EXHIBIT 10.05
MEMBERSHIP AGREEMENT
This Membership Agreement is entered into as of the 1st day of January
1993, by and between the Orlando Predators, Ltd. (hereinafter the "Member")
having a business address of X.X. Xxx 0000, Xxxxxxxxxx, XX and the ARENA
FOOTBALL LEAGUE, INC., a not-for-profit membership corporation organized under
the laws of the State of Delaware, and having its principal place of business
in Des Plaines, Illinois (hereinafter the "AFL").
WHEREAS, the AFL is the assignee of an exclusive License Agreement with
Gridiron Enterprises, Inc., (hereinafter "Gridiron") wherein and whereby AFL
has received the exclusive license to operate a league (the "League") of
football teams playing a patented form of football known as "Arena Football",
and to use the trademarks, names and logos associated with that game; and
WHEREAS, the AFL has been organized as a membership corporation for the
purpose of facilitating the coordination, among its members, of the holding of
Arena Football games using players employed by the AFL; and
WHEREAS, the Member desires to obtain a membership in the AFL and to
operate a football team within the League using AFL players; and
WHEREAS, the Member agrees to be subject to the Bylaws of the League
(hereinafter the "By-Laws"), the restrictions contained in the AFL's License
Agreement with Gridiron, the "Rules of Play" as established by the AFL from time
to time, the regulations set forth in the AFL's "Operations Manual" as
established by the AFL from time to time, and such other requirements as the AFL
may establish from time to time, and any other set of rules, regulations,
covenants and restrictions which are applicable to all of the members of the
AFL;
NOW, THEREFORE, in consideration of, and as a requirement for being granted
the privilege of a membership in the AFL, as evidenced by the issuance of the
accompanying membership Certificate and the rights of participation in League
activities in an exclusive territory, the Member hereby agrees to the following:
1. TERRITORY
The Member acknowledges that its membership in the AFL carries with it
the exclusive right to operate a football team within the League in the city or
township known as Orlando in the State of Florida. This location will be
referred to in this document and other AFL documents as the "Territory" or
"Exclusive Territory" and it will include all of the area within
a seventy-five (75) mile radius of the geographic center of the city or township
noted above in which the member's team plays its AFL home games, and as
otherwise described in the AFL By-Laws, subject to their amendment from time-to-
time.
2. LICENSE AGREEMENT
The Member acknowledges it has received a copy of the License Agreement
between Gridiron and the AFL and agrees that, at all times, it will abide by all
of the restrictions and limitations which are placed upon or becomes a duty of
the AFL, its MEMBERS or the League under which License Agreement as the same is
in effect and as it may be modified or amended from time to time.
3. BY-LAWS AND OPERATIONS MANUAL
The Member acknowledges that it has received a copy of the current version
of the By-Laws of the AFL and the AFL "Operations Manual" and agrees that at all
times it will avail itself of the privileges and will abide by all of the
restrictions and limitations and penalties which are placed upon each member by
said By-Laws and/or said "Operations Manual". The Member further understands
and acknowledges that the By-Laws and AFL "Operations Manual" will necessarily
be modified and amended from time to time in accordance with the established
amendment procedures for the By-Laws and majority vote by the AFL Board of
Directors in the case of the "Operations Manual".
4. MERCHANDISING
(a) The Member agrees to be subject to the AFL's "Licensed Merchandise
Program" as mandated by the License Agreement.
(b) The Member agrees that all team names, design logos and trademarks
related to the Member's team (other than slogans which do not contain the team's
name) will be owned by Gridiron and exclusively licensed to the AFL and all
marks and names must be registered in the name of or assigned to Gridiron,
(Note: Any team which assigns an improperly registered xxxx or logo will be
charged by the AFL for the proper registration or assignment).
(c) The Member acknowledges that the AFL has established a "Licensed
Merchandise Program" (the "Program") which requires royalties to be paid to the
AFL from sales of all merchandise bearing the team names, logos and trademarks.
Member acknowledges and agrees to abide by any reporting requirements and to pay
all royalties when due.
The rights to the Miami Hooters will be determined via a separate agreement
between AFLI and _____________________________
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5. PREPAID EXPENSES AND CONTINGENCY FUND/IRREVOCABLE LETTER OF CREDIT
(a) The Member acknowledges that the AFL's Board of Directors may
establish a preseason "cash deposit" which each team would be obligated to place
in the League's escrow account for purposes of assuring mid-season assessments
or creating a "contingency" fund for League emergencies. The Member further
acknowledges that this deposit requirement may be increased in amount for future
years and that its payment requirement date(s) may be advanced significantly.
The Member further understands that such deposit by the required date(s) is an
absolute requirement to maintaining its membership in good standing and that the
failure to make the deposit(s) by the required date(s) will result in
termination of membership or other penalties as may be established by resolution
of the Board of Directors to be applicable for each LEAGUE SEASON, and the
Member hereby acknowledges his full acceptance and understanding of this
requirement.
(b) The Member acknowledges that the AFL's Board of Directors may, by
resolution, establish a requirement that each member supply an Irrevocable
Letter of Credit (ILOC) in favor of the AFL, which said ILOC may be a supplement
to, or replacement for, the aforesaid cash deposit requirement. The amount and
content of the ILOC may be changed by a majority vote of the Board of Directors
in advance of each LEAGUE SEASON.
6. OBLIGATIONS OF MEMBERS
In addition to any obligation established by virtue of its position as a
member of the AFL or by virtue of this or any other contractual or statutory
provision, the Member expressly agrees and covenants as follows:
(a) To abide by and be bound by any decision of the AFL Commissioner
and/or the AFL Board of Directors in all matters within the respective
jurisdiction of such Commissioner and/or Board;
(b) To include in any contract between the Member and any employee or
coach a provision specifying that the contracting parties agree to be bound by
all of the provisions contained in the AFL By-Laws, the AFL "Operations
Manual", the AFL's License Agreement with Gridiron, Inc., and any written
directives from the Board of Directors or the Commissioner of the AFL.
(c) To operate an active team within the League (Note: Unless the By-Laws
are properly amended so as to create such an option, the Member may not choose
to be inactive for all or any portion of a League season. Inactivity -- defined
generally to be the failure of a member to field a team to play any scheduled
game -- may be determined by the Commissioner of the AFL. If a Member becomes
inactive for any period of time, it shall be
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subject to fines, suspension or termination as further described in the AFL's
By-Laws).
(d) To take all actions necessary to uphold and abide (and to aid the AFL
in its attempts to uphold and abide) all AFL or Member obligations under the
License Agreement.
(e) To pay to the AFL all team assessments and other common expenses of
the AFL as may be determined from time to time by the AFL's Board of Directors,
as well as all fines levied as described in the AFL By-Laws.
7. MEMBERS AS LIMITED AGENT OF AFL
The Member acknowledges that it will be recognized as an agent of the
AFL for the limited purpose of controlling and managing the AFL's players which
are assigned to the Member. In this regard, the Member agrees to cause said
players to be coached by the Member's staff. The Member further agrees and
understands that all expenses of maintaining the Member's team and the players
assigned to it are strictly an expense of the Member and the AFL will not be
responsible for any player or team expense that is not specifically agreed upon
by resolution of the AFL's Board of Directors.
8. BROADCAST RIGHTS
The Member acknowledges that the AFL retains the exclusive right to
broadcast (via live transmission and/or tape) or to license the broadcast of any
and all of the games played by or between any of the League members. In this
regard, it is quite likely that any national television contract will contain
restrictions regarding the rights of the Member to broadcast games in its local
market, and the Member acknowledges and agrees to abide by such restrictions as
the same may be continued in any present or future AFL broadcast contract or
otherwise as may be determined by resolution of the AFL board of directors.
9. WITHDRAWAL FROM OR TERMINATION OF MEMBERSHIP
(a) The Member may withdraw from the AFL or may have its membership
terminated or suspended for reasons or causes and under the conditions set forth
herein and/or in the By-Laws of the AFL as the same are in existence and as may
be modified or amended from time to time, and the Member hereby acknowledges
all such reasons, causes and conditions.
(b) As may be more specifically stated in the AFL's ByLaws, any member
withdrawing and/or being terminated shall remain liable for all of the then-
outstanding obligations (e.g., fines or assessments) to the AFL, and the Member
agrees and commits to pay such outstanding obligations to the AFL regardless of
whether the AFL has applied the Member's prepaid expenses and/or ILOC proceeds
to pay expenses associated with the operations of the
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Member's team. In this regard, the Member also agrees to pay all of the AFL's
costs and expenses for collecting the same from/against the Member, including
reasonable attorneys' fees and expenses.
10. TRANSFER
If the Member has applied to the AFL for a transfer of all or part
of the ownership of the Member, and the AFL approves the transfer of the
membership, any new entity to which the Partnership is to be transferred must
sign the version of this Partnership Agreement in effect at the time of the
transfer before the transfer will become effective.
IN WITNESS WHEREOF, the undersigned Member acknowledges and agrees to the
terms of Membership stated herein.
February , 1993
ORLANDO PREDATORS, LTD.
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MEMBER
TRUSTEES:
[illegible] BY: /s/ Xxxxx Xxxxxxx
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[illegible] (President or General Partner)
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ARENA FOOTBALL LEAGUE, INC.
/s/ Xxxxxx X. X'Xxxx
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XXXXXX X. X'XXXX, President
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