Securities Act of 1933, as amended (the "Act").
2. I acknowledge and agree that this is an extremely
speculative investment, and that I could lose my entire
investment in the Units. I also acknowledge that I have
received and carefully reviewed the Company's Operating
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Agreement (dated May 31, 1996) that will govern the
operations of the Company.
3. I understand that the Units have not been registered,
under the Securities Act or under the securities laws of
any state. I further understand that the Units have been
issued to Investor in reliance upon exemptions from such
laws, which depend, among other things, upon the bona fide
nature of my investment intent and the accuracy of the
representations that I make in this Agreement.
4. I understand that the Units must be held indefinitely
unless subsequently registered under the Securities Act
and any applicable state law, or unless an exemption from
registration is otherwise available. In addition, I
understand that the certificates representing the Units
will be imprinted with a legend which prohibits transfer
of the Units unless the transfer is in accordance with the
terms of the Securities Act and with the terms of the
Company's Operating Agreement.
5. I further understand that at the time I wish to sell the
Units, if ever, there may be no public or private market
in which to make a sale, there may be no valuation
criteria available, and I will not have the right to
require the Company to register the Units, all of which
may severely limit my ability to sell my Units for what I
would consider to be a fair price.
6. You have made available to me, to my counsel and advisors,
all documents that were requested relating to my purchase
of the Units and to the business and future affairs of the
Company, and you have and the officers and directors of
Company have provided answers to all questions that I have
asked of you concerning the offering and my investment in
the Units. I understand and acknowledge that this Member
Admission Agreement, and Exhibit A hereto, replaces and
supersedes the Letter Agreement, and that the terms of the
Letter Agreement shall have no further force or effect.
7. I acknowledge that certain of the information furnished to
me by the Company is confidential and not public, and
agree that all such information will be kept in confidence
by me and neither used to my personal benefit nor
disclosed to any third party for any reason except with
your prior consent.
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8. I understand that as a member of the Company, I will be
entitled to appoint one manager to the Company's board of
managers. However, I also understand that members owning a
majority of Units in the Company control the voting power
of the managers. Therefore, if I do not control a majority
of Units, I will not exercise majority voting control over
the business and affairs of the Company, nor will I have
control over other items related to my investment in the
Company, including possible dilution.
9. I understand that the Company is represented by legal
counsel and that this Agreement and all other documents
related to the Company that have been presented to me have
been prepared with the assistance of the Company's legal
counsel, who do not and cannot represent me or my interest
in this transaction.
10. I HAVE RECEIVED, READ AND UNDERSTAND THE COMPANY'S
OPERATING AGREEMENT, DATED MAY 31, 1996, AND UNDERSTAND
THAT BY EXECUTING THIS MEMBER ADMISSION AGREEMENT, I WILL
BECOME A PARTY TO AND BE BOUND BY ALL TERMS AND CONDITIONS
OF THE OPERATING AGREEMENT.
IN WITNESS WHEREOF, the Company and the Investor have executed this
Agreement to be effective as of the date first written above.
BOARD WILD, LLC, AN OREGON
LIMITED LIABILITY COMPANY
R. XXXXXXX XXXXX
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By: R. Xxxxxxx Xxxxx, Manager
INVESTOR # OF UNITS LOAN AMOUNT EQUITY
-------- ---------- ----------- ------
VANS, INC.
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By: 250 $150,000 $215,500
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EXHIBIT A
TO MEMBER ADMISSION AGREEMENT
FOR VANS, INC.
As additional consideration for the agreement of Vans, Inc. to
subscribe for 250 Units of the Company's Units, the Company hereby grants to
Vans, Inc. ("Vans") the following additional benefits:
1. A non-exclusive worldwide license to utilize all footage (16mm,
Bet SP and Digital) that the Company owns the rights to for use in any
advertising and/or promotional projects conducted by or for Vans excluding the
production of a television program similar to Board Wild. Editing and/or
duplicating costs of preparing said footage for Vans will be billed at cost.
2. A permanent sponsorship for the Company's "Board Wild" domestic
television series that currently airs on the FOX Sports Network. Vans' rights as
a permanent sponsor shall include, but will not be limited to: presenting
billboards in every domestic episode; product and athlete features; and
30-second ad spots at a 15% discount below the lowest rate paid by any
advertiser committed to at least 26 Board Wild episodes.
3. The right to obtain deeply discounted or even free 30-second spots
in the domestic episodes of the Board Wild series. In addition, the Company
shall provide Vans an opportunity to obtain a larger percentage of the Company's
Net Revenue based on Vans' ability to assist with the Company's ongoing
sponsorship needs. In that regard:
3.1 Vans' domestic rate for procuring 30-second ad spots shall
be decreased by 33% if Vans can obtain one sponsor for the
Board Wild program in, at or above Vans' current level of
participation (not less than $5,000 per episode for a
minimum of 26 episodes).
3.2 Vans' domestic rate for procuring 30-second ad spots shall
be decreased an additional 33% if Vans can obtain a second
sponsor in, at or above Vans' current level of
participation.
3.3 Vans' domestic rate for procuring a 30-second ad spot
shall be free if Vans can obtain a third sponsor in, at or
above Vans' current level of participation.
3.4 If Vans procures the aforementioned three sponsors,
additional sponsorship participation generated by Vans
will entitle Vans to a larger percentage of
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the Company's Net Revenues. For each $20,000 worth of
sponsorship procured by Vans beyond the aforementioned
three sponsors, Vans will receive an additional .30% of
the Company's Net Revenues during the fiscal year when
said sponsorship was generated. For purposes of this
Agreement, "Net Revenues" means all revenues collected by
the Company less the following; (a) all expenses incurred
by Board Wild in producing, distributing and advertising
the Board Wild Series, any subsequent series, and any
related retail products, (ii) a management fee of fifteen
thousand dollars ($15,000.00) per month commencing July 1,
1996, payable to International Sports Productions, Inc.
for its management of Board Wild and the assistance it
provides in marketing, sales, distribution and accounting
for all Board Wild products, and (iii) all taxes, fees,
licenses, royalties and other liabilities arising from
Board Wild's business.
4. The right of first refusal to procure advertising space (i.e.
billboards and commercials) in each country where the Board Wild program is
syndicated.
5. A $150,000 credit toward international advertising and/or
advertising on videos produced by the Company in conjunction with an advertising
discount of 20% off the lowest ad rates procured by the Company on all
international in-show advertising. Said credit may be used at any time, but may
not exceed $20,000 within any one quarter.
6. Free billboards in all international episodes that are bartered.
In addition, the Company shall make every reasonable attempt to procure free
billboards for Vans within international episodes that are purchased as long as
the billboard procurement does not adversely affect the purchase price for the
episodes. Vans agrees to pay for the additional editing costs to place the Vans
billboard at the front and back of international episodes (it takes
approximately 30 minutes to lay a Vans billboard into the front and back of a
show; said costs will not exceed $75/episode/country and may be deducted as part
of the $150,000 Vans credit discussed in #8 herein).
7. Free advertising in each of the North American board sport guide
books distributed by the Company (i.e. a Vans full-page print ad will be
included in each such guide book the Company retails nationally and/or
internationally).
8. The right to appoint one (1) manager of the Company.
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