EXHIBIT 10.27
[SPORTS MARKETING ENTERPRISES LOGO]
EPP CONTRACT
February 25, 1998
Contract No. 8045-00-00
SME's Client: X. X. Xxxxxxxx Tobacco Company
Xx. Xxxx Xxx
Brainerd International Raceway
00000 Xxxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxxx, XX 00000
Dear Xx. Xxx:
When signed by you, this letter will constitute the Agreement between
Brainerd International Raceway (hereinafter referred to as Track or Event
Site) and Sports Marketing Enterprises, including its client, X. X.
Xxxxxxxx Tobacco Company (both hereinafter referred to as SME), concerning
advertising displays and promotional considerations at Brainerd
International Raceway. In consideration of the mutual promises contained
herein, the parties agree as follows:
1. RIGHTS GRANTED TO SME
During the term of this Agreement, Track grants to SME the following
rights:
a. SIGNAGE AND ADVERTISING
1. SME shall have the right to use, erect or cause to be erected
signage at the Event Site as described in and conforming to all
of the specifications in Exhibit A attached hereto and
incorporated herein by reference, including the right to
display advertising copy on said signage during the entire term
hereof. Unless otherwise provided herein, all signage shall be
the property of Track.
2. SME shall have the right to select the location of the above-
referenced signage to the extent the location is not set forth
herein, and SME shall also have the right of first refusal with
respect to all signage locations offered to advertisers other
than SME. In any group of adjacent or contiguous signs,
signage of third parties shall be no larger in surface area
than the adjacent or contiguous SME signage.
P.O. BOX 484 WINSTON NC 27102-0484 (000) 000-0000 FAX (000) 000-0000
3. SME shall have the right to display advertising on said signage
at all times during all events at the Event Site, and public
view of such advertising shall not be obstructed or diminished,
in whole or in part, at any time or in any manner whatsoever.
4. SME shall have the right to modify or require modification of
advertising on any and all signage or displays covered by this
Agreement at any time.
b. PROMOTIONAL ACTIVITIES
1. SME shall have the right to prominent display space for
temporary point-of-sale materials, exhibits/tents/pavilions,
banners and inflatables to be produced or supplied by SME, the
dimensions, configurations and specifications of which shall be
within the sole discretion of SME.
2. SME shall have the right to distribute sample cigarettes,
coupons and other promotional materials and to engage in other
promotional activities at the Event Site.
3. SME shall have the right to purchase at standard rates prime
space or position for advertising in the official souvenir
magazines or programs and other publicly distributed materials
or literature for SME events (as hereinafter defined).
2. COVENANTS OF TRACK
During the term of this Agreement, Track covenants and agrees as
follows:
a. Track shall not permit any cigarette or tobacco product other than
those manufactured or sold by X. X. Xxxxxxxx Tobacco Company, or
products bearing the trademark, brand name or logo of any such
cigarette or tobacco product to be (1) advertised or promoted upon
any medium at the Event Site including without limitation, any
scoreboard, advertising panel, message board, audio system,
publication or concession stand, or (2) distributed by sale
(direct or mail order), gift, sampling, promotion, sweepstakes,
premiums, or any other form of distribution activity. No
advertising or other display, message, or activity shall be
permitted within the Event Site by any means, including without
limitation, any scoreboard, advertising panel, message board,
audio system, presentation, demonstration, leaflet, publication,
or concession stand, that is in conflict with or opposed to the
use or sale of cigarettes or tobacco products.
b. Track shall not enter into any form of promotional, advertising,
or sponsorship agreement with any manufacturer of cigarettes or
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tobacco products other than X. X. Xxxxxxxx Tobacco Company, or
merchandise related to any cigarette or tobacco product other than
those manufactured or sold by X. X. Xxxxxxxx Tobacco Company.
c. No cigarettes other than those sold or manufactured by X. X.
Xxxxxxxx Tobacco Company shall be sold or distributed at
concession stands controlled by or under agreement with Track at
any event at the Event Site that is sponsored by SME or that is
part of a series or point fund arrangement sponsored by SME ("SME
Events"). During non-SME events, cigarettes sold or manufactured
by X. X. Xxxxxxxx Tobacco Company shall represent no less than 50%
of the cigarettes offered for sale at such concession stands.
3. PROMOTIONAL SUPPORT PROVIDED BY TRACK
During the term of this Agreement, Track shall provide the following
promotional support to SME in connection with all SME Events:
a. Track will make prominent mention of the official event
name/series logo in all press releases.
b. At the request of SME, Track will require all concessionaires and
traffic, maintenance and parking personnel under its control to
wear vests and hats provided by SME displaying X. X. Xxxxxxxx
Tobacco Company trademarks.
c. At the request of SME, Track shall use its best efforts to ensure
that concessionaires under its control sell promotional items of
SME's licensee containing or displaying X. X. Xxxxxxxx Tobacco
Company trademarks.
d. SME shall have the exclusive right to use and occupy the SME
designated VIP Suites (A&B) for all events at the Event Site.
Track will provide and maintain refrigeration unit, icemaker and
telephone for each designated VIP Suite. Upon SME's request.
Track will provide SME with adequate credentials for entry into
the Event Site and the above-referenced suites.
4. OTHER SERVICES AND OBLIGATIONS OF TRACK
During the term of this Agreement, Track agrees to do or provide the
following:
a. Track will be responsible for the repair and maintenance of the
supporting structures and electrical system for all signage and
advertising displays provided for under this Agreement.
b. Track shall indemnify, defend and hold harmless X.X. Xxxxxxxx
Tobacco Company, its parent, affiliates, and their officers,
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directors, agents and employees, from and against any and all
claims, demands, actions or causes of action for personal injury,
bodily injury (including death), and/or property damage and loss,
cost and expense related thereto, including reasonable attorney
fees, arising from the performance of this Agreement or otherwise
resulting from the work, services, equipment or materials
furnished to or on behalf of SME hereunder, or arising in
connection with any event at the Event Site.
c. Track, its affiliated companies and subsidiaries agree to secure
and maintain during the period of this Agreement the following
insurance coverages:
Workers Compensation (Statutory Limits) and Employer's Liability -
Limits of Employer's Liability of $500,000 per occurrence. Track
will ensure that any subcontractors providing services or
obligations required under this agreement will secure and maintain
like coverage.
Comprehensive General Liability (including Contractual Liability
and Spectator Liability specifically naming the above
indemnification) and Products Completed Operations Liability with
a combined single limit of not less than:
Bodily Injury and
Property Damage $1,000,000 per occurrence
Certificates and/or certified copies of policies of such insurance
shall be filed with SME within ten (10) days of the signing of
this Agreement and such insurance shall be subject to SME approval
as to adequacy of protection within the requirement of this
specification.
Such certificates shall show X.X. Xxxxxxxx Tobacco Company as an
"Additional Insured."
Such certificates shall provide that the coverage shall not be
canceled or materially changed to reduce or restrict the coverage
afforded thereon without at least (30) days PRIOR WRITTEN NOTICE
to SME. Required certificates of insurance shall be sent to:
Sports Marketing Enterprises
P.O. Box 484
Winston-Salem, NC 27102-0484
Attention: Xxxx Xxxxxx
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5. COMPENSATION:
For the advertising and other promotional rights granted by Track and
the services to be provided by Track under this Agreement, SME will
pay a total of $40,000.00 per year for each year in which this
Agreement is in effect. Payment of the foregoing amount shall be made
on or before the 15th of July of each Agreement year.
6. GOVERNMENTAL/JUDICIAL INTERFERENCE
In the event of federal, state or local legislative, judicial,
administrative or other governmental action that prohibits, impairs,
inhibits or declares unlawful the advertising and/or promotion of
cigarettes or the sponsorship of sporting, entertainment or other
events by cigarette manufacturers or brands, or that restricts the
activities contemplated hereunder, or that in any way affects or
frustrates advertising or promotional activity under this Agreement,
then, in any such event, SME may terminate this Agreement effective
upon the earlier of (i) 30 days following the delivery of written
notification by SME of such termination or (ii) the effective date of
such legislative, judicial or administrative action. Neither party
shall have liability to the other on account of termination pursuant
to this paragraph. The parties acknowledge that the current FDA
Regulations Restricting the Sale and Distribution of Cigarettes and
Smokeless Tobacco Products to Protect Children and Adolescents (21 CFR
Parts 801, 803, 804, 807, 830, and 897) are such an event of
governmental action under this Paragraph if such Regulations or any of
them affecting the activities under this Agreement are upheld, through
appeal if taken, by a court of competent jurisdiction or are otherwise
allowed to take effect.
7. FORCE MAJEURE
Neither party shall be liable to bear any responsibility for failure
or inability to perform its obligations hereunder due to any
contingency of cause beyond its reasonable control, including, but not
limited to, fires, floods, wars, orders or injunctions, accidents,
labor disputes or shortages, inability to obtain materials, equipment
or transportation, or any similar cause beyond the reasonable control
of such party. In the event either party cannot perform its
obligations under this Agreement because of such contingency or cause,
the duties and obligations of the parties shall be suspended for a
period of time that is reasonable under the circumstances; provided,
however, that if either party shall fail for a period of sixty (60)
days to perform its obligations hereunder as a result of any such
contingency or cause, then either party may, at its option, terminate
this Agreement upon ten (10) days prior written notice, and thereafter
both parties shall be released from all obligations hereunder.
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8. CHANGED CIRCUMSTANCES
In the event Track or Event Site no longer conducts SME Events at the
Event Site in any Contract year, SME will have the option to cancel
this Agreement by written notice to Track without further payment or
penalty.
In the event the number of SME Events conducted at Track or Event Site
is reduced (but not completely eliminated) for any reason during any
Contract year, SME and Track shall renegotiate the annual compensation
payable to Track by SME. If after renegotiating SME and Track are
unable to agree upon an annual compensation acceptable to both
parties, SME shall have the right to terminate this Agreement without
further payment or penalty.
This Agreement will automatically terminate concurrent with the
expiration or termination of the SERIES SPONSORSHIP AGREEMENT between
SME and the sanctioning entity of SME Events without further payment
or penalty.
9. DEFAULT AND LIQUIDATED DAMAGE
Either party shall have the right to terminate this Agreement upon
breach thereof by the other, or upon failure of any representation or
condition contained herein.
10. INDEPENDENT CONTRACTORS
Track and SME are and shall remain independent contractor, and nothing
contained herein or done pursuant hereto shall be construed to create
any relationship of principal and agent or employer and employee
between Track and SME or to make them joint venturers. Should Track
contract, hire or retain any employees, independent contractors or
other agents to perform the services or provide the equipment or
materials under this Agreement, the parties intend and Track warrants
that no relationship of principal and agent or employer and employee
is created between SME and the above parties.
11. TERM AND OPTION TO RENEW
The term of this Agreement shall commence on the date hereof and
extend until and including December 31, 1998. SME shall have the
right to renew this Agreement for two additional one year terms under
the same terms and conditions herein. If SME chooses to exercise this
option to renew, SME shall notify Track, in writing, by three months
prior to the expiration date of the existing term, of its intention to
renew.
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If this Agreement is terminated due to a default by Track, for a
period of two (2) years after such termination Track shall not agree
or offer to agree with any other entity or party with respect to
signage, advertising, promotion rights or any other arrangement
similar to this Agreement without first offering such arrangement to
SME under the terms and conditions to be offered to the other entity.
12. MISCELLANEOUS
a. Any notices required or permitted to be given under the terms of
this Agreement shall be in writing and shall be deemed to be given
if hand delivered or sent by facsimile transmission or by United
States certified mail, return receipt requested, postage fully
prepaid, to the addresses set forth herein or to such other person
or address as either party may designate by written notice to the
other party as herein provided.
b. North Carolina law shall govern the validity of this Agreement,
the construction of its terms, and the interpretation of the
rights and duties of the parties.
c. The terms of this Agreement shall bind SME and Track and their
respective successors and assigns. However, this Agreement is not
assignable in whole or in part by either party in the absence of
the prior written consent of the other party and any attempt to
assign this Agreement without such consent shall be null and void.
If Track delegates any of its duties or responsibilities under
this Agreement, Track shall remain responsible to SME for the
performance of those duties and responsibilities.
d. This Agreement and its terms shall be kept strictly confidential
by the parties and shall not be revealed in whole or in part to
any third parties.
e. In the event either party becomes insolvent, makes an assignment
for the benefit of creditors, becomes the subject of any
bankruptcy, reorganization or arrangement proceeding or defaults
in any obligation, which default would allow the party to whom the
obligation is owed to attempt to foreclose SME from exercising its
rights or prevent SME from paying its obligations hereunder, then
this Agreement may be terminated by written notice to the
defaulting party.
f. The undersigned representative of Track warrants by his or her
signature that he or she has the right and authority to bind Track
to the terms and conditions of this Agreement.
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g. Headings are supplied for convenience only and are not to be
construed as an interpretation of any of the language of this
Agreement.
h. This Agreement contains the entire understanding of the parties
relating to the subject matter contained herein and may not be
changed except by consent of the parties in writing. Failure of
either party to enforce any of the provisions hereof shall not be
construed as a general relinquishment or waiver of that or any
other provision.
i. Time shall be of the essence with respect to matters set forth
herein.
j. This Agreement may be modified, waived or discharged only by a
writing signed by the duly authorized representative of the party
against whom the same is asserted, which writing refers
specifically to this Agreement.
SPORTS MARKETING ENTERPRISES
BY: /S/ XXXXXXX X. XXXXXXX
Xxxx Xxxxxxx
TITLE: VICE PRESIDENT
DATE: 2/26/98
AGREED TO AND ACCEPTED:
BRAINERD INTERNATIONAL RACEWAY
BY: /S/ XXXXXXX X. XXX
Xxxx Xxx
TITLE: VICE PRESIDENT
DATE: 3/2/98
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EXHIBIT A
1. An 8'x20' win light sign to be located at the finish line of the drag
strip on the "spectator" side of the race track.
2. If and when there is a starter's stand, it shall be painted in a
manner mutually agreed upon by SME and the track.
3. An 8'x40' double-faced sign to be located adjacent to the starting
line on the "pit" side of the race track.
4. A series of four (4) 4'x30' double-faced signs to be located on the
top railings of the first three (3) "spectator" side grandstands. If
and when grandstands are constructed on the pit side of the race
track, a series of four (4) 4'x30' double-faced signs will be located
on the top railings of the first three (3) sections of grandstands.
The bottom edge of the above signs shall be at least six feet above
the top seat.
5. One 2' x 16' sign to be affixed to the guard rail adjacent to the
starting line of the drag strip portion of the race track on the "pit"
side of the race track. The sign shall be mounted in a manner that
allows unobstructed spectator viewing from the side of the race track
opposite their location.
6. Three (3) 4'x20' crowd control fence signs on each side of the drag
strip.
7. Three (3) 3'x20' guard wall signs on each side of the drag strip.
8. One double-faced 10'x60' sign to be affixed to the structure commonly
referred to as the "drag gate" located at the entrance to the drag
racing "pit" area of the race track.
9. A 4'x24' sign to be located in the "turn 10" area of the race track
adjacent to the "scoring stand".
10. A 12'x24' single-faced billboard located behind the first grandstand
on the "spectator" side of the race track.
11. A series of four (4) 4'x20' signs on the "spectator" side of the VIP
building located adjacent to the starting line of the "drag strip"
portion of the race track.
12. Two (2) 4'x40' signs on top of the new pit side VIP building and one
(1) 4'xl2' victory lane sign at the base of the tower.
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13. A 3'xl0' sign on the "infield" scoreboard located at the end of the
"road racing course" main straight on the infield side of the track.
14. A 12'x24' billboard located in the "turn 4" section of the "road
racing course" with the actual signage space facing the spectator
grandstands on the opposite side of the race track.
15. A 4'x24' sign located "inside" of the "turn 7" section of the "road
racing course" with the actual signage space facing the
"photographer's tower" outside the "turn 8" section of the "road
racing course".
16. A series of 18"xl0' signs to be located on the top of the corner
stations located throughout the "road racing course".
17. Two (2) 4'x30' signs on the main entrance sign. This sign is located
at the main entrance to the race track, adjacent to Highway 371 and
the track office/credentials buildings.
18. SME will have exclusive rights to all signage on the interior and
exterior of the VIP hospitality building now called "BIR 300 Club".
Content and placement of signage is subject to prior SME approval.
For the duration of this Agreement and any and all extensions thereof, SME
shall have sole advertising rights on the above signage. There shall be no
other commercial identification on the signage or supporting structures
other than that specified by SME.
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