EXHIBIT 10.36
NAMING, PROMOTiONAL AND SPONSORSHIP AGREEMENT
---------------------------------------------
October 1, 1997
The parties to this Agreement are NovaCare, Inc., a Delaware corporation,
with an office located at 0000 Xxxx Xxxxx Xxxxxx, Xxxx xx Xxxxxxx, Xxxxxxxxxxxx
00000 ("NovaCare"), and the Philadelphia Eagles Limited Partnership, a Delaware
limited partnership with an office located at 0000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000 ("Eagles").
RECITALS
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A. NovaCare is a provider of services in rehabilitation, occupational
therapy, Occupational Health (as defined below), physical therapy, conditioning
and nutrition, and orthotics and prosthetics.
B. The Eagles hold a franchise to play football representing the City of
Philadelphia and the surrounding territory in the National Football League
("NFL").
C. NovaCare wishes to obtain from the Eagles, and the Eagles wish to
grant to NovaCare, naming, sponsorship and promotional rights with respect to
the Eagles and to a corporate/team headquarters complex to be constructed for
the use of the Eagles and its NFL team (the "Eagles Team") in exchange for cash
sponsorship fees and other consideration.
Accordingly, NovaCare and the Eagles have agreed as follows:
I. Certain Definitions
-------------------
For purposes of this Agreement, the following capitalized terms shall have
the following meanings:
"Category" shall mean the service category consisting of the provision of
direct services to patients in rehabilitation, occupational therapy,
Occupational Health, physical therapy, conditioning and nutrition, and the
product and services categories consisting of orthotics and prosthetics.
"Category Competitor" shall mean any Person which (i) during the
immediately preceding fiscal year earned, or is part of a group of companies
majority owned by the same parent company which as a group earned, at least 35%
of its (or their) gross revenues from the provision of products or services in
the Category, or (ii) is primarily known in the Territory for its provision of
products or services in the Category, owns and operates at least ten outpatient
centers providing services in the Category in the Territory and had revenues
from the provision of products and services in the Category in the Territory of
at least $5 million in the immediately preceding fiscal year (such amount to be
increased at the rate of 7% per Contract Year beginning in its 1998 Contract
Year). Notwithstanding the foregoing, however, the term "Category
Competitor" shall not include any division, subsidiary, affiliate or parent of
any Person that would be a Category Competitor under the preceding sentence if
that division, subsidiary, affiliate or parent does not operate under the same
tradename, trademarks or other identifying names or symbols used by such Person
in the provision of products and services in the Category.
"Contract Year" shall mean the period beginning on the date of this
Agreement and ending December 31, 1997, and each subsequent twelve-month period
beginning on January 1 and ending on December 31.
"Game" or "Games" shall mean an NFL football game or games played during
the NFL Season by the Eagles Team and shall include all actual play and all
other periods between the start of such Game or Games and the end thereof,
including, without limitation, all periods of time out, periods between quarters
and halves, and overtime periods.
"Home Game" shall mean a Game played in Veterans Stadium, Philadelphia,
Pennsylvania, or any New Stadium.
"Laws" shall mean all applicable statutes, rules, regulations, legally
binding governmental policies and directives, court orders and laws of any type.
"Licensed Marks" shall mean the logos, name, trademarks, tradenames and
copyrighted design elements of the Eagles or the Eagles Team, as they may exist
from time to time.
"Name" shall mean the name and related logo recognition for the NovaCare
Complex selected in accordance with Article III.B(i), subject to such changes as
may be made pursuant to Article XIII.B.
"New Stadium" shall mean any new facility in the Territory where the
Eagles Team regularly plays home games during the Term.
"NFL Entity" shall mean the NFL, NFL Properties, Inc., the NFL Trust, any
successor to any of the foregoing, or any of their respective affiliates or
subsidiaries in which a majority of NFL members has a direct or indirect
ownership interest from time to time.
"NFL Rules" shall mean the Constitution, By-Laws, rules, regulations,
resolutions and agreements of the NFL Entities, as they may be in effect from
time to time.
"NFL Season" shall mean the season (customarily commencing in July and
ending the following December or January) established by the NFL for playing NFL
professional football games. "NFL Season" shall include all pre-season and
regular season games but shall not include any post-season games unless
specifically stated in this Agreement.
"NovaCare Complex" shall mean the combined corporate/team headquarters
complex to be constructed by or for the Eagles in the Territory, including any
replacements thereof constructed during the Term. For purposes of the provisions
of this Agreement that create
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obligations for the Eagles, the term "NovaCare Complex" shall not include the
clinic that NovaCare has the right to construct at the site of the NovaCare
Complex unless specifically stated in the Agreement.
"NovaCare Marks" shall mean NovaCare's logos, name, trademarks, tradenames
and copyrighted design elements, as they may exist from time to time, including
any NovaCare Marks incorporated as part of the Name.
"NovaCare Marketing" shall have the meaning set forth in Article VI.A.
"Occupational Health" shall mean the service category consisting of the
provision of a system of overall care and case management services with respect
to the full continuum of diagnosis, treatment and rehabilitation care that
arises from workplace injuries; provided, however, that Occupational Health
shall not be construed to apply to any Person providing physician or other
services that may consist of one or more elements of the foregoing but does not
include all of such services.
"officially opens" and words of similar import applied to the NovaCare
Complex shall mean the date on which the Eagles obtain a certificate of
occupancy from the appropriate governmental authority for the office building
that will house the corporate/team headquarters that will form a part of the
NovaCare Complex.
"Person" shall mean an individual, corporation, partnership, limited
liability company, estate, trust, joint venture, association, government (and
any branch, division, agency or instrumentality thereof), governmental entity,
or other entity.
"Promotions" shall mean, collectively, the advertising and other promotion
rights described in Article III.A, and the naming rights described in Articles
III.B, in each case, subject to the terms of this Agreement.
"Required Products and Services" shall mean, collectively, the equipment,
products and services that NovaCare is obligated to provide to the Eagles Team,
its current and former players and staff in each Contract Year during the Term
pursuant to this Agreement.
"Term" shall have the meaning set forth in Article II.
"Territory" shall mean the City of Philadelphia and the other areas forming
the Eagles Territory under NFL Rules.
"Training Staff' shall mean a head trainer plus at least two assistant
trainers, a strength and conditioning coach and at least one assistant, and any
additional staff generally used from time to time by NFL teams whose functions
fall within the type of products or services provided by NovaCare or that are
included in the Category (for example, nutrition advisor).
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"Use Restrictions" shall mean the applicable provisions of all (i) Laws;
(ii) NFL Rules; and (iii) contractually imposed requirements of any location or
site where a Promotion or
NovaCare Marketing activity may be held or presented, including Veterans Stadium
and any New Stadium; provided, however, that this clause (iii) shall not include
any contractual requirements applicable to the NovaCare Complex that may
adversely affect NovaCare's rights that have not been approved by NovaCare,
which approval shall not be unreasonably withheld.
II. Term
----
The term of this Agreement shall begin on the date hereof and shall end on
the last day of the Contract Year in which the "Year 25" payments set forth on
Exhibit B have been made, unless sooner terminated pursuant to Article IX (the
"Term").
III. Advertising and Promotional Rights: Naming Rights
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A. The Eagles will provide for NovaCare's benefit the advertising and
other promotion rights specified in Exhibit A during each Contract Year of the
Term, subject to the terms and conditions specified in this Agreement (including
Exhibit A) and NovaCare's compliance with the provisions of this Agreement. The
Eagles will not, however, be obligated to begin providing or otherwise making
available any Promotions with respect to the NovaCare Complex until after the
official opening of the NovaCare Complex occurs. NovaCare shall only use the
Promotions that represent advertising or sponsorship opportunities to advertise
and promote products or services in the Category and the general corporate image
of NovaCare.
B. Subject to the terms and conditions specified in this Agreement and
NovaCare's compliance in all material respects with the provisions of this
Agreement, the Eagles shall cause NovaCare to receive the following rights at or
with respect to the NovaCare Complex from and after its official opening:
(i) the exclusive right (subject to Articles VI.B and XIII.B) to name
and create a logo for the NovaCare Complex. If the Eagles do not approve any
proposed name and logo prior to the official opening of the NovaCare Complex,
the name shall be "NovaCare Complex" and shall include logo recognition for
NovaCare in the form set forth on Exhibit D;
(ii) the exclusive right to receive Name recognition on the facade of
the main office complex; the marquee at the entrance to the complex; the
road/directional signage leading to the complex (to the extent the Eagles
control such signage); the rooftop of the main office complex; the rooftop of
the indoor practice facility (if in a separate building on the site of the
NovaCare Complex); a reasonable number of locations on the fencing surrounding
the practice fields and in the center of the practice fields; the goal pads on
the practice fields; the facade of the press conference podium; and on all
apparel worn by key facility (such as groundkeepers) and Training Staff. The
precise size and location of all Name recognition described under the preceding
sentence shall be proposed by the Eagles and subject to the approval of
NovaCare, which shall not be unreasonably withheld. All such recognition shall
comply with all Use
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Restrictions applicable to the NovaCare Complex and, subject to Article XIII.B
(with respect to renaming and other changes) and Article X.X. (with respect to
apparel to be provided by NovaCare), shall be created and installed by the
Eagles at its expense, except that NovaCare shall provide any required artwork
and design at its expense as and when reasonably requested by the Eagles; and
(iii) the exclusive right to Name recognition on any other permanent
signage at the NovaCare Complex, other than signage using the Licensed Marks and
the logos, name, trademarks, tradenames and copyright design elements associated
with the NFL, and customary labeling on products or point-of-sale material.
C. Notwithstanding anything to the contrary in Article III.B, the Eagles
shall have the right to display temporary signage at the NovaCare Complex on an
event-by-event basis (including both single and multiple day events) that relate
to or are sold in connection with the event for or by Persons who are not
Category Competitors; provided, however, that the Eagles shall not place any
temporary signage on the facade of the main office building without the prior
consent of NovaCare, which shall not be unreasonably withheld. Temporary signage
shall be displayed only during each event and for a reasonable time before the
beginning and after the conclusion of each event to allow for set-up and removal
(or covering up).
D. The Eagles shall cause the NovaCare Complex to be constructed to
conform to the high level of quality generally associated with the
corporate/team headquarters of NFL teams, and shall include a high quality press
room and high quality training room for players. The Eagles shall cause the
NovaCare Complex to be maintained in a high quality manner but shall not be
obligated to make capital improvements to cause the NovaCare Complex to conform
to evolving standards of NFL quality during the Term.
E. The Eagles shall refer, and shall use reasonable commercial efforts to
cause and encourage others to refer, to the NovaCare Complex by its title name.
IV. Exclusivity
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A. [Intentionally Omitted]
B. During the Term, the Eagles shall not do any of the following:
(i) grant any Person the right to use the Licensed Marks in
connection with the advertising or promotion of products or services in the
Category;
(ii) grant any Person the right to identify itself as a provider or
supplier of products or services in the Category to the Eagles, its players or
its Training Staff;
(iii) grant any Person one or more of the Promotion rights other than
the rights to acquire tickets, suites, parking passes and other rights generally
available to the public in the
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Category or grant any Person any other present or future promotional,
advertising or sponsorship activities (including at any New Stadium) in the
Category;
(iv) grant to any Category Competitor the right to use the Licensed
Marks in connection with advertising or promotion;
(v) grant to any Category Competitor the right to identify itself as
a sponsor of, or as a provider or supplier of products or services to the
Eagles, its players or its Training Staff; or
(vi) grant to any Category Competitor one or more of the Promotion
rights (other than the rights to acquire tickets, suites, parking passes and
other rights generally available to the public) or grant any Category Competitor
any other present or future promotional, advertising or sponsorship activities
(including at any new Stadium).
For purposes of this Section IV.B., a Person which is not a Category
Competitor at the time such Person enters into a promotional, advertising or
other sponsorship arrangement with the Eagles, but which becomes a Category
Competitor during the pendency of such arrangement (and any renewal or extension
of such arrangement), shall be subject only to Article IV.B(i)-(iii) but shall
not be a Category Competitor for any other purpose in this Agreement, including
Article IV.B(iv)-(vi), and shall be permitted to use the Licensed Marks and
appropriate designations in all general corporate advertising. The parties
expressly agree that any restrictions under this Agreement on the Eagles' right
to enter into arrangements with Category Competitors or other Persons apply only
to the acts of the Eagles with respect to media under their control and not to
the acts of third parties (such as Veterans Stadium or the broadcasters of Games
involving the Eagles team).
C. Except as expressly set forth in Section III.B and IV.B., the Eagles
shall not be subject to any restrictions of any kind or description on its
business activities, including, without limitation, any restrictions on its
right to license the Licensed Marks, grant rights to or sell promotional,
advertising or sponsorship products or services, acquire exclusive or non-
exclusive sources of supply of products or services, or otherwise permit third
parties to be associated with the Eagles, their players, coaches and staff.
Without limiting the generality of the preceding sentence, the Eagles shall have
the right (subject to Article III.B) to engage in transactions of any type with
Persons engaged in (i) the retail distribution of conditioning and nutritional
services (e.g., GNC, Bally's health club, Weight Watchers), (ii) the retail
distribution of orthotic and prosthetic products, where either orthotics or
prosthetics are not a primary aspect of the distributor's business (e.g.,
pharmacies, general retailers, medical supply companies), provided that such
transaction does not infringe on NovaCare's right to provide such services
directly to the Eagles, or (iii) in the hospital, medical or surgical care
categories or any health care category other than the Category, including,
without limitation, the right to renew, extend or replace its current
sponsorship and promotion agreement with the Allegheny Health, Education and
Research Foundation and its affiliates (together, "Allegheny"), which the Eagles
represent and Warrant does not provide Allegheny with any rights in the
Category, even if (subject to Article IV.B(i)-(iii)) Allegheny later becomes a
Category Competitor. In addition, the Eagles shall have
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the right to acquire at its own expense from any third-party any product or
service (or any brand of any product or service) in the Category for the use of
its players or staff that is not supplied by NovaCare under Article V.H of this
Agreement, provided that the supplier of such services is not granted the right
to identify itself as a supplier to the Eagles.
D. [Intentionally Omitted].
E. If the NovaCare Complex is constructed at the site in Philadelphia
commonly referred to as the "Navyard," the Eagles shall cause NovaCare to
receive identification on the street name to be incorporated in the address of
the NovaCare Complex (but such identification need not extend to the street
itself). If the NovaCare Complex is constructed at any other site, the Eagles
shall use reasonable commercial efforts to obtain such street name
identification for NovaCare on the street name to be incorporated in the address
of the NovaCare Complex.
V. Sponsorship Fees and Other Consideration
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In consideration for the rights granted to it under this Agreement, in each
Contract Year during the Term NovaCare shall pay the Eagles a cash sponsorship
fee, and shall provide the Required Products and Services, in accordance with
the following:
A. For the rights granted to it for the first Contract Year during the
Term, NovaCare shall pay the Eagles the amount of $850,000, of which $425,000
shall be paid contemporaneously with the execution of this Agreement and
$425,000 shall be paid on December 15, 1997.
B. Unless the NovaCare Complex has officially opened, in each of the
second (beginning January 1, 1998), third (beginning January 1, 1999) and fourth
(beginning January 1, 2000) Contract Years of this Agreement, and, if ground has
been broken on or prior to July 31, 2001 and construction is proceeding, in each
subsequent Contract Year until the NovaCare Complex officially opens, NovaCare
shall pay the Eagles the amount of $900,000 per Contract Year, which payments
shall be made in three equal installments of $300,000 on June 1, September 1 and
November 1 of each Contract Year, except that the June 1, 2001 payment may be
deferred until August 1, 2001 if ground has not been broken prior to June 1.
C. If ground has not been broken on the NovaCare Complex by July 31,
2001, or if the NovaCare Complex has not officially opened by July 31, 2004,
NovaCare shall have the right to terminate this Agreement in accordance with
Article IX.B(i). If ground has not been broken on the NovaCare Complex by July
31, 2003, the Eagles shall have the right to terminate this Agreement in
accordance with Article IX.C(ii). If neither party exercises its right of
termination in accordance with Article IX.B(i) or IX.C(ii), as the case may be,
the aggregate cash sponsorship fee in each Contract Year shall continue to be
$900,000 and shall continue to be payable on each June 1, September 1 and
November 1, until the official opening (or, if applicable, termination), occurs.
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D. If the NovaCare Complex officially opens on or prior to the first Game
played by the Eagles Team in any Contract Year, the aggregate cash fee that
NovaCare is obligated to pay to the Eagles in that Contract Year shall be
increased to the amount set forth next to "Year 1" on Exhibit B (i.e.,
$1,400,000) and the aggregate cash sponsorship fee due in each of the twenty-
four subsequent Contract Years shall be equal to the amount set forth on Exhibit
B for years 2-25, as applicable. The aggregate amount due in the Contract Year
in which the official opening occurs and each subsequent Contract Year shall be
paid in four equal installments on March 1, June 1, September 1 and December 1
of each Contract Year (i.e., each installment shall be equal to one-fourth of
the aggregate cash sponsorship fee due in such Contract Year), except that if
the official opening is after March 1 and before June 1, the first installment
of the Year 1 payment may be paid on the official opening date, and if the
official opening is after June 1 and before the first Game of that NFL Season,
NovaCare shall pay $300,000 on June 1, the amount of the first and second
installment of the year 1 payment in excess of such $300,000 payment (i.e., an
additional $400,000) on the official opening date, and the two remaining
installments of $350,000 each on September 1 and December 1.
E. Notwithstanding the provisions of Article V.B. or C., if the NovaCare
Complex officially opens at any time during any Contract Year in which the
aggregate cash sponsorship fee would otherwise have been $900,000 and the Eagles
Team has already played one or more Games, the aggregate amount due in that
Contract Year shall be $900,000 plus an additional amount equal to (i) $500,000
multiplied by (ii) a fraction, the numerator of which shall be the remaining
number of Games the Eagles Team is scheduled to play during the balance of the
applicable NFL Season and the denominator of which shall be the total number of
Games the Eagles Team is scheduled to play during that NFL Season. (For example,
if the Eagles Team has played four pre-season and six regular season Games out
of a schedule of twenty Games, the fraction will be 10/20 and the additional
amount due will be $250,000). If the official opening occurs after June 1 but
prior to September 1, one-half of the additional amount shall be paid on each of
the September 1 and November 1 payment dates in the applicable Contract Year. If
the official opening occurs after September 1, the entire additional amount
shall be paid on the November 1 payment date in the applicable Contract Year (if
the opening has occurred by that date) or the December 15 of that Contract Year
(if the official opening occurs after November 1 but before the conclusion of
the applicable NFL Season). The aggregate cash sponsorship fee for the full
Contract Year immediately following the Contract Year in which the official
opening occurs shall be the amount set forth next to "Year 2" on Exhibit B and
the aggregate cash sponsorship fee for each succeeding Contract Year shall be
the amount set forth on Exhibit B for years 3-25, as applicable. Such aggregate
amounts shall be paid in four equal installments on March 1, June 1, September 1
and December 1 of each Contract Year.
F. All cash payments due to Eagles shall be made by wire transfer of
immediately available funds over the U.S. federal reserve wire transfer system
to the account described on Exhibit E, unless the Eagles shall designate another
account to NovaCare at least five (5) business days prior to the date the
payment is due. If any payment date is not a business day, the payment shall be
due on the next immediately succeeding business day. All payments shall be made
in U.S. dollars without set-off, reduction, or withholding of any kind (unless
NovaCare
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shall have obtained a final and non-appealable determination that it is
owed an amount by the Eagles, in which case it may set-off the unpaid portion of
such amount) and time shall be of the essence with respect to each payment.
G. If any amount payable under this Agreement is not paid when due, such
amount shall bear interest until paid at the rate of 1.0% per month (or the
maximum rate of interest permitted by law from time to time if 1% per month
exceeds such maximum rate) but the paying of interest shall not limit any other
rights or remedies of the party to which such amount is owed may have.
H. NovaCare shall provide (and if it does not or cannot itself provide,
shall pay) for all rehabilitation, occupational therapy, physical therapy,
conditioning and nutritional services for the Eagles, and the coaches and
current and (subject to the next sentence) former players of the Eagles Team,
except that NovaCare shall not be obligated to provide or pay for any
nutritional services or general fitness related services for the coaches and
front office staff of the Eagles unless the provisions of such nutritional
and/or fitness related services have been authorized by the Eagles and are
reimbursable under applicable payor (which shall not be construed to be the
Eagles under any circumstances) arrangements. NovaCare's obligations under the
preceding sentence shall include, without limitation, providing all such
services to former Eagles players in locations where NovaCare maintains an
outpatient rehabilitation center. Except in situations where a current or former
player or coach, as applicable, specifically requests or independently seeks
such services from a provider other than NovaCare (in which case NovaCare shall
have no obligation to pay for such service), NovaCare shall have both the
obligation and the right to provide or pay for all such rehabilitation,
conditioning and nutritional services to such individuals. NovaCare shall have
the right, however, to xxxx the appropriate payors (which shall not be construed
to be the Eagles under any circumstance) for rehabilitation and for related
medical supplies and services provided at NovaCare centers or NovaCare locations
other than the outpatient clinic it may construct at the NovaCare Complex or
other facilities at the NovaCare Complex. NovaCare acknowledges that under the
Training Staffs current practice substantially all injuries or conditions
requiring the type of services rendered at off-site NovaCare centers or
locations are provided on-site for players, coaches and staff residing in the
Territory and that no payor is filed or such services, that it is the intention
of the Eagles to cause its Training Staff to continue such practice during the
Term and that NovaCare shall not cause or attempt to cause the Training Staff to
change its current practice with respect to the use of such off-site or outside
providers. NovaCare shall not have the right to xxxx any payor for services to
the Eagles, its players, coaches or staff other than in accordance with this
Article V.H.
I. (i) Subject to Article V.I(ii) below, during the Term NovaCare shall
pay all compensation and other costs of the type set forth on Exhibit F
associated with the employment of the current Training Staff. It is the
understanding of the parties that so long as each member of the current Training
Staff remains employed, he or she shall have a total compensation package that
is at least equal to what he or she would have received if employed by the
Eagles and that the Eagles would generally compensate such staff in an amount
comparable to what similar training staff employed at other major market NFL
teams receive, with perquisites
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consistent with what comparable Eagles employees receive ("Prevailing NFL
Wage"). Exhibit F sets forth the total compensation obligation that the Eagles
reasonably expect to be due to the current members of the Training Staff in the
1997-99 Contract Years and NovaCare shall pay all such amounts plus any
additional amounts necessary to pay any current members of the Training Staff a
Prevailing NFL Wage during the term of their employment with the Eagles, except
that any person bound by an employment agreement shall receive at least the
amount set forth in his or her employment agreement during the term of such
agreement. If the Head Trainer, the first assistant to the Head Trainer or the
Head Strength and Conditioning coach currently employed by the Eagles are
replaced at any time during the Term in accordance with this Agreement, and the
Eagles select a replacement that is not then employed by NovaCare, NovaCare
shall be obligated to compensate the replacement at an amount equal to the
Prevailing NFL Wage if so requested by the Eagles because, in its reasonable
business judgment, the services of such replacement could not reasonably be
expected to be obtained at a lower amount. The total compensation of any new
member of the Training Staff that is a NovaCare employee at the time of his or
her selection, in accordance with Article V.I(ii) below (including any person
selected to be Head Trainer, the first assistant to the Head Trainer or the Head
Strength and Conditioning Coach), shall be determined in accordance with
NovaCare's employment policies, subject to reasonable consultation with the
Eagles, and need not be equal to the Prevailing NFL Wage. If the parties are
unable to obtain sufficient information about the Prevailing NFL Wage in any
Contract Year in which a Prevailing NFL Wage is due to a member of the Training
Staff, the aggregate compensation of the applicable member of the Training Staff
shall be increased by an amount agreed by the parties or, if they cannot agree,
by the rate of increase in the compensation of the coaching staff of the Eagles
Team (exclusive of the head coach and bonuses based upon team performance).
(ii) Not later than the end of the current NFL Season, the Eagles
and NovaCare shall take all steps necessary to cause the current members of the
Eagles' Training Staff to become employees of NovaCare. If the Eagles wish to
hire new members of the Training Staff or make any material changes in the day-
to-day reporting functions of the Training Staff during the Term, the Eagles
shall consult with NovaCare with respect to any possible new hires or reporting
function changes and, except with respect to the positions of Head Trainer,
first assistant to the Head Trainer and Head Strength and Coordinating Coach,
shall select a person proposed for its approval by NovaCare, the Eagles'
approval not to be unreasonably withheld. With respect to the positions of Head
Trainer, first assistant to the Head Trainer and Head Strength and Coordinating
Coach, the Eagles shall consider any qualified candidates recommended by
NovaCare that satisfy any criteria established by the Eagles, as well as any
candidates separately identified by the Eagles, but ultimately shall have the
right to make selections for those positions in its sole discretion. Subject to
compliance with Laws, the Eagles shall retain all final termination and
management authority with respect to the Training Staff, including the right to
delegate to the Head Trainer final decision-making ability within the areas of
the Head Trainer's functions; provided, however, that the Eagles shall not
require NovaCare to hire any person for the Training Staff unless that person
agrees not to accept any compensation or other remuneration from a Category
Competitor, other than dividends or distributions with respect to publicly
traded securities. Except as expressly set forth in this
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Article V.I, NovaCare shall not have any consultation rights with respect to any
other hiring or reporting functions of Eagles' personnel, and expressly
recognizes that the Eagles' medical director and ancillary medical personnel are
currently provided (and may in the future continue to be provided) through other
Eagles' sponsors.
J. NovaCare shall provide attire to the Training Staff featuring the
Eagles' and NovaCare's logos at NovaCare's expense. All staff attire must be
approved by the Eagles and NovaCare and must comply with NFL Rules. NovaCare
acknowledges that under current NFL Rule, the Training Staff may not wear such
attire during game day; the Eagles shall however, authorize the wearing of such
attire to the extent permitted by any future changes in NFL Rules. All travel
expenses of the Training Staff for Eagles-related activities will be the
responsibility of the Eagles.
K. NovaCare shall provide, at its sole expense, the quantity and quality
of all medical and training supplies, and all rehabilitation equipment,
generally used by a majority of NFL teams from time to time during the Term that
is of the type or within the categories set forth on Exhibit C (the "Required
Supplies and Equipment"). If in any Contract Year the Eagles shall request any
type or quantity of supplies or equipment that NovaCare does not believe it is
obligated to provide at its expense, NovaCare shall promptly set forth the basis
of its objection in writing and the parties shall thereafter negotiate in good
faith to resolve their differences; each party shall, however, retain the right
to seek arbitration under Article XXII. Until its objection is resolved,
NovaCare shall continue to supply the quantity and quality of medical and
training supplies, and the rehabilitation equipment of the type set forth on
Exhibit C, it believes are generally used by a majority of NFL teams at that
time (and in any event at least the Required Supplies and Equipment it provided
in the immediately prior NFL Season).
VI. NovaCare Marketing; Production and Approval of Promotional and Marketing
------------------------------------------------------------------------
Materials
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A. Subject to the limitations set forth in this Agreement, (i) NovaCare
shall have the right to use the Licensed Marks in connection with promoting and
advertising its rights as a sponsor of the Eagles and as the exclusive provider
(or "official provider" or any similar designation approved by the Eagles in
their reasonable discretion) to the Eagles Team of products or services in the
Category ("NovaCare Marketing"), as well as the right to use the Name and, so
long as it satisfies the definition of Category Competitor, the Licensed Marks
for general promotion, advertising and business purposes, but may not use the
Licensed Marks or the Name for the purpose of promoting or advertising products
or services not included in the Category or, subject to Article XIII.B, in
conjunction with any name other than the "NovaCare" name used alone or in
conjunction with a generic description relating to the Category (such as
NovaCare Nutrition), and (ii) the Eagles shall have the right to use the
NovaCare Marks to perform its obligations to NovaCare under this Agreement, the
right to use the Name for general promotion, advertising and business purposes,
and the exclusive right to exploit commercially the Name on products and
merchandise.
B. Notwithstanding anything to the contrary contained in this Agreement,
(i) all commercials, advertisements, promotions and other activities authorized
by the Eagles under this
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Agreement, whether constituting a Promotion or any aspect of NovaCare Marketing,
and all proposed uses of the NovaCare Marks at the NovaCare Complex (including
as part of the Name) shall be subject to the Eagles' review and prior approval,
which may be granted or withheld in the Eagles' reasonable discretion, (ii) all
uses by the Eagles of the NovaCare Marks that are authorized under this
Agreement shall be subject to NovaCare's review and prior approval, which may be
granted or withheld in NovaCare's reasonable discretion. In order to facilitate
each party s review and to maintain the high standards, style, appearance,
propriety and quality associated with each party and its employees, if either
NovaCare wishes to use the Licensed Marks, or the Eagles wish to use the
NovaCare Marks, it shall submit to the other party the concept, keylines,
artwork, video, audio and/or storyboard for any proposed commercial,
advertisement or promotion using the Licensed Marks or NovaCare Marks, as the
case may be, before commencing production of any such commercial, advertisement
or promotion or undertaking such activity (or representing to a third party that
it will be authorized to conduct or execute such commercial, advertisement,
promotion or activity). Once the Eagles have approved any particular proposed
use of the Licensed Marks or NovaCare has approved any proposed use of the
NovaCare Marks, the party that has received the approval may make additional
uses of the Licensed Marks or the NovaCare Marks, as the case may be, that are
similar to the approved use, except that the party that received the approval
shall cease any similar use within a reasonable time if the other party
reasonably objects.
C. (i) With respect to each element of a Promotion or of NovaCare
Marketing which includes material to be broadcast, published, distributed or
displayed, NovaCare shall prepare and produce such material, at NovaCare's sole
expense, in final form and shall provide such material to the Eagles at least
thirty (30) days prior to the first date on which such Promotion or NovaCare
Marketing is to be broadcast, published, distributed or displayed. The form,
content and presentation of each Promotion or NovaCare Marketing shall be
subject to the approval of the Eagles, the Use Restrictions and the Standards
and Practices of the applicable broadcasters, telecasters or publishers. Any
commercial or government censor and/or clearance requirements, and all matters
and costs with respect to any NovaCare Marketing or the fulfillment of any
Promotion opportunity granted to it by the Eagles under this Agreement (e.g.,
the cost of producing a commercial but not the cost of the television time
granted to it), shall be the sole responsibility, financial and otherwise, of
NovaCare, except to the extent set forth in Article III.B or elsewhere in this
Agreement.
(ii) With respect to each authorized use of the NovaCare Marks to be
made by the Eagles which includes material to be broadcast, published,
distributed or displayed, the Eagles shall prepare and produce such material, at
the Eagles sole expense, in final form and shall provide such material to
NovaCare at least thirty (30) days prior to the first date on which such
material is to be broadcast, published, distributed or displayed. The form,
content and presentation of such material shall be subject to the approval of
NovaCare, the Use Restrictions and the Standards and Practices of the applicable
broadcasters, telecasters or publishers. Any commercial or government censor
and/or clearance requirements, and all matters and costs with respect to any
such material, shall be the sole responsibility, financial and otherwise, of the
Eagles, except to the extent expressly set forth in this Agreement.
12
D. Each party shall use its best efforts to notify the other, in writing,
of its approval or disapproval of a submitted item or materials (a "Proposal")
within ten (10) business days after its receipt of the Proposal. In the event
the receiving party has not notified the party making the Proposal of its
approval or disapproval of the Proposal within such 10-day period, the party
making the Proposal shall notify the receiving party in writing of that fact.
Upon receipt of such written notice, the receiving party shall have until the
end of the next business day either to approve or disapprove the Proposal. If
the receiving party has not responded by the end of the next business day, the
Proposal shall be deemed approved. After a Proposal has been approved, the party
making the Proposal shall not depart from the Proposal in any material respect
without the further review and prior approval of the receiving party.
E. Under no circumstances shall the Eagles approve "Lotteries," "games of
chance" or any other type of Promotion or NovaCare Marketing which the Eagles,
in their sole discretion, believes reflects unfavorably upon or disparages the
Eagles or their players, coaches or staff.
F. The rights granted to NovaCare under this Agreement shall not be
construed to include the right to manufacture, distribute, give away or sell any
product which incorporates any Licensed Xxxx or to use the Licensed Xxxx in
combination with the name, logo, trademark or other intellectual property of any
party other than NovaCare or any NovaCare subsidiary to which it is permitted to
assign its rights under this Agreement pursuant to Article XII.A(ii).
G. Each party's approval of any materials submitted to it is conditioned
upon the submitting party causing such materials to be in compliance with all
Laws and Use Restrictions, and any approval should not, therefore, imply a
representation that the approving party believes that such materials comply with
all Laws and Use Restrictions.
VII. Goodwill And Property Rights
----------------------------
A. NovaCare recognizes that (i) a portion of the value of the Licensed
Marks is attributable to goodwill, (ii) the goodwill attached to the Licensed
Marks belongs exclusively to the Eagles and/or an NFL Entity and (iii) such
Licensed Marks have secondary meanings in the minds of the public. NovaCare
shall not, during the Term or thereafter, challenge the property rights of the
Eagles or of any NFL Entity in and to the Licensed Marks, or challenge the
validity of the Licensed Marks and the Eagles' right to grant rights and
licenses relating to the Licensed Marks (other than grants that constitute a
breach of NovaCare's rights under this Agreement), including, without
limitation, the rights and licenses granted under this Agreement.
B. The Eagles recognize that (i) a portion of the value of the NovaCare
Marks is attributable to goodwill; (ii) the goodwill attached to the NovaCare
Marks belongs exclusively to NovaCare, and (iii) such NovaCare Marks have
secondary meanings in the minds of the public. The Eagles shall not, during the
Term or thereafter, challenge the property rights of NovaCare in and to the
NovaCare Marks or challenge the validity of the NovaCare Marks and NovaCare's
right to grant rights and licenses relating to the NovaCare Marks (other than
grants that constitute a breach of Eagles rights under this Agreement),
including, without limitation, the rights and licenses granted under this
Agreement.
13
C. Notwithstanding anything to the contrary contained in this Agreement,
the Eagles shall own and control all copyrights and trademarks including the
Licensed Marks and NovaCare shall own and control all copyrights and trademarks
including the NovaCare Marks. Nothing in this Agreement serves to assign, convey
or transfer any ownership right in any Licensed Xxxx to NovaCare, or any
NovaCare Marks to the Eagles. No copyright or trademark involving or making use
of a Licensed Xxxx xxx be procured or claimed by NovaCare without the prior
written permission of the Eagles, and any such copyright or trademark shall be
owned by and registered in the name of the Eagles or another entity designated
by the Eagles. No copyright or trademark involving or making use of a NovaCare
Xxxx xxx be procured or claimed by the Eagles without the prior written
permission of NovaCare, and any such copyright or trademark shall be owned by
and registered in the name of NovaCare or another entity designated by NovaCare.
NovaCare shall cause to appear on all materials used in the Promotions or
NovaCare Marketing or otherwise used or created in the exercise of the rights
granted to it under this Agreement appropriate copyright and/or trademark
notices in the name of the Eagles or an NFL Entity, as designated by the Eagles.
The Eagles shall cause to appear on all materials it uses or creates in the
exercise of its rights under this Agreement that use the NovaCare Marks an
appropriate copyright and/or trademark notice in the name of NovaCare.
VIII. Substitution for Unavailable Promotions: Changes in Technology
--------------------------------------------------------------
A. NovaCare and Eagles acknowledge and agree that given an expected Term
of approximately twenty-nine years, certain of the Promotions may become
unavailable (e.g., due to cancellation of a particular television show), or
impossible or impracticable to provide, or may impose an economic burden on the
Eagles materially greater than the burden it could reasonably have expected to
incur on the date hereof (each an "Unavailable Promotion"). Subject to Article
IX.B(ii), the Eagles shall satisfy its obligations under this Agreement with
respect to any Unavailable Promotion if it offers to provide, in lieu of such
Unavailable Promotion, a different promotion, advertisement or marketing right
having substantially the same promotional value as the Unavailable Promotion, as
determined by the agreement of the parties (or if they cannot agree by an
arbitrator in accordance with Article XXII).
B. Certain of the Promotions set forth on Exhibit A require NovaCare to
deliver materials in a particular medium or format (e.g., Beta SP tapes). The
parties agree that if any such medium or format is generally superseded by a new
medium or format in the applicable industry, NovaCare shall supply such material
in the generally accepted medium or format if requested by the Eagles.
IX. Termination
-----------
A. This Agreement may be terminated by either party upon notice to the
other if any of the following shall occur:
(i) The relocation by the Eagles of the playing site of the home
Games of the Eagles Team to a stadium outside the geographic area currently
comprising the Philadelphia Designated Marketing Area (as defined by Xxxxxxx
Co.).
14
(ii) If the other party shall apply for or consent to the appointment
of a receiver, judicial manager, trustee, or liquidator of all or a substantial
part of its assets, files a voluntary petition in bankruptcy, or admits in
writing its inability to pay its debts as they come due, makes a general
assignment for the benefit of creditors, files a petition or an answer seeking
reorganization or arrangement with creditors or to take advantage of any
insolvency law, or files an answer admitting the material allegations of a
petition filed against it in any bankruptcy, reorganization, or insolvency
proceeding, or if any order, judgment, or decree shall be entered by any court
of competent jurisdiction, on the application of a creditor, adjudicating it a
bankrupt or insolvent or approving a petition seeking reorganization of it or
appointing a receiver, trustee, or liquidator of such party or of all or a
substantial part of its assets, and any such order, judgment, or decree shall
continue unstayed and in effect for any period of sixty (60) consecutive days.
(iii) A final, non-appealable determination is made that the other
party has committed a material breach of this Agreement.
B. This Agreement may be terminated by NovaCare upon notice to the Eagles
if any of the following shall occur:
(i) Ground is not broken on the NovaCare Complex on or prior to July
31, 2001 or the NovaCare Complex does not officially open on or prior to July
31, 2004. These rights must be exercised by NovaCare by notice to the Eagles not
later than August 31, 2001 and August 31, 2004, respectively; if the right to
terminate because of the failure to break ground by July 31, 2001 is not
exercised by August 31, 2001, it may not be exercised in that Contract Year and
the right to terminate for the failure of the NovaCare Complex to be officially
opened shall be postponed until July 31, 2005 (and must be exercised by August
31, 2005). If, however, ground is not broken by July 31 in any Contract Year
subsequent to the 2001 Contract Year, NovaCare shall have the right to terminate
this Agreement by notice to the Eagles given by August 31 of that Contract Year;
if such termination right is not exercised by that August 31 such termination
right shall again lapse as to that Contract Year and the right to terminate for
the failure of the NovaCare Complex to be completed (and the date by which
notice of exercise of that termination right is due) shall each be postponed for
one additional year. The Eagles acknowledge that if NovaCare exercises its
termination right pursuant to this Article IX.B(i) NovaCare will have suffered
damages, the amount of which cannot be measured with precision. Accordingly,
upon exercise of the termination right by NovaCare with respect to the failure
to break ground, the Eagles shall pay NovaCare, as liquidated damages and not as
a penalty, the amount of Four Hundred Thousand Dollars ($400,000) not later than
the sixtieth (60th) day after notice of termination is given. Such liquidated
damages amount shall be NovaCare's sole and exclusive remedy for the failure of
the NovaCare Complex to be constructed, the loss of any related opportunities,
Promotions or NovaCare Marketing, and the termination of this Agreement, but
shall not limit the recourse of NovaCare for any other breaches of this
Agreement unrelated to such failure, loss or termination.
(ii) Notwithstanding anything to the contrary in Articles VIII.A and
XXI, if following the official opening of the NovaCare Complex there shall be a
final, non-appealable
15
determination that all or substantially all of the naming rights granted to
NovaCare under Article III.B are unavailable to NovaCare, except that if the
unavailability is the result of any act or omission of NovaCare the effective
date of the termination shall not be until eighteen months after the notice is
given.
C. This Agreement may be terminated by the Eagles upon notice to NovaCare
if any of the following shall occur:
(i) NovaCare fails to make any installment payment of the cash
sponsorship fee within five business days after receiving a notice from the
Eagles that such amount is past due.
(ii) Ground is not broken on the NovaCare Complex on or prior to July
31, 2003. This right must be exercised by the Eagles by notice to NovaCare not
later than August 31, 2003; if the termination option is not exercised by August
31, 2003, it may not be exercised in that Contract Year. If, however, ground is
not broken by July 31 in any subsequent Contract Year, the Eagles will have the
right to terminate this Agreement by notice to NovaCare given by August 31 of
that Contract Year, when the right shall again lapse as to that Contract Year.
The Eagles acknowledges that if it exercises its termination right pursuant to
this Article IX.C(ii), NovaCare will have suffered damages, the amount of which
cannot be measured with precision. Accordingly, upon exercise of this
termination right by the Eagles with respect to the failure to break ground, the
Eagles shall pay NovaCare, as liquidated damages and not as a penalty, the
amount of Four Hundred Thousand Dollars ($400,000) not later than the sixtieth
(60th) day after notice of termination is given. Such liquidated damages shall
be NovaCare's sole and exclusive remedy for the failure of the NovaCare Complex
to be constructed, the loss of any related opportunities, Promotions or NovaCare
Marketing, and the termination of this Agreement, but shall not limit the
recourse of NovaCare for any other breaches of this Agreement unrelated to such
failure, loss or termination.
D. Upon termination of this Agreement in accordance with this Article IX:
(i) NovaCare shall promptly cease all new uses of the Licensed Marks
and the title name of the NovaCare Complex, shall cause all prior uses of the
Licensed Marks and title name to cease during the succeeding 180 days and, not
later than thirty days after the giving of termination notice, shall pay the
Eagles all consideration due and payable (whether in cash or in kind) through
the date of termination, together, if the termination occurs (x) prior to the
official opening of the NovaCare Complex and during the NFL Season, with a pro
rata amount (based on the number of Games played versus the total number of
Games scheduled) of any additional consideration that would have been due in
that Contract Year or (y) after the official opening of the NovaCare Complex
with a pro rata amount (based on the number of days elapsed in the Contract
Year) of any additional consideration that would have been due in that Contract
Year.
(ii) The Eagles shall promptly cease all new uses of the NovaCare
Marks and the Name, and shall cause all prior uses of the NovaCare Marks and the
Name, other than on
16
permanent signage, to cease during the succeeding period of 180 days. The Eagles
shall use reasonable commercial efforts to remove any permanent signage using
the NovaCare Marks or the Name during such 180 day period, subject to extension
for any delay caused by the failure to obtain any required governmental or third
party approval notwithstanding its reasonable efforts to obtain such approval.
NovaCare shall pay all expenses of removal (including the costs associated with
obtaining any such approval) if the reason for the termination is an event under
Article IX.A(ii) or (iii) with respect to it or an event under Article IX.C(i).
X. Indemnification Against Claims of Third Parties
-----------------------------------------------
A. The Eagles shall indemnify NovaCare and hold NovaCare harmless from
and against any and all losses, costs, expenses, damages and liabilities
including, without limitation, reasonable attorneys' fees and other expenses of
defense (collectively "Liabilities and Expenses") incurred in connection with or
arising from any claim, suit, demand, litigation, arbitration, governmental
inquiry or other proceeding (a "Proceeding") commenced by any third party based
upon (i) the Eagles' misrepresentation in or breach of this Agreement, or (ii)
any claim that the Licensed Marks or the grant of rights to NovaCare under this
Agreement infringe the rights of any third party, or (iii) any claim relating to
or arising from the Eagles' operation of the NovaCare Complex, excepting only
those claims arising from or relating to the operation of clinic to be
constructed by NovaCare at the site of the NovaCare Complex or NovaCare's
negligence or willful misconduct.
B. NovaCare shall indemnify the Eagles and hold the Eagles harmless from
and against any and all Liabilities and Expenses arising from any Proceeding
commenced by any third party alleging or arising from (i) NovaCare's
misrepresentation in or breach of this Agreement, (ii) any claim that the
NovaCare Marks or the grant of rights to the Eagles under this Agreement
infringe the rights of any third party, (iii) any claim relating to the
advertising or promotion of NovaCare's products or services or any harm or
damage to any person or property as a result of any act or omission of NovaCare
or persons associated with it in the care or treatment of any person, including,
without limitation, any malpractice claim (the claims described in this clause
(iii) being collectively referred to as the "Treatment Claims"), or (iv) any
claim relating to or arising from NovaCare's operation of the clinic it may
construct at the site of the NovaCare Complex, excepting only those claims
arising from or relating to the Eagles operation of the remainder of the
NovaCare Complex or the Eagles' negligence or willful misconduct.
C. With respect to each separate matter brought by any third person
against which a party (referred to as the "Indemnitee") is indemnified by the
other party (referred to as the "Indemnitor") under this Article, the Indemnitor
shall be responsible, at its sole cost and expense, for controlling, litigating,
defending and/or otherwise attempting to resolve any Proceeding underlying such
matter, except that (i) the Indemnitee may, at its option, participate in such
defense or resolution at its expense and through counsel of its choice; (ii) if
the Indemnitor does not promptly and diligently pursue such defense or
resolution, the Indemnitee may, at its option, assume control of such defense or
resolution provided that the Indemnitor
17
shall continue to be obligated to indemnify the Indemnitee under this Agreement;
(iii) the Eagles and/or an NFL Entity shall control any and all Proceedings in
which the Licensed Marks (but no NovaCare Marks) are involved; (iv) NovaCare
shall control any and all Proceedings in which the NovaCare Marks (but no
Licensed Marks) are involved; (v) the parties shall cooperate in the defense of
any Proceeding involving both the Licensed Marks and the NovaCare Marks based on
the principle that, to the extent practicable and not disadvantageous to the
other party, NovaCare shall control all decisions relating to the NovaCare Marks
and the Eagles and/or an NFL Entity shall control all decisions relating to the
Licensed Marks, and that either party may seek to have claims relating to its
marks be severed, and (vi) neither Indemnitor nor Indemnitee shall agree to any
settlement without the Indemnitee's prior written consent (which shall not be
unreasonably withheld or delayed). In any event, Indemnitor and Indemnitee shall
in good faith cooperate with each other and their respective counsel with
respect to all such Proceedings.
D. With respect to each and every matter with respect to which any
indemnification may be sought hereunder ("Indemnified Matter"), upon the
Indemnitee's receipt of written notice pertaining to such Indemnified Matter,
Indemnitee shall promptly give reasonably detailed written notice to the
Indemnitor of the nature of such Indemnified Matter and the amount demanded or
claimed in connection therewith but the failure to give such notice shall not
affect its right to indemnification under this Agreement except to the extent
the ability of the Indemnitor to defend the action is adversely affected.
XI. Entire Agreement: Amendment
---------------------------
This Agreement constitutes the entire agreement between NovaCare and the
Eagles with respect to the subject matter hereof and supersedes all prior
agreements and understandings relating to the subject matter hereof. The
Agreement may be amended or supplemented only by a writing signed by NovaCare
and Eagles.
XII. Governing Law: NFL Requirements
-------------------------------
This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania applicable to agreements made and to be
performed entirely in Pennsylvania. The parties' rights and obligations under
this Agreement shall in each case be subject to all NFL Rules.
XIII. Assignment: Name Changes
------------------------
A. Neither party may assign its rights, or delegate its duties under this
Agreement without the prior written consent of the other, which consent shall
not be unreasonably withheld, except that each party may assign all of its
rights and delegate all of its duties under this Agreement to an assignee of all
or substantially all of its assets (or to any legal successor by merger,
consolidation or otherwise) without the other's consent; each party may withhold
its consent to any partial assignment or partial delegation in its sole
discretion but otherwise may not unreasonably withhold its consent. No
assignment or delegation shall be permissible unless the assignee or delegate
assumes in writing the obligations of the assigning or delegating party
18
under this Agreement and, in the case of NovaCare, provides evidence reasonably
satisfactory to the Eagles of the assignee's ability to pay the required cash
sponsorship fees and furnish the Required Products and Services hereunder and,
in the case of the Eagles, provides evidence reasonably satisfactory to NovaCare
of its legal authority to assume and perform the Eagles' obligations under this
Agreement. Notwithstanding the foregoing, (i) the Eagles shall have the right to
assign to a commercial or institutional lender or other third party, or to an
affiliate or subsidiary of the Eagles organized to facilitate development of the
NovaCare Complex, all or any portion of its right to the cash sponsorship fees
under this Agreement, provided the assignee's right to receive such payments is
subject to any defenses NovaCare may have under this Agreement with respect to
its obligations to pay, the Eagles remains liable for its obligations under this
Agreement and the assignee acknowledges in writing NovaCare's rights under this
Agreement, and (ii) NovaCare shall have the right to assign one or more of the
Promotions to any direct or indirect subsidiary that does business under the
"NovaCare" name (or the NovaCare name in conjunction with a generic term
relating to the Category, such as NovaCare Nutrition) and that only engages in
the sale of products or services in the Category and other business activities
not material to its operations, provided that NovaCare owns both legally and
beneficially at least 80% of all outstanding shares of each class of capital
stock of such subsidiary, the remaining 20% of such class has been registered
under Section 12(g) of the Securities Exchange Act of 1934, as amended, and is
widely held, and the assignee acknowledges in writing that the right or rights
assigned to it are subject to the terms of this Agreement. Any assignment or
delegation not in compliance with this Article XIII. A shall be void.
B. If NovaCare assigns this Agreement to an assignee of all or
substantially all of its assets (or to any legal successor by merger,
consolidation or otherwise) in accordance with Article XIII.A or if NovaCare
changes its name or makes a generally applicable change in the NovaCare Marks,
NovaCare shall be entitled to rename the NovaCare Complex, cause the signage or
other recognition indicia at the NovaCare Complex to be changed and use the new
name in any Promotion using the Licensed Marks or the Name. If NovaCare
exercises its rights under the preceding sentence it shall consult with the
Eagles and obtain the Eagles' approval of any new name, which the Eagles shall
not unreasonably withhold. If NovaCare requests that any signage at the NovaCare
Complex or other recognition indica be changed, either as the result of a
renaming or a change in the NovaCare Marks, it shall pay all costs incurred by
the Eagles or its affiliates in effectuating the signage and/or other
recognition changes, all of which shall comply with the Use Restrictions and be
approved by the Eagles (such approval not to be unreasonably withheld), and
shall pay all other reasonable out of pocket costs incurred by the Eagles in
connection with the name change.
XIV. No Waiver
---------
No failure of any party to give notice of or to seek a remedy for any
violation of this Agreement or to insist on strict performance hereunder shall
reduce, impair or affect such party's right to later seek such remedy or insist
on such performance with respect to the same or any other violation or failure,
regardless of such party's knowledge or lack of knowledge thereof.
19
XV. Relationship of the Parties
---------------------------
The relationship of NovaCare and the Eagles hereunder shall be solely that
of independent contractors and nothing herein shall be construed to create or
imply any relationship of employment, agency, joint venture, partnership or any
relationship other than that of independent contractors. NovaCare and the Eagles
acknowledge and agree that each of them is engaged in a separate and independent
business and neither shall state, represent or imply any interest in or control
over the business of the other.
XVI. Notices
-------
All notices and other communications provided for hereunder shall be in
writing and shall be deemed effective only if and when delivered by hand, mailed
by prepaid certified or registered United States mail (return receipt requested)
or delivered by overnight courier service, addressed as follows:
If to NovaCare: If to Eagles:
-------------- ------------
NovaCare, Inc. Philadelphia Eagles Limited Partnership
0000 Xxxx Xxxxx Xxxxxx 0000 Xxxxx Xxxxx Xxxxxx
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Att: Xxxxxxx X. Xxxxxx Att: Xxx Xxxxxxxxx
Chief Executive Officer
with a copy to the same address to the
with a copy to the same address to the attention of Xxx Xxxxxx
attention of the General Counsel.
or such other address as is given by notice.
XVII. Confidentiality
---------------
A. The parties may publicly disclose the existence of this Agreement but
shall not disclose to any Person its financial terms, except as expressly
permitted below.
B. The parties shall consult with and cooperate with one another on the
content and timing of all announcements relating to this Agreement.
C. Anything in this Article XXV to the contrary notwithstanding, (i) the
parties may disclose the financial terms of this Agreement (x) which have been
publicly disclosed (other than by a party in breach of its obligations under
this Article XVII), (y) to the extent that a party is or may become legally
compelled to disclose such information, and (z) to their respective owners,
officers, directors, attorneys, accountants and advisors, subject to equivalent
confidentiality requirements if it advises such persons of the confidentiality
requirements of this Agreement, and (ii) the Eagles may disclose such
information to any NFL Entity, the NFL Players' Association, any auditors
operating pursuant to the Collective Bargaining Agreement with the NFL Players'
20
Association, the Eagles' lenders and any parties involved in the planning,
development, financing or construction of the NovaCare Complex.
XVIII. Eagles Players: Endorsements
----------------------------
This Agreement does not grant to NovaCare any rights with respect to the
use of the names or likenesses of Eagles players or coaches. NovaCare further
acknowledges that it shall not use the name or likeness of any player, coach or
staff person, as to constitute an endorsement of NovaCare or any of its products
or services unless NovaCare shall have first obtained the express written
consent of such player, coach or staff person.
XIX. Representations and Warranties
------------------------------
Each party hereto represents and warrants to the other that:
a) the execution, delivery and performance of this Agreement
has been duly and validly authorized by all necessary
corporate or partnership action;
b) this Agreement constitutes the legally valid and binding
obligation of such party; and
c) the execution, delivery and performance of this Agreement
will not violate or constitute a breach or default under any
other agreement by which it is bound.
XX. No Third-Party Beneficiaries
----------------------------
Nothing in this Agreement is intended or shall be construed to give any
other Person any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained in this Agreement.
XXI. Invalidity
----------
If any provision of this Agreement or the application thereof to any
Person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement, or the application of such provision to Persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each provision of this Agreement shall be
valid and be enforceable to the fullest extent permitted by law. To the extent
that any determination of invalidity or unenforceability results in (i) NovaCare
not having one or more of the Promotions, the Eagles shall, if NovaCare has not
exercised any rights it may have under Article IX.B(ii), offer a different
promotion, advertisement or marketing right having substantially the same
promotional value as the Promotion not available to NovaCare, as determined by
the agreement of the parties (or if they cannot agree, by an arbitrator in
accordance with Article XXII), or (ii) the Eagles not receiving any Required
Products and Services, NovaCare shall offer different medical, training or
rehabilitation products, services or
21
equipment required by the Eagles having substantially the same value as the
Required Products and Services not received, or an increase in the cash
sponsorship fee equal to the retail value of Required Products and Services not
received, in each case as determined by the agreement of the parties (or if they
cannot agree by an arbitration in accordance with Article XXII).
XXII. Arbitration: Competent Courts
------------------------------
A. Except as otherwise expressly provided below, any and all disputes,
controversies, claims and differences between the parties arising out of or
relating to this Agreement, or any breach thereof, which cannot be settled
through correspondence and mutual consultation of the parties, shall be finally
settled by arbitration in accordance with the Rules of the American Arbitration
Association ("AAA"). The parties shall select a single arbitrator, or if they
cannot agree on an arbitrator, the AAA shall select such single arbitrator. If
either party does not participate in the selection of the arbitrator within ten
(10) days after service of the notice of demand for arbitration, then the AAA
shall select such arbitrator. Arbitration proceedings shall be held in
Philadelphia, Pennsylvania unless otherwise agreed to by the parties in writing.
The decision of the arbitrator shall be rendered within ninety (90) days of the
date on which arbitration proceedings are initiated, shall be final and binding
upon the parties hereto, shall not be subject to appeal and shall deal with the
questions of costs of the arbitration and all matters related thereto. The
arbitrator shall not be entitled to award punitive damages. Judgment upon the
award or decision rendered by the arbitrator may be entered in any court having
jurisdiction thereof (it being agreed by the parties that the Courts of Common
Pleas of Philadelphia, Pennsylvania have jurisdiction over them and the subject
matter hereof), or application may be made to such court for a judicial
recognition of the arbitration award or an order of enforcement thereof, as the
case may be. This agreement to arbitrate shall be specifically enforceable by
the parties, and they acknowledge and agree that, except as provided in the last
sentence of this Article XXII, they intend that all disputes, controversies or
claims of any kind, including disputes over whether and how to arbitrate, shall
be arbitrated. Notwithstanding this Article XXII, both parties acknowledge and
agree that equitable relief may be sought in any court of competent jurisdiction
in connection with the provisions of Articles XIII and XXIII.
B. To the extent provided in Article XXII.A, each party irrevocably
consents to the exclusive jurisdiction of the Courts of Common Pleas of the
Commonwealth of Pennsylvania located in Philadelphia or the United States
District Court for the Eastern District of Pennsylvania in any and all actions
and proceedings arising hereunder and irrevocably agrees to service of process
by registered or certified mail, return receipt requested, to such party's
address set forth herein.
XXIII. Equitable Relief
----------------
The parties acknowledge that the rights granted under this Agreement by
the Eagles with respect to the Licensed Marks and by NovaCare with respect to
the NovaCare Marks, and the naming rights exclusively granted to NovaCare under
Article III.B, possess a special, unique and extraordinary character that makes
difficult the assessment of monetary damages that would be
22
sustained by the Eagles as a result of any unauthorized use of any Licensed Xxxx
or NovaCare as a result of any unauthorized use of the NovaCare Marks or
infringement of its exclusive naming rights under Article III.B. Accordingly, in
the event of any unauthorized use of any Licensed Xxxx by NovaCare (or a party
authorized or licensed by NovaCare), or any unauthorized use of any NovaCare
Xxxx by the Eagles (or a party authorized or licensed by the Eagles), or any
infringement of NovaCare's exclusive naming rights under Article III.B the party
so harmed shall, in addition to such other contractual, legal and equitable
rights and remedies as may be available to it, have, during the Term and after
the termination or expiration of this Agreement, the right to take such
reasonable steps as are necessary to prevent any further unauthorized use or
infringement of any such Licensed Xxxx, NovaCare Xxxx or naming rights, as the
case may be, without being required to prove actual damages or furnish a bond or
other security, including petitioning a court of competent jurisdiction for a
temporary restraining order, a preliminary or permanent injunction and/or a
decree for specific performance.
XXIV. Force Majeure
-------------
If any party is unable to perform any of its obligations under this
Agreement due to an act of God, war, riot, civil commotion, labor dispute, fire,
act of public enemy, enactment of a government act, regulation or rule or any
other event which is generally regarded as force majeure (but specifically
excluding any lack of funds or credit), such inability to perform shall not make
such party liable to the other during the period in which the force majeure is
in effect (and for a reasonable period thereafter if the force majeure has
resulted in any harm that requires cure, provided the effected party is pursing
such cure in a commercially reasonable manner); provided, however, that if any
force majeure (including any casualty described in Article XXVI) causes there to
be (i) an Unavailable Promotion and the Eagles are unable to provide NovaCare
with a promotion, advertising or other right having substantially the same
promotional value as the Unavailable Promotion, the parties shall negotiate in
good faith a reduction in the consideration due from NovaCare during the
pendency of the force majeure that reflects the relative value of the
Unavailable Promotion to the value of all of NovaCare's rights under this
Agreement (which shall not be construed to have a value in excess of the amount
payable to the Eagles in the applicable Contract Year), or (ii) any Required
Products and Services to be unavailable to the Eagles and NovaCare is unable to
provide the Eagles with other medical, training or rehabilitation products,
services or equipment having substantially the same value as the unavailable
Required Products and Services, the parties shall negotiate in good faith an
increase in the cash sponsorship due to the Eagles during the pendency of the
force majeure that reflects the retail value of the unavailable Required
Products and Services. The preceding sentence shall not, however, limit the
parties' right to terminate in accordance with Article IX.B(i) or IX.C(ii) for
the failure to break ground by July 31, 2001 or July 31, 2003, as the case may
be.
XXV. Insurance
---------
The Eagles shall be obligated to maintain insurance reasonable in scope
and amount to cover personal injury and property damage arising from use,
construction or operation of the
23
NovaCare Complex and claims of the type described in Article X.A(iii). NovaCare
shall be obligated to maintain insurance reasonable in scope and amount to cover
personal injury and property damage arising from use, construction or operation
of a clinic at the site of the NovaCare Complex and claims of the type described
in Article X.B(iv), and to hold the Eagles harmless from any Treatment Claims.
Each party shall cause all such policies of insurance to include the other party
as an additional named insured and to cover claims arising from acts, omissions
or occurrences during the Term even if such claims are made after the end of the
Term, and shall furnish the other certificates of insurance evidencing that such
insurance is in effect if requested by the other (such requests to be made no
more often than twice per Contract Year and not to be made until construction of
the NovaCare Complex begins except with respect to coverage for the Treatment
Claims, which shall be implemented promptly after the date hereof). Neither
party shall cancel any insurance policy it is obligated to have in effect under
this Article XXV without giving the other at least thirty days prior notice.
XXVI. Casualty
--------
If the NovaCare Complex is destroyed or otherwise rendered unusable for
any reason, the Eagles shall give NovaCare a notice within one year after the
casualty event stating whether it will rebuild or restore the NovaCare Complex.
If the notice states that the Eagles will not rebuild or restore the NovaCare
Complex, NovaCare shall have the right to terminate this Agreement by notice to
the Eagles given within the succeeding thirty (30) days. If the notice states
that the Eagles will rebuild or restore the NovaCare Complex, NovaCare shall not
have the right to terminate this Agreement as the result of the casualty unless
the rebuilt or restored NovaCare Complex does not officially open on or prior to
the third anniversary of the rebuild notice from the Eagles.
XXVII. Annual Review
-------------
Beginning in 1998, NovaCare shall have the right to request a meeting
with the Eagles at least once per Contract Year to request replacements of
comparable value of any Promotions set forth on Exhibit A that it no longer
wishes to have. The Eagles shall, however, have no obligation to make any
replacements requested by NovaCare.
XXVIII. Interpretation
--------------
A. All references to "Articles", "Schedules" or "Exhibits" shall be
references to the Articles, Schedules and Exhibits of or to this Agreement.
B. Terms for which meanings are defined in this Agreement shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine and
feminine forms. The term "including", whenever used in any provision of this
Agreement, means including but without limiting the generality of any
description preceding or succeeding such term. Each reference to a person or
entity shall include a reference to the successors and assigns of such person or
entity.
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C. This Agreement shall be interpreted neutrally and without regard to
the party that drafted it and, in particular, no rule of construction shall be
applied as against any party that would result in the resolution of an ambiguity
contained herein against the drafting party.
D. The headings of the Articles of this Agreement are inserted for
convenience of reference only and shall be ignored in the construction or
interpretation of this Agreement.
E. The parties agree that any provision herein resulting in the
Training Staff's disemployment with the NFL is null and void and the parties
shall in good faith negotiate an alternative arrangement consistent with the
overall intent of this Agreement.
XXIX. Counterparts
------------
This agreement may be executed in one or more counterparts, which
together shall constitute one and the same instrument and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to each of the other parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
NOVACARE, INC. PHILADELPHIA EAGLES LIMITED
PARTNERSHIP
By: Philadelphia Eagles, Inc.
By: /s/ Xxxxxxx X. Xxxxxx its general partner
------------------------------
Name:_____________________ By: /s/ Xxx Xxxxxx
Title:____________________ ---------------------------
Xxx Xxxxxx
Executive Vice President
25
CONSENT AND ASSUMPTION
----------------------
November 19, 1999
-----------------
The parties to this Consent and Assumption are NovaCare, Inc., a
Delaware corporation, with an office located at 0000 Xxxx Xxxxx Xxxxxx, Xxxx xx
Xxxxxxx, Xxxxxxxxxxxx 00000 ("NovaCare"), the Philadelphia Eagles Limited
Partnership, a Delaware limited partnership with an office located at 0000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000 ("Eagles") and Select
Medical Corporation, a Delaware corporation with an office at 0000 Xxx
Xxxxxxxxxx Xxxx, Xxxxxxxxxxxxx, XX 00000.
RECITALS
--------
A. NovaCare and Eagles are parties to a Naming, Promotional and Sponsorship
Agreement dated October 1, 1997, as amended (the "Agreement").
B. Select Medical has agreed to purchase the stock of the subsidiaries of
NovaCare engaged primarily in the outpatient physical therapy and
occupational health rehabilitation services business (the "Transaction").
C. In connection with the Transaction, NovaCare wishes to assign all of its
rights and delegate all of its duties under the Agreement to Select Medical
(the "Assignment") and has requested that Eagles consent to such assignment
and delegation.
D. Eagles has agreed to give such consent, subject to the terms of this
Consent and Assumption.
Accordingly, the parties have agreed as follows:
1. Novacare and Select Medical represent and warrant to Eagles that they
have consummated the Transaction contemporaneously with their
execution of this Consent and Assumption.
2. For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Select Medical hereby assumes and
agrees to pay, perform and discharge all of Seller's liabilities and
obligations under the Agreement, whether matured or unmatured, fixed
or contingent ("Liabilities"), and arising on or after the date of
this Consent and Assumption. NovaCare hereby agrees that it shall
remain liable for and shall pay, perform and discharge all Liabilities
that arose prior to the date of this Consent and Assumption.
3. Select Medical will, at any time and from time to time upon the
request of Eagles, execute and deliver or cause to be executed and
delivered such other instruments
of assumption and take such other actions as may be reasonably
requested by Eagles with respect to the assumption by Select Medical
of NovaCare's liabilities and obligations under the Agreement.
4. At Eagles' request, Select Medical shall provide Eagles evidence
reasonably satisfactory to Eagles of Select Medical's ability to pay
the required cash sponsorship fees and furnish the Required Products
and Services (as defined in the Agreement) under the Agreement.
5. Subject to paragraphs 1-4, Eagles hereby consents to the Assignment.
NOVA CARE, INC.
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------
Xxxxxxx Xxxxxxxx
SELECT MEDICAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
Vice President
PHILADELPHIA EAGLES LIMITED PARTNERSHIP
By: Philadelphia Eagles, Inc.
By: /s/ Xxx Xxxxxx
----------------------------
Xxx Xxxxxx
Executive Vice President
