FIRST AMENDMENT TO LICENSE AND CONSULTING AGREEMENT
This First Amendment to License and Consulting Agreement (this "AMENDMENT"),
effective as of October 16, 1999 (the "AMENDMENT DATE"), is made and entered
into by and between Planned Licensing, Inc. a New York corporation and wholly
owned subsidiary of Namanco Productions, Inc. ("LICENSOR"), and XxxxxxXxxx.xxx,
Inc., a Delaware corporation, located at 0000 X.X. 0xx Xxx, Xx. Xxxxxxxxxx,
Xxxxxxx 00000 ("LICENSEE").
INTRODUCTION
Licensor and Licensee entered into a License and Consulting Agreement, executed
as of August 10th 1994 (the "AGREEMENT"). Licensor and Licensee each desires to
amend the terms of the Agreement as described in this Amendment.
For good and valuable consideration the parties hereby agree as follows:
TERMS
1. The second paragraph of the recitals in the Agreement is hereby
stricken in its entirety and in lieu thereof substituted with the
following:
"WHEREAS, Licensor operates a sports-oriented online service (the
"SPORTSLINE SERVICE") distributed via various platforms including but
not limited to on the World Wide Web portion of the Internet at
universal resource locator "xxx.xxxxxxxxxx.xxx" and other URLs owned by
or licensed to SPLN and desires to retain Licensor (i) to consult in
the development, funding, marketing and promotional activities of
Licensee and (ii) to provide the services of Namath as a performer to
advertise and promote its products, and as a spokesman for its
products; and"
2. Sub-section 1(b) of the Agreement is hereby amended by striking
"on-line sports information computer service ("SportsLine")" and in
lieu thereof substituting "the SportsLine Service".
3. Sub-section 1(e) of the Agreement is hereby stricken in its entirety
and in lieu thereof substituting with the following:
"Contract Year" shall mean a consecutive twelve (12) month period
commencing on October 16, 1999, and on each anniversary thereafter
during the term thereof."
4. Sub-section 2(a) of the Agreement is hereby amended by adding the
following sub-sections:
"(vi) Serve as a guest commentator/analyst in the on-air broadcast
of Licensee's nationally syndicated Westwood One/CBS Radio
property "The Drive" during the NFL football season (including
pre- and post-seasons) for a minimum of fifteen (15) minutes
per week with a minimum of three (3) personal in studio
appearances, for so long as Licensee continues to produce such
show or other similar programming during the Term.
(vii) Make a mutually agreed upon quantity (but in all events a
minimum of four (4)) of personal appearances per year
(schedule subject to NAMATH availability) at
greeting/autograph sessions for end users of the SportsLine
Service, sales meetings and other Endorsed Products related
functions.
(viii) Provide a reasonable amount of autographed items as requested
by Licensee and at the sole cost of Licensee. Licensee agrees
not to resell such autographed items and to limit the use of
such items to promotional purposes unless otherwise mutually
agreed by the parties."
5. Section 4 of the Agreement is hereby amended by (a) striking "July 1,
1994" and in lieu thereof substituting "October 16, 1999", (b) striking
the term "Initial Term" and in lieu thereof substituting "Term", and
(c) striking the second and third sentences in their entirety. All
references in the Agreement to the terms "term of this Agreement" and
"Initial Term" are stricken and in lieu thereof substituted with the
"Term."
6. Licensor hereby waives the right to receive any and all payments
otherwise due pursuant to sub-sections (a)-(c) of Section 5 of the
Agreement subsequent to the Effective Date (it being understood that,
subsequent to the Effective Date) the royalty structure set forth below
in amended section 5 as set forth below in section 7 of this Amendment
supersedes the royalty structure set forth in original section 5 of the
Agreement. Licensor further hereby discharges all of Licensee's
obligations pursuant to sub-sections 5 (a)-(c) of the Agreement,
immediately prior to giving effect to the following amendment to
Section 5 of the Agreement, with respect to royalty payments that
otherwise would become due subsequent to the Effective Date.
7. Section 5 of the Agreement is hereby stricken in its entirety and in
lieu thereof substituted with the following:
"In full consideration for the rights, licenses and privileges herein
granted to licensee, and the mutual promises set forth herein, Licensee
agrees to:
(a) pay Licensor two hundred thousand dollars ($200,000) per
Contract Year in cash to be paid in equal quarterly
installments over the Term, commencing on January 1, 2000 and
continuing on the first day of each calendar quarter
thereafter until paid in full or, if sooner, until the
effective date of termination of this Agreement in the event
of a material breach by Licensor or Namath.
(b) grant to Licensor options to purchase up to thirty thousand
(30,000) shares of SPLN common stock (the "OPTIONS") at an
exercise price based on the closing price of SPLN common stock
on the NASDAQ National Market on the Amendment Date, and which
shall (i) vest pro-rata in arrears over the Term (i.e., 20% on
each anniversary of the Effective Date until fully vested),
provided this Agreement is in effect on the applicable vesting
date, and (ii) otherwise be subject to the terms, conditions
set forth in Licensee's Incentive Compensation Plan.
(c) Commencing on July 1, 1999, and continuing until the earlier
of fifteen (15) years thereafter or the effective date of
termination of this Agreement if earlier terminated as a
result of a material breach by Licensor or Namath, Licensor
shall be entitled to receive royalty payments ("ROYALTY
PAYMENTS") on account of paid subscriptions to the SportsLine
Service (e.g. "General Admission" and "Box Seat"
subscriptions) for end user access to fee based content on the
SportsLine Service (but expressly excluding any and all other
specific fee based content and/or services as determined in
the sole and exclusive discretion of Licensee, including,
without limitation, fee based frequency loyalty programs and
fantasy products and any non-fee based frequency loyalty
programs) solely for subscribers who enrolled in the
SportsLine Service during the period commencing on the Launch
Date and ending on June 30, 1999, at the rate of fifteen cents
($0.15) per month per paid subscriber which remains validly
enrolled in the SportsLine Service ("ROYALTY SUBSCRIBERS").
For purposes of this paragraph "Launch Date" shall mean the
date on which the SportsLine Service was generally available
to end users on a commercial basis. Royalty Payments shall be
payable on a calendar quarterly basis in arrears no later than
the end of the month following the quarter with respect to
which Royalty Payments, concurrently with the statement
required by sub-section (d) below.
(d) Licensee shall keep complete and accurate separate records of
all paid subscriptions subject to Royalty Payments, in
sufficient detail to disclose the initial enrollment date and
current status of subscribers. The said records, and all
underlying documents and other documents relating to the
calculation of Royalties, shall be open to inspection by
Licensor or its designated
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representative at all reasonable times during business hours
up to four (4) times per Contract Year and shall be maintained
and preserved by Licensee with respect to each Contract Year
until two (2) years after the end of the applicable Contract
Year. Licensee agrees not to cause or permit any interference
with Licensor or Licensor's representative in the reasonable
performance of their duties of inspection and audit. The
exercise by Licensor in whole or in part, or at any time or
times of the right to audit records and accounts or of any
other right herein granted, the acceptance by Licensor of any
statement or statements or the receipt and deposit by Licensor
of any payment tendered by or on behalf of Licensee shall be
without prejudice to any rights or remedies of Licensor and
shall not stop or prevent Licensor from thereafter disputing
the accuracy of any such statement or payment. This clause (d)
shall survive the expiration or earlier termination of this
Agreement.
(e) No later than the end of the month following each calendar
quarter, Licensee shall transmit to Licensor a complete and
accurate statement certified to be accurate by an officer of
Licensee, covering the immediately preceding calendar quarter.
Such report shall set forth the number of paid subscriptions
subject to Royalty Payments in effect during the preceding
quarter, and the applicable royalty pertaining thereto. In the
event that any inconsistencies or mistakes are discovered in
such statements or payments, they shall immediately be
rectified and the appropriate payment or deduction from future
payments shall be made. Upon demand by Licensor, Licensee
shall at Licensor's expense (such expense to be deducted from
royalties payable to Licensor hereunder), but no more than
once in any twelve (12) month period, furnish to Licensor a
detailed statement by an independent certified public
accountant computing amounts due to Licensor hereunder as of
the date of Licensor's demand. If the certified audit
discloses that royalties were understated by more than ten
percent (10%) per Contract Year, then Licensee shall pay for
such audit. This clause (e) shall survive the expiration or
earlier termination of this Agreement.
(f) If Licensee shall fail to make any payment or deliver any of
the required statements referred to above, or to give access
to the premises and/or records pursuant to the provisions
hereof to Licensor's authorized representatives for the
purposes permitted hereunder, same shall be and Event of
Default hereunder. This clause (f) shall survive the
expiration or earlier termination of this Agreement.
8. Section 7 is hereby amended by adding the following at the end of the
paragraph:
"Notwithstanding the foregoing, Licensor shall not be employed by, act
as consultant to, or provide any services to or for any SPLN
Competitor. For purposes of this Agreement, "SPLN Competitor" shall
mean shall mean any Internet, or other sports online services of:
ESPN/ABC Sports/Xxxx Disney Company, Fox/Sky/Times, CNN/SI, Sports
Illustrated, CNN/HN Sports, The Sporting News/Times Mirror Corp., NBC
Sports, MSNBC, CNBC, MSG, Total Sports, Athlete Direct/Pro Sports
Xchange/Broadband Sports, Quokka, STATS, Inc., Pangolin, The Mirror
Group; any Internet or Web based fantasy game service (e.g., Sandbox
Entertainment); and any online retailer (whether or not exclusively
online) of sports-related merchandise selling substantially the same
general line of merchandise or sports-related products as SPLN
(including, but not limited to, XxxXxxx.xxx, Venator Group/FootLocker,
Xxxxxx.xxx, Xxxx.xxx, The Sports Authority, Fogdog/Sports Site and
Xxxxxxxx'x Sports/Xxxxxxxxxx.xxx, Xxxx.xxx, Global Sports Interactive
etc. (or any of their respective affiliates)."
9. Section 17 is hereby amended by adding the following sub-section 17
(f):
Licensor acknowledges and agrees that damages related to a breach of
this Agreement by Licensor will be difficult to ascertain with any
degree of certainty. Therefore, notwithstanding any other rights
Licensee may have with respect to Licensee's termination of this
Agreement pursuant to this Section 17, in the event Licensee terminates
this Agreement, Licensor shall forfeit all unvested options and
immediately pay to licensee liquidated damages in the amount of one
hundred thousand dollars ($100,000.00) as liquidated
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damages, and the parties agree that such amount is based on a
reasonable estimate of such damages as a result of non-performance.
10. Section 24 is hereby stricken in its entirety and in lieu thereof
substituted with the following:
All notices or other communications hereunder shall be in writing and
shall be deemed to be given or made when received (or upon refusal of
delivery) by overnight courier, U.S. mail, registered or certified,
first class, postage prepaid, or confirmed facsimile (with a copy via
one of the aforementioned forms of delivery promptly thereafter) to the
following address or addresses or such other address or addresses as
either party may designate in writing to the other in accordance with
this paragraph:
If to Licensee: XxxxxxXxxx.xxx, Inc. With a copy to: XxxxxxXxxx.xxx, Inc.
0000 XX 0xx Xxx 0000 XX 0xx Xxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000 Ft. Xxxxxxxxxx, Xxxxxxx 00000
Attn: President Attn: VP, Legal & Business Affairs
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
If to Licensor: Planned Licensing, Inc. Xxxx X. Xxxxx, Esq.
c/o Xxxxx X. Xxxxx, Esq. Penzer and Xxxxx
0 Xxxxxxx Xxxxx 000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
11. This Amendment does not, and shall not be construed to, modify any
term or condition of the Agreement other than those specific terms and
conditions expressly referenced in this Amendment. Except as herein
provided, the Agreement shall remain unchanged and in full force and
effect. In the event of any inconsistency or discrepancy between the
Agreement and this Amendment, the terms and conditions set forth in
this Amendment shall control. Capitalized terms in this Amendment, not
otherwise defined herein, shall have the meanings ascribed to them in
the Agreement. This Amendment may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same document.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
Amendment Date.
PLANNED LICENSING, INC. XXXXXXXXXX.XXX, INC.
By:/S/ Xxxxx Xxxxx By: /s/ Xxxxxxx Xxxx
----------------------------------------- ----------------
Print Name: Xxxxx X. Xxxxx Print Name: Xxxxxxx Xxxx
Title: President Title: President
/s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx, Individually
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx, Individually
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